Southern District of New York

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, James J. Hunt, the Special Agent-in-Charge of the New York Field Office of the Drug Enforcement Administration (“DEA”), Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced today the arrests of AGUSTIN ZAMORA-VEGA, a/k/a “Julio Cesar,” ORLANDO ALCANTARA, CINDY CARRILLO, SANTOS MINJAREZ, and JOSE LUIS GONZALEZ-SOLIS, all of whom conspired to distribute over 1,300 pounds of wax candles laced with methamphetamine.  The defendants were arrested overnight in New Jersey, and were presented today before U.S. Magistrate Judge Kevin Nathaniel Fox.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As alleged, the defendants worked to distribute a massive quantities of methamphetamine, concealed in wax candles. As creative as these defendants were, allegedly hiding dangerous drugs in a common household item, law enforcement was on top of this newest scheme.”

DEA Special Agent-in-Charge James J. Hunt said:  “DEA has seen drugs smuggled in numerous ways:  concealed in puppies, lollipops, furniture, and produce. But secreting a million dollars’ worth of methamphetamine in wax candles of various shapes is shocking.  This seizure signifies that drug trafficking organizations are determined to create a stronghold of meth users in the Northeast. Through the good work of SDNY, DEA, HSI and NYPD, this load of methamphetamine was seized before it even hit the streets, thwarting the organization's plans.”

HSI Special Agent-in-Charge Angel M. Melendez said:  “These individuals allegedly possessed more than half a ton of wax candles that would be melted down and converted into crystal meth, eventually introducing more of these destructive synthetic drugs onto our streets.  Drug traffickers are always thinking of more creative ways to store and traffic their drugs. But the ever evolving way in which investigations are conducted and information is shared among law enforcement is key to identifying and prosecuting these criminals.”

According to the allegations contained in the Complaint[1] charging the five defendants:

In August 2017, law enforcement agents learned that ZAMORA-VEGA was seeking a facility in which he intended to store and convert a large quantity of methamphetamine into crystal form (“crystal meth”).  After that, on August 17, 2017, an undercover officer (the “UC”) drove with ZAMORA-VEGA to a warehouse in New Jersey (the “NJ Warehouse”) that the UC offered to ZAMORA-VEGA to use to store and convert methamphetamine to crystal meth.  ZAMORA-VEGA indicated that he was interested in using the NJ Warehouse for those purposes. 

In the days following August 17, 2017, ZAMORA-VEGA indicated to the UC that he was expecting a large shipment of methamphetamine to arrive in the New York area in the coming days, and that he intended to transport the methamphetamine to the NJ Warehouse where he would convert it to crystal meth.

On August 29, 2017, ZAMORA-VEGA told the UC that the methamphetamine had arrived at a facility on Long Island.  CARRILLO texted the UC the address of the Long Island facility so that the UC could meet ZAMORA-VEGA and CARRILLO there.  Ultimately, however, the UC agreed to meet ZAMORA-VEGA and CARRILLO at a hotel in New Jersey where ZAMORA-VEGA and CARRILLO had been staying (the “NJ Hotel”).

When the UC arrived at the NJ Hotel, he met with ZAMORA-VEGA, CARRILLO, ALCANTARA, MINJAREZ, and GONZALEZ-SOLIS.  While at the NJ Hotel, ZAMORA-VEGA showed the UC that the boxes contained a large quantity of what appeared to be wax candles (the “Meth Candles”).  ZAMORA-VEGA indicated that the candles actually contained methamphetamine, which could be melted and converted to crystal meth.  Thereafter, all of the defendants travelled from the NJ Hotel to the NJ Warehouse.

Once at the NJ Warehouse, ZAMORA-VEGA, CARRILLO, ALCANTARA, MINJAREZ, GONZALEZ-SOLIS all engaged in a discussion with the UC about the fact that the NJ Warehouse would be used to convert the Meth Candles to crystal meth.  The defendants continued to discuss with the UC topics such as how they intended to begin converting the Meth Candles to crystal meth; that they would stay in the NJ Warehouse until the process was completed; that they would need additional equipment; and that they expected it would take them from August 29, 2017, until September 2, 2017, to complete the process of converting the Meth Candles to crystal meth.  ALCANTARA stated that two fans, one on each side of the NJ Warehouse, would need to be uncovered before they began converting the Meth Candles to crystal meth.  In response, GONZALEZ-SOLIS stated that only one fan needed to be uncovered, since they would only be converting the Meth Candles to crystal meth in that area of the NJ Warehouse.

Thereafter, MINJAREZ indicated that he would purchase the necessary supplies.  At that point, CARRILLO provided a credit card to MINJAREZ and told MINJAREZ to charge to the credit card all items purchased to convert the Meth Candles to crystal meth.  MINJAREZ left the NJ Warehouse.  Shortly thereafter, ZAMORA-VEGA, ALCANTARA, MINJAREZ, GONZALEZ-SOLIS and the UC unloaded the boxes containing the Meth Candles.  ZAMORA-VEGA, CARRILLO, ALCANTARA, and GONZALEZ-SOLIS were subsequently placed under arrest.  MINJAREZ was arrested later at the NJ Hotel.

Agents with the DEA, HSI, and NYPD recovered from the NJ Warehouse approximately 27 cardboard boxes each containing a large number of candles, with an aggregate weight in excess of 1,300 pounds.  A field test of one of the Meth Candles revealed that the Meth Candle contained a detectable amount of methamphetamine.

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AGUSTIN ZAMORA-VEGA, a/k/a “Julio Cesar,” 30, ORLANDO ALCANTARA, 33, CINDY CARRILLO, 27, SANTOS MINJAREZ, 26, and JOSE LUIS GONZALEZ-SOLIS, 28, are each charged with one count of conspiracy to distribute and possess with the intent to distribute 500 grams and more of mixtures and substances containing methamphetamine.  This charge carries a mandatory minimum sentence of 10 years in prison and a maximum of life in prison.  The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Kim praised DEA, HSI, and the NYPD for their outstanding work on the investigation.  He added that the investigation is continuing.  

This matter is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Jonathan Rebold and Danielle Sassoon are in charge of the prosecution.

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

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that Yankel Rosenthal Coello pled guilty in Manhattan federal court to attempting to engage in monetary transactions in property derived from drug trafficking offenses in 2013, and Andres Acosta Garcia previously pled guilty to engaging in monetary transactions in property derived from drug trafficking offenses between 2004 and September 2015.  ROSENTHAL, who was arrested at Miami International Airport on October 6, 2015, pled guilty today before U.S. District Judge Valerie E. Caproni.  Acosta, who surrendered in the United States on December 29, 2015, pled guilty on August 16, 2017, before U.S. District Judge Katherine Polk Failla. 

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As they admitted in Manhattan federal court, Yankel Rosenthal and Andres Acosta sought to assist Honduran drug traffickers in laundering the proceeds of their crimes. Rosenthal tried to conceal drug-tainted money through the purchase of U.S. real estate, political contributions in Honduras, and even investment in a professional soccer team. Acosta worked with other members of the Rosenthal family to assist the Cachiros, a notoriously brutal Honduran drug trafficking organization. Despite their attempts to launder these ill-gotten gains, with these pleas Rosenthal and Acosta face significant time in prison.”

According to the Superseding Indictment, other court filings, and statements made during court proceedings[1]:

Beginning in at least 2009, ROSENTHAL provided financial services in Honduras to multiple significant Honduran drug traffickers, which related principally to real estate transactions.  In 2013, ROSENTHAL attempted to launder over a million dollars of drug money by accepting the tainted funds from drug traffickers in Honduras and using his own access to credit to finance a real estate deal in Doral, Florida, which was to involve the same drug traffickers obtaining untainted property assets.  ROSENTHAL also funneled hundreds of thousands of dollars’ worth of bribes from drug traffickers seeking official protection, which were styled as purported campaign contributions, to his cousin and co-defendant Yani Benjamin Rosenthal Hidalgo, which Rosenthal Hidalgo used in connection with failed efforts to become the President of Honduras.  In addition, ROSENTHAL obtained a purported investment from a drug trafficker, comprising hundreds of thousands of dollars of drug money, in C.D. Marathón, the Honduran soccer club ROSENTHAL controlled. 

During a recorded meeting in Honduras with several significant Honduran drug traffickers, including one of the leaders of the Cachiros, a prolific and violent Honduran criminal syndicate that distributed huge quantities of cocaine before being dismantled by the Drug Enforcement Administration (“DEA”), ROSENTHAL discussed some of these bribes and the possibility of obtaining assistance from one or more Honduran politicians so that the drug traffickers could avoid being targeted by law enforcement and extradited to the United States.  In an April 2013 email, ROSENTHAL solicited a bribe for another high-ranking Honduran politician from a U.S.-based company (“Company-1”), which was seeking oil-exploration rights in Honduras, explaining: 

[L]ike I told you a couple of years ago sadly in our countries politicians expect colaboaration [sic] to their campains [sic] when approached for a business proposal, I have all the confidence in this friend he has power now and will have much more later on (Nov 2013), can he count on a contribution for his campain [sic] and at the same time with the unde[r]standing he will help with the exploration and ambient permits requi[r]ed?

In September 2013, one of Company-1’s principals informed ROSENTHAL via email that he was prepared “to contribute to your friend’s election for President,” and subsequently wrote a $100,000 check to one of ROSENTHAL’s shell companies, Shelimar Investments.

ACOSTA worked with his co-defendants, including Jaime Rolando Rosenthal Oliva, a former Vice President and congressman in Honduras, and Rosenthal Hidalgo, also a former congressman and two-time candidate for President of Honduras, to use entities controlled by the Rosenthal family to launder drug proceeds for the Cachiros.  Rosenthal Hidalgo pled guilty on July 26, 2017, to engaging in monetary transactions in property derived from drug trafficking offenses between 2004 and September 2015.  Several aspects of the Cachiros money-laundering scheme that ACOSTA participated in also received support from Fabio Porfirio Lobo, the son of a former President of Honduras. Lobo is scheduled to be sentenced on September 5, 2017, by U.S. District Judge Lorna G. Schofield in United States v. Lobo, No. 15 Cr. 174 (LGS), based on his conviction for participating in a conspiracy with members of the Cachiros and others to import cocaine into the United States.

ROSENTHAL remains designated as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act, along with Rosenthal Oliva (ROSENTHAL’s uncle), Rosenthal Hidalgo (ROSENTHAL’s cousin), and Shelimar Investments, as announced in October 2015 by the United States Department of the Treasury, Office of Foreign Assets Control (“OFAC”).

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ROSENTHAL, 48, pled guilty to one count of attempting to engage in monetary transactions in property derived from specified unlawful activity. The charge carries a maximum term of 10 years in prison. ACOSTA, 42, pled guilty to one count of engaging in monetary transactions in property derived from specified unlawful activity. The charge carries a maximum term of 10 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. ROSENTHAL is scheduled to be sentenced on January 19, 2018, and ACOSTA is scheduled to be sentenced on January 12, 2018.  Both defendants are to be sentenced by U.S. District Judge John G. Koeltl.

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, Jane Kim, and Matthew J. Laroche 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.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, James J. Hunt, the Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging 12 members and associates of a Bronx-based street gang known as “Square Gang” with racketeering conspiracy and a firearms offenses.

A total of seven defendants were taken into custody today; one other defendant was already in federal custody. Seven of the 12 defendants were presented and arraigned before U.S. Magistrate Judge Kevin N. Fox today. REGGIE GOODWIN was arrested in the Western District of New York and was presented and arraigned before Magistrate Judge Jeremiah McCarthy in the U.S. District Court for the Western District of New York today. The case is assigned to U.S. District Judge Sidney H. Stein.

Acting U.S. Attorney Joon H. Kim said: “As alleged in the indictment, these gang members wreaked havoc in the Patterson Houses in the Bronx for years. Thanks to the terrific work of the NYPD and the DEA, the defendants will now face justice in federal court and the Patterson Houses will be safer.”

DEA Special Agent in Charge James J. Hunt said: “Allegedly, the Square Gang was a menacing force, threatening the residents of the Patterson Houses in the Bronx with drug trafficking and violence. By collaborative efforts with our NYPD partners and the Southern District of New York, seven members of this gang have been arrested this morning on federal charges.”

As alleged in the Indictment unsealed today in Manhattan federal court and in other court papers[1]:

Square Gang was a criminal enterprise involved in committing numerous acts of violence, including murder and attempted murder, in the vicinity of the Patterson Houses in the Bronx. Members and associates of Square Gang enriched themselves by committing robberies and selling drugs, such as crack cocaine and marijuana.

Count One of the Indictment charges DAMAR MORALES, TAVON GODFREY, a/k/a “Tay,” HECTOR FIGUEROA, a/k/a “Hec,” GEORGE MCKELVEY, a/k/a “Tyleek,” JUAN CASTILLO, a/k/a “Obama,” JOSEPH RATTI, a/k/a “Yum Yum,” QUADAE BERGER, a/k/a “Icy Day,” RAKIM MOSELY, REGGIE GOODWIN, CURTIS CLARK, a/k/a “Tom,” BRITAIN KELLY, a/k/a “Brit,” and JAREL SABLE, a/k/a “Shoes,” with participating in a racketeering conspiracy for criminal involvement in Square Gang

Count Two of the Indictment charges MORALES, GODFREY, FIGUEROA, MCKELVEY, CASTILLO, RATTI, MOSELY, GOODWIN, CLARK, KELLY, and SABLE, with using and carrying firearms, which were discharged, in connection with the racketeering conspiracy and a narcotics conspiracy.

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

Mr. Kim praised the outstanding investigative work of NYPD and the DEA.

This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jordan Estes and Lauren Schorr are in charge of the prosecution.

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

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that UMAIR HAMID was sentenced today to 21 months in prison for his role in an international diploma mill scheme operated through the Pakistani company Axact.  HAMID pled guilty on April 6, 2017, to conspiracy to commit wire fraud.  HAMID entered the guilty plea before U.S. District Judge Ronnie Abrams, who imposed today’s sentence.

Acting U.S. Attorney Joon H. Kim said:  “Umair Hamid and Axact operated a massive diploma mill that preyed on consumers who thought their tuition would pay for a college education.  Instead, Hamid provided victims with worthless fake diplomas.  Defendants like Hamid who profit from fake schools face very real penalties, including prison time.”

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

HAMID helped run a massive diploma mill through his employer, Axact, which has held itself out as one of the world’s leading information technology providers.  HAMID and his co-conspirators deceived individuals across the world, including throughout the United States, into enrolling in supposed high schools, colleges, and universities.  Consumers paid upfront fees, believing that in return they would be enrolled in real educational courses and, eventually, receive legitimate degrees.  Instead, consumers received no instruction and worthless diplomas.

HAMID, who served most recently as Axact’s Assistant Vice President of International Relations, helped Axact conduct the fraud in the United States, among other locations.  On Axact’s behalf, he served as the primary contact during negotiations with a former competitor for Axact’s acquisition of websites for fake educational institutions.  Under Axact’s control, those websites then continued to deceive consumers into paying upfront enrollment fees for non-existent educational programs.  

In May 2015, Pakistani authorities shut down Axact and arrested multiple individuals associated with the company for participating in the diploma mill operation.  But HAMID, who was not arrested at that time, continued to work in furtherance of the fraudulent business, even personally traveling to the United States in 2016 to open a bank account used to collect money from defrauded consumers.

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In addition to the prison term, HAMID, 31, of Karachi, Pakistan, was ordered to forfeit $5,303,020.

Mr. Kim praised and thanked the Federal Bureau of Investigation and U.S. Postal Inspection Service for their outstanding investigative work. 

If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900.  For additional information, go to http://www.usdoj.gov/usao/nys/victimwitness.html.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Edward A. Imperatore, Noah D. Solowiejczyk, Katherine Reilly, Patrick Egan, and David Abramowicz are in charge of the prosecution.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Kenneth A. Blanco, the Acting Assistant Attorney General of the Department of Justice’s Criminal Division, announced that MAHMOUD THIAM was sentenced today in Manhattan federal court to seven years in prison by U.S. District Judge Denise L. Cote, for his scheme to launder $8.5 million in bribes that THIAM received from senior representatives of a Chinese conglomerate.  THIAM received the bribes in exchange for using his official position as Minister of Mines for the Republic of Guinea to facilitate the award to the Chinese conglomerate of exclusive and highly valuable investment rights in various sectors of the Guinean economy.  THIAM was found guilty on May 3, 2017, following a seven-day trial, of two counts of money laundering.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As a unanimous jury found at trial, Thiam abused his position as Guinea’s Minister of Mines to take millions in bribes from a Chinese conglomerate, and then launder that money through the American financial system.  Enriching himself at the expense of one Africa’s poorest countries, Thiam used some of the Chinese bribe money to pay his children’s Manhattan private school tuition and to buy a $3.75 million estate in Dutchess County.  Today’s sentence shows that if you send your crime proceeds to New York, whether from drug dealing, tax evasion or international bribery, you may very well find yourself at the front end of a long federal prison term.”

Acting Assistant Attorney General Kenneth A. Blanco said: “Mahmoud Thiam engaged in a corrupt scheme to benefit himself at the expense of the people of Guinea. Corruption is a cancer on society that destabilizes institutions, inhibits fair and free competition, and imposes significant burdens on ordinary law-abiding people just trying to live their everyday lives. Today’s sentence sends a strong message to corrupt individuals like Thiam that if they attempt to use the U.S. financial system to hide their bribe money they will be investigated, held accountable, and punished.”            

According to the allegations in the Indictment, other filings in Manhattan federal court, and the evidence admitted at trial:

MAHMOUD THIAM, a United States citizen who was Minister of Mines and Geology of the Republic of Guinea in 2009 and 2010, engaged in a scheme to accept bribes from senior representatives of a Chinese conglomerate and to launder that money into the United States and elsewhere.  In exchange for these multimillion-dollar bribe payments, THIAM used his position as Minister of Mines to facilitate the award to the Chinese conglomerate of exclusive and highly valuable investment rights in a wide range of sectors of the Guinean economy, including near-total control of Guinea’s significant mining sector.  

In order to receive the bribes covertly, THIAM opened a bank account in Hong Kong (the “Hong Kong Account”) and misreported his occupation to the Hong Kong bank to conceal his status as a public official in Guinea.  Upon receiving the bribes, THIAM transferred millions of dollars in bribe proceeds from the Hong Kong Account to, among others, THIAM’s bank accounts in the United States; a Malaysian company that facilitated and concealed THIAM’s purchase of a $3,750,000 estate in Dutchess County, New York; private preparatory schools in Manhattan attended by THIAM’s children; and at least one other West African public official.   

To further conceal the unlawful source of the bribery proceeds that THIAM transferred from the Hong Kong Account to banks in the United States, THIAM lied to two banks based in Manhattan and on tax returns filed with the Internal Revenue Service regarding the bribe payments, his position as a foreign public official, and the source of the funds in the Hong Kong Account.  In total, THIAM received approximately $8.5 million in bribes from the Chinese conglomerate. 

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In addition to the prison term, THIAM, 50, of Manhattan, was sentenced to three years of supervised release and was ordered to forfeit $8.5 million.

Mr. Kim praised and thanked the Department of Justice’s Criminal Division, as well as the Federal Bureau of Investigation for its outstanding investigative work.  The Criminal Division’s Office of International Affairs also provided substantial assistance in this matter. The Office is grateful to the government of Guinea for providing substantial assistance in gathering evidence during this investigation.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Elisha J. Kobre and Christopher J. DiMase and Trial Attorney Lorinda I. Laryea of the Fraud Section of the Justice Department’s Criminal Division are in charge of the prosecution.

A former Minister of Mines and Geology of the Republic of Guinea was sentenced today to seven years in prison, and three years of supervised release, for laundering bribes paid to him by executives of China Sonangol International Ltd. (China Sonangol) and China International Fund, SA (CIF).

Acting Assistant Attorney General Kenneth A. Blanco 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 Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.

Mahmoud Thiam, 50, of New York, New York, was sentenced by U.S. District Judge Denise L. Cote of the Southern District of New York.  Thiam was convicted on May 3, after a seven-day trial of one count of transacting in criminally derived property and one count of money laundering.

“Mahmoud Thiam engaged in a corrupt scheme to benefit himself at the expense of the people of Guinea,” said Acting Assistant Attorney General Blanco. “Corruption is a cancer on society that destabilizes institutions, inhibits fair and free competition, and imposes significant burdens on ordinary law-abiding people just trying to live their everyday lives.  Today’s sentence sends a strong message to corrupt individuals like Thiam that if they attempt to use the U.S. financial system to hide their bribe money they will be investigated, held accountable, and punished.”

“As a unanimous jury found at trial, Thiam abused his position as Guinea’s Minister of Mines to take millions in bribes from a Chinese conglomerate, and then launder that money through the American financial system,” said Acting U.S. Attorney Kim. “Enriching himself at the expense of one Africa’s poorest countries, Thiam used some of the Chinese bribe money to pay his children’s Manhattan private school tuition and to buy a $3.75 million estate in Dutchess County. Today’s sentence shows that if you send your crime proceeds to New York, whether from drug dealing, tax evasion or international bribery, you may very well find yourself at the front end of long federal prison term.”

"Thiam abused his official position, but the outcome shows that no one is above the law," said Assistant Director Stephen E. Richardson. "The FBI will not stand by while individuals attempt to live by their own rules and use the United States as a safe haven for their ill-gotten gains. I would like to applaud the dedicated investigators and prosecutors who have worked to hold those who have committed these crimes accountable for their illegal actions.”

“Today’s sentencing should remind the public that no matter who you are, or how much money you have, you’re not immune from prosecution.  The FBI will continue to use all resources at our disposal to uncover crimes of this nature and expose them for what they really are,” said Assistant Director in Charge Sweeney

According to evidence presented at trial, China Sonangol, CIF and their subsidiaries signed a series of agreements with Guinea that gave them lucrative mining rights in Guinea.  In exchange for bribes paid by executives of China Sonangol and CIF, Thiam used his position as Minister of Mines to influence the Guinean government’s decision to enter into those agreements while serving as Guinea’s Minister of Mines and Geology from 2009 to 2010.  The evidence further showed that Thiam participated in a scheme to launder the bribe payments from 2009 to 2011, during which time China Sonangol and CIF paid him $8.5 million through a bank account in Hong Kong.  Thiam then transferred approximately $3.9 million to bank accounts in the U.S. and used the money to pay for luxury goods and other expenses.  To conceal the bribe payments, Thiam falsely claimed to banks in Hong Kong and the U.S. that he was employed as a consultant and that the money was income from the sale of land that he earned before he was a minister. 

The trial evidence showed that the purpose of the bribes was to obtain substantial rights and interests in natural resources in Guinea, including the right to be the first and strategic shareholder with Guinea of a national mining company into which Guinea had to, among other things, transfer all of its stakes in various mining projects and future mining permits or concessions that the government decided to develop on its own.  China Sonangol and CIF, through their subsidiaries, also obtained exclusive and valuable rights to conduct business operations in a broad range of sectors of the Guinean economy, including mining. 

The FBI’s International Corruption Squads in New York City and Los Angeles investigated the case.  Trial Attorney Lorinda Laryea of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Elisha Kobre and Christopher DiMase of the Southern District of New York prosecuted the case.  Fraud Section Assistant Chief Tarek Helou and Trial Attorney Sarah Edwards, and Money Laundering and Asset Recovery Section Senior Trial Attorney Stephen Parker previously investigated the case.  The Criminal Division’s Office of International Affairs also provided substantial assistance in this matter. 

