Southern District of New York
Press releases recorded for this federal judicial district.
Defendant Charged in over $50 Million Ponzi Scheme and Related Investment FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced the unsealing of an Indictment charging PAUL REGAN with conspiracy, securities fraud, and wire fraud. The charges in the Indictment arise from a scheme to defraud retail investors in projects called Next Level Holdings (“Next Level”) and Yield Wealth Ltd. (“Yield”) by misrepresenting how those companies would use investors’ money and the protections investors would have against losses. REGAN’s fraudulent scheme tricked over 300 people to invest more than $60 million in the Next Level and Yield investment products. When the fraud was eventually exposed, REGAN’s investors were left with over $50 million in losses. REGAN was arrested in the Southern District of Florida on September 4, 2025, and ordered detained following his removal from the Republic of Colombia. The case has been assigned to U.S. District Judge Valerie E. Caproni.
“As alleged, Paul Regan promised high returns but, in reality, he simply used money from new investors to pay off old investors, keeping the fraud going until pointed questions were asked,” said U.S. Attorney Jay Clayton. “There is no place in our markets for scammers, particularly those who prey on Main Street investors. The women and men of the Southern District are committed to putting these scammers out of business permanently.”
“Paul Regan allegedly defrauded over 300 investors of more than $60 million through false promises of protected investments and guaranteed returns while using these deposits to quietly repay other entities,” said FBI Assistant Director in Charge Christopher G. Raia. “This alleged scheme was shrouded in deceit to entice hundreds of clients before ultimately betraying their confidence and their savings. The FBI will continue to investigate all widespread schemes exploiting the wallets of victims, regardless of where the defendant may be located.”
According to the allegations in the Indictment unsealed on September 4, 2025, in Manhattan federal court:[1]
From at least 2022 through December 2024, REGAN and a team of salesmen and associates defrauded hundreds of retail investors by offering investment products through two entities, Next Level and Yield, based on false and misleading statements. REGAN and his co-conspirators misrepresented how Next Level and Yield would use investors’ money and what protections investors would have against losses. These misrepresentations fraudulently induced over 300 people to invest more than $60 million in the Next Level and Yield investment products. When REGAN’s fraud was eventually exposed, REGAN closed Next Level and Yield, leaving investors with over $50 million in losses.
Next Level Notes
REGAN advertised himself as the Chief Executive Officer of Next Level and claimed that Next Level was in the business of providing capital and operational support to mining operations in Colombia. In exchange for this support, Next Level supposedly received precious metals at discounted prices, which Next Level sold at a profit.
In at least in or about mid-2022, REGAN and others began using Next Level to sell what REGAN called “Next Level Holdings Principal & Interest Protected Guaranteed Note[s]” (the “Next Level Notes”). REGAN sold Next Level Notes himself and recruited independent salespeople to sell Next Level Notes using information and sales techniques that REGAN and others working at Next Level provided.
According to marketing materials that REGAN circulated to investors and salespeople, investors who purchased Next Level Notes were guaranteed to receive double-digit returns, with no risk of loss, through Next Level’s precious-metals business. For example: Next Level’s marketing materials represented that investors who made a minimum investment of $50,000 could purchase a Next Level Note with a term of three, five, seven, or 10 years. Each Note came with a contractually guaranteed double-digit annual yield—typically between 12% and 15% depending on the duration of the Note; Next Level’s marketing materials represented that each Next Level Note came with a “noncancelable indemnity or surety bond backed by an insurance company that guarantee[d] that principal and interest will be paid in compliance with the contractual agreement or promissory note.” This meant that holders of Next Level Notes “[could not] lose their principal investment and also serve[d] as a guarantee that [investors] will receive the interest offered in our enhanced annuity note offering in full.”
The Next Level marketing materials that REGAN circulated also made representations about how Next Level would use investor funds and how it planned to protect investors from losses. With respect to returns, the marketing materials represented that Next Level had a successful track record in “gold and precious metals trade finance operations,” and that Next Level would use investor funds to finance mining operations and generate returns from selling precious metals. As for protections, the marketing materials represented that Next Level would obtain for investors “full insurance protections” from a handful of companies, including a Colombian entity (“Company-1”) and an American reinsurance company (“Company-2”). The marketing materials said that this insurance was designed to offer noteholders “ultimate safety and peace of mind for your retirement portfolio in these very uncertain times.”
Next Level issued each investor who purchased a Next Level Note a “Fully Insured Secured Promissory Note,” which set forth the terms of the investment (including the principal amount and interest rate) and included an “Unconditional Loan Guarantee,” representing that Next Level would provide the investor “with a noncancelable surety bond, or other like insurance policy or product to serve as an unconditional guarantee for the Holder that he shall receive payment of both principal and interest on this note.”
Consistent with that representation about insurance, Next Level also sent investors two insurance-related documents: the first was a document titled a “Surety Bond Contract,” purportedly from Company-1, which guaranteed that Company-1 would pay the noteholder the full amount of principal and interest Next Level owed under the note, in the event Next Level did not pay. The second was a document titled a “Reinsurance Cover Note,” purportedly from Company-2, which guaranteed that Company-2 would also insure the noteholder up to the full amount of principal and interest payments required under the terms of the note.
Between 2022 and late 2024, Next Level sold approximately 300 Next Level Notes to investors, including to at least one investor located in the Southern District of New York. In total, the investors in Next Level Notes sent more than $45 million to business entities under the control of REGAN.
Yield Term Deposits
In or about early 2024, REGAN and others launched a new business venture called Yield, which REGAN advertised as an alternative to traditional banks that could offer investors higher returns on their savings and greater protections.
In or about March 2024, REGAN began using Yield to sell what he called “Mega High Yield Term Deposit[s]” and “Super High Yield Term Deposit[s]” (collectively, the “Yield Term Deposits”). As with Next Level Notes, REGAN sold Yield Term Deposits himself and recruited independent salespeople to sell Yield Term Deposits using information and sales techniques that REGAN and others working at Yield provided.
Much like with Next Level Notes, REGAN circulated marketing materials to investors and salespeople, claiming that investors in Yield Term Deposits were guaranteed to make significant returns with no risk. For example: yield marketing materials described Yield as “revolutionizing the banking industry with Enhanced Term Deposits, offering yields up to 10.5% APY and security through insurance coverage up to $10 million.” The materials went on to explain that investors could invest in Yield Term Deposits, with terms of between five and 10 years. Investors would receive guaranteed interest payments each year, with rates ranging up to 10.5% per year, depending on the term of the deposit and other payment options the investor selected. The marketing materials represented that interest payments and investors’ principal would be fully insured, stating that “[y]our APY is 100% guaranteed and insured” and that Yield Term Deposits “offer[] additional insurance on deposits up to $10 million, ensuring unparalleled security for your savings”; similarly, Yield’s website advertised Yield as a new, digital bank that gave investors access to better interest rates and protections than traditional financial institutions. The website allowed investors to calculate returns they would receive from different Yield Term Deposits and touted that Yield Term Deposits were backed by insurers who “provid[e] our depositors the ultimate in insurance protection for both . . . principal and interest”; Yield’s website claimed that Yield would generate returns for investors through a “diverse portfolio that spans multiple industries, including the lucrative sectors of mining and rare minerals.” REGAN separately represented to investors and people selling Yield Term Deposits that Yield would also use investor funds to make investments in plans related to the Affordable Care Act.
Yield sent investors who purchased Yield Term Deposits a “Subscription Agreement” and a “Limited Partnership Agreement,” through which the investors purchased units in either the Mega High-Yield Term Deposit LP or the Super High-Yield Term Deposit LP. The agreements represented, among other things, that investors would receive “an annual percentage yield of no less than” between 5.5% and 8.5%, depending on the type of investment.
Over the course of 2024, Yield sold approximately 85 Yield Term Deposits, totaling more than $15 million deposited by investors.
The Defendant Defrauded Investors
The promises that REGAN and others made to investors about how Next Level and Yield would use their money and protect their investments were materially false and misleading.
When REGAN promoted Next Level Notes and Yield Term Deposits, a core component of that pitch was that Next Level and Yield would use investors’ money to generate significant returns, including through precious-metals operations and investments related to the Affordable Care Act. Those claims were false and misleading. In reality, REGAN and his co-conspirators ran Next Level and Yield like a Ponzi scheme, using money obtained from earlier investors to pay later investors and to pay commissions to salespeople. Meanwhile, Next Level and Yield made no meaningful investments in either precious-metals operations or investments related to the Affordable Care Act. Instead, REGAN and his co-conspirators misappropriated investor money, which included using investor funds for personal payments and sending large sums of money to entities that did not generate returns for Next Level or Yield, let alone investors.
Another important representation that REGAN made when marketing Next Level Notes and Yield Term Deposits was that investors would have insurance to guarantee promised interest payments and prevent them from losing their investments. Those representations were also false and misleading.
Next Level did not obtain insurance for the vast majority of noteholders and did not maintain insurance for any of them. Specifically, between in or about 2022 up to and including late 2023, Next Level obtained authentic surety bonds from Company-1 and reinsurance from Company-2 for approximately 70 Next Level Notes, with a total investment value of approximately $7.75 million. Next Level then stopped paying to maintain that coverage and did not purchase any surety bonds or reinsurance for the more than 200 Next Level Notes it issued over the course of 2024. Instead, Next Level sent the investors who purchased those notes forged surety bonds and forged reinsurance paperwork. REGAN and his co-conspirators also furthered this fraudulent scheme by sending investors and salespeople forged letters that appeared to come from a senior executive at Company-1 and represented that Company-1 would insure more than $100 million of Next Level Notes. Similarly, notwithstanding the representations that Yield Term Deposits had insurance to guarantee interest payments and protect up to $10 million of principal, Yield did not purchase or maintain insurance for Yield Term Deposits.
Investors Suffered Significant Losses
On or about August 30, 2024, a news outlet published an article about Yield and REGAN expressing skepticism about Yield. REGAN responded to the article by holding a videoconference with salespeople, in which REGAN claimed that the article was false and misleading and urged salespeople to continue selling Yield Term Deposits.
In or about November 2024, Next Level and Yield closed, leaving investors with over $50 million in losses.
* * *
REGAN, 48, of New York, New York, is charged with one count of conspiring to commit securities fraud and wire fraud, which carries a maximum sentence of five years in prison; one count of securities fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which also carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory term of two years in prison.
Mr. Clayton also thanked the U.S. Securities and Exchange Commission, which has filed a civil enforcement action, the Justice Department’s Office of International Affairs, the Criminal Division’s Narcotic and Dangerous Drug Section’s Office of Judicial Attaché in Bogotá, Colombia and the authorities of the Republic of Colombia for their assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Thomas S. Burnett and Maggie Lynaugh 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.
u.s._v._regan_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
Government Announces Settlement with Manhattan Pharmacist for Unlawful Distribution of Controlled SubstancesRead the Press Release
United States Attorney for the Southern District of New York,Jay Clayton, and Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), Frank A. Tarentino, announced that the United States has settled a civil Controlled Substances Act lawsuit against JANELLE HARRIS, the owner and supervising pharmacist of THE PHARMACY @ LCC (“THE PHARMACY”), a now-defunct pharmacy that previously operated in Manhattan. The settlement resolves claims that THE PHARMACY, under HARRIS’s supervision and direction, repeatedly filled prescriptions for controlled substances that contained “red flags”—warning signs that should have created a reasonable suspicion that the prescriptions were not legitimate.
The Government’s Complaint alleged violations of the Controlled Substances Act and asked the Court to order HARRIS to pay penalties pursuant to that statute. Under the settlement, which was approved on Friday, September 5, 2025, by U.S. District Judge Jed S. Rakoff, HARRIS agreed to pay a total sum of $100,000. The settlement amount is based on the Office’s assessment of HARRIS’s ability to pay based on financial information she provided. HARRIS has also executed a Consent Judgment in the amount of $16,700,000, which may be enforced if she does not make the payments required under the settlement agreement. As part of today’s court-ordered settlement, HARRIS is also barred for five years from serving as a supervising pharmacist, and for seven years from owning, controlling, operating, or managing a pharmacy that purchases, stores, or dispenses controlled substances. HARRIS also made extensive factual admissions regarding her conduct.
“Pharmacists and other healthcare professionals cannot turn a blind eye to opioid abuse,” said U.S. Attorney Jay Clayton. “Pharmacists who recklessly ignore warning signs of diversion will be held accountable.”
“Pharmacists are not exempt from their regulatory responsibilities, especially when dealing with controlled substances and the dangerous effects they have when misused,” said DEA Special Agent in Charge Frank A. Tarentino. “This settlement reflects DEA’s commitment to making sure measures are in place to safeguard the community and hold DEA registrants accountable. I commend our Diversion Investigators for bringing this matter to a resolution.”
As alleged in the Complaint:
Between 2014 through 2018 (the “Covered Period”), HARRIS, a pharmacist licensed in the State of New York, owned and operated THE PHARMACY and served as its head pharmacist. As THE PHARMACY’s owner and head pharmacist, HARRIS had a duty to ensure that prescriptions filled at THE PHARMACY for controlled substances, including Schedule II controlled substances, were for a legitimate medical purpose before dispensing those drugs. As part of this duty, HARRIS was required to look for “red flags” indicating that the prescribed controlled substances were at risk for abuse or diversion, or not for a legitimate medical purpose.
However, during the Covered Period, The Pharmacy, under HARRIS’s supervision and direction, repeatedly filled prescriptions for Schedule II controlled substances, such as Oxycodone, that presented significant red flags. Such red flags included cash payments by customers for Schedule II controlled substances, numerous prescriptions for a Schedule II controlled substance written by a single doctor, and prescriptions with semi-consecutive prescription numbers. HARRIS and her supervisees ignored these red flags and failed to take sufficient steps to resolve them before filling the prescriptions. Some of THE PHARMACY’s prescriptions for Schedule II controlled substances, such as Oxycodone, were ultimately determined to be issued without a legitimate medical purpose.
As part of the settlement, HARRIS admitted and accepted responsibility for certain conduct alleged by the United States, including the following:
- HARRIS, as a pharmacist and owner of THE PHARMACY, had a duty to ensure that prescriptions filled at THE PHARMACY for controlled substances were for a legitimate medical purpose before dispensing. As part of this duty, HARRIS was required to look for “red flags” indicating that the controlled substances prescribed were at risk for abuse or diversion and/or not for a legitimate medical purpose. Such red flags include but are not limited to: prescriptions for high dosage strengths and/or for large quantities of controlled substances; cash payments for controlled substances; sequential prescription numbers; and multiple prescriptions for controlled substances to a single individual within a short period of time.
- During the Covered Period, HARRIS and/or employees of THE PHARMACY under her supervision filled prescriptions paid for in cash at THE PHARMACY for Schedule II controlled substances, such as Oxycodone, that were ultimately determined to be issued without a legitimate medical purpose and contained numerous red flags.
- For example, HARRIS, and/or employees of THE PHARMACY under her supervision, filled prescriptions for Schedule II controlled substances that contained the following indicia of invalidity: over a four-month period, 114 of the 115 prescriptions written by a single doctor were for 120 tablets of Oxycodone 30mg. During this period, no one from THE PHARMACY called this doctor to confirm the validity of these prescriptions.
* * *
Mr. Clayton praised the outstanding investigative work of the DEA.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jacob M. Bergman is in charge of the case.
u.s._v._harris_settlement_stipulation.pdf u.s._v._harris_complaint.pdfSix Members of Bronx Crew Charged for Spree of 2020 Violence That Killed Two People and Wounded A ThirdRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton; Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Ricky J. Patel; and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced a Superseding Indictment charging STORM JONES; MICHAEL ORTIZ, a/k/a “Dot”; RANDY MACCOW; MARIO MEDINA, a/k/a “Flacco”; JAYSON HOLLAND, a/k/a “Jerry,” a/k/a “Ninety”; and FRANCIS OFORI, a/k/a “Ghana,” in connection with two homicides and a third non-fatal shooting in 2020. The charges relate to the August 2, 2020, killing of 53-year-old Clarence Adams; the September 1, 2020, murder of 29-year-old Jeffrey German; and the November 3, 2020, shooting of a third individual, who survived. Each of the defendants was either in New York City or New York State custody and brought into federal custody, with the final two defendants arraigned in Manhattan federal court today. The case is assigned to U.S. District Judge Lewis J. Liman.
“As alleged, these defendants wreaked havoc across a Bronx neighborhood through a string of robberies and killings,” said U.S. Attorney Jay Clayton. “New Yorkers want and deserve safe streets and those who pursue violence as a way of life will be brought to justice.”
“As alleged, these defendants carried out their violent sprees with depravity, which resulted in the deaths of two victims and the near loss of a third,” said HSI Special Agent in Charge Ricky J. Patel. “However long it takes, HSI New York, the NYPD and the U.S. Attorney’s Office for the Southern District of New York will relentlessly target violent criminals to ensure no victims suffer in vain and the public remains as safe as possible.”
“These alleged Elsmere crew members carried out cold-blooded murders, violent crime sprees, and tried to dodge accountability—all while carrying illegal guns and illicit narcotics,” said NYPD Commissioner Jessica S. Tisch. “Two New Yorkers lost their lives, another was seriously injured, and entire communities were shattered by this violence. The NYPD’s strategy is simple: to keep our streets safe, remove gangs from the equation—and that’s why we have carried out more than 50 gang-related takedowns and arrested almost 400 gang members this year alone. I want to thank the NYPD investigators, HSI, and the U.S. Attorney’s Office for their relentless work to make sure these defendants are brought to justice.”
According to the allegations in the Superseding Indictment, other court documents, and statements made during court proceedings:[1]
Beginning in at least 2020, a group of individuals (the “Elsmere Crew”) utilized the residence located at 804 Elsmere Place in the Bronx (“804 Elsmere”) as a gathering place to use narcotics, carry firearms, plan crimes of violence, and hide from law enforcement after committing those crimes. On August 2, 2020, Elsmere Crew member JONES, while selling drugs several blocks from 804 Elsmere, shot 53-year-old Clarence Adams, who had confronted JONES about JONES’s drug dealing. Adams died from his injuries. After the shooting, JONES fled to 804 Elsmere, where he met with other members of the Elsmere Crew.
In fall 2020, JONES, ORTIZ, MACCOW, MEDINA, HOLLAND, and OFORI planned and carried out two similar robberies near 804 Elsmere. In each robbery, members of the Elsmere Crew persuaded a victim to deliver marijuana to the vicinity of 804 Elsmere, left together from 804 Elsmere to the site of the purported drug purchase, confronted and robbed the victim with firearms, and fled to 804 Elsmere afterward.
JONES, ORTIZ, MACCOW, MEDINA, and HOLLAND committed the first robbery, in which they shot and killed 29-year-old Jeffrey German on September 1, 2020. ORTIZ and OFORI participated in the second robbery with other Elsmere Crew members on November 3, 2020, in which they shot a victim, who survived.
* * *
A chart containing the defendants’ names, ages, charges, and maximum penalties is set forth below.
The statutory maximum sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of HSI and the NYPD.
The case is being prosecuted by the Office’s Violent and Organized Crimes Unit. Assistant U.S. Attorneys Michael R. Herman and Patrick R. Moroney are in charge of the prosecution.
The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
CountChargeDefendantsMaximum Penalty1Conspiracy to commit Hobbs Act robbery
(Jeffrey German robbery and murder)
18 U.S.C. § 1951
STORM JONES, 26;
MICHAEL ORTIZ,
a/k/a “Dot,” 26;RANDY MACCOW, 24
MARIO MEDINA,
a/k/a “Flacco,” 31;JAYSON HOLLAND, a/k/a “Jerry,” a/k/a “Ninety,” 25
20 years in prison2Hobbs Act robbery
18 U.S.C. §§ 1951 and 2(Jeffrey German robbery and murder)
18 U.S.C. §§ 1951 and 2
JONES, ORTIZ, MACCOW, MEDINA, and HOLLAND20 years in prison3Murder through the use of a firearm
(Jeffrey German robbery and murder)
18 U.S.C. §§ 924(j) and 2
JONES, ORTIZ, MACCOW, MEDINA, and HOLLANDLife in prison4Firearm use, carrying, and possession
(Jeffrey German robbery and murder)
18 U.S.C. §§ 924(c) and 2
JONES, ORTIZ, MACCOW, MEDINA, and HOLLANDLife in prison5Hobbs Act robbery conspiracy
(Non-fatal shooting)
18 U.S.C. § 1951
ORTIZ and FRANCIS OFORI, a/k/a “Ghana,” 2220 years in prison6Hobbs Act robbery
(Non-fatal shooting)
18 U.S.C. §§ 1951 and 2
ORTIZ and OFORI20 years in prison7Firearm use, carrying, and possession
(Non-fatal shooting)
18 U.S.C. §§ 924(c) and 2
ORTIZ and OFORILife in prison8Narcotics conspiracy
21 U.S.C. § 846
JONES20 years in prison9Firearm use, carrying, and possession
(Clarence Adams homicide)
18 U.S.C. §§ 924(c) and 2
JONESLife in prison u.s._v._jones_et_al._indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment, and the description of the Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Man Charged with Armed Robbery and Firing Machine Gun That Killed 69-Year-Old BystanderRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton; Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Ricky J. Patel; and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced the unsealing of a Complaint charging FAISIL McCANTS in connection with an August 27, 2025, armed robbery and shooting in which McCANTS fired 15 rounds from a machine gun on a public street in East Harlem, New York, striking and killing a 69-year-old woman. McCANTS was arrested today and is expected to be presented tomorrow before Chief U.S. Magistrate Judge Sarah Netburn.
“As alleged, after robbing a drug dealer at gunpoint, Faisil McCants fired a machine gun in the middle of the day on the busy streets of New York City, killing another person,” said U.S. Attorney Jay Clayton. “The death of that wholly innocent bystander, a 69-year-old woman who was merely standing with her walker on the sidewalk in East Harlem, is as tragic as it is senseless. It is unacceptable. Because of the hard work of our partners at HSI and the NYPD and the prosecutors of this Office, McCants will now answer for his alleged crime. This tragic and senseless act shows again we must do all we can to get violent criminals off our streets.”
"As a result of this defendant’s allegedly ruthless and utterly reckless violence, an innocent victim was gunned down in broad daylight while simply going about her daily life,” said HSI Special Agent in Charge Ricky J. Patel. “New Yorkers deserve better—full stop. HSI New York—together with our partners at the NYPD and the U.S. Attorney's Office for the Southern District of New York—will not rest until the other individuals involved are captured and, like this defendant, face the full force of the criminal justice system for their accused, unacceptable crimes.”
“Faisil McCants allegedly armed himself with a machine gun during a robbery and opened fire in broad daylight, killing a 69-year-old mother, grandmother, and beloved East Harlem community member,” said NYPD Commissioner Jessica S. Tisch. “Robin Wright was an innocent bystander who lost her life to gun violence—and today, justice was served in her memory. Removing illegal firearms from our streets remains at the forefront of the NYPD’s public safety mission, and we will continue to ensure that those who carry them are held accountable. I am grateful to the NYPD investigators, HSI, and the U.S. Attorney’s Office for their swift work to keep our streets safe.”
As alleged in the Complaint:[1]
On or about August 27, 2025, shortly before 12:30 p.m., FAISIL McCANTS and two co-conspirators (“CC-1” and “CC-2”) robbed a drug dealer (“Individual-1”) near East 109th Street and Madison Avenue in Manhattan. During the robbery, McCANTS and his co-conspirators got into a physical altercation with Individual-1 before both McCANTS and CC-2 grabbed backpacks from Individual-1—which contained marijuana—and then fled north on Madison Avenue, turning onto East 110th Street.
As he fled the robbery, McCANTS pulled a black machine gun out of his right sweatshirt pocket and fired 15 shots in rapid succession in the general direction of Individual-1. A 69-year-old woman who was standing with a walker on the northwest corner of East 110th Street and Madison Avenue—in the direction that McCANTS shot the machine gun—was hit by the gunfire. From the scene, she was transported to a hospital, where she was pronounced dead.
* * *
McCANTS, 18, of New York, New York, is charged with one count of Hobbs Act robbery, which carries a maximum sentence of 20 years in prison; and one count of the use, carrying, and possession of a machine gun, which carries a mandatory minimum sentence of 30 years in prison and a maximum sentence of life in prison, and which must be served consecutively to any other sentence imposed.
The minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of HSI and the NYPD. He also thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, and the New York State Board of Parole.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Alexandra S. Messiter and Kathryn Wheelock are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
u.s._v._mccants_complaint.pdf
[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.
