Southern District of New York
Press releases recorded for this federal judicial district.
Kentucky Resident Pleads Guilty in Manhattan Federal Court to Hiding Hundreds of Thousands of Dollars in Secret Swiss Bank AccountsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that PETER CANALE, a United States Citizen and resident of Jamestown, Kentucky, pled guilty today to willfully failing to file Reports of Foreign Bank and Financial Accounts (“FBARs”) with the Internal Revenue Service (“IRS”) regarding secret bank accounts that he maintained and controlled in Switzerland. CANALE maintained his undeclared accounts at multiple different Swiss banks for approximately ten years, from 2000 through 2010. During that time, CANALE’s undeclared assets reached a high value of over $780,000. CANALE entered his guilty plea before U.S. District Judge Katherine B. Forrest.
According to the superseding Information filed in Manhattan federal court, other court documents, and statements made in connection with CANALE’s guilty plea:
Beginning in the early 1990s, a relative of CANALE (the “Relative”) maintained an undeclared offshore bank account at a predecessor firm of the Swiss bank UBS AG. Upon the Relative’s death in July 2000, CANALE met in Manhattan with two Swiss bankers, Hans Thomann and Beda Singenberger, and discussed the continued maintenance of the assets that CANALE and his brother, Michael Canale, had inherited from the Relative. They agreed that Thomann, working with Singenberger, would continue to maintain the assets in an undeclared bank account in Switzerland for the benefit of CANALE and Michael Canale. Later, in July 2005, with the assistance of Singenberger, CANALE opened an undeclared account at Wegelin & Co. (“Wegelin”), a Swiss private bank. CANALE’s undeclared account at Wegelin was opened in the name of a sham foundation organized under the laws of Liechtenstein, called the Janara Foundation. CANALE, however, remained the beneficial owner of the assets in the Janara Foundation account. As of December 31, 2009, the Janara Foundation account at Wegelin held assets valued at approximately $788,920.
In May 2010, Singenberger, acting under the authority given to him by CANALE, opened an undeclared bank account in the name of the Janara Foundation at another Swiss private bank (“Swiss Bank A”), and transferred the assets from the Janara Foundation account at Wegelin to the Janara Foundation account at Swiss Bank A. As of October 31, 2010, the Janara Foundation bank account at Swiss Bank A, of which CANALE was the beneficial owner, held assets valued at approximately $718,143.
As charged in the superseding Information, for each of the calendar years from 2007 through 2010, CANALE was required, but failed, to file FBARs with the IRS disclosing his signatory or other authority over the Janara Foundation accounts held at Wegelin and Swiss Bank A, which had an aggregate value of more than $10,000 during each of these years. For each of the calendar years from 2007 through 2010, CANALE also filed false Forms 1040 with the IRS, in which he failed to report as income the dividends, interest, and other income received by him from the Janara Foundation accounts at Wegelin and Swiss Bank A.
* * *
CANALE, 62, faces a maximum sentence of five years in prison. As part of his plea, CANALE has agreed to pay a civil penalty of $394,460, file amended tax returns, and pay back taxes of $106,820. He is scheduled to be sentenced by Judge Forrest on December 3, 2015 at 1:00 p.m. 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 efforts of the IRS-CI in the investigation. Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for their assistance in the investigation.
This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Jorge Almonte (of the Tax Division) and Assistant United States Attorney Sarah E. Paul are in charge of the prosecution.
Irwin Lipkin, Former Controller at Bernard L. Madoff Investment Securities LLC, Sentenced in Manhattan Federal Court to Six Months in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that IRWIN LIPKIN, the former Controller at Bernard L. Madoff Investment Securities LLC (“BLMIS”), was sentenced today to six months in prison for fraud and other offenses set forth in a two-count Superseding Information to which LIPKIN pled guilty. Specifically, LIPKIN pled guilty in November 2012 to one count of conspiracy to commit securities fraud, to falsify records, to make false filings with the Securities and Exchange Commission (“SEC”), and to falsify statements in relation to documents required by the Employee Retirement Income Security Act (“ERISA”), and to one substantive count of falsifying statements in relation to documents required by ERISA. The overt acts in the conspiracy included, among other things, falsifying financial information BLMIS filed with the SEC, causing fake trades to be created in investment accounts LIPKIN and his family members maintained at BLMIS, and arranging to keep himself and his wife on the BLMIS payroll after his retirement in 1998 – even though neither was working for the firm – so they could collect benefits to which they were not entitled. LIPKIN was sentenced in Manhattan federal court by U.S. District Judge Laura Taylor Swain.
Manhattan U.S. Attorney Preet Bharara said: “Bernard Madoff did not commit his massive fraud alone. Irwin Lipkin, hired in the 1960s as BLMIS’s third employee, right after Madoff and Madoff’s wife, was among Madoff’s most loyal accomplices. Year after year, Lipkin helped keep Madoff’s house of cards from collapsing, falsifying the very financial records that Lipkin, as the Controller, was supposed to monitor. In exchange, Lipkin reaped the rewards of fake trades and no-show jobs for himself and his family. Lipkin’s sentencing – the last among the 15 defendants convicted for their participation in Madoff’s fraud – marks the close of another chapter in this tragic tale of unchecked greed.”
