Southern District of New York
Press releases recorded for this federal judicial district.
Investment Bank Director Charged in Manhattan Federal Court with Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of STEVEN MCCLATCHEY, a director at an investment bank in Manhattan (the “Investment Bank”), on charges of participating in a scheme to commit insider trading in connection with potential mergers and acquisitions (“M&A”) in which the Investment Bank was involved. In addition, charges against GARY PUSEY were unsealed. PUSEY pled guilty and admitted to his participation in the scheme last week.
MCCLATCHEY was arrested this morning in Long Island, New York, and will be presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Kevin Nathaniel Fox. On Friday, May 27, 2016, PUSEY pled guilty before U.S. District Judge Katherine Polk Failla to conspiracy, securities fraud, and wire fraud.
In a separate action, the Securities and Exchange Commission (“SEC”) filed civil charges against MCCLATCHEY and PUSEY.
U.S. Attorney Preet Bharara said: “Insider trading continues to tarnish our securities markets. As alleged, Steven McClatchey abused his position at a major investment bank, feeding sensitive information about mergers and acquisitions to his close friend, Gary Pusey, who in turn traded on that material, nonpublic information. McClatchey did not tip Pusey for free, allegedly receiving cash kickbacks and home renovations from Pusey in exchange. A free and fair marketplace is what securities investors deserve and is what we seek to enforce through prosecutions like this one.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Steven McClatchey violated his confidentiality duty at an investment bank when he shared insider material information with his boat dock buddy, Gary Pusey, who ultimately used the information to make trades. McClatchey allegedly benefited from thousands of dollars cash payments and home repairs. Investing in our markets should be fair to all investors with equal access to information, not boat-side chats that give certain investors advantage. The FBI will continue to work with our partners to ensure our markets are fair and equitable to all.”
According to the allegations in the charging documents unsealed today in Manhattan federal court, including the Complaint and Information, and statements made in court proceedings[1]:
MCCLATCHEY, who had served as a director at the Investment Bank since at least 2008, routinely possessed material, nonpublic information (“Inside Information”) concerning pending mergers and acquisitions in which the Investment Bank was involved. Indeed, among MCCLATCHEY’s responsibilities at the Investment Bank was the tracking of the status of all such pending transactions and the likely date on which such transactions would be publicly announced. MCCLATCHEY breached his duty of confidentiality to the Investment Bank and to its clients by providing Inside Information about pending M&A transactions to his close friend, PUSEY. PUSEY, in turn, used the Inside Information to execute profitable securities trades ahead of at least 10 separate M&A announcements.
Specifically, from February 2014 through September 2015, MCCLATCHEY and PUSEY participated in a scheme to commit insider trading in advance of and in connection with more than 10 separate mergers and acquisitions. MCCLATCHEY and PUSEY were close friends who owned boats docked in a Long Island marina and who spent most Saturdays on their boats, at the marina, or playing pool and watching sports.
MCCLATCHEY learned about the deals as part of his employment with the Investment Bank, which generally advised either (i) the company to be acquired in the transaction; (ii) the acquiring company; or (iii) a company which ultimately lost a bid to acquire the company involved in the transaction.
Having learned the Inside Information about these impending transactions, MCCLATCHEY, in breach of fiduciary duties and other duties of trust and confidence owed to the Investment Bank and its clients, tipped PUSEY so that PUSEY could use the information to trade and with the expectation that PUSEY would confer a benefit upon MCCLATCHEY. Among the benefits that MCCLATCHEY received as part of the insider trading scheme were thousands of dollars of cash payments by PUSEY and the provision of home renovation services.
PUSEY used the Inside Information that he received from MCCLATCHEY to make profitable trades in, among other securities: Forest Oil Corporation, Questcor Pharmaceuticals, Inc., Zygo Corporation, Pepco Holdings, Inc., Measurement Specialties, Inc., Entropic Communications, Inc., PetSmart, Inc., Emulex Corporation, Omnicare, Inc., and TECO Energy, Inc. PUSEY reaped approximately $76,000 in ill-gotten gains from this scheme.
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MCCLATCHEY, 58, of Long Island, New York, is charged with one count of conspiracy to commit securities and wire fraud, which carries a maximum sentence of 25 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and 11 counts of securities fraud, each carrying a maximum sentence of 25 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
On May 30, 2016, PUSEY, 47, of Long Island, New York, pled guilty to one count of conspiracy to commit securities and wire fraud, which carries a maximum sentence of 25 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and 11 counts of securities fraud, each carrying a maximum sentence of 25 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentences for the defendants will be determined by the judge.
Mr. Bharara praised the work of the FBI, and thanked the SEC.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Rebecca Mermelstein is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former U.S. Soldier Sentenced in Manhattan Federal Court to 20 Years in Prison for Conspiracy to Murder A DEA Agent and A DEA Informant and Other CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that JOSEPH HUNTER, a former member of the U.S. Army, was sentenced today to 20 years in prison based on his convictions for conspiracy to murder an agent of the Drug Enforcement Administration (“DEA”) and a DEA informant, conspiracy to import cocaine into the United States, and conspiracy to possess a firearm in furtherance of a crime of violence. HUNTER pled guilty on February 13, 2015, before U.S. District Judge Laura Taylor Swain, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “The sentencing of Joseph Hunter, an admitted contract killer, convicted drug trafficker, and ringleader of trained assassins, ends another chapter in a chilling criminal case that spanned the globe. Hunter and his cohorts turned from serving their countries as soldiers to becoming mercenaries for hire, plotting to kill a DEA agent and informant and trafficking in massive quantities of cocaine. Thanks to the outstanding investigative work of the DEA, these soldiers of fortune have met their rightful fate, long sentences in federal prison.”
According to the Indictment and Superseding Indictments filed against HUNTER and co-defendants Timothy Vamvakias, Dennis Gogel, Slawomir Soborski, and Michael Filter; other documents publicly filed in this case; and statements made during court proceedings, including today’s sentencing:
All five defendants previously served in the armed forces of their respective nations. HUNTER served in the U.S. Army between approximately 1983 and 2004; Vamvakias served in the U.S. Army between approximately 1991 and 2004; Gogel served in the German armed forces until 2010; Filter served in the German armed forces until 2009; and Soborski served in the Polish armed forces until 2011. HUNTER served as a sniper instructor and a senior drill sergeant, training other soldiers in marksmanship and tactics. Vamvakias attained the rank of sergeant and served both as infantryman and a military police officer. Gogel, Soborski, and Filter were also trained as snipers.
In 2013, HUNTER recruited Vamvakias, Gogel, Soborski, and Filter to serve as security for a Colombian drug trafficking organization and to perform contract killings. For example, in March 2013, HUNTER described the work to Soborski, Filter, and Gogel as follows: “It’s just like a military mission. Right. This is a real [expletive]. You know, you see everything. You see James Bond in the movie and you’re saying, ‘Oh, I can do that.’ Well, you’re gonna do it now.” During the same recorded meeting, HUNTER described in detail his previous participation in weapons trafficking, using grenades to conduct an attack, and shootings, as well as his participation in two actual murders-for-hire in the Philippines.
During meetings in Asia, Africa, and the Caribbean that began in January 2013 and continued through late September 2013, HUNTER communicated with three confidential sources (the “CSs”) working with the DEA, who purported to be Colombian narcotics traffickers. HUNTER agreed to serve as the head of security for the CSs’ purported narcotics trafficking organization, and assembled a “security team” consisting of Vamvakias, Gogel, Filter, and Soborski. HUNTER explained to his co-defendants that this work would involve “tons of cocaine” and “millions of dollars,” and that they would also have the opportunity to do “bonus work, that is, assassination” for which they would be paid at least $25,000, and “depending on the threat level, the price goes up.”
HUNTER and his co-defendants thereafter agreed, in meetings and communications with the CSs, to provide security and surveillance services to the narcotics trafficking organization. In late-March 2013, in Thailand, Gogel, Filter, and Soborski surveilled a vessel on behalf of the CSs’ purported narcotics trafficking organization and reported their activities to HUNTER. In April 2013, in Mauritius, at the direction of the CSs, Gogel, Filter, and Soborski provided security for meetings at which the participants – including Scott Stammers and Philip Shackels, who were later extradited to the Southern District of New York and pled guilty to a drug-trafficking offense before U.S. District Judge Andrew L. Carter, Jr., in United States v. Stammers, et al., 13 Cr. 579 (ALC) (S.D.N.Y.) – discussed actual weapons trafficking activities and the distribution of illegal narcotics to the United States. In late June 2013, Vamvakias, Gogel, Filter, and Soborski conducted surveillance of a purported U.S.-registered aircraft at the direction of the third CS (“CS-3”), who posed as a member of the CSs’ narcotics trafficking organization. CS-3 informed the defendants that the aircraft was to be loaded with 300 kilograms of cocaine to be shipped to New York. The security team reported their activities to HUNTER.
Furthermore, HUNTER, Vamvakias, and Gogel agreed to commit murders-for-hire in Liberia by assassinating both a DEA Special Agent and a person who, according to the CSs, was providing information to the DEA about the CSs’ narcotics trafficking organization. In exchange for the murders, Vamvakias and Gogel were together to be paid approximately $700,000, and HUNTER was to receive an additional $100,000 for supervising the hit team. Communications between the defendants and the CSs occurred by telephone, over e-mail, and in a series of surreptitiously audio-recorded and videotaped meetings over an approximately nine-month period.
In mid-May 2013, at a meeting with the CSs in Thailand, HUNTER, Vamvakias, Gogel, and Soborski were told that a “bonus job” – that is, a contract killing – was in the offing, due to a leak within the CSs’ narcotics trafficking organization. In late May 2013, in email communications, HUNTER confirmed that his team would be willing to murder both a U.S. law enforcement agent and a source (a boat captain), who was purportedly providing information to U.S. law enforcement authorities about the CSs’ narcotics trafficking organization. HUNTER confirmed by email that his team would kill both the DEA agent and the informant. At a meeting in late June 2013, CS-3 explained to Vamvakias and Gogel that “the job is to kill a U.S. DEA agent and a source with the DEA,” who would be located in Liberia. Vamvakias and Gogel discussed the weapons that could be used and masks to be worn for the murders, and Vamvakias stated that it would be better to “hit the agent first” and then “the snitch.” In early July 2013, HUNTER sent via e-mail a list of the items needed for the murders, including “[t]wo Submachine Guns with silencers . . . [t]wo .22 pistols with Silencers.”
In mid-August 2013, at a meeting in Thailand, HUNTER, Vamvakias, and Gogel discussed in detail the weapons that would be used and the possibility of entering Liberia without having their passports stamped. They suggested that CS-3 fly them out of the country via private plane following the murders. Vamvakias stated that, among other weapons, a sub-machine gun and two .22 caliber pistols would be needed for the murders, and CS-3 agreed to deliver the weapons to Liberia. The next day, at a meeting with Gogel, CS-3 confirmed that an order for the requested weapons had been made. Later that same day, Gogel met again with CS-3 and provided CS-3 with two highly sophisticated latex facemasks, which can make the wearer appear to be of another race, for CS-3 to transport to Liberia.
In late September 2013, Vamvakias and Gogel arrived in Liberia to commit the planned murders-for-hire.
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In addition to the prison sentence, Judge Swain also sentenced HUNTER, 51, to 10 years of supervised release and to pay a $300 special assessment.
Vamvakias, 44, pled guilty on January 9, 2015, to conspiracy to murder a DEA agent and a DEA informant, conspiracy to import cocaine into the United States, conspiracy to possess a firearm in furtherance of a crime of violence, and conspiracy to distribute cocaine on board an aircraft, and was sentenced by Judge Swain on July 16, 2015, to 20 years in prison. Gogel, 30, pled guilty on January 13, 2015, to conspiracy to murder a DEA agent and a DEA informant, conspiracy to import cocaine into the United States, conspiracy to possess a firearm in furtherance of a crime of violence, and conspiracy to distribute cocaine on board an aircraft, and was sentenced by Judge Swain on September 24, 2015, to 20 years in prison. Filter, 31, pled guilty on February 10, 2015, to conspiracy to import cocaine into the United States, and was sentenced by Judge Swain on September 9, 2015, to eight years in prison. Finally, Soborski, 44, pled guilty on February 10, 2015, to conspiracy to import cocaine into the United States, and is scheduled to be sentenced by Judge Swain on June 10, 2016.
Today’s sentencing was the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York; DEA’s Special Operations Division; DEA’s Bangkok, Ghana, Pretoria, Bucharest, Manila, Nassau and Copenhagen Offices; the Royal Thai Police Narcotics Suppression Bureau and Crime Suppression Division; the Royal Thai Immigration; the Royal Thai Attorney General’s Office; Republic of Liberia’s National Security Agency; the Republic of Liberia’s Attorney General’s Office; the Estonian Police and Border Guard; the Estonian National Criminal Police, Investigative Bureau; the Estonian State Prosecutors Office; the Royal Bahamas Police Force and Drug Enforcement Unit; Interpol; and the U.S. Department of Justice’s Office of International Affairs.
The prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Emil J. Bove III, Michael D. Lockard, Aimee Hector, and Anna Skotko are in charge of the prosecution.
Member of Al Qaeda in the Arabian Peninsula Sentenced to 40 Years in Prison in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and John P. Carlin, Assistant Attorney General for National Security, announced that MINH QUANG PHAM, a/k/a “Amin,” was sentenced today in Manhattan federal court to 40 years in prison for his efforts in support of al Qaeda in the Arabian Peninsula (“AQAP”), a designated foreign terrorist organization. PHAM was arrested in the United Kingdom on June 29, 2012, and was extradited to the United States in February 2015. PHAM pleaded guilty on January 8, 2016, to providing material support to AQAP, conspiring to receive military training from AQAP, and possessing and using a machine gun in furtherance of crimes of violence. U.S. District Judge Alison J. Nathan imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Minh Quang Pham committed himself to the violent mission of al Qaeda in the Arabian Peninsula, a terrorist organization that has claimed responsibility for deadly attacks around the world, including the 2015 Charlie Hebdo attack in Paris. Pham went to Yemen to receive military training from AQAP and contributed to Inspire magazine, a recruitment tool and ‘how-to’ guide for would-be terrorists around the world. This prosecution and today’s sentencing show that terrorists and those who support them will continue to be brought to justice in American courts, thanks to the continuing resolve of the Department of Justice, this Office and our global law enforcement partners.”
Assistant Attorney General John P. Carlin said: “This sentence holds Minh Quang Pham accountable for his terrorist activities, including providing material support to al Qaeda in the Arabian Peninsula and receiving explosives training from Anwar al-Aulaqi in Yemen for the purpose of committing an attack in the United Kingdom. Counterterrorism is the National Security Division’s highest priority, and we will continue to bring justice to those who seek to aid designated foreign terrorist organizations in their efforts to commit violent attacks against the United States and our allies.”
According to the Indictment, extradition materials and court filings, and statements made at related court proceedings, including today’s sentencing:
AQAP was designated by the United States Department of State as a foreign terrorist organization in January 2010. AQAP’s leadership has publicly claimed responsibility for plots to murder U.S. nationals and commit terrorist attacks against U.S. interests, including the 2009 Christmas Day bomb plot, in which an AQAP operative attempted to detonate an explosive device on a civilian airplane traveling to Detroit, Michigan. Only months later, AQAP attempted to detonate explosive devices within the holds of commercial airliners traveling to the United States. More recently, AQAP claimed responsibility for the January 2015 massacre in Paris, France at the office of the magazine Charlie Hebdo, which had published cartoons of the Prophet Mohammed. The attack killed 11 people and injured 11 others.
In December 2010, after informing his wife and others that he planned to travel to Ireland, PHAM traveled from London, where he resided, to Yemen, the principal base of operations for AQAP. PHAM traveled to Yemen in order to join AQAP, to wage jihad on behalf of AQAP, and to martyr himself for AQAP’s cause. After arriving in Yemen, he swore an oath of loyalty to AQAP in the presence of an AQAP commander.
While in Yemen in 2010 and 2011, PHAM provided assistance to and received training from Anwar al-Aulaqi, a U.S.-born senior leader of AQAP. Prior to al-Aulaqi’s death in September 2011, al-Aulaqi called on his followers to conduct attacks against American interests abroad, including by killing American civilians. Al-Aulaqui advised PHAM to return to the United Kingdom for the purpose of finding and making contact with individuals who, like PHAM, wanted to travel to Yemen to join AQAP, and provided PHAM with money, as well as a telephone number and e-mail address that PHAM was to use to contact al-Aulaqi upon his return to the United Kingdom. In addition, PHAM provided his laptop computer to al-Aulaqi, and al-Aulaqi provided PHAM with a new “clean” laptop to take with him when he returned to the United Kingdom so that PHAM would not have any issues if authorities searched his computer.
In or about June 2011, prior to his departure from Yemen, PHAM approached al-Aulaqi about conducting a suicide attack whereby he would “sacrifice” himself on behalf of AQAP. Al-Aulaqi instructed PHAM to conduct a bombing at Heathrow International Airport, and specifically directed him to target the arrivals section, with a specific focus on the area where flights arrived from the United States or Israel. In connection with that terrorist plot, which would have entailed PHAM carrying the explosive concealed in a backpack, PHAM received training from AQAP, including from al-Aulaqi, on how to build an explosive device using readily available household chemicals and other materials. In particular, al-Aulaqi instructed PHAM to tape bolts around the explosive device to act as shrapnel.
During his time in Yemen, PHAM also assisted with the preparation and dissemination of AQAP’s propaganda magazine, Inspire. AQAP uses Inspire magazine not only as a recruitment and propaganda tool, but also as an operational tool by encouraging its supporters to engage in terrorist attacks against the United States and other Western countries. In furtherance of that goal, AQAP has published articles praising so-called “lone-wolf” style attacks, as well as articles providing detailed instructions on how to conduct a terror attack using household or commercially available materials. Dzkokhar Tsarnaev – the convicted “Boston bomber” responsible for detonating two homemade bombs made from pressure cookers near the finish line of the Boston Marathon in April 2013, killing three spectators and maiming 260 other people – previously told the Federal Bureau of Investigation (“FBI”) that he and his brother learned how to create the pressure cooker bombs from Inspire magazine.
PHAM worked directly with now-deceased U.S. citizen Samir Kahn, who was a prominent member of AQAP and responsible for editing and publishing Inspire magazine. PHAM, who has college degrees in both graphic design and animation, received training in the various types of software used for Inspire magazine and worked closely with Khan, contributing to the magazine in numerous ways. For example, PHAM used graphic design software to edit videos and photos that would be used as propaganda in Inspire magazine; recorded television programs for Khan that Khan might find useful to the magazine; and offered his camera to be used for the taking of numerous photos used for Inspire magazine. PHAM also posed in photographs that accompanied Inspire magazine’s articles and provided instructions to its followers. Among those were a series of photographs accompanying an article with instructions on disassembling and cleaning a Kalashnikov assault rifle. In another photograph, accompanying an article entitled, “Why Did I Choose Al Qaeda,” which was written by al-Aulaqi, PHAM and three other men were shown wielding automatic Kalashnikov assault rifles. During his time in Yemen, PHAM received training from AQAP in the use of a Kalashnikov assault rifle, and was provided with a Kalashnikov assault rifle by the organization, which he carried with him in furtherance of his activities on behalf of AQAP in Yemen.
On July 27, 2011, PHAM returned to the United Kingdom from Yemen. Upon his arrival at London’s Heathrow International Airport, United Kingdom authorities detained PHAM, searched him, and recovered various materials from him. For example, PHAM was found in possession of various electronic media that contained computer files forensically identical to those possessed by a cooperating witness who had previously reported sharing electronic documents with PHAM while they were in Yemen with AQAP. In addition, upon his arrival in the United Kingdom from Yemen, PHAM was found to be in possession of a live round of .762 caliber armor-piercing ammunition, which is consistent with ammunition that is used in a Kalashnikov assault rifle.
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In imposing the 40-year prison term, Judge Nathan found that PHAM had been convicted of “among the most serious crimes” prosecutable in the United States, the details of which were “extremely disturbing.” Judge Nathan found that PHAM provided material support to AQAP, including by agreeing to carry out a “horrific and violent” plot to conduct a suicide bombing at Heathrow International Airport in London.
In addition to the 40-year prison term, Judge Nathan imposed a life term of supervised release and a $300 special assessment. On January 8, 2016, Judge Nathan issued an order that PHAM be ordered removed from the United States to the United Kingdom promptly upon completion of his sentence.
Mr. Bharara praised the extraordinary investigative work of the Washington, D.C., Field Office of the FBI. He also expressed his gratitude to the New York Joint Terrorism Task Force – which principally consists of agents from the FBI and detectives from the New York City Police Department – for the critical role it played in the investigation and prosecution. In addition, Mr. Bharara thanked the Department of Justice’s National Security Division and Office of International Affairs. Lastly, Mr. Bharara also thanked the British law enforcement authorities, including the Metropolitan Police Service/SO15 Counter Terrorism Command at New Scotland Yard and the Crown Prosecution Service, for their cooperation in the investigation and prosecution.
This case is being handled by the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office for the Southern District of New York. Assistant U.S. Attorneys Anna M. Skotko, Sean S. Buckley, Shane T. Stansbury, and Ian McGinley are in charge of the prosecution, with assistance provided by Rebecca Magnone of the National Security Division’s Counterterrorism Section.
Member of Bronx Gang Pleads Guilty to Racketeering Conspiracy, Including Murder and Attempted MurderRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that today WALI BURGOS, a/k/a “Guy Fisher,” pled guilty to participating in a racketeering conspiracy, and in connection with that plea, admitted to committing the murder of Johnny Moore and a separate attempted murder of another intended victim, all in connection with a violent street gang known as “18 Park,” which is based primarily in and around the New York City Police Department’s 40th Precinct in the Bronx, New York. As part of his guilty plea, BURGOS admitted to shooting and killing Johnny Moore, a 16-year-old, in the Patterson Houses area in the Bronx, and to committing a shooting and attempted murder in which Burgos fired shots at a rival gang member, hitting the rival gang member’s cap, knocking it off his head. BURGOS faces a maximum term of life in prison, and will be sentenced before United States District Judge Paul A. Engelmayer on September 8, 2016.
Manhattan U.S. Attorney Preet Bharara said: “For far too long, members of 18 Park and their rival gangs have terrorized the people of New York by engaging in all manner of mayhem – including murder, attempted murder, and other racketeering activities. In 2013, Wali Burgos was acquitted of the murder of Johnny Moore after a jury trial in Bronx County Supreme Court. Today, Burgos accepted responsibility for that murder and pled guilty to it in federal court. Gang violence cannot be allowed to persist, and today’s guilty plea shows that law enforcement won’t give up until the perpetrators of such violence are brought to justice.”
According to the Indictment and other documents filed in the case, as well as statements made during the plea proceedings:
BURGOS was a member of the Bronx-based street gang known as 18 Park, and in that capacity committed acts of violence with other gang members, including murder and attempted murder. From at least 2006 to December 2015, members and associates of 18 Park enriched themselves by selling drugs, such as crack cocaine, heroin, and marijuana, and committed acts of violence, including murder and attempted murder, against various people, including rival gang members, rival drug traffickers, and innocent bystanders. As part of this enterprise, members and associates of 18 Park – including BURGOS – killed and attempted to kill other individuals. On May 29, 2011, BURGOS shot Moore to death in the Patterson Houses area. On October 2, 2014, BURGOS shot at and attempted to murder a member of a rival gang, also in the Patterson Houses area. BURGOS just missed the rival gang member, shooting the cap off his head.
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Mr. Bharara praised the work of ATF, the DEA, and the NYPD. He also thanked the Bronx County District Attorney’s Office for their participation and support in this case.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys James McDonald, Samson Enzer, Dina McLeod, and Andrew Adams are in charge of the prosecution.
Two Charged in Manhattan Federal Court with Cocaine OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), and Joseph A. D’Amico, the Superintendent of the New York State Police (“NYSP”), announced today the arrest of MARC HENRY JOHNSON and JAMES HOLDER, a/k/a “Pepsi,” for cocaine-related charges. JOHNSON and HOLDER were arrested last night and will be presented in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein today.
U.S. Attorney Preet Bharara said: “Drugs destroy lives and communities. The charges unsealed today against James Holder and Marc Henry Johnson are a reminder of that. And the work of the DEA, NYPD, and State Police in this investigation is also a reminder of law enforcement’s commitment to stem the distribution of dangerous drugs in our communities.”
DEA Special Agent in Charge James J. Hunt said: “Drug overdoses take too many lives too soon and become a family’s worst nightmare. DEA is committed to dismantling drug trafficking organizations and those responsible for putting poison in the hands of users. By retracing alleged crimes, the DEA Strike Force has sent a message to dealers that the consequences of their actions affect them as well as the families of drug users. DEA commends our law enforcement partners who have worked diligently throughout this investigation.”
NYPD Commissioner William J. Bratton said: “As alleged, the defendants’ apparent disregard for a victim of this poison is frankly, unimaginable. As alleged, when the defendants realized someone was unresponsive after an apparent overdose, they dragged her body down to a building lobby in Manhattan's Chelsea neighborhood. We will continue to pursue those who pour this poison into our streets with every single judicial tool at our disposal.”
State Police Superintendent Joseph A. D’Amico said: “The hard work of our partners on the New York Organized Crime Drug Enforcement Strike Force has led to the arrests of two subjects who have allegedly been dealing or buying cocaine in the city for years, with little regard for the impact of their actions on users or the rest of the community. We will continue to work with our partners to disrupt the supply of dangerous narcotics in our communities and put those responsible behind bars.”
According to the allegations contained in a criminal Complaint[1] unsealed today in Manhattan federal court:
From approximately 2003 to October 4, 2015, HOLDER lived in and sold cocaine from a third-floor apartment in Chelsea. He also delivered cocaine to customers at other locations. Since 2003, HOLDER distributed a total of more than five kilograms of cocaine.
HOLDER and JOHNSON are longtime friends. JOHNSON regularly bought cocaine from HOLDER, used cocaine, and provided cocaine to others in social situations. JOHNSON also introduced HOLDER to other individuals as a potential supplier of cocaine. HOLDER then provided cocaine to those individuals in exchange for money, and those individuals, in turn, introduced still more cocaine buyers to HOLDER.
During the night of October 3, 2015, and the early morning hours of October 4, 2015, JOHNSON sent text messages saying he “may go to Pepsi for a pickup” “in chelsea,” and later met up with a 38-year-old woman (“Individual-1”) and others at a bar in Manhattan. Individual-1 had been using cocaine before JOHNSON arrived. JOHNSON told Individual-1 and others at the bar that he had a significant amount of cocaine, which he offered to share.
Later, JOHNSON and Individual-1 left the bar together in a taxi. They arrived at the Chelsea building where HOLDER lived at approximately 4:25 a.m., and walked upstairs to HOLDER’s apartment. Video surveillance footage shows hours later, JOHNSON and HOLDER dragged Individual-1’s apparently unconscious body into the building’s first-floor vestibule. HOLDER then left the building, carrying an object as he walked away.
JOHNSON called 911 to summon an ambulance at approximately 8:30 a.m. He declined to provide his name to the 911 operator, and neither identified Individual-1 nor described his relationship to her, nor did he explain what had happened to her and why she needed medical assistance. Emergency Medical Technicians (“EMTs”) responded and found Individual-1 unresponsive in the Chelsea building’s vestibule. JOHNSON left the building soon after the EMTs arrived.
Individual-1 was taken to a hospital and pronounced dead later on October 4, 2015. Her death was caused by, among other things, cocaine use.
HOLDER moved out of the Chelsea building after October 4, 2015, but continued to sell cocaine in Manhattan until at least January 2016.
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HOLDER is charged with one count of conspiracy to distribute at least five kilograms of cocaine. The charge carries a mandatory minimum sentence of 10 years in prison, and a maximum potential sentence of life in prison. JOHNSON is charged with one count of attempting to distribute cocaine, which carries a maximum potential sentence of 20 years in prison; and one count of acting as an accessory after the fact in relation to the conspiracy charge against HOLDER, which carries a maximum potential sentence of 15 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service, Criminal Investigation Division, the Federal Bureau of Investigation, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, the New York Department of Taxation and Finance, the Rockland County Sheriff’s Office, the Clarkstown Police Department, the Port Washington Police Department, and the New York State Department of Corrections and Community Supervision. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.
The case is being prosecuted by the Office’s Narcotics Unit. Assistant U.S. Attorneys Margaret Garnett and David Abramowicz are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Russian Banker Sentenced in Connection with Conspiracy to Work for Russian IntelligenceRead the Press Release
Evgeny Buryakov, aka Zhenya, 41, was sentenced to 30 months in prison today for conspiring to act in the United States as an agent of the Russian Federation without providing prior notice to the Attorney General.
The sentence was announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York.
“Evgeny Buryakov is being held accountable for his efforts to secretly operate as a Russian foreign intelligence officer in the United States,” said Assistant Attorney General Carlin. “Foreign intelligence officers attempting to illegally collect information pose a direct threat to our national security. Working with our law enforcement and intelligence partners at tracking down and disrupting these clandestine operations against our country will continue to remain one of the National Security Division’s highest priorities.”
“Evgeny Buryakov, in the guise of being a legitimate banker, gathered intelligence as an agent of the Russian Federation in New York,” said U.S. Attorney Bharara. “He traded coded messages with one of his Russian spy co-defendants, who sent the clandestinely collected information back to Moscow. So long as this type of Cold War-style spy intrigue continues to go on in present-day New York City, the FBI and the prosecutors in my office will continue to investigate and prosecute it.”
According to the complaint, indictment, other court filings and statements made during court proceedings:
Beginning in at least 2012, Buryakov worked in the United States as an agent of Russia’s foreign intelligence agency, known as the SVR. Buryakov operated under non-official cover, meaning he entered and remained in the United States as a private citizen, posing as an employee in the New York office of a Russian bank, Vnesheconombank (VEB). SVR agents operating under such non-official cover (NOCs) are typically subject to less scrutiny by the host government and, in many cases, are never identified as intelligence agents by the host government. As a result, an NOC is an extremely valuable intelligence asset for the SVR.
Federal law prohibits individuals from acting as agents of foreign governments within the United States without prior notification to the Attorney General. Department of Justice records indicate that Buryakov never notified the Attorney General that he was, in fact, an agent of the Russian Federation.
Buryakov worked in New York with at least two other SVR agents, Igor Sporyshev and Victor Podobnyy. From on or about Nov. 22, 2010, to on or about Nov. 21, 2014, Sporyshev officially served as a trade representative of the Russian Federation in New York. From on or about Dec. 13, 2012, to on or about Sept. 12, 2013, Podobnyy officially served as an attaché to the Permanent Mission of the Russian Federation to the United Nations. The investigation, however, showed that Sporyshev and Podobnyy also worked as officers of the SVR.
The directives from the SVR to Buryakov, Sporyshev and Podobnyy, as well as to other covert SVR agents acting within the United States, included requests to gather intelligence on, among other subjects, potential U.S. sanctions against Russian banks and the United States’ efforts to develop alternative energy resources.
During the course of their work as covert SVR agents in the United States, Buryakov, Sporyshev and Podobnyy regularly met and communicated using clandestine methods and coded messages in order to exchange intelligence-related information while shielding their associations with one another as SVR agents.
In the summer of 2014, Buryakov met multiple times with a confidential source working for the FBI and an FBI undercover employee, both of whom purported to be working on a casino development project in Russia. During these meetings, Buryakov accepted documents that were purportedly obtained from a U.S. government agency and which supposedly contained information potentially useful to Russia, including information about U.S. sanctions against Russia.
For their alleged roles in the conspiracy, Sporyshev and Podobnyy are charged with conspiracy to act in the United States as an agent of a foreign government without first notifying the Attorney General, which carries a maximum sentence of five years in prison. They are also charged with aiding and abetting Buryakov’s actions in the United States as an agent of a foreign government without first notifying the Attorney General, which carries a maximum sentence of 10 years in prison. These maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. The charges against Sporyshev and Podobnyy are merely accusations, and those defendants are presumed innocent unless and until proven guilty. Sporyshev and Podobnyy no longer live in the United States and have not been arrested. By virtue of their prior positions in the United States on behalf of Russia, both of them were afforded diplomatic immunity from arrest and prosecution while in the United States.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the investigative work of the FBI’s Counterintelligence Division.
The prosecution is being handled by Assistant U.S. Attorneys Stephen J. Ritchin, Emil J. Bove III, Brendan F. Quigley, Anna M. Skotko and Ian McGinley of the Southern District of New York, with assistance provided by Senior Trial Attorney Heather Schmidt of the National Security Division’s Counterintelligence and Export Control Section.
Russian Banker Sentenced in Manhattan Federal Court to 30 Months in Prison for Conspiring to Work for Russian IntelligenceRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and John P. Carlin, Assistant Attorney General for National Security, announced that EVGENY BURYAKOV, a/k/a “Zhenya,” who worked for a Russian bank in Manhattan, was sentenced today to 30 months in prison for conspiring to act in the United States as an agent of the Russian Federation without providing prior notice to the Attorney General. BURYAKOV pled guilty on March 11, 2016, before U.S. District Judge Richard M. Berman, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Evgeny Buryakov, in the guise of being a legitimate banker, gathered intelligence as an agent of the Russian Federation in New York. He traded coded messages with one of his Russian spy co-defendants, who sent the clandestinely collected information back to Moscow. So long as this type of Cold War-style spy intrigue continues to go on in present-day New York City, the FBI and the prosecutors in my office will continue to investigate and prosecute it.”