The Fraud Section is responsible for investigating and prosecuting all matters relating to the Foreign Corrupt Practices Act (“FCPA”).  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Raymond Donovan, the Special Agent in Charge of the Special Operations Division of the U.S. Drug Enforcement Administration (“DEA”), today announced that MUHAMMAD ASIF HAFEEZ, a/k/a “Sultan,” was provisionally arrested in London pursuant to charges filed in the Southern District of New York, which were unsealed today, based on HAFEEZ’s participation in drug-trafficking activities involving large, and in some instances multi-ton, quantities of heroin, methamphetamine, and methamphetamine precursor chemicals.  The United States plans to seek HAFEEZ’s extradition from the United Kingdom.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As alleged, Muhammad Asif Hafeez, a long-time, priority target of the DEA known as the ‘Sultan,’ trafficked in drugs on a massive and global scale, working with transnational criminal organizations to manufacture and distribute enormous quantities of heroin and methamphetamine around the world and into the United States.  From Kenya and Mozambique to London and New York, Hafeez’s alleged drug operation saw no borders or boundaries – until now.  Thanks to the unwavering commitment of the DEA and the prosecutors in this Office, the ‘Sultan’ has been caught and will have to face American narcotics charges.”

Special Agent in Charge Raymond Donovan said:  “The arrest of Muhammad Asif Hafeez is another win in the fight against global criminals and one of DEA’s priority targets.  He has been allegedly linked to a transnational criminal organization responsible for manufacturing and distributing ton quantities of narcotics.  Removing criminals like Hafeez benefits not just the citizens of London, but communities worldwide.”

According to the allegations contained in S5 and S7 Superseding Indictments filed in Manhattan federal court charging HAFEEZ and certain of his co-conspirators:

From 2013 through the date of his provisional arrest, HAFEEZ conspired to import methamphetamine into the United States.  In connection with this conspiracy, HAFEEZ and certain of his co-conspirators sought to establish a methamphetamine-production facility in Mozambique.  But HAFEEZ and his co-conspirators were forced to abandon their plan after law enforcement authorities seized approximately 18 tons of ephedrine from a factory in Solapur, India, including several tons of ephedrine that HAFEEZ and his co-conspirators planned to use as a precursor chemical to manufacture methamphetamine in Mozambique.

HAFEEZ is also charged with participating in a conspiracy with co-defendants Baktash Akasha Abdalla, Ibrahim Akasha Abdalla, Gulam Hussein, and Vijaygiri Anandgiri Goswami to import heroin into the United States.  Baktash Akasha Abdalla was the leader of an organized crime family in Kenya (the “Akasha Organization”), which was responsible for the production and distribution of ton quantities of narcotics within Kenya and throughout Africa and maintained a network used to distribute narcotics for importation into the United States.  In October 2014, Ibrahim Akasha Abdalla delivered a one-kilogram heroin sample, on behalf of HAFEEZ and the Akasha Organization, to confidential sources acting at the direction of the DEA in Nairobi.  In early November 2014, Ibrahim Akasha Abdalla delivered 98 additional kilograms of heroin to the sources. 

In November 2014, Baktash Akasha Abdalla, Ibrahim Akasha Abdalla, Hussein, and Goswami were provisionally arrested in Kenya.  They arrived in the District for prosecution based on the pending drug-trafficking charges in January 2017.

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HAFEEZ, 58, a Pakistani national residing in, among other places, London, is charged with conspiring to import heroin into the United States; conspiring to import methamphetamine into the United States; and aiding and abetting the distribution of heroin, knowing and intending that it would be imported into the United States.  Each charge carries a mandatory minimum sentence of 10 years in prison.  The potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Kim praised the outstanding efforts of the Special Operations Division of the DEA, Bilateral Investigations Unit.  Mr. Kim also thanked the United Kingdom’s National Crime Agency, the London Metropolitan Police Service – Extradition Team, the DEA London Country Office, the DEA Dubai Country Office, the DEA Nairobi Country Office, the DEA Pretoria Country Office, the DEA New Delhi Country Office, and the U.S. Department of Justice’s Office of International Affairs and London Attaché. 

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Emil J. Bove III, Patrick Egan, and Amanda L. Houle are in charge of the prosecution.

The charges contained in the Superseding Indictments charging HAFEEZ, Baktash Akasha Abdalla, Ibrahim Akasha Abdalla, Gulam Hussein, and Vijaygiri Anandgiri Goswami are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

“We are gratified by the Second Circuit’s affirmation of Mathew Martoma’s conviction.  The strength of our securities markets rests on their integrity and fairness.  And the successful prosecution of those who cheat by trading on illegally obtained inside information, as Martoma did to the tune of over $275 million, is critical to maintaining that integrity and fairness in our markets.”

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the arrests of MICHAEL LUCIANO and PHILIP LUCIANO, a father-son team that sold fentanyl and oxycodone over the “dark web,” including on AlphaBay.  Fentanyl is a synthetic opioid that is significantly stronger than heroin, and is a major contributor to overdose fatalities.  Both defendants surrendered this morning in Manhattan, and are expected be presented today before U.S. Magistrate Judge Henry B. Pitman.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “The defendants’ alleged scheme used the dark web – a place where some criminals think they can hide by trying to conceal their identity and transactions – to sell fentanyl and oxycodone, two highly addictive and potentially lethal opioids.  I want to thank our partners at HSI for bringing this father-son duo’s alleged misconduct out of the dark.”

HSI Special Agent-in-Charge Angel M. Melendez said:  “Fentanyl and other deadly opioids continue to plague far too many American communities because the unscrupulous dealers believe their surreptitious online activities escape the reach of law enforcement. The arrests of these two defendants prove that notion false.  HSI and our partners are proud to be at the forefront of combating illegal activities on the Darknet.”

USPIS Inspector-in-Charge Philip R. Bartlett said:  “Fentanyl is a societal scourge powerful enough to rob the lives of those who use in an instant.  Today's arrest of this father and son should serve as a strong reminder the anonymity of the 'Dark Web' can't always protect you from the long arm of the law.  Postal Inspectors and their law enforcement partners are committed to rooting out those who choose to deal in this deadly opioid.”

According to the allegations contained in the Complaint[1] charging the LUCIANOs:

From at least in or about February 2016 through July 2017, MICHAEL LUCIANO and PHILIP LUCIANO conspired to distribute, and possess with the intent to distribute, fentanyl and oxycodone.  They sold these narcotics over AlphaBay, using the vendor name “Zane61.”  Other AlphaBay users repeatedly provided positive feedback on fentanyl and oxycodone purchased from Zane61, praising Zane61 as follows in one example:  “Great stealth, fast shipping, legit product. Perfect 10/10.”  In June 2017, HSI officers (acting in an undercover capacity) purchased fentanyl from Zane61 on AlphaBay, which Zane61 shipped to an address in the Bronx.

In July 2017, HSI agents executed a search warrant at the LUCIANOs’ home in Staten Island (the “Staten Island Residence”), where Zane61 had received shipments of fentanyl purchased on AlphaBay.  While executing that warrant, agents spoke with MICHAEL LUCIANO who admitted, among other things, that:  he and his son PHILIP LUCIANO bought and sold fentanyl over the dark web; they sold drugs on AlphaBay under the name “Zane61”; PHILIP knew how to use the dark web, had set up their dark web account, had handled the technological aspects of their transactions, and had purchased bitcoins; PHILIP told MICHAEL about orders they received online, and then MICHAEL took packages (containing narcotics) to a local post office, where he handed them to a postal clerk; and they used a fake return address.  A cellphone and an iPad believed to be used by PHILIP LUCIANO were also recovered during the search.  These devices contained widespread evidence of drug-dealing, including text messages between the two defendants, text messages referencing their joint drug-dealing operation, photographs of fentanyl patches and oxycodone pills, and websites associated with bitcoins.

*                *                *

MICHAEL LUCIANO, 58, and PHILIP LUCIANO, 29, both of Staten Island, are each charged with one count of conspiracy to distribute and possess with the intent to distribute two controlled substances – fentanyl and oxycodone.  The fentanyl charge – conspiring to distribute and possess with the intent to distribute 40 grams and more of mixtures and substances containing a detectable amount of fentanyl – carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison.  The oxycodone charge – conspiring to distribute and possess with the intent to distribute a quantity of mixtures and substances containing a detectable amount of oxycodone – carries a maximum sentence of 20 years in prison.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Kim praised HSI for its outstanding work on the investigation.  Mr. Kim also thanked the U.S. Postal Inspection Service, U.S. Customs and Border Protection, and the New York City Police Department for their assistance in 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 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.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services’ Office of Inspector General for the New York Region (“HHS-OIG”), announced that the United States has settled a civil fraud case against US BIOSERVICES CORP. (“US BIO”) pursuant to which US BIO will pay a total of $13.4 million. The settlement resolves claims that US BIO violated the Anti-Kickback Statute and the False Claims Act by participating in a kickback scheme with Novartis PharmaceuticalS Corp. (“Novartis”) relating to the NOVARTIS drug Exjade. Specifically, the United States’ Complaint alleges that US BIO and NOVARTIS entered into a kickback arrangement pursuant to which US BIO was promised additional patient referrals and related benefits in return for refilling a higher percentage of Exjade than the two other pharmacies that also dispensed Exjade. The settlement will also resolve numerous state law civil fraud claims.

Yesterday, Chief U.S. District Judge Colleen McMahon approved a settlement stipulation to resolve the Government’s claims against US BIO. Under the settlement, US BIO is required to pay approximately $10.6 million to the United States and has made extensive admissions regarding its conduct. Further, as part of the settlement, US BIO will pay approximately $2.8 million to resolve the state law civil fraud claims. In prior lawsuits, the Government sued NOVARTIS and the two other pharmacies that participated in this same Exjade kickback scheme. The Government settled those lawsuits, pursuant to which NOVARTIS paid $390 million, the two other pharmacies paid $75 million, and NOVARTIS and the pharmacies made extensive admissions regarding their conduct.

Acting Manhattan U.S. Attorney Joon H. Kim said: “The integrity of the federal healthcare system requires that all providers, including pharmacies like US Bioservices, refrain from entering into kickback relationships. When healthcare providers accept kickbacks, they violate the law, subject what should be health-based decision-making to the influence of profit-seeking drug manufacturers, and thereby put their own financial interests ahead of the interests of their patients. This Office will continue to use its law enforcement tools to pursue healthcare providers who accept kickbacks or otherwise put their profits ahead of patient safety.”

HHS-OIG Special Agent in Charge Scott J. Lampert said: “The conduct displayed by US Bioservices compromised patient care and undermined the integrity of our nation’s health care programs. This settlement should serve as a warning to all providers that choose to let financial inducements cloud their medical judgment.”

As alleged in the Government’s Complaint, US BIO participated in a kickback scheme with NOVARTIS that violated the federal Anti-Kickback Statute and the False Claims Act. In connection with this scheme, US BIO submitted claims for thousands of Exjade prescriptions to Medicare and Medicaid, causing those programs to pay out millions of dollars for false claims tainted by kickbacks. As part of the settlement, US BIO admitted as follows:

• In December 2005, US BIO signed a contract with Novartis relating to the distribution of Exjade. Under that contract, Novartis agreed that US BIO would be one of three specialty pharmacies (the “EPASS pharmacies”) permitted to dispense Exjade as part of Novartis’s EPASS network. US BIO, in turn, agreed to provide specialty pharmacy services to Exjade patients, including having clinical staff available to speak with patients and to answer clinical questions or concerns about Exjade.

   

• In or about June 2007, Novartis began issuing monthly “Exjade Scorecards” to US BIO and the other two EPASS pharmacies that measured, among other things, the pharmacies’ “adherence” scores. The “adherence” score in the Exjade Scorecards showed how long Exjade patients continued to order refills, without excluding patients who stopped ordering refills due to side effects or patients who were directed to stop therapy by their physicians. Starting in or about July 2007, Novartis had discussions with US BIO regarding how US BIO could improve its “adherence” scores in the Exjade Scorecards.

   

• In late 2007 and early 2008, and to improve its “adherence” score, US BIO trained its nurses to call Exjade patients and tell patients that not treating iron overload, for which Exjade is prescribed, could have severe consequences like organ failure, and that while Exjade had certain common side effects like diarrhea, such side effects typically went away with time. The nurses at US BIO did not use written scripts for the calls with Exjade patients.

• In October 2008, Novartis implemented a new plan for allocating Exjade patient referrals among US BIO and the other EPASS pharmacies. Under that plan, Novartis would allocate 60% of all undesignated patient referrals to the EPASS pharmacy with the top “adherence” scores in the Exjade Scorecards and allocate 20% of the undesignated patient referrals to each of the other two EPASS pharmacies.

* * *

Mr. Kim thanked HHS-OIG and the Medicaid Fraud Control Units for New York, Washington, and California for their investigative efforts and assistance with this case.

The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Li Yu and Mónica P. Folch are in charge of the case.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that there is insufficient evidence to pursue federal criminal charges in connection with the fatal shooting of Mohamed Bah.  Mr. Bah was killed during an encounter with police officers from the New York City Police Department (“NYPD”) on September 25, 2012.  The Acting U.S. Attorney met today with Mr. Bah’s family and their counsel to inform them of this decision.

The New York County District Attorney’s Office investigated Mr. Bah’s fatal shooting, and on November 26, 2013, a Manhattan grand jury voted not to bring criminal charges against any officer involved in the shooting of Mr. Bah, finding that the use of deadly force was not unlawful.  Nevertheless, after following the progress of the civil litigation relating to Mr. Bah’s death, receiving documents from Mr. Bah’s family’s counsel in October 2015, and the unsealing of a ballistics report, this Office began to conduct an independent review into the death to determine whether a federal civil rights crime could be proven.

As Mr. Kim informed Mr. Bah’s family today, the only determination the Office made was whether a federal crime could be proven under the standard applicable to criminal cases, which is proof beyond a reasonable doubt.  The Office did not reach any conclusions on any other issue, nor did it evaluate the officers’ actions under any other standard.  The Office expresses no view regarding any claims made against any party under the standard applicable to civil cases, which is proof by a preponderance of the evidence. 

After conducting a review of the evidence, including physical and documentary evidence, as well as grand jury and civil deposition testimony, this Office has determined that there is insufficient evidence to meet the high burden of proof required for a federal criminal civil rights prosecution.  To prove a violation of the federal criminal civil rights statute, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right, meaning that the officer acted with the deliberate and specific intent to do something the law forbids.  This is the highest standard of intent imposed by law, and is different from and higher than the intent standard under the relevant state statutes.  Neither accident, mistake, fear, negligence, nor bad judgment is sufficient to establish a federal criminal civil rights violation. 

In reaching this determination, the Office considered, among other things, testimony from the only eye witnesses to the events (law enforcement officers) that Mr. Bah was holding a knife and lunged at the officers, the fact that vests worn by officers at the scene have slashes consistent with penetration by a knife, and the lack of video evidence of the incident.  The Office also considered the testimony of officers present that non-lethal force, including Tasers, was used before lethal force was deployed, and that shots were fired virtually simultaneously only after non-lethal force was used.  Finally, the Office considered the autopsy report prepared the day after the shooting and conducted an independent ballistics analysis.  After reviewing such evidence, the Office made the determination that it could not prove beyond a reasonable doubt that any officer willfully violated Mr. Bah’s constitutional rights.

Accordingly, this Office’s investigation into Mr. Bah’s death has been closed.

Mr. Kim expressed his deep sympathy to the family of Mr. Bah for their tragic loss.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, James J. Hunt, the Special Agent in Charge of the Drug Enforcement Administration (“DEA”), James P. O’Neill, the Police Commissioner of the City of New York (“NYPD”), and George P. Beach II, the Superintendent of the New York State Police (“NYSP”), today announced the unsealing of an Indictment charging 14 members of a drug trafficking organization (“DTO”) that sold large amounts of heroin, cocaine, and crack cocaine in and around the Bronx, New York.

A total of 11 defendants were taken into custody today; three remain at large.  During the arrests and execution of various search warrants earlier today, law enforcement officers recovered a significant amount of currency, as well as firearms and narcotics.  The 11 defendants who were arrested will be presented and arraigned before U.S. Magistrate Judge Henry Pitman later today.  The case is assigned to U.S. District Judge Kimba M. Wood.  An initial conference is scheduled for September 12, 2017.

Acting U.S. Attorney Joon H. Kim said:  “Today, we charge 14 members of a drug trafficking organization allegedly responsible for trafficking large amounts of heroin, cocaine, and crack cocaine in the Bronx.  As alleged, this case demonstrates the close connection between drug dealing and gun crimes.  We remain committed, along with our partners at the DEA, NYPD, and the New York State Police, to ridding New York’s neighborhoods of drug trafficking.”

Special Agent in Charge James J. Hunt said:  “The alleged crimes committed by this organization show the inescapable connection between drug trafficking and violence. This organization allegedly ran rampant throughout New York City, distributing kilogram quantities of cocaine and heroin. Allegedly supplying drugs to other trafficking organizations throughout the Northeast, they made a profit by feeding on others’ drug addiction.”

State Police Superintendent George P. Beach II said:  “I am proud of the dedicated efforts of our members and law enforcement partners which resulted in the indictments of these individuals, seizures of drugs and firearms, and the end of this organization’s alleged operations.  New York State will not tolerate the sale of these drugs, or the violent crimes that are associated with narcotics distribution.  This sends a strong message of our dedication to clearing our communities of these dangerous substances.”

According to the allegations contained in the Indictment[1] and other documents in the public record, and statements made in court:

Between August 2016 and August 2017, GABRIEL GUILLEN, a/k/a “Toti,” EDWARD JIMENEZ, a/k/a “Buzzy,” ZORAIDA RAMIREZ, WILSON GUILLEN, JOEL TAPIA, a/k/a “Emelio Vasquez,” MATTHEW VASQUEZ, a/k/a “Cabeza,” YEISON SALDANA, a/k/a “Jay,” JASON LLANES, a/k/a “Jay Murder,” GABRIEL CARRION, a/k/a “Gaby,” MOISES SUERO, RICHARD JOSE, a/k/a “Kiki,” JHOAN PICHARDO, a/k/a “Flaco,” RAFAEL RODRIGUEZ, a/k/a “Rafi, and CARLOS PEREZ, a/k/a “Los,” conspired to distribute and possess with intent to distribute one kilogram and more of mixtures and substances containing a detectable amount of heroin, five kilograms and more of mixtures and substances containing a detectable amount of cocaine, and 280 grams and more of mixtures and substances containing a detectable amount of crack cocaine in the Bronx and elsewhere.  The defendants also used and possessed, or aided and abetted each other in using and possessing, firearms in furtherance of their drug trafficking crimes.

    *              *             *

GABRIEL GUILLEN, 33, JIMENEZ, 27, RAMIREZ, 49, WILSON GUILLEN, 35, TAPIA, 40, VASQUEZ, 25, SALDANA, 27, LLANES, 30, CARRION, 24, SUERO, 33, JOSE, 38, PICHARDO, 27, RODRIGUEZ, 47, and PEREZ, 25, are each charged in one count of distributing and possessing with intent to distribute one kilogram and more of heroin, five kilograms and more of cocaine, and 280 grams and more of crack cocaine, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison; and one count relating to the use and possession of firearms during and in relation to their drug trafficking crimes, which carries a maximum sentence of life in prison and a mandatory minimum 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 sentencings of the defendants will be determined by a judge

Mr. Kim praised the investigative work of the DEA, the NYPD, and the State Police, and thanked the United States Marshals Service, U.S. Probation, and the NYPD Narcotics Bureau Bronx for their assistance.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Jessica Fender and Margaret Graham are in charge of the prosecution.

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

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

There will be a press conference today in White Plains to announce federal criminal charges against 31 members and associates of two rival street gangs in Poughkeepsie. The charges include the murders of Caval Haylett in March 2016 and Daquell LeBlanc in December 2012, as well as racketeering, racketeering conspiracy, attempted murder, narcotics, and firearms offenses. Relevant charging documents are attached.

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 Field Office of the Federal Bureau of Investigation

William V. Grady, Dutchess County District Attorney

Thomas Pape, Chief of the City of Poughkeepsie Police Department

WHAT: Press Conference

WHEN: Thursday, August 17, 2017 at 12:00 p.m.

WHERE: U.S. Attorney’s Office, Southern District of New York, White Plains Division

300 Quarropas Street

Third Floor Library

White Plains, NY

CONTACT: James Margolin, Dawn Dearden, Nicholas Biase

(212) 637-2600

NOTE: Please silence all cell phones, PDAs, and pagers before start of press conference.

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 New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that MARK CASTAGNETTA was sentenced to 218 months in prison and a lifetime term of supervised release for child sex trafficking.  CASTAGNETTA pled guilty on November 21, 2016, before U.S. District Judge Cathy Seibel, who imposed today’s sentence.  In imposing sentence, Judge Seibel characterized the defendant’s misconduct as some of the most serious conduct she had encountered during her time on the bench.

Acting U.S. Attorney Joon H. Kim said:  “This defendant callously robbed two children of their innocence, inducing them to travel to his home in New Paltz, New York, where he not only sexually abused them, but forced them to have sex with other men in exchange for drugs and money.  Today, for his reprehensible crimes, he has been sentenced to over 18 years in federal prison.”

From 2014 through July 2016, CASTAGNETTA engaged in trafficking of minors by contacting two minor victims through an adult fetish website and enticing them to travel to his residence to engage in a sexual relationship in which he played the role of “slave master” and the victim played the role of “slave.”  Once there, the defendant engaged in abusive sexual conduct with the victims, supplied the victims with illegal drugs, and induced them to engage in sexual conduct with other individuals in exchange for drugs and money.  The defendant also produced an image containing child pornography of one of the victims. 

*          *         *

CASTAGNETTA, age 52, pled guilty to one count of sex trafficking of children.

Mr. Kim praised the investigative work of the FBI’s Westchester County Safe Streets Task Force and the FBI’s Violent Crimes Against Children Squad and thanked the New York City Police Department, the Manhattan District Attorney’s Office, the Town of New Paltz Police Department, the Westchester County Human Trafficking Task Force, and the Westchester Department of Social Services for their valuable cooperation in this matter.     

This case is being handled by the Office’s White Plains Division.  Assistant United States Attorney Jacqueline Kelly is in charge of the prosecution.

Joon H. Kim, Acting United States Attorney for the Southern District of New York, announced today that RODINY CALYPSO, a New York City Correction Officer, was convicted yesterday of filing a false report in connection with the assault of a handcuffed inmate at Rikers Island.  The jury acquitted the defendant on one count of violating the inmate’s civil rights and one count of obstruction of justice.  The jury returned the verdict after a one-week trial before the Honorable Valerie E. Caproni.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “Prisoners at Rikers Island have the same constitutional rights we all enjoy, and corrections officers do not have the right to abuse inmates in their custody and care.  Rodiny Calypso’s lies about his use of force undermined the investigation into his brutal beating of a handcuffed, defenseless inmate.  We will continue to aggressively protect the rights of prisoners and the integrity of investigations into uses of force to ensure that justice reaches everywhere, including isolated corners of Rikers Island.”

According to the Complaint, Indictment, 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”).

CALYPSO rear-cuffed Inmate-1 for removal, and then opened the door to the shower stall.  Within seconds, CALYPSO 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 began to lose his footing at this point, and clung to Inmate-1’s side.  Officer-1 then arrived outside the stall.  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 across from 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, when a restrained inmate is still dangerous to himself and others, force is to be used as a last resort.  The directives also dictate that any use of force must be reported – on a “Use of Force” report that is filled out truthfully and promptly.