Jamaican National Charged with Committing Robbery in Mount Vernon and Discharging Firearm at Police While in FlightRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced the unsealing of a Complaint against Jamaican national JAMAIRE ROBERTSON in connection with the armed robbery of a gas station attendant working in Mount Vernon, New York, in the early morning hours of August 29, 2025. ROBERTSON was arrested the same day and presented in Manhattan federal court on Saturday, August 30, 2025, before U.S. Magistrate Judge Katharine A. Parker, who ordered him detained.
“As alleged, Jamaire Robertson committed a terrifying gunpoint robbery of a gas station attendant and then, minutes later, shot at police officers trying to stop him on a residential street in Mount Vernon,” said U.S. Attorney Jay Clayton. “Those willing to use guns and violence to terrorize our community and put law enforcement lives at risk should expect to face serious consequences. Anyone who disrupts the safety of New Yorkers and the dedicated officers responsible for keeping us all safe will be swiftly brought to justice.”
“Jamaire Robertson and his associate allegedly robbed a local gas station employee by brandishing firearms to forcefully steal the victim’s wallet, and Robertson allegedly fired upon officers,” said FBI Assistant Director in Charge Christopher G. Raia. “Not only did Robertson’s alleged actions terrorize a random citizen for a nominal payout, but they also recklessly endangered the lives of local law enforcement officers. This arrest reflects the FBI’s enduring determination to apprehend any armed criminal through Operation Summer Heat, so our communities are protected from unnecessary acts of violence.”
As alleged in the Complaint filed on August 30, 2025, in White Plains federal court:[1]
On the morning of August 29, 2025, ROBERTSON and an associate (“Suspect-2”) exited a vehicle registered to ROBERTSON parked near ROBERTSON’s apartment in the Bronx and set out together on foot at approximately 5:19 a.m. toward a gas station on Mount Vernon Avenue in nearby Mount Vernon.
At approximately 5:29 a.m., ROBERTSON and Suspect-2, each brandishing a handgun, violently robbed the gas station’s attendant, stealing approximately $500-$600 in cash on the victim’s person along with the victim’s wallet. The robbery was captured on video surveillance.
The perpetrators fled the gas station and separated, with ROBERTSON seeking cover on a residential street in Mount Vernon near its border with the Bronx. There, ROBERTSON was observed in flight by New York City Police Department (“NYPD”) officers who were aware of the gas station robbery that had taken place minutes before. When the NYPD officers sought to approach ROBERTSON, he opened fire with his handgun and fled, discarding his weapon and a black hooded sweatshirt he wore during the robbery, which were recovered from the scene.
Security camera footage from ROBERTSON’s apartment building captured him returning home in his underwear and a t-shirt at approximately 6:25 a.m. and disposing additional articles of clothing down his building’s trash chute later that day, before his arrest.
If you have information to report regarding this robbery, please contact the FBI through its toll-free Tip Line at 1-800-CALL-FBI or by completing its online tip form at tips.fbi.gov.
* * *
ROBERTSON, 28, a Jamaican national, is charged with conspiracy to commit Hobbs Act robbery and Hobbs Act robbery, each of which carries a maximum sentence of 20 years in prison. ROBERTSON is also charged with using and carrying a firearm during and in relation to, and possessing a firearm in furtherance of, a crime of violence, which carries an additional mandatory minimum sentence of 10 years in prison, which must be served consecutive to any other prison term imposed.
The minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding work of the FBI.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney John Sarlitto 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.
u.s._v._robertson_complaint.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Bronx District Leader and Board of Elections Employee Sentenced to Two Years in Prison for Extortion and FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that NICOLE TORRES, a former elected district leader in the Bronx and employee of the New York City Board of Elections (the “NYC-BOE”), was sentenced today to two years in prison for participating in conspiracies to commit extortion and mail fraud for illegally demanding payments from Bronx residents in exchange for selecting those individuals as poll workers and for agreeing with others to falsify documents to make it appear that certain individuals had worked as poll workers when they had not. TORRES previously pled guilty on April 17, 2025, before U.S. District Judge Mary Kay Vyskocil, who imposed today’s sentence.
“For years, Nicole Torres abused her power to corrupt one of New York City’s most fundamental democratic processes,” said U.S. Attorney Jay Clayton. “By shaking down Bronx residents and falsifying election records, she undermined trust in the very system New Yorkers depend on to make their voices heard. New Yorkers can and should rely on the integrity of the election process, and public officials who contaminate the process and betray this city and its people will be held accountable.”
As detailed in public filings and public court proceedings:
From at least 2019 through at least 2024, TORRES was a district leader for New York’s 81st Assembly District in the Bronx. In addition, from at least 2016 through at least 2024, TORRES was an employee of the NYC-BOE. While working at the NYC-BOE, TORRES had at times been responsible for ensuring that poll workers were paid for their work during early voting and Election Day. TORRES abused her power as a district leader and a NYC-BOE employee to engage in two illegal schemes.
First, from at least 2019 through August 2024, TORRES agreed to require and required Bronx residents to pay a sum of money, usually $150, either to her or to a local organization (the “Bronx Organization”) in exchange for TORRES selecting those individuals as poll workers for upcoming elections. Both the Bronx Organization and TORRES profited from the scheme. TORRES personally obtained at least approximately $28,000 in illegal payments. TORRES received the payments, often in the amount of $150, through mobile payment applications, money orders, and checks. In certain instances, TORRES received money orders or checks that were written out to the Bronx Organization, and TORRES altered the payee line on those money orders or checks to say “Nicole Torres” so that she could deposit that money into her personal bank account.
Second, from at least 2018 through August 2024, TORRES agreed to falsify the Election District Forms Booklet—which is a NYC-BOE record in which poll workers record their attendance at a particular poll site—to make it appear that certain individuals (the “‘No Show’ Poll Workers”) worked as poll workers during early voting and Election Day when, in truth and fact, and as TORRES well knew, those individuals did not work on those dates. TORRES often worked with coordinators who oversaw the Forms Booklets at specific poll sites. These coordinators signed in “No Show” Poll Workers in the Forms Booklets, frequently at TORRES’s direction. TORRES and her coconspirators then received the salaries for the “No Show” Poll Workers—sometimes through the mail—and split the fraudulently obtained salaries among themselves.
Based on her participation in the two schemes, TORRES personally earned at least approximately $40,970.
* * *
In addition to her prison term, TORRES, 44, of the Bronx, New York, was sentenced to three years of supervised release and ordered to pay forfeiture of $40,970.
Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Department of Investigation.
The case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Benjamin M. Burkett and Rebecca T. Dell are in charge of the prosecution.
Safety Inspectors Charged with Fabricating Hundreds of Gas Pipeline Test Results Throughout New York City and WestchesterRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and the New York State Inspector General, Lucy Lang, announced the unsealing of an Indictment charging LIAM TREIBERT and MICHAEL VASCONCELLOS with wire fraud arising out of their scheme to defraud a regulated utility company (“Utility-1”) in connection with fraudulent safety inspections of natural gas pipelines that Utility-1 was installing throughout New York City and Westchester County. TREIBERT was arrested today in North Carolina and will be presented in Raleigh federal court. VASCONCELLOS was arrested today in New York and will be presented in White Plains federal court.
“As alleged, Liam Treibert and Michael Vasconcellos violated the trust placed in them to ensure the safety of natural gas pipelines that were being installed throughout New York City and Westchester County,” said U.S. Attorney Jay Clayton. “They lied about having performed hundreds of inspections and then covered up those lies with fraudulent paperwork. Their actions put the lives of New Yorkers at risk. The safety of New Yorkers is of paramount importance to our Office.”
“When deliberate misconduct - as alleged here - puts entire communities at risk, those responsible must face swift and decisive consequences,” said New York State Inspector General Lucy Lang. “Today’s arrests, made in partnership with the Southern District of New York, demonstrate my agency’s unwavering commitment to protecting critical infrastructure and pursuing accountability on behalf of all New Yorkers.”
As alleged in the Indictment:[1]
Between at least in or about 2016 and 2023, TREIBERT and VASCONCELLOS were supposed to perform safety inspections of welds on natural gas pipelines that were being installed throughout New York City and Westchester County. Those inspections were necessary to ensure that the welds did not contain defects that could cause gas leaks or explosions. TREIBERT and VASCONCELLOS lied about having inspected hundreds of welds that they never actually reviewed and created fraudulent records to cover up what they had done. As a result, Utility-1 paid for hundreds of sham inspections and were deceived by TREIBERT and VASCONCELLOS into thinking that its pipelines had passed critical safety tests that TREIBERT and VASCONCELLOS never performed.
As part of the pipeline installation process, Utility-1 or its contractors would typically place gas pipelines into the ground in segments and then weld those segments together. Before a pipeline could be put into service, the welds throughout the pipeline had to be inspected to assess their quality. Those inspections included non-destructive testing.
One common form of non-destructive testing of pipeline welds involved radiographs, often referred to as x-rays. Radiographic testing required a team to radiograph each weld and then examine the films to identify any defects in the welds. If a defect was identified, then the weld would have to be repaired before the pipeline was put into service. Failure to repair a defect before a pipeline was put into service could have led to critical failures, including gas leaks or explosions.
During the period alleged, TREIBERT and VASCONCELLOS, while performing radiographic testing for Utility-1, repeatedly engaged in a practice referred to in the non-destructive testing industry as “radaring.” Radaring typically involved radiographing the same weld twice and then passing off one copy of films as having come from a second weld. For instance, a radiographer might radiograph Weld A twice, and then claim that the second set of films are of Weld B, even though the radiographer never inspected Weld B.
In total, hundreds of welds across Utility-1’s pipelines installed throughout the Bronx and Westchester County between in or about 2016 and 2023 were affected by radaring engaged in by TREIBERT and VASCONCELLOS. And although TREIBERT and VASCONCELLOS did not actually inspect those welds, invoices for those inspections were submitted to Utility-1. Utility-1 paid those invoices through, among other methods, bank transfers.
* * *
TREIBERT, 30, of Wendell, North Carolina, and VASCONCELLOS, 44, of Mahopac, New York, are each charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the investigative work of the Offices of the New York State Inspector General and the special agents with the U.S. Attorney’s Office.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys David A. Markewitz and Jay McMahon 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.
u.s._v._treibert_et_al._indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitutes only allegations, and every fact described therein should be treated as an allegation.
Seven Defendants Charged with Wide-Scale Narcotics Conspiracy, Racketeering Conspiracy, and MurderRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced today the unsealing of an Indictment charging CARLOS MOLINA RODRIGUEZ; SAMUEL BLAIN, a/k/a “Lobo,” a/k/a “Snipes,” a/k/a “Loboferoz”; CARLOS MARTINEZ, a/k/a “Bway”; KALIF COX, a/k/a “Leef,” a/k/a “LG”; JUSTICE BEARD, a/k/a “Just”; CALVIN LEWIS, a/k/a “Ski”; and EMMANUEL IDYIS with narcotics distribution, narcotics importation, continuing criminal enterprise, racketeering conspiracy, murder, and other related charges in and around Middletown and Newburgh, New York. MOLINA, MARTINEZ, COX, BEARD, LEWIS, and IDYIS were arrested earlier this year in New York, California, and North Carolina. On August 22, 2025, BLAIN was expelled from Mexico and arrested at the Dallas-Fort Worth International Airport. MOLINA, BLAIN, MARTINEZ, COX, BEARD, and LEWIS have been ordered detained pending trial. The case is assigned to U.S. District Judge Vincent L. Briccetti.
“As alleged, these defendants operated a large-scale narcotics distribution, importation, and racketeering conspiracy to smuggle dozens of kilograms of illegal crystal methamphetamine, cocaine, and fentanyl from Mexico and drive them in specially modified minivans all over the United States, including to New York,” said U.S. Attorney Jay Clayton. “The defendants are also charged—in connection with their participation in a violent street gang—with murdering an innocent bystander during a gunfight in Newburgh, in September 2019, committing numerous robberies, illegally trafficking firearms, and creating child pornography. The wide-ranging criminal conduct described in this Indictment shows a troubling indifference to the safety of New Yorkers that cannot be tolerated. This Office and our partners will not rest until every individual responsible for these heinous crimes—wherever they may be hiding, whether in Mexico or New York—is brought to justice.”
“These seven defendants allegedly used any illicit means necessary to support their criminal enterprise, including smuggling large amounts of narcotics into this country, trafficking illegal firearms, and shooting at rivals, which included the murder of an innocent bystander by one of the defendants,” said FBI Assistant Director in Charge Christopher G. Raia. “Their alleged nondiscriminatory criminality depicts a relentless appetite to promote the gang’s operations, regardless of the affected community left in its turmoiled wake. This Summer Heat indictment demonstrates the FBI’s steadfast dedication to crushing all forms of violent crime and eradicating any criminal organization using our communities to perpetuate their unlawful activities.”
According to the allegations contained in the Indictment unsealed yesterday in White Plains federal court, court filings, and statements made in court proceedings:[1]
MOLINA, BLAIN, MARTINEZ, COX, BEARD, LEWIS, and IDYIS are charged with running large-scale narcotics and racketeering conspiracies that involved the importation and cross-country movement of massive quantities of dangerous drugs, including crystal methamphetamine, cocaine, and fentanyl.
Between at least about 2022 and April 2025, the defendants ran and participated in a Mexico-based drug trafficking organization (the “MOLINA DTO”). The MOLINA DTO was led by MOLINA and BLAIN, among others. The MOLINA DTO recruited drivers from the U.S. to import narcotics from Mexico. At the MOLINA DTO’s direction, the drivers would make their way to California, where they would cross into Mexico and receive a specially modified minivan loaded with narcotics and/or narcotics proceeds. The drivers then drove those narcotics/narcotics proceeds-laden vehicles back across the U.S.-Mexico border and then across the country, including to Middletown, staying in regular contact with their MOLINA DTO recruiter to receive instructions about where next to take the vehicle. In total, the MOLINA DTO is responsible for smuggling dozens of kilograms of crystal methamphetamine, cocaine, and fentanyl into the U.S. through this scheme.
Between at least 2019 and April 2025, MARTINEZ led a highly organized gang known as the Forbes List, which was a subset of the national gang known as the Makk Ballas. MARTINEZ’s gang was based in Middletown and its members included COX, BEARD, LEWIS, and IDYIS, among others. Through BLAIN and MARTINEZ, the Forbes List was connected with the MOLINA DTO and began trafficking the MOLINA DTO’s drugs from Mexico into the U.S.
Forbes List members also committed shootings, firearms trafficking, robberies, drug dealing, and fraud as part of their participation in the gang. Specifically, COX is charged with the murder of an innocent bystander, Amed Alberto Alvarado Baquedano, during a gang-related gunfight in Newburgh on September 21, 2019; inducing a minor victim to record herself engaging in sexually explicit conduct and then send that recording to him; illegally trafficking firearms across state lines; and committing a drug‑related shooting in the Bronx, New York, in July 2024. MARTINEZ is also charged with illegally possessing ammunition in Middletown in May 2024, and BEARD is additionally charged with possessing a firearm in connection with drug dealing in Yonkers, New York, and illegally possessing a firearm in Yonkers in July 2024.
* * *
A chart containing the defendants’ names, ages, charges, and maximum penalties is set out below.
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
I
Narcotics distribution conspiracy
21 U.S.C. § 846
CARLOS MOLINA RODRIGUEZ, 31
SAMUEL BLAIN, a/k/a “Lobo,” a/k/a “Snipes,” a/k/a “Loboferoz," 36
CARLOS MARTINEZ, a/k/a “Bway," 35
KALIF COX, a/k/a “Leef,” a/k/a “LG," 28
JUSTICE BEARD, a/k/a “Just," 36
CALVIN LEWIS, a/k/a “Ski," 36
EMMANUEL IDYIS, 25
LifeII
Narcotics importation conspiracy
21 U.S.C. § 963
CARLOS MOLINA RODRIGUEZ
SAMUEL BLAIN, a/k/a “Lobo,” a/k/a “Snipes,” a/k/a “Loboferoz”
CARLOS MARTINEZ, a/k/a “Bway”
KALIF COX, a/k/a “Leef,” a/k/a “LG”
JUSTICE BEARD, a/k/a “Just”
CALVIN LEWIS, a/k/a “Ski”
EMMANUEL IDYIS
LifeIII
Continuing criminal enterprise
21 U.S.C. § 848
CARLOS MOLINA RODRIGUEZ
SAMUEL BLAIN, a/k/a “Lobo,” a/k/a “Snipes,” a/k/a “Loboferoz”
CARLOS MARTINEZ, a/k/a “Bway”
LifeIV
Racketeering conspiracy
18 U.S.C. § 1961(d)
CARLOS MARTINEZ, a/k/a “Bway”
KALIF COX, a/k/a “Leef,” a/k/a “LG”
JUSTICE BEARD, a/k/a “Just”
CALVIN LEWIS, a/k/a “Ski”
EMMANUEL IDYIS
LifeV
Murder in aid of racketeering
18 U.S.C. § 1959(a)(1)
KALIF COX, a/k/a “Leef,” a/k/a “LG”LifeVI
Murder through the use of a firearm
18 U.S.C. § 924(j)
KALIF COX, a/k/a “Leef,” a/k/a “LG”LifeVII
Attempted murder and assault with a deadly weapon in aid of racketeering
18 U.S.C. §§ 1959(a)(3), (a)(5)
KALIF COX, a/k/a “Leef,” a/k/a “LG”20 yearsVIII
Sexual exploitation of a child
18 U.S.C. §§ 2251(a), (e)
KALIF COX, a/k/a “Leef,” a/k/a “LG”30 yearsIX
Receipt of child pornography
18 U.S.C. §§ 2252A(a)(2)(B), (b)(1)
KALIF COX, a/k/a “Leef,” a/k/a “LG”20 yearsX
Firearms trafficking conspiracy
18 U.S.C. § 933
KALIF COX, a/k/a “Leef,” a/k/a “LG”15 yearsXI
Discharge of a firearm in furtherance of a drug trafficking crime
18 U.S.C. § 924(c)(1)(A)(i), (ii), (iii)
KALIF COX, a/k/a “Leef,” a/k/a “LG”LifeXII
Possession of a firearm in furtherance of a drug trafficking crime
18 U.S.C. § 924(c)(1)(A)(i)
JUSTICE BEARD, a/k/a “Just”LifeXIII
Possession of a firearm after a felony conviction
18 U.S.C. § 922(g)(1)
JUSTICE BEARD, a/k/a “Just”15 yearsXIV
Possession of ammunition after a felony conviction
18 U.S.C. § 922(g)(1)
CARLOS MARTINEZ, a/k/a “Bway”15 yearsThe statutory maximum and minimum sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the FBI Hudson Valley Safe Streets Task Force. Mr. Clayton also thanked the FBI Los Angeles Office; the FBI Dallas Office; Mexican law enforcement partners and the FBI Mexico Legal Attache; the U.S. Attorney’s Offices for the Southern District of California, Northern District of Texas, and Eastern District of North Carolina; the Department of Homeland Security, Homeland Security Investigations; the Drug Enforcement Administration; U.S. Customs and Border Patrol; the Bureau of Alcohol, Tobacco, Firearms & Explosives; the U.S. Postal Inspection Service; the New York State Police; the City of Newburgh Police Department; the Town of New Windsor Police Department; the Middletown Police Department; the New York Police Department; and the Kingston Borough Police Department for their assistance in the investigation.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Ryan W. Allison, Justin L. Brooke, Jennifer N. Ong, and Margaret N. Vasu are in charge of the prosecution.
u.s._v._molina_et_al_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
Dutchess County Man Charged with Sexual Exploitation of A ChildRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced the unsealing of a Complaint charging DANIEL ALAN MONARCHI with the sexual exploitation of a minor. MONARCHI was arrested and presented before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court and detained on Friday, August 22, 2025.
“Sexual exploitation of children is too prevalent in our society,” said U.S. Attorney Jay Clayton. “Parents, caregivers, and teachers: if you sense something wrong, please seek assistance. Sexual exploitation of children by teachers and others we entrust must be stopped.”
“We entrust teachers with the responsibility of helping to care for our children and not harm them by engaging in sexual exploitation of minors,” said FBI Assistant Director in Charge Christopher G. Raia. “Daniel Monarchi, a special education teacher, allegedly conducted multiple sexually explicit conversations with victims he knew to be minors. The FBI will continue to bring to justice any individual who endangers minor victims with sexually explicit behavior and actions.”
As alleged in the Complaint filed on August 19, 2025:[1]
MONARCHI worked as a special education teacher for a middle school (“School-1”) in Dutchess County.
In September 2024, Victim-1, who was 14 years old, was contacted by a Discord account with the name “mrteacherman.” “[M]rteacherman.” told Victim-1: “I teach 7th grade” and “I’m a social studies special Ed teacher.” “[M]rteacherman.” engaged in sexual conversations with Victim-1 over the course of a month. During that time, “mrteacherman.” asked Victim-1 if she was “an 8th grader” and Victim-1 confirmed that she was. “[M]rteacherman.” asked Victim-1 if she had “any sexy classmates” and referred to Victim-1 as his “after school snack.” About three weeks after their initial conversation, “mrteacherman.” asked Victim-1, to send him sexually explicit videos and stated, “I want to see you strip.” Victim-1 sent “mrteacherman.” three videos in which she appeared naked, exposing her breasts. Approximately two days later, “mrteacherman.” sent Victim-1 a “selfie” showing his face and a second photo displaying his erect penis. Then “mrteacherman.” asked Victim-1 to send him sexually explicit videos and told Victim-1, “Show me how special you are. Show me why you deserve an A+.” Victim-1 responded by sending “mrteacherman.” a sexually explicit video with her breasts and genitals exposed.
In February 2025, Victim-2, who was 13 years old, was contacted by a Discord account with the name “mrteacherman.” “[M]rteacherman.” told Victim-2 what he wanted to do sexually with Victim-2 and Victim-3. He made statements like, “I’d make you stay after class to earn ‘extra credit.’” “[M]rteacherman.” told Victim-2 that he would “never like download or save any of your pictures” and added “you’re safe with me.” About one week after their initial conversation, “mrteacherman.” told Victim-2 that he was going “to leave for home right after school tho” and sent Victim-2 a picture of his classroom. Victim-2 reported to investigators that “mrteacherman.” sent Victim-2 photos of his penis to Victim-2 throughout the day and night as well as videos of him masturbating.
Victim-3, who was 14 years old, was contacted by a Discord account with the name “mrteacherman.” Victim-3 reported to law enforcement that “mrteacherman” was really sexual and wanted to role play, so she eventually blocked him.
MONARCHI’s name appears on the publicly accessible website for School-1. The staff directory includes a “Daniel Monarchi” and identifies him as a “special education teacher.” The photo that “mrteacherman.” sent to Victim-2 includes an image of the exterior of the middle school building which matches the exterior of School-1.
Investigators reviewed New York Motor Vehicle records for MONARCHI and confirmed that his Motor Vehicle photo appears in likeness to the “selfie” that MONARCHI sent to Victim-1.
There may be more victims of this alleged conduct. If you have information to report or you had contact with the Discord account “mrteacherman.,” contact the FBI through its toll-free Tip Line at 1-800-CALL-FBI or by completing its online tip form at tips.fbi.gov.
* * *
MONARCHI, 26, of Red Hook, New York, is charged with one count of sexual exploitation of a minor, which carries a maximum sentence of 30 years in prison and a mandatory minimum of 15 years in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the efforts of the FBI Hudson Valley Safe Streets Task Force, the Dutchess County Sheriff’s Office, the New York State Police, and the FBI Columbia, South Carolina Division.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Patricia M. Reville is in charge of the prosecution.
u.s._v._monarchi_complaint.pdf
[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.
Suspended Broker Charged for Online Investment FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced today the unsealing of an Indictment charging KENNETH THOM, a/k/a “K$,” a/k/a “K Money,” with securities fraud and investment adviser fraud. THOM was arrested today and will be presented before U.S. Magistrate Judge Barbara Moses. The case has been assigned to U.S. District Judge Edgardo Ramos.
“After his suspension as a broker, Kenneth Thom used social media to steal from investors,” said U.S. Attorney Jay Clayton. “If you’re getting investment advice from someone who is not registered as a broker or investment advisor, the risk of fraud is much higher. We will hold accountable anyone who preys on everyday investors who rightly expect their trading professionals to be in good standing and act in their best interests.”