Assistant Attorney General John P. Carlin said: “Evgeny Buryakov is being held accountable for his efforts to secretly operate as a Russian foreign intelligence officer in the United States. Foreign intelligence officers attempting to illegally collect information pose a direct threat to our national security. Working with our law enforcement and intelligence partners at tracking down and disrupting these clandestine operations against our country will continue to remain one of the National Security Division's highest priorities.”
According to the Complaint, the initial and superseding Indictments, other documents publicly filed in this case, and statements made during court proceedings, including today’s sentencing:
Beginning in at least 2012, bURYAKOV worked in the United States as an agent of Russia’s foreign intelligence agency, known as the “SVR.” BURYAKOV operated under “non-official cover,” meaning he entered and remained in the United States as a private citizen, posing as an employee in the Manhattan office of a Russian bank, Vnesheconombank, also known as “VEB.” SVR agents operating under such non-official cover – sometimes referred to as “NOCs” – typically are subject to less scrutiny by the host government, and, in many cases, are never identified as intelligence agents by the host government. As a result, an NOC is an extremely valuable intelligence asset for the SVR.
Federal law prohibits individuals from acting as agents of foreign governments within the United States without prior notification to the United States Attorney General. Department of Justice records indicate that BURYAKOV never notified the United States Attorney General that he was, in fact, an agent of the Russia Federation.
BURYAKOV worked in New York with at least two other SVR agents, Igor Sporyshev and Victor Podobnyy. From on or about November 22, 2010, to on or about November 21, 2014, Sporyshev officially served as a Trade Representative of the Russian Federation in New York. From on or about December 13, 2012, to on or about September 12, 2013, Podobnyy officially served as an Attaché to the Permanent Mission of the Russian Federation to the United Nations. The investigation, however, showed that Sporyshev and Podobnyy also worked as officers of the SVR.
BURYAKOV’s Co-Conspirators Are Recorded Inside the SVR’s New York “Residentura”
During the course of the investigation, the FBI recorded Sporyshev and Podobnyy speaking inside the SVR’s offices in New York, known as the “Residentura.”
The FBI obtained the recordings after Sporyshev attempted to recruit an FBI undercover employee (“UCE-1”), who was posing as an analyst from a New York-based energy company. In response to requests from Sporyshev, UCE-1 provided Sporyshev with binders containing purported industry analysis written by UCE-1 and supporting documentation relating to UCE-1’s reports, as well as covertly placed recording devices. Sporyshev then took the binders to, among other places, the Residentura.
During subsequent recorded conversations, Sporyshev and Podobnyy discussed, among other things, Sporyshev’s SVR employment contract and his official cover position, their work as SVR officers, and the FBI’s July 2010 arrests of ten SVR agents in the United States, known as the “Illegals.”
Sporyshev and Podobnyy also discussed BURYAKOV’s prior service with the SVR in South Africa. BURYAKOV worked in South Africa between approximately 2004 and 2009, officially as a representative of VEB. During a conversation about Sporyshev’s cover position in New York, Podobnyy related that, when BURYAKOV was working in South Africa, Podobnyy had dinner with an SVR official and BURYAKOV’s supervisor at VEB and that, during the dinner, the SVR official told the VEB official that BURYAKOV was an “employee of the Service,” i.e., the SVR.
Further, Sporyshev and Podobnyy were recorded discussing, among other things, their (i) attempting to recruit New York City residents as intelligence sources for Russia; (ii) tasking BURYAKOV to gather intelligence; and (iii) transmitting intelligence reports prepared by BURYAKOV back to SVR headquarters in Moscow.
The directives from the SVR to BURYAKOV, Sporyshev, and Podobnyy, as well as to other covert SVR agents acting within the United States, included requests to gather intelligence on, among other subjects, potential United States sanctions against Russian banks and the United States’ efforts to develop alternative energy resources.
BURYAKOV’s Intelligence Taskings
Sporyshev was responsible for relaying intelligence assignments from the SVR to BURYAKOV.
BURYAKOV Drafts a Proposal for the SVR’s “Active Measures Directorate”
For example, in May 2013, Sporyshev and Podobnyy were recorded discussing a proposal that BURYAKOV had drafted about a planned deal in which Bombardier Aircraft Company in Canada would manufacture certain airplanes in Russia. Sporyshev noted that Canadian “unions were resisting” and that BURYAKOV’s “proposal [was] for MS” – the SVR’s Active Measures Directorate – to “pressur[e] the unions and secur[e] from the company a solution that is beneficial to us.” Other evidence developed during the investigation showed that, around the time of this conversation, BURYAKOV had conducted Internet searches relating to Bombardier and labor unions and, earlier, had obtained news articles regarding the planned deal and attended a conference in Canada that Bombardier personnel also attended.
BURYAKOV Assists Sporyshev in Attempting to Obtain Sensitive Information About the New York Stock Exchange
Also, on May 21, 2013, Sporyshev called BURYAKOV, greeted him, and then described a tasking from “top sources” relating to three questions that ITAR-TASS, a Russian news agency, could put to the New York Stock Exchange. Sporyshev called the defendant back approximately 20 minutes later. During the call, BURYAKOV proposed questions regarding (i) Exchange Traded Funds (ETFs), including the “mechanisms of their use to destabilize the market”; (ii) “curbing of trading robot activities”; and (iii) “technical parameters” and “other regulations directly related to the exchange.” On July 8, 2013, a purported “Bureau Chief” for ITAR-TASS sent an email to an employee of the New York Stock Exchange that parroted the questions that BURYAKOV proposed to Sporyshev.
BURYAKOV Assists Sporyshev in Analyzing the Effect of Sanctions
Another example of an intelligence tasking occurred in late March 2014. Specifically, on or about March 28, 2014, Sporyshev was recorded telling BURYAKOV that Sporyshev needed help researching the “effects of economic sanctions on our country,” among other things. A few days later, on April 2, 2014, Sporyshev called BURYAKOV and stated, in an intercepted conversation, that he had not seen BURYAKOV in a while, and asked to meet BURYAKOV outside VEB’s office in Manhattan in 20 minutes. A court-authorized search of BURYAKOV’s computer at VEB revealed that, at around the time of this telephone call, BURYAKOV conducted the following internet searches: “sanctions Russia consiquences” [sic] and “sanctions Russia impact.”
Two days later, on April 4, 2014, BURYAKOV called Sporyshev and, in an intercepted conversation, stated that he “wrote you an order list,” and suggested that they meet. Approximately 20 minutes later, Sporyshev met BURYAKOV in the driveway of BURYAKOV’s home. Their encounter, which was captured by a video surveillance camera located near BURYAKOV’s residence, lasted approximately two minutes. On the video footage, the defendants appeared to exchange a small object.
Clandestine Meetings and Communications
During the course of their work as covert SVR agents in the United States, BURYAKOV, Sporyshev, and Podobnyy regularly met and communicated using clandestine methods and coded messages, in order to exchange intelligence-related information while shielding their associations with one another as SVR agents. These efforts were designed, among other things, to preserve their respective covers as an employee of VEB (BURYAKOV), a Trade Representative of the Russian Federation in New York (Sporyshev), and an Attaché to the Permanent Mission of the Russian Federation to the United Nations (Podobnyy).
During the investigation, the FBI intercepted numerous calls between BURYAKOV and Sporyshev in which one of the men told the other that he needed to meet for some purpose, such as to transfer an item (such as a “ticket,” “book,” or “list,”) or for a purported social purpose. In fact, BURYAKOV and Sporyshev used this coded language to signal that they needed to exchange intelligence information.
FBI surveillance revealed that, at some of these meetings between BURYAKOV and Sporyshev, they exchanged documents or other small items. Notably, despite discussing on approximately one dozen occasions the need to meet to transfer “tickets,” BURYAKOV and Sporyshev were – other than one occasion where they discussed going to a movie – never observed attending, or discussing in any detail, events that would typically require tickets, such as a sporting event or concert.
BURYAKOV’s Receipt of Purported Official United States Government Documents
In the summer of 2014, BURYAKOV met multiple times with a confidential source working for the FBI (“CS-1”) and an FBI undercover employee (“UCE-2”). Both CS-1 and UCE-2 purported to be working on a casino development project in Russia.
During a conversation recorded on July 22, 2014, Sporyshev warned BURYAKOV that meeting with UCE-2 might be a “trap” but authorized BURYAKOV to go ahead so he could make a better assessment.
During the course of the subsequent meetings, and consistent with his interests as a Russian intelligence agent, BURYAKOV demonstrated his strong desire to obtain information about subjects far outside the scope of his work as a bank employee. During these meetings, BURYAKOV also accepted documents that were purportedly obtained from a U.S. government agency and which purportedly contained information potentially useful to Russia, including information about United States sanctions against Russia.
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In addition to the prison sentence, Judge Berman ordered BURYAKOV, 41, to pay a $10,000 fine and a $100 special assessment. BURYAKOV was also sentenced to three years of supervised release. Judge Berman also ordered that BURYAKOV be removed from the United States to the Russian Federation promptly upon the completion of his prison sentence.
For their alleged roles in the conspiracy, Sporyshev, 41, and Podobnyy, 28, are charged in two counts. The first count charges Sporyshev and Podobnyy with a conspiracy to act in the United States as agents of a foreign government without first notifying the Attorney General, and carries a maximum penalty of five years in prison. The second count charges Sporyshev and Podobnyy with aiding and abetting BURYAKOV’s actions in the United States as an agent of a foreign government without first notifying the Attorney General, and carries a maximum penalty of 10 years in prison. These maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge. Sporyshev and Podobnyy no longer live in the United States and have not been arrested. By virtue of their prior positions in the United States on behalf of Russia, both of them were afforded diplomatic immunity from arrest and prosecution while in the United States. The charges against Sporyshev and Podobnyy are merely accusations, and these defendants are presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the FBI’s Counterintelligence Division.
The prosecution has being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Stephen J. Ritchin, Emil J. Bove III, Brendan F. Quigley, Anna M. Skotko, and Ian McGinley are in charge of the prosecution, with assistance provided by Deputy Chief Richard Scott and Trial Attorney Heather Schmidt of the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division.
International Arms Trafficker Found Guilty for Conspiring to Kill Americans and Provide Material Support to a Designated Foreign Terrorist OrganizationRead the Press Release
Romanian Citizen Agreed to Provide Military-Grade Weapons to be Used to Shoot Down American Aircraft in Colombia
Virgil Flaviu Georgescu, 43, of Romania, was convicted by a federal jury today of conspiring to sell large quantities of military-grade weaponry to the Fuerzas Armadas Revolucionarias de Colombia (the FARC), a designated foreign terrorist organization, to be used to kill Americans in Colombia. Georgescu’s conviction followed a 10-day trial before U.S. District Judge Ronnie Abrams of the Southern District of New York.
The conviction was announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York.
“As the jury swiftly found, Virgil Flaviu Georgescu conspired to kill American officers and provide material support to the FARC,” said U.S. Attorney Bharara. “In concert with his co-defendants, Georgescu conspired to obtain and sell to the FARC military weapons, including anti-aircraft cannons and rocket propelled grenades, to be used against American personnel and aircraft in Colombia. Having sought to profit from the murder of U.S. officers abroad, Georgescu has now been convicted in the U.S. by a unanimous jury.”
According to the allegations in the indictment, other documents publicly filed in federal court and the evidence introduced at trial:
Between May 2014 and December 2014, Georgescu, a Romania-based weapons broker, conspired with his co-defendants, a former Romanian government official and a former member of the Italian Parliament, to sell an arsenal of weapons, including machine guns and anti-aircraft cannons, to the FARC, with the understanding that the FARC would use the weapons against U.S. personnel in Colombia. During a series of recorded telephone calls and in-person meetings, Georgescu and his co-conspirators agreed to sell the weapons to three confidential sources (CSs), who represented that they were acquiring these weapons for the FARC but were, in fact, working with the Drug Enforcement Administration (DEA). Georgescu and his co-conspirators agreed to provide these weapons to the CSs with the specific understanding that the weapons would be used to kill Americans and, in particular, to shoot down American helicopters and airplanes.
Georgescu first spoke with a CS in May 2014. Thereafter, Georgescu recruited both of his co-conspirators to help obtain the weapons for the CSs, with the understanding that the former Romanian government official would provide weapons expertise and the former Italian Parliament member would help secure fraudulent end-user certificates, in order to make the illegal sale of weapons look legitimate. Georgescu instructed his co-conspirators and others involved in the deal to use encrypted applications when communicating about the weapons deal to avoid detection by U.S. authorities.
Over the course of five consensually-recorded meetings with the CSs in Romania and Montenegro, Georgescu and his co-conspirators provided the CSs with catalogues of weapons that included anti-aircraft cannons, rocket propelled and thermobaric grenades and other high-powered weapons, as well as military-grade optical equipment. During these meetings, the CSs explained that the arms would be used to kill Americans and Georgescu offered his thoughts on what weapons would best suit the FARC’s needs.
Between September 2014 and December 2014, Georgescu and his co-conspirators traveled to Romania, Montenegro, Italy, Germany, Albania, Poland and Bulgaria to advance the weapons deal. During this period, the co-conspirators met with weapons suppliers, obtained sample fraudulent end-user certificates and test-fired military-grade rifles. In December 2014, Georgescu and his co-conspirators secured a signed contract from a European weapons supplier to provide more than $17 million worth of weapons to a straw purchaser. On Dec. 15, 2014, Georgescu met with the CSs, showed them the signed contract and discussed means of payment and transportation of the weapons to Colombia.
Georgescu was arrested by Montenegrin authorities on the charges in the indictment on Dec. 15, 2014, and extradited to the United States on Feb. 25, 2015.
Georgescu was convicted of one count of conspiracy to kill U.S. officers or employees, which carries a maximum sentence of life in prison, and one count of conspiracy to provide material support or resources to a designated foreign terrorist organization, which carries a maximum sentence of 15 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. Georgescu is scheduled to be sentenced by Judge Abrams on Sept. 16, 2016, at 3:00 p.m. EDT.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the outstanding investigative efforts of the DEA’s Special Operations Division, the DEA’s Bucharest Country Office, the DEA’s Rome Country Office, the Montenegrin National Police and the Romanian Authorities. Assistant Attorney General Carlin and U.S. Attorney Bharara also thanked the Department of Justice’s Office of International Affairs.
This case is being prosecuted by Assistant U.S. Attorneys Andrea Surratt and Ilan Graff of the Southern District of New York, with assistance from Trial Attorney Josh Parecki of the National Security Division’s Counterterrorism Section.
International Arms Trafficker Found Guilty in Manhattan Federal Court for Conspiring to Kill Americans and Provide Material Support to A Foreign Terrorist OrganizationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and John P. Carlin, Assistant Attorney General for National Security, announced that VIRGIL FLAVIU GEORGESCU was convicted today by a jury of conspiring to sell large quantities of military-grade weaponry to the Fuerzas Armadas Revolucionarias de Colombia (the “FARC”) – a designated foreign terrorist organization – to be used to kill Americans in Colombia. GEORGESCU’s conviction followed a 10-day trial in Manhattan before U.S. District Judge Ronnie Abrams.
Manhattan U.S. Attorney Preet Bharara said: “As the jury swiftly found, Virgil Flaviu Georgescu conspired to kill American officers and provide material support to the FARC. In concert with his co-defendants, Georgescu conspired to obtain and sell to the FARC military weapons, including anti-aircraft cannons and rocket propelled grenades, to be used against American personnel and aircraft in Colombia. Having sought to profit from the murder of U.S. officers abroad, Georgescu has now been convicted in the U.S. by a unanimous jury.”
According to the allegations in the Indictment, other documents publicly filed in Manhattan federal court, and the evidence introduced at trial:
Between May 2014 and December 2014, GEORGESCU, a Romania-based weapons broker, conspired with his co-defendants, a former Romanian government official and a former member of the Italian Parliament, to sell an arsenal of weapons, including machine guns and anti-aircraft cannons, to the FARC, with the understanding that the FARC would use the weapons against United States personnel in Colombia. During a series of recorded telephone calls and in-person meetings, GEORGESCU and his co-conspirators agreed to sell the weapons to three confidential sources (the “CSs”), who represented that they were acquiring these weapons for the FARC but were, in fact, working with the Drug Enforcement Administration (“DEA”). GEORGESCU and his co-conspirators agreed to provide these weapons to the CSs with the specific understanding that the weapons would be used to kill Americans and, in particular, to shoot down American helicopters and airplanes.
GEORGESCU first spoke with a CS in May 2014. Thereafter, GEORGESCU recruited both of his co-conspirators to help obtain the weapons for the CSs, with the understanding that the former Romanian government official would provide weapons expertise and the former Italian member of Parliament would help secure fraudulent end-user certificates, in order to make the illegal sale of weapons look legitimate. GEORGESCU instructed his co-conspirators and others involved in the deal to use encrypted applications when communicating about the weapons deal to avoid detection by U.S. authorities.
Over the course of five consensually recorded meetings with the CSs in Romania and Montenegro, GEORGESCU and his co-conspirators provided the CSs with catalogues of weapons that included anti-aircraft cannons, rocket propelled and thermobaric grenades, and other high-powered weapons, as well as military-grade optical equipment. During these meetings, the CSs explained that the arms would be used to kill Americans and GEORGESCU offered his thoughts on what weapons would best suit the FARC’s needs.
Between September 2014 and December 2014, GEORGESCU and his co-conspirators traveled to Romania, Montenegro, Italy, Germany, Albania, Poland, and Bulgaria to advance the weapons deal. During this period, the co-conspirators met with weapons suppliers, obtained sample fraudulent end-user certificates, and test-fired military-grade rifles. In December 2014, GEORGESCU and his co-conspirators secured a signed contract from a European weapons supplier to provide more than $17 million dollars’ worth of weapons to a straw purchaser. On December 15, 2014, GEORGESCU met with the CSs, showed them the signed contract, and discussed means of payment and transportation of the weapons to Colombia.
GEORGESCU was arrested by Montenegrin authorities on the charges in the Indictment on December 15, 2014, and extradited to the United States on February 25, 2015.
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GEORGESCU, 43, of Romania, was convicted of one count of conspiracy to kill United States officers or employees, which carries a maximum sentence of life in prison, and one count of conspiracy to provide material support or resources to a designated foreign terrorist organization, which carries a maximum sentence of 15 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. GEORGESCU is scheduled to be sentenced by Judge Abrams on September 16, 2016, at 3:00 p.m.
Mr. Bharara praised the outstanding investigative efforts of the DEA’s Special Operations Division, the DEA’s Bucharest Country Office, the DEA’s Rome Country Office, the Montenegrin National Police, and the Romanian Authorities. Mr. Bharara also thanked the Counterterrorism Section of the Department of Justice’s National Security Division and the Department of Justice’s Office of International Affairs.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Andrea Surratt and Ilan Graff are in charge of the prosecution, with assistance from Trial Attorney Josh Parecki of the Counterterrorism Section.
5 Charged in National Counterfeit Perfume RingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Angel Melendez, Special Agent in Immigration and Customs Enforcement’s Homeland Security Investigation in New York (“HSI”), Robert E. Perez, Director of the U.S. Customs and Border Protection New York Field Office (“CBP”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced that PATRICK BADAL, KAIUM SHAH, KENNY NI, ABUL KASHEM, and PARVEZ SHAZZED were arrested today for participating in a scheme to distribute counterfeit name brand perfumes in New York and around the United States. The defendants were presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein.
According to the allegations in the Complaint unsealed today in Manhattan federal court[1]:
From December 2014 to May 2016, the defendants and others (collectively, the “Counterfeit Perfume Ring”) imported generic liquid fragrances from China, separately imported boxes and packaging bearing counterfeit trademarks from China, packaged the generic liquid fragrances into the branded and trademarked packaging, and then sold counterfeit perfumes to wholesalers in New York and at least six other states, including out of a store located in or around Lafayette Street in New York City.
Based on physical surveillance conducted by NYPD and HSI, the Counterfeit Perfume Ring used seven primary locations to receive, prepare, and distribute its products:
The Port. Inbound shipping containers arrived at the Port of Newark and were transported to a bonded warehouse in Elizabeth, New Jersey, (the “Port”) regulated by CBP.
The Temporary Warehouse. Once shipping containers had been released by CBP, members of the Counterfeit Perfume Ring arranged for the containers to be moved from the Port to a temporary warehouse located in Elizabeth, New Jersey (the “Temporary Warehouse”). The Temporary Warehouse was operated by a trucking company (the “Trucking Company”).
Packaging Facilities. From the Temporary Warehouse, the Trucking Company typically delivered the containers to premises in Queens, New York, for packaging (the “Packaging Facilities”).
The Storage Facility. The Counterfeit Perfume Ring then transferred the goods from the Packaging Facilities to a self-storage facility located in Queens, New York (the “Storage Facility”).
The Freight Forwarder. The Counterfeit Perfume Ring distributed certain of its goods to wholesalers located outside the New York City area. To accomplish this, the Counterfeit Perfume Ring used a freight forwarding service (the “Freight Forwarder”) to pick up pallets of goods from the Storage Facility. The Freight Forwarder, in turn, delivered parcels to out-of-state addresses. In addition to distributing its products out-of-state, the Counterfeit Perfume Ring distributed its products throughout New York City. SHAZZED operated one of these locations, a store located in or around Lafayette Street in New York City.
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BADAL, SHAH, NI, KASHEM, and SHAZZED are each charged with one count of conspiracy to traffic in counterfeit goods and one count of trafficking in counterfeit goods, each of which carries a maximum penalty of 10 years in prison. BADAL, SHAH, NI, and KASHEM are also each charged with one count of trafficking in counterfeit packaging, which carries a maximum penalty of five years in prison. BADAL and SHAH are also charged with smuggling goods into the United States, which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding work of HSI, CBP, and NYPD for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being overseen by the Office’s General Crimes Unit. Assistant U.S. Attorneys Andrew M. Thomas and Michael C. McGinnis are in charge of the case.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
New York Man Arrested for Attempting to Provide Material Support to ISILRead the Press Release
Sajmir Alimehmeti, aka Abdul Qawii, 22, of the Bronx, New York, was arrested today for attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, as well as for making a false statement in an application for a U.S. passport. Alimehmeti is expected to be presented later today before U.S. Magistrate Judge Gabriel W. Gorenstein of the Southern District of New York.
The arrest was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara of the Southern District of New York, Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department (NYPD).
“Alimehmeti was charged for his attempt to provide material support to ISIL by assisting a person who he believed was traveling to Syria to join ISIL,” said Assistant Attorney General Carlin. “The National Security Division will continue to work with our partners to identify, disrupt and hold accountable those who seek to provide material support to designated foreign terrorist organizations.”
“As alleged, Sajmir Alimehmeti, a Bronx man and an ISIL sympathizer, took steps to travel overseas to support ISIL’s terror campaign,” said U.S. Attorney Bharara. “As the complaint alleges, Alimehmeti also bought military-type weapons and helped someone he believed to be a fellow ISIL supporter get travel documents, equipment and encryption technology purportedly to get to Syria to fight with ISIL. Alimehmeti is charged today with actions that show a clear intention to support a terrorist organization that is hell-bent on murder and mayhem. For that, thanks to the incredibly dedicated work of the FBI-NYPD Joint Terrorism Task Force, Alimehmeti is under arrest and facing federal criminal charges.”
“The subject in this case was allegedly having a hard time getting overseas to fight with ISIL,” said Assistant Director in Charge Rodriguez. “But when he couldn’t leave, he allegedly seemed more than willing to help others tread the same path to join an insidious and deadly terrorist organization. Cases like this keep the FBI JTTF and our partners at the NYPD going day in and day out, protecting our city from individuals who plot to help murderers.”
“As alleged, Alimehmeti continued his quest to support ISIL’s deadly terrorist agenda, after being denied entry into Europe with a bag full of military gear,” said Commissioner Bratton. “When he returned home, to the Bronx, he allegedly turned to helping others join the terrorist organization as he built his own arsenal of weapons. Today’s case is the latest example of collaboration at its best, a case worked through the Joint Terrorism Task Force with undercover officers from the NYPD’s Intelligence Bureau.”
As alleged in the criminal complaint, unsealed today in federal court:
In October 2014, Alimehmeti attempted to enter the United Kingdom but was denied entry after U.K. authorities found camouflage clothing and nunchucks in his luggage. In December 2014, Alimehmeti was again denied entry into the United Kingdom, this time after U.K. authorities found that his cellphone contained images of ISIL flags and improvised explosive device attacks. Further forensic examination of images on the cellphone and Alimehmeti’s laptop computer showed numerous indications of Alimehmeti’s support for ISIL, including a picture of Alimehmeti with an ISIL flag in the background, pictures of ISIL fighters in the Middle East, a picture of Alimehmeti making a gesture of support for ISIL and numerous audio files relating to jihad and martyrdom.
After returning to the United States, Alimehmeti continued to express his support for -ISIL by displaying an ISIL flag in his apartment in the Bronx, among other things. In meetings with undercover law enforcement employees, Alimehmeti played multiple ISIL-related videos on his computer and his phone, including videos of ISIL decapitating prisoners.
Over the last 11 months, Alimehmeti made multiple purchases of military-style knives and other military-type equipment, including masks, handcuffs, a pocket chain-saw and steel-knuckled gloves.
In October 2015, Alimehmeti applied for a new U.S. passport, claiming his previous passport had been lost. However, Alimehmeti later told an undercover law enforcement employee that his prior passport had not been lost and, instead, that he was applying for a new passport because he believed rejection stamps on his old passport, including rejection stamps from his attempted entries into the United Kingdom, would make it difficult to travel.
In May 2016, Alimehmeti attempted to assist an individual who was purportedly traveling from New York to Syria to train and fight with ISIL but who was actually an undercover law enforcement employee (UC). On May 17, 2016, Alimehmeti met with the UC in Manhattan, New York, where the UC was purportedly en route to John F. Kennedy International Airport to take an overseas flight later that night in order to join ISIL.
Alimehmeti agreed to help the UC with several tasks before the UC went to the airport, including by locating stores so that the UC could purchase supplies to use while traveling to and fighting with ISIL, including a cellphone, boots, a compass, a bag and flashlight, among other items. Alimehmeti provided the UC with advice and suggestions on the best boots to purchase and on which items to purchase. The defendant also advised the UC on the use of different kinds of encrypted communications apps, including an app that Alimehmeti stated was currently being used by “the brothers,” and downloaded three encrypted communications apps onto the UC’s new cellphone.
Further, Alimehmeti assisted the UC in traveling from Manhattan to a hotel in Queens, New York, so that the UC could purportedly meet with an individual who was preparing travel documents that the UC would use to travel to Syria (document facilitator). Alimehmeti, who had repeatedly expressed his own desire to travel to join ISIL, gave the UC a piece of paper with his name and contact information so that the UC could provide that information to the supposed document facilitator. In voicing his interest in joining ISIL, Alimehmeti stated, excitedly, “I’m ready to . . . go with you man . . . you know I would. I’m done with this place.” After leaving the hotel in Queens, Alimehmeti brought the UC to Kennedy International Airport via public transportation.
The charges contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
If convicted, Alimehmeti faces a maximum sentence of 20 years in prison for providing material support and a maximum sentence of 10 years in prison for making a false statement in an application for a U.S. passport. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the outstanding efforts of the FBI’s New York Joint Terrorism Task Force. Assistant Attorney General Carlin and U.S. Attorney Bharara also thanked the Department of Justice’s Office of International Affairs and British authorities for their assistance.
The case is being prosecuted by Assistant U.S. Attorneys Brendan F. Quigley and Emil J. Bove III of the Southern District of New York with assistance from Trial Attorney Kiersten Korczynski of the National Security Division's Counterterrorism Section.
Alimehmeti Complaint
Bronx Man Charged in White Plains Federal Court with Discharging A Firearm While Robbing A Yonkers Bank in October 2013Read the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Charles Gardner, the Commissioner of the Yonkers Police Department, announced the unsealing of a Complaint charging GIOVANNY MARTE, a/k/a “Gio,” with robbing a Wells Fargo Bank branch in October 2013 and discharging a firearm in furtherance of the robbery. MARTE was arrested yesterday morning in the Bronx and was presented yesterday before U.S. Magistrate Judge Lisa Margaret Smith in White Plains federal court.
U.S. Attorney Preet Bharara stated: “As alleged, Giovanny Marte committed a dangerous, violent bank robbery in broad daylight. Together with his co-conspirators, he allegedly entered a Wells Fargo branch carrying a loaded firearm. Marte allegedly fired two shots during the robbery – and fortunately did not hit anyone – before making off with more than $300,000 in cash. This frightening crime occurred more than two years ago, but thanks to the tireless efforts of the FBI, the Yonkers Police Department, and the NYPD, this defendant will now be held to account in federal court.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “The subject in this case was so intent on allegedly getting his hands on money that wasn’t his that he put lives in danger. He’s accused of firing his weapon several times in his rush to get into the vault. No bag of cash is worth a life.”
Yonkers Police Commissioner Charles Gardner stated: “This case demonstrates that we will work with our federal and local partners to make sure those who choose to engage in violent crime in our city are held accountable. I would like to thank the F.B.I., the U.S. Attorney’s Office, and the N.Y.P.D. for their persistence in this lengthy investigation.”
According to the allegations in the Complaint[1]:
On or about October 29, 2013, at approximately 3:17 p.m., MARTE and three co-conspirators (“CC-2,” “CC-3,” and “CC-4”) approached a Wells Fargo Bank branch located at 500 Odell Avenue in Yonkers, New York (the “Wells Fargo Branch”). MARTE, CC-2, and CC-3 entered the bank, while CC-4 remained in their vehicle. The robbers all wore gloves and clothing hiding their faces. MARTE and CC-3 each brandished a handgun, and CC-2 brandished a wood saw. The robbers ordered everyone to the ground. MARTE climbed onto the teller counter and pointed his gun at one of the tellers. He then entered the vault room and demanded that the manager assist him in opening the vault. As the manager tried to open the vault, MARTE fired two shots. No one was hit. Ultimately, MARTE accessed the vault, filled a bag with approximately $303,500 in cash, and fled the Wells Fargo Branch with CC-2 and CC-3. The robbers re-entered their vehicle, and CC-4 drove them away.
* * *
The Complaint charges GIOVANNY MARTE, a/k/a “Gio,” age 25, of the Bronx, New York, with conspiring to rob the Wells Fargo Branch in or about October 2013, robbing the Wells Fargo Branch on or about October 29, 2013, and carrying and discharging a firearm in furtherance of a violent crime. The maximum and mandatory minimum sentences are as follows: a maximum of five years in prison on Count One (conspiracy); a maximum of 20 years in prison on Count Two (bank robbery); and a maximum of life in prison, with a mandatory minimum of 10 years in prison, on Count Three (firearm offense). The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI’s Westchester Violent Crimes Task Force, which comprises agents and detectives of the FBI, United States Probation, the City of Yonkers Police Department, the City of Peekskill Police Department, the New York City Police Department, the Westchester County Police, and the Westchester County District Attorney’s Office.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Douglas Zolkind is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Charged in Manhattan Federal Court with Attempting to Provide Material Support to IsilRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, John P. Carlin, Assistant Attorney General for National Security, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, the Commissioner of the Police Department for the City of New York (“NYPD”), announced that SAJMIR ALIMEHMETI, a/k/a “Abdul Qawii,” was arrested today in the Bronx, for attempting to provide material support to the Islamic State of Iraq and the Levant (“ISIL”), a designated foreign terrorist organization, as well as for making a false statement in an application for a United States passport. ALIMEHMETI is expected to be presented later today before U.S. Magistrate Judge Gabriel W. Gorenstein in Manhattan federal court.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Sajmir Alimehmeti, a Bronx man and an ISIL sympathizer, took steps to travel overseas to support ISIL’s terror campaign. As the Complaint alleges, Alimehmeti also bought military-type weapons and helped someone he believed to be a fellow ISIL supporter get travel documents, equipment, and encryption technology purportedly to get to Syria to fight with ISIL. Alimehmeti is charged today with actions that show a clear intention to support a terrorist organization that is hell-bent on murder and mayhem. For that, thanks to the incredibly dedicated work of the FBI-NYPD Joint Terrorism Task Force, Alimehmeti is under arrest and facing federal criminal charges.”
Assistant Attorney General John P. Carlin said: “Alimehmeti was charged for his attempt to provide material support to ISIL by assisting a person who he believed was traveling to Syria to join ISIL. The National Security Division will continue to work with our partners to identify, disrupt and hold accountable those who seek to provide material support to designated foreign terrorist organizations.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “The subject in this case was allegedly having a hard time getting overseas to fight with ISIL. But when he couldn’t leave, he allegedly seemed more than willing to help others tread the same path to join an insidious and deadly terrorist organization. Cases like this keep the FBI JTTF and our partners at the NYPD going day in and day out, protecting our city from individuals who plot to help murderers.”
NYPD Commissioner William Bratton said: “As alleged, Alimehmeti continued his quest to support ISIL’s deadly terrorist agenda, after being denied entry into Europe with a bag full of military gear. When he returned home, to the Bronx, he allegedly turned to helping others join the terrorist organization as he built his own arsenal of weapons. Today’s case is the latest example of collaboration at its best, a case worked through the Joint Terrorism Task Force with undercover officers from the NYPD’s Intelligence Bureau.”