According to the Superseding Information to which LIPKIN pled guilty and other court filings:
LIPKIN was employed by BLMIS from 1964 through 1998, and was the first person who was not a family member to be hired by Bernard L. Madoff. In his role as Controller, LIPKIN participated in maintaining the firm’s financial books and records since at least the mid-1970s. At the direction of Bernard L. Madoff, LIPKIN, along with Daniel Bonventre, Enrica Cotellessa-Pitz, and others, made false and misleading entries concerning BLMIS’s profit and loss numbers (“P&L”) in the General Ledger and Stock Record, and in supporting books and records.
As an SEC-registered broker-dealer, BLMIS was required to file Financial and Operational Combined Uniform Single (“FOCUS”) Reports on a monthly, quarterly, and annual basis, as well as annual financial statements concerning BLMIS’s assets, liabilities, revenues, and expenses. The information contained in the FOCUS Reports and the annual financial statements was derived principally from information recorded in the BLMIS General Ledger and the Stock Record. Because those numbers were false and misleading, the corresponding numbers contained in the FOCUS Reports and annual financial statements were false and misleading as well. The annual financial statements provided to various BLMIS Investment Advisory customers also failed to accurately reflect the P&L of BLMIS. “These filings,” LIPKIN admitted when pleading guilty in November 2012, “helped Mr. Madoff run the Ponzi scheme that harmed thousands of people.”
When LIPKIN retired from BLMIS in 1998, he taught his successor as Controller how to manipulate the revenues at BLMIS in order to reach a particular P&L result, thereby allowing the fraud at BLMIS to continue.
In addition, since at least 1975, LIPKIN and his wife maintained their own personal Investment Advisory accounts at BLMIS. On multiple occasions, LIPKIN asked Annette Bongiorno, a BLMIS employee who worked in the Investment Advisory business, to execute fake, back-dated trades in both his account and the accounts of his family members. In an effort to reduce his capital gains income, LIPKIN also asked Bongiorno either to cancel the sales of shares in his account well after those sales had purportedly occurred, or to document nonexistent purchases of shares near the monthly high price, and nonexistent sales near the monthly low price, weeks later. No such trades actually occurred.
LIPKIN also arranged “no-show” jobs at BLMIS for both himself and his wife. As a result, they received income from salaries, health care insurance, 401(k) plans, and other benefits to which they were not entitled.
* * *
In addition to the prison term, Judge Swain sentenced LIPKIN, 77, of Paramus, New Jersey, to three years’ supervised release, including eighteen months of home confinement. LIPKIN was also ordered to forfeit $170 billion dollars and various pieces of property, including a house in Florida, stocks from brokerage and retirement accounts, and artwork. This amount represents all of the investor funds paid into BLMIS from the mid-1970s – when LIPKIN became involved with the conspiracy – through December 2008.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission and the U.S. Department of Labor for their assistance on this case.
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’s 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.
The case is being handled by the Office's Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Christopher Frey, Andrea Griswold, and David Abramowicz are in charge of the prosecution. Assistant U.S. Attorneys Jonathan Cohen, Paul Monteleoni, and Niketh Velamoor are responsible for the forfeiture aspects of the case.
Three Orange County Residents Charged with $2.5 Million Fraud Involving Fraudlent Loans to Banks and Credit Unions Throughout the NortheastRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Philip R. Bartlett, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service (“USPIS”), and Thomas E. Bishop, Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service’s Criminal Investigation Division (“IRS-CI”) announced the arrests today of BINDER TAL, BALDEV TAL, and SHARIFUL MINTU on bank fraud and money laundering charges. BALDEV TAL was arrested this morning in Orefield, Pennsylvania and appeared in Philadelphia federal court this afternoon. MINTU was arrested this morning in Orange County, New York, and appeared in White Plains federal court this morning, before U.S. Magistrate Judge Paul E. Davison. BINDER TAL remains at large. Each defendant is charged with one count of conspiring to commit bank fraud and one count of conspiring to commit money laundering.
Manhattan U.S. Attorney Bharara said: “For years, banks, credit unions, and small businesses have lost millions of dollars because of the fraud allegedly perpetrated by the defendants in this case. I would like to thank our partner agencies for their assistance on this case.”
Inspector in Charge Philip R. Bartlett said: “Through disguise and deceit, these defendants created an elaborate scheme to defraud financial institutions. The use of the U.S. Mail to facilitate any fraud scheme will never be tolerated by members of America's oldest law enforcement agency"
Acting Special Agent-in-Charge Thomas E. Bishop said: “IRS-CI is always ready to work with our law enforcement partners in the investigation of money laundering schemes and the financial crimes with which they are related. It is important to remember that money laundering is not a victimless crime. While the victims of bank fraud are usually identifiable individuals or institutions, the damage money laundering inflicts on our nation’s economic strength ultimately harms every American taxpayer.”