“Kenneth Thom allegedly manipulated his client’s investments to not only place unsuccessful trades, but also promote an illusion of success,” said FBI Assistant Director in Charge Christopher G. Raia. “Thom’s alleged incessant deceit betrayed the trust of investors by failing to disclose his misuse and loss of client funds. The FBI will never waiver from apprehending any individual who steals from others’ pockets to greedily finance personal purchases.”
According to the allegations in the Indictment unsealed today:[1]
In May 2006, THOM passed securities licensing examinations and registered as a broker with the Financial Industry Regulatory Authority (“FINRA”). In or around January 2011, FINRA suspended THOM’s broker registration after he failed to pay an arbitration award to an investor. THOM also admitted around that time to the FBI that he had commingled that investor’s money with his own money in a brokerage account that THOM controlled and lost most of the money through unsuccessful trading. THOM further admitted that when the investor sought to withdraw her funds, he did not tell the investor that he had lost her money and instead invented fake excuses and then ignored the investor altogether.
After being suspended by FINRA, THOM turned to social media and promoted himself online as a successful trader. Using the monikers “K$” and “K Money,” THOM described himself as a “Wall Street veteran,” a “luminary,” and a “beacon of knowledge,” and he used his online platforms to sell trading courses and trade suggestions to his followers. One of THOM’s platforms was a Facebook group called, at relevant times, the “K$ Trading Group” (the “K$ Facebook Group”), in which THOM posted the results of his purportedly successful trades.
Beginning in late 2023, THOM invited members of the K$ Facebook Group to participate in “shared accounts” that THOM would manage in exchange for a percentage of the trading profits. THOM eventually raised nearly $800,000 from approximately 67 clients. Of this sum, THOM invested only approximately $350,000, diverting most of the remainder for his own personal use, including on travel, dining, and luxury goods.
Of the $350,000 that THOM invested, he lost more than $250,000 trading options, for a net loss of approximately 73% between in or around March 2024 and March 2025. To hide these losses, THOM published false performance updates showing significant gains. For example, on or around July 3, 2024, THOM posted in the K$ Facebook Group that each of his three purported shared accounts was positive year-to-date, with returns ranging from 4% to 120% (see photo below). In fact, as of the close of the preceding trading day, THOM had lost approximately 31% of the client funds he invested to date.
In or about January 2025, the name of the K$ Facebook Group was changed to “AYBABTU” — an acronym for the Internet meme “all your base are belong to us” — and THOM stopped responding to clients.
* * *
THOM, 41, of Westfield, New Jersey, is charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of investment adviser fraud, which carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding work of the FBI. Mr. Clayton also expressed appreciation for the assistance of the U.S. Securities and Exchange Commission, which separately initiated civil proceedings against the defendant today.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Alexander Li 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.
u.s._v._thom_indictment.pdf[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
Brooklyn Cardiologist Sentenced to 37 Months in Prison in Connection with Health Care Fraud and Bribery SchemeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that NIRANJAN MITTAL was sentenced today by U.S. District Judge Ronnie Abrams to 37 months in prison in connection with a years’ long health care fraud and bribery scheme. As part of that scheme, MITTAL, a Brooklyn-based cardiologist, paid physicians for patient referrals. The defendant also fabricated patient records in order to bill for medically unnecessary vascular procedures. In February 2025, MITTAL pled guilty to one count of violating the Anti-Kickback Statute in connection with the scheme.
“At the core of our healthcare system is patient-doctor trust,” said U.S. Attorney Jay Clayton. “Mittal abused that trust, turning his offices into ‘patient mills’ and subjecting trusting patients to procedures they did not need. Today’s sentence sends a deterrent message to doctors and the healthcare industry: if you abuse patient trust for profit, you will face justice.”
According to court documents and statements made during court proceedings:
Since at least 2016, MITTAL operated a medical clinic in Brooklyn, New York (the “Brooklyn Clinic”), with a patient base consisting of many individuals of limited economic means who were insured by government health care programs. In order to ensure a steady flow of new patients to the Brooklyn Clinic, MITTAL paid rental payments to other providers pursuant to purported “leases” for office space. Often, however, the timing and amount of the payments bore no relation to the terms of those leases. In fact, MITTAL made the purported lease payments to induce other providers to refer patients to MITTAL’s staff members, who, at the direction of MITTAL, periodically traveled to the providers’ offices, performed basic tests on the referred patients, and convinced the patients to attend follow-up appointments at the Brooklyn Clinic.
Once patients arrived at the Brooklyn Clinic, often without understanding why they had been referred to the practice, they underwent a series of diagnostic tests and follow-up office visits. These tests and office visits generally were not based on the patients’ actual treatment needs. Rather, MITTAL and others acting at his direction ordered these tests and office visits to create documentation sufficient to justify subjecting patients to unnecessary peripheral vascular interventional procedures—surgical procedures focused on clearing purported blockages in the blood vessels in patients’ legs. MITTAL directed others to, among other things, fabricate the descriptions of patients’ symptoms recorded in the practice’s office visit notes, varying the symptoms across patients so that it was not apparent that the symptoms were fake.
As a result of MITTAL’s scheme, patients at the Brooklyn Clinic, many of whom were already in poor health, routinely underwent medically unnecessary vascular interventions at MITTAL’s office, with some patients undergoing 10 or more interventional procedures over the course of several years. The patients’ conditions often did not improve, despite these repeated interventions. Between 2016 and 2023, insurers paid over $40 million to MITTAL’s practice for claims from patients who were referred by doctors who received improper “rent” payments from MITTAL.
* * *
In addition to the prison term, MITTAL, 72, of Brooklyn, New York, was sentenced to two years of supervised release and ordered to forfeit the proceeds traceable to his offense.
Mr. Clayton praised the outstanding investigative work of the U.S. Department of Health and Human Services – Office of the Inspector General, Internal Revenue Service – Criminal Investigations, and U.S. Department of Homeland Security – Homeland Security Investigations.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Patrick R. Moroney, Matthew Weinberg, Ryan B. Finkel, and Brandon C. Thompson are in charge of the prosecution.
Colombian National Sentenced to 150 Months in Prison for Conspiring to Import Tons of Cocaine into the United StatesRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that Alberto Alonso Jaramillo Ramirez was sentenced today to 150 months in prison for conspiring to import cocaine into the United States. JARAMILLO RAMIREZ pled guilty on March 24, 2025, before U.S. District Judge Lewis J. Liman, who imposed today’s sentence.
“Our fight against the flood of dangerous drugs from Colombia, Venezuela, and Mexico is about protecting our children and our communities,” said U.S. Attorney Jay Clayton. “Jaramillo Ramirez conspired to traffic massive amounts of cocaine into our country, working with paramilitaries. New Yorkers want him and others like him put out of business.”
According to court documents and statements made during court proceedings:[1]
JARAMILLO RAMIREZ conspired with his co-defendants and other individuals associated with the Fuerzas Armadas Revolucionarias de Colombia (“FARC”)—a violent organization based in Colombia that was dedicated to the overthrow of the Colombian government and responsible for the production and distribution of the majority of the cocaine that eventually reached the U.S.—to source and distribute tons of cocaine destined for the U.S. JARAMILLO RAMIREZ negotiated with individuals he believed to be narcotics traffickers from a Mexico-based drug trafficking organization (the “Mexican DTO”) seeking to establish a cocaine supply line from Venezuela to the U.S. These individuals, however, were actually confidential sources working at the direction of the U.S. Drug Enforcement Administration (“DEA”).
In recorded communications during the investigation, JARAMILLO RAMIREZ agreed to assist the planned cocaine venture through his connections in Colombia. Specifically, JARAMILLO RAMIREZ agreed to provide connections to sources of supply for ton quantities of cocaine and to other individuals to assist with transportation and security for the planned large-scale cocaine loads. In December 2021, to prove their bona fides and establish the quality of their cocaine supply, JARAMILLO RAMIREZ and his co-defendants sold the confidential sources a five-kilogram sample of cocaine containing a high level of purity—lab tests demonstrated the cocaine was between 86.6% to 89.1% pure—from a FARC-associated farm outside of Medellín. JARAMILLO RAMIREZ was arrested in Colombia in February 2022, at the request of the U.S., while finalizing a much larger partnership with the Mexican DTO, which contemplated the shipment of approximately 500 kilograms of cocaine to the U.S. per week.
JARAMILLO RAMIREZ is the third defendant in this case to be sentenced. On April 11, 2024, Libia Amanda Palacio Mena was sentenced to 168 months in prison, and on April 26, 2024, Alvaro Fredy Cordoba Ruiz was also sentenced to 168 months in prison.
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In addition to the prison term, JARAMILLO RAMIREZ, 56, of Medellín, Colombia, was sentenced to four years of supervised release.
Mr. Clayton praised the outstanding investigative work of the DEA’s Special Operations Division Bilateral Investigations Unit and Bogotá Country Office, as well as the U.S. Department of Justice’s Office of International Affairs and the Criminal Division’s Narcotic and Dangerous Drug Section’s Office of Judicial Attaché in Bogotá, Colombia for securing the arrest and March 2024 extradition of JARAMILLO RAMIREZ.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Nicholas S. Bradley, Kaylan E. Lasky, and Kevin T. Sullivan are in charge of the prosecution.
[1] Communications, conversations, and statements discussed and quoted herein are described in substance and in part, and many of these conversations occurred in Spanish.
Statement of United States Attorney Jay Clayton on Court AppointmentRead the Press Release
“I am honored to continue serving the people of New York together with the talented and hardworking women and men of the Office.”
Founder and Former CEO of Charity Pleads Guilty to Multimillion-Dollar Charity Fraud and Tax EvasionRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that KEITH TAYLOR, the founder and former chief executive officer of Modest Needs Foundation (“Modest Needs”), a charitable organization, pled guilty today before U.S. District Judge Jennifer L. Rochon to defrauding the charity and its donors by stealing millions in donations meant for low-income families and spending them instead on personal expenses—including rent in a luxury apartment building in midtown Manhattan, food delivery services, and lavish meals at some of New York City’s most expensive restaurants—and lying about the charity’s oversight and governance. TAYLOR also pled guilty to evading more than a million dollars in federal income taxes and is scheduled to be sentenced on January 20, 2026.
“Keith Taylor preyed on the trust of New Yorkers who gave generously to help struggling families,” said U.S. Attorney Jay Clayton. “Those who use charitable dollars to line their own pockets undermine the work of our many great charities and the special tax status charities enjoy. They must be brought to justice.”
According to the Superseding Indictment, the Complaint, filings, and court proceedings:
In or about 2002, TAYLOR founded Modest Needs, a 501(c)(3) charitable organization that used a crowdsourcing model to help low-income workers pay for unexpected expenses like medical bills or broken appliances. Its mission was to provide short-term financial assistance to individuals and families living paycheck-to-paycheck who were faced with an unexpected crisis or expense that they could not pay.
Since at least 2015, TAYLOR embezzled more than $2.5 million from the charity and its donors and used that money to fund his lavish personal spending. TAYLOR regularly dined at Per Se, Jean-Georges, Masa, and Marea in midtown Manhattan, sometimes as often as twice a day, spending more than $320,000 of charity funds at New York City restaurants and steakhouses. Funds donated to the charity paid over $300,000 of TAYLOR’s rent for a luxury apartment on the 30th floor of a midtown Manhattan skyscraper. TAYLOR also used charity funds to buy himself expensive electronics, pay over $100,000 to food delivery services, and pay for his own medical expenses. TAYLOR put over $270,000 of charity funds directly into his personal brokerage account. TAYLOR also routinely paid his other personal expenses from the charity’s bank accounts.
TAYLOR continued to defraud Modest Needs and its donors, even after his arrest in June 2024 on these charges. Even though he purportedly resigned his employment with Modest Needs and no longer was supposed to have access to Modest Needs’ bank accounts, as a condition of his pretrial release, TAYLOR continued to use Modest Needs’ funds for his personal expenses, including to pay for meals, medical expenses, and rent for his luxury apartment, all in violation of the conditions of his pretrial release in this case.
TAYLOR attempted to hide his embezzlement of charity funds by creating a fake board of directors and claiming it had approved his personal spending and provided oversight over the organization. TAYLOR used the names of his acquaintances and falsely listed them on the charity’s tax forms and website as board members. TAYLOR’s acquaintances who were listed as the charity’s board members included a bartender from Jean-Georges, a friend, and his house-cleaner, none of whom ever attended a board meeting or even knew that they had been listed on the charity’s website or tax forms as board members.
For at least the calendar years of 2017 through 2024, TAYLOR did not file personal income tax returns or pay income taxes on the millions of dollars in income he received from the charity, evading more than a million dollars in federal income taxes.
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TAYLOR, 58, of New York, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 30 years in prison because he committed the offense while on pretrial release, and eight counts of tax evasion, each of which carry a maximum sentence of five years in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the exceptional investigative work of Internal Revenue Service-Criminal Investigation and the Special Agents of the United States Attorney’s Office.
My office and our law enforcement partners will continue to do all that we can to protect the community from the devastating consequences of pernicious fraud schemes. If you believe you are a victim of Taylor's fraud, please contact [email protected].
If you are a victim, and would like to send the Judge presiding over this case a victim impact statement, which describes how this crime impacted you and your family, your statement can be emailed to [email protected]. The Court will consider any statements sent in connection with sentencing of defendant Keith Taylor.
If you are a victim, and would like to speak at Keith Taylor’s sentencing hearing, to describe to the Judge how Keith Taylor’s crimes impacted you and your family please email [email protected].
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Eli J. Mark, Rebecca R. Delfiner, and James G. Mandilk are in charge of the prosecution.
Federal Inmate Convicted of First-Degree MurderRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today the conviction of DANIEL V. SMITH of first-degree murder. SMITH was convicted by a jury following a trial before U.S. District Judge Philip M. Halpern and will be sentenced on December 4, 2025. SMITH faces a mandatory life sentence.
“Daniel V. Smith murdered a fellow inmate in cold blood at FCI Otisville by brutally beating him in the head with a lock tied to a belt,” said U.S. Attorney Jay Clayton. “Thanks to the career prosecutors of this Office and our law enforcement partners, the defendant has been held accountable for his heinous crime.”
According to the Indictment, court filings, and statements made in court:
On October 26, 2021, SMITH was incarcerated at FCI Otisville, where he was serving a sentence related to a prior assault he committed in 2013 while incarcerated. To obtain a transfer to a different housing unit, SMITH, without provocation, brutally attacked another inmate—housed in the cell next to his own—by swinging a lock tied to a belt and striking his victim in the head repeatedly, cracking open the victim’s skull. The inmate suffered traumatic brain injury, fell into a vegetative state, and died from his injuries.
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SMITH, 65, of Otisville, New York, was convicted of one count of murder in the first degree, which carries a mandatory sentence of life in prison.
Mr. Clayton thanked the staff of FCI Otisville for their assistance and praised the investigative work of the Federal Bureau of Investigation Hudson Valley Safe Streets Task Force.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Justin L. Brooke, Shaun E. Werbelow, Benjamin D. Klein, Jeffrey C. Coffman, with the assistance of Paralegal Specialist Jackie Fleury, are in charge of the prosecution.
Defendants Charged in over $200 Million Water Vending Machine Ponzi Scheme and Related Investment FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton; Acting United States Attorney for the Western District of Washington, Teal Luthy Miller; Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), Daniel Brubaker; and Special Agent in Charge of the Seattle Field Office of the Federal Bureau of Investigation (“FBI”), W. Mike Herrington, announced today the unsealing of an Indictment and Superseding Indictment. The first Indictment charges RYAN WEAR, the former owner and operator of Water Station Management LLC (“Water Station”), with securities and wire fraud in connection with WEAR raising more than $200 million from investors by selling them water vending machines that, in many cases, did not exist, and paying promised returns through new investor money. The second, Superseding Indictment charges JORDAN CHIRICO, a former fund portfolio manager and investment adviser, with investment adviser fraud in connection with purchasing more than $100 million of Water Station bonds while concealing his personal financial stake in the company and, eventually, his knowledge of the fraud that had been perpetrated by WEAR. Together, the defendants’ conduct caused hundreds of millions of dollars in losses to Water Station investors and bondholders. The case has been assigned to U.S. District Judge Jennifer L. Rochon.
“Ryan Wear raised hundreds of millions of dollars through false promises of a water vending machine business that became nothing more than a scam that victimized retail investors, including military veterans,” U.S. Attorney Jay Clayton said. “Jordan Chirico made matters worse by putting his own financial interests before his professional duties, investing clients’ money in Water Station—helping himself and hurting his investors—even after he knew it was a scam. One fraud does not excuse another. With the assistance of our dedicated law enforcement partners and our colleagues throughout the Department of Justice, this Office will continue to aggressively pursue financial frauds on Wall Street and Main Street.”
“From the relatively small city of Everett, Washington, to the major financial markets in New York, this fraud scheme had a broad reach,” said Acting U.S. Attorney Teal Luthy Miller. “We appreciate our partnership with the Southern District of New York on this investigation.”
“The greed and deception of this Ponzi scheme has resulted in the same way they have throughout history, with unwitting investors seeing their hard-earned money grossly misused, and the scammers arrested and held accountable for their crimes,” said USPIS Inspector in Charge Daniel Brubaker. “Postal Inspectors, along with our law enforcement partners, will continue to aggressively investigate and disrupt criminals from defrauding the American public.”
“The scale of this fraud, which resulted in at least $200 million in losses, is simply staggering,” said FBI Special Agent in Charge W. Mike Herrington. “And the deception and obfuscation these two men allegedly engaged in to siphon funds from retail investors, even U.S. military veterans, is absolutely unconscionable. FBI Seattle is committed to working with our law enforcement partners throughout Washington state and the nation to hold accountable those who abuse investors’ trust and defraud them of their hard-earned savings.”
According to the allegations contained in the Indictment and Superseding Indictment unsealed today:[1]
WEAR operated Water Station as a fraudulent investment scheme, deceiving investors about the nature and profitability of the purported business. He raised over $200 million from retail investors and military veterans through multiple fraudulent solicitations, initially claiming that each investment of $8,500 would fund individual water machines generating passive income. He later raised capital through bonds falsely claimed to be collateralized by numerous water vending machines.
WEAR perpetuated the fraud by manufacturing far fewer water machines than represented, selling the same machines to multiple investors, and claiming machines existed when they did not. The deployed machines failed to generate the revenue promised by WEAR. To satisfy questioning investors, WEAR operated a Ponzi-like scheme, using new investor funds to pay earlier investors while siphoning off millions to expand his traditional vending machine business and cover personal expenses. When he could no longer raise sufficient funds, Water Station was forced into bankruptcy in August 2024, causing at least $200 million in investor losses.
CHIRICO engaged in a scheme to defraud 3|5|2 Capital ABS Master Fund LP (the “352 Fund”), an investment fund that was part of Jefferies Financial Group’s Leucadia Asset Management. As a portfolio manager entrusted with hundreds of millions in investors’ funds, CHIRICO breached his fiduciary duties by causing the 352 Fund to invest almost $100 million in what he came to learn was a Ponzi scheme while concealing his personal financial stake in Water Station.
CHIRICO had a significant personal investment in Water Station, holding a joint venture partnership worth over $7 million. When Water Station needed a capital infusion, the company launched a $70 million bond issuance in April 2022. CHIRICO invested millions of the 352 Fund’s assets without fully disclosing his personal stake in Water Station, his monthly payments exceeding $90,000 from Water Station, or the $1.6 million he had received from referring friends and family members to invest in the company. After investing the 352 Fund’s money, CHIRICO sold his interests back to Water Station without disclosing that he was being paid with bond proceeds originating from, among others, the 352 Fund and its investors. CHIRICO also deliberately omitted other conflicts that jeopardized the fund’s investment, including millions of dollars that WEAR and Water Station owed CHIRICO in loan and note repayments.
By summer of 2023, CHIRICO learned of serious issues at Water Station, including the inability to locate thousands of water machines supposedly collateralizing the bonds. Rather than alert investors, CHIRICO—who was personally owed more than $1 million by WEAR—prioritized his own repayment. In January 2024, WEAR admitted to CHIRICO that thousands of machines collateralizing the bonds did not exist, and that WEAR had misappropriated tens of millions of dollars in bond proceeds. Despite learning of this fraud—which another Water Station investor described to WEAR and CHIRICO as “the largest franchise fraud case in the history of the United States”—CHIRICO did not disclose Water Station’s problems to the 352 Fund or its investors. Instead, CHIRICO directed the 352 Fund to buy another $19 million of additional Water Station-issued bonds, some of the proceeds of which WEAR used to repay CHIRICO. From April 2022 to February 2024, CHIRICO received from WEAR and Water Station more than $11 million in joint venture earnings, buyouts, and loan and note repayments. The 352 Fund has not received any principal payments on $106.925 million of Water Station bonds, for which CHIRICO caused the fund and its affiliates to pay almost $100 million.
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WEAR, 49, of Everett, Washington, is charged with one count of securities fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison. CHIRICO, 41, of Carmel, Indiana, is charged with one count of investment adviser fraud, which carries a maximum sentence of five years in prison, and one count of securities fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the outstanding work of the USPIS, FBI, Internal Revenue Service-Criminal Investigation, the Small Business Administration Office of Inspector General, and the Federal Deposit Insurance Corporation Office of Inspector General. Mr. Clayton also thanked the U.S. Attorney’s Office for the Western District of Washington and the U.S. Securities and Exchange Commission for their assistance and cooperation in the investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Adam S. Hobson and Justin V. Rodriguez, along with Dane Westermeyer of the Western District of Washington, are in charge of the prosecution.
The charges contained in the Indictment and Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
u.s._v._wear_indictment_-_copy.pdf u.s._v._chirico_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and Superseding Indictment and the descriptions of the Indictment and Superseding Indictment constitute only allegations, and every fact described should be treated as an allegation.
U.S. Attorney Announces Settlement with Members-Only Social Club for Covid Relief FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the Eastern Regional Office of the U.S. Small Business Administration, Office of Inspector General (“SBA-OIG”), Amaleka McCall-Brathwaite, announced today that the United States has settled a civil fraud lawsuit against TCC INTERNATIONAL LLC, CORE GRAVITY LLC, and CORE CLUB MEMBERS CORP. (collectively, the “Defendants”), for falsely certifying to the SBA that they were eligible to receive two Paycheck Protection Program (“PPP”) loans and have those loans forgiven, as well as a Restaurant Revitalization Fund (“RRF”) grant in violation of the False Claims Act.
Under SBA rules and regulations, private clubs were ineligible for PPP loans and restaurants that were either not-for-profits or did not primarily serve the public (such as restaurants operating within private clubs) were ineligible for RRF grants. The settlement resolves claims that TCC International LLC and Core Gravity LLC falsely certified that they were eligible to receive and have forgiven two PPP loans despite being ineligible because TCC International LLC and Core Gravity LLC intended to, and did, use the PPP funds to operate a private club; and Core Club Members Corp. falsely certified that it was eligible to receive a RRF grant despite being ineligible because it was a not-for-profit organization with no food or beverage sales to the public.
Under the settlement approved today by U.S. District Judge Mary Kay Vyskocil, the Defendants will pay the United States a total sum of $360,000. The settlement amount is based on the Office’s assessment of the Defendants’ ability to pay, as reflected in financial information they provided. The Defendants have also executed a Consent Judgment in the amount of $8,189,172.10, which may be enforced if they do not make the payments required under the settlement agreement. Additionally, the Defendants have admitted and accepted responsibility for conduct alleged in the Government’s Complaint.
“The Paycheck Protection Program and Restaurant Revitalization Fund were intended to assist small businesses suffering the financial impacts of a pandemic-related lockdown,” said U.S. Attorney Jay Clayton. “New Yorkers supported these programs to protect their neighbors and their community. New Yorkers also want those who abused the programs held accountable. Our Office and the SBA are committed to doing so.”
“Falsely certifying eligibility for Paycheck Protection Program loans and Restaurant Revitalization Fund grants undermines critical relief programs designed to support small businesses and public-facing restaurants,” said SBA-OIG Special Agent in Charge Amaleka McCall-Brathwaite. “OIG remains dedicated to protecting the integrity of SBA’s programs and holding accountable those who exploit them for personal gain.”
As alleged in the Complaint filed in Manhattan federal court:
Under the PPP, eligible businesses could obtain SBA-guaranteed loans; however, before receiving a PPP loan, businesses were required to certify that they were, in fact, eligible for the loan. By regulation, certain businesses, such as private clubs, were ineligible for PPP loans. The SBA also allowed for forgiveness of PPP loans. To receive forgiveness, businesses were required to submit signed loan forgiveness applications in which they certified that the PPP funds were used for eligible expenses.