As alleged in the criminal Complaint,[1] unsealed today in Manhattan federal court:
In October 2014, ALIMEHMETI attempted to enter the United Kingdom but was denied entry after U.K. authorities found camouflage clothing and nunchucks in his luggage. Two months later, in December 2014, ALIMEHMETI was again denied entry into the United Kingdom, this time after U.K. authorities found that his cellphone contained images of ISIL flags and improvised explosive device attacks. Further forensic examination of images of the cellphone and ALIMEHMETI’s laptop computer showed numerous indicia of ALIMEHMETI’s support for ISIL, including a picture of ALIMEHMETI with an ISIL flag in the background, pictures of ISIL fighters in the Middle East, a picture of ALIMEHMETI making a gesture of support for ISIL, and numerous audio files relating to jihad and martyrdom.
After returning to the United States, ALIMEHMETI continued to express his support for ISIL, by displaying an ISIL flag in his apartment in the Bronx, among other things. In meetings with undercover law enforcement employees, ALIMEHMETI played multiple ISIL videos on his computer and his phone, including videos of ISIL decapitating prisoners.
Further, over the last 11 months, ALIMEHMETI made multiple purchases of military-style knives and other military-type equipment, including masks, handcuffs, a pocket chain-saw, and steel-knuckled gloves.
In October 2015, ALIMEHMETI applied for a new United States passport, claiming his previous passport had been lost. However, ALIMEHMETI later told an undercover law enforcement employee that his prior passport had not been lost and, instead, that he was applying for a new passport because he believed rejection stamps on his old passport, including rejection stamps from his attempted entries into the United Kingdom, would make it difficult to travel.
In May 2016, ALIMEHMETI attempted to assist an individual who was purportedly traveling from New York to Syria to train and fight with ISIL but who was actually an undercover law enforcement employee (the “UC”). On May 17, 2016, ALIMEHMETI met with the UC in Manhattan, where the UC was purportedly en route to John F. Kennedy International Airport to take an overseas flight later that night in order to join ISIL.
ALIMEHMETI agreed to help the UC with several tasks before the UC went to the airport, including by locating stores so that the UC could purchase supplies to use while traveling to, and fighting with, ISIL, including a cellphone, boots, a compass, a bag, and flashlight, among other items. ALIMEHMETI provided the UC with advice and suggestions on the best boots to purchase and on which items to purchase. The defendant also advised the UC on the use of different kinds of encrypted communications applications, including an application that ALIMEHMETI stated was currently being used by “the brothers,” and downloaded three encrypted communications applications onto the UC’s new cellphone.
Further, ALIMEHMETI assisted the UC in traveling from Manhattan to a hotel in Queens, so that the UC could purportedly meet with an individual who was preparing travel documents that the UC would use to travel to Syria (“Document Facilitator”). ALIMEHMETI, who had repeatedly expressed his own desire to travel to join ISIL, gave the UC a piece of paper with his name and contact information so that the UC could provide that information to the supposed Document Facilitator. In voicing his interest in joining ISIL, ALIMEHMETI stated, excitedly, “I’m ready to . . . go with you man . . . you know I would. I’m done with this place.” After leaving the hotel in Queens, ALIMEHMETI brought the UC to John F. Kennedy International Airport via public transportation.
* * *
ALIMEHMETI, 22, of the Bronx, is charged with one count of provision of material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison, and one count of making a false statement in an application for a United States passport, which carries a maximum sentence of ten years’ imprisonment. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Bharara praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD, and the NYPD’s Intelligence Division. Mr. Bharara also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, the Department of Justice’s Office of International Affairs, and British authorities for their assistance.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Brendan F. Quigley and Emil J. Bove III are in charge of the prosecution, with assistance from Trial Attorney Kiersten Korczynski of the National Security Division's Counterterrorism Section.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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[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.
Yonkers Gang Leader Sentenced to 30 Years in Prison for Murder, Racketeering, and Narcotics CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DA’QUAN JOHNSON was sentenced on Friday, May 20, 2016, in White Plains federal court to a prison term of 30 years for crimes committed as part of a Yonkers-based street gang, the “Grimy Motherfuckers” (“GMF”), including the murder of Tyrone Arthur on December 27, 2013. JOHNSON pled guilty on January 7, 2016, to participating in the GMF racketeering conspiracy and to conspiring to murder rival gang members, resulting in the death of Arthur. JOHNSON pled guilty before U.S. District Judge Cathy Seibel, who imposed Friday’s sentence.
U.S. Attorney Preet Bharara stated: “Da’Quan Johnson was a leader of a violent, vicious street gang that terrorized the streets of southwest Yonkers with shootings, assaults, and drug dealing. On December 27, 2013, Johnson and his fellow gang members participated in a shooting that resulted in the senseless murder of an innocent man, Tyrone Arthur. Thanks to the hard work of the FBI and Yonkers Police Department, Johnson and the other members of GMF have been brought to justice.”
According to documents filed in this case and statements made in related court proceedings:
GMF, formed in or about 2008, was based in the Schlobohm Housing Project. GMF was initially aligned with the Strip Boyz, a different gang likewise based in the Schlobohm Housing Project. Up until late June and early July 2012, when 20 members of the Strip Boyz were arrested and charged with narcotics and firearms offenses, GMF and the Strip Boyz together controlled crack cocaine and marijuana distribution in and around the Schlobohm Housing Project, including an area of Palisade Avenue known as the “Strip.”
Following the 2012 arrests of the Strip Boyz, GMF members continued to engage in acts of violence and intimidation to preserve GMF’s dominance within the Schlobohm Housing Project and the surrounding areas. Members of GMF worked together to distribute narcotics, but above all, they were aligned in their disputes with rival gangs in southwest Yonkers. GMF members had disputes with gang members from various nearby neighborhoods, including Cottage Place Gardens, Warburton Avenue, Highland Avenue, and Riverdale Avenue. These disputes resulted in a number of violent incidents among the gangs, including assaults, stabbings, and shootings.
From approximately 2008 to 2014, GMF was engaged in a violent dispute with members of a rival gang from Highland Avenue known as “Highland.” This dispute resulted in a lethal cycle of shootings and acts of violence. The dispute culminated on the evening of December 27, 2013, when a shooting occurred in the vicinity of Palisade Avenue and Elm Street in Yonkers, which was territory controlled by GMF. After the shooting, members of GMF received information that members of Highland were responsible for the shooting. The same night, DA’QUAN JOHNSON obtained a loaded firearm and traveled with other GMF members to territory controlled by Highland with the intent of retaliating. A GMF member then shot into a crowd that had congregated for a candlelight vigil at the intersection of Highland Avenue and Jackson Street. One of the bullets hit Tyrone Arthur in the chest, killing him.
On July 16, 2014, a grand jury returned an indictment charging JOHNSON and two other defendants in connection with the murder of Tyrone Arthur. On December 10, 2014, a grand jury returned a superseding indictment charging thirteen members and associates of GMF – including the initial three – with the same offenses as the original indictment, as well as additional racketeering, narcotics, and firearms offenses. To date, all but one of the remaining defendants have pled guilty in satisfaction of the charges in the superseding indictment.
DA’QUAN JOHNSON, 25, of Yonkers, New York, was sentenced to 20 years in prison on the racketeering conspiracy and 10 years in prison on the murder conspiracy, to run consecutively, to be followed by three years of supervised release.
Mr. Bharara praised the outstanding investigative work of the FBI’s Westchester Violent Crimes Task Force, which comprises agents and detectives of the FBI, United States Probation, the City of Yonkers Police Department, the City of Peekskill Police Department, the New York City Police Department, the Westchester County Police, and the Westchester County District Attorney’s Office.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Scott Hartman and Douglas Zolkind are in charge of the prosecution.
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Manhattan Energy Investor Indicted in Tax Fraud Schemes Involving Evasion of over $45 Million of Income and Sales TaxesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Shantelle P. Kitchen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that MORRIS E. ZUKERMAN, a Manhattan businessman who owns companies involved in energy investments, was charged today in a three-count Indictment with engaging in multi-year tax fraud schemes pursuant to which he evaded over $45 million in income and other taxes. ZUKERMAN was presented earlier today in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein.
U.S. Attorney Preet Bharara said: “As alleged in the indictment, Morris Zukerman cheated on virtually all of his various tax obligations: he evaded tens of millions of dollars of corporate income taxes arising out of $130 million sale of an oil company; he prepared personal tax returns for himself and family members that claimed millions of false deductions; he evaded employment taxes based on personal employees; and he evaded New York sales and use taxes. To top it off, when the IRS auditors examined his returns, Zukerman allegedly schemed to defraud and obstruct the IRS auditors who were examining his false tax returns.”
IRS-CI Special Agent in Charge Shantelle P. Kitchen said: “There is simply no excuse for a financially successful individual, clearly with the resources to meet his tax obligations, to defraud the tax system and ultimately cheat hard working, law abiding taxpayers who strive to do what is right. As protectors of our nation’s tax system, IRS Criminal Investigation is committed to ensuring that everyone pays their fair share. We will use our financial investigative expertise to dissect and unravel complex tax fraud schemes, especially those specifically designed to obstruct the Internal Revenue Service from carrying out its mission to serve American taxpayers.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Honest taxpayers should be offended by the actions of Mr. Zukerman who devised a scheme to avoid paying his fair share of taxes. As citizens we have a legal obligation to pay taxes and when this doesn’t happen, law enforcement will be there to ensure these scofflaws are brought to justice.”
According to the Indictment[1] unsealed today in Manhattan federal court and other court filings related to this matter:
ZUKERMAN, the principal of M.E. Zukerman & Co. (“MEZCO”), an investment firm located in Manhattan, schemed to evade taxes based on income received from the January 2008 sale of a petroleum products company (the “Oil Company”) he co-owned (through a MEZCO subsidiary) with a public company. ZUKERMAN schemed to evade the reporting of the sale – which resulted in the receipt by the MEZCO subsidiary of $130 million in gross sales proceeds – by falsely telling his accountants in mid-2008 that he had transferred ownership of the MEZCO subsidiary to a family trust in early 2007. In support of the story he gave to the accountants, ZUKERMAN created backdated documents such as promissory notes and a board resolution purporting to show the transfer of the subsidiary to his family trust in 2007. The false documents allowed ZUKERMAN to remove the MEZCO subsidiary from the consolidated tax reporting being handled by the accountants for MEZCO and thereby evade the reporting to the IRS of the sale of the Oil Company, as well as the payment of over $35 million in corporate income taxes.
Following the sale of the Oil Company, ZUKERMAN transferred the proceeds of the sale from the MEZCO subsidiary to his family trust and various corporations he controlled, including a company called Zukerman Investments. Between 2008 and 2013, ZUKERMAN directed that over $50 million of the funds transferred to Zukerman Investments be used to purchase paintings by European artists from the 15th through the 19th centuries (the “Old Master paintings”), which ZUKERMAN used to decorate his Upper East Side apartment and the apartments of two family members – Family Member-1 and Family Member-2.
In connection with the purchase of the Old Master paintings, ZUKERMAN schemed to defraud New York State of over $4.5 million of sales and use taxes by directing that the paintings, which were frequently purchased from galleries located blocks from ZUKERMAN’s Manhattan residence, be shipped by the galleries to ZUKERMAN’s corporate addresses located in Delaware and New Jersey, and transported immediately thereafter (sometimes within minutes), by ZUKERMAN and others, back to ZUKERMAN’s residence in New York – all without the payment to New York State of sales or use taxes. ZUKERMAN further schemed to defraud New York State of sales and use taxes by using his corporate address in New Jersey to be falsely listed on a sales invoice for a $645,000 pair of diamond earrings he purchased in Europe from a jeweler who turned over possession of the earrings to a member of ZUKERMAN’s family in Manhattan but charged no sales tax, based on the out-of-state address provided by ZUKERMAN.
ZUKERMAN also schemed to evade personal income taxes and to obstruct the IRS by (i) causing various tax return preparers to prepare U.S. Individual Income Tax Returns, Forms 1040, for ZUKERMAN and his wife, and for Family Member-1, Family Member-2, and Family Member-3, that claimed, in the aggregate, millions of dollars of false and fraudulent deductions and expenses, such as phony charitable contributions and investment interest expenses; (ii) diverting, for personal use, corporate assets from MEZCO and other corporate entities ZUKERMAN controlled by directing that hundreds of thousands of dollars of fees be paid between 2007 and 2013 to Family Member-1, Family Member-2, and Family Member-3, for which the family members performed little or no work; (iii) directing that corporate funds be used to pay compensation to, and health care insurance for, a household employee of ZUKERMAN, whom ZUKERMAN also caused to be falsely identified as a MEZCO employee to ZUKERMAN’s corporate health care provider when, in truth and fact, the household employee worked exclusively out of ZUKERMAN’s homes in New York City and in Maine as a domestic employee; (iv) falsely under-reporting employment taxes through the payment of hundreds of thousands of dollars of cash and other wages to ZUKERMAN’s domestic employees; and (v) providing false information to the IRS during audits in an attempt to fraudulently convince IRS auditors and other IRS employees that the fraudulent claims made on his previously filed tax returns were accurate when, in truth, they were not.
The False Charitable Contribution Deductions for the 2009 & 2011 Tax Years
ZUKERMAN’s fraudulent charitable contribution deductions – totaling $1 million – arose out of a real estate transaction in 2009 and 2010, pursuant to which ZUKERMAN purchased approximately 240 acres of property on Black Island, a small island located off the coast of Maine, close to ZUKERMAN’s home on a nearby island. ZUKERMAN was enlisted to purchase the Black Island property by a Maine-based land conservation entity (“the Conservation Entity”) that was seeking to orchestrate the purchase, for conservation purposes. After considering making a charitable contribution to the Conservation Entity intended to be used to purchase the property, ZUKERMAN decided instead to purchase the land as the outright owner for the benefit of himself and his family for $1 million through a newly formed limited liability company he solely owned. ZUKERMAN, however, falsely told his tax return preparer that the $1 million he paid for the property should be declared on his personal income tax returns as a charitable contribution to the Conservation Entity during the 2008 and 2010 tax years. ZUKERMAN subsequently signed the false 2008 and 2010 tax returns and caused them to be filed with the IRS.
The False Investment Interest Expense Deductions Relating to the Corporate Loans
ZUKERMAN orchestrated the creation of hundreds of thousands of dollars of fraudulent “investment interest expense” deductions on his own tax returns and those of three family members. ZUKERMAN accomplished this by falsely telling his tax preparers that payments made from the personal bank accounts of ZUKERMAN and his family members to a California bank were made to legitimately satisfy loan interest payments owed by one of his California companies. In fact, although the interest payments were initially made from the bank accounts of ZUKERMAN and those of his family members (whose accounts ZUKERMAN controlled), ZUKERMAN secretly took funds from the bank account of the California corporation that owed the interest payments and reimbursed himself and his family members. In addition, because the corporation that owed the interest payments had claimed the interest indebtedness as an expense on its corporate tax returns, ZUKERMAN’s claiming of the same expenses on his own tax returns and those of his family members constituted fraudulent double deductions.
The Audit Fraud
In seeking to obstruct and defraud the IRS during an audit of one of ZUKERMAN’s companies, ZUKERMAN utilized two attorneys from a law firm in Washington, D.C., to convey a false factual narrative to an IRS Appeals officer, who was undertaking a review of ZUKERMAN’s challenge to an adverse determination made by an IRS auditor during the corporate audit. Pursuant to a “crime-fraud” ruling by the United States District Court for the Southern District of New York, and affirmed by the Second Circuit Court of Appeals, ZUKERMAN’s companies were required to disclose to the grand jury all of the communications between ZUKERMAN and the two attorneys that led to the submission to the IRS of the false factual narrative.
* * *
ZUKERMAN, 71, of New York, New York, is charged with: one count of tax evasion, which carries a maximum sentence of five years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of obstructing the IRS, which carries a maximum sentence of three years in prison. The three charges each also carry a maximum fine of $250,000, or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentences for the defendant will be determined by the judge.
ZUCKERMAN was released on a $2,500,000 secured bond. The case was assigned to United States District Judge Analisa Torres, and a conference is set for June 8, 2016, before Judge Torres.
Mr. Bharara praised the outstanding investigative work of the IRS and the U.S. Postal Inspection Service.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Stanley J. Okula and Edward Imperatore are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Canadian-Iranian Citizen Sentenced to Three Years in Prison for Conspiring to Violate Iran SanctionsRead the Press Release
Ali Reza Parsa, 45, a Canadian-Iranian dual citizen and resident of Canada, was sentenced to three years in prison for his participation in a conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR).
The sentence was announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York.
“Over the course of six years, Parsa repeatedly violated export control laws and aided Iranian entities in procuring high-tech electronic components that have both commercial and military uses,” said Assistant Attorney General Carlin. “With this sentence, he will be held accountable for circumventing important U.S. laws designed to protect our national security interests. One of our top national security priorities remains safeguarding our national assets from those who may wish to do us harm.”
“As he admitted in court, Ali Reza Parsa conspired to purchase high-tech electronic components – some used in the production of rockets and missiles – from American companies for eventual delivery to Iran through Canada,” said U.S. Attorney Bharara. “He has now been sentenced to three years in prison for his violation of federal law.”
Parsa was arrested in October 2014 following an investigation by the FBI and U.S. Department of Commerce’s Bureau of Industry and Security (BIS). He pleaded guilty on Jan. 20, 2016, before U.S. District Judge Ronnie Abrams of the Southern District of New York, who also imposed Friday’s sentence.
According to the indictment filed against Parsa and other court documents publicly filed in this case and statements made in court proceedings, including at Friday’s sentencing hearing:
Between approximately 2009 and 2015, Parsa conspired to obtain high-tech electronic components from American companies for transshipment to Iran and other countries for clients of Parsa’s procurement company in Iran, Tavan Payesh Mad, in violation of U.S. economic sanctions. To accomplish this, Parsa used his Canadian company, Metal PM, to place orders with U.S. suppliers and typically had the parts shipped to him in Canada or to a freight forwarder located in the United Arab Emirates, and then shipped from these locations to Iran or to the location of his Iranian company’s client. Parsa provided the U.S. companies with false destination and end-user information about the components in order to conceal the illegality of these transactions.
Parsa’s criminal scheme targeted numerous American technology companies. The components that Parsa attempted to procure included cryogenic accelerometers, which are sensitive components that measure acceleration at very low temperatures. Cryogenic accelerators have both commercial and military uses, including in applications related to ballistic missile propellants and in aerospace components such as liquid-fuel rocket engines.
In addition, following his arrest and while incarcerated, Parsa continued to violate the IEEPA and the ITSR by conducting business for Metal PM and Tavan Payesh Mad, including by ordering parts from German and Brazilian companies for Iranian customers. Parsa subsequently directed a relative to delete email evidence of his ongoing business transactions while in jail and emphasized the need for secrecy in their dealings.
Neither Parsa nor any other individual or entity involved in transactions that gave rise to his conviction applied for or obtained a license from the U.S. Department of the Treasury’s Office of Foreign Assets Control for the transactions.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the outstanding investigative work of the FBI and BIS.
This case was prosecuted by Assistant U.S. Attorneys Michael D. Lockard and Anna Skotko of the Southern District of New York, with assistance provided by Trial Attorney Mariclaire Rourke of the National Security Division’s Counterintelligence and Export Control Section.
Canadian-Iranian Citizen Sentenced in Manhattan Federal Court to Three Years in Prison for Conspiring to Violate Iran SanctionsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and John P. Carlin, Assistant Attorney General for National Security, announced that ALI REZA PARSA, a Canadian-Iranian dual citizen and resident of Canada, was sentenced on Friday, May 20, 2016, to three years in prison for his participation in a conspiracy to violate the International Emergency Economic Powers Act (“IEEPA”) and the Iranian Transactions and Sanctions Regulations (“ITSR”). PARSA was arrested in October 2014 following an investigation by the Federal Bureau of Investigation (“FBI”) and United States Department of Commerce, Bureau of Industry and Security (“BIS”). PARSA pled guilty on January 20, 2016, before U.S. District Judge Ronnie Abrams, who imposed Friday’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “As he admitted in court, Ali Reza Parsa conspired to purchase high-tech electronic components – some used in the production of rockets and missiles – from American companies for eventual delivery to Iran through Canada. He has now been sentenced to three years in prison for his violation of federal law.”
Assistant Attorney General John P. Carlin said: “Over the course of six years, Parsa repeatedly violated export control laws and aided Iranian entities in procuring high-tech electronic components that have both commercial and military uses. With this sentence, he will be held accountable for circumventing important U.S. laws designed to protect our national security interests. One of our top national security priorities remains safeguarding our national assets from those who may wish to do us harm.”
According to the Indictment filed against PARSA and other court documents publicly filed in this case and statements made in court proceedings, including Friday’s sentencing:
Between approximately 2009 and 2015, PARSA conspired to obtain high-tech electronic components from American companies for transshipment to Iran and other countries for clients of PARSA’s procurement company in Iran, Tavan Payesh Mad, in violation of U.S. economic sanctions. To accomplish this, PARSA used his Canadian company, Metal PM, to place orders with U.S. suppliers and typically had the parts shipped to him in Canada or to a freight forwarder located in the United Arab Emirates, and then transshipped from these locations to Iran or to the location of his Iranian company’s client. PARSA provided the U.S. companies with false destination and end-user information about the components in order to conceal the illegality of these transactions.
PARSA’s criminal scheme targeted numerous American technology companies. The components that PARSA attempted to procure included cryogenic accelerometers, which are sensitive components that measure acceleration at very low temperatures. Cryogenic accelerators have both commercial and military uses, including in applications related to ballistic missile propellants and in aerospace components such as liquid-fuel rocket engines.
In addition, following his arrest and while incarcerated at the Metropolitan Detention Center, PARSA continued to violate the IEEPA and the ITSR by conducting business for Metal PM and Tavan Payesh Mad, including by ordering parts from German and Brazilian companies for Iranian customers. PARSA subsequently directed a relative to delete email evidence of his ongoing business transactions while in jail, emphasizing the need for secrecy in their dealings.
Neither PARSA nor any other individual or entity involved in transactions that gave rise to his conviction applied for or obtained a license from the U.S. Department of the Treasury’s Office of Foreign Assets Control for the transactions.
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In addition to the 36-month prison term, PARSA, 45, was ordered to pay a $100 special assessment.
Mr. Bharara praised the outstanding investigative work of the FBI and BIS. He also thanked the U.S. Department of Justice’s National Security Division’s Counterintelligence and Export Control Section.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael D. Lockard and Anna Skotko are in charge of the prosecution.
Private Violin Teacher Charged in White Plains Federal Court with Transporting, Receiving, and Possessing Child PornographyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Angel M. Melendez, the Special Agent-in-Charge of the New York Office of the United States Immigration and Customs Enforcement (“ICE”), Homeland Security Investigations (“HSI”), announced today the voluntary surrender of NICHOLAS SZUCS for transporting, receiving, and possessing child pornography. SZUCS, a private violin teacher, surrendered today at the White Plains federal courthouse and was presented before United States Magistrate Judge Judith C. McCarthy.
Manhattan U.S. Attorney Preet Bharara stated: “The allegations in this case are particularly disturbing and sad. A private violin teacher, who works with children, stands accused of allegedly victimizing children. Thanks to the efforts of the Westchester County District Attorney’s Office and Homeland Security Investigations, SZUCS’s alleged illicit conduct was brought to light, and he will now have to answer to these serious charges.”
HSI Special Agent-in-Charge Angel M. Melendez stated: “This music teacher allegedly violated his position of trust and robbed the victims of their innocence. HSI agents will continue to police the cyber space to investigate and bring to justice those individuals who exploit the most vulnerable segment of our society- our children.”
As alleged in the criminal Complaint unsealed today in White Plains federal court[1]:
From at least 2012 to 2015, SZUCS possessed, transported, and received images and videos containing child pornography. According to the Complaint, SZUCS used a peer to peer file sharing network to download child pornography. Searches of an external hard drive and a laptop belonging to SZUCS revealed hundreds of images and videos of child pornography. SZUCS also attempted to have the laptop destroyed before law enforcement could seize it.
SZUCS is charged with one count each of transporting and of receiving child pornography, each of which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, and one count of possessing child pornography, which carries a maximum sentence of 10 years in prison. Each of the three counts also carries a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of Homeland Security Investigations. He also thanked the Westchester County District Attorney’s Office, including their High Tech Squad, for their assistance in the investigation.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE. Investigators staff this hotline around the clock. Suspected child sexual exploitation or missing children may also be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com.
The case is being handled by the Office’s White Plains Division. Assistant United States Attorney Jennifer Beidel 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.
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[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Former Senior Executive from Universal Forest Products Robert Lees Found Guilty by White Plains Federal Jury for Fraudulent Kickback SchemeRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced today that ROBERT LEES, a former senior executive of Universal Forest Products, Inc. (“UFP”) was convicted a jury of conspiracy, mail fraud, money laundering and making false statements in a loan application following a seven-day trial in White Plains before United States District Judge Kenneth M. Karas.
Manhattan U.S. Attorney Preet Bharara said: “Today, a jury unanimously found that Robert Lees, a senior executive at Universal Forest Products, participated in a kickback scheme that defrauded both HUD and a mortgage lender. This verdict should serve as a warning to other corporate executives tempted by fraud.”
The evidence at trial proved that, in or about 2009, Michael Barnett, a real-estate developer, hired JK Scanlan Company, Inc. (“Scanlan”) to be the general contractor on Vineyard Commons, a senior housing community in Ulster County. In or about 2009, Scanlan entered into falsely inflated contracts with Shawnlee Construction, LLC (“Shawnlee”), a subsidiary of UFP for which LEES had responsibility, to be the subcontractor on Vineyard Commons responsible for framing and rough carpentry.
In or about 2009, a private lender (the “Mortgagor”), agreed to provide financing to Vineyard Commons, which financing would be insured by HUD. The Mortgagor and the borrower agreed that the proceeds would be disbursed incrementally after the borrower submitted draw requests based upon its completion of phases of the project.
On or about January 19, 2009, Shawnlee provided Scanlan a final bid to supply labor and materials for Vineyard Commons. In or about March and April 2009, representatives of UFP – including LEES – Shawnlee, and Scanlan entered into an agreement by which UFP and Shawnlee agreed to provide labor and materials in an amount approximately $865,000 greater than the final bid. LEES and others intended for the approximately $865,000 difference between the final bid and the inflated contract price to be returned to Barnett as a kickback, and further intended that the Mortgagor would unwittingly finance the kickback by disbursing HUD-insured funds on the basis of inflated draw requests.
In or about early 2009, Scanlan’s owner agreed to provide Barnett and Vineyard Commons with a million-dollar loan. In order to obtain this loan, Barnett informally pledged the anticipated $865,000 kickback to Scanlan’s owner as collateral.
In or about June 2009, Barnett needed additional funds in order to secure HUD-insured financing from the Mortgagor. UFP provided a $650,000 letter of credit to the Mortgagor. Barnett informally pledged the anticipated approximately $865,000 kickback to UFP as collateral, even though it was already pledged to Scanlan’s owner.
On or about July 2, 2009, Barnett and others provided HUD with a written estimate of the cost of Shawnlee’s work (the “Final Framing Price”) that exceeded Shawnlee and UFP’s actual price for labor and materials by approximately $865,000.
Beginning in or about July 2009, and continuing until in or about January 2012, Barnett and Scanlan submitted contractor’s requisitions (the “Contractor Requisitions”) on forms provided by HUD to the Mortgagor, which the Mortgagor then sent to HUD. These Contractor Requisitions included a certification by a representative of Scanlan that “all the information stated herein, as well as any information provided in the accompaniment herewith, is true and accurate.” Each of these forms set forth the Final Framing Price as the actual cost of rough carpentry. Each month, the Mortgagor disbursed HUD-insured funds on the basis of the Contractor Requisitions. UFP set aside the “extra” from the Shawnlee/Scanlan contract in an accrual account falsely labeled as a rebate accrual.
In or about January 2010, LEES agreed with Barnett to pay Scanlan’s owner $200,000, which payment they understood would be guaranteed by part of Barnett’s interest in the approximately $865,000 difference between the contract price and the actual price for labor and materials provided by Shawnlee and UFP. Barnett sought this payment, and LEES agreed to make this payment, as a partial payment of Barnett’s obligation to Scanlan’s owner. LEES arranged for UFP to send a $200,000 check to a company controlled by Barnett that was not involved in the development of Vineyard Commons – which would then pass the money on to Scanlan’s owner. On or about January 15, 2010, UFP issued a check for $200,000 to Barnett’s company and mailed it from Michigan to Barnett in Dutchess County, New York.
On or about January 20, 2010, Barnett sent to Scanlan’s owner in Massachusetts a $200,000 check that he drew on the account into which Barnett had deposited the check he received from UFP.
Later in 2010, Barnett sought a five-million-dollar loan from UFP. Among other incentives, Barnett offered to surrender the remainder of his kickback to UFP, allowing UFP to take that money into its own profit. With LEES’s encouragement, UFP issued the loan to Barnett.
The developer of Vineyard Commons defaulted on the loan after the project failed. HUD assumed the loan and sold the project, losing $28 million.
LEES, 62, of Lititz, Pennsylvania, is scheduled to be sentenced by Judge Karas on November 4, 2016. LEES faces a maximum sentence of five years in prison on the conspiracy count, 20 years in prison on the mail fraud count, 30 years in prison for making false statements in a loan application, and 10 years in prison on the money laundering count. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes, as any sentencing of the defendant will be determined by the judge.
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Mr. Bharara praised the investigative work of the HUD-OIG.
The prosecution is being handled by the Office's White Plains Division. Assistant U.S. Attorneys Michael D. Maimin and Won S. Shin are in charge of the prosecution.
William T. “Billy” Walters Charged in Manhattan Federal Court with Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the arrest of WILLIAM T. WALTERS, a/k/a “Billy,” on charges of participating in a scheme, from in or about 2008 through in or about 2014, to commit insider trading principally relating to securities of Dean Foods Company (“Dean Foods” or the “Company”). In addition, Mr. Bharara announced the unsealing of charges against THOMAS C. DAVIS, who pled guilty and admitted to his participation in the scheme earlier this week. On a number of occasions beginning in 2008, DAVIS, who routinely possessed material, nonpublic information through his service on the Dean Foods’ Board of Directors, betrayed his duty of confidentiality to the Company by providing this information to WALTERS before it was publicly announced. As alleged in the charging documents, WALTERS, in turn, used the confidential information to execute profitable trades in Dean Foods that netted him realized and unrealized gains and avoided losses of more than $40 million. In exchange, WALTERS provided DAVIS with substantial pecuniary benefits, including, among other things, capital for joint business ventures and two loans of nearly $1 million that DAVIS largely did not repay.
WALTERS, who is charged with conspiracy, securities fraud, and wire fraud, was arrested yesterday in Las Vegas, Nevada, and will be presented later today before a United States Magistrate Judge in the District of Nevada. His case is before United States District Judge P. Kevin Castel in the Southern District of New York. On Monday, DAVIS pled guilty before Judge Castel to conspiracy, securities fraud, wire fraud, obstruction of justice, and perjury.
In a separate action, the Securities and Exchange Commission (“SEC”) filed civil charges against WALTERS and DAVIS.
U.S. Attorney Preet Bharara said: “Tom Davis has admitted that, over five years as a Dean Foods board member, he repeatedly and systematically fed material nonpublic information about the company to Billy Walters, who we allege benefited handsomely by trading on that information. With a direct channel into Dean Foods’ boardroom, Walters allegedly traded in advance of good news and bad news alike. As alleged, it was all good news for Walters, because he had the information before everyone else – he had tomorrow’s headlines today. Brazen insider trading continues to be a blot on our securities markets, and so the integrity of our markets continues to be a priority for this office. When the board member of a Fortune 500 company feeds inside information to a professional gambler who makes a fortune on well-timed trades in that company’s stock, that is a form of corruption – the corruption of our markets. And we don’t let corruption stand. We intend to prove every one of these allegations in a court of law.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Trading on inside information for personal gain causes untold devastation in the stock and commodities markets. This kind of criminal behavior keeps wealth concentrated among the powerful, prevents everyday investors from turning a profit, and undermines public confidence in the integrity of the marketplace. The FBI and our federal partners will continue to work to protect Americans from the devastating consequences of these deceptive practices.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “These individuals were more concerned with their ‘high-roller’ image and the continuation of their lavish lifestyles than they were with adhering to fair and equitable investment regulations. This arrest should send a message to all that no matter how much money you accrue, no one is above the law and all will be prosecuted equally for their illegal investment practices.”
According to the allegations in the charging documents unsealed today in Manhattan federal court, including the Indictment,[1] and statements made in court proceedings:
From in or about 2008 through in or about 2014, WALTERS and DAVIS, among others, participated in a scheme to commit insider trading principally related to securities of Dean Foods, a Fortune 500 company that is the largest processor and distributor of fresh milk in the United States. From in or about 2001 until on or about August 7, 2015, DAVIS served as a member of the Board of Directors of Dean Foods (the “Board”), in which role he regularly possessed material, nonpublic information about Dean Foods, including about the Company’s financial performance and results, including quarterly earnings results; contemplated and actual corporate transactions; and other significant corporate and strategic developments (the “Inside Information”). In furtherance of the scheme, DAVIS violated his duties of trust and confidence to Dean Foods by providing Inside Information to WALTERS in advance of public announcements. WALTERS, knowing that DAVIS owed duties of trust and confidence to the Company, used the Inside Information to execute profitable trades in Dean Foods stock. In total, WALTERS’s trading on the basis of Inside Information netted realized and unrealized profits of approximately $32 million and avoided additional losses of approximately $11 million. In return for DAVIS providing the Inside Information to WALTERS, WALTERS, among other things, provided capital to DAVIS for joint business ventures and made two loans to DAVIS for approximately $1 million in total, which DAVIS largely did not repay.