A full day after the assault, in violation of the directives, CALYPSO filled out a “Use of Force” report on which he was supposed to report truthfully the circumstances of that assault.  In this report, CALYPSO attempted to justify his conduct by lying about how he and Inmate-1 had acted.  He mischaracterized and misstated portions of the assault, omitting the close-fisted punches he delivered to Inmate-1 while holding him in a headlock and claiming that he had hit  Inmate-1 only in the “upper torso” area.           

*                      *                      *

RODINY CALYPSO, 38, of Springfield Gardens, New York, was convicted of one count of filing a false form.   CALYPSO faces a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  CALYPSO is scheduled to be sentenced on November 30, 2017.

Mr. Kim praised the investigative work of the Federal Bureau of Investigation.  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, which remains ongoing.

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.   

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Catherine R. McCabe, Acting Regional Administrator for the U.S. Environmental Protection Agency (“EPA”), Region 2, announced today that the United States entered into a Consent Decree settling a civil lawsuit against Accolade Construction Group Inc. (“Accolade”) for violations of the Toxic Substances Control Act (“TSCA”) and EPA’s Renovation, Repair, and Painting Rule (“RRP Rule”).  The provisions of TSCA and the RRP Rule that Accolade violated are designed to protect public health by minimizing the risk of lead exposure during renovations of residential buildings.

Acting U.S. Attorney Joon H. Kim stated:  “Accolade repeatedly ignored rules designed to protect children and others from lead poisoning.  By requiring Accolade to turn over profits it made by evading these requirements, this Consent Decree ensures that Accolade will not benefit from its misdeeds.  And because Accolade’s future work will be subject to court oversight, the public health will be protected.”

EPA Acting Regional Administrator McCabe stated:  “Lead paint is very dangerous when it is being stripped or sanded during renovations. By not complying with EPA rules designed to ensure that the paint dust is properly handled by properly trained workers, Accolade put people, including its own workers, at risk. This Consent Decree protects the public by requiring company officials to get training to ensure that the company follows the rules in all future renovations.”

The Consent Decree, which is subject to public comment and approval by the court, will resolve a lawsuit filed in Manhattan federal court in 2015, which alleged that Accolade repeatedly violated TSCA and the RRP Rule in the course of renovating six different Manhattan apartment buildings.  The lawsuit also alleged that Accolade violated TSCA and the RRP Rule by failing to provide EPA with records necessary to enable EPA to monitor Accolade’s compliance.  Accolade committed these violations despite a prior administrative settlement with the EPA for violations of the RRP Rule.

*                *                *

In the Consent Decree entered today, Accolade admits, acknowledges, and accepts responsibility for the fact that it “violated the RRP Rule and, consequently, TSCA” as a result of the following conduct at each of the six buildings at issue: 

• Failing to have a certified renovator direct the renovations and to ensure that all other persons performing the renovations received training on lead-safe work practices;

• Failing to post warning signs defining the work areas and cautioning occupants and other persons to keep out;

• Failing to provide the owner of the units being renovated with an EPA pamphlet on lead hazards, The Lead-Safe Certified Guide to Renovate Right: Important Lead Hazard Information for Families, Child Care Providers, and Schools;

• Failing to contain the renovation work areas to minimize the risk of lead exposure;

• Failing to clean the work areas after the renovations were completed to ensure that no dust, debris, or residue remained in those areas; and

• Failing to make available to EPA the records necessary to demonstrate Accolade’s compliance with the RRP Rule.

Pursuant to the Consent Decree, Accolade will disgorge $58,000 in profits obtained from the conduct alleged in the lawsuit.  Further, the Consent Decree requires Accolade’s principal to receive training before Accolade conducts future RRP Rule-covered work and requires Accolade to comply with safe work practices and other RRP Rule requirements in the future.  Failure to comply with the Consent Decree will give rise to significant penalties. 

To provide public notice and to afford members of the public the opportunity to comment on the Consent Decree, the Consent Decree will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval.

Acting U.S. Attorney Kim thanked the attorneys and enforcement staff at EPA Region 2 for their critical work in this matter.

This case is being handled by the Office’s Environmental Protection Unit.  Assistant U.S. Attorneys Mónica P. Folch and Sharanya Mohan are in charge of the case.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that EVALDAS RIMASAUSKAS was extradited from Lithuania.  In March 2017, RIMASAUSKAS was arrested in Lithuania on the basis of a provisional arrest warrant for orchestrating a fraudulent business email compromise scheme that induced two U.S.-based Internet companies to wire more than $100 million to bank accounts controlled by RIMASAUSKAS.  RIMASAUSKAS arrived in the Southern District of New York last night, and will be presented today in Manhattan federal court before the Honorable Barbara Moses, U.S. Magistrate Judge.    

*                *                *

RIMASAUSKAS, 48, of Vilnius, Lithuania, is charged in an Indictment with one count of wire fraud and two counts of money laundering, each of which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison. 

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

Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation, and thanked the Prosecutor General’s Office of the Republic of Lithuania, the Lithuanian Criminal Police Bureau, the Vilnius District Prosecutor’s Office and the Economic Crime Investigation Board of Vilnius County Police Headquarters, the International Assistance Group at the Department of Justice, Canada, and the Department of Justice’s Office of International Affairs for their assistance in this matter.

This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Eun Young Choi 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.

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 Division of the Federal Bureau of Investigation (“FBI”), William V. Grady, Dutchess County District Attorney, Thomas Pape, Chief of Police for the City of Poughkeepsie, Adrian Anderson, Dutchess County Sheriff, and George P. Beach, the Superintendent of the New York State Police (“NYSP”), announced today the unsealing of two indictments charging 31 members and associates of two rival street gangs operating in Poughkeepsie, New York: Uptown and Downtown.  The gangs are charged in two separate Indictments – United States v. Douglas Owens et al., 17 Cr. 506 (NSR) (the “Uptown Indictment”), and United States v. Ronald Johnson et al., 17 Cr. 505 (the “Downtown Indictment”) – with murders, attempted murders, racketeering conspiracy, narcotics conspiracy, and firearms offenses.

Acting U.S. Attorney Joon H. Kim said:  “As alleged in the indictments unsealed today, two violent Poughkeepsie street gangs have been at war with each other for the last several years.  Their war has left in its wake a bloody trail of tragedy – alleged murders, attempted murders, shootings, and rampant drug dealing.  One of the innocent victims of this alleged gang war was Caval Haylett, an 18-year-old basketball star whose bright future and promise was extinguished on March 9, 2016, in a hail of senseless gunfire.  With today’s charges and arrests, we seek to dismantle these gangs from the top down, and together with our federal and local law enforcement partners, we seek to stem the tide of gun violence and drug dealing in Poughkeepsie.  When gangs flourish, neighborhoods suffer, parents grieve, and children die; it is as simple as that.  And we will not sit by and let that happen.”    

FBI Assistant Director William F. Sweeney Jr. said:  “Two young lives were lost in the alleged ongoing criminal activity of these street gangs. We will not sit idly in the midst of violence, as shown by the diligent and dedicated work of our FBI Hudson Valley Safe Streets Task Force and our law enforcement partners. As gang rivalry continues to stir strife in our community, we won't stop or slow down in our pursuit to take these members off the streets and keep our residents safe.”

District Attorney William V. Grady said:  “There is no question that gang activity in our community has resulted in drug dealing, shootings, violent crimes and homicides, and this cannot be tolerated.  All possible efforts must and are being made to insure that our community is a safe place to live and work.  These indictments today send a clear message that law enforcement agencies at all levels will join forces to insure that these violent offenders are held accountable and removed from our streets.”

Chief of Police Thomas Pape said:  “On December 23, 2012, a senseless act of violence took the life of a young resident of Poughkeepsie.  This act was the beginning of many more shootings and homicides that plagued our City and took the lives of too many young men. Today, through the cooperation of federal, state and local law enforcement, the persons responsible have been taken into custody and will have to answer for their actions.  I want to personally thank the United States Attorney, Mr. Kim, his office, and all of the law enforcement agencies that through a collaborative effort, removed these violent individuals from our community.”

Dutchess County Sheriff Adrian Anderson said:  “Today was an enormous victory for law enforcement by the taking of these individuals off of our streets. These charges are evidence of the strong commitment that we share with other law enforcement agencies, both local and federal, and should serve as a great example of what can be achieved when everyone works together. I commend all of those involved for their outstanding efforts to remove dangerous individuals from our communities and prosecute them to the fullest extent.” 

NYSP Superintendent George P. Beach said:  “This investigation is another example of our law enforcement partners working collaboratively to put an end to the dangerous gang activity that brings violence and crime into our neighborhoods.  I commend all of our law enforcement partners for their hard work in dismantling these rival gangs and for their commitment to making our neighborhoods safer.  We have no tolerance for those who bring drugs and the threat of violence to our communities.”

According to the Indictments[1] unsealed today in White Plains and Manhattan federal court and other documents in the public record:

The Indictments arise from a joint investigation by the FBI’s Hudson Valley Safe Streets Task Force, the City of Poughkeepsie Police Department, the Dutchess County District Attorney’s Office, and the Dutchess County Sheriff’s Office into the gang war between Uptown and Downtown, which has led to multiple fatal and non-fatal shootings between 2012 and the present in the City of Poughkeepsie.

Uptown is a criminal organization whose members referred to themselves by, and were known by, several different names.  Those names include the “Spready Gang,” the “400 Savages,” the “Boogotti Boys,” and the “Mob Stars.”  Uptown gang members referred to themselves by different combinations of these names, all of which referred to the same criminal enterprise: the Uptown street gang.  Uptown is based within the eastern portion of Poughkeepsie, from east of Hamilton Street to the city line and, more specifically, within the Hudson Gardens housing development (commonly referred to as the “Bricks”).  Uptown gang members and associates control the narcotics trade within the Bricks, distributing primarily heroin, crack cocaine, and marijuana.  Uptown gang members stored shared guns in various locations known to gang members to protect the narcotics business, to protect each other from rival gangs, and to strike against rival gangs.  The case of United States v. Douglas Owens et al. charges 12 members and associates of Uptown, including its leaders: DOUGLAS OWENS, a/k/a “Born Truth,” and JIHAD WILLIAMS, a/k/a “Goodie.”

Downtown, like Uptown, is the name of a large-scale criminal organization that went by many different names.  Those names include the “420 Boys,” “L-Block,” “Most Hated,” “Hamo Gang,” the “C-Eazy Gang,” and the “Bully Hard Hunna” faction of the Bloods street gang.  Despite the existence of several different names, each one referred to the same criminal enterprise: the Downtown street gang.  Downtown’s base of operations was located in the western portion of Poughkeepsie, from west of Hamilton Street to the Hudson River and, particularly, within the Martin Luther King and Rip Van Winkle housing developments (commonly referred to as the “Ville” and “Rip,” respectively).  Downtown gang members and associates controlled the narcotics trade within the Ville, Rip, and the surrounding area, also distributing primarily resale amounts of heroin, crack cocaine, and marijuana.  Downtown gang members also stored their shared firearms in different locations known to members and associates.  This allowed Downtown gang members to arm themselves quickly when confronted by rivals and to protect each other and their narcotics business.  The case of United States v. Ronald Johnson et al. charges 19 members and associates of Downtown, including its leader: RONALD JOHNSON, a/k/a “Top Gun.”

In addition to countless non-fatal acts of violence against rival gang members and innocent victims, the rivalry between Uptown and Downtown has led to the following two murders:

• The murder of Downtown gang member Daquell LeBlanc, a/k/a “Hamo,” who was killed by a single gunshot wound to the chest at the age of 16 in the vicinity of Main Street, between Academy and North Hamilton Streets, on or about December 23, 2012.

• The murder of Caval Haylett, 18, an innocent bystander and local high school basketball star, who was killed by a single gunshot wound to the head while attending a barbeque in the vicinity of Winnikee Avenue and Harrison Street, on or about March 9, 2016.

*                      *                     *

In a coordinated operation, 11 defendants were arrested in and around Dutchess County yesterday and early this morning, one defendant was arrested in North Carolina, and one defendant was arrested in Florida.  The Uptown defendants will be presented later this afternoon in Manhattan federal court, while the Downtown defendants will be presented later this afternoon in White Plains federal court.  Eighteen defendants were in custody on state charges and will be transferred to federal custody in the next day.  Charts identifying each defendant, the charges, and the maximum penalties are below.

Mr. Kim praised the outstanding investigative work of the FBI’s Hudson Valley Safe Streets Task Force, the City of Poughkeepsie Police Department, the Dutchess County Sheriff’s Office, the Dutchess County Drug Task Force, as well as the United States Marshals’ Service, the New York State Police, and the New York State Department of Corrections and Community Supervision for their assistance in today’s arrests.  Mr. Kim also thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives for their assistance in the investigation.

The prosecution is being handled by the Office’s White Plains Division.  Assistant United States Attorneys Christopher J. Clore and Maurene Comey are in charge of the prosecution.

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

United States v. Douglas Owens et al.

CHARGE

DEFENDANTS

MAXIMUM PENALTIES

Count One

Racketeering Conspiracy

DOUGLAS OWENS

  a/k/a “Born Truth”

JIHAD WILLIAMS

  a/k/a “Goodie”

NICHOLAS HARRIS

  a/k/a “Bados”

DIMETRI MOSELEY

  a/k/a “Pancho”

JAQUEZ HILL

  a/k/a “Quezzy”

  a/k/a “Quez”

MARKEL GREEN

  a/k/a “Booge”

RAHEIM MILLER

  a/k/a “Bigs”

  a/k/a “Bigs Miller”

  a/k/a “Trippy”

CHRISTIAN BLADES

  a/k/a “C Blades”

  a/k/a “JT”

ASHANTI BUNN

  a/k/a “Shan D”

RAYSHAWN CASANOVA

  a/k/a “Cass”

  a/k/a “Uber Jack”

TREQUON DANCY

  a/k/a “Trigga Tre”

  a/k/a “Tre Pound”

RASHMI RUPARELIA

  a/k/a “Baby Rash”

20 years in prison

Count Two

Murder in Aid of Racketeering

MARKEL GREEN

RAHEIM MILLER

Life in prison

Count Three

Murder in Aid of Racketeering

NICHOLAS HARRIS

DIMETRI MOSELEY

JAHQUEZ HILL

Life or the death penalty with a mandatory minimum of life

Count Four

Firearms Offense

RASHMI RUPARELIA

JIHAD WILLIAMS

Life in prison with a mandatory minimum of 5 years’ in prison

Count Five

Firearms Offense

CHRISTIAN BLADES

ASHANTI BUNN

RAYSHAWN CASANOVA

Life in prison with a mandatory minimum of 10 years’ in prison

Count Six

Firearms Offense

MARKEL GREEN

RAHEIM MILLER

Life in prison with a mandatory minimum of 10 years’ in prison

Count Seven

Firearms Offense

NICHOLAS HARRIS

DIMETRI MOSELEY

JAHQUEZ HILL

Life in prison with a mandatory minimum of 10 years’ in prison

DEFENDANT

AGE

DOUGLAS OWENS

34

JIHAD WILLIAMS

26

NICHOLAS HARRIS

25

DIMETRI MOSELEY

23

JAHQUEZ HILL

19

MARKEL GREEN

21

RAHEIM MILLER

21

CHRISTIAN BLADES

24

ASHANTI BUNN

30

RAYSHAWN CASANOVA

21

TREQUON DANCY

22

RASHMI RUPARELIA

41

United States v. Ronald Johnson et al.

CHARGE

DEFENDANTS

MAXIMUM PENALTIES

Count One

Racketeering Conspiracy

RONALD JOHNSON

  a/k/a “Top Gun”

MARKUS ANDERSON

  a/k/a “Sparks”

SAVON BAGBY

  a/k/a “Baggs”

NATQUAN CATTS

  a/k/a “Nate”

  a/k/a “Scoop”

JAHQUEZ COLEMAN

  a/k/a “Quez the Rapper”

  a/k/a “Quez”

WALTER COLEMAN

  a/k/a “BB”

CHEVEZ DERELLO

  a/k/a “Vezy”

LEONARD DERELLO

  a/k/a “Lenny Boy”

TYRECK DOUGLAS

  a/k/a “Little Ty”

ERVING FERZAN

  a/k/a “Erv”

RAKEE JOHNSON

  a/k/a “Spaz”

  a/k/a “Zetho”

COREY LATIMER

  a/k/a “Fonzi”

ANTOINE MCKINNON

  a/k/a “Twon”

  a/k/a “Cuzzi”

WAYNE MORGAN

  a/k/a “Chum Chum”

GORDON RIDDICK

  a/k/a “Stacky G’s”

  a/k/a “Stacks”

KEENAN WATTS

  a/k/a “Milleone”

  a/k/a “Mills”

20 years in prison

Count Two

Attempted Murder in Aid of Racketeering

TYRECK DOUGLAS

GORDON RIDDICK

MARKUS ANDERSON

10 years in prison

Count Three

Attempted Murder in Aid of Racketeering

TYRECK DOUGLAS

10 years in prison

Count Four

Narcotics Conspiracy

CARLOS OCASIO

  a/k/a “Pimp”

  a/k/a “Leak”

KWAMENE WILLIAMS

  a/k/a “Kwa”

  a/k/a “Rich Quality”

GLORIOUS LANDUM

  a/k/a “Gus”

RAKEE JOHNSON

  a/k/a “Spaz”

  a/k/a “Zetho”

Life in prison with a mandatory minimum of 10 years’ in prison

Count Five

Firearms Offense

MARKUS ANDERSON

JAHQUEZ COLEMAN

CHEVEZ DERELLO

LEONARD DERELLO

RAKEE JOHNSON

COREY LATIMER

ANTOINNE MCKINNON

GORDON RIDDICK

Life in prison with a mandatory minimum of 5 years’ in prison

Count Six

Firearms Offense

TYRECK DOUGLAS

Life in prison with a mandatory minimum of 10 years’ in prison

Count Seven

Firearms Offense

GLORIOUS LANDRUM

Life in prison with a mandatory minimum of 5 years’ in prison

DEFENDANT

AGE

RONALD JOHNSON

33

MARKUS SPARKS

24

SAVON BAGBY

19

NATQUAN CATTS

22

JAHQUEZ COLEMAN

22

WALTER COLEMAN

43

CHEVEZ DERELLO

25

LEONARD DERELLO

22

TYRECK DOUGLAS

23

ERVING FERZAN

27

RAKEE JOHNSON

25

GLORIOUS LANDRUM

27

COREY LATIMER

23

ANTOINNE MCKINNON

43

WAYNE MORGAN

21

CARLOS OCASIO

36

GORDON RIDDICK

23

KEENAN WATTS

23

KWAMENE WILLIAMS

27

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint in Manhattan federal court charging correction officers SAQUAN WILLIAMS a/k/a “Will,” JABAR ALLEN, and SHAWN PETTIGREW with taking bribes in exchange for smuggling contraband into a private detention facility in Queens, New York, which houses federal inmates pursuant to a contract with the United States Marshals Service (the “Jail”).  PETTIGREW was arrested Tuesday night.  WILLIAMS and ALLEN were arrested this morning.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As alleged, these correction officers abused the public power entrusted to them by taking bribes to smuggle contraband, including drugs, into a jail that housed federal inmates.  Corruption of those who work within our criminal justice system, including officers at a private detention facility, cannot be tolerated and must be rooted out, as it undermines the public faith in the system and betrays the trust of all fellow officers who dedicate themselves to the proper administration of justice.”

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

WILLIAMS, ALLEN, and PETTIGREW are all correction officers at the Jail.  As alleged, WILLIAMS, ALLEN, and PETTIGREW took bribes from numerous inmates at the Jail in exchange for smuggling contraband, including smokeable synthetic cannabinoids (“K2”), marijuana, alcohol, tobacco, and other items into the Jail for the inmates.  The bribes were funneled to WILLIAMS, ALLEN, and PETTIGREW by non-incarcerated friends and relatives of the inmates either in cash or by wire transfer.  For example, on at least three occasions in 2017, WILLIAMS received bribes from an inmate (“Inmate-1”) in exchange for smuggling K2, marijuana, and cigarettes into the Jail.  On at least two occasions in 2016, ALLEN also took bribes from Inmate-1 in exchange for smuggling marijuana and cigarettes into the Jail.  On approximately 10 occasions in 2017, PETTIGREW received bribes from an inmate (“Inmate-2”) in exchange for smuggling K2, marijuana, cigarettes, and cellular telephones into the Jail.  ALLEN also took a bribe from Inmate-2 in exchange for smuggling, among other things, K2 into the Jail.  When Inmate-2 later approached WILLIAMS about bribing him in exchange for contraband, WILLIAMS told Inmate-2 that WILLIAMS and ALLEN were on the “same team.”  On Thanksgiving Day 2016, WILLIAMS, after losing a bet with another inmate, agreed to smuggle marijuana, cigarettes, and alcohol into the Jail.  WILLIAMS met with an inmate’s non-incarcerated friend near the Jail during one of WILLIAMS’s breaks from work to pick up the contraband, which he then smuggled into the Jail approximately one week later.

*                      *                      *

SAQUAN WILLIAMS, 34, of Queens, New York, JABAR ALLEN, 26, of Queens, New York, and SHAWN PETTIGREW, 31, of Queens, New York, have each been charged in the Complaint with one count of conspiracy to commit bribery and to introduce contraband into prison, which carries a maximum prison term of five years, and one count of bribery, which carries a maximum prison term of 15 years.

Mr. Kim thanks the Department of Justice’s Office of the Inspector General, for their assistance in the investigation.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Thomas McKay and Max Nicholas are in charge of the prosecution.   

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

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 New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of MICHAEL SIVA, ROBERTO RODRIGUEZ, RODOLFO SABLON, a/k/a “Rudy,” JHONATAN ZOQUIER, and JEFFREY ROGIERS for their roles in three overlapping insider trading schemes based on material, nonpublic information (the “Inside Information”) misappropriated from an investment bank (the “Investment Bank”) by a corporate insider.  These schemes resulted in more than $5 million in illicit profits between August 2014 and April 2017. 

In a 54-count Indictment unsealed today, SIVA, RODRIGUEZ, SABLON, ZOQUIER, and ROGIERS were each charged with conspiracy, wire fraud, and multiple counts of securities fraud and fraud in connection with a tender offer.  In addition, Mr. Kim announced the unsealing of guilty pleas on August 9, 2017, by DANIEL RIVAS and JAMES MOODHE, who admitted to their own involvement in the fraudulent schemes and are cooperating with the Government in this investigation.  RIVAS, the corporate insider who exploited his role as a technology consultant at the Investment Bank to misappropriate Inside Information, pled guilty before the Honorable Valerie E. Caproni.  MOODHE, who received Inside Information from RIVAS, pled guilty before Magistrate Judge Ronald Ellis.  Both RIVAS and MOODHE pled guilty to conspiracy, securities fraud, fraud in connection with a tender offer, wire fraud, and making false statements to law enforcement officials. 

SIVA was arrested this morning in West Orange, New Jersey.  ZOQUIER was arrested this morning in Englewood, New Jersey.  SIVA and ZOQUIER are expected to be presented this afternoon in federal court in Manhattan before United States Magistrate Judge Barbara Moses. 

RODRIGUEZ and SABLON were arrested this morning in Miami, Florida, and are expected to be presented later today in federal court in the Southern District of Florida. 

ROGIERS was arrested this morning in Oakland, California, and is expected to be presented later today in federal court in the Northern District of Califorina. 

The case is before United States District Judge Alison J. Nathan.

In a separate action, the SEC filed civil charges against RIVAS, MOODHE, SIVA, RODRIGUEZ, SABLON, ZOQUIER, and ROGIERS.