Under the RRF, qualifying bars and restaurants could apply for grants to offset pandemic-related revenue losses. Per the RRF rules, certain businesses were ineligible for funding, including not-for-profit entities and restaurants and bars where on-site sales to the public comprised less than 33% of gross receipts in 2019.
TCC International LLC and Core Gravity LLC applied for and received two PPP loans totaling approximately $2.3 million and the SBA ultimately forgave all but $514,176.45 of those funds. Core Club Members Corp. received an RRF grant of more than $2.3 million and did not repay any of that amount. However, TCC International LLC and Core Gravity LLC were ineligible to receive their PPP loans or have them forgiven because they intended to, and did, use the funds for the benefit of a private club. Additionally, Core Club Members Corp. was ineligible to receive its RRF grant because none of its gross receipts in 2019 were derived from on-site sales to the public and it was not-for-profit.
As part of the settlement, the Defendants admit, acknowledge, and accept responsibility for the following conduct:
- TCC International LLC d/b/a Core Gravity, through its authorized representative, certified in a first-draw PPP loan application seeking $960,400 that it was eligible for funding and that the funds would be used in accordance with PPP rules. However, TCC International LLC d/b/a Core Gravity was not eligible for a PPP loan, as it intended to, and did, use the funds to fund payment of employees of a members-only club.
- Core Gravity LLC sought and obtained partial forgiveness for the first-draw PPP loan in the amount of $446,223.55, after its authorized representative falsely certified in a loan forgiveness application that the funds as to which forgiveness was sought were used to pay business costs that were eligible for forgiveness.
- TCC International LLC d/b/a The Core Club, through its authorized representative, certified in a second-draw PPP loan application seeking $1,344,675.50 that it was eligible for funding and that the funds would be used in accordance with PPP rules. However, TCC International LLC d/b/a The Core Club was not eligible for a PPP loan, as it intended to, and did, use the funds to fund payment of employees of a members-only club.
- TCC International LLC sought and obtained full forgiveness for the second-draw PPP loan, after its authorized representative falsely certified in the forgiveness application that the funds as to which forgiveness was requested were used to pay business costs that were eligible for forgiveness.
- Core Club Members Corp. submitted an application to SBA to obtain a grant of $2,303,687.00 through the RRF, in which its authorized representative certified the applicant’s eligibility for funding and that the funds would be used in accordance with RRF rules. However, Core Club Members Corp., a not-for-profit company that did not serve food or drink to the public, was not eligible for an RRF grant.
In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.
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Mr. Clayton thanked the SBA-OIG for its assistance with this case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jessica F. Rosenbaum is in charge of the case.
u.s._v_tcc_international_llc_et_al_complaint_in_intervention.pdf u.s._v_tcc_international_llc_et_al_settlement_agreement.pdfTech Company CEO Charged with Securities and Wire Fraud After Gambling Away Seed Round FundingRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced the unsealing of an Indictment yesterday charging RICHARD KIM, the former Chief Executive Officer of Zero Edge Corporation (“Zero Edge”), with engaging in a scheme to defraud investors and prospective investors of Zero Edge by making false and misleading statements regarding the use of investor funds and subsequently misappropriating those funds. The case has been assigned to U.S. District Judge Lorna G. Schofield.
“As alleged, Richard Kim misled investors by promising that he would build a blockchain-based casino gaming app, but ironically Kim turned around and gambled away the very funds he said he would use to build a better casino,” said U.S. Attorney Jay Clayton. “Founders who abuse the trust of their investors threaten the integrity of our important and uniquely American venture capital market.”
“Richard Kim allegedly misappropriated millions of investors’ dollars intended to develop his online casino company by redirecting these funds for personal gambling and trading ventures,” said FBI Assistant Director in Charge Christopher G. Raia. “Kim allegedly hedged his bets that false assurances would induce more investments and conceal the true nature of his spending. The FBI remains committed to apprehending any individual who leverages executive positions to defraud others for selfish purposes.”
According to the allegations contained in the Indictment:[1]
KIM founded Zero Edge in March 2024, purporting to build an app-based casino using blockchain and cryptocurrency technologies. KIM represented to prospective investors that Zero Edge would develop on-chain games beginning with craps, and later offering roulette, baccarat, and blackjack. KIM also represented to investors that their funds would be used to build the business and its technology. Instead, KIM misappropriated the proceeds of the company’s seed round to make speculative cryptocurrency trades and gamble at an online casino.
Shortly after closing on the approximately $4.3 million seed financing round, KIM diverted approximately $3.8 million of investors’ funds first into a personal cryptocurrency account held at Coinbase and then sent approximately $1 million on to a variety of other crypto exchanges, including Binance, Kraken, and Backpack. Between in or about June 21, 2024, and June 27, 2024, KIM made transfers of approximately $7 million, and net transfers of approximately $1 million, from Coinbase and Kraken to a personal account held at Shuffle.com, which advertises itself as a “VIP Crypto Casino and Sportsbook.” KIM also directed a net sum of approximately $450,000 to other cryptocurrency wallets with unknown owners and transferred approximately $145,000 more from Kraken to a personal checking account.
In e-mails KIM later sent to investors, KIM admitted to misappropriating the investors’ funds, writing that he was “solely responsible for the loss of $3.67m of the Company’s balance sheet” following “leveraged trading losses from seed round financing proceeds” and that the company had lost nearly all its money. But even as KIM admitted to some investors that he had misappropriated funds, he continued to conceal the true nature of his conduct, telling investors that he had lost the money as a result of a “treasury management strategy” rather than personal gambling.
At the time of his arrest, KIM admitted to the FBI that he knew what he did “was clearly wrong from the beginning” and “completely unjustifiable.”
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KIM, 39, of New York, New York, is charged with one count of securities fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison.
The maximum potential sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of the Special Agents from the FBI. Mr. Clayton also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Ryan T. Nees 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.
u.s._v._kim_indictment.pdf[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.
Mexican Cartel Leader Servando Gomez-Martinez in U.S. Custody on Drug Importation ChargeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Division of the U.S. Drug Enforcement Administration (“DEA”), Frank A. Tarentino, announced today the unsealing of an Indictment charging SERVANDO GOMEZ-MARTINEZ, a/k/a “La Tuta,” with conspiring to import cocaine and methamphetamine into the U.S. GOMEZ-MARTINEZ was taken into U.S. custody from Mexico yesterday and will be presented on the charge contained in the Indictment today before U.S. Magistrate Judge Henry J. Ricardo. The case is assigned to U.S. District Judge John G. Koeltl.
“As alleged, Servando Gomez-Martinez was a leader, enforcer, drug trafficker, weapons supplier, and public spokesman for the violent drug trafficking organization, La Familia Michoacana, based in Mexico,” said U.S. Attorney Jay Clayton. “La Familia Michoacana imported vast quantities of cocaine and methamphetamine into the United States from Mexico and engaged in extensive violence in furtherance of its drug trafficking activities, including against those Mexican law enforcement officials who stood in its way. This Office and our partners in the DEA are committed to bankrupting the cartels and bringing their leaders to justice.”
“The expulsion of Servando Gomez-Martinez marks a significant step in our fight against the world’s most violent and prolific drug trafficking organizations,” said DEA Special Agent in Charge Frank A. Tarentino. “For years, Gomez-Martinez allegedly fueled the cocaine and methamphetamine trade that devastated communities across the United States, and the DEA remains committed to bringing such ruthless cartel leaders to justice.”
According to the allegations contained in the Indictment:[1]
GOMEZ-MARTINEZ was the operational chief of La Familia Michoacana (“LFM”), a powerful, violent drug trafficking organization based in the state of Michoacan, in southwestern Mexico. LFM controlled drug manufacturing and distribution within and around the state of Michoacan, as well as a port that served as a key transshipment point for drug shipments. LFM imported vast quantities of cocaine and methamphetamine into the United States from Mexico. In addition, LFM forbade the sale or use of methamphetamine in the areas under its control in Mexico, and instructed its members that its methamphetamine was solely for export to the United States. GOMEZ-MARTINEZ made public statements on behalf of LFM and was responsible for, among other things, ensuring that LFM’s drug trafficking activities were not impeded by law enforcement, and for acquiring weapons for use by LFM.
Under the leadership of GOMEZ-MARTINEZ and others, LFM engaged in extensive violence, including assault, murder, and kidnapping to support its narcotics trafficking activities. On or about July 17, 2009, days after the bodies of 12 Mexican federal police officers believed to have been murdered by LFM were discovered in Michoacan, GOMEZ-MARTINEZ gave a recorded statement to a local television station in Michoacan. In the statement, GOMEZ-MARTINEZ publicly acknowledged that he was a member of LFM and, among other things, claimed that he was in charge of the port city of Lazaro Cardenas in Michoacan; that LFM was in a battle against the Mexican federal police and prosecutors; and that LFM kidnaps people who owe LFM money and those whose family members work in state and federal governments.
GOMEZ-MARTINEZ was transferred on August 12, 2025, from Mexico to the United States pursuant to Mexico’s National Security law. He was among more than two dozen wanted fugitives facing a range of federal and state criminal charges from around the country, including charges relating to drug-trafficking, hostage-taking, kidnapping, illegal use of firearms, human smuggling, money laundering, the murder of a sheriff’s deputy, and other crimes.
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GOMEZ-MARTINEZ, 59, a Mexican national, is charged with conspiring to import cocaine and methamphetamine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the DEA’s New York Field Division, Houston Field Division, and Mexico City Country Office, as well as the assistance of the Office of International Affairs of the Justice Department’s Criminal Division, the U.S. Marshals Service, and the Government of Mexico.
This prosecution is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Daniel G. Nessim, Henry L. Ross, and Kyle A. Wirshba are in charge of the prosecution.
The charge contained in the Indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
u.s._v._gomez_martinez_et_al_indictment.pdf
[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.
Leaders of Sinaloa Cartel Presented in Manhattan Federal CourtRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Administrator of the U.S. Drug Enforcement Administration (“DEA”), Terrance C. Cole, announced that KEVIN GIL ACOSTA, a/k/a “El 200,” MARTIN ZAZUETA PEREZ, a/k/a “Piyi,” and LEOBARDO GARCIA CORRALES, a/k/a “Leo,” arrived from Mexico in the Southern District of New York last night. GIL ACOSTA, ZAZUETA PEREZ, and GARCIA CORRALES are charged with fentanyl trafficking and weapons offenses in connection with their roles working for the Sinaloa Cartel. The defendants were presented today before U.S. Magistrate Judge Henry J. Ricardo and detained.
“The illicit fentanyl trade continues to plague Americans and New Yorkers of all walks of life, and the Sinaloa Cartel, a vast, deadly, and corrupt enterprise, is at the center of the scourge,” said U.S. Attorney Jay Clayton. “The defendants allegedly held leading roles, using abhorrent violence to protect the Cartel. Their arrival yesterday in the United States to face justice in a U.S. courtroom is another major step in the partnership between our Office and the DEA to end the operations of the Sinaloa Cartel.”
According to the allegations contained in the Indictments against GIL ACOSTA, ZAZUETA PEREZ, and GARCIA CORRALES, and other court filings: [1]
The Sinaloa Cartel (the “Cartel”), based in the Mexican state of Sinaloa, operates in countries around the world and is one of the dominant drug trafficking organizations in the Western Hemisphere responsible for the massive influx of fentanyl into the United States, as well as the accompanying violence and deaths that have afflicted communities on both sides of the U.S.-Mexico border.
To protect and further the Cartel’s fentanyl trafficking operations, the Cartel, and specifically, the sons of the Cartel’s notorious former leader, Joaquin Archivaldo Guzman Loera, a/k/a “El Chapo,” known collectively as the “Chapitos,” have relied upon armed enforcers, known as sicarios. These sicarios comprise a security apparatus built to commit acts of violence to protect the Chapitos’ operation and its leaders, territory, labs, trafficking routes, and money. They regularly use military-grade weapons which are often smuggled from the United States, including machine guns, to perpetrate violence, including murder, torture, and kidnapping.
GIL ACOSTA and ZAZUETA PEREZ were leaders of the Chapitos’ security apparatus. GIL ACOSTA served as the leader of a group of sicarios tasked with protecting the Chapitos’ fentanyl laboratories and fentanyl distribution routes, and personally trafficked fentanyl manufactured in labs controlled by the Chapitos. ZAZUETA PEREZ was responsible for providing security in the Mexican state of Sinaloa, including by protecting the Chapitos’ fentanyl operations through kidnapping, torture, and murder using machine guns and other weapons. On behalf of the Chapitos, GIL ACOSTA and ZAZUETA PEREZ participated in attacks against Mexican government and military officials, including during the Mexican authorities’ failed efforts in or about October 2019 to arrest one of the Chapitos. Specifically, during that operation, GIL ACOSTA led sicarios armed with AK-47s, M-16s, and AR-15s in attacks on Mexican government and military officials, and ZAZUETA PEREZ, armed with an AR-15 and grenade launcher, conducted attacks on Mexican government and military officials.
GARCIA CORRALES is a fentanyl supplier who has worked closely with the Sinaloa Cartel and has produced fentanyl in ton quantities. He oversaw the importation of kilogram quantities of fentanyl into the United States and conspired with others to arrange the sale of fentanyl in exchange for military-grade weapons, including hundreds of automatic weapons and .50-caliber rifles and grenades, for the purpose of promoting and protecting his drug trafficking activities. In connection with those efforts, GARCIA CORRALES and his co-conspirators delivered approximately 33 kilograms of fentanyl to buyers in the United States as partial payment for the planned weapons deal.
GIL ACOSTA, ZAZUETA PEREZ, and GARCIA CORRALES were transferred on August 12, 2025, from Mexico to the United States pursuant to Mexico’s National Security law. They were among more than two dozen wanted fugitives facing a range of federal and state criminal charges from around the country, including charges relating to drug trafficking, hostage-taking, kidnapping, illegal use of firearms, human smuggling, money laundering, the murder of a sheriff’s deputy, and other crimes.
* * *
GIL ACOSTA, 35; ZAZUETA PEREZ, 29; and GARCIA CORRALES, 55, all from Mexico, are each charged with one count of fentanyl importation conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of possession of machine guns and destructive devices, which carries a mandatory minimum sentence of 30 years in prison and a maximum sentence of life in prison; and one count of conspiracy to possess machine guns and destructive devices, which carries a maximum sentence of life in prison. GIL ACOSTA and ZAZUETA PEREZ are also each charged with one count of fentanyl trafficking conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The mandatory minimum and maximum potential sentences in these cases are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the DEA’s Special Operations Division, Bilateral Investigations Unit and the DEA offices in Mexico, as well as the assistance of the Office of International Affairs of the Justice Department’s Criminal Division, the United States Marshals Service, and the Government of Mexico.
This prosecution is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Nicholas S. Bradley, Jane Y. Chong, Sarah L. Kushner, and David J. Robles 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.
u.s._v._garcia_corrales_et_al_indictment.pdf u.s._v._zazueta_perez_indictment.pdf u.s._v._gil_acosta_indictment.pdf
[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.
Do Kwon Pleads Guilty to FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today that DO HYEONG KWON, the co-founder and former chief executive officer of Terraform Labs PTE, Ltd. (“Terraform”), pled guilty to one count of conspiring to commit commodities fraud, securities fraud, and wire fraud; and one count of committing wire fraud in connection with fraudulent schemes at Terraform. KWON touted Terraform as a self-contained and decentralized financial world that leveraged proprietary blockchain technology to offer its own cryptocurrencies, payment system, stock market, and savings bank. In reality and unbeknownst to Terraform investors and users, the core suite of Terraform products did not work as advertised and had been manipulated to create the illusion of a functioning and decentralized financial system. KWON pled guilty today before U.S. District Judge Paul A. Engelmayer.
“Do Kwon used the technological promise and investment euphoria around cryptocurrency to commit one of the largest frauds in history,” said U.S. Attorney Jay Clayton. “Kwon attracted tens of billions in funds to Terraform’s ecosystem by promising a self-stabilizing stablecoin. By the time the markets discovered the ecosystem was unstable, it was too late: the system collapsed, and investors around the world suffered billions in losses. Kwon’s plea represents an important milestone in this Office’s continuing efforts to bring integrity and accountability to the digital asset markets. It would not have been possible without the dedicated work of our law enforcement partners at the FBI and the assistance of our allies abroad.”
According to the allegations contained in the Superseding Indictment and statements made in public filings and in public court proceedings:
Terraform was a blockchain and cryptocurrency company co-founded by KWON in 2018. Terraform distinguished the Terra blockchain from other competing blockchains by issuing so-called algorithmic stablecoins pursuant to what it called the “Terra Protocol.” According to KWON and others, Terraform stablecoins maintained a steady value even under changing market conditions. In or around September 2020, Terraform publicly announced the launch of Terraform’s stablecoin pegged to the U.S. dollar, TerraUSD (“UST”). Terraform promotional materials claimed that, under the Terra Protocol, one UST could always be exchanged for $1 worth of LUNA, the Terra blockchain’s native token. Conversely, $1 worth of LUNA could always be exchanged for one UST.
Over time, Terraform and its affiliated entities developed and launched various purportedly decentralized finance applications and entities designed to increase the number of users and transactions on the Terra blockchain, including:
- Chai, a Korean payment platform that purportedly began using the Terra blockchain to process financial transactions in or around June 2019;
- Mirror Protocol, a platform launched around December 2020 that allowed for the creation, buying, and selling of synthetic versions of financial assets, such as stocks listed on United States securities exchanges, using the Terra blockchain;
- Anchor Protocol, a platform launched in or around March 2021 that allowed for borrowing and lending UST, and that offered an approximately 20% annual return for UST deposited in Anchor;
- And the Luna Foundation Guard Ltd. (“LFG”), an entity incorporated publicly and launched in or around January 2022 that eventually maintained billions of dollars’ worth of financial reserves in the form of other cryptocurrencies such as bitcoin (the “LFG Reserve”) to purportedly support UST’s peg to the dollar.
KWON solicited and obtained investments from several investment firms in the United States and other locations, with the investments primarily consisting of agreements for the purchase or loan of Terraform’s cryptocurrencies built on the Terra blockchain. Through his work at Terraform, KWON became one of the most prominent business leaders in the cryptocurrency industry. In truth, KWON’s constructed financial world was built on lies and manipulative and deceptive techniques used to mislead investors, users, business partners, and government regulators regarding Terraform’s business:
- The Stablecoin Misrepresentations: KWON made misrepresentations about the effectiveness of the Terra Protocol, which purportedly used a computer algorithm to maintain the value of one UST at $1. But as KWON knew, after the Terra Protocol failed to cause the restoration of UST’s $1 peg in May 2021, KWON reached an agreement with executives at a high-frequency trading firm (the Trading Firm) so that the Trading Firm would purchase large amounts of UST in order to artificially support UST’s $1 peg.
- The LFG Misrepresentations: KWON claimed LFG was managed by an independent governing body and was tasked with deploying billions of dollars’ worth of financial reserves to defend UST’s peg. But as KWON knew, he controlled both the LFG and Terraform. In addition, KWON misappropriated hundreds of millions of dollars in assets from the LFG.
- The Mirror Misrepresentations: KWON claimed that Mirror operated in a decentralized manner and that he and Terraform played no role in Mirror’s governance. But as KWON knew, he and Terraform secretly maintained control over Mirror, and used automated trading bots to manipulate the prices of synthetic assets that Mirror issued. KWON also caused Terraform to inflate key user metrics to deceive investors.
- The Chai Misrepresentations: KWON falsely claimed that the Terra blockchain was being used to process billions of dollars in financial transactions for Chai. In doing so, KWON claimed that the Terra blockchain had “real world” applications or uses, as distinct from competing cryptocurrency platforms. But as KWON knew, Chai processed transactions through traditional financial processing networks, not the Terra blockchain.
- The Genesis Coin Misrepresentations: KWON made misrepresentations about the use of a supply of one billion stablecoins programmed into the Terra blockchain at its creation (the Genesis Stablecoins), which were purportedly held in reserve for Terraform for certain specified uses. But KWON used at least $145 million worth of Genesis Stablecoins, among other things, to fund fake Chai blockchain transactions and trading bots to manipulate the prices of synthetic assets that Mirror issued.
At its peak in the spring of 2022, the total apparent market value of all UST and LUNA exceeded $50 billion. Much of this growth followed KWON’s misrepresentations about Terraform and its technology, including efforts in May 2021 by KWON and his associates to secretly manipulate the market for UST. By May 2022, the UST market was approximately nine times larger in terms of market capitalization and more than eight times larger in terms of daily trading volume relative to May 2021. In May 2022, UST’s peg began to break down as it had a year prior. While KWON was able to cover up the weaknesses of the Terra Protocol in May 2021, he was not able to do so in May 2022. As a result, the value of UST and LUNA crashed, and investors suffered over $40 billion in losses. After the crash of UST and LUNA in May 2022, KWON caused the distribution of a misleading “third party audit” report to cover up his crimes.
On or about March 23, 2023, KWON was arrested in Europe while traveling on a false passport. U.S. authorities submitted a formal request for the arrest and extradition of KWON on March 25, 2023. On December 31, 2024, KWON was extradited from Montenegro to the United States.
* * *
KWON, 33, of the Republic of Korea, pled guilty to one count of conspiring to commit commodities fraud, securities fraud, and wire fraud; and one count of committing wire fraud, which combined carry a maximum sentence of 25 years in prison. As part of his plea, KWON has agreed to forfeit over $19 million in proceeds from his illegal schemes, including his interest in Terraform and its cryptocurrencies. KWON is scheduled to be sentenced by Judge Engelmayer on December 11, 2025.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation (“FBI”), FBI’s Virtual Assets Unit, FBI’s Economic Crimes Unit, FBI’s International Operations Division and Legal Attaché office covering Montenegro, the Ministry of Justice of the Republic of Montenegro, the Ministry of Interior of the Republic of Montenegro, the Montenegro Supreme State Prosecutor's Office, and the Montenegro Special State Prosecutor's Office. Mr. Clayton also gave special thanks to the Department of Justice’s Office of International Affairs for securing the extradition.
The case is being overseen by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Marguerite B. Colson, Sarah Mortazavi, Kimberly Ravener, and Andrew Thomas are in charge of the prosecution.
Ghanaian Nationals Extradited for Roles in Criminal Organization That Stole More Than $100 Million Through Romance Scams and Other FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced today the unsealing of an Indictment charging four Ghanaian nationals, ISAAC ODURO BOATENG, a/k/a “Kofi Boat,” INUSAH AHMED, a/k/a “Pascal,” DERRICK VAN YEBOAH, a/k/a “Van,” and PATRICK KWAME ASARE, a/k/a “Borgar,” for their roles in an international criminal organization that stole more than $100 million from victims via romance scams and business email compromises. They further announced Ghana’s extradition of BOATENG, AHMED, and VAN YEBOAH, who arrived in the U.S. on August 7, 2025, and will be presented today before U.S. Magistrate Judge Robert W. Lehrburger. ASARE remains at large. The case has been assigned to U.S. District Judge Arun Subramanian.
“As alleged, Isaac Oduro Boateng, Inusah Ahmed, Derrick van Yeboah, and Patrick Kwame Asare led and participated in an international fraud ring that engaged in a massive conspiracy to defraud vulnerable people and steal from businesses,” said U.S. Attorney Jay Clayton. “Offshore scammers should know that we, the FBI, and our law enforcement partners will work around the world to combat online fraud and bring perpetrators to justice.”
“The defendants have been brought to the United States to be held accountable for their alleged roles in scamming companies and vulnerable Americans out of over $100 million,” said FBI Assistant Director in Charge Christopher G. Raia. “Deceiving businesses using email compromise campaigns and tricking innocent elderly victims through fraudulent companionship in order to exploit their trust and finances is not merely appalling but illegal. The FBI will continue to ensure anyone who preys on companies and vulnerable Americans online is made to face the criminal justice system.”
As alleged in the Indictment:[1]
BOATENG, AHMED, VAN YEBOAH, and ASARE were high-ranking members of a criminal organization based in Ghana that committed romance scams and business email compromises against individuals and businesses located across the U.S.
Many of the conspiracy’s victims were vulnerable older men and women who were tricked into believing that they were in online romantic relationships with people who were, in fact, fake identities assumed by members of the conspiracy. Once members of the conspiracy had gained the trust of their victims, they deceived those victims into sending their money to the enterprise or into helping them launder funds from other victims. The conspirators also committed business email compromises to trick and deceive businesses into wiring funds to the enterprise. In total, the conspiracy stole and laundered more than $100 million from dozens of victims.