In furtherance of the scheme, and to avoid detection by law enforcement, WALTERS provided DAVIS with a prepaid cellular phone to use when passing Inside Information to WALTERS. Moreover, WALTERS further instructed DAVIS to use code words when discussing the Inside Information, including by referring to Dean Foods as the “Dallas Cowboys.”
Specific Examples of WALTERS’s Insider Trading in Dean Foods
On June 25, 2008, in an unanticipated announcement near the end of the second quarter, Dean Foods informed the public that it had revised upwards its earnings guidance for that quarter. From June 19 to June 23, 2008, WALTERS purchased nearly four million shares of Dean Foods – which constituted between 29 and 37 percent of the daily trading volume of Dean Foods stock on those days – on the basis of tips provided to WALTERS by DAVIS about the second-quarter financial performance. As a result of trading on the Inside Information provided by DAVIS, WALTERS earned realized and unrealized profits of approximately $6 million.
On or about Friday, April 9, 2010, WALTERS and DAVIS met in Las Vegas, Nevada. During that meeting, WALTERS agreed to provide DAVIS with a loan of $625,000, and DAVIS provided Inside Information to WALTERS about Dean Foods’ recent engagement of investment bankers to investigate strategic possibilities related to the separation of WhiteWave-Alpro (the “WhiteWave Spinoff”), a segment of Dean Foods that produced and distributed organic and other branded food and beverage products. On Monday, April 12, 2010, the next trading day, and up through April 15, WALTERS purchased approximately 1.5 million shares of Dean Foods. Less than three weeks later, DAVIS tipped WALTERS about Dean Foods’ forthcoming first-quarter earnings announcement, which DAVIS knew did not meet Wall Street’s expectations. On the following two days, Monday, May 3, and Tuesday, May 4, WALTERS sold the approximately 1.5 million shares of Dean Foods he had purchased in April, which sales constituted 29 and 16 percent, respectively, of the daily trading volume for those days. On May 10, 2010, Dean Foods publicly announced its poor earnings results for the first quarter of 2010 and suspended full-year guidance, which caused the stock to decrease by approximately 28 percent that day. As a result of his timely sales of Dean Foods stock the prior week, WALTERS avoided losses of $7.3 million. Moreover, beginning on May 10, 2010, and continuing through May 14, 2010, WALTERS purchased approximately 1.5 million shares of Dean Foods stock, thereby re-establishing his previous position in the stock at a reduction in cost of $9.5 million.
In addition, on or about May 8, 2012, DAVIS provided Inside Information to WALTERS about Dean Foods’ positive first-quarter earnings and its intention to pursue the WhiteWave Spinoff, on the basis of which WALTERS purchased 1.2 million shares of Dean Foods on May 8 and 9, 2012. On May 9, 2012, Dean Foods announced its earnings results for the first quarter of 2012, which were positive, and that the Company was “mindful of the opportunity . . . to perhaps accrete value for our shareholder.” After this announcement, Dean Foods stock rose by approximately 10 percent. In the ensuing months, DAVIS repeatedly provided WALTERS with additional Inside Information about the WhiteWave Spinoff, including the expected timing of the Spinoff announcement on August 7, 2012. From July 13 through July 31, 2012, WALTERS purchased an additional 2.8 million shares of Dean Foods to raise his total position to 4 million shares.
On August 7, 2012, Dean Foods announced and that it intended to spin off WhiteWave through an initial public offering (“IPO”), and that the Company would maintain ownership over more than 80 percent of WhiteWave stock following the IPO. On August 8, 2012, the day after the announcement, Dean Foods’ stock price increased by approximately 40 percent, netting WALTERS unrealized profits of approximately $17.1 million on his 4 million shares of Dean Foods stock.
After the announcement of the WhiteWave Spinoff, DAVIS continued to provide WALTERS with Inside Information about the forthcoming WhiteWave IPO. By October 25, 2012, the day the IPO was priced above expectations at $17 per share, WALTERS had increased his position in Dean Foods stock to more than 5.3 million shares, which were worth approximately $100 million. By the end of August 2013, after WALTERS received shares of WhiteWave stock in a dividend made to Dean Foods shareholders in May 2013, WALTERS had sold all of his securities in Dean Foods and WhiteWave for gross proceeds of approximately $110 million.
WALTERS’s Insider Trading in Darden Restaurants, Inc.
In or about August 2013, DAVIS received, pursuant to a non-disclosure agreement, a confidential investment plan (the “Investment Plan”) from an investment firm in New York, New York (“Investment Firm A”) related to Darden Restaurants, Inc. (“Darden”), a holding company that owned a number of restaurants. The Investment Plan outlined Investment Firm A’s desire to separate one or more of Darden’s restaurant businesses to unlock additional value in the stock (the “Darden Inside Information”). DAVIS provided this information to WALTERS, who, on August 20 and 21, 2012, purchased 625,000 shares of Darden worth approximately $30 million.
On October 9, 2013, a national newspaper published an article about a significant investment in Darden by Investment Firm A, among others, with the intent to separate Darden into two companies. At the end of the trading day, Darden’s stock price had increased from $46.28 per share to $49.57, resulting in unrealized profits for WALTERS of approximately $1 million.
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WALTERS, 69, is charged with one count of conspiracy to commit securities fraud, four counts of securities fraud, one count of conspiracy to commit wire fraud, and four counts of wire fraud. Count One carries a maximum sentence of five years in prison. Counts Two through Ten each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
On May 16, 2016, DAVIS, 67, pled guilty before Judge Castel to one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, four counts of securities fraud, four counts of wire fraud, one count of obstruction of justice, and one count of perjury. Counts One and Twelve each carry a maximum sentence of five years in prison. Counts Two through Eleven each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentences for the defendants will be determined by the judge.
Mr. Bharara praised the work of the FBI and the Postal Inspection Service, and thanked the SEC and the Financial Industry Regulatory Authority (“FINRA”) for their assistance. He also thanked the Las Vegas offices of the FBI and the Internal Revenue Service, Criminal Investigation Division.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brooke E. Cucinella and Daniel S. Goldman are in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Westchester Neurologist Pleads Guilty in Manhattan Federal Court to Tax Fraud ViolationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Shantelle P. Kitchen, Special Agent in Charge of the New York Office of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), announced that DAVID S. YOUNGER, a neurologist with a private medical practice in Manhattan, pled guilty today in Manhattan federal court to one count of tax fraud for falsely classifying personal expenses as business expenses attributable to his medical professional corporation. In total, in 2007 and 2008, YOUNGER falsely classified over $580,000 in expenses. YOUNGER pled guilty before U.S. District Judge Jed S. Rakoff.
According to the Information and statements made at today’s plea proceeding:
YOUNGER, a resident of Westchester County, is a board-certified neurologist engaged in private medical practice in Manhattan through the David S. Younger M.D., P.C., professional corporation (the “Younger P.C.”). In 2007 and 2008, Younger filed both personal tax returns on behalf of himself and his wife, and corporate tax returns on behalf of the Younger P.C. In 2007, YOUNGER used approximately $250,000 of corporate funds to pay personal expenses, and in 2008, YOUNGER used approximately $335,000 of corporate funds to pay personal expenses. YOUGNER caused all of these expenses falsely to be recorded as business expenses such as medical supplies, office expenses, and professional fees in the books and records of the Younger P.C. YOUNGER caused these expenses falsely to be deducted from income on tax returns of the Younger P.C., and YOUNGER also fraudulently omitted these personal expenses as income on his personal tax returns.
Among the personal expenses that YOUNGER falsely categorized as business expenses and deducted on his corporate tax returns in 2007 and 2008 are the following: approximately $100,000 in fees to a private golf and country club, approximately $53,000 in property taxes for YOUNGER’s residence, a $4,300 placement fee for a nanny/housekeeper, approximately $17,000 for the construction of an electric gate at YOUNGER’s residence, $345 for a Mickey Mantle baseball card, approximately $26,000 for the restoration of a piano that was picked up from and delivered to YOUNGER’s residence, approximately $37,000 for a vendor to perform construction work at YOUNGER’s residence, approximately $18,000 for furniture delivered to YOUNGER’s residence, and at least approximately $20,000 of airfare for members of YOUNGER’s family.
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YOUNGER, 61, of Scarsdale, New York, faces a maximum sentence of three years in prison. As part of his plea agreement, YOUNGER is also required to pay restitution to the IRS. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. YOUNGER is scheduled to be sentenced by Judge Rakoff on September 19, 2016, at 4:00 p.m.
Mr. Bharara praised the work of the Internal Revenue Service, Criminal Investigation.
This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Richard Cooper is in charge of the prosecution.
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Former Corporate Lawyer Sentenced in Manhattan Federal Court to Five Years in Prison in Connection with Multimillion-Dollar Ponzi SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that CHARLES A. BENNETT was sentenced today in Manhattan federal court to five years in prison for securities and wire fraud charges stemming from his scheme to defraud over 30 investors of more than $5 million through a Ponzi scheme that he perpetrated for more than five years. Among other false and misleading statements, BENNETT lied to investors by claiming to have exclusive access to a highly successful privately held investment fund in which he would purportedly invest the investors’ money. BENNETT solicited millions of dollars from over 30 investors, including his close friends and family members, but never actually invested any of the money in the investment fund or any other investment vehicle. Instead, BENNETT used the investors’ money for his own personal benefit and to pay back other investors. BENNETT pled guilty on October 28, 2015, to one count of securities fraud and one count of wire fraud before United States District Judge Laura Taylor Swain, who imposed today’s sentence.
U.S. Attorney Preet Bharara said: “Charles Bennett lied to dozens of investors, including family and friends, to solicit millions of dollars for a purported investment vehicle. Then, rather than invest their money as he said he would, he spent most of it on himself. Today, he received a sentence reflecting the seriousness of his crimes.”
According to the Complaint, the Indictment, and other statements made in open court:
From 2008 through November 2014, BENNETT, a former corporate lawyer at a law firm based in New York City, engaged in a multimillion-dollar Ponzi scheme, during which he solicited money from investors based on materially false and misleading representations. Specifically, BENNETT told the investors that he himself had invested money in a highly successful privately held investment fund, and that, should they choose to invest, the investors’ money would be held in BENNETT’s account. BENNETT communicated by email and telephone with many of the investors in order to tell them about the purported status of their investments, including their purported returns. BENNETT also led most of the investors to believe that they were the only individuals to whom he had extended the offer to invest with him.
BENNETT created false and misleading paperwork in furtherance of the scheme, including “promissory notes” that he provided to the investors as a record of the amounts of money they had given to BENNETT to invest. BENNETT also provided certain investors with account statements that purported to show the amount that BENNETT (and the investors, through BENNETT) had invested. In fact, BENNETT never invested any of the investors’ money in the investment fund or in any other investment vehicle, but instead spent the money on his own personal expenses and to repay other investors.
During the course of the fraudulent scheme, BENNETT solicited more than $5 million from more than 30 investors.
* * *
In addition to the five-year prison sentence, BENNETT, 58, formerly of Manhattan, was sentenced to three years of supervised release. The Court further ordered BENNETT to forfeit the proceeds of the scheme and to pay restitution in amount to be determined.
Mr. Bharara praised the work of the Federal Bureau of Investigation.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Amy Lester is in charge of the prosecution.
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Bronx Man Charged in Manhattan Federal Court with 2013 Home-Invasion Robbery and MurderRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced the return of a Superseding Indictment charging TERRILL STATON with the October 29, 2013, home-invasion robbery and murder of Erwin Elliot, 44, in the Bronx, New York.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, the defendant went into Erwin Elliot’s home with a gun, robbed him, and murdered him. Thanks to the dogged efforts of the FBI and the NYPD, the defendant is now being held accountable for his alleged brutal crimes.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “Today, Terrill Staton faces justice for his alleged role in the brutal home-invasion robbery and murder of a Bronx resident. The FBI would like to thank our law enforcement partners for their assistance with this case.”
NYPD Commissioner William Bratton said: “I want to commend the NYPD detectives and our law enforcement partners who were integral to this indictment, which we hope will offer some consolation to the family who lost their loved one to this violent act.”
As alleged in the Superseding Indictment,[1] on October 29, 2013, STATON carried out a home-invasion robbery of Erwin Elliot, a marijuana dealer, at 642 East 221st Street in the Bronx. In the course of the robbery, STATON shot and killed Elliot.
* * *
STATON was already in federal custody, and will be arraigned on the Superseding Indictment before U.S. District Judge Naomi Reice Buchwald at a date to be determined.
A chart containing the charges and maximum penalties is below. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI and the NYPD. Mr. Bharara also thanked the Bronx District Attorney’s Office for its assistance in the case.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Hadassa Waxman and Michael Gerber 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.
CHARGE
MAXIMUM PENALTY
Robbery conspiracy
20 years in prison
Robbery
20 years in prison
Murder
Life in prison
Mandatory minimum:
5 years in prison, to be imposed consecutively to any other sentence
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Twenty-One Defendants Charged in White Plains Federal Court with Committing Narcotics and Firearms Offenses in Sullivan CountyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James R. Farrell, the Sullivan County District Attorney, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), Joseph A. D’Amico, the Superintendent of the New York State Police (“NYSP”), Michael A. Schiff, the Sullivan County Sheriff, Scott Kinne, the Chief of the Village of Liberty Police, and Robert Mir, the Chief of the Village of Monticello Police Department, today announced the unsealing of an Indictment charging a total of 21 defendants with committing various narcotics and firearms offenses in the Village of Liberty, Sullivan County, New York.
Manhattan U.S. Attorney Preet Bharara stated: “Drugs destroy lives, rip apart families, and fuel a cycle of addiction and violence in our communities. With the federal drug and gun charges brought today, we seek to incapacitate two different drug rings that have for years been selling heroin and crack cocaine, and protecting their business with guns, in Sullivan County and specifically, in the Village of Liberty.”
Sullivan County District Attorney James R. Farrell stated: “The investigation into the distribution of dangerous narcotics in Sullivan County by local, county, state and federal law enforcement continues to move forward, at full speed, with the twenty-one arrests made today. Those who traffic in dangerous narcotics in Sullivan County are on notice that all law enforcement agencies, at every level, are working together, every single day, to put you out of business and to hold you accountable for your actions through investigation, arrest and prosecution.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “Heroin is spreading through our communities like a cancer. It brings with it alleged pushers who use crime and weapons to defend their so called turf, in this case targeting people outside of a drug recovery treatment center of all places. The FBI’s Hudson Valley Safe Streets Task Force and our law enforcement partners won’t let the disease grow and infect neighborhoods and hamlets in Sullivan County and beyond.”
NYSP Superintendent Joseph A. D’Amico stated: “The combined efforts of federal, state and local law enforcement have put this operation out of business and disrupted the sale of heroin and cocaine in Sullivan County. This case continues our commitment and partnership to identify, arrest and prosecute anyone who tries to sell these dangerous drugs in our communities.”
Sullivan County Sheriff Michael A. Schiff stated: “Many of our residents have expressed concern over the apparent narcotics activity in their towns and villages. We have heard you loud and clear. Today’s joint law enforcement operation is an attempt to restore the quality of life that our citizens have come to expect and deserve. Make no mistake, we will use every resource available, whether it be Federal, State or local, to find those who are peddling poison to our children and bring them to justice.”
Village of Liberty Police Chief Scott Kinne stated: “Todays arrests are part of the ongoing commitment and cooperation of all of Sullivan County’s law enforcement agencies to investigate and arrest the dealers and distributers who sell heroin and other controlled substances on our streets. This investigation will have a significant impact on drug sales and other crimes in the Village of Liberty, these types of investigations and arrests make Liberty a safer community, I thank all the agencies who work with us to help rid our communities of drugs and violence.”
Village of Monticello Police Chief Robert Mir stated: “The village of Monticello police department will continue to work with our local, state and federal law enforcement partners in investigating, arresting and successfully prosecuting the indivuals that supply the dangerous drugs that are causing so much misery in our communities.”
As alleged in the Indictment unsealed today in White Plains federal court[1]:
In at least 2015 and 2016, KYLE JAMES, a/k/a “Killa,” 30, JAMAR SHAW, a/k/a “Double R,” 33, DANIEL FRANCO, a/k/a “Young Papi,” 26, RASHAWN PERRY, a/k/a “Cass,” 29, NORDIA TOMPKINS, a/k/a “Nadia,” 31, JUAN MONTERO, a/k/a “Chino,” 37, LOREN PERRY, a/k/a “Skip,” 41, HERBERT MURPHY, a/k/a “Superb,” a/k/a “Perb,” a/k/a “Alan,” a/k/a “Herbie,” 42, GRADY BLACKMON, 57, CANDICE BROOKINS, 29, ASHLEY EDWARDS, 19, DAVID GUZMAN, 18, PATRICK HILLIARD, 23, CHERYL JERNIGAN, 26, ARIK PERKINS, 22, KEVIN PRIMIANO, 41, MANUEL RIVERA, 20, and NICOLE SNEDEKER, 25, conspired to sell one kilogram or more of heroin. The conspiracy was led, at different times, by JAMES and SHAW. Members of the conspiracy distributed heroin in and around the Village of Liberty, New York and other locations in Sullivan County, New York. Members of the conspiracy regularly sold heroin in the parking lots of businesses, including a nursing home and a drug recovery center, in the Village of Liberty.
In April 2016, JAMES and LOREN PERRY used, carried, and possessed a firearm in furtherance of the heroin conspiracy in which they were both members.
In at least 2015 and 2016, RICHIERAY SUCCI, 35, MONTERO, JONATHAN PAGAN, a/k/a “JP,” 24, and JASON WOOD, 32, conspired to sell 28 grams or more of crack cocaine, and SUCCI, MONTERO, and WOOD conspired to sell 100 grams or more of heroin. Members of the conspiracy distributed crack and heroin in and around the Village of Liberty.
* * *
All 21 defendants were taken into federal custody this morning. These defendants will be presented in White Plains federal court today before U.S. Magistrate Judge Judith C. McCarthy.
Charts containing the names of the defendants who were charged today, and the charges and maximum penalties they face, are attached. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the respective judges.
Mr. Bharara praised the outstanding investigative work of the FBI, the New York State Police, the Sullivan County Sheriff’s Department, the Village of Monticello Police Department, the Village of Liberty Police Department, the Town of Fallsburg Police Department, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Mr. Bharara also thanked the Sullivan County District Attorney’s Office for its ongoing assistance in the case.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Jennifer Beidel, Maurene Comey, Michael Gerber, and Won Shin 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.
United States v. Kyle James, et al., 16 Mag. 2293
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Narcotics conspiracy
(Conspiracy to distribute and possess with intent to distribute 1 kilogram or more of heroin.)
KYLE JAMES,
a/k/a “Killa,”
JAMAR SHAW,
a/k/a “Double R,” DANIEL FRANCO,
a/k/a “Young Papi,” RASHAWN PERRY,
a/k/a “Cass,”
NORDIA TOMPKINS,
a/k/a “Nadia,”
JUAN MONTERO,
a/k/a “Chino,”
LOREN PERRY,
a/k/a “Skip,”
HERBERT MURPHY,
a/k/a “Superb,”
a/k/a “Perb,”
a/k/a “Alan,”
a/k/a “Herbie,”
GRADY BLACKMON, CANDICE BROOKINS, ASHLEY EDWARDS, DAVID GUZMAN, PATRICK HILLIARD, CHERYL JERNIGAN,
ARIK PERKINS,
KEVIN PRIMIANO, MANUEL RIVERA, and NICOLE SNEDEKER
Life in prison
Mandatory minimum:
10 years in prisonPossession of a firearm in furtherance of a drug trafficking crime
LOREN PERRY,
a/k/a “Skip,” and
KYLE JAMES,
a/k/a “Killa”
Life in prison
Mandatory minimum:
five years in prison, to be imposed consecutively to any other sentenceNarcotics conspiracy
(Conspiracy to distribute and possess with intent to distribute 28 grams or more of crack cocaine and/or 100 grams or more of heroin.)
RICHIERAY SUCCI,
JUAN MONTERO,
a/k/a “Chino,”
JONATHAN PAGAN,
a/k/a “JP,” and
JASON WOOD
40 years in prison
Mandatory minimum:
5 years in prison
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Son of the Former President of Honduras Pleads Guilty in Manhattan Federal Court to Conspiring to Import Cocaine into the United StatesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that FABIO PORFIRIO LOBO pled guilty in Manhattan federal court to a charge that he conspired to import cocaine into the United States. LOBO, who was arrested in the Republic of Haiti on May 20, 2015, and arrived in the United States on May 21, 2015, pled guilty before U.S. District Judge Lorna G. Schofield. LOBO’s father, Porfirio Lobo, served as president of Honduras between 2010 and 2014.
Manhattan U.S. Attorney Preet Bharara said: “Fabio Lobo has now admitted in court that he conspired to import thousands of kilograms of cocaine into the United States. Whether you are a street-level dealer, a member of a cartel, or the son of a former foreign president, drug dealing is drug dealing. It is a serious federal crime for which you will be prosecuted.”
According to the Indictment, other court filings, and statements made during court proceedings:
In 2014, LOBO agreed to assist two purported Mexican drug traffickers, who were in fact confidential sources (the “CSes”) acting at the direction of the Drug Enforcement Administration (“DEA”), with the transportation of a multi-ton load of cocaine through Honduras so that the narcotics could be imported into the United States. In exchange, LOBO was to receive a financial interest in a portion of the cocaine that was intended to be sold and distributed in the United States. In furtherance of the conspiracy, LOBO introduced the CSes to, among others, Honduran police officials who agreed to participate in the cocaine transaction by providing security and logistical support for the transportation of the cocaine through Honduras. During 2015, in consensually recorded calls and emails between LOBO and one of the CSes, LOBO agreed to travel to Haiti for the purpose of receiving payment from the proceeds of the cocaine transaction. LOBO subsequently traveled to Haiti in May 2015 and was arrested.
* * *
LOBO, 44, pled guilty to one count of conspiring to (i) import five or more kilograms of cocaine into the United States from a foreign country; and (ii) distribute five or more kilograms of cocaine knowing and intending that it would be imported into the United States. The charge carries a maximum term of life in prison, and a mandatory minimum term of 10 years in prison. The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
LOBO will be sentenced on September 15, 2016.
Mr. Bharara praised the outstanding efforts of the Special Operations Division of the DEA. Mr. Bharara also thanked the DEA’s Port-au-Prince Country Office, the Government of the Republic of Haiti and its Bureau de Lutte Contre le Trafic Illicite de Stupefiants, and the U.S. Department of Justice’s Office of International Affairs for their ongoing assistance.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III, Matthew J. Laroche, and Michael D. Lockard are in charge of the prosecution.
Software Company Ceo and Former Adjunct Columbia Business School Professor Sentenced in Manhattan Federal Court for Multi-Million Dollar Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York announced today that GREGORY RORKE was sentenced to two years in prison for his scheme to defraud investors in his company, Navagate, Inc. (“Navagate”), of more than $3 million dollars. RORKE pled guilty on May 7, 2015, to one count of securities fraud and one count of wire fraud before U.S. District Court Judge Katherine Polk Failla, who also imposed today’s sentence.
U.S. Attorney Preet Bharara said: “As he admitted, Gregory Rorke lied to investors while soliciting their investments in his company. He overstated his own net worth and the tax liabilities of the company. Today, Rorke, a former professor at Columbia Business School, learned an important lesson in business ethics, as he was sentenced to two years in prison for his crimes.”
According to the Complaint, Indictment, other documents filed in the case, and statements made in open court:
From at least December 2009 through October 2014, RORKE engaged in a fraudulent scheme to mislead investors into making investments in a convertible debt offering (the “Navagate Offering”) in his company, Navagate. RORKE, a former adjunct professor at Columbia Business School, was the co-founder, chief executive, and principal owner of Navagate. RORKE solicited investments and was involved in the daily management and operation of Navagate.
RORKE solicited investor contributions to the Navagate Offering based on materially false and fraudulent misrepresentations. In particular, RORKE signed and provided to investors a personal guarantee supported by a financial statement. The financial statement falsely indicated that Rorke personally had at least $12 million in assets, including more than $1 million in cash, more than $5 million in “readily marketable securities” and a home worth more than $1 million. In truth, and as RORKE well knew, the majority of the pledged assets did not belong to RORKE.
In addition, in order to obtain access to funds invested by Navagate investors and maintained in an escrow account, RORKE signed a notarized affidavit indicating that he had paid monies owed to the Internal Revenue Service in satisfaction of Navagate’s tax liabilities. In truth, the tax liabilities had not been paid, remained outstanding, and were actually increasing.
As a result of his fraudulent scheme, RORKE raised approximately $3 million in investor money from more than 30 investors.
* * *
In addition to the two-year prison term, RORKE, 63, of Manhattan and Bronxville, New York, was sentenced to three years of supervised release.
Mr. Bharara praised the work of the FBI and also thanked the Securities and Exchange Commission, which has brought civil actions against the defendant.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Andrea M. Griswold and Michael J. Ferrara are in charge of the prosecution.
16-123 ###
Statement of U.S. Attorney Preet Bharara on Sentencing of Former New York State Senate Majority Leader Dean SkelosRead the Press Release
“In the span of just 16 months, we have seen the arrest, prosecution, conviction, and sentencing of both leaders of the New York State legislature. The nearly simultaneous convictions of Sheldon Silver and Dean Skelos, whose corruption crimes were laid bare during fair and public trials, have no precedent. And while Silver and Skelos deserve their prison sentences, the people of New York deserve better. These cases show – and history teaches – that the most effective corruption investigations are those that are truly independent and not in danger of either interference or premature shutdown. That will continue to be our guiding principle in exposing and punishing corruption throughout New York. I thank the career investigators and prosecutors in my office, as well as FBI Assistant Director Diego Rodriguez and his entire team for their tremendous work in these two landmark prosecutions. All New Yorkers who believe in clean government owe them an enormous debt of gratitude.”
Manhattan U.S. Attorney Announces Arrest of Joseph Grossmann for Defrauding New York State Pension Fund of over $130,000Read the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Thomas P. DiNapoli, the New York State Comptroller, announced today the arrest of JOSEPH GROSSMANN for fraudulently obtaining the pension of a deceased former New York State employee. The defendant was arrested and presented today in the District of South Carolina.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Joseph Grossmann methodically devised a scheme to steal a deceased New York State employee’s pension money. He allegedly lied, created fake documents, and deceived state officials to ensure he got his hands on money that didn’t belong to him. I want to thank New York State Comptroller Thomas DiNapoli for his work to bring Grossmann to account for this conduct.”
State Comptroller Thomas P. DiNapoli said: “Joseph Grossmann allegedly tried to deceive officials that a deceased New York State employee was alive so he could pocket her retirement checks. Due to my office’s investigation and our partnership with United States Attorney Preet Bharara, Grossmann’s acts were exposed and he now faces federal prosecution. My message to would-be pension scammers is this: we will find you no matter what state you are in and recoup what you steal from the retirement system. I thank U.S. Attorney Bharara for partnering with us in the fight against pension fraud.”
According to the Complaint unsealed today: [1]
From August 2010 until August 2015, GROSSMANN executed a fraud whereby he deceived the New York State and Local Employees’ Retirement System (“NYSLERS”) into believing that a deceased former employee of New York State (“Pensioner-1”) was alive and entitled to continued pension payments. GROSSMANN then defrauded NYSLERS into depositing the payments into a bank account under GROSSMANN’s control.
Upon her retirement from employment with New York State, Pensioner-1 began to receive pension payments from NYSLERS by electronic deposit or mailed check. Pensioner-1 received her first payment on February 1, 1999, in the amount of approximately $1,740. Starting on or about April 30, 1999, Pensioner-1 received a monthly pension payment by either mailed check or electronic deposit.
Pensioner-1 was reported deceased as of August 5, 2010. The death certificate filed with the Probate Court in Kershaw County, South Carolina, lists her social security number, date of birth, and place of death, and GROSSMANN is listed as the “informant” of Pensioner-1’s death. On November 2, 2010, GROSSMANN filed an application for appointment with the same court, seeking to be named the personal representative of Pensioner-1’s estate. This application was approved on the same day.
Around the time of Pensioner-1’s death, NYSLERS learned of her death and attempted to verify that she was deceased and thus no longer eligible for pension payments. NYSLERS sent two letters to Pensioner-1’s last known address of record, and received a phone call in response, explaining that ‘Pensioner-1’ was going to respond to the letter and would provide paperwork showing that her ‘brother’ had been granted her power of attorney. On November 12, 2010, NYSLERS received a written response to its inquiry. Included in this response was a copy of the appointment application that GROSSMANN had filed with the probate court, which omitted the portions concerning anything related to the death of Pensioner-1. This response also included a direct deposit form, requesting that all future pension payments be remitted to an account opened by GROSSMANN on September 17, 2010 – approximately six weeks after Pensioner-1’s death. Since that time, approximately 61 pension payments totalling approximately $130,624.15 have been made by either check or wire.
* * *
GROSSMANN, 67, of Camden, South Carolina, is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the New York State Comptroller’s Office. He also thanked the United States Marshal’s Service for its assistance in the arrest of the defendant.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jason A. Richman is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Genovese Organized Crime Family Members and Associates Charged in Manhattan Federal Court with Racketeering Offenses, Including Murder Conspiracy, Attempted Murder, Extortion Conspiracy, and Illegal Gambling, as Well as Firearms OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Madeline Singas, the Nassau County District Attorney, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), and Thomas C. Krumpter, the Acting Commissioner of the Nassau County Police Department (“NCPD”), announced the unsealing today of a superseding Indictment charging a total of 18 individuals arising out of a multi-year investigation of racketeering activities by members and associates of the Genovese Organized Crime Family of La Cosa Nostra. The Indictment charges four members and associates of the Genovese Family – namely, Genovese Family soldiers ROBERT DEBELLO and STEVEN PASTORE and Genovese Family associates RYAN ELLIS and SALVATORE DELLIGATTI – with racketeering conspiracy, and various of these defendants with involvement in a murder conspiracy, an attempted murder, an extortion conspiracy, and an illegal gambling operation relating to their participation in the criminal affairs of the Genovese Family, and with firearms offenses. The Indictment also charges a number of the remaining 14 defendants with involvement (along with DELLIGATTI) in a murder-for-hire conspiracy, participation in the illegal gambling operation, and firearms offenses. The case, captioned United States v. Robert DeBello, et al., is pending before United States District Judge Laura T. Swain of the Southern District of New York.
Of the 18 defendants charged in the Indictment, 17 are currently in custody, including 13 defendants who were arrested earlier today as part of a coordinated takedown by the FBI, NYPD, and NCPD. The 17 defendants in custody will be presented today before United States Magistrate Judge Ronald L. Ellis of the Southern District of New York.
Manhattan U.S. Attorney Preet Bharara said: “Today’s charges show that the mob continues to wreak havoc in our communities, including through a recent murder conspiracy, attempted murder, and extortion. With today’s charges, we strike an important blow against the Genovese Crime Family. Whether you are an old school made member of the mob or a young street criminal looking to join it, the message today is clear: the life of a mobster is a dead-end street that ends nowhere good. I thank our law enforcement partners at the NYPD, FBI and Nassau County Police Commissioner, as well as, in particular, the Nassau County District Attorney’s Office, for the incredible work in this important case.”
Nassau County District Attorney Madeline Singas said: “Today’s arrests send a strong message that we are disrupting organized crime in New York. Working with our federal and local partners we are focused on breaking up criminal organizations that try to operate outside of the law. The allegations against some of the defendants – including conspiracy to commit murder, racketeering and gambling – are very serious, and we will continue our joint efforts to dismantle these violent criminal enterprises.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “The crimes of extortion for so-called ‘protection,’ illegal gambling businesses, and conspiracy to commit murder are woven into the history of organized crime families, but so are the federal racketeering charges that wise guys face after committing those criminal activities. Today, 18 defendants were indicted as part of a multi-year investigation by the FBI and our partners at Nassau County Police Department and New York City Police Department. As long as organized crime members and associates keep their criminal ways, we will keep investigating and bringing charges against them.”
NYPD Commissioner Bratton William J. Bratton said: “This racket was as old as La Cosa Nostra. From murder for hire to extortion and gambling, there wasn’t a scheme that was off limits to these soldiers and associates of the Genovese family. The mob may be diminished, but it’s not dead, and it requires our continued vigilance. I commend of the FBI, Nassau County Police, U.S. Attorney, and team of NYPD detectives who made today’s arrests possible.”
Acting NCPD Commissioner Thomas C. Krumpter said: “The indictment of these members of the Genovese Crime Family is an example of how partners in law enforcement utilize talented personnel and resources to work together and bring individuals to justice. The Nassau County Police Department is committed to working with our fellow law enforcement partners to ensure public safety.”
As alleged in the Indictment unsealed today in Manhattan federal court:[1]
Four of the defendants – ROBERT DEBELLO, STEVEN PASTORE, RYAN ELLIS, and SALVATORE DELLIGATTI – are members or associates of the Genovese Organized Crime Family of La Cosa Nostra. The Genovese Family is a criminal organization whose members have engaged in numerous acts of violence and other crimes in the Southern District of New York and elsewhere, including, as relevant in this case, conspiracy to commit murder, attempted murder, conspiracy to commit extortion, and the operation of an illegal gambling business. DEBELLO and PASTORE were “made” soldiers of the Genovese Family, and ELLIS and DELLIGATTI were associates of the Genovese Family. In his capacity as a Genovese Family soldier, DEBELLO reported directly to a Genovese Family captain, often at a social club in lower Manhattan within the Southern District of New York. From at least in or about 2008 through in or about May 2016, DEBELLO, PASTORE, ELLIS, and DELLIGATTI conspired to participate in the criminal affairs of the Genovese Family through a pattern of racketeering activity. For example, in connection with their involvement in the racketeering activity of the Genovese Family, DEBELLO as well as ELLIS and DELLIGATTI participated in a 2014 conspiracy to commit a murder, in an attempted murder, in a conspiracy to commit extortion, and in the operation of an illegal gambling business (the “Illegal Gambling Business”), and committed firearms offenses. PASTORE was also involved in the operation of the Illegal Gambling Business.