According to the allegations in the Complaint unsealed this morning in White Plains federal court[1]:
From at least in or about 2007 through in or about July 2015, BINDER TAL, BALDEV TAL, and MINTU fraudulently obtained loans and lines of credit from banks, credit unions, and other lending institutions. The defendants obtained the loans by providing materially false information to the lenders about the borrowers’ assets, including false information about the borrowers’ employment and income. Through their scheme, the defendants and their co-conspirators fraudulently obtained more than $2.5 million in proceeds in connection with dozens of loan applications and applications for lines of credit. The vast majority of the loans and lines of credit went into default, and millions of dollars were not repaid.
As part of their fraud scheme, the defendants used the proceeds to personally enrich themselves and their families. They used their proceeds for, among other things, (i) credit card debts for personal expenses; (ii) debts arising from business expenses; and (iii) debts arising from other fraudulently obtained loans, to conceal the fraudulent nature of these loans.
In addition, the defendants and their co-conspirators also engaged in extensive efforts to perpetuate and conceal the fraudulent scheme. These efforts included members of the conspiracy acting as the borrowers for different loans, falsely claiming that the purpose of the loans was to purchase or finance used luxury automobiles. In fact, many of the automobiles were never purchased or leased by the defendants or their co-conspirators, and the loan proceeds were later distributed to other members of the conspiracy and to entities they controlled.
* * *
BINDER TAL, BALDEV TAL, and MINTU each face a maximum sentence of 30 years in prison on the charge of conspiring to commit bank fraud and a maximum sentence of 20 years in prison on the charge of conspiring to commit money laundering. 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 efforts of the United States Postal Inspection Service, the Internal Revenue Service, Criminal Investigation Division, and the New York State Police Special Investigations Unit.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney John P. Collins, Jr. is in charge of the prosecution.
The charge and 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 herein constitute only allegations, and every fact described should be treated as an allegation.
Ten Defendants Charged in White Plains Federal Court with Heroin Trafficking and Firearms Offenses in Dutchess CountyRead 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 Office of the Federal Bureau of Investigation (“FBI”), Adrian H. Anderson, the Dutchess County Sheriff, and Ronald J. Knapp, the Chief of Police of City of Poughkeepsie Police Department, today announced the unsealing of an Indictment and two Complaints charging 10 defendants with committing heroin trafficking and firearms offenses in and around Dutchess County, New York. Eight defendants were taken into federal custody today and were presented in White Plains federal court this afternoon before U.S. Magistrate Judge Paul E. Davison. Two defendants were previously taken into federal custody on a Complaint filed on May 14, 2015.
U.S. Attorney Preet Bharara said: “Heroin is a growing problem in New York, making an unfortunate comeback in cities and rural communities alike. Heroin and prescription pill overdoses keep going up, killing more and more people every day. With heroin trafficking and firearms charges like those brought today against ten defendants selling drugs in Dutchess County, we aim to confront this epidemic. We thank the FBI, the Dutchess County Sherriff’s Office and the Poughkeepsie Police Department for their extraordinary efforts on this case.”
Assistant Director-in-Charge Diego Rodriguez said: “Today, we announce the charges against ten individuals who allegedly sought to sell heroin in the City of Poughkeepsie with the aid of firearms. The charges demonstrate the FBI’s continued effort to work closely with our law enforcement partners in eliminating the terror these groups inflict on our communities. Dismantling violent gangs remains a priority for the FBI.”
Sheriff Adrian H. Anderson said: “Today the Dutchess County Sheriff’s Office partnered with Federal and local law enforcement agencies to assist in the arrests of numerous people who have allegedly been dealing heroin and other dangerous drugs throughout Dutchess County and surrounding areas. All of these law enforcement agencies are dedicated to working together to rid our streets of dangerous drugs, and I would like to take this opportunity to thank the U.S. Attorney’s Office, the FBI, and the City of Poughkeepsie Police for their outstanding work in helping to make this investigation such an enormous success. Those who deal in heroin and other dangerous drugs are not going to be allowed to poison our community, and this investigation is the latest example of how Federal and local law enforcement agencies working together can make a huge difference and go a long way towards making our streets and residents safer.”
Chief of Police Ronald J. Knap said: “These arrests culminate a joint investigation into regional narcotics trafficking, specifically heroin. The City of Poughkeepsie was one of the communities that these suspects lived and operated in. We thank the U.S. Attorney’s Office for their work and pending prosecution of this case. We also thank the FBI and Dutchess County Sheriff for their participation in this successful investigation. The City of Poughkeepsie has suffered more than its share of heroin deaths. Arresting and prosecuting those who deal in these dangerous drugs on the Federal level is an important strategy as the effort cannot be deal with solely as a local problem.”