Acting Manhattan U.S. Joon H. Kim said:  “As alleged, the defendants took advantage of an insider at an investment bank to make millions in illegal profits, trading over 50 times in advance of confidential corporate information. The defendants allegedly used code words and encrypted messages to try to avoid law enforcement detection. But despite their efforts to hide their crimes, the defendants’ insider trading schemes have been exposed, and two have already pled guilty federal crimes. Those who seek to cheat the markets by trading on stolen inside information corrupt the integrity of our nation’s securities markets, and we are committed to stopping them and holding them accountable.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “In an industry where confidentiality is key, the defendants allegedly showed no regard.  During the years they allegedly passed inside information from one person to another, they tried to work under the radar, but their illegal activity did not go unnoticed.  These arrests show our commitment to investigating illicit schemes and bringing conspirators to justice.”

According to the allegations contained in the indictment (the “Indictment”):[1]

The Investment Bank and the Insider

From in or about August 2013 through in or about May 2017, RIVAS was employed as a technology consultant in the Research and Capital Markets Technology Group of the Investment Bank.  In this role, RIVAS had access to an internal, proprietary system maintained by the Investment Bank (the “Deal Tracking System”) containing Inside Information about potential and unannounced merger and acquisition transactions, including tender offers, involving the Investment Bank.  The Investment Bank’s written policies prohibited the unauthorized disclosure of confidential information, which included the Inside Information.  RIVAS had a duty, among other obligations, to maintain the confidentiality of all of the Investment Bank’s confidential information, including the Inside Information.  During his tenure at the Investment Bank, RIVAS reviewed and certified his duties of loyalty and confidentiality to the Investment Bank.

Overview of Insider Trading Schemes

From at least August 2014 through at least in or about April 2017, RIVAS violated the duties of confidentiality he owed to the Investment Bank by serially misappropriating material, nonpublic information from the Investment Bank’s Deal Tracking System and passing that information along to friends so that they could utilize it to make profitable trades.  On more than 50 occasions between August 2014 and April 2017, RIVAS provided Inside Information about contemplated but unannounced merger and acquisition (“M&A”) transactions and tender offer transactions involving clients and prospective clients of the Investment Bank to friends who used that information to purchase and sell securities.  In total, the insider trading based on Inside Information misappropriated by RIVAS resulted in illicit profits of more than $5 million through trading in more than two dozen securities.  The Inside Information was passed through three tipping chains.

Tipping Chain Number 1: Moodhe-Siva Insider Trading

Until June 2017, MOODHE worked as the treasurer and assistant controller for a global interdealer brokerage firm.  MOODHE has three adult children, including a daughter not identified by name herein (the “Daughter”).  In or about 2013, the Daughter, who at the time lived with MOODHE, entered into a romantic relationship with RIVAS.  As the romantic relationship between the Daughter and RIVAS became more serious, MOODHE also developed a close relationship with RIVAS.  For more than a decade, SIVA has worked as a broker and financial adviser for a global commercial and investment bank headquartered in Manhattan, New York (the “New York Bank”).  By 2014, SIVA and MOODHE had known each other for more than a decade and had a close relationship.  In approximately June 2016, MOODHE moved his brokerage accounts to the New York Bank and SIVA became MOODHE’s broker.  Prior to that date, MOODHE maintained or controlled several self-directed online brokerage accounts.

Between at least in or about 2014 and 2017, RIVAS repeatedly provided MOODHE with Inside Information misappropriated from the Investment Bank so that MOODHE could execute profitable trades, which MOODHE repeatedly did.  RIVAS shared the Inside Information with MOODHE because of their close relationship, including their shared connection with the Daughter.  Beginning in at least January 2015, MOODHE began sharing the Inside Information he received from RIVAS with SIVA so that SIVA could execute profitable trades on behalf of his financial advisory clients and himself, which he repeatedly did.  Throughout 2015 and 2016, and up through April 2017, MOODHE continued to pass Inside Information he obtained from RIVAS onto SIVA.  Throughout this time, SIVA understood that the source of the stock tips provided by MOODHE was a corporate insider at an investment bank with whom MOODHE was friends.  In order to keep their scheme from being exposed, including by the New York Bank, MOODHE and SIVA developed code phrases to use on the telephone so that MOODHE could surreptitiously provide SIVA with updated Inside Information.  MOODHE and SIVA also began going to various diners outside of New York City so that MOODHE could provide stock tips to SIVA in person.  During these meetings, MOODHE read from pieces of paper provided to him by RIVAS, which contained detailed information about confidential impending deals, including ticker symbols, deal values, and expected announcement dates.  After SIVA officially became MOODHE’s broker, in June 2016, SIVA instructed MOODHE to mark his illicit trades as “solicited” in the New York Bank’s online trading platform, so that it would appear that SIVA had directed the trades as opposed to the suggestion coming from MOODHE.  On occasion, SIVA also instructed MOODHE to wait to trade on a tip from RIVAS until SIVA could first trade in the security on behalf of his financial advisory clients, thereby making it look like SIVA had originated the idea. 

SIVA and MOODHE’s illicit trading generated in excess of $3 million in profits.  SIVA also earned thousands of dollars in commissions on the illegal trades entered on behalf of his clients.

Tipping Chain Number 2: Rivas to Rodriguez and Sablon Insider Trading

RODRIGUEZ and RIVAS were childhood friends in New York City and have maintained a close relationship as adults.  Since at least 2014, RODRIGUEZ lived and worked in Miami, Florida, with SABLON, with whom he was also friends.  In or about 2015, RODRIGUEZ introduced RIVAS to SABLON.  RIVAS and SABLON then communicated with each other directly and developed an independent relationship. 

In or about the fall of 2015, RIVAS disclosed to RODRIGUEZ that RIVAS had access to Inside Information by virtue of his position as a corporate insider at the Investment Bank.  At RODRIGUEZ’s request, RIVAS also agreed to share Inside Information with SABLON.  While RIVAS had originally agreed to divulge Inside Information to RODRIGUEZ because of their history of friendship, RIVAS also learned that RODRIGUEZ and SABLON intended to start an investment fund with the proceeds of the insider trading scheme.  RIVAS understood that in exchange for the Inside Information RIVAS was providing to RODRIGUEZ and SABLON, RIVAS would be invited to join the investment fund as a partner once it was successfully launched.

At first, RIVAS communicated with RODRIGUEZ and SABLON primarily via phone and text message.  As the scheme progressed, however, so did the methods used by RODRIGUEZ and SABLON to hide their illegal activity.  On several occasions, RIVAS met personally with RODRIGUEZ and/or SABLON in Miami, Florida, in order to provide them with Inside Information.  RIVAS also provided RODRIGUEZ and SABLON with Inside Information using an encrypted mobile messaging application (the “Messaging App”), which allows users to set a timer to messages to irretrievably “self-destruct.”

In order to maximize the illicit profits that could be earned using RIVAS’s Inside Information, RODRIGUEZ and SABLON, in consultation with RIVAS, initiated an aggressive strategy of purchasing short-term, out-of-the-money call options.  In total, from at least in or about 2015 through at least in or about April 2017, RODRIGUEZ and SABLON earned more than $2 million in illicit profits through insider trading in more than two dozen securities based on Inside Information divulged by RIVAS.

Tipping Chain Number 3: Zoquier-Rogiers Insider Trading

For at least the last several years, RIVAS and ZOQUIER, who lives and works in New Jersey, have had a close relationship.  ROGIERS lived and worked in California as a computer and network security analyst and had a close relationship with ZOQUIER.  In or about 2013, ZOQUIER introduced RIVAS to ROGIERS.  Between at least in or about March 2016 and in or about April 2017, RIVAS repeatedly provided ZOQUIER with Inside Information misappropriated from the Investment Bank so that ZOQUIER could execute profitable trades, which ZOQUIER repeatedly did.  ZOQUIER was aware that RIVAS was employed by the Investment Bank and had access to Inside Information by virtue of this position.  RIVAS shared the Inside Information with ZOQUIER because of their close personal friendship.  Beginning in approximately March 2016, ZOQUIER began sharing the Inside Information he received from RIVAS with his close friend ROGIERS so that ROGIERS could execute profitable trades for himself.  Throughout the time that ROGIERS was obtaining Inside Information from ZOQUIER, ROGIERS understood that RIVAS was the source of the Inside Information, to which RIVAS had access as a result of his position as a corporate insider at an Investment Bank.  In fact, previously, in or about 2015, at ZOQUIER’s request, RIVAS agreed to meet with ROGIERS and explain the nature of the Inside Information to which he had access.  ROGIERS understood that RIVAS was supplying the Inside Information to ZOQUIER because they were friends.

ROGIERS also caused other individuals to execute profitable trades based on Inside Information.  In total, ZOQUIER and/or ROGIERS caused trades generating nearly $500,000 based on RIVAS’s Inside Information.

*                      *                      *

Mr. Kim praised the investigative work of the FBI, and thanked the Securities and Exchange Commission for their assistance.  Mr. Kim also thanked the Investment Bank for their assistance during the course of the investigation.  He added that the investigation is continuing.

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

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

Defendants and Charges

SIVA, RODRIGUEZ, SABLON, ZOQUIER, and ROGIERS are charged with the following offenses, which carry the maximum prison terms listed below:

Count

Defendants

Charge

Maximum Prison Term

One

SIVA

Conspiracy to Commit Securities Fraud and Fraud in Connection with a Tender Offer

5 years

Two

SIVA

Conspiracy to Commit Wire Fraud

20 years

Three

SIVA

Securities Fraud: Thoratec

20 years

Four

SIVA

Securities Fraud: ADT

20 years

Five

SIVA

Securities Fraud: St. Jude

20 years

Six

SIVA

Securities Fraud: Monsanto

20 years

Seven

SIVA

Securities Fraud: Cabela’s

20 years

Eight

SIVA

Securities Fraud: Mead Johnson

20 years

Nine

SIVA

Securities Fraud: NPS Pharma

20 years

Ten

SIVA

Securities Fraud: ZS Pharma

20 years

Eleven

SIVA

Securities Fraud: AUSPEX

20 years

Twelve

SIVA

Securities Fraud: Diamond Resorts

20 years

Thirteen

SIVA

Securities Fraud: Outerwall

20 years

Fourteen

SIVA

Securities Fraud: Raptor

20 years

Fifteen

SIVA

Fraud In Connection with a Tender Offer: NPS Pharma

20 years

Sixteen

SIVA

Fraud In Connection with a Tender Offer: ZS Pharma

20 years

Seventeen

SIVA

Fraud In Connection with a Tender Offer: AUSPEX

20 years

Eighteen

SIVA

Fraud In Connection with a Tender Offer: DRII

20 years

Nineteen

SIVA

Fraud In Connection with a Tender Offer: Outerwall

20 years

Twenty

SIVA

Fraud In Connection with a Tender Offer: Raptor

20 years

Twenty-One

RODRIGUEZ and SABLON

Conspiracy to Commit Securities Fraud and Fraud in Connection with a Tender Offer

5 years

Twenty-Two

RODRIGUEZ and SABLON

Conspiracy to Commit Wire Fraud

20 years

Twenty-Three

RODRIGUEZ and SABLON

Securities Fraud: Monsanto

20 years

Twenty-Four

RODRIGUEZ and SABLON

Securities Fraud: Twitter

20 years

Twenty-Five

RODRIGUEZ and SABLON

Securities Fraud: Brocade

20 years

Twenty-Six

RODRIGUEZ and SABLON

Securities Fraud: LifeLock

20 years

Twenty-Seven

RODRIGUEZ and SABLON

Securities Fraud:  Mead Johnson

20 years

Twenty-Eight

RODRIGUEZ and SABLON

Securities Fraud: Panera

20 years

Twenty-Nine

RODRIGUEZ and SABLON

Securities Fraud:  Diamond Resorts

20 years

Thirty

RODRIGUEZ and SABLON

Securities Fraud: Outerwall

20 years

Thirty-One

RODRIGUEZ and SABLON

Securities Fraud:  Medivation

20 years

Thirty-Two

RODRIGUEZ and SABLON

Securities Fraud:  Raptor

20 years

Thirty-Three

RODRIGUEZ and SABLON

Securities Fraud:  Nimble

20 years

Thirty-Four

RODRIGUEZ and SABLON

Fraud In Connection with a Tender Offer:  Diamond Resorts

20 years

Thirty-Five

RODRIGUEZ and SABLON

Fraud In Connection with a Tender Offer: Outerwall

20 years

Thirty-Six

RODRIGUEZ and SABLON

Fraud In Connection with a Tender Offer:  Medivation

20 years

Thirty-Seven

RODRIGUEZ and SABLON

Fraud In Connection with a Tender Offer:  Raptor

20 years

Thirty-Eight

RODRIGUEZ and SABLON

Fraud In Connection with a Tender Offer:  Nimble

20 years

Thirty-Nine

ZOQUIER and ROGIERS

Conspiracy to Commit Securities Fraud and Fraud in Connection with a Tender Offer

5 years

Forty

ZOQUIER and ROGIERS

Conspiracy to Commit Wire Fraud

20 years

Forty-One

ZOQUIER

Securities Fraud: St. Jude

20 years

Forty-Two

ZOQUIER

Securities Fraud: Twitter

20 years

Forty-Three

ROGIERS

Securities Fraud: Cabelo

20 years

Forty-Four

ROGIERS

Securities Fraud: Macy’s

20 years

Forty-Five

ZOQUIER

Securities Fraud:  Diamond Resorts

20 years

Forty-Six

ZOQUIER

Securities Fraud: Outerwall

20 years

Forty-Seven

ROGIERS

Securities Fraud:   Outerwall

20 years

Forty-Eight

ZOQUIER

Securities Fraud: Medivation

20 years

Forty-Nine

ROGIERS

Securities Fraud:  Medivation

20 years

Fifty

ZOQUIER

Fraud In Connection with a Tender Offer:  Diamond Resorts

20 years

Fifty-One

ZOQUIER

Fraud In Connection with a Tender Offer: Outerwall

20 years

Fifty-Two

ROGIERS

Fraud In Connection with a Tender Offer: Outerwall

20 years

Fifty-Three

ZOQUIER

Fraud In Connection with a Tender Offer:  Medivation

20 years

Fifty-Four

ROGIERS

Fraud In Connection with a Tender Offer:   Medivation

20 years

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Ashan M. Benedict, Special Agent-in-Charge of the New York Division of the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the arrests of FRANKLYN STERLING and XAVIER DELISER for the 2008 murder of Francisco Unapanta. STERLING was arrested on August 10, 2017, and DELISER was arrested this morning.

On August 10, 2017, a one-count indictment was unsealed charging STERLING and DELISER with committing murder through the use of a firearm during and in relation to a crime of violence. STERLING was presented in federal court in Manhattan before U.S. Magistrate Judge Ronald L. Ellis on August 10 and ordered detained; DELISER will be presented later today in federal court. The case has been assigned to U.S. District Judge Naomi Reice Buchwald, who has scheduled an initial conference for Tuesday, August 29, 2017, at 11:00 a.m.

Acting United States Attorney Joon H. Kim said: “As alleged, Franklyn Sterling and Xavier Deliser shot and killed Francisco Unapanta during a Brooklyn robbery nearly nine years ago, a murder that remained unsolved until now. Together with our law enforcement partners, we will continue to pursue justice for victims like Mr. Unapanta, no matter how cold the case.”

ATF Special Agent-in-Charge Ashan M. Benedict said: “Francisco Unapanta and a co-worker were hard working immigrants who fell victim to a gun point robbery alleged to have been committed by Sterling and Deliser. A struggle ensued during the robbery and Unapanta was fatally shot. Thanks to the outstanding investigative work of the special agents and detectives assigned to the ATF SPARTA Task Force, for whom the passage of time does not lessen the resolve to identify the perpetrators of violent criminal activity, these defendants will now face justice for their alleged crimes.”

NYPD Commissioner James P. O’Neill said: “Our commitment to both preventing and solving crime is relentless. This homicide, nearly a decade old, is further evidence of our commitment. Thanks to the detectives, agents, and prosecutors whose focus led to the arrests and charges.”

As alleged in the Indictment against STERLING and DELISER[1]:

On September 3, 2008, in the vicinity of 358 Montgomery Street in Brooklyn, FRANKLYN STERLING and XAVIER DELISER robbed Francisco Unapanta, and during the course of that robbery, Unapanta was shot and killed.

* * *

STERLING, 34, of Brooklyn, and DELISER, 34, of Brooklyn, each face a maximum sentence of death or life in prison, and a mandatory term of five years in prison.

The statutory maximum and minimum sentences are prescribed by Congress and are provided here for information purposes only, as any sentencings of the defendants would be determined by the respective judges.

Mr. Kim praised the investigative work of the NYPD and the ATF, and in particular the Strategic Patterned Armed Robbery Technical Apprehension (“SPARTA”) Task Force, which is composed of agents and officers of the ATF and the NYPD. Mr. Kim also thanked the Joint Regional Fugitive Task Force for their work in apprehending DELISER.

This matter is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Scott Hartman, David Zhou, and Jason Swergold are in charge of the prosecution.

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

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that two leaders of the violent Bronx gang known as “18 Park” pled guilty yesterday before the U.S. District Judge Paul A. Engelmayer to firearms offenses in connection with murders and racketeering offenses that they engaged in on behalf of the gang. MARQUIS WRIGHT pled guilty to two counts of possessing and using firearms, including in connection with WRIGHT’s role in the September 28, 2008, murder of Brandon Howard, 18, and the May 29, 2011, murder of Johnny Moore, 16. JONATHAN RODRIGUEZ pled guilty on August 10, 2017, to two counts of possessing and using firearms, including in connection with RODRIGUEZ’s role in the murder of Brandon Howard. RODRIGUEZ and WRIGHT are scheduled to be sentenced before Judge Engelmayer on December 12 and December 14, 2017, respectively.

Manhattan Acting U.S. Attorney Joon Kim said: “For years, the 18 Park gang wreaked havoc in the Mott Haven section of the Bronx, forcing law-abiding neighborhood residents to endure regular gunfire, drug dealing, and violent assaults. 18 Park’s pattern of violence culminated in the murders of Brandon Howard and Johnny Moore, two young men whose families were devastated by their loss. We want to thank our law enforcement partners, who have relentlessly pursued justice for Brandon Howard and Johnny Moore, and who have brought 18 Park’s reign of terror to an end.”

According to the allegations in court documents, including the Information and a previously filed criminal complaint, and statements made during court proceedings:

From 2006 to 2016, the 18 Park gang operated primarily in and around the Patterson Houses, a New York City public housing development in the Mott Haven area of the Bronx. Members of 18 Park sold crack cocaine and marijuana on a near-daily basis, turning the area in and around the Patterson Houses into an open-air drug market. 18 Park members used firearms and violence to assert the gang’s control over the area. Both WRIGHT and RODRIGUEZ served as leaders of 18 Park, and were integral to the success of its drug trade.

On September 28, 2008, RODRIGUEZ confronted 18-year-old Brandon Howard in the hallway immediately outside a house party at 315 East 143rd Street, and shot him to death. WRIGHT accompanied RODRIGUEZ to the party and aided and abetted his commission of the murder.

On May 29, 2011, Marquis WRIGHT drove another 18 Park member, Wali Burgos, to the vicinity of 2625 Third Avenue so that Burgos could shoot and kill a member of a rival gang. Burgos did not shoot a rival gang member, but instead fired his gun into a crowd and killed 16-year-old Johnny Moore. After the shooting, WRIGHT drove Burgos away from the scene of the crime. Burgos previously pled guilty to racketeering conspiracy and admitted to his role in the murder of Johnny Moore. On January 13, 2017, Burgos was sentenced to 262 months in prison.

WRIGHT, 29, faces a mandatory minimum sentence of 35 years, and RODRIGUEZ, 28, faces a mandatory minimum sentence of 30 years. With the guilty pleas of WRIGHT and RODRIGUEZ, 25 members of 18 Park have now been convicted by this Office of racketeering, firearms, and narcotics offenses.

Mr. Kim thanked the ATF, the DEA, and the NYPD for their work in this three-year investigation.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Max Nicholas, Jordan Estes, and Samson Enzer are in charge of the prosecution.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that MARC HENRY JOHNSON was sentenced today to one year and one day in prison for helping cover up a drug dealer’s narcotics offense by moving a woman’s body out of a Manhattan apartment where she had suffered a fatal cocaine overdose. JOHNSON pled guilty on March 21, 2017, to acting as an accessory after the fact to the offense of maintaining a drug-involved premises. JOHNSON entered the guilty plea before U.S. District Judge Jesse M. Furman, who imposed today’s sentence.

Acting U.S. Attorney Joon H. Kim said: “Faced with a choice between helping his long-time drug dealer avoid arrest or helping a woman survive a cocaine overdose, Marc Henry Johnson chose to help the drug dealer. For his callous and illegal choice, Johnson will now join that drug dealer in federal prison.”

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

JOHNSON regularly bought cocaine from James Holder, who lived in and sold cocaine from a third-floor apartment in Chelsea. During the night of October 3, 2015, and the early morning hours of October 4, 2015, JOHNSON met with a 38-year-old woman (“Individual-1”) and others at a bar in Manhattan. Individual-1 had been using cocaine before JOHNSON arrived. Later, JOHNSON and Individual-1 left the bar together in a taxi. They arrived at Holder’s apartment building at approximately 4:25 a.m., and walked upstairs to Holder’s apartment. Hours later, JOHNSON and Holder dragged Individual-1’s apparently unconscious body into the building’s first-floor vestibule. Holder then left the building, and JOHNSON called 911 to summon an ambulance. JOHNSON declined to provide his name to the 911 operator, and he did not identify Individual-1, or describe his relationship to her, or explain what had happened to her or why she needed medical assistance. Emergency Medical Technicians responded and found Individual-1 unresponsive in the Chelsea building’s vestibule. JOHNSON left the building soon after the EMTs arrived.

Individual-1 was taken to a hospital and pronounced dead later on October 4, 2015. Her death was caused by, among other things, cocaine use.

* * *

In addition to the prison term, MARC HENRY JOHNSON, 53, was sentenced to two years of supervised release and ordered to pay a fine of $20,000.

Holder, who pled guilty on December 12, 2016, to maintaining a drug-involved premises, was sentenced on May 11, 2017, to a term of five years in prison.

Mr. Kim praised the outstanding investigative work of the U.S. Drug Enforcement Administration’s (DEA) New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, the New York Department of Taxation and Finance, the Rockland County Sheriff’s Office, the Clarkstown Police Department, Port Washington Police Department, and New York State Department of Corrections and Community Supervision. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.

The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Margaret Garnett and David Abramowicz are in charge of the prosecution.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and John Grasso, the Special Agent in Charge of the United States Social Security Administration, Office of the Inspector General, announced today the entry of a $330,284 consent judgment against TORRENCE ROBINSON (“ROBINSON”), a Bronx pastor and recently retired New York City assistant principal, for fraudulently misappropriating Social Security retirement benefits.  The consent judgment, along with a Stipulation and Order of Settlement (the “Stipulation”), resolves the United States’ civil claims against ROBINSON, brought under the False Claims Act in a complaint filed on October 5, 2016.  Both the consent judgment and Stipulation were entered today by U.S. District Judge Valerie E. Caproni.

Acting U.S. Attorney Joon H. Kim said:  “Social Security is a critical but limited resource that millions of Americans depend on in retirement.  We will not tolerate abuse of this common good.  Relatives of deceased beneficiaries have an obligation to notify the Social Security Administration, and those who choose to pocket the cash will be held to account.”

Special Agent in Charge John Grasso said:  “This consent judgment should serve as a warning to people who choose to selfishly defraud the Social Security Trust Fund. Such individuals are not only liable for the money that they stole, but potentially additional monetary penalties under the False Claim Act.  Our Office vigorously pursues these cases criminally, civilly, and administratively to the fullest extent of the law.  I strongly encourage the public to report suspected instances of Social Security fraud to the OIG’s Fraud Hotline at 1-800-269-0271 or https://oig.ssa.gov/report.”