After stealing the money, the fraud proceeds were then laundered to West Africa, where they were largely funneled to individuals called “chairmen,” who directed the activities of other members of the conspiracy. BOATENG and AHMED were considered chairmen of the organization.
* * *
BOATENG, 36; AHMED, 40; VAN YEBOAH, 40; and ASARE, 39, each of Ghana, are charged with one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison; one count of conspiracy to receive stolen money, which carries a maximum sentence of five years in prison; and one count of receipt of stolen money, which carries a maximum sentence of 10 years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the outstanding work of the FBI. He also thanked Ghana and the U.S. Department of Justice’s Office of International Affairs for their assistance.
The Justice Department’s Office of International Affairs worked with the International Cooperation Unit of the Office of the Attorney-General of Ghana to secure the extraditions to the United States. Ghana’s Economic and Organized Crime Office, the Ghana Police Service – INTERPOL, Ghana’s Cyber Security Authority, and Ghana’s National Intelligence Bureau all provided significant assistance to ensure the success of these extraditions.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Kevin Mead and Mitzi Steiner 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.
u.s._v._boateng_et_al_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitutes only allegations, and every fact described therein should be treated as an allegation.
Two Defendants Plead Guilty to Fraud Scheme Involving Data Stolen from Hospital PatientsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton; Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia; and Special Agent in Charge of the Northeast Region of the U.S. Department of Labor Office of Inspector General (“DOL-OIG”), Jonathan Mellone, announced today that WILKINS ESTRELLA and CHARLENE MARTE pled guilty before U.S. District Judge Gregory H. Woods to conspiracy to commit wire fraud and bank fraud in connection with using social security numbers and other personally identifiable information belonging to hundreds of victims to open debit cards and attempt to fraudulently obtain $1.6 million in pandemic relief funds from the Internal Revenue Service (“IRS”) and the New York State Department of Labor. The scheme resulted in almost $1 million in actual losses. ESTRELLA, a former clerk at a Bronx hospital, is also charged with the wrongful disclosure of individually identifiable health information for accessing and stealing the data of at least 4,005 hospital patients for use in the fraud scheme. ESTRELLA pled guilty yesterday and is scheduled to be sentenced on December 1, 2025. MARTE pled guilty on July 28, 2025, and will be sentenced on November 5, 2025.
“Wilkins Estrella stole the personal data of thousands of people, including hospital patients, and used this data along with his partner Charlene Marte to claim money that was intended to assist struggling Americans during the pandemic,” said U.S. Attorney Jay Clayton. “Defrauding federal programs harms all New Yorkers and our Office is committed to stopping it.”
“Wilkins Estrella and Charlene Marte exploited thousands of patient records to steal almost one million dollars from various government programs,” said FBI Assistant Director in Charge Christopher G. Raia. “These defendants misused sensitive identifying information to perpetuate this illicit scheme and reap unlawful proceeds. The FBI remains committed to pursuing any individual who targets confidential medical information for personal enrichment.”
“Wilkins Estrella and Charlene Marte committed numerous frauds against multiple government agencies, including a scheme to defraud the New York State Department of Labor’s unemployment insurance program by misusing the stolen identities of individuals to falsely obtain benefits,” said DOL-OIG Special Agent in Charge Jonathan Mellone. “We will continue to work with our federal and state law enforcement partners to safeguard the integrity of U.S. Department of Labor programs.”
As alleged in public court filings, statements at public court proceedings, and the charging documents in the case:
From at least 2020 to 2022, ESTRELLA and his romantic partner, MARTE, misused the names, social security numbers, and other personally identifiable information belonging to hundreds of individuals to fraudulently obtain almost $1 million in COVID-19 stimulus checks and tax refunds from the IRS and unemployment insurance benefits from the New York State Department of Labor. ESTRELLA and MARTE also arranged for these and other funds to be loaded onto hundreds of debit cards that they opened in other people’s names using stolen data, and had the cards mailed to their homes and to the homes of their family members.
ESTRELLA and MARTE obtained this data from multiple sources, including a hospital in the Bronx where ESTRELLA worked as a business clerk for almost a decade. In 2020, ESTRELLA was terminated from that role after an internal systems audit revealed that he had improperly accessed the protected health information of at least 4,005 hospital patients.
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ESTRELLA, 40, of Hackensack, New Jersey, and MARTE, 31, of the Bronx, New York, each pled guilty to conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison. ESTRELLA also pled guilty to wrongful disclosure of individually identifiable health information, which carries a maximum sentence of 10 years in prison. In addition, ESTRELLA and MARTE each agreed that they are jointly and severally liable for $951,618.20 in forfeiture and the same amount in restitution.
The statutory maximum penalties in this case are prescribed by Congress and provided here for informational purposes only, as the sentencings of the defendants will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of the FBI and DOL-OIG and thanked the New York State Department of Labor for its assistance in the investigation of the case.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jane Yumi Chong is in charge of the prosecution.
Executives of Data Intelligence and Mobile Advertising Companies Charged in Connection with Accounting Fraud SchemeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced today the unsealing of an Indictment charging ANIL MATHEWS, RAHUL AGARWAL, and KENNETH HARLAN with conspiracy and securities fraud. MATHEWS and AGARWAL were, respectively, the Chief Executive Officer and Chief Financial Officer of Near Intelligence, Inc. (“Near”), and HARLAN was the Chief Executive Officer of MobileFuse LLC (“MobileFuse”). The charges in the Indictment arise from an alleged scheme to defraud investors in Near by fraudulently inflating the company’s revenue by approximately $25 million through a series of “round trip” transactions in which Near made inflated payments to MobileFuse, only for MobileFuse to pay the money back to Near. MATHEWS and AGARWAL are also charged with wire fraud in connection with their separate schemes to embezzle money from Near, and MATHEWS is charged with aggravated identity theft in connection with his appropriation of the identities of others that he used to generate fake invoices to disguise his embezzlement.
MATHEWS was previously arrested in connection with these charges in France, where he fled during the pendency of this criminal investigation. The United States is seeking his extradition. AGARWAL, an Indian citizen and resident, is at large. HARLAN was arrested earlier today and will be presented this afternoon before U.S. Magistrate Judge Robert W. Lehrburger.
“As alleged, executives from Near and MobileFuse ran a circular payment scheme to inflate revenue and increase Near’s value,” said U.S. Attorney Jay Clayton. “Our investors, businesses and employees depend on the integrity of our capital markets. Market integrity is one of America’s great competitive advantages, and this Office will hold those who undermine that essential integrity to account.”
“These defendants not only allegedly recycled more than $25 million through each other’s businesses, but two of them also stole even more funds to maintain their personal lifestyles,” said FBI Assistant Director in Charge Christopher G. Raia. “These defendants allegedly manipulated their executive positions within their respective companies to create a mirage of financial success and attract prospective buyers. The FBI is determined to apprehend any individual who relies on fraudulent misrepresentations to improve their economic portfolio.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
The defendants, from 2021 to December 2023, caused Near to fraudulently inflate its reported revenue by “round-tripping” money through MobileFuse, a private mobile advertising company founded and run by HARLAN. The round-tripping scheme began before Near became a public reporting company, and MATHEWS and AGARWAL’s fraudulent inflation of Near’s revenue was designed, at least in part, to make Near look more attractive for acquisition by a Special Purpose Acquisition Company, or SPAC, to take Near public. HARLAN, along with other senior MobileFuse executives, agreed to facilitate Near’s fraudulent inflation of its revenue by exchanging fake invoices along with inflated payments that allowed Near’s revenue from MobileFuse’s business to appear more than 10 times higher than it actually was, while MobileFuse “netted” out the roundtripped amounts and paid Near only what MobileFuse owed it for services actually rendered. The defendants, and other senior executives at Near and MobileFuse, knew that Near was recognizing fake revenue that was based on these round-tripped amounts that originated at Near, rather than representing money MobileFuse legitimately owed Near for business services.
The fraudulent accounting practices instigated by the defendants and their co-conspirators caused Near to overstate its revenue by at least approximately $25 million. At various times, Near’s revenue was falsely inflated by as much as approximately 28 percent, with the greatest inflations to Near’s revenue in 2022, just before it went public. These inflated figures were relied on by the SPAC when it evaluated whether to acquire Near. Near’s misrepresentations about its revenue, as orchestrated by the defendants and their co-conspirators, continued after it became a public reporting company. Revenue inflated by MobileFuse’s round-tripped payments gave the appearance that Near was meeting its revenue projections, when, actually, Near would have failed to meet those projections without the round-trip payments. In order to conceal Near’s fraudulent accounting practices, the defendants, and other senior executives at Near and MobileFuse, took steps to mislead the independent certified public accountants engaged to audit Near’s financial statements.
The round-tripping scheme unraveled a few months after Near began trading on the Nasdaq on or about March 24, 2023. On or about October 5, 2023, Near announced an initial assessment that revenue may have been overstated and that its financial statements should not be relied on. Near filed for bankruptcy in December 2023, less than nine months after its merger with the SPAC was completed.
The Round-Tripping Scheme
In January 2021, before the round-tripped payments began, MATHEWS and AGARWAL, along with another Near executive (“Near Executive-3”), invested $2 million in MobileFuse through a Singaporean private limited company in exchange for approximately 1.2 million Class B MobileFuse shares, which amounted to an approximately 10% equity stake in MobileFuse. In the summer of 2023, shortly after Near became a public company, MobileFuse repurchased these Class B MobileFuse shares from MATHEWS, AGARWAL, and Near Executive-3 for only approximately $12,000. Effectively, therefore, the January 2021 “investment” amounted to a nearly $2 million payment from the Near executives to MobileFuse, and specifically, to HARLAN and his co-founder, the majority owners of MobileFuse.
A few months later, the round-tripped payments began. MATHEWS, AGARWAL, and HARLAN coordinated the mechanics of the payments, which would begin with a large invoice from Near to MobileFuse followed by a “counter invoice” representing the amount MobileFuse would legitimately owe Near for services rendered on a monthly basis, plus the round-tripped amount that originated from Near. In accordance with this plan, from May 2021 to September 2023, Near and MobileFuse engaged in a series of similar transactions in which Near paid MobileFuse followed by reverse payments to Near on or about the same day in close but slightly greater amounts, the difference representing the amount MobileFuse legitimately owed to Near for actual services rendered. The payments totaled approximately more than $25 million to MobileFuse, and approximately $27,750,000 to Near.
Near booked payments received from MobileFuse as revenue, even though the defendants knew that the payments Near received from MobileFuse lacked economic substance and merely reflected a return of money Near had previously paid MobileFuse the same day or the day before. Near’s recognition of the fraudulently inflated revenue from the MobileFuse round-tripped transactions caused Near’s revenue to be overstated on its financial statements, including its audited financial statements from both before and after Near became a public company.
HARLAN knew that MobileFuse’s exchange of invoices with Near enabled Near to record increased revenue on its books and that this the increased revenue was fraudulent, and he acted accordingly. Explaining the arrangement to other MobileFuse executives, HARLAN said “Basically [Near is] grossing up their revenue.” MobileFuse, however, did not book the money it received from Near as part of the round-tripped transactions as revenue within its own financial statements. Rather, MobileFuse “netted” the amount Near paid it against the amount it paid Near and recorded only the difference. The result was that Near and MobileFuse accounted for the revenue from their mutual transfers differently. HARLAN recognized that Near’s approach was highly misleading: on or about March 28, 2023, HARLAN texted MobileFuse Executive-2 to compare MobileFuse’s finances to Near’s: “Interesting note….we have more revenue than Near and obviously profitable both in 2022 and forecasted for 2023 and our revenue is real.”
The Embezzlement Schemes
MATHEWS and AGARWAL further enriched themselves at Near’s expense by embezzling money from the company. From in or about May 2022, through in or about 2024, MATHEWS engaged in a scheme to embezzle hundreds of thousands of dollars from Near to pay rent for a luxury home located in Laguna Beach, California. MATHEWS took concerted efforts to conceal the embezzlement scheme from Near, its auditors, and its shareholders, including through the creation and use of fictitious invoices using misappropriated identities. Similarly, from in or about 2021 to in or about 2022, AGARWAL also embezzled from Near by transferring funds equivalent to more than a million dollars to a Singaporean company owned by him, along with hundreds of thousands of dollars to a company owned by another Near executive (“Near Executive-3”). Agarwal later facilitated a cover-up by causing Near’s finance department to transmit to Near’s independent auditors a fraudulent MobileFuse invoice to account for the transfers.
* * *
A chart containing the names, ages, residences, charges, and maximum penalties for the individual defendants is attached.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the outstanding work of the FBI and further thanked the U.S. Securities and Exchange Commission.
The Justice Department’s Office of International Affairs is handling the extradition.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Nicholas Chiuchiolo and Allison Nichols 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.
DefendantAgeResidenceChargesMaximum Potential Sentence(s)MATHEWS51Laguna Niguel, CAConspiracy to commit securities fraud, to make false statements in a registration statement, to make false statements in reports required to be filed by the SEC, improperly influencing the conduct of audits, and falsifying the books and records of a publicly traded company, 18 U.S.C. § 371
(Count One)
Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff
(Count Two)
Wire Fraud,
18 U.S.C. § 1343 (Count Three)
Aggravated Identity Theft, 18 U.S.C. § 1028A
Five years
20 years
20 years
Two years, mandatory consecutive
AGARWAL40IndiaConspiracy to commit securities fraud, to make false statements in a registration statement, to make false statements in reports required to be filed by the SEC, improperly influencing the conduct of audits, and falsifying the books and records of a publicly traded company, 18 U.S.C. § 371
(Count One)
Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff
(Count Two)
Wire Fraud,
18 U.S.C. § 1343 (Count Five)
Five years
20 years
20 years
HARLAN52Princeton, NJConspiracy to commit securities fraud, to make false statements in a registration statement, to make false statements in reports required to be filed by the SEC, improperly influencing the conduct of audits, and falsifying the books and records of a publicly traded company, 18 U.S.C. § 371
(Count One)
Securities fraud, 15 U.S.C. §§ 78j(b) & 78ff
(Count Two)
Five years
20 years
u.s._v._mathews_et_al_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Charged with Possession of Child PornographyRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today the arrest of CARLOS RIVAS in connection with the unsealing of a Complaint charging RIVAS with possessing hundreds of images and videos of child pornography that depict pre-pubescent children engaging in sexually explicit conduct. RIVAS was arrested yesterday and presented before U.S. Magistrate Judge Robert W. Lehrburger.
“As alleged, Carlos Rivas possessed hundreds of images and videos of child pornography while working at a Bronx school,” said U.S. Attorney Jay Clayton. “Child pornography has no place anywhere in our society, particularly anywhere connected to a school. Our devoted prosecutors and partners will unrelentingly fight this scourge.”
According to the allegations contained in the Complaint:[1]
In the summer of 2024, RIVAS worked at a school in the Bronx, New York (“School-1”).
From at least in or about July 14, 2024, through in or about August 15, 2024, RIVAS possessed hundreds of images and videos constituting child pornography on his account with an electronic service provider’s file storage service. Some of the child pornography was uploaded to RIVAS’s account from an Internet Protocol address associated with School-1.
* * *
RIVAS, 22, of the Bronx, New York, is charged with one count of possession of child pornography, including images and videos of prepubescent minors and minors who had not attained 12 years of age, which carries a maximum sentence of 20 years in prison.
The statutory maximum sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the efforts of Homeland Security Investigations.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Rita Maxwell 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.
u.s._v._rivas_complaint_1.pdf
[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.
Founders of Samourai Wallet Cryptocurrency Mixing Service Plead GuiltyRead the Press Release
Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, Nicolas Roos; Special Agent in Charge of the New York Field Office of Internal Revenue Service-Criminal Investigation (“IRS-CI”), Harry T. Chavis, Jr.; and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced today the guilty pleas of KEONNE RODRIGUEZ and WILLIAM LONERGAN HILL, the co-founders of Samourai Wallet (“Samourai”), a cryptocurrency mixer that facilitated more than $200 million in illegal transactions. RODRIGUEZ, the Chief Executive Officer of Samourai, and HILL, the Chief Technology Officer, pled guilty to participating in a conspiracy to operate a money transmitting business that transmitted crime proceeds from, among other things, illegal dark web markets, cyber intrusions, a spear phishing scheme, and schemes to defraud multiple decentralized finance protocols. RODRIGUEZ and HILL pled guilty on July 30, 2025, before U.S. District Judge Denise L. Cote.
“The defendants created and operated a cryptocurrency mixing service that they knew enabled criminals to wash millions in dirty money, including proceeds from cryptocurrency thefts, drug trafficking operations, and fraud schemes,” said Attorney for the United States Nicolas Roos. “When criminals exploit cryptocurrency technology for illicit purposes, it undermines the public trust and unfairly burdens legitimate cryptocurrency companies that are committed to operating lawfully. This Office and our partner agencies are committed to holding accountable those who exploit emerging technologies to launder crime proceeds.”
“Rodriguez and Hill admitted to operating a money transmitting business that transmitted crime proceeds, essentially ‘washing’ more than $200 million in ‘dirty’ money for criminals,” said Special Agent in Charge of IRS-CI, Harry T. Chavis, Jr. “They did not just facilitate this illicit movement of money, but also encouraged it. Special Agents with IRS-CI New York and IRS-CI LA’s Cyber units worked with our federal and international law enforcement partners in this investigation that detailed the company’s clear disregard for the rule of law. Even with all the ‘washing’ in this scheme, no one was clean in these transactions.”
“Keonne Rodriguez and William Hill's guilty pleas prove their cryptocurrency mixing service–Samourai Wallet–was designed to conceal criminal financial transactions and launder millions of dollars of dirty money,” said FBI Assistant Director in Charge Christopher G. Raia. “The FBI is committed to bringing to justice anyone who uses technological innovation to facilitate illicit activity.”
According to court documents and admissions:
Beginning around 2015, RODRIGUEZ and HILL began developing Samourai, a mobile application that was designed and operated as a service for transmitting criminal proceeds. The defendants engineered Samourai around two services specifically intended to conceal the nature of illicit transactions. The first, a Bitcoin mixing service known as “Whirlpool,” coordinated batches of Bitcoin exchanges between groups of Samourai users. Through this process, the original source of particular Bitcoin holdings became obscured within the blockchain’s transactional record, effectively preventing law enforcement agencies and cryptocurrency exchanges from tracing funds back to their origins. The second service, called “Ricochet,” enabled users to introduce additional and unnecessary intermediate transactions—known as “hops”—between sending and receiving addresses. This feature served a similar obfuscation purpose, making it substantially more difficult for monitoring entities to establish connections between cryptocurrency transfers and potential illicit activities. The scale of these operations proved considerable: from Ricochet’s launch in 2017 and Whirlpool’s inception in 2019, more than 80,000 Bitcoin—valued at over $2 billion when calculated using contemporaneous exchange rates—passed through these services. Samourai collected a fee for both services, estimated to be over $6 million in revenue based on Bitcoin’s value at the time each fee was earned.
RODRIGUEZ and HILL actively promoted Samourai’s utility for concealing criminal proceeds. Their communications reveal a clear understanding of Samourai’s illegal applications. In a WhatsApp exchange, when asked to explain the concept of “mixing,” RODRIGUEZ described the process as “money laundering for bitcoin.” HILL similarly marketed Samourai as a transmittal service for criminal proceeds on Dread, a darknet forum dedicated to discussing illegal marketplace activities. In one exchange on that platform, a user asked about the most “secure methods to clean dirty BTC” to make it “untraceable, clean” and ensure the user would “never get caught.” HILL responded by writing that “Samourai Whirlpool is a much better option” than a competitor service to “clean dirty BTC.” The defendant’s own marketing materials acknowledged that customers would include “Dark/Grey Market participants” moving proceeds from “illicit activity.”
The defendants’ conduct extended beyond passive facilitation to active encouragement of criminal activity. In June and July 2020, RODRIGUEZ and HILL tracked in real time the flow of crime proceeds from a widely publicized hack of a prominent social media platform. Rather than reporting the criminal activity or attempting to stop it, both defendants publicly and privately expressed their intent and desire that the hackers use Samourai’s Whirlpool service to move the crime proceeds of the hack. That encouragement included a July 16, 2020 Twitter exchange: after a third party encouraged the “lovely hackers” of the social media platform to “use @SamouraiWallet whirlpool to mix out once you are done collecting or decide to take profits” in order to “protect you from being found,” RODRIGUEZ responded by personally encouraging the hackers to “feed” and “send” the crime proceeds into Samourai’s Whirlpool. When the hackers used a different cryptocurrency mixing service to launder the proceeds of the hack, RODRIGUEZ and HILL expressed their disappointment on social media.
* * *
RODRIGUEZ, 36, of Harmony, Pennsylvania, and HILL, 67, a U.S. national who was arrested in Portugal, each pled guilty to one count of conspiracy to operate a money transmitting business knowing the business transmitted crime proceeds, which carries a maximum sentence of five years in prison. As part of their plea agreements with the Government, RODRIGUEZ and HILL agreed to forfeit $237,832,360.55.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Roos praised the investigative work of IRS-CI and the FBI. He also acknowledged the assistance of the Justice Department’s Office of International Affairs, Europol, the Portuguese Judicial Police, the Procuradoria-Geral da República, the Icelandic Police, and the FBI Field Office in Pittsburgh for their assistance in the investigation of this case.
The Justice Department’s Office of International Affairs provided substantial assistance to secure the July 2024 extradition from Portugal of HILL.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Andrew K. Chan, David R. Felton, and Cecilia Vogel are in charge of the prosecution.
Founder of Tornado Cash Crypto Mixing Service Convicted of Knowingly Transmitting Criminal ProceedsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced today the conviction of ROMAN STORM, a co-founder of Tornado Cash, a cryptocurrency mixer that facilitated more than $1 billion in illegal transactions, for willfully conspiring to operate a money transmitting business that moved more than $1 billion in dirty money. The defendant was found guilty following a four-week jury trial before U.S. District Judge Katherine Polk Failla.
“Roman Storm and Tornado Cash provided a service for North Korean hackers and other criminals to move and hide more than $1 billion of dirty money,” said U.S. Attorney Jay Clayton. “The speed, efficiency, and functionality of stablecoins and other digital assets offer great promise, but that promise cannot be an excuse for criminality. Criminals who use new technology to commit age old crimes, including hiding dirty money, undermine the public trust, and unfairly cast a shadow on the many innovators who operate lawfully. This Office and our partner agencies are committed to holding accountable those who exploit emerging technologies to commit crime.”
As reflected in the Indictment, public filings, and the evidence presented at trial:
STORM was one of the three founders of Tornado Cash, a cryptocurrency mixer that allowed its customers to engage in untraceable transfers of cryptocurrency. The defendant and his co-conspirators created the core features of Tornado Cash, paid for critical infrastructure to operate Tornado Cash, promoted Tornado Cash, and made millions of dollars in profits from operating Tornado Cash. Tornado Cash advertised to customers that it provided untraceable and anonymous financial transactions, and STORM continued to provide this service with knowledge that Tornado Cash was transmitting large volumes of criminal proceeds. As proven at trial, STORM was personally aware of numerous instances in which criminals transmitted proceeds of criminal exploits using Tornado Cash, totaling more than $1 billion in criminal proceeds. The transmission of such large sums of criminal proceeds benefitted the operations of Tornado Cash and STORM’s profits from running it. Ultimately, STORM and his co-founders were able to cash out more than $12 million in profits from the illicit money transmitting business.
STORM designed Tornado Cash to generate profits for himself and his co-founders and continued to operate the business with knowledge that he was transmitting criminal proceeds. This included his knowing transmission of hundreds of millions of dollars in criminal proceeds from the Ronin hack, which the Federal Bureau of Investigation (“FBI”) publicly attributed to the sanctioned North Korean cybercriminal organization, the Lazarus Group. STORM continued to transmit these hacked funds even after the public attribution of the hack to the Lazarus Group.
* * *
STORM, 36, of Auburn, Washington, was convicted of one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the investigative work of the FBI and the Internal Revenue Service-Criminal Investigations.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Thane Rehn, Benjamin A. Gianforti, and Ben Arad, and Special Assistant U.S. Attorney Kevin Mosley, are in charge of the prosecution, with assistance from Paralegal Specialists Olivia Sebade and Dean Iannuzzelli.