As alleged in the Indictment unsealed today in White Plains federal court[1]:
From December 2013 through June 2015, MONDU ALLAH, CARITA BENNERMAN, CLIFTON CATTS, EUGENE LAMONT GRAVES, LARRY GRAVES, MAURICE HOLLIS, JULIENNE KOLOZY, and SAMUEL TURNER conspired to sell more than one kilogram of heroin. During the course of the conspiracy, law enforcement officers observed certain defendants participating in the sale of heroin to confidential informants working with law enforcement and to an undercover law enforcement officer. Law enforcement officers, using a court-authorized wiretap, also intercepted numerous communications in which certain of the defendants discussed heroin trafficking and arranged heroin transactions. On May 13, 2015, ALLAH and HOLLIS also carried, and aided and abetted the carrying of, a firearm in furtherance of the narcotics conspiracy charged in the Indictment.
In addition the Indictment, two Complaints were also unsealed today. As alleged in those Complaints:
From December 2013 through January 2014, ROBERT NOVICK conspired to sell heroin, and sold 3, 4 methylenedioxymethamphetamine, commonly referred to as “MDMA,” in Poughkeepsie. On May 9, 2015, VARICK GOSS conspired to sell heroin and crack cocaine in Poughkeepsie.
* * *
ALLAH and HOLLIS, two of the defendants charged in the Indictment, both face a mandatory term of 10 years in prison on Count One and a mandatory term of 5 years in prison on Count Two, consecutive to any sentence on Count One. Each faces a maximum term of life in prison on both counts. The other six defendants charged in the Indictment each face a mandatory term of 10 years in prison on Count One, and a maximum term of life. Each defendant charged in the Complaints faces a maximum term of 20 years in prison. The statutory minimum and maximum sentences are prescribed by Congress and are provided here for information purposes only, as any sentencing of the defendants would be determined by the respective judges.
Mr. Bharara praised the outstanding investigative work of the FBI Hudson Valley Safe Streets Task Force, the Dutchess County Sheriff’s Office, the City of Poughkeepsie Police Department, and other local law enforcement partners.
These cases are being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Lauren Schorr and Douglas Zolkind are in charge of the prosecutions.
The charges contained in the Indictment and Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
15-202
CHARGE
DEFENDANTS
MAXIMUM PENALTIES
Narcotics conspiracy – Heroin
(conspiracy to distribute and possess with intent to distribute heroin, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(A))
MONDU ALLAH,
a/k/a “Mindu Allah,”
a/k/a “Duberry,”
a/k/a “Du,”
CARITA BENNERMAN,
CLIFTON CATTS,
EUGENE LAMONT GRAVES,
LARRY GRAVES,
a/k/a “Knowledge,”
MAURICE HOLLIS,
a/k/a “Mo,”
JULIENNE KOLOZY, and
SAMUEL TURNER
Life in prison
Mandatory minimum: 10 years in prison
Use of a firearm in furtherance of a drug trafficking crime
(in violation of 18 U.S.C. § 924(c))
MONDU ALLAH,
a/k/a “Mindu Allah,”
a/k/a “Duberry,”
a/k/a “Du,” and
MAURICE HOLLIS,
a/k/a “Mo”
Life in prison
Mandatory minimum: 5 years in prison, to be imposed consecutively to any other sentence
Narcotics conspiracy – Heroin
(conspiracy to distribute and possess with intent to distribute heroin, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(C))
ROBERT NOVICK
20 years in prison
Distribution and possession with intent to distribute 3, 4 methylenedioxymethamphetamine
(in violation of 21 U.S.C. §§ 841(a)(1) & 841(b)(1)(C))
ROBERT NOVICK
20 years in prison
Narcotics conspiracy – Heroin and crack cocaine
(conspiracy to distribute and possess with intent to distribute heroin, in violation of 21 U.S.C. §§ 846, 841(a)(1) & 841(b)(1)(C))
VARICK GOSS
20 years in prison
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the Complaints, and the description of the Indictment and the Complaints set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Sullivan County Man Sentenced to 12 Years in Prison for Attempting to Entice A Minor to Engage in Sexual ActivityRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that SAMUEL TERWILLIGER was sentenced to 12 years in prison for his attempted enticement of a minor to engage in sexual activity. TERWILLIGER pled guilty on October 22, 2014 before U.S. District Court Judge Vincent Briccetti, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Samuel Terwilliger has now been sentenced for his predatory crime, attempting to entice a minor to engage in sexual activity. This case – and others like it that we prosecute – underlines the need for law enforcement to be vigilant in its protection of children from those who prey on them. I want to thank the FBI, the Rockland County Computer Crimes Task Force, the Child Protective Services of Sullivan County, and the Sullivan County Sheriff’s Department for their work in this investigation and prosecution. ”
According to the Complaint and other documents filed in this case, and statements made in related court proceedings:
In August 2013, an individual (the “Reporter”) advised the Federal Bureau of Investigation (“FBI”) that the Reporter, posing as a 14-year-old girl, had engaged in online communications with a person using the screen name “tas_128.” During those communications, “tas_128” indicated that “tas_128” wanted to engage in sexual activities with the Reporter. The FBI instructed the Reporter to advise “tas_128” that the Reporter had a young friend who would be interested in communicating with “tas_128” and provided the Reporter with an email address to provide to “tas_128” for an undercover FBI agent (“UC”).