This Office filed a civil fraud suit against ROBINSON under the False Claims Act and common law alleging that he misappropriated more than $200,000 in Social Security benefits between 1999 and 2013.  These benefits had been paid by the Social Security Administration to Robinson’s father after his father had died.  The False Claims Act was amended in 2009 to cover persons who knowingly conceal or improperly avoid repaying amounts owed to the Government, regardless of whether a false claim or statement is made.  Thus, those who misappropriate Social Security benefits paid to deceased relatives after 2009 may be subject to treble damages and penalties under the False Claims Act.  Up until 2009, the Government could recover only single damages in such cases, in common-law court actions.

Under the Stipulation, ROBINSON agreed to a judgment in the amount of $330,284, representing the amount of benefits he took plus additional damages under the False Claims Act for conduct occurring after the law was amended in 2009.

ROBINSON, 65, of New Windsor, New York, further admitted and accepted responsibility for misappropriating $214,994 in payments from the Social Security Administration.  Specifically, ROBINSON admitted that after his father died in 1999, ROBINSON maintained access to a joint bank account into which his father’s Social Security retirement benefits continued to be deposited, and ROBINSON redirected those funds for his own use until 2013.  During this time, ROBINSON was employed as the pastor of a Bronx church and as a New York City assistant principal, earning well over six figures from his positions.  ROBINSON also admitted that he was aware that he had no right to the payments and that he was obligated to inform the Social Security Administration of the death of his father and to return the payments, but failed to do so.   

Mr. Kim thanked the Social Security Administration’s Office of Inspector General for its investigative work.

The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Stephen Cha-Kim is in charge of the case.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that JEFFREY GREEN, a former correction officer at the Bedford Hills Correctional Facility for Women (the “Bedford Facility”), was sentenced in White Plains federal court to nine months in prison for violating the constitutional rights of an inmate through abusive sexual contact.  GREEN pled guilty on May 5, 2017 to sexually assaulting an inmate at the Bedford Facility during the evening hours of March 10, 2016.  GREEN pled guilty before U.S. Magistrate Judge Paul E. Davison, who imposed today’s sentence.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “Jeffrey Green, a former correction officer, sexually assaulted a female inmate serving time in a Bedford correctional facility.  Incarcerated individuals, repaying their debt to society, are entitled to the same protections of the Constitution as the rest of us.  For violating an inmate’s constitutional rights, Green will serve time in prison himself.” 

According to the Information to which GREEN pled guilty, the related Complaint in which he was originally charged on February 15, 2017, and statements made in related court proceedings:

The Bedford Facility is a jail complex located in Bedford Hills, in Westchester County, New York, maintained by the New York State Department of Corrections and Community Supervision.  At the time of the assault, Victim-1 was an inmate incarcerated at the Bedford Facility.

On March 10, 2016, GREEN unlocked and opened Victim-1’s cell and entered it alone.  GREEN then grabbed Victim-1 by her arms, held her against the wall of her cell, licked and kissed her neck, and fondled her breasts.  After Victim-1 pushed GREEN away, he again grabbed her, pushed her against the wall of her cell, pulled up her shirt and bra and licked and kissed her neck, chest, and breasts.  GREEN stopped and left Victim-1’s cell when he was interrupted by the arrival of another correction officer.

*                      *                      *

In addition to the prison sentence, GREEN, 48, of Brooklyn, New York, was sentenced to one year of supervised release.

Mr. Kim praised the outstanding investigative work of the New York State Department of Corrections and Community Supervision Office of Special Investigations and the Criminal Investigators at the United States Attorney’s Office.  He also thanked the Westchester County District Attorney’s Office for its assistance in the investigation.

This case is being handled by the Office’s Civil Rights and Public Corruption Units.  Assistant U.S. Attorneys Alex Rossmiller and Ellen Blain are in charge of the prosecution.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, and James D. Robnett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that Prime Partners SA (“Prime Partners”) entered into a non-prosecution agreement (“NPA”) with the U.S. Attorney’s Office and agreed to pay $5 million to the United States for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from 2001 through 2010. The NPA was based on Prime Partners’ extraordinary cooperation, including its voluntary production of approximately 175 client files for non-compliant U.S. taxpayer-clients, and provides that Prime Partners will not be criminally prosecuted. The NPA requires Prime Partners to forfeit $4.32 million to the United States, representing certain fees that it earned by assisting its U.S. taxpayer-clients in opening and maintaining these undeclared accounts, and to pay $680,000 in restitution to the IRS, representing the approximate unpaid taxes arising from the tax evasion by Prime Partners’ U.S. taxpayer-clients.

Acting Manhattan U.S. Attorney Joon H. Kim said: “Prime Partners admits to helping its clients conceal their ownership of foreign bank accounts to avoid their U.S. tax obligations. They created sham entities and even counseled their clients to use pay phones and prepaid debit cards to avoid detection of their tax fraud scheme. The resolution of this matter through a non-prosecution agreement, along with forfeiture and restitution, reflects the extraordinary cooperation provided by Prime Partners to our investigation. It should serve as proof that cooperation has tangible benefits. We will continue to pursue financial services firms around the world that help their clients evade U.S. taxes.”

Acting Deputy Assistant Attorney General Stuart M. Goldberg said: “The message is clear to those using foreign bank accounts to engage in schemes to evade U.S. taxes – you can no longer assume your ‘secret’ accounts will remain concealed, no matter where they are located. In our ongoing investigations, we will continue to draw on information from a variety of sources and to provide substantial credit to those around the globe who provide full and timely cooperation regarding the identity of U.S. tax cheats and the phony trusts and shell companies they seek to hide behind.”

IRS-CI Special Agent in Charge James D. Robnett said: “Today’s NPA signals the continued erosion of the tax secrecy safe havens that helped facilitate this criminal activity at a significant cost to the US taxpayer. IRS-CI is focused on tracking funds of individuals hiding income offshore and will continue to investigate international tax evasion.”

As part of the NPA, Prime Partners admitted various facts concerning its wrongful conduct and the remedial measures that it took to cease that conduct. Specifically, Prime Partners admitted that it knew certain U.S. taxpayers were maintaining undeclared foreign bank accounts with the assistance of Prime Partners in order to evade their U.S. tax obligations, in violation of U.S. law. Prime Partners acknowledged that it helped certain U.S. taxpayer-clients conceal from the IRS their beneficial ownership of undeclared assets maintained in foreign bank accounts by, among other things: (i) creating sham entities, which had no business purpose, that served as the nominal account holders for the accounts; (ii) advising U.S. taxpayer-clients not to retain their account statements, to call Prime Partners collect from pay phones, and to destroy any faxes they received from Prime Partners; (iii) providing U.S. taxpayer-clients with prepaid debit cards, which were funded with money from the clients’ undeclared accounts; and (iv) facilitating cash transfers in the United States between U.S. taxpayer-clients with undeclared accounts.

The NPA recognizes that, in early 2009, Prime Partners voluntarily implemented a series of remedial measures to stop assisting U.S. taxpayers in evading federal income taxes. The NPA further recognizes the extraordinary cooperation of Prime Partners, including its voluntary production of approximately 175 client files for non-compliant U.S. taxpayers, which included the identities of those U.S. taxpayers.

As part of the NPA, Prime Partners has agreed to forfeit $4.32 million to the United States, representing a portion of the gross revenues from services that it provided to U.S. taxpayers with undeclared foreign bank accounts from 2001 through 2010. In connection with this forfeiture, Prime Partners has agreed not to contest a civil forfeiture action to be filed by the United States.

The U.S. Attorney’s Office entered into the NPA based on factors including:

• Prime Partners’ voluntary and extraordinary cooperation, including its voluntary production of account files containing the identities of U.S. taxpayer-clients;
• Prime Partners’ voluntary implementation of various remedial measures beginning in or around early 2009, before the investigation of its conduct began;
• Prime Partners’ willingness to continue to cooperate to the extent permitted by applicable law; and
• Prime Partners’ representation – based on an investigation by outside counsel, the results of which have been reviewed by the U.S. Attorney’s Office and the Tax Division – that the misconduct under investigation did not, and does not, extend beyond that described in the Statement of Facts.

The NPA requires Prime Partners to continue to cooperate with the United States for at least three years from the date of the agreement. In the event that Prime Partners violates the NPA, the U.S. Attorney’s Office may prosecute Prime Partners.

Mr. Kim thanked the IRS for its outstanding work in the investigation of this matter and the Tax Division of the Department of Justice for its assistance in the investigation.

This investigation is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. Paul and Kiersten A. Fletcher are in charge of the matter.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, and James D. Robnett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that Prime Partners SA (“Prime Partners”) entered into a non-prosecution agreement (“NPA”) with the U.S. Attorney’s Office and agreed to pay $5 million to the United States for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from 2001 through 2010.  The NPA was based on Prime Partners’ extraordinary cooperation, including its voluntary production of approximately 175 client files for non-compliant U.S. taxpayer-clients, and provides that Prime Partners will not be criminally prosecuted.  The NPA requires Prime Partners to forfeit $4.32 million to the United States, representing certain fees that it earned by assisting its U.S. taxpayer-clients in opening and maintaining these undeclared accounts, and to pay $680,000 in restitution to the IRS, representing the approximate unpaid taxes arising from the tax evasion by Prime Partners’ U.S. taxpayer-clients. 

Acting Manhattan U.S. Attorney Joon H. Kim said:  “Prime Partners admits to helping its clients conceal their ownership of foreign bank accounts to avoid their U.S. tax obligations.  They created sham entities and even counseled their clients to use pay phones and prepaid debit cards to avoid detection of their tax fraud scheme.  The resolution of this matter through a non-prosecution agreement, along with forfeiture and restitution, reflects the extraordinary cooperation provided by Prime Partners to our investigation. It should serve as proof that cooperation has tangible benefits.  We will continue to pursue financial services firms around the world that help their clients evade U.S. taxes.”

Acting Deputy Assistant Attorney General Stuart M. Goldberg said:  “The message is clear to those using foreign bank accounts to engage in schemes to evade U.S. taxes – you can no longer assume your ‘secret’ accounts will remain concealed, no matter where they are located.  In our ongoing investigations, we will continue to draw on information from a variety of sources and to provide substantial credit to those around the globe who provide full and timely cooperation regarding the identity of U.S. tax cheats and the phony trusts and shell companies they seek to hide behind.”

IRS-CI Special Agent in Charge James D. Robnett said:  “Today’s NPA signals the continued erosion of the tax secrecy safe havens that helped facilitate this criminal activity at a significant cost to the US taxpayer.  IRS-CI is focused on tracking funds of individuals hiding income offshore and will continue to investigate international tax evasion.”

As part of the NPA, Prime Partners admitted various facts concerning its wrongful conduct and the remedial measures that it took to cease that conduct.  Specifically, Prime Partners admitted that it knew certain U.S. taxpayers were maintaining undeclared foreign bank accounts with the assistance of Prime Partners in order to evade their U.S. tax obligations, in violation of U.S. law.  Prime Partners acknowledged that it helped certain U.S. taxpayer-clients conceal from the IRS their beneficial ownership of undeclared assets maintained in foreign bank accounts by, among other things: (i) creating sham entities, which had no business purpose, that served as the nominal account holders for the accounts; (ii) advising U.S. taxpayer-clients not to retain their account statements, to call Prime Partners collect from pay phones, and to destroy any faxes they received from Prime Partners; (iii) providing U.S. taxpayer-clients with prepaid debit cards, which were funded with money from the clients’ undeclared accounts; and (iv) facilitating cash transfers in the United States between U.S. taxpayer-clients with undeclared accounts. 

The NPA recognizes that, in early 2009, Prime Partners voluntarily implemented a series of remedial measures to stop assisting U.S. taxpayers in evading federal income taxes.  The NPA further recognizes the extraordinary cooperation of Prime Partners, including its voluntary production of approximately 175 client files for non-compliant U.S. taxpayers, which included the identities of those U.S. taxpayers.

As part of the NPA, Prime Partners has agreed to forfeit $4.32 million to the United States, representing a portion of the gross revenues from services that it provided to U.S. taxpayers with undeclared foreign bank accounts from 2001 through 2010.  In connection with this forfeiture, Prime Partners has agreed not to contest a civil forfeiture action to be filed by the United States.          

The U.S. Attorney’s Office entered into the NPA based on factors including:

• Prime Partners’ voluntary and extraordinary cooperation, including its voluntary production of account files containing the identities of U.S. taxpayer-clients;
• Prime Partners’ voluntary implementation of various remedial measures beginning in or around early 2009, before the investigation of its conduct began;
• Prime Partners’ willingness to continue to cooperate to the extent permitted by applicable law; and
• Prime Partners’ representation – based on an investigation by outside counsel, the results of which have been reviewed by the U.S. Attorney’s Office and the Tax Division – that the misconduct under investigation did not, and does not, extend beyond that described in the Statement of Facts.

The NPA requires Prime Partners to continue to cooperate with the United States for at least three years from the date of the agreement.  In the event that Prime Partners violates the NPA, the U.S. Attorney’s Office may prosecute Prime Partners.

*               *               *

Mr. Kim thanked the IRS for its outstanding work in the investigation of this matter and the Tax Division of the Department of Justice for its assistance in the investigation. 

This investigation is being overseen by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Sarah E. Paul and Kiersten A. Fletcher are in charge of the matter.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Carl J. Kotowski, the Special Agent in Charge of the New Jersey Division of the Drug Enforcement Administration (“DEA”), today announced the unsealing of an indictment charging 12 defendants with participating in a drug trafficking organization that distributed large quantities of heroin in and around Monmouth and Ocean Counties, New Jersey, and obtained the heroin from Washington Heights and the Bronx, among other places.  In conjunction with the unsealing of the Indictment, search warrants were executed at several locations in New Jersey.

Defendants MIGUEL ARIEL SUSANA, a/k/a “Jariel Santos,” QUADREE HUBBARD, JAMES F. SMITH III, a/k/a “Trey,” a/k/a “Brim Reaper,” a/k/a “Reaper,” TAHMIR RICE, DAMAR BIVINS, JAIR OLIVER, TYSHEEM SMITH, JOEL ROSADO, AVEENA VITRANO-MANLEY, and FRANK DESANTO were arrested by DEA agents this morning and will be presented in federal court in Manhattan before U.S. Magistrate Judge Barbara C. Moses later today.  Defendant MARCELLUS CUTLER has not yet been apprehended.  Defendant TYRON TROTMAN is currently in custody on state charges and will be transferred to federal custody and presented at a later date.  The case has been assigned to U.S. District Judge Richard J. Sullivan.

Acting U.S. Attorney Joon H. Kim stated:  “As alleged, this organization transported large quantities of heroin from Washington Heights and the Bronx across the Hudson to Monmouth and Ocean Counties in New Jersey, helping to fuel the opioid epidemic plaguing our nation.  Today’s arrests of twelve alleged members of this heroin distribution organization is part our sustained commitment, along with our partners at the DEA, to stop the flow of heroin into and out of New York.”

DEA Special Agent in Charge Carl J. Kotowski said:  “Today’s arrests should send a clear message to the drug traffickers that DEA and our partners are committed to keeping our neighborhoods safe.  Those arrested are facing significant time in prison and will no longer be pushing their poison.”

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

MIGUEL ARIEL SUSANA, a/k/a “Jariel Santos,” QUADREE HUBBARD, JAMES F. SMITH III, a/k/a “Trey,” a/k/a “Brim Reaper,” a/k/a “Reaper,” TAHMIR RICE, DAMAR BIVINS, JAIR OLIVER, MARCELLUS CUTLER, TYSHEEM SMITH, JOEL ROSADO, AVEENA VITRANO-MANLEY, TYRON TROTMAN, and FRANK DESANTO conspired to distribute significant amounts of heroin from May 2017 to August 2017, as members of a drug trafficking organization (the “DTO”) that obtained narcotics for resale from Washington Heights, New York, and the Bronx, New York, among other places, and packaged and sold those narcotics throughout Monmouth and Ocean Counties.  SUSANA acted as a source of supply for HUBBARD and SMITH.  RICE, BIVINS, OLIVER, CUTLER, and TYSHEEM SMITH each assisted either HUBBARD or SMITH in managing certain aspects of the DTO, including in obtaining, packaging, storing, and distributing narcotics.  DESANTO and TROTMAN sold heroin obtained from SMITH to street-level customers.  ROSADO and VITRANO-MANLEY worked with SMITH to obtain significant quantities of narcotics, including by pooling money with SMITH.

*              *             *

Each defendant is charged with one count of conspiracy to distribute narcotics.  Defendants SUSANA, HUBBARD, JAMES F. SMITH III, RICE, OLIVER, and CUTLER are charged with conspiring to distribute and possess with the intent to distribute one kilogram and more of mixtures and substances containing a detectable amount of heroin, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.  Defendants BIVINS, TYSHEEM SMITH, ROSADO, and VITRANO-MANLEY are charged with conspiring to distribute and possess with the intent to distribute 100 grams and more of mixtures and substances containing a detectable amount of heroin, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison.  Defendants TROTMAN and DESANTO are charged with conspiring to distribute and possess with the intent to distribute a quantity of mixtures and substances containing a detectable amount of heroin, which carries a maximum sentence of 20 years in prison.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  A chart with the defendants’ ages and residences is below.

Mr. Kim thanked the DEA Monmouth Ocean HIDTA Task Force for their outstanding work on the investigation.  The Monmouth Ocean HIDTA Task Force comprises representatives from the DEA, the ATF, the New Jersey State Police, Monmouth County Prosecutor’s Office, Ocean County Prosecutor’s Office, Toms River Police Department, and the Neptune Township Police Department.  Mr. Kim also thanked the Howell Police Department, the Freehold Township Police Department, the Lakewood Police Department, the Monmouth County Sheriff’s Office, Ocean County Sheriff’s Office, the Passaic County Sheriff’s Office, the Union County Sheriff’s Office and the United States Attorney’s Office for the District of New Jersey for their assistance in this investigation.  He added that the investigation is continuing.

This matter is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Elizabeth A. Hanft and Michael D. Neff are in charge of the prosecution.

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

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

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 Field Office of the Federal Bureau of Investigation (“FBI”), and Charles Gardner, Commissioner of the Yonkers Police Department (“YPD”), announced the arrest of SEAN AUSTIN and BRAULIO MONCION on charges of Hobbs Act robbery and a firearms offense.

According to the allegations contained in the Complaint[1] charging AUSTIN and MONCION, and other documents in the public record:

On August 12, 2017, AUSTIN and MONCION committed a gunpoint robbery of The Customer Center, doing business as Sprint, located in Yonkers, New York.  AUSTIN entered the store carrying a silver firearm.  He displayed the firearm to two store employees, racked the slide, and instructed them not to move.  MONCION subsequently entered the store, at which point AUSTIN and MONCION took cellphones, cash, and car keys from the employees.  AUSTIN and MONCION then ordered the employees to remain in the bathroom of the store while they stole numerous cellphones.  The robbery was captured on the store’s surveillance cameras.  Following the robbery, AUSTIN and MONCION fled in one of the employee’s vehicles, which had been parked outside the store.  Law enforcement pursued AUSTIN and MONCION to the Bronx, where they were ultimately apprehended by the Yonkers Police Department.   Numerous stolen cellphones were recovered from the vehicle that AUSTIN and MONCION had used to flee the scene.  In addition, law enforcement recovered a firearm and ammunition magazine that the defendants had discarded during the pursuit. 

*              *             *

AUSTIN, 44, of New York, New York, and MONCION, 41, of the Bronx, New York, are each charged with one count of Hobbs Act robbery, which carries a maximum sentence of 20 years in prison, and one count of use of a firearm during and in relation to a crime of violence, which carries a maximum sentence of life in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

AUSTIN and MONCION were arrested on August 12, 2017, and were presented today in White Plains federal court before United States Magistrate Judge Paul E. Davison and detained on consent.

Mr. Kim praised the investigative work of the Yonkers Police Department and the FBI’s Westchester County Safe Streets Task Force, which comprises agents and task force officers from the FBI, the U.S. Probation Office, the Westchester County Police Department, the Westchester County District Attorney’s Office, the New York City Police Department, the City of Yonkers Police Department, the Peekskill Police Department, and the Mount Vernon Police Department. 

The case is being prosecuted by the Office’s White Plains Division.  Assistant United States Attorneys Christopher J. Clore and Gillian Grossman are in charge of the prosecution.

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

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

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 Emil Califano, Chief of the Village of Ardsley Police Department, announced today charges against VEDOUTIE HOOBRAJ, a/k/a “Shivonie Deokaran,” for allegedly engaging in a scheme to defraud donors through false representations that she had been diagnosed with terminal leukemia and needed money to pay for her treatments.   HOOBRAJ was arrested in Orlando, Florida this morning and will be presented before a Magistrate Judge in the Middle District of Florida. 

Acting Manhattan U.S. Attorney Joon H. Kim said:  “Vedoutie Hoobraj allegedly concocted an elaborate story about having cancer when she did not, using GoFundMe pages and accepting money raised by a local high school, all supposedly to fund her medical care.  Hoobraj even falsified medical records for donors to conceal the fraud.  I commend our law enforcement partners for thwarting this allegedly brazen fraud.”

Assistant Director-in-Charge William F. Sweeney Jr. said:  “Vedoutie Hoobraj went to great lengths to hide behind her self-fabricated cancer diagnosis.  Not only did she allegedly allow the people of her community to hold fundraisers on her behalf, including a local high school football team, but sat idly by as they showered her and her family with their love, money, and unwavering support.  To further aggravate the matter, as alleged, she actively peddled her story in an effort to make more money; falsely claimed that she received treatment from legitimate doctors and hospitals; and produced fake test results to support her claims. Hoobraj's alleged crime is not only an injustice to those who were kind enough to help her, but also to those who do truly need the support of their communities and may now be met with suspicion because of Hoobraj’s alleged behavior.”    

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

Beginning in at least about October 2014 and through at least March 2016, in Westchester County, New York, and elsewhere, HOOBRAJ engaged in a scheme that solicited donations through fraudulent representations that she had been diagnosed with terminal cancer and needed money for living and medical expenses.   

HOOBRAJ obtained donations from donors through checks and fund transfers to two GoFundMe fundraising websites set up in October 2014 and August 2015 on her behalf.  The GoFundMe websites represented, among other things, that HOOBRAJ was diagnosed with leukemia and given eighteen months to live, and that HOOBRAJ’s family was suffering financial burdens from her chemotherapy treatments and other medical and living expenses.  HOOBRAJ publicized the sites in online posts and emails, among other means. 

As alleged in the Complaint, HOOBRAJ received in excess of $50,000 in donations from over 300 individuals in Ardsley, New York, and elsewhere based on these and other related misrepresentations.   Between October 2014 and December 2015, HOOBRAJ transferred a total of approximately $32,600 from an Ohio bank account operated by GoFundMe’s payment processor vendor to HOOBRAJ’s bank account in New York.  In or about November 2015, HOOBRAJ deposited two donation checks totaling $16,274 from the Student Activity Fund of Ardsley High School, in Ardsley, New York, representing proceeds of a fundraising event organized in part by a donor (“Individual-1”).  HOOBRAJ also deposited other donation checks.

In an interview with a detective at the Ardsley Police Department on or about January 20, 2016, HOOBRAJ stated, among other things, that she had been diagnosed with terminal cancer by a specified doctor at Sloan Kettering Medical Center who died in an earthquake in Nepal in April 2015, was currently being treated by another specified doctor, and had also gone to “Mount Kisco Medical Center” and “Bronx Lebanon Hospital” for treatments.  However, as alleged in the Complaint, HOOBRAJ had never been treated by these doctors and medical centers.