Five of the defendants – LUIGI ROMANO, BERTRAM DUKE, TYRONE MCCULLUM, MARCUS GRANT, and SHARIF BROWN – participated in a conspiracy along with Genovese Family associate SALVATORE DELLIGATTI to commit a murder for hire, and committed a related firearms offense.
The nine remaining defendants – LUIGI CAMINITI, SCOTT JACOBSON, FRANK CELSO, JOSEPH TEDESCO, MICHAEL VIGORITO, MICK SOKOL, SPYRO ANTONAKOPOULOS, MICHAEL KARNBACK, and JONATHAN DESIMONE – were involved in the operation of the Illegal Gambling Business.
* * *
Set forth below is a chart containing the names, ages, residences, charges, and maximum penalties for the defendants. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by Judge Swain.
Mr. Bharara praised the outstanding investigative work of the FBI, the NYPD’s Detective Bureau, Criminal Enterprise Investigations, and the NCPD. He also thanked the Nassau County District Attorney’s Office for their participation and support in this ongoing investigation.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Samson Enzer, James McDonald, and Jordan Estes, as well as Special Assistant United States Attorney Jeremy Glicksman, 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.
16-122 ###
United States v. Robert DeBello, et al., S4 15 Cr. 491 (LTS)
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Racketeering conspiracy
18 U.S.C. § 1962(d)
ROBERT DEBELLO
STEVEN PASTORE
RYAN ELLIS
SALVATORE DELLIGATTI
20 years in prison
2
Conspiracy to commit murder in aid of racketeering activity
18 U.S.C. § 1959(a)(5)
ROBERT DEBELLO
RYAN ELLIS
SALVATORE DELLIGATTI
10 years in prison
3
Attempted murder in aid of racketeering activity
18 U.S.C. § 1959(a)(5)
ROBERT DEBELLO
RYAN ELLIS
SALVATORE DELLIGATTI
10 years in prison
4
Conspiracy to commit murder for hire
18 U.S.C. § 1958
SALVATORE DELLIGATTI
LUIGI ROMANO
BERTRAM DUKE
TYRONE MCCULLUM
MARCUS GRANT
SHARIF BROWN
10 years in prison
5
Participating in an illegal gambling business
18 U.S.C. §§ 1955 and 2
ROBERT DEBELLO
STEVEN PASTORE
RYAN ELLIS
SALVATORE DELLIGATTI
LUIGI CAMINITI
SCOTT JACOBSON
FRANK CELSO
JOSEPH TEDESCO
MICHAEL VIGORITO
MICK SOKOL
SPYRO ANTONAKOPOULOS MICHAEL KARNBACK
JONATHAN DESIMONE
5 years in prison
6
Use of Firearms for Crimes of Violence
18 U.S.C. §§ 924(c)(1)(A)(i) and 2
ROBERT DEBELLO
RYAN ELLIS
Life in prison
7
Use of Firearms for Crimes of Violence
18 U.S.C. §§ 924(c)(1)(A)(i) and 2
SALVATORE DELLIGATTI
Life in prison
8
Use of a Firearm for Murder-for-Hire Conspiracy
LUIGI ROMANO
BERTRAM DUKE
TYRONE MCCULLUM
MARCUS GRANT
SHARIF BROWN
Life in prison
DEFENDANT
AGE
RESIDENCE
ROBERT DEBELLO
a/k/a “Old Man”
a/k/a “Bobby”
a/k/a “Grandpa”
74
Whitestone, Queens, NY
STEVEN PASTORE
56
Staten Island, NY
RYAN ELLIS
a/k/a “Joseph Princi”
a/k/a “Baldy”
a/k/a “Lazy Eye”
a/k/a “Zeus”
34
Bayside, Queens, NY
SALVATORE DELLIGATTI
a/k/a “Jay”
a/k/a “Fat Sal”
40
Oakland Gardens, Queens, NY
LUIGI ROMANO
a/k/a “Louie Sunoco”
38
Whitestone, Queens, NY
BERTRAM DUKE
a/k/a “Birdy”
48
New York, NY
TRYONE MCCULLUM
a/k/a “Ty”
37
Bronx, NY
MARCUS GRANT
27
Bronx, NY
SHARIF BROWN
a/k/a “QB”
31
Bronx, NY
LUIGI CAMINITI
35
Whitestone, Queens, NY
SCOTT JACOBSON
31
Old Beth Page, Long Island, NY
FRANK CELSO
50
West Hempstead, Long Island, NY
JOSEPH TEDESCO
44
Brooklyn, NY
MICHAEL VIGORITO
35
Massapequa, Long Island, NY
MICK SOKOL
41
Brooklyn, NY
SPYRO ANTONAKOPOULOS
31
Elmont, Long Island, NY
MICHAEL KARNBACH
a/k/a “Combat”
43
Brooklyn, NY
JONATHAN DESIMONE
34
Huntington, Long Island, NY
[1] As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described in the Indictment should be treated as an allegation.
Former New York State Senate Leader Dean Skelos Sentenced to 5 Years in Prison and His Son, Adam Skelos, Sentenced to 6 ½ Years in Prison, in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that former New York State Senate Majority Leader DEAN SKELOS was sentenced today to five years in prison after having been found guilty by a federal jury of using his official position to obtain more than $300,000 in bribes and extortion payments that were paid to his son, ADAM SKELOS, in exchange for DEAN SKELOS’s official acts. ADAM SKELOS, who was convicted by the same jury, was also sentenced to six-and-a-half years in prison. DEAN SKELOS and ADAM SKELOS were sentenced in Manhattan federal court by U.S. District Judge Kimba M. Wood, who also presided over the four-week jury trial.
U.S. Attorney Preet Bharara said: “In the span of just 16 months, we have seen the arrest, prosecution, conviction, and sentencing of both leaders of the New York State legislature. The nearly simultaneous convictions of Sheldon Silver and Dean Skelos, whose corruption crimes were laid bare during fair and public trials, have no precedent. And while Silver and Skelos deserve their prison sentences, the people of New York deserve better. These cases show – and history teaches – that the most effective corruption investigations are those that are truly independent and not in danger of either interference or premature shutdown. That will continue to be our guiding principle in exposing and punishing corruption throughout New York. I thank the career investigators and prosecutors in my office, as well as FBI Assistant Director Diego Rodriguez and his entire team for their tremendous work in these two landmark prosecutions. All New Yorkers who believe in clean government owe them an enormous debt of gratitude.”
According to the evidence introduced at trial, court filings, and statements made in Manhattan federal court:
From 2011 to 2015, DEAN SKELOS served as Majority Leader and Co-Majority Leader of the New York State Senate, a position that gave him significant power over the operation of New York State government. DEAN SKELOS repeatedly used this power to pressure companies with business before New York State to make payments to his son, ADAM SKELOS, who substantially depended on these companies for his income. DEAN SKELOS and ADAM SKELOS were able to secure these illegal payments through implicit and explicit representations that DEAN SKELOS would use his official position to benefit those who made the payments, and punish those who did not. In total, DEAN SKELOS obtained over $300,000 in payments to ADAM SKELOS through persistent and repeated pressure applied to senior executives of three different companies that needed legislation passed in the New York State Senate and other official actions from DEAN SKELOS.
The Glenwood Scheme
Beginning in late 2010, and continuing for approximately two years, DEAN SKELOS repeatedly solicited payments for ADAM SKELOS from representatives of Glenwood Management Corp. (“Glenwood”), a major New York City real estate company. DEAN SKELOS’s solicitations for payments to ADAM SKELOS took place during the same meetings when Glenwood’s representatives were asking for DEAN SKELOS’s assistance with New York State legislation that was crucial to Glenwood’s profitability. As a result of the sustained pressure from DEAN SKELOS, representatives of Glenwood arranged for a $20,000 direct payment to ADAM SKELOS and further arranged for Abtech Industries (“Abtech”), an Arizona-based stormwater technology company in which Glenwood’s founding family owned a stake, to make $4,000 monthly payments to ADAM SKELOS. Glenwood arranged for these payments to ADAM SKELOS due to the company’s substantial dependence on DEAN SKELOS for real estate tax abatements and other real estate legislation favorable to Glenwood, and based in part on statements from DEAN SKELOS that he would punish those in the real estate industry who defied him.
The Abtech Scheme
After successfully obtaining ADAM SKELOS’s Abtech consulting contract for $4,000 per month, DEAN SKELOS assisted Abtech in causing Nassau County to issue a request for proposal (“RFP”) for a public works project that was tailored to Abtech’s stormwater technology. DEAN SKELOS and ADAM SKELOS then threatened to use DEAN SKELOS’s official powers to block Abtech’s bid for the RFP unless the company sharply increased ADAM SKELOS’s payments. Abtech ultimately agreed to increase ADAM SKELOS’s payments to $10,000 per month because the company feared that, if it did not meet the defendants’ demands, it would lose the Nassau County contract that was critical to its business. In return for the payments to ADAM SKELOS, and to ensure that they would continue, DEAN SKELOS facilitated the approval of Abtech’s $12 million contract with Nassau County and thereafter took numerous additional official actions to benefit Abtech.
For example, when Abtech and ADAM SKELOS believed Nassau County was insufficiently funding the company’s project, DEAN SKELOS pressured Nassau County officials to make additional funds available. In January 2015, DEAN SKELOS was intercepted in a call with the Nassau County Executive in which he asked for an explanation for the lack of funding, complaining on behalf of ADAM SKELOS that “somebody feels like they’re getting jerked around the last two years.” The next day, DEAN SKELOS traveled with the County Executive and his Deputy to the funeral of a New York City Police Department officer, where DEAN SKELOS reiterated in person his demand that the County expedite payments to Abtech.
DEAN SKELOS also used his official position in an attempt to direct a portion of a $5.4 billion sum that the State had recovered in litigation with financial services companies (the “Settlement Funds”) in a way that would benefit water projects and contracts that were being pursued by Abtech. For example, at the same time ADAM SKELOS was attempting to obtain additional Abtech stormwater projects with local municipalities by claiming that the projects could be funded through State funds, DEAN SKELOS was advocating for a portion of the Settlement Funds to be allocated for stormwater projects.
DEAN SKELOS also used his official position in an attempt to enact State “design-build” legislation that was being sought by Abetch and that Nassau County officials had explained was necessary to implement fully the $12 million contract with Abtech. Nassau County officials provided DEAN SKELOS with proposed legislation that DEAN SKELOS stated he would support if backed by the Governor. In a recorded call on ADAM SKELOS’s “burner” phone, ADAM SKELOS told a representative of Abtech that DEAN SKELOS had privately assured ADAM SKELOS that DEAN SKELOS was “going to be sure that [the design-build legislation] gets done.” Later, ADAM SKELOS told Abtech’s representatives that while design-build legislation would not be enacted as part of the April 2015 budget process, DEAN SKELOS would continue to pursue it in the legislative session continuing through June 2015. The defendants were arrested in May 2015 before their plan to enact the legislation could be completed.
The PRI Scheme
During the same time period as the Glenwood and Abtech schemes, DEAN SKELOS pressured yet a third company, called Physician Reciprocal Insurers (“PRI”), to pay ADAM SKELOS. PRI is a major medical malpractice insurance firm, whose existence depends on New York State legislation that exempts the firm from being liquidated even though its liabilities exceed its assets. Similar to the Glenwood scheme, DEAN SKELOS solicited payments to ADAM SKELOS from PRI during the same conversations when PRI was seeking DEAN SKELOS’s support for the extension of this legislation that was critical to PRI’s business.
In response to the pressure from DEAN SKELOS to find sources of payment to ADAM SKELOS, PRI agreed to, among other things, give ADAM SKELOS a full-time job with benefits. Even though ADAM SKELOS was expected to work 40 hours per week, he treated his PRI position as a “no show” job from the outset of his employment. When ADAM SKELOS’s supervisor told ADAM SKELOS that he was expected to show up to work, ADAM SKELOS berated him and told him “[g]uys like you . . . couldn’t shine my shoes. . . . And if you talk to me like that again, I will smash your fucking head in.” When the CEO of PRI told DEAN SKELOS that ADAM SKELOS was not showing up to work and was mistreating the other employees, DEAN SKELOS expressed no concern about ADAM SKELOS’s conduct and simply told the CEO to “[w]ork [it] out.” Based on this conversation, among others, the CEO understood that if he did not continue to pay ADAM SKELOS, despite his non-performance and misconduct at work, he was risking DEAN SKELOS taking legislative action against PRI. Later, when former Senator Alphonse D’Amato, one of PRI’s lobbyists, reiterated to DEAN SKELOS that ADAM SKELOS was not showing up to work and was being disruptive when he actually did show up, DEAN SKELOS also dismissed Senator D’Amato’s concerns and told him that ADAM SKELOS needed the income and benefits from PRI.
DEAN SKELOS did not inform any of the companies he pressured to pay ADAM SKELOS that, between 2011 and 2014, ADAM SKELOS was making between $230,000 and $441,000 per year.
During the time period that PRI was paying ADAM SKELOS, DEAN SKELOS repeatedly voted to extend PRI’s legislative protection from liquidation as well as other legislation that was being sought by PRI.
* * *
In addition to the prison sentence, Judge Wood ordered DEAN SKELOS, 68, of Rockville Centre, New York, to pay a $500,000 fine, forfeit $334,120, and pay a $800 special assessment fee. DEAN SKELOS also was sentenced to one year of supervised release. In imposing a fine on DEAN SKELOS, Judge Wood took into account the tax-payer funded pension that DEAN SKELOS would be receiving. Judge Wood ordered ADAM SKELOS, 33, also of Rockville Centre, to forfeit $334,120, pay a $800 special assessment, and serve three years of supervised release.
DEAN SKELOS and ADAM SKELOS were found guilty by a unanimous jury on December 11, 2015, of conspiracy to commit extortion under color of official right, conspiracy to commit honest services wire fraud, three counts of extortion under color of official right, and three counts of soliciting and receiving bribes.
U.S. Attorney Bharara praised the work of the Criminal Investigators of the United States Attorney’s Office and the Federal Bureau of Investigation, who jointly conducted this investigation.
This case was prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Jason A. Masimore, Rahul Mukhi, Tatiana R. Martins, and Thomas A. McKay are in charge of the prosecution.
Seven Defendants Charged in Manhattan Federal Court with Defrauding A Native American Tribe and Investors of over $60 MillionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that seven defendants were arrested today and charged with orchestrating a scheme to defraud investors and a Native American tribal entity of tens of millions of dollars.
JASON GALANIS and HUGH DUNKERLEY were arrested in the Central District of California. JASON GALANIS will be presented later today before a U.S. Magistrate Judge in Los Angeles and DUNKERLEY will be presented before a U.S. Magistrate Judge in Santa Ana, California. GARY HIRST was arrested in the Middle District of Florida and will be presented later today before a U.S. Magistrate Judge in Orlando. JOHN GALANIS, a/k/a “Yanni,” was arrested in the Southern District of California and will be presented later today before a U.S. Magistrate Judge in San Diego. BEVAN COONEY was arrested in the District of Nevada and will be presented later today before a U.S. Magistrate Judge in Reno. DEVON ARCHER was arrested in the Eastern District of New York. MICHELLE MORTON was arrested in New Jersey. ARCHER and MORTON will be presented later today before United States Magistrate Judge Ronald L. Ellis in Manhattan.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, the defendants induced an Oglala Sioux Native American tribal entity to issue bonds through lies about how the bond proceeds would be invested. Instead of investing the proceeds in a way that would provide capital for development and help cover the interest payments, the defendants allegedly pocketed most of it to pay for their own personal expenses, homes, cars, travel, and jewelry. The defendants’ alleged fraud did not stop with the tribe. The defendants also allegedly duped unwitting investors into buying the bonds by hiding material facts about them, including their lack of liquidity. The defendants’ alleged fraud has left devastation in its wake: a tribe with tens of millions in bond obligations it cannot pay, and investors out tens of millions, left holding bonds they did not want.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “The alleged fraudsters named in this case didn’t just see an opportunity to steal money when they thought no one was looking, they allegedly hatched a plan to scam a municipal entity from the start. The most egregious fallout from this scheme is that the bondholders now hold worthless securities, and the tribe can’t make the interest payments due.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “These individuals allegedly took advantage of their clients, by luring them into creating bonds the defendants allegedly knew would never pay any returns to investors. White-collar criminals always believe their crimes and abilities are above the law, but Postal Inspectors and their law enforcement partners are very skilled at bringing these fraudsters to justice for their illegal financial schemes.”
According to the Complaint unsealed today in Manhattan federal court:[1]
From at least in or about March 2014 through in or about April 2016, JASON GALANIS, GARY HIRST, JOHN GALANIS, a/k/a “Yanni,” HUGH DUNKERLEY, MICHELLE MORTON, DEVON ARCHER, and BEVAN COONEY engaged in a fraudulent scheme to cause a Native American tribal entity to issue more than $60 million in municipal bonds and then misappropriate the proceeds from their sale. JASON GALANIS and JOHN GALANIS used the millions of dollars in illicit profits derived from the scheme to pay for a variety of personal and business expenses, including house payments, car payments and tax obligations, and to make food, travel and jewelry purchases. JASON GALANIS also used the proceeds to make millions of dollars of payments to other defendants, including to HIRST, DUNKERLEY, and COONEY, as well as to asset management firms run by MORTON.
To accomplish the scheme, JASON GALANIS and JOHN GALANIS first induced the Wakpamni Lake Community Corporation (“WLCC”), an Oglala Sioux tribal entity, to issue tens of millions of dollars in municipal bonds (the “Tribal Bonds”) based on false and misleading representations. MORTON and HIRST, at the direction of JASON GALANIS, used approximately $40 million of funds belonging to clients of two related investment advisers run by MORTON – Hughes Capital Management, Inc. (“Hughes”) and Atlantic Asset Management, LLC (“Atlantic”) – to purchase the Tribal Bonds, even though those defendants were well aware that material facts about the Tribal Bonds had been withheld from clients in whose accounts they were placed, including the fact that the Tribal Bond purchases fell outside the investment parameters of certain Hughes clients and of the Atlantic investment vehicle in which the Tribal Bonds were placed. In addition, those defendants failed to apprise the Hughes and Atlantic clients of substantial conflicts of interest relating to the defendants – including that HIRST and DUNKERLEY were on multiple sides of the deal with respect to the issuance and placement of the Tribal Bonds. When Hughes and Atlantic clients learned about the purchase of the Tribal Bonds, several of them demanded that the Tribal Bonds be sold. However, because there was no ready secondary market for the Tribal Bonds, the Tribal Bonds remain in their accounts.
Moreover, certain defendants, including JASON GALANIS and DUNKERLEY, falsely represented to the WLCC that proceeds from the sale of the Tribal Bonds would be placed with an investment manager who would invest the proceeds in investments that would generate annuity payments sufficient to pay the interest on the Tribal Bonds and provide additional funds to the WLCC to be used for tribal economic development purposes. In fact, none of the proceeds of the Tribal Bonds were turned over to the investment manager specified in the closing documents. Instead, the defendants misappropriated significant portions of the proceeds for their own personal use.
Some of the misappropriated proceeds were recycled and provided by JASON GALANIS to entities affiliated with ARCHER and COONEY in order to facilitate the purchase of additional Tribal Bonds issued by the WLCC in subsequent offerings induced by JOHN GALANIS. As with the first offering of Tribal Bonds, none of the proceeds of the Tribal Bonds were actually turned over to the investment manager specified in the closing documents. Instead, the defendants again misappropriated substantial portions of the proceeds for their own use. As a result of the defendants’ fraudulent scheme, the investors in whose accounts the Tribal Bonds were placed now hold worthless securities that cannot be sold, and the WLCC has no means of paying the interest payments due on the Tribal Bonds.
* * *
JASON GALANIS, HIRST, JOHN GALANIS, DUNKERLEY, MORTON, ARCHER, and COONEY are each charged with one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense; and one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. JASON GALANIS, HIRST, and MORTON are also charged with conspiracy to commit investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense; and investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $10,000. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and USPIS, and thanked the SEC, which has filed civil charges in a separate action.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brian Blais, Aimee Hector, and Rebecca Mermelstein are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
21 Members of South Bronx Drug Trafficking Organization Charged with Narcotics Trafficking and Firearms OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (“HSI”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of two Indictments charging a total of 21 members of a Bronx-based drug trafficking organization with narcotics trafficking and firearms offenses. The organization operates in the vicinity of the Diego Beekman Houses (“Beekman Houses”) in the South Bronx and is charged in two separate indictments – United States v. Demetrius Flowers et al. and United States v. Damon Guadalupe et al. Some of the members of the organization were affiliated with a subset of the Bloods Street Gang, known as the “Low Rider Brims,” and other members were affiliated with a gang known as the “Young Shooters.” Of the 21 defendants charged in both Indictments, 14 are currently in custody, including 12 defendants who were arrested earlier today and yesterday as part of a coordinated takedown. The defendants already in custody will be presented today before United States Magistrate Ronald L. Ellis in Manhattan federal court.
In connection with today’s takedown, law enforcement agents also executed search warrants at three locations, including residential apartments in the area occupied by several of the defendants. During the execution of those search warrants, agents recovered, among other items, crack, cocaine, marijuana, as well as ammunition and gang paperwork. To date, in this case, agents and officers have seized, among other evidence, quantities of crack, cocaine, heroin, marijuana, prescription pills, as well as firearms, ammunition, and knives. During the investigation, agents and officers also intercepted thousands of wiretapped calls, during many of which various members and associates of the drug trafficking organization discussed their gang and narcotics activities.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, these defendants, many of them members of street gangs, terrorized a South Bronx neighborhood with their drug dealing and violence. Law enforcement has no duty more important than keeping our citizens safe. As we have done in a number of recent takedowns with our law enforcement partners, we will continue to focus on those in our communities who are allegedly responsible for so much of the gang and gun violence. All New Yorkers are entitled to live in neighborhoods free from constant drug-dealing and senseless violence. That is why we bring actions like the one we bring today.”
DEA Special Agent-in-Charge James J. Hunt said: “Law enforcement’s crackdown on gang related drug trafficking has netted 14 more arrests in New York City. It is alleged that the ‘Low Rider Brims’ and ‘Young Shooters’ street gangs instilled fear and intimidation in the residents of the Beekman Housing Projects in the Bronx. Not only did their alleged drug trafficking fuel drug addiction, their ‘armed and ready’ attitude resulted in numerous shootings and turf battles jeopardizing the safety of the neighboring schools and community.”
HSI Special Agent-in-Charge Angel M. Melendez said: “Residents of the Mott Haven section of the Bronx can rest easier knowing members of a violent gang are under arrest and out of their neighborhood. These gangs allegedly peddled drugs and used violence to protect their criminal enterprise. HSI and its law enforcement partners are committed to combating violent criminal organizations and ensure the continued safety of our communities.”
Commissioner William J. Bratton said: “This investigation is the latest example of a coordinated effort to combat drug trafficking, whose operations brought an influx of violence and firearms to the Bronx. I commend both our NYPD detectives and law enforcement partners for their hard work, which led to these arrests, and for their ongoing commitment to protect our neighborhoods.”
As alleged in the Indictments unsealed today in Manhattan federal court and in other court papers[1]:
The Beekman Houses is a private housing complex comprising approximately 38 apartment buildings in the Mott Haven neighborhood of the Bronx, New York. From at least 2010 up to and including May 2016, the defendants operated a drug trafficking organization (the “Beekman Houses DTO”) in and around the Beekman Houses. The Beekman Houses DTO trafficked in a variety of narcotics – including crack cocaine, heroin, and marijuana – on a daily basis. Some of the members of the Beekman Houses DTO were affiliated with a subset of the Bloods Street Gang known as the “Low Rider Brims,” and other members were affiliated with a gang known as the “Young Shooters.” The defendants sold narcotics in areas frequented by New York City’s most vulnerable citizens, including in the vicinity of New York City schools.
In addition, members of the Beekman Houses DTO protected and maintained their drug business through the possession of firearms and acts of violence. These included shootings that happened in broad daylight on public streets and into apartment buildings.
* * *
Charts containing the names, ages, charges, and maximum penalties for the defendants are set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the NYPD’s Bronx Gang Squad, HSI’s El Dorado Task Force, and the New York Field Division of the DEA, as well as the United States Marshals’ Service for its assistance in today’s arrests. He also thanked the Bronx County District Attorney’s Office for their support in this ongoing investigation.
This case is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Eli J. Mark and Matthew Laroche are in charge of the prosecution.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Demetrius Flowers, a/k/a “MoJo” et al.
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Conspiracy to Distribute Narcotics
(including crack cocaine, heroin, and marijuana)
21 U.S.C. § 846
DEMETRIUS FLOWERS, a/k/a “Mojo,”
JOSEPH SMITH, a/k/a “Joe Lite,”
FRANK O’BRYANT, a/k/a “Frank White,”
ELADIO PADILLA, a/k/a “Nino,”
QUINZELL FRAZIER, a/k/a “Q Black,” a/k/a “Blizzy,”
JONATHAN SAEZ, a/k/a “John J,” a/k/a “J,”
BRIAN MCBETH, a/k/a “Smoove,”
FRANCISCO REYES, a/k/a “Bundlez,”
LUIS CRUZ, a/k/a “Manny,”
RALPHIE DEJESUS, a/k/a “Nuws,”
GABRIEL OCASIO, a/k/a “Fifty,”
RAHIM SOLANO, a/k/a “Rah,” a/k/a “Radio,”
MICHAEL MESTRE, a/k/a “Getty,” a/k/a “Wax,”
SAQURAN CURTIS, a/k/a “Esai,”
CHRISTOPHER NAPOLEONIS, a/k/a “Pudge,”
ROBERT WILSON, a/k/a “Rubar,” a/k/a “Lil Rubar,”
Life in prison with a mandatory minimum of 10 years in prison
2
Use of Firearms in Furtherance of Narcotics Trafficking
18 U.S.C. § 924(c)(1)(A)
DEMETRIUS FLOWERS, a/k/a “Mojo,”
JOSEPH SMITH, a/k/a “Joe Lite,”
FRANK O’BRYANT, a/k/a “Frank White,”
ELADIO PADILLA, a/k/a “Nino,”
QUINZELL FRAZIER, a/k/a “Q Black,” a/k/a “Blizzy,”
JONATHAN SAEZ, a/k/a “John J,” a/k/a “J,”
BRIAN MCBETH, a/k/a “Smoove,”
FRANCISCO REYES, a/k/a “Bundlez,”
LUIS CRUZ, a/k/a “Manny,”
RALPHIE DEJESUS, a/k/a “Nuws,”
GABRIEL OCASIO, a/k/a “Fifty,”
RAHIM SOLANO, a/k/a “Rah,” a/k/a “Radio,”
MICHAEL MESTRE, a/k/a “Getty,” a/k/a “Wax,”
Life in prison with a mandatory minimum of 10 years in prison
3
Felon in Possession of a Firearm
18 U.S.C. § 922(g)(1)
DEMETRIUS FLOWERS, a/k/a “Mojo,”
10 years in prison
DEFENDANT
AGE
DEMETRIUS FLOWERS, a/k/a “Mojo,”
35
JOSEPH SMITH, a/k/a “Joe Lite,”
28
FRANK O’BRYANT, a/k/a “Frank White,”
29
ELADIO PADILLA, a/k/a “Nino,”
27
QUINZELL FRAZIER, a/k/a “Q Black,” a/k/a “Blizzy,”
23
JONATHAN SAEZ, a/k/a “John J,” a/k/a “J,”
30
BRIAN MCBETH, a/k/a “Smoove,”
24
FRANCISCO REYES, a/k/a “Bundlez,”
22
LUIS CRUZ, a/k/a “Manny,”
20
RALPHIE DEJESUS, a/k/a “Nuws,”
24
GABRIEL OCASIO, a/k/a “Fifty,”
28
RAHIM SOLANO, a/k/a “Rah,” a/k/a “Radio,”
24
MICHAEL MESTRE, a/k/a “Getty,” a/k/a “Wax,”
24
SAQURAN CURTIS, a/k/a “Esai,”
26
CHRISTOPHER NAPOLEONIS, a/k/a “Pudge,”
26
ROBERT WILSON, a/k/a “Rubar,” a/k/a “Lil Rubar,”
24
United States v. Damon Guadalupe, a/k/a “Pappy,” et al.
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Conspiracy to Distribute Narcotics
21 U.S.C. § 846
DAMON GUADALUPE, a/k/a “Pappy,”
MOHAMMED FABELO, a/k/a “Mo,”
WILLIAM RODRIGUEZ,
JASON HOOKS, a/k/a “Hamo,”
WILFREDO LABOY, a/k/a “Gutter,”
Life in prison with a mandatory minimum of 10 years in prison
2
Possession of Firearms in Furtherance of Narcotics Trafficking
18 U.S.C. § 924(c)(1)(A)
DAMON GUADALUPE, a/k/a “Pappy,”
Life in prison with a mandatory minimum of 5 years in prison
DEFENDANT
AGE
DAMON GUADALUPE, a/k/a “Pappy,”
34
MOHAMMED FABELO, a/k/a “Mo,”
38
WILLIAM RODRIGUEZ,
54
JASON HOOKS, a/k/a “Hamo,”
31
WILFREDO LABOY, a/k/a “Gutter,”
30
[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.
Bahamas Man Pleads Guilty to Hacking Scheme to Steal Celebrities’ Copyrighted and Personal InformationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALONZO KNOWLES pled guilty today in Manhattan federal court to criminal copyright infringement of scripts of movies and television shows that had not yet aired, as well as identity theft of personal identification information, all of which KNOWLES obtained by hacking into the personal e-mail accounts of numerous individuals in the entertainment, sports, and media industries. He pled guilty before U.S. District Judge Paul A. Engelmayer.
Manhattan U.S. Attorney Preet Bharara said: “Alonzo Knowles targeted and hacked into the private emails of celebrities in entertainment and in professional sports. His crimes did not end with this frightening invasion of privacy, as Knowles then sought to sell what he stole, including unreleased movie and television scripts, to the highest bidder. Thanks to the terrific work of the Homeland Security Investigations agents and prosecutors in my office, this story of cybercrime meets celebrity stalking ends well, with the perpetrator caught and convicted.”
According to the Indictment, other documents filed in Manhattan federal court, and statements made at various proceedings in this case, including yesterday’s guilty plea:
ALONZO KNOWLES unlawfully accessed the personal e-mail accounts of numerous individuals in the entertainment, sports, and media industries (the “Victims”). As a result of his hacking scheme, KNOWLES obtained the Victims’ copyrighted and confidential documents, including scripts of movies and television shows that had not yet been publicly released, personal identifying information such as Social Security numbers, and private sexually explicit photographs and videos.
Over the course of two weeks in December 2015, KNOWLES and an undercover law enforcement agent (the “UC”) communicated about the material KNOWLES sought to sell to the UC. KNOWLES claimed to the UC that he had “exclusive content” that was “really profitable” and worth “hundreds of thousands of dollars.” KNOWLES stated that he obtained the material directly from the Victims without their knowledge, and claimed to be able to acquire such material from at least some of the approximately 130 Victims whose e-mail addresses and phone numbers he had in his possession.
On December 21, 2015, KNOWLES met with the UC in New York, New York. During their meeting, KNOWLES described two methods he used to hack each Victim’s e-mail account. The "easier” method, according to KNOWLES, involved sending a virus to the Victim’s computer that would enable KNOWLES to access it. The more difficult method, according to KNOWLES, involved KNOWLES sending a false hacking notification to the Victim and asking the Victim for his passcodes. Once KNOWLES had used the Victim’s passcodes to successfully access the Victim’s e-mail account, KNOWLES, unbeknownst to the Victim, would change the settings in the Victim’s e-mail account in order to continue to access to it. In order to avoid detection from the Victim, KNOWLES would delete notifications from the e-mail service provider regarding changes to the settings of the Victim’s e-mail account. KNOWLES attempted to sell numerous movie and television scripts and personal identifying information that he had unlawfully obtained from the Victims to the UC in exchange for thousands of dollars, whereupon KNOWLES was arrested.
* * *
KNOWLES, 24, of Freeport, Bahamas, faces a maximum of 10 years in prison and six years of supervised release. The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. KNOWLES is scheduled to be sentenced by Judge Engelmayer on August 25, 2016.
Mr. Bharara praised the investigative work of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Kristy J. Greenberg is in charge of the prosecution.
Liberty Reserve Founder Arthur Budovsky Sentenced in Manhattan Federal Court to 20 Years for Laundering Hundreds of Millions of Dollars Through His Global Digital Currency BusinessRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Leslie R. Caldwell, Assistant Attorney General for the Justice Department’s Criminal Division, announced that ARTHUR BUDOVSKY, 42, was sentenced today in Manhattan federal court to 20 years in prison for running a massive money laundering enterprise through his company Liberty Reserve, a virtual currency once used by cybercriminals around the world to launder the proceeds of their illegal activity. BUDOVSKY was arrested in Spain in May 2013 and was extradited to the United States in October 2014. BUDOVSKY pled guilty to one count of conspiring to commit money laundering on January 29, 2016, three days before his trial was scheduled to begin. U.S. District Judge Denise L. Cote imposed today’s sentence, noting that the defendant did not express any “genuine remorse,” and that his crimes caused “widespread harm” and led to “countless victims of fraud around the world.”