Between August 16, 2013 and September 26, 2013, the UC and “Tas_128,” later identified as SAMUEL TERWILLIGER, engaged in a series of emails and text communications. Among other things, TERWILLIGER told the UC that he was 24 years old and the UC told TERWILLIGER that she was a 13-year-old girl. During these communications, TERWILLIGER acknowledged his understanding that the UC was a minor, solicited graphic sexual images of the minor from the UC, and described in detail a variety of sexual acts he wanted to engage in with the 13-year-old. TERWILLIGER repeatedly requested that the minor join him in a “three-way relationship” with his girlfriend and told the girl that he wanted to impregnate her. TERWILLIGER told the UC, “We have been trying to find a woman for a year now that would join our relationship.”
On April 10, 2014, the FBI executed a search warrant at the defendant’s residence. On that date, the defendant admitted that he had engaged in sexually-explicit conversations with a girl whom he believed to be approximately 13 years old. He also admitted that, at the time he was communicating with her, he planned to bring her to stay with him and his girlfriend because he wanted to have sex with her and impregnate her. In addition, the defendant admitted that, in October 2013, he had engaged in sexual intercourse with a 15-year-old girl while his girlfriend watched.
* * *
TERWILLIGER, 26, of Calicoon, NY, was also sentenced to 5 years’ supervised release to follow the imprisonment.
Mr. Bharara praised the efforts of the FBI, the Rockland County Computer Crimes Task Force, Child Protective Services of Sullivan County, and the Sullivan County Sheriff’s Department in connection with this case.
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.
Defendant Sentenced to 205 Months in Prison for Leading Crew That Committed More Than Two Dozen Armed RobberiesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that HENRY JAMES was sentenced today in Manhattan federal court to 205 months in prison for leading a robbery crew that committed over two dozen armed robberies in the Bronx and Brooklyn in 2013. Since September 2013, JAMES and ten other defendants have been charged for their respective roles in this armed robbery conspiracy. In October 2014, JAMES pled guilty to participating in the robbery conspiracy and a firearms offense. JAMES was sentenced by United States District Judge Sidney H. Stein.
In November 2014, co-defendants Markquez McFadden and Qushawn Woods were convicted after a two-week jury trial before Judge Stein. McFadden and Woods were each found guilty of participating in the robbery conspiracy, and McFadden was also found guilty of a firearms offense. On July 9, 2015, Judge Stein sentenced Woods to 46 months in prison. On July 15, 2015 Judge Stein sentenced McFadden to 120 months in prison.
The eight other defendants in this case – Jerome Ortiz, Edward Matthews, Kelvin Green, Tyrell Jones, Untra Jones, Cesar Thomas, Dennis Buie, Sr., and Dennis Buie, Jr. – pled guilty to various offenses, including participating in the robbery conspiracy and/or firearms offenses.
Manhattan U.S. Attorney Preet Bharara said: “Henry James, a convicted murderer, led a violent and ruthless armed robbery crew that terrorized hard working employees at various stores in the Bronx and Brooklyn. For his crime spree of over two dozen armed robberies, James has now been convicted and sentenced.”
According to the allegations contained in the Indictments, evidence presented at trial, and other court documents previously filed in Manhattan federal court:
Between July and October 2013, the eleven-member crew that JAMES led and organized committed more than two dozen armed robberies in the Bronx and Brooklyn. The robberies followed a simple but violent pattern. Multiple robbers entered a store during business hours while customers and employees were inside and demanded money, cellphones, and other items at gunpoint. During these robberies, one robber entered the store first, drew his gun, approached the clerk, and announced a robbery. The other robber or robbers then walked in, often closed the door behind them, and then put a mask over (or pulled a hood onto) their faces. The robbers would demand access to the “drop box” or “lock box” where they believed cash was held. Afterward, the robbers left the store and drove away in a vehicle that was parked around the corner from the store. In certain robberies, store employees were pistol whipped.
JAMES previously served a more than a 20-year sentence for a 1986 second degree murder in which a victim was killed during the course of a robbery. Less than one year after he was released from prison, JAMES began recruiting members to commit these armed robberies.
* * *
All eleven defendants have either pled guilty or been convicted after trial. In addition to JAMES, Woods, and McFadden, the following defendants have been sentenced by Judge Stein:
- On July 31, 2014 Jerome Ortiz was sentenced to 120 months in prison.