In or about March 2016, in an effort to prove that she had cancer, HOOBRAJ used the online messaging platform Facebook Messenger to send Individual-1 a screenshot of HOOBRAJ’s purported laboratory tests from a January 29, 2016, examination at Jacobi Medical Center in the Bronx, New York (“Jacobi”).  The results presented by HOOBRAJ appeared to indicate that her hemoglobin, platelet counts, and red blood cell counts were all outside the stated normal ranges.  Records obtained from Jacobi as part of this investigation, however, revealed that the document sent by HOOBRAJ was a forgery, and that the actual medical record previously provided by Jacobi to HOOBRAJ stated, “Your labs turned out to show no abnormalities.”  

*                      *                      *

VEDOUTIE HOOBRAJ, a/k/a “Shivonie Deokaran,” 38, of Orlando, Florida, has been charged in the Complaint with one count of wire fraud, which carries a maximum prison term of 20 years.

Mr. Kim praised the investigative work of the FBI and the Ardsley Police Department.  Mr. Kim also thanked the Westchester County District Attorney’s Office for its assistance. 

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Vladislav Vainberg is in charge of the prosecution.                  

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that JASON GALANIS was sentenced today by the Honorable Ronnie Abrams to 173 months for defrauding a Native American tribal entity and numerous pension fund investors of tens of millions of dollars in connection with the issuance of bonds by the tribal entity.

Acting U.S. Attorney Joon H. Kim said: “In a brazen securities scheme designed to enrich themselves at the expense of everyone else, Jason Galanis and his co-conspirators cheated both their tribal clients as well as the investing public. After defrauding a Native American tribe into issuing bonds, Jason Galanis and his cohorts sold the illiquid bonds to unwitting pension funds, and then stole the proceeds for themselves. For his role in this campaign of theft and deception, Jason Galanis will now spend over 14 years in federal prison.”

According to the allegations contained in the Indictment filed against JASON GALANIS and his co-conspirators and statements made in related court filings and proceedings[1]:

From March 2014 through April 2016, JASON GALANIS and others engaged in a fraudulent scheme to misappropriate the proceeds of bonds issued by the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity (the “Tribal Bonds”), and to use funds in the accounts of clients of asset management firms controlled by JASON GALANIS and others to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market.

Documents governing the Tribal Bonds specified that an investment manager would invest the proceeds of the Tribal Bonds in investments that would generate annuity payments sufficient to pay interest on the Tribal Bonds and provide funds to the WLCC to be used for tribal economic development purposes. In fact, none of the proceeds of the Tribal Bonds were turned over to the investment manager specified in the closing documents. Instead, significant portions of the proceeds were misappropriated by JASON GALANIS and his co-defendants for their own personal use.

Specifically, the proceeds of the Tribal Bonds were deposited into a bank account in the name of Wealth Assurance Private Client Corporation (“WAPCC”). More than $38 million from the WAPCC account to an account controlled by JASON GALANIS, who then misappropriated more than $8.5 million of the proceeds for his personal use, including for expenses associated with his home, jewelry and clothing purchases, travel and entertainment, and restaurant meals.

There was no ready secondary market for the Tribal Bonds. Nonetheless, without prior notice, JASON GALANIS directed others to use funds belonging to clients of two related investment advisers, Hughes Capital Management, Inc. (“Hughes”) and Atlantic Asset Management, LLC (“Atlantic”) to purchase the Tribal Bonds, even though JASON GALANIS and others were well aware that material facts about the Tribal Bonds had been withheld from clients in whose accounts they were placed, including the fact that the Tribal Bond purchases fell outside the investment parameters set forth in the investment advisory contracts of certain Hughes clients and of the Atlantic pooled investment vehicle in which the Tribal Bonds were purchased. When Hughes and Atlantic clients learned about the purchase of the Tribal Bonds in their accounts, several of them demanded that the Tribal Bonds be sold. However, because there was no ready secondary market for the Tribal Bonds, no Tribal Bonds have been sold from any Hughes or Atlantic client accounts. In addition, JASON GALANIS and his co-conspirators failed to apprise clients of Hughes and Atlantic regarding substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf.

In addition, a portion of the misappropriated proceeds was recycled and provided by JASON GALANIS to entities affiliated with co-conspirators in order to enable the purchase of subsequent Tribal Bonds issued by the WLCC. As a result of the use of recycled proceeds to purchase additional issuances of Tribal Bonds, the face amount of Tribal Bonds outstanding increased and the amount of interest payable by the WLCC increased, but the actual bond proceeds available for investment on behalf of the WLCC did not increase.

* * *

In addition to the prison term, JASON GALANIS, 47, was sentenced to three years of supervised release. GALANIS was also ordered to forfeit $43,277,436 and to make restitution in the amount of $43,785,176.

Trial with respect to the remaining defendants is scheduled to begin on February 5, 2018, before the Honorable Ronnie Abrams.

This conviction represents JASON GALANIS’s second conviction in this District in the past year. On February 15, 2017, GALANIS was sentenced by the Honorable P. Kevin Castel to 135 months in prison in connection with his participation in a scheme to manipulate the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and to defraud the shareholders of that company.

Mr. Kim praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Rebecca Mermelstein, Brian Blais, Aimee Hector, and Andrea Griswold are in charge of the prosecution.

[1] As for the defendants who have not pled guilty, the description of the charges set forth herein constitute only allegations.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that AVANEESH KRISHNAMOORTHY, who worked as a vice president and risk management specialist for a Manhattan-based investment bank (the “Investment Bank”), pled guilty earlier today to a criminal Information (the “Information”) charging him with engaging in a scheme to commit insider trading. KRISHNAMOORTHY made over $78,000 by trading in the stock and options of three publicly traded companies based on material nonpublic information he misappropriated from the Investment Bank and its parent company (the “Company”). KRISHNAMOORTHY pled guilty before United States District Judge Jesse M. Furman.

Acting U.S. Attorney Joon H. Kim said: “As he admitted today in federal court, Avaneesh Krishnamoorthy abused his position as an investment bank executive to get nonpublic information about several companies and then trade on it. We remain committed to prosecuting financial professionals whose greed drives them to break the law.”

According to the allegations in court documents, including the Information and a previously filed criminal complaint, and statements made during court proceedings:

As a vice president and risk management specialist, KRISHNAMOORTHY was given access to material, nonpublic information concerning mergers and acquisitions in which the Investment Bank was potentially going to be retained.

In November 2016, the Investment Bank was contacted about financing the acquisition of Neustar, Inc., a company whose shares are traded on the New York Stock Exchange, by a private equity fund (the “Fund”). KRISHANMOORTHY received multiple emails regarding the Investment Bank’s potential involvement in the transaction, which also summarized the mechanics of the deal. In violation of the Company’s policies and in breach of his duties to the Company and its clients, KRISHNAMOORTHY used this material nonpublic information to acquire Neustar stock and options. In the days and weeks after receiving the emails, KRISHNAMOORTHY purchased numerous Neustar call options and hundreds of shares of Neustar stock before the public announcement of the transaction. KRISHANMOORTHY did not reveal these trades or the existence of the underlying brokerage accounts to the Company. The price of Neustar stock increased by approximately 20% following the public announcement of the Fund’s acquisition of Neustar on December 14, 2016. KRISHNAMOORTHY also used material nonpublic information that he received from the Company to make profitable trades in securities of Cabelas Inc. and Axiall Corporation.

As a result of the scheme, KRISHNAMOORTHY reaped over $78,000 in ill-gotten gains, which he has agreed to forfeit to the Government as part of his plea agreement.

* * *

KRISHNAMOORTHY, 42, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

KRISHNAMOORTHY is scheduled to be sentenced November 21, 2017.

Mr. Kim praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission.

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that KEVIN WILTSHIRE was sentenced today in White Plains federal court to a prison term of 30 years and one day for crimes committed as part of a Yonkers-based street gang, “Cruddy 650,” including the murder of Andre Folsom, who was killed in Greenacres, Florida, on May 26, 2014. WILTSHIRE pled guilty on April 10, 2017, to participating in the Cruddy 650 racketeering conspiracy, to using and carrying firearms during and in relation to that conspiracy, and to using a firearm to murder Folsom. WILTSHIRE pled guilty before U.S. District Judge Vincent Briccetti, who imposed today’s sentence.

Acting U.S. Attorney Joon H. Kim stated: “Kevin Wiltshire and his fellow gang members wrought havoc on the City of Yonkers through shootings, drug distribution, and robberies. They also took their mayhem on the road, with disastrous consequences for Andre Folsom, whom Wiltshire murdered in Greenacres, Florida, in a senseless act of violence. Thanks to the hard work of the FBI and Yonkers Police Department, Wiltshire and the other members of Cruddy 650 have been brought to justice.”

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

Cruddy 650 is a criminal enterprise operating principally in and around the City of Yonkers, New York. Cruddy 650 was founded in 2013 as the result of an alliance between gang members hailing from various parts of Yonkers, including Riverdale Avenue, Woodworth Avenue, Warburton Avenue, and Cottage Place Gardens. Even after the alliance, members of the gang hailing from Cottage Place Gardens continued to identify primarily as “Cruddy,” while members of the gang hailing from Riverdale Avenue identified primarily as “650.”

Cruddy 650 members and associates protected and promoted the gang’s power and territory, and sought to enrich its members through acts of violence, intimidation, and the sale of illegal drugs. During the time period relevant to the Superseding Indictment, members and associates of Cruddy 650 were responsible for multiple shootings and attempted murders, street robberies, robberies of banks and other businesses, bank fraud, witness tampering, and the distribution of narcotics, including crack cocaine and marijuana. Victims of the shootings and other acts of violence perpetrated by members of Cruddy 650 included both rival gang members and innocent bystanders.

The violence of the Cruddy 650 enterprise and its members spread from Yonkers, New York, to Florida. On May 26, 2014, KEVIN WILTSHIRE murdered Andre Folsom in Greenacres, Florida, shooting him in the head during a dispute in the parking lot of a Walmart store.

The tragic circumstances of Folsom’s death did not deter WILTSHIRE from further violence. After the murder, he and his fellow Cruddy 650 members returned to Yonkers, where he continued to engage in acts of violence on behalf of the gang. Of particular note, during the summer of 2014, WILTSHIRE and a co-conspirator shot into a crowd in the vicinity of Oliver Street in Yonkers. Although their objective was to kill rival gang members, no one was seriously hurt. Subsequently, on September 21, 2014, WILTSHIRE and several co-conspirators again fired on rival gang members in the vicinity of Oliver Avenue in Yonkers.

WILTSHIRE, 22, of Yonkers, New York, was sentenced to 25 years on the murder count, five years on the firearms offense, and one day on the racketeering count, all to run consecutively, to be followed by five years’ supervised release.

Mr. Kim praised the outstanding investigative work of the FBI’s Westchester County Safe Streets Task Force, which comprises agents and investigators from the FBI, the United States Probation Office, the Westchester County District Attorney’s Office, the Westchester County Department of Public Safety, the New York City Police Department, the City of Yonkers Police Department, the City of Peekskill Police Department, and the Mount Vernon Police Department. He also thanked the FBI’s Miami Division and the Palm Beach County Sheriff’s Office for their assistance.

The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Scott Hartman and Jessica Feinstein are in charge of the prosecution.

Joon H. Kim, Acting United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge of the U.S. Drug Enforcement Administration’s New York Field Division (“DEA”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an Indictment charging nine members of a Bronx drug trafficking organization with narcotics and firearms trafficking offenses. The case is assigned to U.S. District Judge Kimba M. Wood.

Acting Manhattan U.S. Attorney Joon H. Kim said: “The defendants, members of a drug organization associated with the Crips street gang, allegedly sold large amounts of heroin, crack cocaine, and illegal firearms – including assault rifles – on the streets of the central Bronx. Together with our partners at the DEA and the NYPD, we are committed to protecting our city from drugs and illegal guns.”

DEA Special Agent in Charge James J. Hunt said: “Gun and drug trafficking have been the financial fortress behind gangs, such as the Hughes Avenue Organization. Unfortunately, these gangs set up shop in communities, intimidating neighborhoods and putting them in danger. Law enforcement has pooled resources to target drug gangs in this city and to remove those responsible for fueling gun violence and drug trafficking.”

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

The members of the Hughes Avenue drug trafficking organization (the “Hughes Avenue DTO”) controlled narcotics trafficking near East Tremont Avenue, Hughes Avenue, and Belmont Avenue in the Bronx, New York. From 2016 to August 2017, members of the Hughes Avenue DTO sold heroin and crack cocaine in that area. Certain members of the Hughes Avenue DTO also illegally sold firearms for profit. firearms included an AK-47 assault rifle, an SKS assault rifle, a shotgun, and handguns. Members of the DTO are also members and associates of the “Rolling 30s” neighborhood set of the nationwide Crips street gang.

Count One of the Indictment charges ARIEL ACOSTA, a/k/a “A-Loc,” a/k/a “Blue,” a/k/a “True Blue,” ZORA BENITEZ, a/k/a “Baby," DERRICK RICHARDSON, a/k/a “J-Rock,” KEVIN RIVERA, a/k/a “Montana,” SANTOS RODRIGUEZ, a/k/a “Lefty,” EDWIN ROMAN, a/k/a “Capo,” KENNETH SAMPSON, a/k/a “Remo,” JAYLEN SCOTT-KING, a/k/a “Boo,” a/k/a “Legend,” a/k/a “Flirm,” and ALEXIS VALDEZ, a/k/a “Lil Rico,” with participating in a conspiracy to distribute one kilogram and more of heroin and 280 grams and more of crack cocaine.

Count Two of the Indictment charges ACOSTA, SCOTT-KING, and VALDEZ with firearms trafficking.

Counts Three and Four of the Indictment charge ACOSTA and VALDEZ with being felons in possession of firearms.

In a coordinated operation, eight of the defendants were arrested in New York on Tuesday afternoon and earlier today. Defendants ACOSTA, RICHARDSON, RODRIGUEZ, and VALDEZ were in custody on state charges and have been transferred to federal custody. They will be presented this afternoon in Manhattan federal court. BENITEZ remains at large. A chart identifying each defendant, the charges, and the maximum penalties is attached to this release.

* * *

Mr. Kim thanked the DEA and the NYPD for their work on the investigation.

The Office’s Violent and Organized Crime Unit is overseeing the case. Assistant U.S. Attorneys Drew Skinner and Anden Chow are in charge of the prosecution.

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

CHARGE(S)

DEFENDANTS

MAXIMUM PENALTIES

Count One

Narcotics conspiracy, 21 U.S.C. § 846

(Conspiracy to distribute and possess with intent to distribute 1 kilogram and more of heroin and 280 grams and more of crack cocaine.)

ARIEL ACOSTA,

a/k/a “A-Loc,”

a/k/a “Blue,”

a/k/a “True Blue,”

ZORA BENITEZ,

a/k/a “Baby,"

DERRICK RICHARDSON,

a/k/a “J-Rock,”

KEVIN RIVERA,

a/k/a “Montana,”

SANTOS RODRIGUEZ,

a/k/a “Lefty,”

EDWIN ROMAN,

a/k/a “Capo,”

KENNETH SAMPSON,

a/k/a “Remo,”

JAYLEN SCOTT-KING,

a/k/a “Boo,”

a/k/a “Legend,”

a/k/a “Flirm,”

ALEXIS VALDEZ,

a/k/a “Lil Rico”

Lifetime imprisonment

Mandatory minimum: 10 years in prison

Count Two

Firearms trafficking, 18 U.S.C. § 922(a)(1)(A)

ARIEL ACOSTA,

a/k/a “A-Loc,”

a/k/a “Blue,”

a/k/a “True Blue,”

JAYLEN SCOTT-KING,

a/k/a “Boo,”

a/k/a “Legend,”

a/k/a “Flirm,”

ALEXIS VALDEZ,

a/k/a “Lil Rico”

5 years in prison

Count Three

Felon in possession of firearms, 18 U.S.C. § 922(g)

ARIEL ACOSTA,

a/k/a “A-Loc,”

a/k/a “Blue,”

a/k/a “True Blue,”

ALEXIS VALDEZ,

a/k/a “Lil Rico”

10 years in prison

Count Four

Felon in possession of firearms, 18 U.S.C. § 922(g)

Count Four

Felon in possession of firearms, 18 U.S.C. § 922(g)

10 years in prison

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that JONATHAN POWELL pled guilty today to one count of fraud in connection with his scheme to obtain unauthorized access to more than 1,000 email accounts maintained by a New York City area university in order to download sexually explicit photos and videos.  POWELL pled guilty earlier today in Manhattan federal court before United States District Judge Alison J. Nathan.

Acting U.S. Attorney Joon H. Kim said:  “From a computer in Arizona, Jonathan Powell wreaked havoc on the email servers of a New York area university.  To feed his perverse desire for personal photos and videos, Powell hacked into hundreds of student and faculty email accounts by surreptitiously changing their passwords.  Cybercrime is a threat to organizations large and small, from big companies to local universities.  Luckily, the FBI was able to stop Powell before he victimized others.”

According to the allegations in the Information to which POWELL pled guilty, a criminal complaint filed against POWELL, as well as statements made during the plea and other proceedings in the case:

From October 2015 up to September 2016, POWELL obtained unauthorized access to email accounts hosted by a U.S.-based university which has its primary campus in New York, New York (“University-1”).  POWELL obtained unauthorized access to these accounts by accessing the password reset utility maintained by the email servers at Univeristy-1, which was designed to allow authorized users to reset forgotten passwords to accounts.  POWELL utilized the password reset utility to change the email account passwords of students and others affiliated with University-1.  Once POWELL gained access to the compromised email accounts (the “Compromised Accounts”), he obtained unauthorized access to other password-protected email, social media, and online accounts to which the Compromised Accounts were registered, including, but not limited to, Apple iCloud, Facebook, Google, LinkedIn, and Yahoo! accounts.

Specifically, using the Compromised Accounts, POWELL requested password resets for linked accounts hosted by those websites (the “Linked Accounts”), resulting in password reset emails being sent to the Compromised Accounts, which allowed POWELL to change the passwords for the Linked Accounts.  POWELL then logged into the Linked Accounts and searched within the Linked Accounts, gaining access to private and confidential content stored in the Linked Accounts.  In one instance, POWELL searched a University-1 student’s linked Gmail account for digital photographs and for various lewd terms.  The Government’s investigation ultimately revealed that POWELL accessed the Compromised and Linked Accounts at least in part to download sexually explicit photographs and videos of college-aged women.

An analysis of University-1 password reset utility logs and other data revealed that POWELL accessed the University-1 password reset utility approximately 18,640 different times between October 2015 and September 2016.  During that timeframe, POWELL attempted approximately 18,600 password changes in connection with approximately 2,054 unique University-1 email accounts, and succeeded in making 1,378 password changes in connection with approximately 1,035 unique University-1 email accounts, in some cases compromising the same email accounts multiple times. 

*              *             *

POWELL, 30, of Phoenix, Arizona, was arrested on November 2, 2016.  POWELL pled guilty today to one count of fraud in connection with computers, which carries a maximum sentence of five years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as the defendant’s sentence will be determined by the judge.

POWELL is scheduled to be sentenced on December 1, 2017, at 12 p.m.

Mr. Kim praised the investigative work of the FBI.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Christopher J. DiMase is in charge of the prosecution.

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 New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment in Manhattan federal court charging PETER G. JOHNSON, PETER B. JOHNSON, and THOMAS REICH with defrauding a group of lenders (the “Banks”) with false “borrowing base” reports designed to secure and maintain a $400 million line of credit for their company, Transmar Commodity Group Ltd. (“Transmar” or the “Company”). PETER G. JOHNSON was Transmar’s president and chief executive officer. PETER B. JOHNSON, the son of PETER G. JOHNSON, was responsible for the operations of Transmar affiliate Euromar Commodities GMBH (“Euromar”), and was also involved in Transmar’s affairs. THOMAS REICH was a vice president in Transmar’s finance department. When Transmar filed for bankruptcy in December 2016, it owed the Banks approximately $360 million. PETER G. JOHNSON and PETER B. JOHNSON were arrested at their New Jersey homes this morning. THOMAS REICH surrendered to the FBI this afternoon.

Acting Manhattan U.S. Attorney Joon H. Kim said: “As alleged, these executives of a major cocoa company that supplied some of the world’s largest confectionary conglomerates defrauded lenders out of hundreds of millions of dollars by lying repeatedly about the financial condition of their company. As they allegedly deceived lenders about the collateral available to secure their borrowings, the defendants regularly emailed each other about how the paperwork was fake. Together with our partners at the FBI, we remain committed to rooting out corporate fraud of all types and holding the alleged perpetrators accountable.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As alleged, Johnson, Johnson, and Reich falsely represented Transmar’s financials, manipulating their monetary value in more ways than one, in order to receive loans they didn’t qualify for – plain and simple. In the end, it became clear the payoff would be a score they couldn’t settle. This is not a crime to be taken lightly, as our charges today prove.”

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

From at least 2014 through at least December 2016, Transmar maintained a credit facility from the Banks that varied from approximately $250 million to approximately $400 million. To secure and maintain these hundreds of millions of dollars in credit, PETER G. JOHNSON, PETER B. JOHNSON, THOMAS REICH, and others schemed to misrepresent material information about Transmar’s finances, making it appear that Transmar had far more credit-eligible collateral than it actually had.

The scheme centered on periodic “borrowing base” reports (“BB Reports”) that the Banks required Transmar to submit, sometimes as frequently as weekly, as a condition to continued credit extension. The BB Reports were supposed to accurately reflect and quantify those portions of Transmar’s collateral that qualified for financing under the terms of credit agreements between Transmar and the Banks.

Beginning no later than 2014, THOMAS REICH and others manipulated the BB Reports and related documents to give the false impression that Transmar had sufficient eligible collateral to support the amount of credit the Banks were extending. PETER G. JOHNSON and PETER B. JOHNSON directed and encouraged this manipulation. The manipulation involved, among other devices, counting inventory that Transmar had already sold, counting accounts receivable for which Transmar had already received payment, recording fake accounts receivable, and arranging “circle” transactions with amenable third-party intermediaries which agreed to “buy” goods from Transmar with Transmar’s own money, funneled to the third parties through Euromar.

The defendants acknowledged their manipulative devices in internal Transmar correspondence. On June 14, 2016, for example, PETER B. JOHNSON responded to an email from REICH about a circle arrangement by lamenting, “this is the problem with fake circles and non-existent last minute intermediary deals, there is never a payment to settle them.” After suggesting a further device to rectify an immediate problem related to a BB Report, JOHNSON continued, “[t]here isn’t going to be an audit [of the BB Report] for a year and its [sic] causing huge problems to keep writing up fictitious contracts and paperwork.”

* * *

PETER G. JOHNSON, 68, of Harding Township, New Jersey, PETER B. JOHNSON, 38, of Morristown, New Jersey, and THOMAS REICH, 59, of Montvale, New Jersey, have each been charged in the Indictment with one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, one count of bank fraud, and one count of wire fraud affecting a financial institution. Each charge carries a maximum prison term of 30 years.

Mr. Kim praised the investigative work of the FBI.

This case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorneys Sarah Eddy and Benet Kearney are in charge of the prosecution.