Manhattan U.S. Attorney Preet Bharara stated: “Liberty Reserve founder Arthur Budovsky ran a digital currency empire built expressly to facilitate money laundering on a massive scale for criminals around the globe. Despite all his efforts to evade prosecution, including taking his operations offshore and renouncing his citizenship, Budovsky has now been held to account for his brazen violations of U.S. criminal laws.”
Assistant Attorney General Leslie R. Caldwell stated: “The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime. Together with our American and international law enforcement partners, we will protect the public even when criminals use modern technology to break the law.”
According to the allegations contained in the Indictment filed against Liberty Reserve, BUDOVSKY, and six other individual defendants; BUDOVSKY’s plea agreement; the evidence filed with the sentencing submissions for BUDOVSKY; and statements made in related court filings and proceedings:
Liberty Reserve S.A. (“Liberty Reserve”) billed itself as the Internet’s “largest payment processor and money transfer system” and operated one of the world’s largest and most widely used digital currencies, which could be used to send and receive payments, via the Internet, to and from people all over the world. At all relevant times, BUDOVSKY directed and supervised Liberty Reserve’s operations, finances, and business strategy.
Liberty Reserve was originally conceived by BUDOVSKY and co-defendant Vladimir Kats in Brooklyn, New York, in approximately 2001, and became operational in late 2005. From his previous experience with “GoldAge” – a digital currency exchange business that he ran with Kats – BUDOVSKY was aware that a substantial volume of digital currency transactions were related to Internet investment schemes called high-yield investment programs (“HYIPs”), which he knew to be online Ponzi schemes. BUDOVSKY was also aware that digital currencies were used by other online criminals, such as credit card traffickers and identity thieves.
BUDOVSKY designed Liberty Reserve specifically to appeal to these online criminals in order to capture their business. Among other things, BUDOVSKY set up Liberty Reserve to have weak anti-money laundering (“AML”) controls and allowed users to move money anonymously through Liberty Reserve’s system, regardless of the volume or provenance of the funds. BUDOVSKY also marketed Liberty Reserve specifically to HYIP operators and other criminal clientele.
In May 2006, BUDOVSKY and Kats were arrested and later pled guilty to operating GoldAge as an unlicensed money transmitting business. Following their arrests, over the next two years, BUDOVSKY and Kats moved Liberty Reserve’s operations offshore to Costa Rica in an attempt to insulate themselves from the reach of U.S. law enforcement. BUDOVSKY was so committed to evading U.S. law enforcement that he later renounced his U.S. citizenship and became a Costa Rican citizen. In May 2008, BUDOVSKY pushed Kats out of Liberty Reserve and became the sole beneficial owner and principal operator of the company, with final decision-making authority over company decisions. BUDOVSKY maintained this role until Liberty Reserve was shut down in May 2013.
During the time period from 2009 to 2013, Liberty Reserve reached the height of its activity. At its peak in late 2012, Liberty Reserve handled a transactional volume of over $300 million per month, a significant portion of which came from users in the United States. BUDOVSKY knew that a substantial number of these transactions were connected to HYIPs and other online criminal activities, and continued to operate Liberty Reserve to cater to these customers. Among other things, BUDOVSKY and his co-conspirators intentionally failed to implement effective AML controls at Liberty Reserve. BUDOVSKY and his co-conspirators also took steps to prevent the Costa Rican regulatory authorities and Liberty Reserve’s own compliance officials from discovering the criminal transactions flowing through Liberty Reserve.
Liberty Reserve ultimately grew into a financial hub for cybercriminals around the world who used it to amass, distribute, store, and launder criminal proceeds derived from HYIPs, credit card trafficking, stolen identity information, and computer hacking. By May 2013, when it was shut down as a result of the Government’s criminal investigation, Liberty Reserve had more than 5.5 million user accounts worldwide, and had processed more than 78 million financial transactions with a combined value of more than $8 billion. United States users accounted for the largest segment of Liberty Reserve’s total transactional volume – between $1 billion and $1.8 billion – and the largest number of user accounts – over 600,000. As part of his plea agreement, BUDOVSKY admitted to laundering between $250 million and $550 million in criminal proceeds linked to Liberty Reserve accounts based in the United States.
* * *
Two co-defendants – Mark Marmilev and Maxim Chukharev – pled guilty and have been sentenced to five and three years in prison, respectively. Two other co-defendants – Vladimir Kats and Azzeddine El Amine – are currently scheduled to be sentenced before U.S. District Judge Denise L. Cote on May 13, 2016. Charges against Liberty Reserve and two individual defendants who have not been apprehended remain pending.
Mr. Bharara praised the outstanding work of the United States Secret Service, the Internal Revenue Service-Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, which worked together in this case as part of the Global Illicit Financial Team. Mr. Bharara also thanked the United States Secret Service’s New York Electronic Crimes Task Force for its extraordinary assistance with the investigation. Additionally, Mr. Bharara specially thanked all the international law enforcement agencies that assisted in the investigation, in particular, the Judicial Investigation Organization in Costa Rica, Interpol, the National High Tech Crime Unit in the Netherlands, the Spanish National Police-Financial and Economic Crime Unit, the Cyber Crime Unit at the Swedish National Bureau of Investigation, and the Swiss Federal Prosecutor’s Office.
This case is being prosecuted jointly with the Department of Justice’s Asset Forfeiture and Money Laundering Section (“AFMLS”), which is overseen by Assistant Attorney General Leslie R. Caldwell. Mr. Bharara thanked AFMLS for its partnership and also thanked the Department of Justice’s Office of International Affairs and Computer Crime and Intellectual Property Section for their support.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Asset Forfeiture Unit. Assistant United States Attorneys Christian Everdell, Christine Magdo, and Andrew Goldstein of the Southern District of New York and Trial Attorney Kevin Mosley of AFMLS are in charge of the prosecution.
U.S. Attorney Charges College Student with Sexual Exploitation of MinorsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Angel M. Melendez, the Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations, New York Field Office (“HSI”), announced today the arrest of ROBERT J. GARNEAU, a/k/a “Raptorr427,” a/k/a “Bobby Sixx,” a/k/a “Allison Denario,” a/k/a “Giannafitz81.” GARNEAU is charged with communicating with three different underage victims online and convincing them to take sexually explicit photographs and send them to GARNEAU online. GARNEAU was arrested this morning and will be presented today before U.S. Magistrate Judge Judith McCarthy in White Plains federal court.
Manhattan U.S. Attorney Preet Bharara said: “Robert Garneau’s alleged crimes are the nightmare of every modern parent. Using every day social media websites, Garneau allegedly exploited minors for his own sexual gratification. We will continue to work with our partners at Homeland Security Investigations to vigorously investigate and prosecute defendants who sexually exploit children.”
Special Agent in Charge Angel M. Melendez said: “Today’s arrest should serve as a stern reminder to parents that, as kids spend more and more time on the internet and gaming consoles, parents must step up by teaching their kids how to spot internet predators and talking to them about who they talk to and what information they share. Those who look to exploit the most vulnerable in our society by hiding behind the wall of the internet will remain a top priority for HSI as we continue to identify and arrest these heinous criminals.”
According to the Complaint[1] unsealed today in White Plains federal court:
From September 2014 to December 1, 2014, GARNEAU communicated online via Instagram and Kik with a then 12-year-old minor (“Victim-1”) in Vacaville, California, and convinced Victim-1 to take and send sexually-explicit photographs of Victim-1 to GARNEAU. On August 10, 2015, and July 18, 2015, GARNEAU engaged in the same type of activity with two more minors (“Victim-2” and “Victim-3”).
During his communications with his victims, GARNEAU utilized the screen names “Raptorr427,” “BobbySixx,” “Allison Denario” and/or “Giannafitz81.” Further, while communicating with his victims, GARNEAU posed as a minor and threatened his victims that if they did not send additional photos and/or videos, they would be arrested for the photos and/or videos they had already sent. With respect to Victim-2, GARNEAU also threatened to show the photos and videos to Victim-2’s Instagram followers.
There may be more victims of this alleged conduct. If you have information to report, contact Homeland Security Investigations through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form. Both are staffed around the clock by investigators. From outside the U.S. and Canada, callers should dial 802-872-6199. Hearing-impaired users can call TTY 802-872-6196.
* * *
GARNEAU, 21, of Warwick, New York, is charged with three counts of sexual exploitation of a minor, each carrying a minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison. The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the efforts of Homeland Security Investigations, Long Island University, the Nassau County Police Department, and the Vacaville Police Department in Vacaville, California, in connection with this investigation. He added that the investigation is ongoing.
The prosecution is being handled by the Office’s White Plains Division. Assistant United States Attorney Marcia S. Cohen is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Manhattan U.S. Attorney Announces $4.3 Million Settlement of False Claims Act Action Based on New York City Fire Department’s Receipt of Improper Reimbursements from MedicareRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”), announced today that the United States has settled civil claims under the False Claims Act against the City of New York (the “City”) related to the receipt by the New York City Fire Department (“FDNY”) of reimbursements for claims for emergency ambulance services that did not meet Medicare’s medical necessity requirement. This matter was brought to the attention of the U.S. Attorney’s Office through a voluntary disclosure by the City.
Manhattan U.S. Attorney Preet Bharara said: “For the Medicare program to function properly and fairly, it is essential that providers be reimbursed only for those services that are covered. For more than four years, the New York City Fire Department received reimbursements for emergency ambulance services that did not meet Medicare’s requirements. We appreciate that the City of New York brought this to our attention, and we believe this settlement to be an appropriate resolution of the problem.”
HHS-OIG Special Agent in Charge Scott L. Lampert said: “HHS-OIG is committed to protecting the Medicare program and the taxpayers who help fund it. This settlement will help ensure that our federal health care programs are utilized properly so they continue to serve those who need them most.”
The FDNY, through its Bureau of Emergency Medical Services, provides emergency ambulance services throughout the City, including to patients eligible for Medicare. FDNY ambulances are dispatched in response to 9-1-1 calls for emergency medical assistance. To receive payment for emergency ambulance services provided to patients eligible for Medicare, the FDNY, through its ambulance billing contractor, submits claims to Medicare containing required information about each service. Emergency ambulance services for patients eligible for Medicare are only reimbursable from Medicare if those services meet Medicare’s medical necessity requirement.
As alleged in a complaint filed on Tuesday, May 3, 2016 in Manhattan federal court, between October 2008 and October 2012, the City consistently received reimbursements for tens of thousands of claims submitted to Medicare for emergency ambulance services that the City had identified as not meeting the Medicare medical necessity requirement. The City was aware that Medicare was paying reimbursements for these claims, but did not take steps to inform Medicare of the reimbursements for more than four years.
In the settlement, approved yesterday by United States District Judge Edgardo Ramos, the City agreed to pay $4.3 million and admitted and accepted responsibility for the following:
-
From October 2008 through and including October 2012, the FDNY, through its ambulance billing contractor, submitted claims to Medicare for reimbursement for emergency ambulance services. As part of the claim submission process, the FDNY made assessments as to whether the emergency ambulance services associated with each claim met the Medicare medical necessity requirement.
-
During this time period, the FDNY determined that thousands of claims for emergency ambulance services did not satisfy the Medicare medical necessity requirement, and provided information in the claims reflecting that determination to a Medicare Administrative Contractor as part of the claim submission process.
-
During this time period, the FDNY consistently received reimbursements from Medicare for claims submitted to Medicare for emergency ambulance services that FDNY had identified as not meeting the Medicare medical necessity requirement.The FDNY was aware that Medicare was consistently paying the FDNY for such claims, but did not take steps to inform Medicare of its consistent receipt of Medicare reimbursement for such claims until December 2012.
-
Beginning in or around September 2013, the FDNY modified its claiming procedures to reduce the risk that the FDNY would be improperly reimbursed for claims for emergency ambulance services that were not medically necessary.
* * *
This case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Andrew E. Krause and Rebecca C. Martin are in charge of the case.
-
Five Defendants Charged in White Plains Federal Court with Robbery and Murder in Swan LakeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James R. Farrell, the Sullivan County District Attorney, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), Joseph A. D’Amico, the Superintendent of the New York State Police (“NYSP”), Michael A. Schiff, the Sullivan County Sheriff, Robert Mir, the Chief of the Village of Monticello Police Department, and Scott Kinne, the Chief of the Village of Liberty Police Department, announced the unsealing of a Superseding Indictment charging JEFFREY HERRING, TRAVIS DAVIS, JESSE HUMMEL, MARK MACK, and ANDREW REYNOLDS with the October 12, 2015, robbery and murder of Michael Northcote, 34, in Swan Lake, New York.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, these defendants undertook a violent home-invasion robbery, which resulted in the senseless murder of Michael Northcote. I want to thank all our federal, state and local law enforcement partners, especially Sullivan County District Attorney James Farrell for his extraordinary partnership with our office in this important case.”
Sullivan County District Attorney James R. Farrell stated: “This indictment reflects the tireless work of all of the police officers, detectives, investigators, special agents and prosecutors assigned to this case, and their dedication to bringing those allegedly responsible for the robbery and homicide of Michael Northcote to justice. It is the product of unparalleled cooperation among local, county, state and federal law enforcement agencies committed to holding accountable those who allegedly perpetrated these violent acts against Northcote, who was just 34 years old when he was killed during a home invasion. I would like to thank my colleagues in the United States Attorney's Office for their unwavering commitment to working together with my office and all of Sullivan County's law enforcement agencies. Our joint efforts make each of our agencies more effective than we would be if we worked independently of one another, which only enhances the safety of the Sullivan County community and strengthens our ability to do the right thing. This indictment is a step toward justice for Michael Northcote and his family, and I look forward to continued collaboration with our United States Attorney in this and other important cases.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “Violence isn’t limited to the big cities in this day and age. However, when someone is robbed and murdered in their own home in a small town, it sends shockwaves through the community. Our Safe Streets Task Forces work with our local law enforcement partners to keep this type of crime out of every neighborhood, big or small.”
New York State Police Superintendent Joseph A. D’Amico stated: “This indictment is the direct result of the continued collaboration between the State Police and our law enforcement partners on the local and federal level. Because of this partnership, five alleged dangerous criminals are now off the streets and will be fully prosecuted for their involvement in this case.”
Sullivan County Sheriff Michael A. Schiff stated: “Through the coordinated effort of all of the participating law enforcement agencies, we were able to have a multiplier effect on this case and were able to bring these defendants to justice. I would like to thank the U.S. Attorney for the Southern District of New York, Preet Bharara, for taking on this case and ensuring that justice is served.”
Village of Monticello Police Chief Robert Mir stated: “Cooperation between all levels of law enforcement and the community are required to solve crimes. This impressive collaboration between the Sullivan County Sheriff’s Office, New York State Police, F.B.I., Monticello Police, Liberty Police, Sullivan County District Attorney’s Office and the United States Attorney General’s Office, has brought to justice several individuals who allegedly senselessly and viciously robbed and murdered a man. The Monticello Police Department is committed to our sworn oath and will continue to dedicate resources and work with our local, state and federal partners, in order to deliver the best police services. Too many people in our community have been lost to drugs and violence, and too many family members and friends are grieving. I hope that these arrests will bring some comfort and closure to the Northcote family.”
Village of Liberty Police Chief Scott Kinne stated: “The Village of Liberty Police remains committed to sharing our resources and working with all levels of law enforcement. All crimes, especially a violent crime of this nature, affect the residents of our county as a whole. Interagency cooperation is key in a case like this and because of this cooperation several violent criminals have been taken off the streets of Sullivan County.”
As alleged in the Superseding Indictment unsealed today in White Plains federal court,[1] on October 12, 2015, the defendants carried out a home-invasion robbery of Michael Northcote, a marijuana dealer, at 177 Cohen & Cohen Road, Swan Lake, New York. In the course of the robbery, JEFFREY HERRING shot and killed Northcote.
* * *
TRAVIS DAVIS and ANDREW REYNOLDS were taken into federal custody this morning. JEFFREY HERRING and MARK MACK were already in state custody. These four defendants were presented in White Plains federal court today before U.S. Magistrate Judge Judith C. McCarthy. JESSE HUMMEL was taken into federal custody last night in the District of Arizona and will be presented there today. The case is assigned to U.S. District Court Judge Kenneth M. Karas.
Charts containing the names of the defendants who were charged today, and the charges and maximum penalties they face, are attached. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the respective judges.
Mr. Bharara praised the outstanding investigative work of the FBI, the New York State Police, the Sullivan County Sheriff’s Department, the Village of Monticello Police Department, the Village of Liberty Police Department, the Town of Fallsburg Police Department, the United States Marshals Service, the New York City Police Department, and the Casa Grande, Arizona, Police Department. Mr. Bharara also thanked the Sullivan County District Attorney’s Office for its assistance in the case.
The case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Michael Gerber and Lauren Schorr are in charge of the prosecutions.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Robbery conspiracy
JEFFREY HERRING,
TRAVIS DAVIS,
JESSE HUMMEL,
MARK MACK, and
ANDREW REYNOLDS
20 years in prison
Robbery
JEFFREY HERRING,
TRAVIS DAVIS,
JESSE HUMMEL,
MARK MACK, and
ANDREW REYNOLDS
20 years in prison
Murder
JEFFREY HERRING,
TRAVIS DAVIS,
JESSE HUMMEL,
MARK MACK, and
ANDREW REYNOLDS
Life in prison, or the death penalty
Mandatory minimum:
5 years in prison, to be imposed consecutively to any other sentence
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and the descriptions of the Superseding Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Father of Investment Banker Sentenced in Manhattan Federal Court for Million-Dollar Insider Trading SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ROBERT STEWART, a/k/a “Bob,” was sentenced to four years’ probation, with the first year to be served in home detention, and $150,000 in forfeiture for conspiring to use inside information provided by Sean Stewart, the defendant’s son and co-conspirator, to trade and cause another to trade in the securities of five different health care companies. The insider trading conspiracy spanned over four years and generated profits of approximately $1.16 million, with STEWART himself reaping approximately $150,000 of those gains. ROBERT STEWART pled guilty on August 12, 2015, to one count of conspiracy to commit securities fraud and fraud in connection with a tender offer before the Honorable James C. Francis, United States Magistrate Judge. U.S. District Court Judge Laura Taylor Swain imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Robert Stewart received nonpublic mergers and acquisitions information from his investment banker son, and then used this illegal edge to earn substantial trading profits. Stewart has admitted to violating federal securities laws and now stands a convicted felon.”
According to the Complaint, Indictment, other documents filed in the case, and statements made in open court:
In early 2011, Sean Stewart, who at the time held the position of Vice President in the Healthcare Investment Banking Group of a global bank headquartered in Manhattan (“Investment Bank A”), began tipping his father, ROBERT STEWART, with nonpublic information about upcoming mergers and acquisitions. The first of these deals involved the acquisition of Kendle International Inc. by INC Research, LLC, which was announced publicly on May 5, 2011. Sean Stewart worked on the deal, representing Kendle. ROBERT STEWART made about $7,900 in profits on purchases of Kendle stock executed in February and March of 2011. When questioned about his Kendle trades by the Securities and Exchange Commission in May 2013, ROBERT STEWART reported that he used the proceeds of those trades to pay expenses related to Sean Stewart’s June 2011 wedding.
The second deal about which Sean Stewart tipped ROBERT STEWART was the acquisition of Kinetic Concepts, Inc. (“KCI”) by Apex Partners, announced on July 13, 2011. Although ROBERT STEWART purchased some stock in KCI based on Sean Stewart’s tip, he sold that stock before the acquisition was announced, around the same time that Sean Stewart learned the Financial Industry Regulatory Authority was conducting an inquiry into ROBERT STEWART’s Kendle trading.
Also around this time, in the spring of 2011, ROBERT STEWART expressed a concern to Richard Cunniffe, a co-conspirator and cooperating witness, that ROBERT STEWART was “too close to the source” to be trading KCI stock in his own account, and asked Cunniffe to make purchases of KCI call options for ROBERT STEWART in Cunniffe’s brokerage account. Cunniffe agreed to do so, and also mirrored for his own benefit the KCI trades that ROBERT STEWART was directing.
When the KCI/Apax Partners deal was announced, ROBERT STEWART and Cunniffe reaped profits totaling approximately $107,790. Around this time, ROBERT STEWART told Cunniffe that the source of the KCI tip and the earlier Kendle tip had been ROBERT STEWART’s son. Later, around the spring of 2012, ROBERT STEWART clarified for Cunniffe that the son in question was Sean Stewart, who worked on the “sell side” on Wall Street.
In October 2011, Sean Stewart left Investment Bank A. A few months later, he joined an investment banking advisory firm headquartered in Manhattan (“Investment Bank B”) as a Managing Director.
During Sean Stewart’s tenure with Investment Bank B, based on tips concerning nonpublic acquisition-related information supplied by Sean Stewart, ROBERT STEWART had Cunniffe conduct options trading in advance of the public announcements of three more deals: (1) the acquisition of Gen-Probe Inc. by Hologic, Inc., announced on April 30, 2012; (2) the acquisition, by tender offer, of Lincare Holdings Inc. by Linde AG, announced on July 1, 2012; and (3) the acquisition of CareFusion Corp. by Becton, Dickinson & Co. (“Becton”), announced October 4, 2014. Investment Bank B represented Hologic in connection with its acquisition of Gen-Probe; Linde in connection with its acquisition of Lincare; and CareFusion in connection with its acquisition by Becton. The profits that ROBERT STEWART and Cunniffe reaped from illegal insider trading in advance of the announcements of these three deals totaled over $1 million.
To try to avoid detection for their crimes, ROBERT STEWART and Cunniffe refrained from speaking explicitly about their trading over the phone or via e-mail, sometimes using codes to hide their criminal activity from authorities who might be listening to their phone calls or reading their email. Other steps ROBERT STEWART and Cunniffe took to avoid detection included trying to discuss their trading at face-to-face meetings and adopting a profit-splitting mechanism that had Cunniffe paying ROBERT STEWART his portion of the illegal proceeds in small increments, over time, typically in cash.
In March and April of 2015, Cunniffe recorded meetings he had with ROBERT STEWART. During one such meeting, ROBERT STEWART accepted a payment of $2,500 cash from Cunniffe, which was the balance of the proceeds owed to ROBERT STEWART for profitable trading executed in Cunniffe’s account in advance of the CareFusion acquisition announcement. Also during this meeting, ROBERT STEWART admitted that Sean Stewart once chastised him for failing to make use of a tip, saying, “I can’t believe I handed you this on a silver platter and you didn’t invest in it.”
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ROBERT STEWART, a/k/a “Bob,” 61, of North Merrick, New York, was sentenced to four years’ probation, with the first year to be served in home detention, $150,000 in forfeiture, and a $100 special assessment.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and also thanked the Securities and Exchange Commission, which has brought civil actions against the defendant.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Sarah E. McCallum and Brooke E. Cucinella are in charge of the prosecution.
California Man Found Guilty in Manhattan Federal Court of Orchestrating $31 Million Mortgage Modification Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Christy Goldsmith Romero, Special Inspector General of the Troubled Asset Relief Program (“SIGTARP”), announced that DIONYSIUS FIUMANO, a/k/a “D,” was found guilty late yesterday in Manhattan federal court of orchestrating a massive mortgage modification scheme through which he and his co-conspirators defrauded more than 30,000 American homeowners out of a total of approximately $31 million.
Manhattan U.S. Attorney Preet Bharara said: “Dionysius Fiumano was the ringleader of a heartless criminal conspiracy that preyed on desperate homeowners struggling to pay their mortgages. Claiming to offer a lifeline to homeowners, Fiumano deceived tens of thousands into paying exorbitant fees for mortgage modification services they never got.”
Special Inspector General Christy Goldsmith Romero said: “A jury convicted Dionysius Fiumano for his role in orchestrating an elaborate advance fee scheme that defrauded more than 30,000 struggling homeowners out of more than $30 million. Using the Treasury’s Home Affordable Modification Program (HAMP) as the backdrop for their fraud, Fiumano and his co-conspirators conned homeowners who had fallen behind on their mortgage payments into believing their mortgages were being modified. In reality, they did little or nothing to help these homeowners. And when consumer complaints attracted attention, the co-conspirators renamed their companies to continue the fraud. These crimes were uniquely despicable, as HAMP is a free federal government housing program designed to help those most impacted by the financial crisis. Rather than offer relief, Fiumano added to the distress and despair of thousands of innocent Americans struggling to stay in their homes.”
According to the Indictment other filings in Manhattan federal court and the evidence presented at trial:
FIUMANO was the general manager of sales at Vortex Financial Management, Inc., a/k/a Professional Marketing Group, a/k/a Professional Legal Network (“PMG”), an Irvine, California, company that offered purported “mortgage modification” services, that is, assistance persuading the homeowner’s lender to agree to a modification to the terms of the homeowner’s mortgage to make it more affordable. In that capacity, FIUMANO oversaw PMG’s sales staff of approximately 65 telemarketers and managers.
From about November 2011 through May 2014, FIUMANO perpetrated a scheme to defraud homeowners in dire financial straits who were seeking relief through government mortgage relief programs. Through a series of false and fraudulent representations, FIUMANO duped thousands of homeowners into paying thousands of dollars each in up-front fees in exchange for little or no mortgage modification service. In total, through their scheme, FIUMANO and his co-conspirators obtained approximately $31 million from more than 30,000 victim-homeowners throughout the United States.
PMG purchased thousands of “leads,” consisting of the name, address, and other contact information of homeowners who had fallen behind in making mortgage payments on their homes. PMG then sent false and fraudulent solicitation letters by e-mail to the homeowners they identified through the “leads,” misleading these homeowners into believing that their mortgages were already under review and that new, modified rates had already been contemplated and approved by the homeowners’ lenders.
At FIUMANO’s direction, FIUMANO’s sales staff called and emailed homeowners who received PMG’s fraudulent solicitations. During these calls, in an effort to convince the homeowners to pay up-front fees, FIUMANO, through his sales staff, regularly lied to homeowners, including by saying that (a) the homeowners were retaining a “law firm” and an “attorney” who would complete a mortgage modification application and negotiate aggressively on the homeowners’ behalf with banks to modify the terms of the homeowners’ mortgages; (b) the homeowners had been “pre-approved” or “pre-qualified” to receive a mortgage modification; (c) PMG employed underwriters who would calculate and guarantee the homeowners a new, modified rate and monthly mortgage payment; and (d) the up-front fees paid by the homeowners would be paid directly to the homeowners’ lenders, to the attorneys to pay their fees, or to pay the purported “hard costs” of the modification. In truth and in fact, and as FIUMANO well knew, all of these representations were false.
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FIUMANO, 43, of Irvine, California, was convicted of one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a statutory maximum sentence of 20 years in prison. FIUMANO is scheduled to be sentenced by U.S. District Judge John F. Keenan on September 13, 2016, at 11:00 a.m.
Three other co-conspirators have also been convicted for their roles in the scheme:
Pedram Abghari, a/k/a “Ted Allen,” 38, of Irvine, California, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a statutory maximum sentence of 20 years in prison, and one count of misprision of a felony, which carries a statutory maximum sentence of three years in prison.
Justin Romano, 41, of Blue Point, New York, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud.
Mahyar Mohases, 33, of Irvine, California, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud.
Abghari, Romano, and Mohases are scheduled to be sentenced in the coming months.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the Office of the Special Inspector General for the Troubled Asset Relief Program.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Edward A. Imperatore and Patrick Egan are in charge of the prosecution.
Statement of U.S. Attorney Preet Bharara on Sentencing of Former New York State Assembly Speaker Sheldon SilverRead the Press Release
“Today’s stiff sentence is a just and fitting end to Sheldon Silver’s long career of corruption.”
Manhattan U.S. Attorney Sues Narco Freedom and Certain of Its Former Executives and Business Associates for Engaging in A Series of Fraudulent SchemesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the United States has filed a complaint alleging violations of the False Claims Act by NARCO FREEDOM, INC. (“NARCO FREEDOM”), a former operator of outpatient chemical dependency clinics, ALAN BRAND, former CEO of NARCO FREEDOM, GERALD BETHEA, former CEO and program director of NARCO FREEDOM, JOINING HANDS MANAGEMENT INC. (“JOINING HANDS”), a former business associate of NARCO FREEDOM and operator of short-term residences known as “three-quarter houses,” and BERNARD RORIE and DEVORAH HAIGLER, co-owners of JOINING HANDS. The complaint alleges that each of the defendants engaged in one or more fraudulent schemes that caused Medicaid to be billed for services in NARCO FREEDOM’s outpatient programs that were premised upon illegal kickbacks, or that were based on false and fraudulent medical records.
Manhattan U.S. Attorney Preet Bharara said: “Having already disrupted Narco Freedom’s fraud and taken steps to protect hundreds whose housing was put at risk by kickbacks, we now bring this follow-on action to recover the funds fraudulently taken from federal healthcare programs and to hold alleged wrongdoers accountable.”
HHS-OIG Special Agent in Charge Scott Lampert said: “The allegations in this complaint continue to underscore the damage that greed does to our nation’s health care system and the tax payers who help fund it. HHS-OIG will continue to ensure that substance abuse providers are held accountable for the way they do business, so the services utilized by the vulnerable individuals that need them are delivered in an honest and appropriate manner.”
The complaint, filed today in Manhattan federal court, alleges three separate fraudulent schemes. In the first scheme, NARCO FREEDOM, BRAND, and BETHEA are alleged to have provided kickbacks in the form of below-cost housing in NARCO FREEDOM’s three-quarter houses, known as “Freedom Houses,” to induce residents of those houses to enroll in and attend NARCO FREEDOM’s outpatient programs. The scheme exploited vulnerable individuals who were forced to comply with NARCO FREEDOM’s rules because they lacked stable housing options. This scheme also was the subject of a lawsuit brought by this Office in October of 2014, United States v. Narco Freedom, Inc., 14 Civ. 8593 (JGK), in which the United States obtained a temporary restraining order and preliminary injunction enjoining NARCO FREEDOM’s conduct. The injunction was granted based on the Government’s preliminary showing of ongoing violations of the Anti-Kickback Statute and ultimately resulted in a Court order that protected the hundreds of Freedom House residents by transferring management of the Freedom Houses away from NARCO FREEDOM to other providers.
The complaint also alleges a second illegal kickback scheme, whereby NARCO FREEDOM paid JOINING HANDS and RORIE in exchange for RORIE and HAIGLER referring residents of JOINING HANDS three-quarter houses to NARCO FREEDOM outpatient programs and enforcing attendance at those programs.
The complaint alleges a third scheme in which NARCO FREEDOM and BETHEA directed and paid employees of NARCO FREEDOM’s outpatient program in Red Hook, Brooklyn, to create false medical records for patients despite the fact that those employees had not treated the patients, and to create and backdate records for services allegedly provided months or years earlier.
According to the complaint, the defendants have subjected HHS to tens of millions of dollars in losses in Medicaid funds paid as a result of the fraudulent kickback schemes.
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Mr. Bharara thanked HHS-OIG for its investigative efforts and ongoing support and assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Kirti Vaidya Reddy and Cristine Irvin Phillips are in charge of the case.
Former New York State Assembly Speaker Sheldon Silver Sentenced in Manhattan Federal Court to 12 Years in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that former New York State Assembly Speaker SHELDON SILVER was sentenced this afternoon to 12 years in prison after having been found guilty by a federal jury of using his official position to obtain nearly $4 million in bribes and kickbacks in exchange for his official acts and obtaining another $1 million through laundering the proceeds of his crimes. SILVER was sentenced in Manhattan federal court by U.S. District Judge Valerie E. Caproni who also presided over the five-week jury trial.
U.S. Attorney Preet Bharara said: “Today’s stiff sentence is a just and fitting end to Sheldon Silver’s long career of corruption.”
According to the evidence introduced at trial, court filings, and statements made in Manhattan federal court:
For more than two decades, SHELDON SILVER served as Speaker of the New York State Assembly, a position that gave him significant power over the operation of state government. SILVER used this immense power – including, in particular, his power over the real estate industry and his control over certain health care funding – to unlawfully and corruptly enrich himself. Among other things, he unlawfully solicited and obtained client referrals worth millions of dollars in exchange for SILVER’s official acts, and attempting to disguise this money as legitimate outside income earned from his work as a private lawyer. In particular, SILVER claimed on financial disclosure forms required to be filed with New York State and in public statements that the millions of dollars he received in outside income while also serving as Speaker of the Assembly came from a Manhattan-based law firm, Weitz & Luxenberg P.C., where SILVER claimed to work representing individual clients in personal injury actions. These claims were materially false and misleading – and made to cover up unlawful payments SILVER received solely due to his official power and influence as an elected legislator and the Speaker of the Assembly.
The scheme provided SILVER with two different streams of unlawful income: (i) approximately $700,000 in kickbacks SILVER received by steering two real estate developers with business before the state legislature to a law firm with which he was associated, and (ii) more than $3 million in asbestos client referral fees SILVER received by, among other official acts, awarding $500,000 in state grants to a university research center of a physician who referred patients made ill by asbestos to SILVER at Weitz & Luxenberg.
Unlawful Income From the Real Estate Law Firm
SILVER entered into a corrupt relationship with Goldberg & Iryami, which specialized in making applications to New York City to reduce taxes assessed on properties. Beginning in at least 2000, SILVER approached two prominent developers of properties in Manhattan, Glenwood Management Corp. and The Witkoff Group, Inc., and asked them to hire Goldberg & Iryami. The developers – both of whom lobbied SILVER on real estate issues because their businesses depended heavily on favorable state legislation – agreed to use Goldberg & Iryami as SILVER had requested. Over the years, Witkoff and Glenwood Management, in particular, paid millions of dollars in legal fees to Goldberg & Iryami. SILVER received a cut from the legal fees amounting to nearly $700,000. SILVER had no public affiliation with Goldberg & Iryami and performed no legal work at all to earn those fees, which were simply payments for SILVER having arranged the business through his official power and influence.