- On October 28, 2014, Edward Matthews was sentenced to 132 months in prison.
- On December 17, 2014, Untra Jones was sentenced to 90 months in prison.
- On February 23, 2015, Dennis Buie, Sr. was sentenced to 27 months in prison.
Cesar Thomas, Dennis Buie, Jr., Kelvin Green, and Tyrell Jones have yet to be sentenced.
Mr. Bharara praised the investigative work of the New York City Police Department, especially detectives from the Bronx Robbery Squad and Joint Robbery Task Force. Mr. Bharara also thanked the United States Marshals Service Fugitive Task Force for their outstanding assistance in the pursuit and arrest of JAMES.
The case is being prosecuted by the Office’s Violent & Organized Crime Unit. Assistant United States Attorneys Andrew Bauer, Andrea M. Griswold, and Joshua A. Naftalis are in charge of the prosecution.
Married Lawyer and Doctor Sentenced to Prison for Obstructing IRS Audit to Hide False Deductions and Expenses Claimed on Tax ReturnsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JEFFREY S. STEIN and MARLA STEIN, who are husband and wife, were sentenced today to 18 months and 12 months and one day in prison, respectively, for obstructing the IRS by, among other things, providing to an IRS auditor phony documents designed to support false deductions both claimed on their joint tax returns for the years 2009-2012. JEFFREY S. STEIN, a vascular surgeon, and MARLA STEIN, a New York personal injury lawyer, were both sentenced by U.S. District Judge Denise L. Cote.
Manhattan U.S. Attorney Preet Bharara said: “Taxpayers have an obligation not only to file truthful and accurate tax returns, but also to deal with the IRS honestly during audits. Jeffrey and Marla Stein failed to do so, and as a result, both have been sentenced today to jail terms.”
According to the Information and other documents filed in Manhattan federal court, as well as the transcript of today’s sentencing proceedings:
JEFFREY S. STEIN was a vascular surgeon who, between 2009 and 2012, conducted business principally through his own Manhattan and Long Island-based medical practice, “Jeffrey Stein, M.D.” Between 2008 and 2011, JEFFREY S. STEIN was also affiliated with and earned income from certain medical groups, including one based in Brooklyn that had contracts with the United States Department of Veterans Affairs (“V.A.”).
MARLA STEIN was an attorney who, between 2009 and 2012, performed legal services largely as an independent contractor to certain Manhattan-based personal injury law firms.
Both JEFFREY S. STEIN and MARLA STEIN reported the profits from their medical and law practices, respectively, on separate Schedules C (Profit or Loss From Business) attached to the joint U.S. Individual Income Tax Returns, Forms 1040, that they filed for the tax years 2009-2012.
Filing of False Tax Returns
In connection with the preparation of their Forms 1040 for the tax years 2009-2012, JEFFREY S. STEIN and MARLA STEIN provided false and fictitious information to their accountant in order to fraudulently reduce the amount of taxes they would have to pay to the IRS. In particular, JEFFREY S. STEIN provided the accountant with (a) wholly fictitious Schedule C expenses purportedly incurred by his medical practice, such as contract labor expenses and transcription services that were, in truth and fact, never incurred or paid; and (b) falsely inflated Schedule C expenses purportedly incurred by his medical practice, including travel and auto expenses, deductible meals and entertainment, and the amounts of wages paid to employees of his medical practice. In addition, MARLA STEIN provided this accountant with (a) wholly fictitious Schedule C contract labor and advertising expenses purportedly incurred by her law practice but which were, in truth and fact, never incurred or paid; and (b) falsely inflated Schedule C expenses purportedly incurred by her law practice, including those for office supplies and deductible meals and expenses.
In addition to the foregoing, for the tax years 2007-2013, JEFFREY S. STEIN and MARLA STEIN failed to inform their accountant that they employed and paid approximately $15,000 annually in cash wages to a household employee (“the Domestic Employee”) who performed certain cleaning and childcare services in their Upper East Side home.
As a result of the falsely inflated and wholly fictitious information provided by JEFFREY S. STEIN and MARLA STEIN to their accountant in connection with the preparation of their Forms 1040 for the 2009-2012 tax years, the accountant prepared tax returns for JEFFREY S. STEIN and MARLA STEIN that falsely and fraudulently understated their business income and, consequently, the amount of taxes due and owing to the IRS. In addition, as a result of the failure of JEFFREY S. STEIN and MARLA STEIN to inform their accountant of the cash wages paid to their Domestic Employee for the 2007-2013 tax years, JEFFREY S. STEIN and MARLA STEIN failed to pay to the IRS various employment taxes due and owing to the IRS, and also aided the Domestic Employee in avoiding detection by the IRS of the employee’s failure to report her cash wages to the IRS for the tax years 2007-2013.