Former U.S. Embassy Employee Extradited to Face Charges for Cocaine Importation ConspiracyRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the Newark Field Office of Homeland Security Investigations (“HSI”), Michael McCarthy, announced today that JAIRO ELIEZER ARIAS CACERES, a former employee of the U.S. Embassy in Santo Domingo, Dominican Republic, was extradited from the Dominican Republic in connection with the unsealing of an Indictment charging ARIAS CACERES with conspiracy to import cocaine into the United States. ARIAS CACERES will make his initial appearance later today before U.S. Magistrate Judge Robert W. Lehrburger. The case is assigned to U.S. District Judge Gregory H. Woods.
“Jairo Eliezer Arias Caceres allegedly orchestrated a cocaine smuggling scheme while employed as a security officer at our U.S. Embassy in the Dominican Republic and as a former security officer at the airport in Santo Domingo,” said U.S. Attorney Jay Clayton. “While Arias Caceres was supposed to be protecting our diplomats and embassy staff from danger, he was allegedly busy endangering New Yorkers by pumping illegal drugs into our community. Abuse of a position of national trust to traffic in deadly narcotics shocks the sensibilities of New Yorkers and the women and men of our office are committed to bringing those who abuse that trust to justice.”
“The charges against Jairo Arias Caceres are the result of an extensive investigation into a significant narcotics importation conspiracy, led by our Border Enforcement Security Task Force (BEST),” said HSI Newark Special Agent in Charge Michael S. McCarthy. “In coordination with HSI Santo Domingo and multiple federal partners, this investigation successfully dismantled a sophisticated trafficking network responsible for moving dangerous narcotics from the Dominican Republic into the United States. HSI remains committed to protecting the American public by targeting and disrupting the transnational criminal organizations that seek to bring illicit drugs into our communities.”
As alleged in the Indictment and other court filings:[1]
Since at least in or about April 2023 through at least in or about December 2023, ARIAS CACERES—while employed as a security officer by the U.S. Embassy in the Dominican Republic—operated a transnational conspiracy to import cocaine into the United States. ARIAS CACERES devised a scheme through which couriers smuggled cocaine into various airports in the New York area by disguising the cocaine in the packaging of items purchased from the Santo Domingo Airport Duty Free store. Photographs of some of the several cocaine seizures linked to ARIAS CACERES are below:
Before working for the U.S. Embassy, where he was employed from 2018 through 2025, ARIAS CACERES also worked for at least seven years as security officer at the Santo Domingo Airport. ARIAS CACERES exploited his former positions of authority at the Embassy and the Airport in order to operate this narcotics importation scheme.
The defendant was in charge of several aspects of the scheme. He helped to recruit couriers, paid for and arranged their travel to and from the Dominican Republic, and organized the logistics of the couriers’ receipt of cocaine from other airport employees. For each of the couriers, the defendant was their main point of contact before, during, and after their smuggling trips to and from the Dominican Republic.
* * *
ARIAS CACERES, 35, of Santo Domingo, Dominican Republic, is charged with one count of conspiracy to import narcotics into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of HSI New York; the New York Division of the Drug Enforcement Administration; HSI Santo Domingo; the U.S. Customs and Border Protection (“CBP”) Strategic Partnership for Enforcement and Analytical Response Port of New York/New Jersey; CBP’s Air & Marine Operations; and the U.S. Marshals Service Office of International Operations, Dominican Republic Foreign Field Office.
The Justice Department's Office of International Affairs provided substantial assistance in securing the arrest and extradition to the United States of CACERES.
This prosecution is part of an OCDETF operation. OCDETF identifies, disrupts, and dismantles criminal organizations using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Jackie Delligatti and Katherine Cheng are in charge of the prosecution.
The charges in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
u.s._v._caceres_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Two Defendants Charged in Investment Fraud Scheme with over One Hundred VictimsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton; Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Ricky J. Patel; Special Agent in Charge of the New York Regional Office of the Federal Deposit Insurance Corporation’s Office of the Inspector General (“FDIC-OIG”), Patricia Tarasca; and Acting Inspector in Charge of the New York Division of the U.S. Postal Inspection Service (“USPIS”), Edward Gallashaw, announced today the unsealing of an Indictment charging LOURDES ROSALES BANEGAS and RAMON CONCEPCION with stealing more than one million dollars from over one hundred victims through an investment fraud scheme known as “LNJ Funds.” BANEGAS is also charged with sending proceeds from the scheme to bank accounts in Colombia. The defendants were arrested and will be presented today before U.S. Magistrate Judge Robert W. Lehrburger.
“As alleged, Lourdes Rosales Banegas and Ramon Concepcion defrauded over one hundred victims through false promises about high and safe returns on their investments,” said U.S. Attorney Jay Clayton. “But, Banegas and Concepcion selfishly spent their victims’ money on themselves. Our office is committed to bringing those who prey on Main Street investors to justice.”
“As alleged, the defendants fleeced over a hundred innocent victims out of millions of dollars through their sham claims of a ‘risk-free’ money-making opportunity,” said HSI Special Agent in Charge Ricky J. Patel. “Their alleged Ponzi scheme crumbled today, as did any façade of legitimacy behind their purported investment firm, LNJ Funds. Every day, HSI New York stands alongside our law enforcement partners in utilizing every tool at our disposal to ensure New Yorkers as well as those around the world, and their livelihoods, are protected from criminal opportunists’ intent on filling their pockets by any means necessary."
“The defendants allegedly made false promises as part of an investment scam involving more than 100 victims and enriched themselves while doing so,” said FDIC-OIG Special Agent in Charge Patricia Tarasca. “Despite assurances that their victims could eventually recover their invested money, this did not prove to be the case. We are pleased to join our law enforcement partners in bringing the perpetrators of such deceit to justice.”
“The U.S. Postal Inspection Service will continue to investigate investment schemes such as this and hold those who seek to defraud the American public accountable,” said USPIS Acting Inspector in Charge Edward Gallashaw. “Before investing, individuals should research all claims and promises of high returns made by investment companies. Too often, victims are enticed by bold promises and overlook warning signs that something may be off.”
According to allegations in the Indictment:[1]
BANEGAS and CONCEPCION marketed and operated a supposed investment business they called “LNJ Funds.” BANEGAS and CONCEPCION told their victims that investments in LNJ Funds provided a guaranteed 20% rate of return every sixty days and that there was no risk of losing money in the investment. BANEGAS and CONCEPCION claimed that LNJ Funds could offer risk-free investments because it invested money in student loans backed by the federal government. BANEGAS and CONCEPCION also told their investors that they could withdraw their money from LNJ Funds after a waiting period of approximately 60 to 90 days.
Contrary to BANEGAS and CONCEPCION’s promises, LNJ Funds did not invest the money that its prospective investors provided. Instead, BANEGAS and CONCEPCION spent money from their victim-investors on airfare, hotels, retail stores, and personal expenses. BANEGAS also sent money to several bank accounts in Colombia, including an account in her name, as well as other accounts under her control. Additionally, at times money from some LNJ Funds investors was paid to other LNJ Funds investors to perpetuate the myth that LNJ Funds was a legitimate business rather than a scam.
While BANEGAS and CONCEPCION told LNJ Funds investors that they could obtain a return of their invested money after a waiting period, BANEGAS and CONCEPCION did not maintain enough money to repay their investors. Instead, BANEGAS and CONCEPCION stole and misused the investor money. Moreover, instead of repaying their investors as promised, BANEGAS, CONCEPCION, and a co-conspirator insulted, ignored, and lied to victims who attempted to withdraw their money from LNJ Funds.
* * *
BANEGAS, 43, and CONCEPCION, 43, both of Queens, New York, are each charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. BANEGAS is also charged with three counts of engaging in monetary transactions in property derived from specified unlawful activity, each of which carries a maximum of 10 years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the outstanding work of HSI, FDIC-OIG, and USPIS.
The case is being handled by the Office’s Illicit Finance and Money Laundering Unit. Assistant U.S. Attorney Christopher Brumwell is in charge of the prosecution, with the assistance of Paralegal Specialist Angelica Cotto.
u.s._v._banegas_and_concepcion_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the texts of the Indictment and the descriptions of the Indictment set forth herein constitute only allegations and every fact described should be treated as an allegation.
Nigerian Man Extradited to Face Hacking, Fraud, and Identity Theft ChargesRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced that CHUKWUEMEKA VICTOR AMACHUKWU, a/k/a “Chukwuemeka Victor Eletuo,” a/k/a “So Kwan Leung,” was extradited yesterday to the U.S. from France in connection with hacking, fraud, and identity theft offenses. AMACHUKWU was presented today before U.S. Magistrate Judge Robert W. Lehrburger. The case is assigned to U.S. District Judge Paul G. Gardephe
“As alleged, Chukwuemeka Victor Amachukwu took part in a scheme to hack into U.S. tax businesses, trade in the stolen identifying information of victims, and defraud the IRS and other governmental bodies,” said U.S. Attorney Jay Clayton. “Amachukwu also allegedly took part in a separate fraud scheme that promised his victims valuable investments that did not in fact exist. This Office and our law enforcement partners stand committed to protecting Americans from criminals operating here and offshore.”
“Amachukwu allegedly operated multiple illicit fraud schemes – identity theft, computer intrusions via spearphishing, and false investments – profiting at the costs of others,” said FBI Assistant Director in Charge Christopher G. Raia. “If you are attempting to enrich yourself by scamming Americans from behind a keyboard, the FBI with our extensive law enforcement partnerships is willing and able to bring you to the United States to face justice.”
According to the Superseding Indictment, public court filings, and statements made in court:[1]
Beginning in at least in or about 2019, AMACHUKWU, his co-conspirator Kinglsey Uchelue Utulu, and other Nigeria-based conspirators took part in a scheme to hack into U.S-based tax preparation businesses—including several U.S. based businesses located in New York, Texas, and other states—by utilizing spearphishing emails to obtain access to these business’s electronic systems. Once they had obtained access, the conspirators stole the tax and other identifying information of the business’ customers.
The conspirators obtained the stolen identity information of thousands of individuals and used this information to file fraudulent tax returns with the Internal Revenue Service and state tax authorities. The conspirators sought fraudulent refunds of at least approximately $8.4 million, of which they successfully obtained at least approximately $2.5 million.
In addition to filing fraudulent tax returns, the conspirators used the stolen identities to file fraudulent claims with the Small Business Administration’s Economic Injury Disaster Loan program. The conspirators were able to obtain at least an additional approximately $819,000 in fraudulent payouts.
AMACHUKWU is also charged with participating in a separate fraud scheme. In this scheme, the defendant offered victims investments in purportedly valuable standby letters of credit. However, these letters of credit did not exist, and AMACHUKWU pocketed millions of dollars of his victims’ money.
AMACHUKWU was arrested in France at the request of the United States for his involvement in this scheme, and he was thereafter extradited to the U.S.
* * *
AMACHUKWU, 39, of Nigeria, is charged with one count of conspiracy to commit computer intrusions, which carries a maximum sentence of five years in prison; two counts of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; two counts of wire fraud, which carries a maximum sentence of 20 years in prison; and aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.
The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the FBI, as well as the assistance of the Justice Department’s Office of International Affairs and the U.S. Marshals Service in securing the arrest and extradition from France. Mr. Clayton further thanked the French National Gendarmerie for their assistance in this case.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Daniel G. Nessim is in charge of the prosecution.
The charges contained in the Superseding Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
u.s._v._amachukwu_superseding_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment, and the description of the Superseding Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Charged with Slashing of U.S. Postal Service Mail CarrierRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Acting Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), Edward Gallashaw, announced today the arrest and filing of a Complaint charging JOHN GARCIA with assaulting a U.S. Postal Service (“USPS”) mail carrier with a deadly and dangerous weapon on July 16, 2025, in the Bronx, New York. The defendant was presented this afternoon before U.S. Magistrate Judge Robert W. Lehrburger.
“John Garcia allegedly attacked a uniformed USPS carrier who was delivering the mail,” said U.S. Attorney Jay Clayton. “Attacks like this are senseless and threaten the good people and systems we rely on every day. They will not be tolerated.”
“The Postal Inspection Service takes matters involving the safety and well-being of postal service employees as a top priority,” said USPIS Acting Inspector in Charge Edward Gallashaw. “Let it be clear, we will investigate and identify anyone who commits a criminal act against a USPS letter carrier. I’d like to thank our local law enforcement partners and the U.S. Attorney’s Office for the Southern District of New York for their constant assistance.”
According to the allegations contained in the Complaint:[1]
On or about July 16, 2025, at approximately 12:50 p.m., in the Bronx, New York, GARCIA attacked a uniformed, on-duty USPS mail carrier (“Victim‑1”) with a sharp object. GARCIA slashed Victim-1’s head and right ear, causing multiple deep lacerations that required Victim-1 to be hospitalized.
* * *
GARCIA, 49, of the Bronx, is charged with one count of assaulting an officer of the U.S. using a deadly or dangerous weapon, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Kevin Grossinger 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.
u.s._v._garcia_complaint.pdf
[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.
Founder and Managing Director of Tax Lien Investment Firm Convicted of Fraud and Money LaunderingRead the Press Release
Attorney for the United States, Acting under Authority Conferred by 28 U.S.C. § 515, Sean S. Buckley, announced today the conviction of JOHN ARTHUR HANRATTY, the founder and managing director of a tax lien investment firm, for his role in a fraudulent scheme to steal over $20 million from investors and a Federal Deposit Insurance Corporation (“FDIC”)-insured bank. The defendant was found guilty following a two-week jury trial before U.S. District Judge Lorna G. Schofield and is scheduled to be sentenced on January 20, 2026.
“John Arthur Hanratty, a New York-licensed attorney and the founder of a multi-million-dollar municipal tax lien investment firm, lied to investors and stole money from a bank by falsely claiming to own millions of dollars of tax lien collateral to obtain more than $20 million in loan advances,” said Attorney for the United States Sean S. Buckley. “This verdict highlights our Office’s commitment to ensuring the integrity of the lending and investment markets by protecting lenders and investors from financial fraud.”
As reflected in the Indictment, public filings, and the evidence presented at trial:
HANRATTY was the Founder and Managing Director of Ebury Street Capital, LLC (“Ebury Street Capital”), an investment firm with a portfolio primarily comprised of municipal tax liens. HANRATTY has been an attorney licensed to practice law in the State of New York since 2002 and held legal and compliance positions at well-known investment firms and financial institutions, including serving as the Chief Compliance Officer and General Counsel for a trading broker dealer.
Between 2017 and 2021, HANRATTY participated in a fraudulent scheme to steal money from an FDIC-insured bank (“Victim Bank-1”) by drawing down on commercial lines of credit that had been extended to Ebury Street Capital. Specifically, HANRATTY made materially false statements inflating by millions of dollars tax lien collateral pledged to Victim Bank-1. As a result of HANRATTY’s misstatements, Victim Bank-1 was defrauded of over $20 million. In addition, HANRATTY falsely told investors and Victim Bank-1 that the tax lien collateral was managed by an independent third-party custodian, when, in reality, that was not true. The defendant’s fraud ultimately resulted in millions of dollars of losses for the investors in Ebury Street Capital and for Victim Bank-1.
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HANRATTY, 50, of New Jersey, was convicted of one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of bank fraud, which carries a maximum sentence of 30 years in prison; and two counts of money laundering, each of which carries a maximum sentence of 10 years in prison.
The maximum potential sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Buckley praised the outstanding investigative work of the Federal Bureau of Investigation.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Andrew Chan, Nicholas Chiuchiolo, Danielle Kudla, and Adam Sowlati are in charge of the prosecution, with assistance from Paralegal Specialist Alexander Ross.
Bronx Man Sentenced to 27 Years for 2016 Murder and Conspiracy to Distribute Crack and HeroinRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that BRUCE MORRIS, a/k/a “G,” was sentenced today by U.S. District Judge Jesse M. Furman to 27 years in prison in connection with the August 2016 murder of Jerome Jemison in the Bronx, New York, as well as related narcotics and firearm offenses. MORRIS was convicted following a jury trial in January 2025 of conspiracy to distribute crack cocaine and heroin and of using, carrying, and brandishing a firearm in connection with that conspiracy. Following an evidentiary hearing, Judge Furman also found that MORRIS was responsible for the murder of Jemison.
“In 2016, Bruce Morris murdered Jerome Jemison in the middle of the day on the landing of a public stairwell of an apartment building in the Bronx, a building that he terrorized for over a decade,” said U.S. Attorney Jay Clayton. “Morris has now been held accountable for his heinous crimes.”
As detailed in public filings and public court proceedings:
From at least 2012 through in or about June 2023, MORRIS led a narcotics conspiracy that sold crack cocaine and heroin in the Hunts Point neighborhood of the Bronx. The base of MORRIS’s operation was an apartment in the building where his family lived at 868 Faile Street and the surrounding area, as well as, for a time, a vacant apartment in that same building. MORRIS used guns, threats of violence, and acts of violence to maintain control of his drug trafficking business and the building. On one occasion, when the superintendent of the building confronted the conspirators about their use of the vacant apartment, MORRIS threatened the superintendent with a firearm.
On August 11, 2016, during the middle of a summer day, on the third floor of 868 Faile Street, MORRIS shot Sal in the back of his head over a drug debt. Sal was 46 years old.
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In addition to his prison term, MORRIS, 43, of the Bronx, New York, was sentenced to five years of supervised release.
Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation and the New York City Police Department.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Matthew Weinberg, Camille L. Fletcher, Jeffrey W. Coyle, Jackie Delligatti, and Marguerite B. Colson are in charge of the prosecution, with the assistance of Paralegal Specialist Jackie Fleury.
Bronx Man Charged with Federal Narcotics Offenses Resulting in DeathRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), Frank A. Tarentino, announced today the unsealing of an Indictment charging ESTHERLYN FRIAS, a/k/a “Platinum,” a/k/a “Silver,” with conspiring to distribute narcotics resulting in death in connection with the poisoning death—or “overdose”—of a victim in Greenwich, Connecticut (“Victim-1”). The case has been assigned to U.S. District Judge Kevin P. Castel.
“As alleged, Estherlyn Frias has been pumping deadly drugs into our communities for years, including fentanyl, heroin, cocaine, methamphetamine, and more,” said U.S. Attorney Jay Clayton. “The drugs that he sold claimed someone’s life, and it appears they may have claimed others before. Shockingly, Frias appears to have stored his significant drug supply in an apartment where his two young children lived with him, mere feet away from where they slept. Our communities’ suffering from this kind of personal profit ends now. As the charges in this case show, together with our law enforcement partners, we will relentlessly pursue those who distribute illegal drugs.”
“Another senseless death at the hands of an individual pushing illicit narcotics laced with fentanyl,” said DEA Special Agent in Charge Frank A. Tarentino. As alleged, Estherlyn Frias repeatedly trafficked and sold fentanyl laced products, going so far as to recklessly stash these deadly drugs in a bedroom where his children slept. While today’s indictment against Mr. Frias will not bring back the person whose life was lost; it undoubtably represents a step towards justice and likely saved countless others. The DEA is committed to saving lives and will continue to work alongside our law enforcement partners in targeting those responsible for poisoning our communities and destroying families.”
As alleged in the Indictment, other court filings, and statements made during court proceedings:[1]
From at least in or about January 2023 through at least in or about July 2025, FRIAS and others conspired to distribute methamphetamine, fentanyl, para-fluorofentanyl, cocaine base, cocaine, heroin, and methadone, including from FRIAS’s apartment in the Bronx, New York. FRIAS used that apartment—where his girlfriend and two young children resided—as a stash house, where he stored significant quantities of a variety of narcotics.
As a consequence of the drug conspiracy engaged in by FRIAS and his co-conspirators, Victim-1 died from acute fentanyl and cocaine intoxication on or about July 1, 2025. Victim-1 met FRIAS outside of FRIAS’s apartment the day before to buy drugs. Within about twelve hours of their meeting, Victim-1 died from consuming fentanyl and cocaine purchased from FRIAS. FRIAS had been selling Victim-1 drugs for weeks in the lead-up to dealing the drugs that killed Victim-1. Below are text messages from Victim-1’s phone in which FRIAS, saved in Victim-1’s phone under his alias “Platinum,” sent Victim-1 a menu of the drugs that he had for sale, among them “soft” (heroin), “hard” (cocaine), “down” (fentanyl), and “everything.”
Law enforcement searched FRIAS’s apartment on the night of Victim-1’s death, pursuant to a judicially authorized search warrant. There, they found, among other things: 1,413 white glassine envelopes containing fentanyl; 603 purple glassine envelopes containing fentanyl; two plastic bags containing fentanyl; a third plastic bag containing fentanyl; 585 pink glassine envelopes containing para-fluorofentanyl; a plastic bag containing heroin; a second plastic bag containing heroin; two plastic bags containing crystal methamphetamine; a third plastic bag containing methamphetamine; 777 colored capsules containing crack cocaine; and 20 plastic bottles containing methadone. Law enforcement also recovered various drug paraphernalia, including bulk packages of empty capsules, a digital scale, and a ledger summarizing FRIAS’s drug deals.
Additional records from FRIAS’s phones include two videos, both of which depict FRIAS walking into his apartment bedroom to retrieve drugs. In both videos, FRIAS walks past a bed in which a young child can be seen asleep. And, in both videos, after passing the bed, FRIAS pans the camera to a dresser—mere feet from where his children slept—covered in drugs, cash, and drug paraphernalia, including, in one video, a digital scale on which a plastic bag containing a white substance is resting (depicted in a screenshot below).
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FRIAS, 34, of the Bronx, New York, is charged with one count of conspiring to distribute narcotics resulting in death, which carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison; one count of possession with intent to distribute narcotics, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; and one count of possession with intent to distribute narcotics resulting in death, which carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.
The statutory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of the DEA and the Greenwich Police Department.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Rebecca R. Delfiner and Benjamin M. Burkett 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.
u.s._v._frias_indictment.pdf[1] As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Two Men Charged for Nationwide Fraud Scheme Targeting Hundreds of Elderly VictimsRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton; Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia; and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced charges against JINGBIN JIANG and SU JIAN LIU, a/k/a “Fatty,” a/k/a “Ah Pang,” for a scheme to defraud elderly victims across the United States, which attempted to steal over $18 million from over 350 victims and resulted in actual losses of over $5 million to over 70 victims. JIANG was arrested in Staten Island this morning and will be presented today before U.S. Magistrate Judge Stewart D. Aaron. LIU is still at large. The case is assigned to U.S. District Judge Mary Kay Vyskocil.
“As alleged, Jingbin Jiang and Su Jian Liu worked together with others to steal the hard-earned money of some our most vulnerable New Yorkers and others around the country,” said U.S. Attorney Jay Clayton. “Taking advantage of our elderly after they have worked so hard to save and contributed so much to our city and this country is heartless and despicable. These charges, and the efforts of the FBI and the NYPD, should serve as a warning to fraudsters and cybercriminals: New Yorkers want you held accountable for your crimes, and the women and men of our Office are committed to doing so.”
“Jingbin Jiang and Su Jian Liu allegedly defrauded elderly victims of more than $5 million by utilizing extortionate tactics to coerce withdrawals of significant cash or purchases of gold,” said FBI Assistant Director Christopher G. Raia. “This alleged conspiracy wielded fear of bankruptcy and arrest to ensure victims complied with the unlawful requests for money. The FBI is committed to apprehending any individual who utilizes online platforms to target and exploit vulnerable victims across the country.”
“These defendants allegedly led a nationwide fraud scheme with the goal of targeting innocent, elderly victims and stealing millions of their hard-earned savings,” said NYPD Commissioner Jessica S. Tisch. “Jingbin Jiang and Su Jian Liu allegedly participated in a plot involving elaborate, fictitious narratives to manipulate elderly victims and trick them into participating in their scheme, which involved attempts to steal over $18 million from 350 people. I am grateful to the members of the NYPD, FBI, and the U.S. Attorney’s Office for holding these alleged predatory fraudsters accountable.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
Between at least in or about 2023 and in or about July 2025, JIANG and LIU participated with others in a fraudulent scheme that primarily targeted elderly victims located all across the United States, including in New York, New Jersey, Pennsylvania, Massachusetts, Texas, Washington, Wisconsin, California, Connecticut, Arizona, North Carolina, South Carolina, Missouri, Mississippi, Kentucky, Utah, Oregon, Colorado, and Montana.