While continuing to receive the fees and in furtherance of the scheme, SILVER took official action beneficial to Glenwood Management and Witkoff. For example, while SILVER was publicly associated with advocating for tenants, a proposal that benefitted Glenwood Management was in substantial part enacted in real estate legislation in 2011 with SILVER’s support.
Unlawful Income From Asbestos Client Referrals
SILVER also entered into a corrupt arrangement with Dr. Robert Taub, who was a leading physician specializing in the treatment of asbestos-related diseases, through which SILVER issued state grants and otherwise used his official position to provide favors to Dr. Taub so that Dr. Taub would refer and continue to refer his patients to SILVER at Weitz & Luxenberg, a firm with which SILVER was affiliated as counsel. Specifically, SILVER arranged for New York State to fund two grants – each for $250,000, and paid out of a secret and un-itemized pool of funds controlled entirely by SILVER – for a research center Dr. Taub had established. SILVER used his official position to provide Dr. Taub with other benefits as well, including helping to direct $25,000 in state funds to a not-for-profit organization for which one of Dr. Taub’s family members served on the board, and asking the CEO of a second not-for-profit to hire a second family member of Dr. Taub’s.
From 2002 to the present, SILVER received more than $3 million from legal fees Weitz & Luxenberg received from patients Dr. Taub had referred to SILVER at the firm while SILVER was taking official actions to benefit Dr. Taub. SILVER did no legal work whatsoever on these asbestos cases, his sole role having been to use his official position and access to state funds to induce Dr. Taub to provide him with these lucrative referrals.
Silver’s Efforts to Cover Up the Scheme
SILVER took various efforts to disguise his unlawful outside income and prevent the detection of his criminal scheme. SILVER listed on his official public disclosure forms that his outside income consisted of “limited practice of law in the principal subject area of personal injury claims on behalf of individual clients,” which was false and misleading. Beginning in 2010, SILVER’s disclosures changed to state that the source of his legal income was a “Law Practice” that “includ[ed]” being of counsel to Weitz & Luxenberg. SILVER never disclosed his relationship with Goldberg & Iryami or any work beyond what he claimed was a “personal injury” practice.
SILVER also repeatedly made false statements about his outside income in his public statements, including the following:
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SILVER claimed he performed legal work consisting of spending several hours each week evaluating legal matters brought to him by potential clients and then referring cases that appeared to have merit to lawyers at Weitz & Luxenberg.In fact, SILVER did no such work on the asbestos cases and obtained those referrals to Weitz & Luxenberg based on his corrupt arrangement with Dr. Taub.
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SILVER claimed his law practice involved the representation of “plain, ordinary simple people.”In fact, SILVER represented some of the largest real estate developers in the state, for whom favorable state legislation was critical to their business interests.
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SILVER claimed through his spokesperson that SILVER found clients by virtue of his having been a “lawyer for more than 40 years,” in a manner that was “not unlike any other attorney in this state, anywhere.” In fact, SILVER found his lucrative asbestos and real estate developer clients solely by virtue of his official position.
- SILVER stated through his spokesperson that “[n]one of his clients have any business before the state.” In fact, SILVER’s outside income included millions of dollars of fees obtained through Glenwood and Witkoff, both of which had significant business before the state, and Dr. Taub, to whose benefit SILVER provided state funding and other benefits related to SILVER’s official position.
In addition, SILVER thwarted the Moreland Commission to Investigate Public Corruption so that it would not learn of his illegal outside income, first by filing legal motions on behalf of the Assembly and taking other action to block the Moreland Commission’s investigation into legislators’ outside income.
Finally, SILVER laundered part of crime proceeds through private investment vehicles that yielded him another $1 million in ill-gotten gains.
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In addition to the prison sentence, Judge Caproni ordered SHELDON SILVER, 72, of New York, New York, to pay a $1.75 million fine, forfeit $5.3 million, and pay a $700 special assessment fee. SILVER also was sentenced to two years of supervised release. The Government had sought a fine above the Sentencing Guidelines level in light of the taxpayer-funded pension that Silver will received for the rest of his life, despite having been convicted of federal corruption offenses. In imposing the fine, Judge Caproni took into account Silver’s pension.
SILVER was found guilty by a unanimous jury on November 30, 2015, of two counts of honest services wire fraud, two counts of honest services mail fraud, two counts of extortion under color of official right, and one count of engaging in illegal monetary transactions.
U.S. Attorney Bharara praised the work of the Criminal Investigators of the United States Attorney’s Office and the Federal Bureau of Investigation, who jointly conducted this investigation.
This case was prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Carrie H. Cohen, Howard S. Master, Andrew D. Goldstein, and James McDonald are in charge of the prosecution.
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Nikita Kuzmin, Creator of the Gozi Virus, Sentenced in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that NIKITA KUZMIN, the creator of “Gozi” malware, was sentenced in Manhattan federal court to time served (37 months). Gozi, which was used to steal money from bank accounts across the United States and Europe, infected over one million computers globally and caused tens of millions of dollars in losses. KUZMIN pled guilty, pursuant to a cooperation agreement, to various computer intrusion and fraud charges in May 2011. He was sentenced today by the Honorable Kimba M. Wood.
According to the charging and sentencing documents, and statements made in Manhattan federal court:
In approximately 2007, computer network security experts identified, for the first time, a form of malicious software, or malware, that was stealing victims’ personal bank account information on a widespread basis. The malware, which the experts named “Gozi” (and which is sometimes called the “Gozi Virus”) infected the victim’s computer, among other ways, when the victim received and opened a .pdf document that was designed to appear innocuous and relevant to the victim. Opening the .pdf caused Gozi to be downloaded onto the victim’s computer secretly, where it generally remained undetectable by anti-virus software. Once downloaded, the malware collected bank account-related data from the victim’s computer, including the username and password, to access the victim’s bank account online. The malware transmitted that data to the individuals who controlled the malware, which they used fraudulently to transfer money out of victims’ bank accounts. The network security experts subsequently identified a server that contained certain data stolen by Gozi, including 10,000 account records belonging to over 5,200 personal computer users. The records included login information for accounts at over 300 companies, including leading global banks and financial services firms.
Coordinated efforts between U.S. and foreign law enforcement ultimately led to the identification of KUZMIN, a Russian national, as the individual who controlled the malware. KUZMIN previously had significant computer science training, attending two major engineering universities in Russia and graduating with a computer science degree.
In addition to creating Gozi, KUZMIN developed an innovative means of distributing and profiting from it. Unlike many cybercriminals at the time, who profited from malware solely by using it to steal money, KUZMIN rented out Gozi to other criminals, pioneering the model of cybercriminals as service providers for other criminals. For a fee of $500 a week paid in WebMoney, a digital currency widely used by cybercriminals, KUZMIN rented the Gozi “executable,” the file that could be used to infect victims with Gozi malware, to other criminals. KUZMIN designed Gozi to work with customized “web injects” created by other criminals that could be used to enable the malware to target information from specific banks; for example, criminals who sought to target customers of particular American banks could purchase web injects that caused the malware to search for and steal information associated with those banks. Once KUZMIN’s customers succeeded in infecting victims’ computers with Gozi, the malware caused victims’ bank account information to be sent to a server that KUZMIN controlled where, as long as the criminals had paid their weekly rental fee, KUZMIN gave them access to it. KUZMIN, who used the online identity “76,” advertised this cybercriminal business, which he called “76 Service,” on underground cybercriminal forums. KUZMIN made at least a quarter of a million dollars renting and selling Gozi to other criminals.
In the course of the investigation, Gozi was found to have infected over one million computers across the United States, Germany, Great Britain, Poland, France, Finland, Italy, Turkey, and other countries. U.S. victims include individuals, companies, and others, including the National Aeronautics and Space Administration (“NASA”). Gozi caused at least tens of millions of dollars in losses to victims.
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In addition to the sentence, KUZMIN, 28, a citizen of Russia, was ordered to pay forfeiture and restitution in the amount of $6,934,979.
On January 5, 2016, Deniss Calovskis, a/k/a “Miami,” a Latvian national who wrote the computer code for certain “web injects” that enabled Gozi to target information from particular banks, was sentenced to time served (21 months) for his role in the offense. Mihai Ionut Paunescu, a/k/a “Virus,” a Romanian national who allegedly ran a “bulletproof hosting” service that enabled cybercriminals to distribute Gozi and other notorious malware, was arrested in Romania in December 2012 and currently awaits extradition to the United States.
Mr. Bharara praised the Federal Bureau of Investigation for its outstanding work in the investigation. He also specially thanked the NASA Office of Inspector General.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Nicole Friedlander and Sarah Lai are in charge of the prosecution.
New York City Human Resources Administration Supervisor Pleads Guilty to Defrauding Two Public Assistance Programs of More Than $1.8 MillionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that CHERRISE WATSON-JACKSON, a/k/a “Reesie,” a supervisor with the New York City Human Resources Administration (“HRA”), pled guilty today to fraud offenses involving the theft of more than $1.8 million from two public assistance programs she helped to administer. WATSON-JACKSON, who was arrested in December 2015, entered her plea today before U.S. District Judge John G. Koeltl, and is scheduled to be sentenced by Judge Koeltl on August 5, 2016.
U.S. Attorney Bharara stated: “As she admitted today, Cherrise Watson-Jackson, a supervisor with the New York City Human Resources Administration, abused her official position to defraud public benefit programs out of nearly $2 million. Because of Watson-Jackson’s crimes, money meant for the needy went instead to the pockets of the corrupt.”
According to the Complaint, Superseding Indictment, other information in the public record, and today’s plea proceeding:
HRA is an agency of the City of New York responsible for administering various public assistance programs. Among other things, HRA provides temporary help to individuals and families with social service and economic needs to assist them in reaching self-sufficiency. Its services include, among other things, administering the federally-funded Supplemental Nutrition Assistance Program (“SNAP”) (more commonly known as “food stamps”), and providing rental assistance to low-income families and individuals.
Starting in 1993, WATSON-JACKSON worked at HRA, most recently as a supervisor in a job center in Queens, New York. In that capacity, she supervised a group of other supervisors who in turn were responsible for teams of employees who review and determine eligibility for public assistance clients. Since at least early 2012, and continuing until at least December 2013, WATSON-JACKSON abused her position by engaging in a scheme to defraud two of the public assistance programs that she was charged to help administer. The first of the two schemes involved WATSON-JACKSON fraudulently loading electronic benefit transfer (“EBT”) cards with funds from SNAP, and the cards were then used by co-conspirators throughout the New York City area. The second scheme involved WATSON-JACKSON fraudulently causing rental assistance checks to be mailed to co-conspirators who posed as “landlords” of low-income tenants. Co-conspirators then cashed and/or assisted others to cash the fraudulently obtained checks. The two schemes resulted in the loss of more than $1.8 million in public funds.
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WATSON-JACKSON, 45, of Queens, New York, pled guilty to one count of conspiracy to commit mail fraud and one count of conspiracy to commit wire fraud, each of which carries a statutory maximum of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
In connection with pleading guilty, WATSON-JACKSON also agreed to forfeit more than $1.8 million and to pay restitution of more than $1.8 million.
WATSON-JACKSON was arrested in December 2015, along with alleged co-conspirators Maurice Cromwell, a/k/a “Reese,” 40, of Staten Island, New York; Isaac Allen, 39, of Brooklyn, New York; Corey Brock, a/k/a “Cee,” 35, of Queens, New York; Derrick Williams, a/k/a “Blood,” 35, of Queens, New York; Vernecka Petersen-Fowler, 45, of Brooklyn, New York; Kevin Williams, 28, of Queens, New York; Jaron Annuziata, 36, of Brooklyn, New York; Beverly Franklin, 38, of Queens, New York; Beverly Lord, 54, of Queens, New York; Yesenia Depena, 24, of Brooklyn, New York; and Gerard Stokes, 32, of Queens, New York. To date, all defendants except Lord, Depena, and Stokes have pled guilty to their participation in one or both fraudulent schemes, and are scheduled to be sentenced by Judge Koeltl in the coming months.
U.S. Attorney Bharara thanked and praised the work of the New York City Department of Investigation, the New York State Office of Welfare Inspector General, and the Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Daniel C. Richenthal and Andrew D. Beaty are in charge of the prosecution.
The pending charges against Beverly Lord, Yesenia Depena, and Gerard Stokes are merely accusations, and these defendants are presumed innocent unless and until proven guilty.
Manhattan U.S. Attorney Announces Arrest of Black Market Distributor of Diverted HIV Medications Worth Approximately $4 MillionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Russell Hermann, Acting Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office (“FDA-OCI”), announced that ROBIN DELEONROSA, a/k/a “Magic,” a/k/a “Robin Deleon Rosa,” a/k/a “Robin Rosa,” was arrested today for his role in a nationwide black market that distributed millions of dollars’ worth of fraudulently obtained HIV prescription drugs to unsuspecting consumers. DELEONROSA personally obtained and sold more than $1.9 million worth of second-hand HIV prescription drugs. In addition, a search earlier today of DELEONROSA’s residence in the Bronx resulted in the seizure of over 1,000 bottles of second-hand HIV prescription pills, with an estimated value of $1.8 million, as well as lighter fluid that was used to remove labels from the pill bottles, and over $70,000 in United States currency. DELEONROSA will be presented later today in Manhattan federal court before Magistrate Judge Frank Maas.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Robin Deleonrosa served as a middle-man in a black market scheme to illegally re-sell potentially dangerous or ineffective second-hand HIV medications to unsuspecting patients and pharmacies. As a result of his alleged participation in this scheme, Deleonrosa endangered the health of unsuspecting patients needing these drugs, and defrauded Medicaid of more than an estimated $1.9 million.”
FDA-OCI Acting Special Agent in Charge Russell Hermann said: “When prescription medications are diverted from the legal supply chain, there is no longer any assurance that the medicines are safe and effective. Our office will pursue and bring to justice individuals who endanger the public’s health in this manner.”
According to the Complaint unsealed today in Manhattan federal court[1]:
From at least in or about September 2013 until April 2016, DELEONROSA was part of a black market distribution network that distributed bulk quantities of second-hand HIV prescription drugs to unsuspecting consumers. In particular, the members of the black market distribution ring would initially obtain the HIV prescription drugs by purchasing these drugs from patients to whom these medications were originally prescribed. The prescription HIV bottles were then collected and the labels (containing the patients’ names) were removed using dangerous substances, including lighter fluid and other potentially hazardous chemicals. Through this process, the members of the black market distribution network made the bottles appear new in order to conceal the fact that the bottles had previously been dispensed to patients. This process allowed the bottles eventually to be re-sold to pharmacies and unsuspecting consumers. Consumers who eventually received these second-hand prescription HIV medications were not aware that the prescription bottles had been previously sold, treated with potentially hazardous chemicals, and possibly not stored under conditions sufficient to maintain their medical efficacy.
In addition to placing consumers at significant risk, Medicaid and other health insurers were defrauded in multiple ways by DELEONROSA’s scheme. On the front end, health care benefit enrollees, including Medicaid recipients who participated in this scheme, filled their prescriptions for little or no cost with the intention of selling the drugs into the underground black market rather than taking the drugs as prescribed to treat their illnesses. Because health benefits, such as HIV prescription drugs, are for the sole use of the insured, Medicaid and other health care benefit plans would not have paid for such drugs if the beneficiaries had disclosed their intent to sell the medications rather than take them as prescribed. On the back end, Medicaid was further defrauded by reimbursing pharmacies for the cost of prescription HIV drugs as if the drugs were new and obtained from a legitimate stream of commerce, when, in truth and in fact, the drugs were second-hand and came from the black market. Accordingly, as result of this scheme, health care benefit plans, including Medicaid, were defrauded multiple times by paying for the same drugs twice.
As is detailed in the Complaint, DELEONROSA served as a middleman in this scheme – selling hundreds of second-hand prescription HIV medication bottles to a cooperating source (“CS”) on multiple occasions, with a total estimated Medicaid reimbursement value of more than $1.9 million. DELEONROSA stored these second-hand prescription HIV medication bottles in his residence in the Bronx, and provided the bottles to the CS in suitcases and a duffel bag. Many of the HIV prescription bottles that DELEONROSA sold still bore the labels of the patients to whom the drugs were originally dispensed. In 2014, DELEONROSA also provided the CS with second-hand HIV prescription medication bottles that were to be delivered to addresses in California, but which were intercepted by Federal Express due to the suspicious nature of the packages.
* * *
DELEONROSA, 48, of the Bronx, is charged with one count of conspiracy to commit health care fraud, which carries a maximum potential sentence of 10 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Preet Bharara praised the outstanding work of the FDA’s Office of Criminal Investigations.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Noah Solowiejczyk and Patrick Egan are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Newburgh City Fire Chief Pleads Guilty to Wire Fraud for Fraudulently Obtaining Retirement BenefitsRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced that MICHAEL J. VATTER pled guilty today to wire fraud in connection with state pension benefits before U.S. District Judge Cathy Seibel in White Plains federal court.
Manhattan U.S. Attorney Preet Bharara said: “Michael Vatter, the former Newburgh City Fire Chief, cheated the public he swore to serve by double-dipping, receiving both a public pension and a paycheck at the same time. Today, he admitted to his fraud, and he will be held accountable for his corruption.”
According to the Indictment:
VATTER served in the Newburgh City Fire Department in various capacities from in or about 1980 until his retirement in May 2000. Following his retirement, VATTER attended law school and practiced law. In November 2009, the Indictment charges, VATTER returned to the Newburgh Fire Department as its Chief. The Indictment further alleges that VATTER failed to report his return to the public sector New York State and Local Police and Fire Retirement System despite knowing he had a duty under state law to do so. As a result, VATTER received more than $95,000 in pension benefits that he was not entitled to receive.
Under New York State law, a public sector retiree who is receiving a pension and who returns to public service cannot receive both pension payments and a public sector paycheck. The law permits public sector retirees to earn up to $30,000 per year from public sector employment before their pension benefits are cut off for that year.
VATTER, 57, of Walkill, New York, faces a maximum sentence of 20 years in prison.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation, the Office of the New York State Comptroller, and the Orange County Sheriff’s Office.
This prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney James McMahon is in charge of the prosecution.
16-104 ###
Manhattan U.S. Attorney Announces Extradition of Leader of Mexican Drug Trafficking OrganizationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and James J. Hunt, Special Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), today announced that ABRAHAM INZUNZA INZUNZA was extradited from Mexico where he had been arrested for charges arising out of his leadership of an organization engaged in the trafficking of large-scale quantities of cocaine, marijuana, and methamphetamine into the United States. INZUNZA, a Mexican citizen, arrived in the Southern District of New York yesterday, and was presented today in Manhattan federal court.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Abraham Inzunza Inzunza was for years the leader of a major Mexican drug trafficking organization. He is charged with the importation of large quantities of dangerous and potentially lethal drugs to the U.S. Thanks to the coordinated efforts of the DEA and the Mexican Federal Police, Inzunza will now face American justice.”
Special Agent-in-Charge James J. Hunt said: “Today marks the end of a violent battle to bring Abraham Inzunza Inzunza to America to face the drug trafficking charges against him. Allegedly, as one of the largest drug traffickers in Mexico, he sent loads of marijuana, cocaine and crystal methamphetamine to cities across the United States for distribution. State, local, federal and international law enforcement worked collaboratively to arrest Peque and bring him to justice.”
According to the allegations contained in the Superseding Indictment unsealed yesterday in Manhattan federal court:[1]
From at least in or about 2008 through in or about March 6, 2014, INZUNZA operated a continuing criminal enterprise that trafficked large quantities of cocaine, marijuana, and methamphetamine into the United States. Among other things, in approximately March 2012, INZUNZA directed two co-conspirators to negotiate the importation of over 100 kilograms of cocaine into the United States. In August and September 2013, INZUNZA oversaw and directed other co-conspirators regarding the distribution of large quantities of methamphetamine to several states in the United States, namely, California, New Mexico, and Arizona. In September 2013, INZUNZA additionally discussed with another co-conspirator the delivery of approximately 400 kilograms of marijuana from Mexico to the United States.
INZUNZA was arrested by Mexican authorities on or about March 6, 2014, in Mexico, pursuant to a provisional arrest warrant that was issued on the charges in this case.
* * *
INZUNZA, 39, is charged in three counts. Count One charges INZUNZA with conspiring to distribute at least five kilograms of cocaine, at least 1,000 kilograms of marijuana, and at least 500 grams of methamphetamine, knowing that such substances would be imported into the United States. Count Two charges INZUNZA with occupying a position of organizer, supervisor, and manager of a continuing criminal enterprise involving cocaine, marijuana, and methamphetamine trafficking. Count Three charges INZUNZA with occupying the position of a principal administrator, organizer, or leader of a continuing criminal enterprise involving trafficking in at least 150 kilograms of cocaine and at least 10,000 grams, or 10 kilograms, of methamphetamine.
Count One carries a mandatory minimum term of 10 years in prison, Count Two carries a mandatory minimum term of 20 years in prison, and Count Three carries a mandatory minimum term of life in prison in prison. Each count carries a maximum penalty of life in prison. The statutory minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. The case is assigned to U.S. District Judge Andrew L. Carter, Jr.
The charges contained in the Superseding Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the New York Division of the DEA and its Organized Crime Drug Enforcement Strike Force, and the DEA Mexico City Country Office. The DEA New York Organized Crime Drug Enforcement Strike Force, which is composed of agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, the New York Department of Taxation and Finance, the Rockland County Sheriff’s Office, the Clarkstown Police Department, Port Washington Police Department and New York State Department of Corrections and Community Supervision. Mr. Bharara also thanked the Government of Mexico for its assistance, in particular, the Mexican Federal Police, and the U.S. Department of Justice, Office of International Affairs.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorney Shane T. Stansbury is in charge of the prosecution.
[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.
Jury Convicts Former Police Officer for Selling Date Rape DrugRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today the conviction of ROBERT SMUTEK on four counts of distributing and possessing with intent to distribute 1,4 butanediol, an illegal analogue of the date rape drug gamma hydroxybutyric acid, or GHB. SMUTEK was found guilty by a jury after a five-day trial before U.S. District Judge Kenneth M. Karas.
U.S. Attorney Preet Bharara said: “Robert Smutek was a modern-day drug dealer, dealing a date rape drug over the Internet out of his suburban home. Despite his bucolic surroundings, Smutek was as much a drug dealer as those who sell on street corners, and he will now face the consequences of running a narcotics enterprise for more than five years.”
According to the allegations contained in the Indictment as well as the evidence presented during trial:
SMUTEK, a former police officer and member of a drug task force, operated Online Coral Calcium, an Internet website that sold patent medicines. Starting in 2009, SMUTEK sold “Potion 9” as a “mood enhancer” that supposedly made users feel euphoric. According to the label, Potion 9 contained yohimbe, a derivation of a tree root found in South Africa, as well as other natural ingredients. But according to the evidence at trial, Potion 9 actually contained 1,4 butanediol, an industrial solvent that converted to GHB in the body when ingested.
At trial, SMUTEK testified that he sold more than 200,000 one-ounce bottles of Potion 9 in a five-year period, reaping well over $1.2 million in revenue.
* * *
SMUTEK, 52, of Sleepy Hollow, New York, was convicted of four counts of possession with intent to distribute a controlled substance, each carrying a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. SMUTEK was remanded to prison following the verdict. His sentencing is scheduled for September 8, 2016.
Mr. Bharara praised the work of the Rhode Island Task Force of the Office of Criminal Investigations, Food & Drug Administration. Mr. Bharara also thanked the Internal Revenue Service, Criminal Investigation Division, and the Postal Inspection Service for their assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Maurene Comey, Douglas Zolkind, and James McMahon are in charge of the prosecution.
Bronx Man Pleads Guilty to Participating in June 18, 2015, Upper West Side Robbery and MurderRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that MICHAEL ADAMS, 30, of the Bronx, pled guilty before U.S. Magistrate Judge Frank Maas to participating in an armed robbery of a small business on the Upper West Side of Manhattan on June 18, 2015, which resulted in the shooting and killing of a store clerk, Bubacarr Camera.
U.S. Attorney Preet Bharara stated: “Today, Michael Adams admitted to his role in the June 2015 robbery and murder of innocent shopkeeper Bubacarr Camera. I want to thank the ATF, the NYPD, and the U.S. Marshals for their outstanding investigative work on this important case.”
According to the allegations in the Indictment to which MICHAEL ADAMS pled guilty and other documents in the public record:
On June 18, 2015, MICHAEL ADAMS and two other men, Stephen Adams and Zubearu Bettis, shot and killed Bubacarr Camera in the course of a robbery of a store located at 906 Amsterdam Avenue on the Upper West Side of Manhattan.
* * *
The charges to which MICHAEL ADAMS pled guilty carry a maximum of life in prison, and a mandatory minimum of 10 years in prison. The maximum and minimum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Jared Lenow and Max Nicholas are in charge of the prosecution.
120 Members and Associates of Two Rival Street Gangs in the Bronx Charged in Federal Court with Racketeering, Narcotics, and Firearms OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), James J. Hunt, the Special Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), and Delano Reid, the Special Agent-in-Charge of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), announced charges today against 120 members and associates of two rival street gangs operating in the Bronx: the 2Fly YGz (“2Fly”) and the Big Money Bosses (“BMB”). The gangs are charged in two separate Indictments – United States v. Laquan Parrish et al., S1 16 Cr. 212 (LAK) (the “Parrish Indictment”), and United States v. Nico Burrell et al., S2 15 Cr. 95 (AJN) (the “Burrell Indictment”) – with racketeering conspiracy, narcotics conspiracy, narcotics distribution, and firearms offenses.
Manhattan U.S. Attorney Preet Bharara said: “Today, we seek to eviscerate two violent street gangs – 2Fly and BMB – that have allegedly wreaked havoc on the streets of the Northern Bronx for years, by committing countless acts of violence against rival gang members and innocents alike. The gangs’ alleged victims include not only a 15 year-old child stabbed and left to die in the street, as well as a 92 year-old woman shot by a stray bullet in her own home, but also extend to the thousands of residents of Eastchester Gardens and its surrounding neighborhoods terrorized for years by the gangs’ open-air drug dealing and senseless violence. We bring these charges today so that all New Yorkers, including those in or near NYCHA public housing, can live their lives as they deserve: free of drugs, free of guns, and free of gang violence. I thank and recognize the bravery and tireless investigative work of the NYPD’s Bronx Gang Squad, HSI’s Violent Gang Unit, the New York Field Division of the DEA, and the ATF’s Joint Firearms Task Force, as well as all the other law enforcement partners that assisted in the operations today.”
NYPD Commissioner William Bratton said: “As alleged, these individuals engaged in open-air drug sales near homes and schools in the Bronx, pushing poison onto our streets. Allegedly, they also committed numerous acts of violence and at least eight murders in the course of their illicit operations. This includes the murder of a 92 year-old innocent bystander who was killed by a stray bullet inside her home. I want to thank the members of the NYPD’s Bronx Gang Squad and our law enforcement partners for dismantling these gangs. I commend them for their dedication and precision throughout this long-term investigation.”
HSI Special Agent-in-Charge Angel M. Melendez said: “Those arrested today allegedly used violence and fear to intimidate people who live within and around the Eastchester Gardens Public Housing. These ruthless gang members are allegedly responsible for more than 1,800 shots fired, resulting in eight alleged homicides. Public safety is important to us, and today our city streets are safer because of the work of HSI agents in our Violent Gang Unit and the work of our federal and local law enforcement partners.”
DEA Special Agent-in-Charge James J. Hunt said: “The gangs of New York have returned to open air drug markets; brazenly selling marijuana, crack cocaine, powder cocaine and prescription pain medication to drug users in neighborhood parks, abandoned houses, and playgrounds. A decade long rivalry between two of the Bronx's most violent gangs has resulted in drug related violence, fatal stray bullets and daily intimidation felt by the law abiding residents living in their crosshairs. Law enforcement has come together again to identify and dismantle these gangs that have plagued our community for too long.”
ATF Special Agent-in-Charge Delano Reid said: “This investigation demonstrates ATF’s commitment to our communities by partnering with our federal and local counterparts in order to dismantle armed criminal organizations. These two violent groups, allegedly responsible for multiple shootings, homicides, and other acts of violence, will now have to face the consequences of terrorizing the communities that they lived in. This should be a lesson to others who are engaged in these types of illegal activities. Our cooperative law enforcement efforts will continue.”
According to the Indictments[1] unsealed today in Manhattan federal court and other publicly filed documents:
The Indictments arise from a joint investigation by the NYPD’s Bronx Gang Squad, HSI’s Violent Gang Unit, the New York Field Division of the DEA, and the ATF’s Joint Firearms Task Force into the years-long gang war between 2Fly and BMB, which has led to an enormous amount of fatal and non-fatal violence between 2007 and the present in the Northern Bronx, including shootings, stabbings, slashings, beatings, and robberies.
2Fly is a subset of the “Young Gunnaz,” or “YG” street gang, which operates throughout New York City. 2Fly is based in the Bronx, within and around the Eastchester Gardens housing development (“ECG”) and in an area called the “Valley” or the “V,” which is in the vicinity of Gun Hill Road. ECG is a rectangular complex of residential buildings bordered by Burke, Adee, Yates, and Bouck Avenues, in the middle of which is a playground. Members and associates of 2Fly control the narcotics trade at ECG, which takes place in the open air at the playground and in apartments at ECG. 2Fly primarily sells marijuana and crack cocaine, but also sells powder cocaine and prescription pills, such as oxycodone. 2Fly members and associates store guns at the playground or in nearby apartments or cars in order to protect the narcotics business and for protection against rival gangs. The case of United States v. Laquan Parrish et al. charges 57 members and associates of 2Fly, including its “Big Guns,” or leaders: LAQUAN PARRISH, a/k/a “MadDog,” a/k/a “Quanzaa,” ANDRE BENT, a/k/a “Dula,” and AARON RODRIGUEZ, a/k/a “Gunz,” a/k/a “Cito.” 2Fly coexists at ECG with a faction of the Bloods street gang called “Sex Money Murder” (“SMM”), which controlled ECG before 2Fly and has allied with 2Fly to prevent others from selling drugs at ECG. Two of the leaders of SMM at ECG – brothers PRESTON PASLEY, a/k/a “Fresh,” and TERRENCE PASLEY, a/k/a “Smoove” – and several of its members are also charged in the Parrish Indictment.
BMB is a subset of the “Young Bosses,” or “YBz” street gang, which operates throughout New York City. BMB – whose members also sometimes refer to themselves as the “Money Making Mafia” or “Triple M” – operates primarily on White Plains Road from 215th Street to 233rd Street in the Bronx. This area is a long stretch of road under a subway train overpass, bordered on each side by single-family homes and local commercial establishments, and in the vicinity of several playgrounds and schools. BMB’s narcotics trafficking activity is based principally in the vicinity of White Plains Road and 224th Street, an open-air drug spot that is referred to by gang members as the “Forts.” BMB members also operate a drug spot on Boston Road and Eastchester Road in the Bronx, which they refer to as “B Road.” BMB members who work principally at the B Road spot typically refer to themselves as “Blamma.” BMB primarily sells marijuana and crack cocaine, but also sells prescription pills, such as oxycodone. BMB members and associates store guns in abandoned homes and other places near their drug spots in order to protect their narcotics business and for protection against rivals. The case of United States v. Nico Burrell et al. charges 63 members and associates of BMB, including its “Big Suits,” or leaders: NICO BURRELL, a/k/a “Nico Zico,” and DOUGLAS MCLARTY, a/k/a “Q-Don,” a/k/a “Q-Dizzy.”
In addition to numerous non-fatal acts of violence against both rival gang members and innocents, the rivalry between 2Fly and BMB – as well as with other gangs, such as the “Slut Gang,” which is based at the Boston Secor housing development, and the “YSGz,” who are based at the Edenwald housing development – has led to the following murders, among others:
-
The murder of Sadie Mitchell, who was killed in her own home by a stray bullet, at the age of 92, by an associate of BMB in the vicinity of White Plains Road and 224th Street and White Plains Road, on or about October 20, 2009;
-
The murder of Jeffrey Delmore, a/k/a “Famous,” a/k/a “Junior,” who was stabbed to death, at the age of 15, by members of BMB in the vicinity of East Gun Hill Road, on or about May 15, 2010;
-
The murder of Alexander “A.J.” Walters, who was stabbed to death at age 17 by members of 2Fly in the vicinity of 1824 Prospect Avenue in the Bronx, on or about March 8, 2012;
-
The murder of Donville Simpson, a/k/a “Donny,” who was shot to death at ECG at age 17 by members of 2Fly, on or about October 5, 2013
-
The murder of Keshon Potterfield, a/k/a “Keke,” who was shot to death, at the age of 18, by a member of BMB in the vicinity of 232nd Street between White Plains Road and Barnes Avenue, on or about June 22, 2014;
-
The murder of Fabian Pennant, an associate of 2Fly, who was shot to death by a member of BMB at the age of 24 in the vicinity of Eastchester Road on October 22, 2014;
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The murder of Jordan Jackwett, who was shot and killed at the age of 23 in the vicinity of Ely Avenue during a shooting between members of 2Fly and BMB on July 26, 2015; and
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The murder of Darren Epps, age 47, who was shot to death by a member of 2Fly in the vicinity of 215th and White Plains Road during a botched robbery on March 13, 2016.