Obstruction of the IRS Audit
In February 2013, the IRS notified JEFFREY S. STEIN and MARLA STEIN, the defendants, that their tax returns for the 2010 and 2011 tax years had been selected for audit, specifically with respect to their respective Schedule C expenses. In response to requests by the IRS auditor for documents supporting their claimed deductions and expenses, JEFFREY S. STEIN and MARLA STEIN created and provided to their accountant – whom they retained to represent them during the audit – various fabricated and fictitious documents and information as part of a corrupt effort to convince the IRS auditor that the expenses claimed on their respective Schedules C were legitimate.
Among the fabricated and fictitious documents created by JEFFREY S. STEIN and MARLA STEIN and provided to their accountant, in order to pass on to the IRS auditor, were the following:
(a) Using the names of four disabled military veterans (including two former patients) whose identities and other personal information JEFFREY S. STEIN obtained as a result of his work for the V.A., JEFFREY S. STEIN created bogus invoices in the names of those veterans (“the Bogus Invoices”). The Bogus Invoices falsely recited that the individuals whose names were contained on the invoices had performed during 2010 and 2011, and been paid by JEFFREY S. STEIN for, various medical services rendered to JEFFREY S. STEIN’s medical practice, such as “ultrasound technologist” and “vascular technologist” services. In truth and fact, none of the individuals whose names were placed on the Bogus Invoices provided any of the services recited in the fabricated invoices, which totaled $126,525. One of the veterans whose name and social security number were placed on a Bogus Invoice by JEFFREY S. STEIN was not even alive in 2011 – a year for which JEFFREY S. STEIN created a Bogus Invoice for that individual.
(b) JEFFREY S. STEIN created invoices purportedly sent to STEIN’s medical practice in 2010 and 2011 by a Long Island hospital (“the Hospital”) reflecting payments sought by the Hospital for “surgical physician assistant cost sharing,” which invoices JEFFREY S. STEIN claimed were paid by his medical practice. In truth and fact, the services reflected in the Hospital invoices were never provided to JEFFREY S. STEIN and never paid by his medical practice as expenses.
(c) JEFFREY S. STEIN created invoices purportedly sent to STEIN’s medical practice in 2010 and 2011 by a company that provided transcription services. In truth and fact, the transcription company identified by JEFFREY S. STEIN never provided any transcription services to JEFFREY S. STEIN’s medical practice.
(d) MARLA STEIN created certain documentation indicating that two individuals, whose names and purported tax identification numbers were included thereon, had provided certain services to MARLA STEIN’s law practice and had been paid fee income by MARLA STEIN as a result. In truth and fact, neither of those individuals had provided services to MARLA STEIN’s law practice. Instead, the individuals whose identities and social security numbers were used were those of the Domestic Employee and a medical professional who had performed services for a member of MARLA STEIN’s immediate family.
(e) Using genuine invoices previously provided to MARLA STEIN by photographers and a videographer who had performed services in connection with religious celebrations for MARLA STEIN’s family, MARLA STEIN used the names of the photographers and videographer but fraudulently altered the real invoices to make them appear as if the services reflected in the invoices had been provided to MARLA STEIN’s law practice, as part of her work on personal injury cases.
* * *
In addition to prison terms, JEFFREY S. STEIN, 58, of New York, New York, and MARLA STEIN, 52, also of Manhattan, were also ordered to pay restitution to the IRS in the aggregate amount of $344,989.
Mr. Bharara praised the outstanding investigative work of IRS-CI.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Stanley J. Okula, Jr. is in charge of the prosecution.
Twenty Individuals Charged with Narcotics Trafficking Involving Firearms in the BronxRead 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 William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging 20 defendants with participating in a conspiracy to distribute large quantities of heroin and crack cocaine in the vicinity of Hoe Avenue and Aldus Street in the Bronx. Six of the 20 defendants were also charged with possessing firearms in furtherance of the narcotics trafficking conspiracy. Several of the defendants charged in the Indictment were involved in a recent shooting in which a member of the conspiracy used a handgun to fire shots at two individuals – who luckily were not struck by the gunfire – in front of an apartment building on Aldus Street. Fifteen of the defendants named in the Indictment are in federal custody and are expected to be arraigned in Manhattan federal court before U.S. Magistrate Judge Henry Pitman. Fourteen of those defendants were taken into federal custody today, and one was already in federal custody on a separate criminal case pending in Manhattan federal court.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, the twenty defendants charged today were part of a dangerous drug trafficking crew that terrorized a Bronx neighborhood by peddling heroin and crack cocaine in apartment buildings with families and children, just a block from a public school. As the indictment alleges, this crew protected its turf with guns, not afraid to shoot at people in front of a Bronx apartment building, as one of the defendants is alleged to have done in May. Thanks to the outstanding work of the FBI and the NYPD, the residents of that Bronx neighborhood are safer today.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “The FBI remains committed to protecting our community by targeting and removing violent drug distributors and their guns from our neighborhoods. As alleged herein, the defendants committed their illegal acts near a school and surrounded by families. With no regard for innocent lives, they brazenly carried and fired their weapons on crowded New York City streets. We thank the New York City Police Department and the United States Attorney's Office for sharing our commitment through solid partnerships and strong joint investigations.”