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

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 James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced today that JAMEL GODDARD, a/k/a “Payroll,” was arrested for his alleged role as the leader of a sex trafficking and prostitution enterprise, which exploited vulnerable minor girls and adult women.  GODDARD was charged in an Indictment with conspiracy to commit sex trafficking, sex trafficking by force, fraud or coercion, and sex trafficking of a minor.  GODDARD was also charged with the use of interstate facilities and interstate travel to promote a prostitution enterprise.  GODDARD will be presented before U.S. Magistrate Judge Ronald L. Ellis in Manhattan federal court this afternoon.  The case has been assigned to U.S. District Judge Loretta A. Preska.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As alleged, Jamel Goddard sexually exploited and trafficked vulnerable minor girls and adult women for profit.  He used physical violence, threats, and intimidation to control his victims and force them to engage in sex work.  Along with our partners at the FBI and the NYPD, we will continue to find, investigate, and prosecute those engaged in sex trafficking.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “For Goddard to allegedly take advantage of these helpless young girls and women—­ their lack of education, stability, and history of trauma, illustrates his lack of respect and regard for the victims as human beings. They did not deserve to be used, abused, and sold for the sake of Goddard greedily filling his pockets. The FBI will continue to investigate trafficking enterprises, and we will not allow disturbing crimes of this nature to plague our communities.”

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

 Since at least 2012, GODDARD directed and conducted a criminal sex trafficking and prostitution enterprise (the “Enterprise”) that recruited and exploited minor girls and adult women, and then prostituted them using an online classifieds website for his own profit.  GODDARD operated the Enterprise out of motels in the Bronx and Brooklyn, New York, upstate New York, and in or around other states, including New Jersey, Connecticut, Rhode Island, and Florida.

GODDARD typically recruited vulnerable minor and adult victims who lacked education, a stable home, and family support, and who had suffered past physical and emotional trauma.  He then exploited those victims’ need for shelter, stability, and affection as a means to prostitute them for his own financial gain.  Once GODDARD recruited his victims, he advertised them on classifieds websites, such as Backpage.com (“Backpage”). 

To evade detection by law enforcement, the Enterprise’s advertisements often purported to be offering individuals as escorts.  However, such advertisements often signaled that they were, in fact, offering individuals for sale for commercial sex acts through a variety of cues, including pictures of scantily-clad minor and adult women in sexually provocative poses, with coded language indicating that the people being offered would perform commercial sex acts.

GODDARD’s victims typically engaged in commercial sex with multiple customers in a single day.  Customers typically paid for commercial sex with GODDARD’s victims in cash, and the victims were able to earn thousands of dollars from commercial sex in a single day.  All or most of the victims’ earnings from commercial sex was taken by GODDARD.

GODDARD set rules for his victims, controlled their actions, and punished violations of his rules and disobedience by using physical violence.  GODDARD threatened violence and physically beat his victims for, among other things, being disrespectful, owing GODDARD money, and holding back commercial sex earnings from GODDARD. 

*                *                *

GODDARD, 31, of the Bronx, is charged with one count of conspiracy to commit sex trafficking, which carries a maximum sentence of life in prison; one count of sex trafficking by force, fraud, or coercion, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 15 years in prison; one count of sex trafficking of a minor victim, 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 and interstate travel 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.

Any individuals who believe they have information concerning JAMEL GODDARD, a/k/a “Payroll,” that may be relevant to the investigation, or information regarding other sex trafficking crimes, should contact the Federal Bureau of Investigation at (212) 384-1000 or https://tips.fbi.gov/, or the New York City Police Department at (646) 610-7272.

Mr. Kim praised the outstanding investigative work of the FBI and the NYPD.  Mr. Kim also thanked the Port Authority of New York and New Jersey - Youth Services Unit and the New York City Administration for Children’s Services for their assistance during the investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Elizabeth Hanft, Sagar K. Ravi, and Alexandra N. Rothman are in charge of the prosecution.

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

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge of the U.S. Drug Enforcement Administration’s New York Field Division (“DEA”), Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), George Beach, the Superintendent of the New York State Police (“NYSP”), James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), and George Beach, Superintendent, New York State Police, announced charges against five defendants for allegedly possessing and conspiring to possess with the intent to distribute over 2,000 kilograms of cocaine, in violation of the maritime drug enforcement laws of the United States.  IVAN CORTES MOLINERO, FRANCISCO JAVIER OCHOA JOAQUIN, MIGUEL CHAVEZ DELGADO, ENEDINO GATAN VARGAS, and FERNANDO MORENO HERNANDEZ were transported to and arrived in the Southern District of New York on August 4, 2017, and are expected to be presented later today, before Magistrate Judge Ronald L. Ellis in Manhattan federal court.

Manhattan Acting U.S. Attorney Joon H. Kim said:  “These five defendants allegedly made a brazen attempt to ship nearly 5,000 pounds of cocaine to the U.S., packing the drugs in a speedboat and then trying to outrun authorities in the waters off of Mexico. I want to thank our law enforcement partners, who stopped this massive shipment of narcotics from arriving at our shores.”

DEA Special Agent in Charge James J. Hunt said:  “From digging border tunnels to using go-fast boats, drug cartels will stop at nothing to get their illicit product into America. This seizure was a significant profit loss to the traffickers with a sobering effect to drug users in the U.S. I would like to thank our law enforcement partners in the U.S, Mexico and Colombia for their diligent work and collaboration on this investigation.”

HSI Special Agent-in-Charge Angel Melendez said:  “This team of perpetrators allegedly attempted to bring more than two tons of cocaine though U.S. borders.  It is the collaborative effort with the DEA and other federal and local agencies that law enforcement was able to interdict this action and keep deadly drugs off American streets.”
 

NYPD Commissioner James P. O’Neill said:  “As alleged, this criminal enterprise attempted to import a significant amount of cocaine to the United States by boat but law enforcement intercepted this shipment, five individual were taken into custody, and were subsequently charged. This investigation demonstrates the commitment of the NYPD to work alongside our federal partners to stop illegal drugs from entering our communities and hold responsible those who work to profit from illegal narcotics.”

State Police Superintendent George P. Beach II said: “We simply will not tolerate this type of alleged illegal drug trafficking activity in New York State. The valuable partnerships developed through the New York Organized Crime Drug Enforcement Strike Force were instrumental in these arrests and the seizure of these lethal narcotics. I want to thank our federal, state and local partners for their ongoing hard work and collaboration on this case, which has resulted in the arrests and removal of five alleged dangerous criminals who profit at the expense of our communities.”

As alleged in the criminal Complaint,[1] filed earlier this week in Manhattan federal court:

The DEA has been investigating a Colombian drug cartel (the “Cartel”) that sends shipments of cocaine to various points around the world by, among other methods, panga boats or “go-fasts.”  Go-fasts are small boats, typically similar in size to speed boats, with hulls of approximately 20 to 50 feet and a maximum capacity of approximately five passengers. 

On or about July 8, 2017, a United States Navy Aircraft (the “Aircraft”) was on routine patrol off the western coast of Mexico and approximately 590 nautical miles south of Mexico.  While there, an occupant of the Aircraft observed what appeared to be a go-fast boat (the “Go-Fast”).  The Aircraft communicated this information to the command of the United States Coast Guard (the “Coast Guard”), which dispatched a Coast Guard cutter (the “Cutter”) to intercept and board the Go-Fast.

The Cutter approached the Go-Fast and launched a helicopter and a patrol boat (the “Patrol Boat”), which proceeded to intercept the Go-Fast.  Occupants of the Patrol Boat (the “Boarding Team”) boarded and gained control of the Go-Fast, where they found CORTES MOLINERO, OCHOA JOAQUIN, CHAVEZ DELGADO, GATAN VARGAS, and MORENO HERNANDEZ. 

The Boarding Team observed numerous bales or large bundles wrapped in black plastic and brown tape on the deck of the Go-Fast.  The bales were in plain sight and occupied a substantial portion of the deck of the Go-Fast.

The Boarding Team recovered approximately 107 bales and one loose brick from the Go-Fast.  Two samples from the bales were field-tested, and tested positive for the presence of cocaine.  In total, the contents of the 107 bales and brick weighed approximately 2,141 kilograms or approximately 4,720 pounds.

*                      *                      *

CORTES MOLINERO, 30, OCHOA JOAQUIN, 40, CHAVEZ DELGADO, 46, GATAN VARGAS, 51, and MORENO HERNANDEZ 31, are citizens of Mexico.  Each defendant is charged with one count of conspiring to violate maritime drug enforcement laws and one count of violating maritime drug enforcement laws by possessing with the intent to distribute cocaine.  Each defendant faces a maximum sentence of life imprisonment and a mandatory minimum sentence of ten years’ imprisonment.  The statutory maximum penalties and mandatory minimum penalties 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 efforts of the DEA’s New York Drug Enforcement Strike Force, which is comprised of officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations, the New York State Police, and the U.S. Marshal Service, among other agencies.  Mr. Kim also praised the outstanding efforts and assistance provided by the Coast Guard, United States Customs and Border Protection, the United States Navy, and the Naval Criminal Investigative Service.

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorney Jane Kim is in charge of the prosecution. 

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 are only allegations, and every fact described should be treated as an allegation.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that WENDELL BELLE, a/k/a “Delly Dell,” was sentenced this afternoon to a term of 384 months of imprisonment in federal custody, which must run consecutively to a prior sentence of 108 months of imprisonment in state custody, for his crimes as a high-ranking member of the “Young Gunnaz” or “YGz” gang. Those crimes included the April 16, 2012 murder of Moises Lora, a/k/a “Noah,” 16, during which BELLE and several other YGz gang members stomped Lora to death in a courtyard in the Melrose housing projects in the Bronx, and the November 26, 2013 attempted murder of a rival gang member, whom BELLE shot near the Bronx Criminal Courthouse. BELLE was sentenced in Manhattan federal court by United States District Judge Valerie E. Caproni, before whom he previously pled guilty.

Acting Manhattan U.S. Attorney Joon H. Kim said: “Wendell Belle and his fellow gang members stomped to death Moises Lora, a frail, 90-pound, 16-year-old, a few yards from a playground, and Belle later shot a rival gang member on a busy street in the middle of a workday near the Bronx Criminal Courthouse. The sentence imposed holds Belle accountable for his brutal crimes, and we hope that it also brings some comfort to the victims of Belle’s crimes, including the family of Moises Lora. Together with our law enforcement partners, we will continue to aggressively prosecute those who engage in such violence in our communities.”

According to the charging and other documents filed in the case, as well as the evidence presented at a co-defendant’s presentencing hearing and statements made during BELLE’s guilty plea and sentencing proceedings and other court proceedings in this case:

BELLE was a high-ranking member of the Bronx-based street gang known as the YGz. From at least 2005 to 2016, members and associates of the YGz enriched themselves by committing robberies and by selling drugs, such as crack cocaine, heroin, and marijuana, and committing acts of violence, including the murder of rival gang members, rival drug traffickers, and innocent bystanders. As part of his involvement in the YGz gang, BELLE participated in numerous acts of violence in the South Bronx.

For example, as part of his involvement in the YGz gang, BELLE and several other YGz gang members murdered Moises Lora, a member of a rival gang, on April 16, 2012, in the South Bronx. On the date of the murder, a group of YGz members, including BELLE, got drunk, and began arguing among themselves about who had done the most violence for the YGz. This group of YGz members went to the territory of a rival gang in the Melrose housing projects to settle their dispute. Upon arriving at the Melrose projects, BELLE and other members of the YGz saw Lora and attacked him. During the attack, Lora’s skull was fractured in several places. BELLE and the group left Lora to die. Following the stomping, BELLE and several of his confederates bragged to fellow YGz members about what they had done.

In addition, on November 26, 2013, BELLE shot and attempted to kill a rival gang member in the vicinity of the Bronx County Criminal Court.

* * *

Mr. 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 County District Attorney’s Office for their support in this case.

This case is being handled by this 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.

###

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that GARY HIRST, former president and chairman of the board of Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, was sentenced to 78 months in prison for defrauding the shareholders of that company by secretly giving away nearly $72 million of company stock to himself and his co-conspirators for no legitimate business purpose. HIRST was convicted after a two-week trial in September, 2016, before U.S. District Judge P. Kevin Castel.

Acting U.S. Attorney Joon H. Kim said: “Today’s sentence reflects the magnitude of Gary Hirst’s massive fraud scheme, which netted tens of millions in ill-gotten gains. Hirst and his co-conspirators issued large amounts of stock, lied about their roles, and found other novel means to defraud the stockholders of Gerova Financial and the investing public. Ultimately, Hirst’s stock manipulation resulted not in huge returns, but instead in a long prison sentence.”

According to the allegations contained in the Indictment as well as the evidence presented during trial[1]:

From 2009 to 2011, GARY HIRST, along with his co-conspirators Jason Galanis, John Galanis, Derek Galanis, Ymer Shahini, and Gavin Hamels, engaged in a scheme to defraud the shareholders of Gerova, and the investing public, by issuing shares of Gerova stock for no legitimate business purpose and by effecting securities transactions in Gerova stock for the purpose of conferring millions of dollars of undisclosed remuneration on HIRST and his co-conspirators.

As a part of the scheme to defraud, GARY HIRST and Jason Galanis obtained sufficient control over Gerova to be able to cause Gerova to enter into transactions of their own design, and for their benefit, including the issuance of Gerova stock. Jason Galanis obtained this control without causing himself to be identified as an officer or director of Gerova in order to appear to abide by an SEC-imposed bar which forbade him from holding such positions at publicly traded companies. Among other means and methods, HIRST caused over 5 million shares of Gerova stock, which represented nearly half the company’s public float and which were intended for HIRST and his co-conspirators’ ultimate benefit, to be issued to and held in the name of Ymer Shahini, who knowingly served as a foreign nominee for the co-conspirators. HIRST, Jason Galanis, John Galanis, Jared Galanis, Derek Galanis, and Shahini understood that the purpose of the stock grant to Shahini was to disguise the co-conspirators’ true ownership interest in the stock, and to evade the SEC’s regulations for issuing unregistered shares of stock.

In furtherance of the scheme, HIRST and his co-conspirators created fraudulent, back-dated documents to conceal their theft of the stock and cover their tracks. Also in furtherance of the scheme, HIRST deliberately misled Gerova’s other officers, including its chief financial officer, and caused Gerova to fail to disclose the stock giveaway in Gerova’s public filings with the SEC. In a telephone call with Jason Galanis that was recorded by the FBI, HIRST gloated, upon reviewing a draft of one such public filing, “That whole, that whole Shahini thing, I mean, nobody, they totally missed it. Everybody.”

At the same time, and as a further part of the scheme to defraud, HIRST’s co-conspirators opened and managed brokerage accounts in the name of Shahini (the “Shahini Accounts”), effected the sale of Gerova stock from the Shahini Accounts, and received and concealed the proceeds, knowing that this activity was designed to conceal from the investing public the fraudulent nature of the co-conspirators’ ownership of and control over the Gerova stock.

Jason Galanis, among others, also fraudulently induced investment advisers, including Gavin Hamels, to purchase shares of Gerova stock in the investment advisers’ client accounts by offering compensation and/or other benefits to the respective investment adviser. By causing the purchase of Gerova stock at the time, quantity, and/or price of their choosing, the co-conspirators were able to, among other things, effectuate the sale of large quantities of Gerova stock from the Shahini Accounts that the co-conspirators controlled while artificially maintaining the price of Gerova stock through coordinated matched trading. Such coordinated trading served to manipulate the market for Gerova stock and deceive the investing public.

As a result, GARY HIRST, Jason Galanis, and their co-conspirators reaped nearly $20 million in profits, including approximately $2.6 million that benefitted HIRST directly.

* * *

In addition to the prison term, GARY HIRST, 64, was sentenced to 1 year of supervised release. HIRST was also ordered to forfeit $19,038,650.53, and restitution to be determined at a later date.

Jason Galanis, who pled guilty to two counts of conspiracy to commit securities fraud, one count of securities fraud, and one count of investment adviser fraud, was sentenced to a term of 135 months in prison on February 15, 2017. John Galanis and Derek Galanis, each of whom pled guilty to one count of conspiracy to commit securities fraud and one count of securities fraud, were each sentenced to a term of 72 months’ imprisonment on February 16, 2017. Jared Galanis, who pled guilty to misprision of a felony, was sentenced to a term of 150 days in prison on January 11, 2017. Gavin Hamels, who pled guilty to one count of conspiracy to commit securities fraud, one count of securities fraud, and one count of investment adviser fraud, is scheduled to be sentenced before Judge Castel on November 29, 2017. Defendant Ymer Shahini remains a fugitive.

Mr. Kim praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.

This charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brian Blais, Rebecca Mermelstein, and Aimee Hector are in charge of the prosecution.

[1] As for co-defendant Ymer Shahini, who remains a fugitive, the description of the charges set forth herein constitute only allegations.

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 United States Department of Homeland Security’s Homeland Security Investigations, announced today the unsealing of a criminal Complaint charging MICHAEL RIZZI and EDWARD MONAHAN with bank fraud and conspiracy to commit bank fraud, in connection with a scheme to submit false documentation to a bank to make RIZZI’s sale of property to his friend and business partner look like an “arm’s length” transaction. MONAHAN was arrested in Staten Island, New York, and is was presented in federal court. RIZZI is currently incarcerated in Federal Correctional Institute, Loretto in Pennsylvania, and is expected to be presented in federal court early next week.

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

RIZZI purchased a property (the “Rizzi Property”) in 2007 with the assistance of a mortgage (the “Mortgage”) The Mortgage was acquired by a bank (“Bank-1”) that same year. Over time, RIZZI stopped paying the Mortgage and, in 2009, the Mortgage fell delinquent. In 2015, RIZZI contacted Bank-1 and requested a short sale due to financial hardship (the “Short Sale”). Bank-1 advised RIZZI that the Short Sale was required to be an “arm’s length” transaction, meaning that the buyer could not have any personal, familial, or business connections with RIZZI.

Later that year, MONAHAN agreed to buy the Rizzi Property from RIZZI. In connection with the sale and closing of the Rizzi Property, RIZZI and MONAHAN both executed various documents in which they affirmed that the buyer and the seller were engaged in an “arm’s length” transaction, and the seller and buyer of the Rizzi Property did not have a personal or business relationship. RIZZI and MONAHAN were, in fact, friends and business partners. Among other things, RIZZI and MONAHAN were partners in the ownership of Nitecap Megastore, a Staten Island adult sex and smoke shop. MONAHAN also has posted photos and videos on social media, which depict RIZZI and MONAHAN socializing with each other.

As a result of this scheme, Bank-1 suffered more than $250,000 in losses.

* * *

RIZZI, 45, of Brooklyn, New York, and MONAHAN, 45, of Staten Island, New York, are each charged in the Complaint with one count of bank fraud and one count of conspiracy to commit bank fraud. Each charge carries a maximum sentence of 30 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Kim praised the investigative work of HSI’s El Dorado Task Force in this case, and thanked the New York City Police Department for its assistance.

The case is being prosecuted by the Office’s General Crimes Unit. Assistant United States Attorney Louis A. Pellegrino is in charge of the prosecution.

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Mark G. Peters, the Commissioner of the New York City Department of Investigation, announced the arrest of DANIEL SHERLOCK stemming from his possession of child pornography. SHERLOCK was arrested today and will be presented today before United States Magistrate Judge Henry Pitman in Manhattan.

Acting Manhattan U.S. Attorney Joon H. Kim said: “As alleged, Daniel Sherlock, a city employee, had child pornography on his work computer, which he tried to conceal through a computer program designed to permanently delete files. Whatever efforts are made to avoid detection, we are committed to prosecuting child pornography offenses and protecting children from sexual exploitation.”

DOI Commissioner Mark G. Peters said: “This defendant allegedly used his access to NYC Health + Hospital computers to download child pornography, according to the criminal complaint. DOI’s comprehensive investigation recovered dozens of these disturbing images, and even before today’s arrest DOI quickly put protocols in place to prevent this defendant from accessing City hospital computers and properties. This charged crime is serious and the security of City facilities of paramount importance – there can be no tolerance for this type of grotesque behavior. We thank the United States Attorney’s Office for the Southern District of New York for their swift response and partnership on this investigation.”

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

In June 2017, law enforcement agents searched SHERLOCK’s work computer and recovered 86 images of child pornography, many of which depicted prepubescent children engaged in sexual activity with adults. Law enforcement agents also discovered that a program named “CCleaner,” which is a privacy and cleaning tool for computers that removes files, cleans the computer registry, and cleans traces of online activities, had been installed on SHERLOCK’s computer. New York City Health and Hospitals’ records confirmed that SHERLOCK had been at work on the days the child pornography was created and “CCleaner” was installed.

* * *

DANIEL SHERLOCK, 28, of East Meadow, New York, is charged with one count of possession of child pornography, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Any individuals who believe they have information concerning DANIEL SHERLOCK that may be relevant to the investigation should contact the United States Attorney’s Office through its toll-free hotline at 212-637-0650.

Mr. Kim praised the Criminal Investigators of the U.S. Attorney’s Office, and the New York City Department of Investigation and its Office of the Inspector General for NYC Health + Hospitals for their outstanding investigative work.

This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Alexandra N. Rothman 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 below constitute only allegations and every fact described should be treated as an allegation.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William V. Grady, the Dutchess County District Attorney, announced today that there is insufficient evidence to pursue criminal charges in connection with the death of Samuel Harrell. Mr. Harrell, who was an inmate at the Fishkill Correctional Facility in Beacon, New York, died on April 21, 2015, following an altercation with correctional officers. Mr. Harrell was 30 years old at the time. The Acting U.S. Attorney and the District Attorney met today with Mr. Harrell’s family and their representatives to inform them of this decision.

After conducting a thorough and independent investigation, career prosecutors determined that there is insufficient evidence to meet the high burden of proof required for a federal criminal civil rights prosecution. To prove a violation of the federal criminal civil rights statute, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right, meaning that the officer acted with the deliberate and specific intent to do something the law forbids. Neither accident, mistake, fear, negligence nor bad judgment is sufficient to establish a federal criminal civil rights violation.

The Dutchess County District Attorney’s Office also finds that there is insufficient evidence to meet the high burden of proof necessary to support a prosecution under any State theory of homicide. Although there was a physical altercation with corrections officers, the theory of such a homicide prosecution would require that death occurred as a result of an intentional act, a reckless act, or a criminally negligent act. Any State law theory would require a direct causal connection between any injuries inflicted by the corrections officers and the resulting death. The uncontroverted findings of the autopsy in this case find no such connection.

The evidence developed during this investigation reveals the following: Mr. Harrell resided in Building 21 of the Fishkill Correctional Facility, which contains housing units for inmates, including inmates with mental health issues. On the evening of April 21, 2015, Mr. Harrell packed his personal belongings and told corrections officers that he was leaving the facility. Mr. Harrell had not yet completed his term of incarceration. A call was placed to the mental health unit for assistance. Mr. Harrell then ran from his housing unit and attempted to exit the facility. Mr. Harrell ran head-first into a locked exit door before a group of corrections officers used physical force to apprehend and handcuff him. Mr. Harrell was over six feet tall and weighed approximately 240 pounds.

There is no video evidence of the altercation between Mr. Harrell and the corrections officers and numerous eyewitness accounts of the incident, including those provided by inmates, are inconsistent and contradictory. After the altercation, Mr. Harrell and several officers were taken to the facility’s medical unit. One officer was transported to the medical unit on a stretcher and later treated at a hospital for bruised ribs. A group of officers transported Mr. Harrell to the medical unit in a wheelchair. Mr. Harrell had a faint pulse upon arrival, but shortly thereafter, his pulse could not be detected. Medical staff attempted to resuscitate Mr. Harrell. Mr. Harrell was transported to St. Luke’s Cornwall Hospital, in Orange County, where he was pronounced dead.