In connection with these arrests, federal and local law enforcement officers also executed court-authorized search warrants at four locations tied to the defendants. During the arrests and searches, agents and officers seized, among other evidence, seven guns, ammunition, crack, marijuana, counterfeit currency, and drug paraphernalia. To date, in this case, agents and officers have seized, among other evidence, quantities of marijuana, crack, cocaine, and oxycodone, as well as firearms, ammunition, scalpels, and knives. During the investigation, agents and officers also intercepted thousands of wiretap calls, during many of which various members and associates of the gangs discussed their racketeering and narcotics activities.
* * *
In a coordinated operation, 78 defendants were arrested in New York yesterday and early this morning. They will be presented later this afternoon in Manhattan federal court. Defendants ANDRE BENT, ROBERT POPE, JAMES PILGRIM, JAMAL BLAIR, STEPHAN CLARKE, LAQUAN PARRISH, JAFAR BORDEN, ANDERSON ROSS, BARFFOUR ABEBERSE, ROBERT HAUGHTON, SHAQUILLE DEWAR, MARTIN MITCHELL, DONQUE TYRELL, DEVANTE JOSEPH, DAQUAN ANDERSON, JAQUAN MCINTOSH, and SEAN MCINTOSH were in custody on state charges and were transferred to federal custody today. Charts identifying each defendant, the charges, and the maximum penalties are below.
U.S. v. Parrish et al. is assigned to U.S. District Judge Lewis A. Kaplan. U.S. v. Burrell et al. is assigned to U.S. District Judge Alison J. Nathan.
Mr. Bharara praised the outstanding investigative work of the NYPD’s Bronx Gang Squad, HSI’s Violent Gang Unit, the New York Field Division of the DEA, and the ATF’s Joint Firearms Task Force, as well as the United States Marshals’ Service, the New York State Office of Special Investigation--Department of Corrections and Community Supervision, and the New York State Police for their assistance in today’s arrests. He also thanked the Department of Investigation and the Bronx County District Attorney’s Office for their support in this ongoing investigation.
The Office’s Violent and Organized Crime Unit is overseeing the case. Assistant U.S. Attorneys Rachel Maimin, Micah W.J. Smith, Robert Allen, Hagan Scotten, Jessica Feinstein, and Drew Johnson-Skinner are in charge of the prosecution.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Burrell et al.
Count
Charge
Defendant
Maximum Penalty
1
Racketeering Conspiracy
NICO BURRELL,
a/k/a “Zico Nico,”
DOUGLAS MCLARTY,
a/k/a “Q-Don,”
a/k/a “Q-Dizzy,”
MARTIN MITCHELL,
a/k/a “Tyliek,”
DONQUE TYRELL,
a/k/a “Polo Rell,”
GERARD BASS,
a/k/a “Roddo,”
DOMINICK SHERLAND,
a/k/a “D-Nick,”
BARFFOUR ABEBERSE,
a/k/a “BB,”
a/k/a “Duce Bigga,”
MASHUD YODA,
a/k/a “Papa Ola,”
ANDERSON ROSS,
a/k/a “Boogy,”
a/k/a “Boogy Boo,”
a/k/a “Ray Allen Jr.,”
ANTHONY KING,
a/k/a “Ant-Dog,”
MARK WILLIAMS,
a/k/a “Spangler,”
a/k/a “Markie Bossin,”
QUAYSEAN CANNONIER,
a/k/a “Tic-Tic,”
TAYQUAN TUCKER,
a/k/a “Chicken,”
a/k/a “Chickenita,”
WILLIAM REID,
a/k/a “Uptown Will,”
MARLON ROBERTS,
a/k/a “Fetti,”
ABDULLAH YODA,
a/k/a “Dellah,”
KENNETH RUGGS,
a/k/a “Money Making Kenny,”
CALVIN RUGGS,
a/k/a “GQ,”
FABIAN MORRISON,
a/k/a “Fabo,”
SHAQUILLE DEWAR,
a/k/a “Shaq Doe,”
DESEAN BENNETT,
a/k/a “Doola,”
JAFAR BORDEN,
a/k/a “Jaffy,”
JOSE RODRIGUEZ,
a/k/a “Hov,”
SHAVON WRIGHT,
a/k/a “Bhippy,”
a/k/a “Yung Bhippy,”
RASHEID BUTLER,
a/k/a “Rah,”
BRIAN RICHARDS,
a/k/a “B-Rich,”
DEVANTE JOSEPH,
a/k/a “Wiz,”
STEPHAN CLARKE,
JAMES PILGRIM,
a/k/a “Jizzle,”
MICHELLE JEMISON,
a/k/a “Pebbles,”
IVANJOEL ARYEETEY,
a/k/a “Ijoe,”
a/k/a “Ivan,”
ROBERT HAUGHTON,
a/k/a “Duke,”
JAMAL BLAIR,
a/k/a “Fish,”
ONEIL DASILVA,
a/k/a “Soxx,”
a/k/a “Bobby Soxx,”
DURELL GUY,
HAKEEM CAMPBELL,
a/k/a “Ocky,”
a/k/a “Ackee,”
RICHARD PHILLIPS,
a/k/a “G-Mack,”
RUSHAUN BROWN,
a/k/a “Boobie,”
a/k/a “Gambino,”
MICHAEL FRANCIS,
a/k/a “Mikey Bandz,”
TYRONE GRAY,
a/k/a “Ty,”
LAMAR FRANCIS,
a/k/a “Lammy,”
a/k/a “Andrew Blacks,”
SHANE BENNETT,
a/k/a “Fattah,”
DAVID JONES,
RICARDO STEWART,
a/k/a “Cardo,”
DANTE PLUMMER,
a/k/a “Tae,”
JOEL HARGROVE,
a/k/a “Flow,”
SHAWN REID,
a/k/a “Sama,”
a/k/a “Sama Lama,”
BRADLEY WILSON,
a/k/a “Broadway,”
ROBERT FELICIANO,
a/k/a “RJ,”
DANTE STEPHENS,
a/k/a “Jibba,”
CARLETTO ALLEN,
a/k/a “Joker,”
20 years’ imprisonment
2
Narcotics Conspiracy
NICO BURRELL,
a/k/a “Zico Nico,”
DOUGLAS MCLARTY,
a/k/a “Q-Don,”
a/k/a “Q-Dizzy,”
MARTIN MITCHELL,
a/k/a “Tyliek,”
DONQUE TYRELL,
a/k/a “Polo Rell,”
GERARD BASS,
a/k/a “Roddo,”
DOMINICK SHERLAND,
a/k/a “D-Nick,”
BARFFOUR ABEBERSE,
a/k/a “BB,”
a/k/a “Duce Bigga,”
MASHUD YODA,
a/k/a “Papa Ola,”
ANDERSON ROSS,
a/k/a “Boogy,”
a/k/a “Boogy Boo,”
a/k/a “Ray Allen Jr.,”
ANTHONY KING,
a/k/a “Ant-Dog,”
MARK WILLIAMS,
a/k/a “Spangler,”
a/k/a “Markie Bossin,”
TAYQUAN TUCKER,
a/k/a “Chicken,”
a/k/a “Chickenita,”
WILLIAM REID,
a/k/a “Uptown Will,”
MARLON ROBERTS,
a/k/a “Fetti,”
ABDULLAH YODA,
a/k/a “Dellah,”
KENNETH RUGGS,
a/k/a “Money Making Kenny,”
CALVIN RUGGS,
a/k/a “GQ,”
FABIAN MORRISON,
a/k/a “Fabo,”
SHAQUILLE DEWAR,
a/k/a “Shaq Doe,”
DESEAN BENNETT,
a/k/a “Doola,”
JOSE RODRIGUEZ,
a/k/a “Hov,”
SHAVON WRIGHT,
a/k/a “Bhippy,”
a/k/a “Yung Bhippy,”
RASHEID BUTLER,
a/k/a “Rah,”
BRIAN RICHARDS,
a/k/a “B-Rich,”
MICHELLE JEMISON,
a/k/a “Pebbles,”
IVANJOEL ARYEETEY,
a/k/a “Ijoe,”
a/k/a “Ivan,”
ROBERT HAUGHTON,
a/k/a “Duke,”
JAMAL BLAIR,
a/k/a “Fish,”
ONEIL DASILVA,
a/k/a “Soxx,”
a/k/a “Bobby Soxx,”
DURELL GUY,
HAKEEM CAMPBELL,
a/k/a “Ocky,”
a/k/a “Ackee,”
RICHARD PHILLIPS,
a/k/a “G-Mack,”
RUSHAUN BROWN,
a/k/a “Boobie,”
a/k/a “Gambino,”
MICHAEL FRANCIS,
a/k/a “Mikey Bandz,”
TYRONE GRAY,
a/k/a “Ty,”
LAMAR FRANCIS,
a/k/a “Lammy,”
a/k/a “Andrew Blacks,”
SHANE BENNETT,
a/k/a “Fattah,”
DAVID JONES,
RICARDO STEWART,
a/k/a “Cardo,”
DANTE PLUMMER,
a/k/a “Tae,”
JOEL HARGROVE,
a/k/a “Flow,”
SHAWN REID,
a/k/a “Sama,”
a/k/a “Sama Lama,”
BRADLEY WILSON,
a/k/a “Broadway,”
ROBERT FELICIANO,
a/k/a “RJ,”
DANTE STEPHENS,
a/k/a “Jibba,”
CARLETTO ALLEN,
a/k/a “Joker,”
SHAQUILLE JOHN,
a/k/a “Poppy,”
OKEIFA JOHN,
a/k/a “Ratty,”
DAQUAN REID,
a/k/a “DQ,”
MICHAEL REDLEY,
a/k/a “Mikey,”
a/k/a “Jones,”
ALBERT AMPONSAH,
a/k/a “Jungle,”
RICHARD MONTAGUE,
a/k/a “Spanks,”
ANTHONY LETTERIO,
a/k/a “Yay,”
RAI THOMAS,
a/k/a “Ritch,”
JAVONE PEARCE,
a/k/a “Jevy,”
SHANICE JOHN,
DOMINIQUE BASS,
a/k/a “Domo,”
RICARDO BURGESS,
a/k/a “Zilla,”
Life imprisonment with a mandatory minimum of 10 years’ imprisonment
3
Narcotics Distribution
DOUGLAS MCLARTY,
a/k/a “Q-Don,”
a/k/a “Q-Dizzy,”
DONQUE TYRELL,
a/k/a “Polo Rell,”
GERARD BASS,
a/k/a “Roddo,”
DOMINICK SHERLAND,
a/k/a “D-Nick,”
BARFFOUR ABEBERSE,
a/k/a “BB,”
a/k/a “Duce Bigga,”
MARK WILLIAMS,
a/k/a “Spangler,”
a/k/a “Markie Bossin,”
TAYQUAN TUCKER,
a/k/a “Chicken,”
a/k/a “Chickenita,”
MARLON ROBERTS,
a/k/a “Fetti,”
FABIAN MORRISON,
a/k/a “Fabo,”
SHAQUILLE DEWAR,
a/k/a “Shaq Doe,”
DESEAN BENNETT, a/k/a “Doola,”
JOSE RODRIGUEZ,
a/k/a “Hov,”
SHAVON WRIGHT,
a/k/a “Bhippy,”
a/k/a “Yung Bhippy,”
MICHELLE JEMISON,
a/k/a “Pebbles,”
IVANJOEL ARYEETEY,
a/k/a “Ijoe,”
a/k/a “Ivan,”
ROBERT HAUGHTON,
a/k/a “Duke,”
JAMAL BLAIR,
a/k/a “Fish,”
ONEIL DASILVA,
a/k/a “Soxx,”
a/k/a “Bobby Soxx,”
DURELL GUY,
HAKEEM CAMPBELL,
a/k/a “Ocky,”
a/k/a “Ackee,”
RICHARD PHILLIPS,
a/k/a “G-Mack,”
RUSHAUN BROWN,
a/k/a “Boobie,”
a/k/a “Gambino,”
MICHAEL FRANCIS,
a/k/a “Mikey Bandz,”
TYRONE GRAY,
a/k/a “Ty,”
LAMAR FRANCIS,
a/k/a “Lammy,”
a/k/a “Andrew Blacks,”
SHANE BENNETT,
a/k/a “Fattah,”
DAVID JONES,
RICARDO STEWART,
a/k/a “Cardo,”
JOEL HARGROVE,
a/k/a “Flow,”
SHAWN REID,
a/k/a “Sama,”
a/k/a “Sama Lama,”
BRADLEY WILSON,
a/k/a “Broadway,”
ROBERT FELICIANO,
a/k/a “RJ,”
DANTE STEPHENS,
a/k/a “Jibba,”
CARLETTO ALLEN,
a/k/a “Joker,”
SHAQUILLE JOHN,
a/k/a “Poppy,”
OKEIFA JOHN,
a/k/a “Ratty,”
DAQUAN REID,
a/k/a “DQ,”
MICHAEL REDLEY,
a/k/a “Mikey,”
a/k/a “Jones,”
ALBERT AMPONSAH,
a/k/a “Jungle,”
RICHARD MONTAGUE,
a/k/a “Spanks,”
JAVONE PEARCE,
a/k/a “Jevy,”
SHANICE JOHN,
DOMINIQUE BASS,
a/k/a “Domo,”
RICARDO BURGESS,
a/k/a “Zilla,”
Life imprisonment with a mandatory minimum of one year’s imprisonment
4
Firearms Offense
NICO BURRELL,
a/k/a “Zico Nico,”
DOUGLAS MCLARTY,
a/k/a “Q-Don,”
a/k/a “Q-Dizzy,”
MARTIN MITCHELL,
a/k/a “Tyliek,”
DONQUE TYRELL,
a/k/a “Polo Rell,”
GERARD BASS,
a/k/a “Roddo,”
DOMINICK SHERLAND,
a/k/a “D-Nick,”
BARFFOUR ABEBERSE,
a/k/a “BB,”
a/k/a “Duce Bigga,”
MASHUD YODA,
a/k/a “Papa Ola,”
ANDERSON ROSS,
a/k/a “Boogy,”
a/k/a “Boogy Boo,”
a/k/a “Ray Allen Jr.,”
ANTHONY KING,
a/k/a “Ant-Dog,”
QUAYSEAN CANNONIER,
a/k/a “Tic-Tic,”
TAYQUAN TUCKER,
a/k/a “Chicken,”
a/k/a “Chickenita,”
WILLIAM REID,
a/k/a “Uptown Will,”
MARLON ROBERTS,
a/k/a “Fetti,”
ABDULLAH YODA,
a/k/a “Dellah,”
KENNETH RUGGS,
a/k/a “Money Making Kenny,”
CALVIN RUGGS,
a/k/a “GQ,”
FABIAN MORRISON,
a/k/a “Fabo,”
SHAQUILLE DEWAR,
a/k/a “Shaq Doe,”
DESEAN BENNETT,
a/k/a “Doola,”
JAFAR BORDEN,
a/k/a “Jaffy,”
JOSE RODRIGUEZ,
a/k/a “Hov,”
RASHEID BUTLER,
a/k/a “Rah,”
BRIAN RICHARDS,
a/k/a “B-Rich,”
DEVANTE JOSEPH,
a/k/a “Wiz,”
STEPHAN CLARKE,
JAMES PILGRIM,
a/k/a “Jizzle,”
IVANJOEL ARYEETEY,
a/k/a “Ijoe,”
a/k/a “Ivan,”
JAMAL BLAIR,
a/k/a “Fish,”
ONEIL DASILVA,
a/k/a “Soxx,”
a/k/a “Bobby Soxx,”
DURELL GUY,
HAKEEM CAMPBELL,
a/k/a “Ocky,”
a/k/a “Ackee,”
RUSHAUN BROWN,
a/k/a “Boobie,”
a/k/a “Gambino,”
TYRONE GRAY,
a/k/a “Ty,”
LAMAR FRANCIS,
a/k/a “Lammy,”
a/k/a “Andrew Blacks,”
SHANE BENNETT,
a/k/a “Fattah,”
DAVID JONES,
RICARDO STEWART,
a/k/a “Cardo,”
DANTE PLUMMER,
a/k/a “Tae,”
ROBERT FELICIANO,
a/k/a “RJ,”
CARLETTO ALLEN,
a/k/a “Joker,”
OKEIFA JOHN,
a/k/a “Ratty,”
RICARDO BURGESS,
a/k/a “Zilla,”
Life imprisonment with a mandatory minimum of 10 years’ imprisonment
“BMB” Defendants
Age
Barffour Abeberse
23
Carleto Allen
21
Albert Amponsah
29
IvanJoel Aryeetey
20
Dominique Bass
26
Gerard Bass
23
Desean Bennet
22
Shayne Bennet
24
Vashon Bennett
22
Jamal Blair
24
Jaffar Borden
19
Rushaun Brown
24
Ricado Burgess
38
Nico Burrell
23
Rasheid Butler
19
Hakeem Campbell
22
Quaysean Cannonier
20
Stephan Clarke
21
Oneil Dasilva
22
Shaquille Dewar
21
Robert Feliciano
25
Lamar Francis
25
Michael Francis
25
Tyrone Gray
22
Durell Guy
24
Joel Hargrove
25
Robert Haughton
21
Michelle Jemison
22
Okeifa John
20
Shanice John
23
Shaquille John,
21
Howard Johnson
39
David Jones
23
Anthony King
26
Anthony Letterio
35
Douglas McLarty
22
Robert Miles
55
Martin Mitchell
21
Richard Montague
21
Fabian Morrison
26
Javone Pearce
24
Richard Phillips
23
James Pilgrim
21
Michael Redley
27
Daquan Reid
21
Shawn Reid
21
William Reid
22
Brian Richards
22
Marlon Roberts
26
Jose Rodriguez
23
Anderson Ross
21
Calvin Ruggs
21
Kenneth Ruggs
19
Dominick Sherland
23
Dante Stephens
23
Ricardo Stewart
23
Rai Thomas
21
Tayquan Tucker
20
Donque Tyrell
20
Mark Williams
24
Bradley Wilson
24
Shavon Wright
24
Abdullah Yoda
19
Mashud Yoda
23
United States v. Parrish et al.
1
Racketeering Conspiracy
LAQUAN PARRISH,
a/k/a “MadDog,” a/k/a “Quanzaa,”
ANDRE BENT, a/k/a “Dula,”
AARON RODRIGUEZ,
a/k/a “Gunz,” a/k/a “Cito,”
SEAN MCINTOSH,
a/k/a “Slimmy,”
JAQUAN MCINTOSH,
a/k/a “BJ,”
MARK CLARKE,
a/k/a “Gritty,” a/k/a “Mark the Gritty Shark,”
BOWLIN WALLINGFORD,
a/k/a “BK,”a/k/a “Bay Kay,”
RODRIGO GONZALEZ,
a/k/a “Frenchy,”
ELIJAH BROWN, a/k/a “Lil Eli,”
JOSHUA BROWN, a/k/a “Josh,”
KAYSHAWN CAMPBELL,
a/k/a “Fresh,”
ROBERT POPE,
a/k/a “Big Bert,”
DAVID MATTISON,
a/k/a “Dave,” a/k/a “Daddy,”
KEVIN MATTISON,
a/k/a “Kev,”
JAYVON CARTER,
a/k/a “Jay,” a/k/a “Jigga,”
MARCEL BENT,
a/k/a “Marcellus,” a/k/a “Cellie,”
PRESTON PASLEY,
a/k/a “Smoove,”
TERRENCE PASLEY, a/k/a “Fresh,”
DAQUAN ANDERSON,
a/k/a “BD,”
DANTE GREGORY,
a/k/a “Smiley,”
CINTRON POWELL,
a/k/a “C-Live,”
WALTER JERNIGAN,
a/k/a “Lil G,” a/k/a “G-Boo,”
MOUHAHAMET CHERRY,
a/k/a “Momo,”
HASANI FITTS,
a/k/a “Has,”
EMMANUEL MCKENZIE,
a/k/a “Manny Fresh,”
LLOYD RODRIGUEZ,
a/k/a “T-Boy,”
NICHOLAS BAILEY,
a/k/a “Nicholas Dale,”
a/k/a “Nick,”
SHAWN WALKER,
a/k/a “Styles,”
PETER LEWIS,
a/k/a “Pebbs,”
KRAIG LEWIS
a/k/a “K-Murda,”
RONALD MATTHEWS,
a/k/a “Ronnie,”
TRAVIS THOMPSON,
KAREEM SANDERS,
a/k/a “Reem,”
JONATHON CUMMINGS,
a/k/a “J-Starz,”
WAYNE LEON,
a/k/a “Wayne Brady,”
PATRICK LITTLEJOHN,
a/k/a “Pat,”
EMILE ANDERSON,
a/k/a “Fetti,”
a/k/a “Kev,”
KAVONE HORTON,
a/k/a “Styles,”
DEVIN WALKER,
a/k/a “Dev,”
20 years’ imprisonment
2
Narcotics Conspiracy
LAQUAN PARRISH,
a/k/a “MadDog,”
a/k/a “Quanzaa,”
ANDRE BENT,
a/k/a “Dula,”
AARON RODRIGUEZ,
a/k/a “Gunz,”
a/k/a “Cito,”
SEAN MCINTOSH,
a/k/a “Slimmy,”
JAQUAN MCINTOSH,
a/k/a “BJ,”
MARK CLARKE,
a/k/a “Gritty,”
a/k/a “Mark the Gritty Shark,”BOWLIN WALLINGFORD,
a/k/a “BK,”
a/k/a “Bay Kay,”
RODRIGO GONZALEZ,
a/k/a “Frenchy,”
ELIJAH BROWN,
a/k/a “Lil Eli,”
JOSHUA BROWN,
a/k/a “Josh,”
KAYSHAWN CAMPBELL,
a/k/a “Fresh,”
ROBERT POPE,
a/k/a “Big Bert,”
DAVID MATTISON,
a/k/a “Dave,”
a/k/a “Daddy,”
KEVIN MATTISON,
a/k/a “Kev,”
JAYVON CARTER,
a/k/a “Jay,”
a/k/a “Jigga,”
MARCEL BENT,
a/k/a “Marcellus,”
a/k/a “Cellie,”
PRESTON PASLEY,
a/k/a “Smoove,”
TERRENCE PASLEY,
a/k/a “Fresh,”
DAQUAN ANDERSON,
a/k/a “BD,”
DANTE GREGORY,
a/k/a “Smiley,”
CINTRON POWELL,
a/k/a “C-Live,”
WALTER JERNIGAN,
a/k/a “Lil G,”
a/k/a “G-Boo,”
MOUHAHAMET CHERRY,
a/k/a “Momo,”
HASANI FITTS,
a/k/a “Has,”
LLOYD RODRIGUEZ,
a/k/a “T-Boy,”
NICHOLAS BAILEY,
a/k/a “Nicholas Dale,”
a/k/a “Nick,”
SHAWN WALKER,
a/k/a “Styles,”
PETER LEWIS,
a/k/a “Pebbs,”
KRAIG LEWIS
a/k/a “K-Murda,”
RONALD MATTHEWS,
a/k/a “Ronnie,”
TRAVIS THOMPSON,
KAREEM SANDERS,
a/k/a “Reem,”
JONATHON CUMMINGS,
a/k/a “J-Starz,”
WAYNE LEON,
a/k/a “Wayne Brady,”
DANNY JONES,
a/k/a “Red,”
a/k/a “Casper,”
LAMOR MILES,
a/k/a “Ls,”
ROBERT MILES,
PATRICK LITTLEJOHN,
a/k/a “Pat,”
ANDREW MONCRIEFFE,
a/k/a “Drew,”
GARY ARRINGTON,
a/k/a “G,”
WILLIAMS RODRIGUEZ,
a/k/a “Will,”
MELVIN RODRIGUEZ,
a/k/a “YB,”
BRANDON ANDERSON,
a/k/a “Big BD,”
EMILE ANDERSON,
a/k/a “Fetti,”
a/k/a “Kev,”
KAVONE HORTON,
a/k/a “Styles,”
JOHN ALVAREZ,
a/k/a “Gotti,”
COURTNEY GREEN,
a/k/a “C-Rock,”
ERICK CANALES,
a/k/a “EC,”
GREGORY CAMERON,
a/k/a “Biggs,
a/k/a “Bigga,”a/k/a “GG,”
JABRIEL LEWIS,
a/k/a “Breeze,”
a/k/a “Breezy,”VAUGHN WASHINGTON,
a/k/a “Murder,”
BRUCE WASHINGTON,
a/k/a “BJ,”
DAMON PARRISH,
ROBERTO MUNOZ,
a/k/a “Jr,”
ALONZO MCINTOSH,
a/k/a “Manuke,”
Life imprisonment with a mandatory minimum of 10 years’ imprisonment
3
Narcotics Distribution
LAQUAN PARRISH,
a/k/a “MadDog,”
a/k/a “Quanzaa,”
ANDRE BENT,
a/k/a “Dula,”
AARON RODRIGUEZ,
a/k/a “Gunz,”
a/k/a “Cito,”
SEAN MCINTOSH,
a/k/a “Slimmy,”
JAQUAN MCINTOSH,
a/k/a “BJ,”
MARK CLARKE,
a/k/a “Gritty,”
a/k/a “Mark the Gritty Shark,”BOWLIN WALLINGFORD,
a/k/a “BK,”
a/k/a “Bay Kay,”
RODRIGO GONZALEZ,
a/k/a “Frenchy,”
ELIJAH BROWN,
a/k/a “Lil Eli,”
JOSHUA BROWN,
a/k/a “Josh,”
KAYSHAWN CAMPBELL,
a/k/a “Fresh,”
ROBERT POPE,
a/k/a “Big Bert,”
DAVID MATTISON,
a/k/a “Dave,”
a/k/a “Daddy,”
KEVIN MATTISON,
a/k/a “Kev,”
JAYVON CARTER,
a/k/a “Jay,”
a/k/a “Jigga,”
MARCEL BENT,
a/k/a “Marcellus,”
a/k/a “Cellie,”
PRESTON PASLEY,
a/k/a “Smoove,”
TERRENCE PASLEY,
a/k/a “Fresh,”
DAQUAN ANDERSON,
a/k/a “BD,”
DANTE GREGORY,
a/k/a “Smiley,”
CINTRON POWELL,
a/k/a “C-Live,”
WALTER JERNIGAN,
a/k/a “Lil G,”
a/k/a “G-Boo,”
MOUHAHAMET CHERRY,
a/k/a “Momo,”
HASANI FITTS,
a/k/a “Has,”
LLOYD RODRIGUEZ,
a/k/a “T-Boy,”
NICHOLAS BAILEY,
a/k/a “Nicholas Dale,”
a/k/a “Nick,”
SHAWN WALKER,
a/k/a “Styles,”
PETER LEWIS,
a/k/a “Pebbs,”
KRAIG LEWIS
a/k/a “K-Murda,”
RONALD MATTHEWS,
a/k/a “Ronnie,”
TRAVIS THOMPSON,
KAREEM SANDERS,
a/k/a “Reem,”
JONATHON CUMMINGS,
a/k/a “J-Starz,”
WAYNE LEON,
a/k/a “Wayne Brady,”
DANNY JONES,
a/k/a “Red,”
a/k/a “Casper,”
LAMOR MILES,
a/k/a “Ls,”
ROBERT MILES,
PATRICK LITTLEJOHN,
a/k/a “Pat,”
ANDREW MONCRIEFFE,
a/k/a “Drew,”
GARY ARRINGTON,
a/k/a “G,”
WILLIAMS RODRIGUEZ,
a/k/a “Will,”
MELVIN RODRIGUEZ,
a/k/a “YB,”
BRANDON ANDERSON,
a/k/a “Big BD,”
EMILE ANDERSON,
a/k/a “Fetti,”
a/k/a “Kev,”
KAVONE HORTON,
a/k/a “Styles,”
JOHN ALVAREZ,
a/k/a “Gotti,”
COURTNEY GREEN,
a/k/a “C-Rock,”
ERICK CANALES,
a/k/a “EC,”
GREGORY CAMERON,
a/k/a “Biggs,
a/k/a “Bigga,”a/k/a “GG,”
JABRIEL LEWIS,
a/k/a “Breeze,”
a/k/a “Breezy,”VAUGHN WASHINGTON,
a/k/a “Murder,”
BRUCE WASHINGTON,
a/k/a “BJ,”
DAMON PARRISH,
ROBERTO MUNOZ, a/k/a “Jr,”
ALONZO MCINTOSH,
a/k/a “Manuke,”
Life imprisonment with a mandatory minimum of 1 year’s imprisonment
4
Firearms Offense
LAQUAN PARRISH,
a/k/a “MadDog,”
a/k/a “Quanzaa,”
ANDRE BENT,
a/k/a “Dula,”
AARON RODRIGUEZ,
a/k/a “Gunz,”
a/k/a “Cito,”
SEAN MCINTOSH,
a/k/a “Slimmy,”
JAQUAN MCINTOSH,
a/k/a “BJ,”
MARK CLARKE,
a/k/a “Gritty,”
a/k/a “Mark the Gritty Shark,”BOWLIN
WALLINGFORD,
a/k/a “BK,”
a/k/a “Bay Kay,”
RODRIGO GONZALEZ,
a/k/a “Frenchy,”
ELIJAH BROWN,
a/k/a “Lil Eli,”
JOSHUA BROWN,
a/k/a “Josh,”
KAYSHAWN CAMPBELL,
a/k/a “Fresh,”
ROBERT POPE,
a/k/a “Big Bert,”
DAVID MATTISON,
a/k/a “Dave,”
a/k/a “Daddy,”
KEVIN MATTISON,
a/k/a “Kev,”
JAYVON CARTER,
a/k/a “Jay,”
a/k/a “Jigga,”
MARCEL BENT,
a/k/a “Marcellus,”
a/k/a “Cellie,”
PRESTON PASLEY,
a/k/a “Smoove,”
TERRENCE PASLEY,
a/k/a “Fresh,”
DAQUAN ANDERSON,
a/k/a “BD,”
DANTE GREGORY,
a/k/a “Smiley,”
CINTRON POWELL,
a/k/a “C-Live,”
WALTER JERNIGAN,
a/k/a “Lil G,”
a/k/a “G-Boo,”
MOUHAHAMET CHERRY,
a/k/a “Momo,”
HASANI FITTS,
a/k/a “Has,”
EMMANUEL MCKENZIE,
a/k/a “Manny Fresh,”
LLOYD RODRIGUEZ,
a/k/a “T-Boy,”
NICHOLAS BAILEY,
a/k/a “Nicholas Dale,”
a/k/a “Nick,”
SHAWN WALKER,
a/k/a “Styles,”
PETER LEWIS,
a/k/a “Pebbs,”
KRAIG LEWIS
a/k/a “K-Murda,”
RONALD MATTHEWS,
a/k/a “Ronnie,”
TRAVIS THOMPSON,
KAREEM SANDERS,
a/k/a “Reem,”
JONATHON CUMMINGS,
a/k/a “J-Starz,”
WAYNE LEON,
a/k/a “Wayne Brady,”
DANNY JONES,
a/k/a “Red,”
a/k/a “Casper,”
ROBERT MILES,
PATRICK LITTLEJOHN,
a/k/a “Pat,”
MELVIN RODRIGUEZ,
a/k/a “YB,”
EMILE ANDERSON,
a/k/a “Fetti,”
a/k/a “Kev,”
KAVONE HORTON,
a/k/a “Styles,”
DEVIN WALKER,
a/k/a “Dev,”
JOHN ALVAREZ,
a/k/a “Gotti,”
COURTNEY GREEN,
a/k/a “C-Rock,”
ERICK CANALES,
a/k/a “EC,”
GREGORY CAMERON,
a/k/a “Biggs,
a/k/a “Bigga,”a/k/a “GG,”
JABRIEL LEWIS,
a/k/a “Breeze,”
a/k/a “Breezy,”
VAUGHN WASHINGTON,
a/k/a “Murder,”
BRUCE WASHINGTON,
a/k/a “BJ,”
DAMON PARRISH,
ROBERTO MUNOZ,
a/k/a “Jr,”
ALONZO MCINTOSH,
a/k/a “Manuke,”
Life imprisonment with a mandatory minimum of 10 years’ imprisonment
Defendants
Age
John Alvarez
29
Brandon Anderson
31
Daquan Anderson
22
Emile Anderson
22
Gary Arrington
32
Nicholas Bailey
23
Andre Bent
23
Marcel Bent
25
Elijah Brown
18
Joshua Brown
20
Kayshawn Campbell
23
Erick Canales
22
Jayvon Carter
21
Mouhahmet Cherry
23
Mark Clarke
21
Hasani Fitts
23
Rodrigo Gonzalez
19
Courtney Green
29
Dante Gregory
19
Kavone Horton
18
Walter Jernigan
21
Danny Jones
27
Kraig Lewis
24
Peter Lewis
24
Patrick Littlejohn
23
Ronald Matthews
25
David Mattison
24
Kevin Mattison
21
Jacquon McIntosh
21
Sean McIntosh
24
Emmanuel McKenzie
25
Lamor Miles
26
Andrew Moncrieffe
40
Laquan Parrish
24
Preston Pasley
26
Terrence Pasley
27
Robert Pope
23
Cintron Powell
21
Aaron Rodriguez
23
Lloyd Rodriguez
20
Melvin Rodriguez
23
Williams Rodriguez
34
Kareem Sanders
25
Travis Thompson
20
Davon Walker
19
Shawn Walker
24
Bowlin Wallingford
26
Bruce Washington
28
Vaughn Washington
26
[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.
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