The scheme proceeded in the following manner: First, victims would typically see a pop-up message on their computers indicating that they needed to call a particular phone number controlled by members of the scheme. The pop-up message would typically claim to come from a technology company, a bank, or the government. Second, when victims called the phone number, they were told a fictitious narrative that would ultimately lead to a suggestion that the victims withdraw money from their bank account. For example, some victims were falsely told that their computers had a virus, or that their computers had been hacked into and used to commit serious crimes, like downloading child sexual abuse material. Others were falsely told that their bank accounts had been compromised and were vulnerable to unauthorized withdrawals. To avoid arrest or protect their bank accounts from being compromised, victims were instructed to withdraw large amounts of cash from their bank accounts or purchase large quantities of gold. Some victims were even told that their money would be safely held in the custody of a consumer protection agency like the Federal Trade Commission, and they were sent notices on fake federal government letterhead purporting to bear the signature of a federal government official:
Third, many victims were told that a courier would be arriving at their home (or other coordinated pick-up location) to retrieve the gold and/or cash. Victims were often provided with the courier’s name (which was fictitious), a description of the courier’s clothing, and sometimes a password, purportedly to ensure the courier was authorized to pick up the gold and/or cash. Other victims were told to purchase and transfer cryptocurrency or gift cards, which did not require a courier. Victims were typically under the impression that this gold and/or cash would then be deposited, on the victims’ behalf, into a new, safe, uncompromised bank account (or with the Federal Trade Commission, as noted above) that they could access without concern in the future. In reality, these funds were stolen and never returned to the victims. Some victims engaged in multiple transactions before realizing the fraudulent nature of the scheme.
JIANG and LIU participated in the scheme by managing and supervising the couriers that traveled to meet the victims to pick up the cash and gold, which was then transported back to New York City. JIANG and LIU received information about potential victims from other members of the scheme on text-messaging platforms, in messages that typically included the zip codes and the amounts of cash or gold to be collected from each victim. JIANG and LIU could then decide whether to accept the pick-up, and if they did, the other members of the scheme would provide more specific details about the victim and when and where to pick up the cash or gold. After arranging for couriers to make the pick-ups, JIANG and LIU would provide updates to other members of the scheme about the couriers’ progress. After the victims provided the criminal proceeds to the couriers, JIANG and LIU arranged for the criminal proceeds to be distributed to other members of the scheme, including by converting cash and gold into cryptocurrency to be easily transmitted to members of the scheme located overseas, including in India and China. In total, members of the conspiracy have attempted to steal at least approximately $18 million from over 350 victims, and they have successfully stolen at least approximately $5 million from over 70 victims.
If you or someone you know has been victimized by this scheme, please file a complaint with the FBI’s Internet Crime Complaint Center, which is available at ic3.gov.
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JIANG, 37, of Staten Island, New York, and LIU, 38 of Edmond, Oklahoma, are both charged with one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit interstate transportation of stolen property, which carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Clayton praised the investigative work of the FBI and NYPD’s Joint Organized Crime Task Force. Mr. Clayton also thanked the New York State Police and the Bedford Police Department for their assistance in the investigation of this case.
This case is being handled by the Office’s Violent & Organized Crime Unit. Assistant U.S. Attorneys Andrew K. Chan and Angela Zhu 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.
u.s._v._jiang_and_liu_indictment.pdf
[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 herein should be treated as an allegation.
Armed Fentanyl Dealer Sentenced to PrisonRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that JAHREEK BUSH was sentenced today by U.S. District Judge Kenneth M. Karas to 117 months in prison for trafficking fentanyl and cocaine while armed with a loaded firearm. BUSH was previously convicted, following a five-day jury trial, of six counts of distributing or possessing with intent to distribute narcotics and one count of carrying a firearm during a drug trafficking crime.
“Jahreek Bush dealt highly dangerous drugs, including fentanyl that he falsely branded as heroin, and he illegally carried a loaded gun while doing so,” said U.S. Attorney Jay Clayton. “Armed drug traffickers fuel violence and overdoses in our communities. This Office and our law enforcement partners will work tirelessly to bring to justice those who put innocent lives at risk.”
According to allegations contained in the Superseding Indictment, the evidence offered at trial, and matters included in public filings:
From January through April 2023, BUSH sold cocaine and fentanyl—which BUSH falsely billed as heroin—in Monticello, New York. On April 25, 2023, as BUSH arrived at a parking lot in Monticello for a drug deal, BUSH was arrested by officers from the New York State Police and the Sullivan County District Attorney’s Office. At the time of his arrest, BUSH was wearing a fanny pack containing a loaded 9-millimeter semi‑automatic handgun, more than 100 individually wrapped packages containing fentanyl, and plastic bags containing additional fentanyl and cocaine. Images of the handgun and packages are shown below.
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In addition to the prison term, BUSH, 29, of Monticello, New York, was sentenced to three years of supervised release.
Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation Hudson Valley Safe Streets Task Force, the New York State Police, and the Sullivan County District Attorney’s Office in connection with this investigation.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Margaret Vasu, Benjamin Levander, and Courtney Heavey are in charge of the prosecution.
Illegal Re-Entrant with Prior Murder and Narcotics Convictions Sentenced to 100 Months in PrisonRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Ricky J. Patel, announced that JUAN CARLOS PADILLA SANTOS was sentenced today by U.S. District Judge Vernon S. Broderick to 100 months in prison for illegally re-entering the U.S. after having been previously deported twice and having been the subject of a third removal order. In connection with the instant illegal re-entry offense, PADILLA SANTOS made false statements to immigration authorities and on a green card replacement form he had submitted.
“Juan Carlos Padilla Santos was previously deported after he committed multiple serious drug offenses in the U.S.,” said U.S. Attorney Jay Clayton. “Like so many, Santos then deceitfully and illegally exploited our immigration system. Dangerous felons who return to this country illegally after being deported will be prosecuted to the fullest extent of the law. We thank the women and men of Homeland Security Investigations for their commitment to these matters.”
“Juan Carlos Padilla Santos exhibited time and time again his disregard for our immigration laws needed for public safety,” said HSI Special Agent in Charge Ricky J. Patel. “With a history that includes murder, narcotics possession, and even apparently faking his own death, this defendant took repeated steps to illegally enter and re-enter the United States. Padilla Santos now faces a significant sentence for his actions.”
According to the indictment, court filings, and statements made in court:
PADILLA SANTOS was deported from the U.S. for the first time in 2010, after he was convicted of conspiring to distribute narcotics and sentenced to nearly seven and a half years in prison. Less than a year after being deported, he re-entered the U.S. illegally and was again ordered to be removed, in absentia. In 2016, PADILLA SANTOS was convicted of murder in the Dominican Republic and was sentenced to 15 years in prison. Instead of serving that sentence, PADILLA SANTOS again returned to the U.S. illegally, where in 2018 he was convicted of possessing cocaine and bail jumping, and ultimately deported for a second time. In 2019, PADILLA SANTOS appears to have falsified his death in the Dominican Republic and, in 2021, he illegally re-entered the U.S. for a third time. In doing so, he made false statements to U.S. Customs and Border Protection claiming to be a valid lawful permanent resident of the U.S. and subsequently submitted a U.S. green card replacement form in which he stated under penalty of perjury that he had never previously been deported or ordered to be removed.
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In addition to his prison term, PADILLA SANTOS, 50, of the Dominican Republic, was sentenced to three years of supervised release.
Mr. Clayton praised the outstanding investigative work of HSI New York and thanked Enforcement and Removal Operations and its Criminal Prosecutions Unit, the U.S. Citizenship and Immigration Services Office of Fraud Detection and National Security, and HSI Santo Domingo International Operations for their assistance.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Katherine Cheng is in charge of the prosecution.
Bronx Man Sentenced to 15 Years in Prison in Connection with Shooting of Five-Year-Old GirlRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that AUSTIN MORRISHOW was sentenced today to 15 years in prison—the maximum sentence prescribed by statute—for illegally possessing ammunition in connection with a June 30, 2023, shooting in which MORRISHOW fired multiple shots at fleeing vehicles on a residential street in the Bronx, striking and seriously injuring a five-year-old girl. MORRISHOW previously pled guilty before U.S. District Judge Loretta A. Preska, who imposed today’s sentence, as well as the sentence of MORRISHOW’s co-defendant, CURTIS WHITE, on July 9, 2025.
“On June 30, 2023, Austin Morrishow and his co-defendant, Curtis White, fired several shots while attending a sidewalk vigil for someone who, in a sad twist of irony, was killed in a shooting,” said U.S. Attorney Jay Clayton. “Morrishow’s brazen acts left a bullet in a five-year-old child’s chest. Instead of accepting responsibility, Morrishow remained a fugitive for eight months. Today’s sentence sends an important message: if you threaten the lives of innocent New Yorkers through senseless gun violence, we will find you and prosecute you to the fullest extent of the law.”
According to the allegations in the Complaint and Indictment, court filings, and statements made in court proceedings:
On June 30, 2023, MORRISHOW, WHITE, and several others were gathered on a residential sidewalk in the Bronx, attending a vigil for an individual who had been killed by gunfire just the day before. As three cars idled nearby, one of the cars backfired, causing the group attending the vigil to drop to the ground and scatter. MORRISHOW took cover behind a parked vehicle for a few seconds before aiming a .40 caliber pistol at the three nearby cars while draped over the roof of the parked vehicle, assuming a shooting stance, and emptying his .40 caliber pistol at the three nearby cars. Shortly after MORRISHOW began shooting, WHITE sprinted after the three fleeing cars, firing his .380 caliber pistol wildly. The shots fired by MORRISHOW and WHITE left at least seven .40 caliber shell casings and two .380 caliber shell casings in the street, and bullet fragments, bullet holes, and shattered windows in nearby parked cars. One of the shots fired by MORRISHOW hit a five-year-old girl sitting in the backseat of one of the cars in the chest, narrowly missing her vital organs. Photographs of MORRISHOW firing his handgun at the fleeing vehicles and the back of the vehicle in which the five-year-old girl was sitting, with bullet holes circled in red, are below.
MORRISHOW and WHITE fled immediately after the shooting. Although WHITE was apprehended shortly after the shooting in July 2023, MORRISHOW evaded law enforcement until February 2024. MORRISHOW was not permitted to possess ammunition because of, among other felony convictions, a prior federal conviction for using and carrying a firearm during and in relation to a narcotics conspiracy, for which he was sentenced to 60 months in prison. At the time of the shooting, MORRISHOW was also serving a term of supervised release in connection with his previous federal conviction. WHITE was not permitted to possess a firearm or ammunition because of his prior state conviction for attempted first-degree assault with intent to cause serious injury with a weapon.
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In addition to the prison term, MORRISHOW, 27, of the Bronx, New York, was sentenced to three years of supervised release and ordered to pay restitution to the victim of the shooting. WHITE, 28, of the Bronx, New York, was previously sentenced to 51 months in prison to be followed by three years of supervised release and was also ordered to pay restitution to the victim of the shooting.
Mr. Clayton praised the outstanding investigative work of the New York City Police Department, and thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Marshals Service for their assistance with the investigation and apprehension of the defendants.
The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jerry J. Fang is in charge of the prosecution.
Brooklyn Man Convicted of Possessing 18 Rounds of Ammunition Inside Federal CourthouseRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced the conviction of JONATHAN BANYAN yesterday for possessing ammunition after a felony conviction. On April 7, 2025, BANYAN brought ammunition into the Daniel Patrick Moynihan U.S. Courthouse. The defendant was found guilty following a four-day jury trial before U.S. District Judge Jed S. Rakoff.
“Everyone who enters a federal courthouse—judges and juries, lawyers and litigants, the press and the public—must know they are safe,” said U.S. Attorney Jay Clayton. “This conviction sends a clear message: ammunition carried by a convicted felon should not be tolerated in our community, let alone in the court.”
According to the allegations contained in the Indictment and the evidence presented at trial:
On April 7, 2025, BANYAN entered the Daniel Patrick Moynihan U.S. Courthouse wearing a backpack. Inside that backpack were 18 bullets in three different calibers. As BANYAN passed through the security station, court security officers spotted the bullets. BANYAN grabbed the bag of bullets and tried to hide it in his pocket, but court security officers stopped him and recovered the ammunition. BANYAN has previously been convicted of a felony.
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BANYAN, 39, of Brooklyn, New York, was convicted of knowingly possessing ammunition after having been convicted of a felony, which carries a maximum penalty of 15 years in prison. BANYAN is scheduled to be sentenced on December 1, 2025.
The maximum potential sentence in this case is prescribed by Congress and is provided here for information purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding investigative work of the U.S. Marshals Service. He also thanked the court security officers for their assistance.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys James G. Mandilk, Ariana L. Bloom, and Nicholas S. Bradley are in charge of the prosecution, with the assistance of Paralegal Specialist Samantha Roberts.
Dominican Republic Nationals Charged in Connection with Shooting of Off-Duty Federal Customs and Border Protection OfficerRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton; Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Ricky J. Patel; and Director of the New York Field Office of U.S. Customs and Border Protection (“CBP”), Francis J. Russo, announced today the filing of a Complaint charging MIGUEL FRANCISCO MORA NUNEZ and CHRISTHIAN AYBAR-BERROA in connection with the shooting of an off-duty CBP Officer. The incident occurred on July 19, 2025, in Manhattan, New York. AYBAR-BERROA was arrested today and will be presented tomorrow before Magistrate Judge Ona T. Wang.
“As alleged, Miguel Mora Nunez and Christhian Aybar-Berroa came to a New York City park and Mora Nunez opened fire—hitting a federal officer in the face,” said U.S. Attorney Jay Clayton. “Gun violence will not go unanswered. Our office will relentlessly pursue anyone who threatens the safety of New Yorkers and the federal officers sworn to protect them.”
“As alleged, these defendants entered and spent years in our country illegally, and their criminal activity culminated in Saturday night’s near-deadly attack on one of our own,” said HSI Special Agent in Charge Ricky J. Patel. “Today’s announcement underscores HSI New York’s tireless commitment to answers, and ultimately justice on behalf of our DHS family, alongside our partners from CBP, the NYPD, and the United States Attorney's Office for Southern District of New York. As we continue to hope for the speedy recovery of the CBP officer, we will leave no stone unturned – we owe that much to the law enforcement community and the American public at-large.”
"Our officer demonstrated extraordinary bravery and professionalism in the face of imminent danger," said CBP Director Francis J. Russo. "His quick and decisive actions taken not only saved the officer's life but also saved the life of his girlfriend and took a dangerous criminal off the streets, preventing further harm to the community. We are immensely proud of our officer's actions and dedication to duty. Our thoughts and prayers are with him and the family, and we are hopeful for a full recovery. We thank the Southern District of New York, HSI, and the New York City Police Department for their collaboration and partnership. Their actions have been instrumental in saving our officer's life and in assisting with apprehending the suspects."
According to the allegations contained in the Complaint:[1]
On or about July 19, 2025, MORA NUNEZ shot an off-duty CBP Officer in Fort Washington Park in Manhattan, New York. A bullet MORA NUNEZ fired struck the CBP Officer in the face and right arm. The CBP Officer appeared to return fire, hitting MORA NUNEZ twice, before MORA NUNEZ fled on a motorbike driven by AYBAR-BERROA. AYBAR-BERROA drove MORA NUNEZ to a hospital. AYBAR-BERROA later tried to get rid of the clothing he was wearing during the shooting because it was bloody, and discussed with a relative of MORA NUNEZ that they needed to get rid of AYBAR-BERROA's bloody clothes.
Both MORA NUNEZ and AYBAR-BERROA entered the U.S. illegally, are in the U.S. unlawfully, and are subject to orders of removal from the U.S.
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MORA NUNEZ, 21, of the Dominican Republic, is charged with one count of possession of ammunition by an illegal alien, which carries a maximum sentence of 15 years in prison, and AYBAR-BERROA, 22, also of the Dominican Republic, is charged with accessory after the fact, which carries a maximum sentence of seven and a half years in prison.
The maximum sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton thanked the New York City Police Department and Customs and Border Protection for their assistance in this case.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Mostafa Khairy 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.
u.s._v._mora_nunez_and_aybar-berroa_complaint.pdf
[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.
Senegalese National Charged with Assaulting Federal Officers at 26 Federal PlazaRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Secretary of Public Affairs for the Department of Homeland Security, Tricia McLaughlin, announced today the arrest and filing of a Complaint charging BASS NDIAYE with assaulting federal Immigration and Customs Enforcement (“ICE”) officers and using a deadly and dangerous weapon. The incident occurred on July 18, 2025, at 26 Federal Plaza in New York, New York, where immigration processing is conducted. The defendant was presented this afternoon before Magistrate Judge Ona Wang.
“Bass Ndiaye’s alleged attempt to attack multiple ICE officers by wielding a dangerous weapon endangered numerous members of law enforcement and nearly a dozen civilians,” said U.S. Attorney Jay Clayton. “The safety of federal law enforcement and the communities they protect is paramount, and we will prosecute those who threaten that safety to the full extent of the law.”
“ICE arrested Bass Ndiaye—an illegal alien from Senegal—on July 17,” said DHS Assistant Secretray Tricia McLaughlin. “While in custody, he attempted to stab law enforcement officers and others surrounding him. Now, this dangerous criminal will face justice for his violent actions. Make no mistake: attacks on law enforcement are on the rise. Secretary Noem stands with the brave men and women of law enforcement as they risk their lives to remove criminal illegal aliens and protect Americans.”
According to the allegations contained in the Complaint:[1]
On or about July 18, 2025, at approximately 6:00 p.m., NDIAYE was being processed at 26 Federal Plaza in New York, New York, and awaiting transport to an immigration detention center.
While in the processing room, NDIAYE seized a pair of scissors. NDIAYE began slashing the scissors in the air and wielding them as a weapon, moving aggressively toward and attempting to stab several security guards, ICE officers, a Homeland Security Investigations Special Agent, and the approximately dozen other detainees in the room, among others.
Due to the quick actions and training of the officers and security guards in the area, NDIAYE was ultimately restrained.
* * *
NDIAYE, 22, of Senegal, is charged with one count of assaulting an officer of the U.S. using a deadly or dangerous weapon, which carries a maximum sentence of 20 years in prison.
The maximum sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Leslie Arffa 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.
u.s._v._ndiaye_complaint.pdf
[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.
Inmate Sentenced to 57 Months in Prison for Assaulting Former Cellmate with Contraband KnifeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that DA’QUAN TUCKER was sentenced today by U.S. District Judge Philip M. Halpern to 57 months in prison for repeatedly stabbing his former cellmate in the head and face with a 6‑inch contraband knife on April 3, 2024, while incarcerated at Federal Correctional Institution (“FCI”) Otisville. In March 2025, TUCKER pled guilty to assault with a dangerous weapon and possessing contraband in prison.
“Da’Quan Tucker brutally attacked a fellow inmate in the prison yard at FCI Otisville without provocation by repeatedly stabbing him in the head and face with a contraband knife,” said U.S. Attorney Jay Clayton. “Violence like this risks the lives and safety of inmates and prison staff and will not be tolerated in federal prison. Today’s sentence demonstrates that such conduct will be met with serious punishment.”
According to the Indictment, court filings and statements made in court:
On April 3, 2024, TUCKER was incarcerated at FCI Otisville, where he was serving a sentence related to a robbery he committed in July 2023 while he was on supervised release. That day, TUCKER, without provocation, repeatedly stabbed another inmate—his former cellmate—in the head and face using a six-inch contraband knife. Following the assault, TUCKER told prison staff that he would attack the victim again if he had the chance and would try to kill him.
* * *
In addition to the prison term TUCKER, 23 of Washington, D.C., was sentenced to three years of supervised release.
Mr. Clayton thanked the staff of FCI Otisville for their assistance and praised the investigative work of the Federal Bureau of Investigation Hudson Valley Safe Streets Task Force.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Shaun E. Werbelow and Justin L. Brooke are in charge of the prosecution.
Construction Company President Charged with $5 Million Payroll Tax and Wire Fraud SchemesRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Field Office of Internal Revenue Service-Criminal Investigation (“IRS-CI”), Harry T. Chavis, Jr., announced the unsealing of a 14-count Complaint charging NIGEL KENNETH JOSEPH with failing to pay years of employee payroll taxes, scheming to defraud a construction contractor of millions of dollars, and aggravated identify theft. JOSEPH was arrested and presented yesterday before U.S. Magistrate Judge Ona T. Wang.
“As alleged, Nigel Joseph didn’t just shortchange his workers—he lied about it, falsified records, and pocketed the money for himself,” said U.S. Attorney Jay Clayton. “Then he allegedly defrauded the public by ducking millions in taxes. That’s not entrepreneurship that fuels growth—it’s fraud that erodes trust.”
“When a person purportedly leases luxury vehicles, buys NBA tickets and travels to tropical islands instead of paying payroll taxes for his employees, it is the American people who are victimized,” said IRS-CI Special Agent in Charge Harry T. Chavis, Jr. “There is no turning a blind eye to this egregious fraud, and our CI agents work relentlessly to follow the money and bring those who think they can evade payroll taxes and falsify records to justice.”
According to the allegations in the Complaint:[[1]]
JOSEPH founded BWK, a masonry subcontractor registered in the Bronx, New York, in 2019. Between 2019 and 2021, BWK earned at least $10 million performing construction across New York, New Jersey, and Connecticut. Despite these earnings, JOSEPH willfully refused to collect payroll taxes from his employees and refused to pay taxes he owed as an employer. According to an IRS-CI analysis of financial records, JOSEPH failed to pay at least approximately $2.9 million on behalf of his employees and at least approximately $750,000 he owed as an employer. Rather than pay taxes, JOSEPH used BWK funds to finance his own lifestyle—including by transferring tens of thousands of dollars to his wife; making personal rental payments; purchasing courtside NBA tickets and a Rolex; leasing a BMW 3-Series, a Mercedes GLE, and a BMW 5-Series; and traveling to the Dominican Republic and Jamaica.
According to interviews with employees and business partners, JOSEPH said, in sum and substance, that he did not want to file taxes and sometimes refused to speak to an accountant because he did not want to talk about how much he owed to the Government. An employee said that JOSEPH chose to not collect or file taxes because the IRS was, JOSEPH said in sum and substance, not paying attention during the COVID-19 pandemic.
Moreover, because JOSEPH knew that payroll taxes had not been properly withheld by BWK, JOSEPH also directed the production of falsified certified payroll documents in order to obtain approximately $1.96 million in payments pursuant to at least two construction contracts. According to documents reviewed and interviews conducted by IRS-CI, JOSEPH conspired with others to produce falsified documents listing the names, hours worked, wages, and tax withholdings for at least approximately 10 employees between in or about October 2021 and June 2022 in order to obtain payment for performing masonry work as part of two elementary school construction projects on Long Island.
In order to falsify payroll documents as part of the scheme, on or about November 17, 2021, JOSEPH texted an employee instructions to “Put [an employee], [another employee], yourself and one other laborer” as employees on a construction site where the employee—who performed only payroll functions for BWK—in fact never worked. In a text message he sent on or about November 8, 2021, JOSEPH directed an employee to identify JOSEPH as a “foreman”; JOSEPH’s wife as a “laborer”; and two other employees as “laborers.” In fact, JOSEPH was not a foreman; his wife was not a laborer; and neither of the other two employees were laborers, either.
In a text message sent on or about February 3, 2022, JOSEPH expressed concern that the falsified certifications would be uncovered, writing in response to a warning from an employee that “[w]e have big problems . . . [w]ith the taxes,” that, “Damn . . . I’m thinking I should not have put everyone working 35 hours every week.” On or about March 28, 2022, JOSEPH directed an employee in text messages that “this is going to be the last month that we do this with [the] accountant . . . [a]nd then you and I gonna do it ourselves,” adding that he would “fake it until we make it.”
* * *
JOSEPH, 45, of Bergenfield, New Jersey, is charged with 11 counts of failure to account for and pay over payroll taxes, each of which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison.
The mandatory and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of IRS–CI.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Ryan T. Nees 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.
u.s._v._joseph_complaint.pdf
[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.
New York Man Charged for Making and Attempting to Use Improvised Explosive Devices in ManhattanRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton; Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia; and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today charges against MICHAEL GANN alleging that he manufactured at least seven improvised explosive devices (“IEDs”) using precursor chemicals—chemicals that can be combined to create an explosive mixture—that he had ordered on the internet, stored at least five IEDs and shotgun shells on adjoining rooftops of residential apartment buildings in the SoHo neighborhood of Manhattan, threw at least one IED onto the subway tracks of the Williamsburg Bridge, and subsequently lied to law enforcement about having disposed of his explosives and supplies in a dumpster. This case has been assigned to U.S. District Judge Dale E. Ho.