The Orange County Medical Examiner performed an autopsy on April 22, 2015. The Medical Examiner concluded that, although the manner of death was noted in the report as “homicide,” the cause of death was “cardiac arrhythmia due to hypertensive cardiovascular disease following physical altercation with corrections officers.” In addition, the Medical Examiner found that Mr. Harrell suffered from cardiac hypertrophy, or an enlarged heart. No bone fractures or other serious injuries were found. While the Medical Examiner identified soft-tissue injuries on Mr. Harrell’s arms and legs and one soft-tissue injury on the front of Mr. Harrell’s head, there is insufficient evidence to prove beyond a reasonable doubt that these injuries resulted from the use of excessive force. The Medical Examiner found no indication that Mr. Harrell was asphyxiated, and confirmed that none of the injuries, singularly or collectively, were a direct cause of Mr. Harrell's death.

In light of the absence of video evidence, the inconsistent eyewitness accounts, and the inconclusive medical evidence of excessive use of force, the Department of Justice could not prove beyond a reasonable doubt that any corrections officer willfully violated Mr. Harrell’s constitutional rights.

This Office analyzed these issues under the standard applicable to criminal cases, which is proof beyond a reasonable doubt. The Office expresses no view regarding any claims made against any party under the standard applicable to civil cases, which is proof by a preponderance of the evidence.

Accordingly, this Office’s investigation into Mr. Harrell’s death has been closed.

Mr. Kim thanked the Dutchess County District Attorney’s Office, the Federal Bureau of Investigation, Investigators from the U.S. Attorney’s Office, SDNY, and the New York State Department of Corrections and Community Supervision’s Office of Special Investigation for their assistance in this investigation.

Mr. Kim expressed his deep sympathy to the family of Mr. Harrell for their tragic loss.

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 a criminal Complaint charging PATRICK MURACA with wire fraud, in connection with a scheme to defraud investors in purported medical and pharmaceutical companies owned and controlled by MURACA. MURACA was arrested this morning in Pittsfield, Massachusetts, and is expected to be presented in federal court in Springfield, Massachusetts, later today.

Acting U.S. Attorney Joon H. Kim said: “Patrick Muraca promised investors their money would be used to expand his businesses, but as alleged, he instead used those funds to line his pockets. Thanks to the investigative work of the FBI, Muraca must now answer for his fraud.”

FBI Assistant Director-in-Charge William Sweeney said: “The prevalence of fraud in today’s society is simply troubling. Misappropriating investor funds for one’s own indulgences will never be taken lightly, and fraud of any kind will be thoroughly investigated.”

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

MURACA, the former President of Nuclea Biotechnologies, Inc., which filed for bankruptcy in August 2016, founded two new businesses in 2016: NanoMolecularDX LLC (“NanoMolecular”) and MetaboRx LLC (“Metabo”). In sworn testimony during a deposition conducted by the Securities and Exchange Commission (“SEC”) in April 2017, MURACA stated that NanoMolecular’s primary business is to develop medical diagnostic tests and that Metabo is a pharmaceutical company.

From at least in or about May 2016 up to and including in or about June 2017, MURACA solicited and received a total of more than approximately $1 million from investors by making false and misleading representations that the investors’ money would be used to expand the business of NanoMolecular and Metabo. MURACA then misappropriated hundreds of thousands of dollars of these investors’ funds and used the misappropriated money for personal expenses. For example, MURACA spent tens of thousands of dollars of investor funds on rent, utilities, and food distributor expenses related to the operation of a restaurant owned by his fiancée. In addition, MURACA wrote approximately $176,000 in checks to himself from the bank accounts associated with NanoMolecular and Metabo, and he used investor funds to make purchases of hundreds of dollars each at a cigar store, an online ticket retailer, and a tattoo and piercing establishment, among other businesses.

* * *

MURACA, of Pittsfield, Massachusetts, is charged in the Complaint with one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Kim praised the investigative work of the FBI in this case, and thanked the SEC, which has filed civil charges in a separate action.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney David Abramowicz is in charge of the prosecution.

The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.

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

Yesterday, a federal jury convicted the chairman of a real estate development company for his role in a scheme to bribe United Nations ambassadors to obtain support to build a conference center in Macau that would host, among other events, the annual United Nations Global South-South Development Expo.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Joon H. Kim of the Southern District of New York, Assistant Director in Charge William F. Sweeney, Jr. of the FBI’s New York Field Office and Chief Don Fort of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.

After a four week trial, Ng Lap Seng, a/k/a “David Ng,” 69, of Macau, China, was convicted of two counts of violating the Foreign Corrupt Practices Act, one count of paying bribes and gratuities, one count of money laundering and two counts of conspiracy. No sentencing date has been set.

“The defendant’s corrupt activities were all the more egregious and shameful as he tried to hide his bribes as philanthropy,” said Acting Assistant Attorney General Blanco. “Corruption is a disease that has a corrosive effect on the rule of law everywhere and harms good people throughout the world. The Department is steadfast in its mission to aggressively investigate and prosecute bribery in all its forms, and vigorously protect the rule of law.”

“In his unbridled pursuit of even greater personal fortune, billionaire Ng Lap Seng corrupted the highest levels of the United Nations,” said Acting U.S. Attorney Kim. “Through bribes and no show jobs, Ng turned leaders of the league of nations into his private band of profiteers. Ng’s journey from a Macau real estate mogul to convicted felon should serve as a cautionary tale to all tempted to follow his path. If you bring corruption to New York – whether to the State Capitol in Albany or to the halls of the U.N. General Assembly – your journey may very well end in a Manhattan federal courtroom, with a unanimous jury announcing your guilt.”

“Ng’s bribery scheme began at the intersection where business and intergovernmental matters overlap,” said Assistant Director in Charge Sweeney, Jr. He may have thought this was a good place to start, but it’s doubtful this was the ending he had in mind. This case is nothing more than an example of corruption in its purest form, and we’ve proven once again that no individual or organization is powerful enough to be immune from prosecution.”

“Today’s conviction is a result of untangling a global labyrinth of complex financial transactions used by Ng to facilitate bribes to foreign officials,” said Chief Fort. “IRS-CI has become a trusted leader in pursuit of those who use corruption as their business model to circumvent the law. CI is committed to maintaining fair competition, free of corrupt practices, through a dynamic synthesis of global teamwork and our robust financial investigative talents.”

According to the evidence presented at trial, Ng, the chairman of the Sun Kian Ip Group, conspired with and paid bribes to Francis Lorenzo, a former UN Ambassador from the Dominican Republic, and John W. Ashe, the late former Permanent Representative of Antigua and Barbuda to the UN and the 68th President of the UN General Assembly (“UNGA”). With the assistance of Jeff C. Yin, an accountant and co-conspirator who worked with Ng and others and previously pleaded guilty, Ng orchestrated a scheme with the principal objective of obtaining the formal support of the UN for a multi-billion dollar facility that Ng hoped to build in Macau using the Sun Kian Ip Group (the “Macau Conference Center”). Ng wanted the Macau Conference Center to serve as a location for meetings, discussions, forums, and other events associated with the UN. In particular, he wanted it to serve as the permanent home of the annual “Global South-South Development Expo,” which is run by the UN Office for South-South Cooperation, and is hosted in a different country or city every year.

The trial evidence further showed that Ng bribed Ambassador Ashe and Ambassador Lorenzo (together, the “Ambassadors”) in exchange for their agreement to use their official positions to advance Ng’s interest in obtaining formal UN support for the Macau Conference Center. As the evidence demonstrated at trial, Ng paid the Ambassadors in a variety of forms. For example, Ng appointed Ambassador Lorenzo as the President of South-South News, a New York-based organization — funded by Ng — which described itself as a media platform dedicated to advancing the implementation of the UN’s Millennium Development Goals, a set of philanthropic goals. Ng provided bribe payments to Ambassador Lorenzo through South-South News by transmitting payments from Macau to a company in the Dominican Republic affiliated with Ambassador Lorenzo’s brother (the “Dominican Company”). Through South-South News, Ng also made payments to Ambassador Ashe, including to Ambassador Ashe’s wife, who was paid in her capacity as a “consultant” to South-South News, and to an account that Ambassador Ashe had established, purportedly to raise money for his role as President of UNGA. Ng also provided bribes through cash and wire payments to the Ambassadors.

According to the trial evidence, one of the actions that the Ambassadors took in exchange for bribe payments, to advance Ng’s objectives, was to submit an official document to the then-UN Secretary-General in support of the Macau Conference Center (the “UN Document”). The UN Document claimed that there was a need to build the Macau Conference Center to support the UN’s global development goals. Ambassador Ashe, aided by Ambassador Lorenzo, initially submitted the UN Document to the UNGA in or about late February 2012. More than a year later, at Ng’s behest, the Ambassadors revised the UN Document to refer specifically to Ng’s company, the Sun Kian Ip Group, as a partner in the Macau Conference Center project. The UN Document requested that the Secretary-General circulate the UN Document “as a document of the sixty-sixth session of the General Assembly,” under a specific item of the official UNGA agenda. The Secretary-General followed this request, thereby making the UN Document an official part of the UNGA record.

Five other defendants have been charged in this matter. Co-conspirators Lorenzo, Yin and Heidi Hong Piao have pleaded guilty and are awaiting sentencing. Shiwei Yan has pleaded and was sentenced to 20 months in prison. Co-defendant Ashe passed away in 2016 and the charges against him were dismissed.

This case was investigated by the FBI and IRS-CI. Trial Attorney David A. Last of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Daniel C. Richenthal, Janis M. Echenberg and Douglas S. Zolkind of the Southern District of New York are prosecuting the case.

The Criminal Division’s 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.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that WILLIAM T. WALTERS, a/k/a “Billy,” was sentenced to five years in prison for conspiring to commit insider trading from at least 2008 through 2014, principally relating to securities of Dean Foods Company (“Dean Foods” or the “Company”). 

Acting U.S. Attorney Joon H. Kim said: “Billy Walters, a legendary sports gambler who mastered playing the odds, refused to play by the rules. As the evidence at trial revealed and as a unanimous jury found, Walters cheated his way to tens of millions in illegal profits, making massive, perfectly timed trades in Dean Foods based on confidential information stolen directly from the boardroom. Making millions in the stock market with a deck stacked in your favor leads to time in a federal penitentiary. For the integrity of our securities markets, that is the blunt lesson our insider trading prosecutions must teach.”

According to the allegations in the charging documents, evidence at trial, and statements made in court proceedings:

From 2008 through 2014, WALTERS and Thomas C. Davis, among others, participated in a scheme to commit insider trading principally related to securities of Dean Foods, a Fortune 500 company that is the largest processor and distributor of fresh milk in the United States.  Davis pled guilty to insider trading, perjury, and obstruction of justice charges on May 16, 2016, and cooperated with the investigation.

From 2001 until August 7, 2015, Davis served as a member of the Board of Directors of Dean Foods (the “Board”), and regularly possessed material, nonpublic information about Dean Foods, including about the Company’s financial performance and results, comprising quarterly earnings results; contemplated and actual corporate transactions; and other significant corporate and strategic developments (the “Inside Information”).  In furtherance of the scheme, Davis violated his duties of trust and confidence to Dean Foods by providing Inside Information to WALTERS in advance of public announcements.  WALTERS, knowing that Davis owed duties of trust and confidence to the Company, used the Inside Information to execute profitable trades in Dean Foods stock.  In total, WALTERS’ trading on the basis of Inside Information netted realized and unrealized profits of approximately $32 million and avoided additional losses of approximately $11 million.  In return for Davis providing the Inside Information to WALTERS, WALTERS, among other things, provided capital to Davis for joint business ventures and made two loans to Davis for approximately $1 million in total, which Davis largely did not repay.

In furtherance of the scheme, and to avoid detection by law enforcement, WALTERS provided Davis with a prepaid cellular phone to use when passing Inside Information to WALTERS.  Moreover, WALTERS further instructed Davis to use code words when discussing the Inside Information, including by referring to Dean Foods as the “Dallas Cowboys.”

*                      *                      *

In addition to the prison term, WALTERS, 70, of Las Vegas, Nevada, was sentenced to one year of supervised release, and a $10 million fine.

Mr. Kim praised the work of the FBI and the Postal Inspection Service, and thanked the SEC and the Financial Industry Regulatory Authority (“FINRA”) for their assistance.  He also thanked the Las Vegas offices of the FBI and the Internal Revenue Service, Criminal Investigation Division.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Brooke E. Cucinella, Daniel S. Goldman, and Michael Ferrara are in charge of the prosecution.  

Acting U.S. Attorney Joon H. Kim stated: “In his unbridled pursuit of even greater personal fortune, billionaire Ng Lap Seng corrupted the highest levels of the United Nations. Through bribes and no show jobs, Ng turned leaders of the league of nations into his private band of profiteers. Ng's journey from a Macau real estate mogul to convicted felon should serve as a cautionary tale to all tempted to follow his path. If you bring corruption to New York – whether to the State Capitol in Albany or to the halls of the U.N. General Assembly – your journey may very well end in a Manhattan federal courtroom, with a unanimous jury announcing your guilt.”

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that NICO BURRELL, a/k/a “Zico Nico,” pled guilty today to racketeering conspiracy in connection with his leadership of the “Big Money Bosses” gang (“BMB”), a violent street gang founded by BURRELL that operated primarily on White Plains Road from 215th Street to 233rd Street in the Bronx.

Acting U.S. Attorney Joon H. Kim said: “For far too long, under the leadership of Nico Burrell, the BMB street gang has terrorized citizens of the Bronx through violence, robberies, and drug dealing. With Burrell’s guilty plea today, the community around White Plains Road is safer.”

According to the Indictment and other documents filed in the case, as well as statements made during the plea proceedings:

BURRELL was a founder and leader of BMB, a subset of the “Young Bosses,” or “YBz” street gang, which operated throughout New York City. Between 2007 and 2016, members and associates of BMB committed numerous acts of violence against rival gang members in the Bronx—including murders, attempted murders, and armed robberies—and sold crack cocaine and marijuana. As part of his leadership of BMB, BURRELL attempted to shoot a rival gang member on February 11, 2009, but hit an innocent bystander instead. BURRELL also sold significant amounts of oxycodone and, during pretrial detention in this case, assaulted a witness.

BURRELL was arrested in this case as a result of a multi-year investigation by the New York City Police Department’s Bronx Gang Squad (the “Bronx Gang Squad”), U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Violent Gang Unit (“HSI”), the New York Field Division of the Drug Enforcement Administration (“DEA”), and the Joint Firearms Task Force of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) into gang violence in the Northern Bronx. On April 27, 2016, the Indictment was unsealed, charging 63 members and associates of BMB with racketeering conspiracy, narcotics conspiracy, narcotics distribution, and/or firearms charges. To date, 55 of these defendants have pled guilty.

* * *

BURRELL, 25, of the Bronx, New York, was arrested on April 27, 2016. BURRELL pled guilty today to one count of racketeering conspiracy, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as the defendant’s sentence will be determined by the judge.

Mr. Kim praised the outstanding work of the NYPD’s Bronx Gang Squad, HSI, DEA, and ATF.

This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Rachel Maimin, Micah W.J. Smith, Hagan Scotten, Jessica Feinstein, and Drew Skinner are in charge of the prosecution.

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Bethanne M. Dinkins, Special Agent-in-Charge of the U.S. Department of Agriculture, Office of Inspector General (“USDA-OIG”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced that THOMAS CARRANO self-surrendered today in connection with an indictment charging him with conspiring to possess, sell, and transport roosters for purposes of participation in animal fights around the United States. The defendant was arraigned today in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker and the case has been assigned to the Honorable Deborah A. Batts.

Acting Manhattan U.S. Attorney Joon H. Kim said: “As alleged, Thomas Carrano masqueraded as a gamefowl enthusiast, going so far as to become the leader of an organization dedicated to protecting and promoting birds. But in fact, as alleged, Carrano was heavily involved in the cruel ‘sport’ of cockfighting. Thanks to the investigative work of the U.S. Department of Agriculture and the NYPD, Carrano’s alleged inhumane practices are over.”

Special Agent-in-Charge Dinkins said: “The provisions of the Animal Welfare Act were designed to protect animals from being used in illegal fighting ventures, which often entail other forms of criminal activity involving drugs, firearms and gambling. Together with the Department of Justice, animal fighting is an investigative priority for USDA-OIG, and we will work with our law enforcement partners to investigate and assist in the criminal prosecution of those who participate in animal fighting ventures.”

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

Cockfighting is an activity in which two roosters are put forward to fight one another for sport and entertainment. The roosters typically have metal spurs, known as gaffs, or plastic spurs, known as “postiza,” affixed to their legs for use in the fight. The fights between roosters are ended when one rooster is dead or refuses to continue to fight. If not killed during the fight, the losing rooster is typically killed afterwards. Roosters involved in cockfighting will often be mutilated in preparation for fights, typically by cutting off the rooster’s comb and wattle and shaping the rooster’s spur.

From January 2012 up June 2017, THOMAS CARRANO, a member and former leader of the New York chapter of the United Gamefowl Breeders Association (“NYUGBA”), conspired with others—including a co-conspirator in the Bronx, New York—to buy, sell, transport, and receive roosters for cockfighting. CARRANO used two social media accounts—one in his own name, and one in the NYUGBA’s name —to communicate with co-conspirators, including members of the NYUGBA and others that were located in the Southern District of New York. In a 2014 newsletter to its members, the NYUGBA stated that “We DO NOT promote cockfighting in any way.” Yet in messages sent through these social media accounts, CARRANO discussed breeding and training roosters for cockfighting, the sale and purchase of gaffs and postizas for cockfighting, and CARRANO’s personal participation in cockfighting.

On May 23, 2017, law enforcement personnel executed a search warrant at CARRANO’s gamefowl farm in Ontario, New York. During the search, law enforcement officers discovered, among other things, gaffs, postizas, shears for dubbing roosters, a rooster sparring dummy, a specialized ladder used to train fighting roosters, steroids, and videos of roosters being trained for cockfights. In addition, law enforcement officers recovered approximately 104 chickens, including 19 adult roosters and 12 adolescent roosters. More than three-quarters of the male birds had their comb, wattles, and/or earlobes removed. In addition, more than a third of the roosters had at least one of their natural spurs altered.

* * *

CARRANO, 44, of Ontario, New York, is charged with one count of conspiring to sell, possess, and transport animals for purposes of participating in an animal fight, which carries a maximum penalty of 5 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Kim praised the outstanding investigative work of the USDA-OIG and NYPD’s Animal Cruelty Investigations Squad, and thanked them for their ongoing support and assistance with the case. Mr. Kim also thanked the American Society for the Prevention of Cruelty to Animals for their assistance in this case.

The prosecution of this case is being overseen by the Office’s General Crimes Unit. Assistant U.S. Attorneys Alison G. Moe and Michael C. McGinnis are in charge of the case.

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

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

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that NG LAP SENG, a/k/a “David Ng,” a/k/a “Wu Liseng” (“NG”), was convicted after a four-week trial on six counts in connection with his multi-year scheme to pay more than $1.3 million in bribes to ambassadors of the United Nations (“UN”).

Acting U.S. Attorney Joon H. Kim said: “In his unbridled pursuit of even greater personal fortune, billionaire Ng Lap Seng corrupted the highest levels of the United Nations. Through bribes and a no show job, Ng turned leaders of the league of nations into his private band of profiteers. Ng’s journey from a Macau real estate mogul to convicted felon should serve as a cautionary tale to all tempted to follow his path. If you bring corruption to New York – whether to the State Capitol in Albany or to the halls of the U.N. General Assembly – your journey may very well end in a Manhattan federal courtroom, with a unanimous jury announcing your guilt.”

According to the Complaint, the Indictment, and evidence presented at trial, NG, the chairman of the Sun Kian Ip Group (the “Macau Real Estate Development Company”), conspired with and paid bribes to Francis Lorenzo, a former UN Deputy Ambassador from the Dominican Republic, and John W. Ashe, the late former Permanent Representative of Antigua and Barbuda to the UN and the 68th President of the UN General Assembly (“UNGA”). With the assistance of Jeff C. Yin, an accountant and co-conspirator who worked with NG and others and previously pleaded guilty, NG orchestrated a scheme with the principal objective of obtaining the formal support of the UN for a multibillion-dollar facility that NG hoped to build in Macau using the Macau Real Estate Development Company (the “Macau Conference Center”). NG wanted the Macau Conference Center to serve as a location for meetings, discussions, forums, and other events associated with the UN. In particular, he wanted it to serve as the permanent home of the annual “Global South-South Development Expo,” which is run by the UN Office for South-South Cooperation, and is hosted in a different country or city every year.

NG agreed to and did bribe Ambassador Ashe and Ambassador Lorenzo (together, the “Ambassadors”) in exchange for their agreement to use their official positions to advance NG’s interest in obtaining formal UN support for the Macau Conference Center. As the evidence demonstrated at trial, NG paid the Ambassadors in a variety of forms. For example, NG appointed Ambassador Lorenzo as the President of South-South News, a New York-based company—funded by NG—which described itself as a media platform dedicated to advancing the implementation of the UN’s Millennium Development Goals. NG provided bribe payments to Ambassador Lorenzo through South-South News, as well as, among other things, by transmitting payments from Macau to a company in the Dominican Republic affiliated with Ambassador Lorenzo’s brother (the “Dominican Company”). Through South-South News, NG also made payments to Ambassador Ashe, including to Ambassador Ashe’s wife, who was paid in her capacity as a “consultant” to South-South News, and to an account that Ambassador Ashe had established, purportedly to raise money for his role as President of UNGA. NG also provided bribes through cash and wire payments to Ambassador Ashe and Ambassador Lorenzo.

One of the actions that the Ambassadors agreed to take and took, in exchange for bribe payments, to advance NG’s objectives was to submit an official document to the then-UN Secretary-General in support of the Macau Conference Center (the “UN Document”). The UN Document claimed that there was a need to build the Macau Conference Center to support the UN’s global development goals. Ambassador Ashe, aided by Ambassador Lorenzo, initially submitted the UN Document to the UNGA in or about late February 2012. More than a year later, at NG’s behest, the Ambassadors revised the UN Document to refer specifically to NG’s company, the Macau Real Estate Development Company, as a partner in the Macau Conference Center project. The UN Document requested that the Secretary-General circulate the UN Document “as a document of the sixty-sixth session of the General Assembly,” under a specific item of the official UNGA agenda. The Secretary-General followed this request, thereby making the UN Document an official part of the UNGA record.

Five other defendants have been charged in this matter. Co-conspirators Lorenzo, Yin and Heidi Hong Piao have pleaded guilty and are awaiting sentencing. Shiwei Yan has pleaded and was sentenced to 20 months in prison. Co-defendant Ashe passed away in 2016 and the charges against him were dismissed.

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NG, 69, of Macau, China, was convicted on one count of conspiracy to commit bribery and to violate the Foreign Corrupt Practices Act; one count of paying illegal bribes and gratuities; two counts of violating the Foreign Corrupt Practices Act; one count of conspiracy to commit money laundering; and one count of money laundering. The conspiracy to commit bribery conviction carries a maximum penalty of five years in prison, and the bribery conviction carries a maximum of 10 years in prison. The Foreign Corrupt Practices Act convictions each carry a maximum of five years in prison. The conspiracy to commit money laundering and money laundering convictions each carry a maximum 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 a judge.

Mr. Kim praised the outstanding investigating work of the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation.

This case is being prosecuted by the Office’s Public Corruption Unit and the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Daniel C. Richenthal, Janis M. Echenberg, Douglas S. Zolkind, and Trial Attorney David A. Last of the Fraud Section are in charge of the prosecution.