“The safety of New Yorkers is paramount,” said U.S. Attorney Jay Clayton. “As alleged, Michael Gann built explosive devices, stored them on a rooftop in SoHo, and threw one onto the subway tracks—putting countless lives at risk. Thanks to swift work by our law enforcement partners, no one was harmed. That vigilance assuredly prevented a tragedy in New York.”
“Michael Gann allegedly produced multiple improvised explosive devices intended for use in Manhattan,” said FBI Assistant Director in Charge Christopher G. Raia. “Due to the successful partnership of law enforcement agencies in New York, Gann was swiftly brought to justice before he could harm innocent civilians shortly after his dangerous actions became known. The FBI’s Joint Terrorism Task Force is enduring in its commitment and determination to protect the homeland.”
“This defendant allegedly stockpiled homemade explosives and traveled to New York City with these deadly devices,” said NYPD Commissioner Jessica S. Tisch. “He threw one of these devices onto an active subway track and stored others on the rooftop of a residential building, but because of the skilled investigative work and swift response from the NYPD and our partners, we were able to intervene before he caused any harm. I am grateful to the members of the NYPD, FBI, and the U.S. Attorney’s Office for all the work they do every day to keep New Yorkers safe.”
As alleged in the Complaint, Indictment, and public court filings:[1]
In or about May 2025, GANN ordered approximately two pounds of potassium perchlorate and approximately one pound of aluminum powder—precursor chemicals—online, along with over 200 cardboard tubes and over 50-feet worth of fuses. In or about early June 2025, GANN received his packages containing the precursor chemicals and other supplies, mixed the precursor chemicals together, applied a flame to the mixture, and caused an explosion. GANN subsequently assembled at least seven IEDs using the precursor chemicals, cardboard tubes, and fuses.
GANN stored the precursor chemicals and at least five IEDs, pictured below, on the rooftops of residential apartment buildings in SoHo. The pictured black device contained approximately 30 grams of explosive powder—approximately 600 times the legal limit for consumer fireworks.
GANN also stored at least four shotgun shells on the same rooftops, which he intended to combine with one or more of the IEDs.
GANN threw a sixth IED onto the subway tracks on the Williamsburg Bridge, as pictured below.
On or about June 5, 2025, law enforcement agents arrested GANN in SoHo, incident to which they recovered a seventh IED from GANN’s person. Following GANN’s arrest, GANN falsely told law enforcement, in substance and in part, that he had disposed of the precursor chemicals and the shotgun shells in a dumpster in Manhattan.
In or about May and June 2025, GANN conducted internet searches related to explosives and firearms, including: “will i pass a background check,” “gun background check test,” “can i buy a gun in any state without ffl [federal firearms license],” “3D gun printing,” “gun stores,” “clorine bomb,” “how to make flash powder from household items,” “what to mix with potassium perchlorate to make flash powder,” “alluminum powder,” “black powder nearby,” “quarter stick m1000 firecracker,” “1/2 stick dynamite,” and “rechargeable nail gun to shoot into steal.”
On or about June 5, 2025, just hours before GANN was arrested with an IED on his person, GANN posted to Instagram, “Who wants me to go out to play like no tomorrow?”
* * *
GANN, 55, of Inwood, New York, is charged with one count of attempted destruction of property by means of explosives, which carries a mandatory minimum of five years in prison and a maximum sentence of 20 years in prison; one count of transportation of explosive materials, which carries a maximum sentence of 10 years in prison; and one count of unlawful possession of destructive devices, which also carries a maximum sentence of 10 years in prison.
The minimum and maximum potential sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding efforts of the New York Joint Terrorism Task Force of the FBI, which consists of investigators and analysts from the FBI, NYPD, and over 50 other federal, state, and local agencies; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Nassau County Police Department; and the New York Metropolitan Transportation Authority.
This case is being handled by the Office’s National Security and International Narcotics Unit. Assistant U.S. Attorneys Jonathan L. Bodansky, Michael D. Lockard, and Chelsea L. Scism, and Special Assistant U.S. Attorney Julie Isaacson, are in charge of the prosecution.
u.s._v._gann_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the charging instruments and other public filings to date constitute only allegations, and every fact described herein should be treated as an allegation.
Gun and Drug Trafficker ConvictedRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced the conviction at trial yesterday of BIANNEURY PENA, a/k/a “Charly,” for his role in gun and drug trafficking conspiracies as well as his unlawful possession of a firearm as an illegal alien. The conviction comes after a 4-day jury trial before U.S. District Judge Denise L. Cote. PENA is scheduled to be sentenced on October 17, 2025.
“Within weeks of entering the United States unlawfully, Pena immersed himself in a gun and drug trafficking scheme,” said U.S. Attorney Jay Clayton. “Pena and his crew smuggled guns and cocaine up and down the east coast without regard for the danger they were bringing to New Yorkers. Thanks to the prompt action of the DEA and our prosecutors, Pena was arrested and has been held accountable for his crimes.”
As alleged in the Indictment and statements made in public filings and public court proceedings:
On June 7, 2024, PENA and ABEL ROSARIO were arrested in New York, New York, after arriving from North Carolina by bus. At the time of their arrest, PENA and ROSARIO were smuggling two firearms into New York City from North Carolina. In their possession were the below-depicted Aero Precision model M4E1 firearm, a Glock .40 caliber model 23 handgun, dozens of rounds of ammunition, a standard magazine, two high-capacity magazines, and a drum magazine.
Just a month earlier, in April 2024, PENA illegally entered the U.S. and began conspiring with ROSARIO, who was unlawfully present in the U.S. after having been previously deported. Between May and June 2024, PENA took three round trips between New York and North Carolina, during which he smuggled cocaine to North Carolina and returned with firearms.
* * *
PENA, 35, of the Dominican Republic, was convicted of three total counts and faces up to 50 years in prison.
CountChargeSentenceCount One18 U.S.C. § 933 (Gun Trafficking Conspiracy)15 years, a maximum term of supervised release three yearsCount Two18 U.S.C. § 922(g)(5) (Alien in Possession of a Firearm)15 years, a maximum term of supervised release of three yearsCount Three21 U.S.C. §s 846 and 841(b)(1)(C)20 years; maximum term of supervised release of three yearsThe maximum potential sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding work of the New York Drug Enforcement Task Force, the Bureau of Alcohol, Firearms, Tobacco and Explosives, the Department of Homeland Security, the New York City Police Department, the Port Authority Police Department, and the New York State Police.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Ashley C. Nicolas, Alexandra S. Messiter, and Brandon D. Harper are in charge of the prosecution.
u.s._v._pena_indictment.pdfCaaStle Founder Charged in $300 Million Fraud SchemeRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Christopher G. Raia, announced today the unsealing of an Indictment charging CHRISTINE HUNSICKER with wire fraud, securities fraud, money laundering, making false statements to a financial institution, and aggravated identity theft. The charges in the Indictment arise from an alleged scheme by the defendant to defraud investors in the fashion technology business CaaStle and a related venture out of more than $300 million through false statements, misleading claims, and fabricated documents. HUNSICKER self-surrendered this morning and will be presented this afternoon before U.S. Magistrate Judge Jennifer E. Willis. The case has been assigned to U.S. District Judge J. Paul Oetken.
“As alleged, Christine Hunsicker defrauded investors of hundreds of millions of dollars through document forgery, fabricated audits, and material misrepresentations about her company’s financial condition,” said U.S. Attorney Jay Clayton. “The promise of pre-IPO technology companies can be fertile ground for fraudsters who play on investor euphoria. Investors should be aware of these incentives and that pre-IPO companies are not subject to the rigors of SEC registration. This Office is committed to protecting investors who place their trust and capital in emerging companies. We will continue to work closely with our law enforcement partners to investigate, detect, and prosecute those individuals who abuse our markets and our investors”
“Christine Hunsicker allegedly submitted fraudulent financial statements to swindle investors and banks of more than $300 million,” said FBI Assistant Director in Charge Christopher G. Raia. “This alleged scheme was stitched together with repeated deception and misinformation, ultimately betraying the trust of the defendant’s clients. The FBI remains committed to apprehending any business owners who implement unlawful practices to increase their personal wealth.”
As alleged in the Indictment:[1]
HUNSICKER, a well-known entrepreneur and successful businessperson in the fashion-tech industry, founded and was the chief executive officer of CaaStle, a clothing technology business. While promoting CaaStle as a rapidly growing business valued at more than $1.4 billion, HUNSICKER knew that CaaStle was in financial distress with limited cash and significant expenses. To raise the capital for CaaStle’s operations, HUNSICKER provided investors with falsified income statements, fake audited financial statements, fictitious bank records, and sham corporate documents that grossly overstated CaaStle’s operating profit, revenue, and available cash. She also misrepresented to investors that their funds would be used to purchase discounted shares from existing shareholders who needed liquidity, when in fact she fabricated the existence of those shareholders and used the money as new capital for CaaStle while concealing the company’s cash needs. In total, HUNSICKER fraudulently induced more than $275 million in investments.
When confronted by an audit firm in October 2023 about transmitting a fake audit to an investor, HUNSICKER lied, falsely claiming that she had created the fake audit in connection with a lecture she gave at Princeton University, and that sending the audit to the investor had been a one-time error. In reality, HUNSICKER had provided two fake audits to the investor while soliciting an investment. She later repaid that investor to prevent the public disclosure of her fraud. Undeterred, she continued the scheme, providing an investor with fake bank account screenshots showing nearly $200 million in available cash when CaaStle had less than $200,000. One month later, in October 2024, HUNSICKER provided a different investor with a fake draft audit. In 2024, HUNSICKER also falsified the signature of a Board director to make it appear that the Board had authorized the grant of stock options to another investor, raising more than $20 million for CaaStle. Around the same time, HUNSICKER extended her fraudulent activities to a new business venture, P180, using false information about CaaStle’s success to raise approximately $30 million for P180. HUNSICKER also submitted false information about CaaStle to a bank in order to obtain and keep a $20 million personal loan.
Even after the CaaStle Board removed HUNSICKER as Chair and prohibited her from soliciting investments, she continued her fraudulent activities and attempted to raise new capital. In early 2025, she sold $8 million of her CaaStle shares and more than $5 million in P180 convertible notes without disclosing material information to investors. In February 2025, HUNSICKER attempted to sell an additional $19 million of her CaaStle shares to another investor. HUNSICKER persisted in her deceptive practices even after law enforcement agents seized her electronic devices in March 2025, continuing to meet with the investor about a fake audit without revealing its fraudulent nature, her removal from the Board, or the prohibition against her selling shares. CaaStle filed for Chapter 7 bankruptcy on June 20, 2025.
* * *
HUNSICKER, 48, of Lafayette, New Jersey, is charged with one count of wire fraud, two counts of securities fraud, and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. HUNSICKER is also charged with one count of making false statements to a financial institution, which carries a maximum sentence of 30 years in prison, and aggravated identity theft, which carries a mandatory sentence of two years in prison.
The maximum potential sentences are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding work of the FBI. Mr. Clayton also expressed appreciation for the assistance of the U.S. Securities and Exchange Commission, which separately initiated civil proceedings against the defendant today.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Marguerite Colson and Alexandra Rothman are in charge of the prosecution.
us_v._hunsicker_indictment.pdf
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Bronx Woman and Queens Man Plead Guilty to Participating in Murder Plot That Killed Innocent BystanderRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Commissioner of the New York City Police Department (“NYPD”), Jessica S. Tisch, announced today that KARL SMITH, a/k/a “Pacavell,” and CHELSEY HARRIS, a/k/a “Ms. Chinn,” have pled guilty before U.S. District Judge Paul E. Engelmayer for their role in orchestrating a shooting that killed Clarisa Burgos, an innocent bystander. HARRIS pled guilty on June 26, 2025, and is scheduled to be sentenced on November 6, 2025, and SMITH pled guilty yesterday and is scheduled to be sentenced on December 8, 2025. Two other defendants, DAJAHN MCBEAN, a/k/a “Jeezy Mula,” a/k/a “Freeze,” and JULISSA BARTHOLOMEW, a/k/a “Trophy,” a/k/a “Tactical Mommy,” have been charged and are awaiting trial.
“Karl Smith and Chelsey Harris participated in an elaborate plot to murder their victim, setting him up to be shot multiple times at several locations across New York City in December 2023,” said U.S. Attorney Jay Clayton. “During one of those shootings, an innocent bystander, Clarisa Burgos, was tragically killed. Thanks to the hard work of the prosecutors in this Office and our law enforcement partners, Smith and Harris will now be held to account for this heinous crime. We and the NYPD are committed to making our streets safer and will tirelessly fight against gun crime.”
“This wasn’t random gunfire – it was a calculated plot to carry out a murder on New York City streets, and an innocent woman paid the price,” said NYPD Commissioner Jessica S. Tisch. “It’s a stark reminder of how reckless, calculated violence puts innocent New Yorkers in the line of fire. I commend our detectives and federal partners for their unrelenting work to take violent criminals off the streets and hold them accountable.”
As alleged in public court filings, statements at public court proceedings, and the charging documents in the case:
In December 2023, MCBEAN was detained at the Metropolitan Detention Center in Brooklyn, New York (“MDC Brooklyn”), awaiting sentencing for directing a separate gang-related shooting in January 2017. While in federal custody, MCBEAN feuded over social media with another person (“Victim-1”). MCBEAN then used a contraband cellphone from inside MDC Brooklyn to conspire with SMITH and HARRIS, who were at liberty in the community, to lure Victim-1 to various nightclubs in New York City where MCBEAN had arranged for gunmen to kill Victim-1. MCBEAN paid SMITH and HARRIS through intermediaries, including BARTHOLOMEW, for their roles in this scheme.
The plot to kill Victim-1 resulted in two shootings. First, on December 24, 2023, MCBEAN and his co-conspirators lured Victim-1 to a nightclub (“Club-1”) in Queens, New York. Outside Club-1, gunmen shot and struck Victim-1’s car multiple times but missed Victim-1. Second, on December 26, 2023, MCBEAN and his co-conspirators tried again to kill Victim-1, this time luring him to a different nightclub (“Club-2”) in Queens. At MCBEAN’s direction from within MDC Brooklyn, gunmen again fired on Victim1’s car when it was parked outside Club-2. The bullets struck Victim-1 multiple times, but Victim-1 survived. The bullets also struck and killed Clarisa Burgos, who was seated in Victim-1’s car. Clarisa Burgos was twenty-eight years old.
* * *
SMITH, 27, of Queens, New York, and HARRIS, 24, of the Bronx, New York, each pled guilty to stalking resulting in life threatening bodily injury and death, which carries a maximum term of life in prison. SMITH also pled guilty to aiding and abetting the discharge of a firearm in furtherance of the plot to kill Victim-1, which carries a mandatory minimum term of 10 years in prison. HARRIS additionally pled guilty to aiding and abetting the possession of a firearm in furtherance of the plot to kill Victim-1, which carries mandatory minimum term of five years in prison.
The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Clayton praised the work of the U.S. Secret Service Financial Crimes Task Force and the NYPD. Mr. Clayton also thanked the Special Agents from Homeland Security Investigations’ El Dorado Task Force for their assistance in the investigation. He added that the investigation is ongoing.
This case is being handled by the Office’s Violent & Organized Crime Unit. Assistant U.S. Attorneys Ryan W. Allison, Andrew Chan, Dominic Gentile, and Timothy Ly are in charge of the prosecution.
Trinitarios Gang Member Arrested for Selling Fentanyl, Firearms, and Machine Gun Conversion DevicesRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), Ricky J. Patel, announced today the arrest of WILVYN ANTONIO ROSARIO MARTINEZ, a/k/a “Anthony,” a self-proclaimed member of the Trinitarios street gang. ROSARIO MARTINEZ is charged with, among other things, conspiring to distribute fentanyl and possessing, in connection with that conspiracy, numerous firearms, including an untraceable firearm and several devices that operated to convert the untraceable firearm into a machine gun capable of automatically shooting more than one shot, without manual reloading, by a single function of the trigger. ROSARIO MARTINEZ was presented yesterday before a U.S. Magistrate Judge in the District of Massachusetts.
“As alleged, Rosario Martinez traveled from Massachusetts to New York to deal highly dangerous drugs and guns,” said U.S. Attorney Jay Clayton. “Besides selling fentanyl in the form of counterfeit pharmaceutical pills, multiple loaded firearms, firearms with serial numbers partially defaced, and an untraceable ghost gun, he also allegedly sold switches to convert the ghost gun into a fully automatic machine gun. The trafficking of these deadly poisons and lethal weapons fuels violence and overdose deaths in our communities. Together with our law enforcement partners, we will relentlessly pursue those who sell illegal drugs and firearms and prosecute them to the fullest extent of the law.”
“Wilvyn Antonio Rosario Martinez and his associates are accused of crimes that jeopardize the public’s safety in several ways,” said HSI Special Agent in Charge Ricky J. Patel. “As alleged, he was among individuals found to be in possession of several firearms, including a ghost gun, several firearm ‘switches,’ which convert a pistol into a machine gun, and thousands of potentially ultra-deadly fentanyl pills – all of which could have caused irreparable harm or death to countless members of our New York neighborhoods. I thank the brave Special Agents and NYPD Detectives with HSI New York’s Violent Gang Task Force for confronting our community’s most serious offenses directly and without hesitation.”
According to the allegations contained in the Complaint:[1]
On five occasions between approximately December 2024 and May 2025, ROSARIO MARTINEZ and his associates – who claimed to be Trinitarios members – traveled from Massachusetts to New York to sell approximately 580 grams of powder fentanyl and counterfeit 30-milligram oxycodone pills that actually were pressed fentanyl, seven firearms, more than 100 rounds of ammunition (including armor piercing bullets), five firearm switches, and other firearm accessories. The firearms included three loaded firearms, two firearms with partially defaced serial numbers, a rifle, and a privately manufactured, untraceable ghost gun. NYPD analysis of the firearm switches confirmed that each one was operable and converted the ghost gun that was sold with the switches into a fully automatic machine gun, capable of continuous fire so long as bullets remained in the firearm’s clip. A photograph of the switches, some of the firearms, some of the ammunition, and some of the fentanyl pills sold by ROSARIO MARTINEZ and his associates appears below:
March 4, 2025 sale of a semiautomatic rifle, a pistol with a partially obliterated serial number, a magazine that had been loaded with 8 armor piercing bullets, 65 other rounds of ammunition, and approximately 595 fentanyl pills
May 7, 2025 sale of a ghost gun, a magazine that had been loaded with 9 rounds of ammunition, 5 ghost gun switches, and approximately 2,000 fentanyl pills
* * *
ROSARIO MARTINEZ, 35, of Lynn, Massachusetts, is charged with one count of conspiring to distribute fentanyl, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of possessing firearms, including machine guns, in furtherance of the fentanyl trafficking conspiracy, which carries a mandatory sentence of 30 years in prison, to be served consecutive to any other prison term imposed, and a maximum sentence of life in prison; and one count of possessing and transferring a machine gun, which carries a maximum potential sentence of 10 years in prison.
The statutory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Clayton praised the outstanding investigative work of HSI’s Violent Gang Task Force and the Yonkers Police Department.
This case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorney Katherine Cheng 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.
u.s._v._rosario_martinez_complaint.pdf[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.
Investment Advisor Charged and Pleads Guilty to FraudRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, and Acting Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), Edward Gallashaw, announced today the filing of an Information charging JOSEPH D’AMBROSIO with engaging in a scheme to defraud clients who believed they were investing in securities and other investments managed by D’AMBROSIO through a private investment fund he managed for friends and family. D’AMBROSIO also entered a guilty plea to the Information in a proceeding today before U.S. District Judge P. Kevin Castel, to whom the case has been assigned.
“Joseph D’Ambrosio stole more than $5 million from his friends and family and hid this fraud until the money ran out,” said U.S. Attorney Jay Clayton. “Fraudsters often prey on those close to them – friends, family, members of religious and social groups – using their trust to exploit them. This Office will bring those who violate that trust to justice and recognizes Mr. D’Ambrosio’s self-reporting and acceptance of responsibility.”
“For years D’Ambrosio, using deceptive tactics, allegedly stole from people who trusted him all in the name of greed,” said USPIS Acting Inspector in Charge Edward Gallashaw. “What makes D’Ambrosio’s alleged conduct especially appalling is that his victims were personal friends and family. The Postal Inspection Service will continue investigating fraud cases such as these and will hold individuals accountable who use their professional positions as a mechanism to steal from trusting investors.”
According to the allegations contained in the Information:
From at least in or about 2010, up to and including at least in or about December 2024, D’AMBROSIO was the operator of Hereford Holdings, a private investment vehicle for him, his family, and his friends. D’AMBROSIO told his investors that he had invested their Hereford funds in a private fund managed by an investment advisor for which D’AMBROSIO served as the chief investment officer. In reality, D’AMBROSIO misappropriated investor funds for his personal use.
To deceive Hereford investors and keep the scheme going, D’AMBROSIO sent Hereford investors false investment performance letters and fraudulent K-1 tax forms that stated the investors had gained money, when they had not. When some investors sought withdrawals from Hereford, D’AMBROSIO used new investor funds to pay them in a Ponzi-like fashion to keep the scheme going. In December 2024, facing withdrawal requests he could not honor, D’AMBROSIO confessed to his crimes.
D’AMBROSIO fraudulently obtained more than $5 million from investors during the course of his fraud scheme.
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D’AMBROSIO, 66, of Bronxville, New York, is charged with one count of investment adviser fraud, which carries a maximum sentence of five years in prison.
The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Clayton praised the outstanding work of the USPIS. Mr. Clayton further thanked the Securities and Exchange Commission, which has separately filed civil charges against D’AMBROSIO.
This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Matthew R. Shahabian is in charge of the prosecution.
Mount Vernon Police Sergeant Sentenced for Use of Excessive ForceRead the Press Release
United States Attorney for the Southern District of New York, Jay Clayton, announced that MARIO STEWART, a Sergeant with the Mount Vernon Police Department (“MVPD”), was sentenced by U.S. District Judge Kenneth M. Karas to six months in prison. While working as a Sergeant for the MVPD in 2019, STEWART used excessive force against an individual experiencing a mental health crisis (the “Victim”), tasing him seven times over the course of several minutes, in violation of the Victim’s rights under the U.S. Constitution.
“New Yorkers depend daily on the women and men of law enforcement,” said U.S. Attorney Jay Clayton. “We trust them to keep us safe, to act in line with their training, and to respect our individual rights. This trust, earned over decades, is essential to our way of life. When a law enforcement officer breaches that trust, we are all affected. Yesterday’s sentencing was about protecting the trust between our communities and our police departments.”
According to the Indictment, court filings and statements made in court:
On or about March 26, 2019, STEWART was employed as a Sergeant with the MVPD. STEWART was assigned to the MVPD’s Emergency Services Unit, which is responsible for, among other things, responding to individuals who are experiencing mental health crises. On that day, STEWART and six other MVPD officers received a call to assist the Victim in Mount Vernon, New York, as the Victim was experiencing a mental health crisis.
At the scene, STEWART and the other MVPD officers restrained the Victim, handcuffing his hands behind his back and securing his legs in a restraint bag in preparation to transport the Victim for medical assistance. When the MVPD officers were unable to pull the restraint bag over the Victim’s chest because the Victim was holding onto one of the bag’s straps, STEWART directed the Victim to release the strap. STEWART then deployed his taser seven times on the Victim. During each of STEWART’s taser deployments, the Victim remained laying on the ground, handcuffed with his hands behind his back and his legs secured in the restraint bag. STEWART’s actions caused bodily injury to the Victim, including extreme pain.
In pronouncing STEWART’s sentence, U.S. District Judge Kenneth M. Karas stated that a prison sentence was necessary “to send a clear message” to law enforcement that “even though your job is really hard, and even though you protect us every day and you have to make really tough decisions, there are still times where you have to yield to authority, and where the line is clear, you cannot cross it. . . . The people of Mount Vernon have to know that they will not be themselves victims of their law enforcement officers.”
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In addition to the prison term, STEWART, 46, of Brooklyn, New York, was also sentenced to six months of home confinement.
Mr. Clayton praised the outstanding investigative work of the Federal Bureau of Investigation and thanked the Westchester County District Attorney’s Office and the MVPD for their assistance with the investigation.
The case is being handled by the Office’s Civil Rights Unit in the Criminal Division. Assistant U.S. Attorneys Sam Adelsberg and Jared Hoffman are in charge of the prosecution.