NYPD Commissioner Bratton said: “There is no place in our communities for narcotics trafficking and the violence associated with this criminal enterprise. I would like to commend the NYPD investigators, the agents of the FBI, and the prosecutors of the U.S. Attorney’s Office whose work in this investigation brought these individuals to justice.”
As alleged in the Indictment and other court documents unsealed today in Manhattan federal court***:
From May 2014 through July 2015, the twenty defendants named in the Indictment – specifically, RAFAEL OJEDA, 51, CALVIN OJEDA, 24, JONATHAN OJEDA, 22, SERVANDO JOSE GOMEZ, 41, HECTOR TIRADO, 22, TRAVIS PROFIT, 28, ANGEL SEPULVEDA, 35, EDUARDO VAZQUEZ, 23, JASON PEREZ, 24, TREVIS BOWENS, 25, JHOVY DIONIZIO, 27, CHRISTIAN DUMES, 33, CHRISTIAN RAMOS, 26, PAQUITO RODRIGUEZ, 56, GISETTE RIVERA, 56, SAMUEL PALMER, 20, JOSE COLON, 48, ANTOINE HENDERSON, 28, ADRIEL PONCE, 25, and CHRISTOPHER RICHARDSON, 22 – participated in a conspiracy to sell controlled substances, including heroin and crack cocaine, in the vicinity of Hoe Avenue in the Bronx. Specifically, the Indictment charges these twenty defendants with conspiring to distribute and possess with intent to distribute at least one kilogram of mixtures and substances containing a detectable amount of heroin and an unspecified quantity of mixtures and substances containing cocaine base in a form commonly known as “crack.” Six of the twenty defendants – namely, CALVIN OJEDA, JONATHAN OJEDA, GOMEZ, PROFIT, VAZQUEZ and PEREZ – are also charged with possessing firearms in furtherance of the narcotics trafficking conspiracy.
During the time period charged in the Indictment, members of the conspiracy sold large quantities of heroin and crack in the vicinity of Hoe Avenue in the Bronx, about one city block from a public school. Members of the conspiracy sold heroin and crack from stairwells and other common areas in apartment buildings where families with children reside, and in private apartments that have been converted into drug stash houses in such buildings, among other locations. Multiple members of the conspiracy used firearms in connection with their narcotics trafficking. On or about May 29, 2015, several of the defendants charged in the Indictment were involved in a shooting in which one of the defendants used a handgun to fire shots at two people in front of an apartment building on Aldus Street.
* * *
Of the twenty defendants named in the Indictment, the fourteen defendants charged only with participating in the narcotics trafficking conspiracy face mandatory minimum prison terms of 10 years and maximum prison terms of life. The remaining six defendants, who are charged both with participating in the narcotics trafficking conspiracy and also with possession of firearms in furtherance of that conspiracy, face mandatory minimum prison terms of fifteen years and maximum prison terms of life. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentences imposed on the defendants will be determined by the Court.
Mr. Bharara praised the outstanding investigative work of the FBI and NYPD.
The prosecution is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Samson Enzer and Jared Lenow 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.
###
15 Cr. 487 (GBD).
CHARGE(S)
DEFENDANTS
MAXIMUM PENALTIES
Conspiracy to distribute and possess with intent to distribute one kilogram and more of heroin, and an unspecified quantity of crack cocaine
All twenty of the defendants named in the Indictment:
RAFAEL OJEDA
CALVIN OJEDA
JONATHAN OJEDA
SERVANDO JOSE GOMEZ
HECTOR TIRADO
TRAVIS PROFIT
ANGEL SEPULVEDA
EDUARDO VAZQUEZ
JASON PEREZ
TREVIS BOWENS
JHOVY DIONIZIO
CHRISTIAN DUMES
CHRISTIAN RAMOS
PAQUITO RODRIGUEZ
GISETTE RIVERA
SAMUEL PALMER
JOSE COLON
ANTOINE HENDERSON
ADRIEL PONCE
CHRISTOPHER RICHARDSON
Life in prison
Mandatory minimum: 10 years in prison
Possession of firearms in furtherance of the above-referenced narcotics conspiracy
Six of the twenty defendants named in the Indictment:
CALVIN OJEDA
JONATHAN OJEDA
SERVANDO JOSE GOMEZ
TRAVIS PROFIT
EDUARDO VAZQUEZ
JASON PEREZ
Life in prison
Mandatory minimum: 5 years in prison, to be imposed consecutively to any other sentence
***As the introductory phrase signifies, the text of the Indictment and other court papers referenced herein, and the description of those materials set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Founder and Managing Partner of R2 Capital Group LLC Pleads Guilty in Connection with Commodities Investment SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that RYAN TOMAZIN, the founder and managing partner of R2 Capital Group LLC (“R2 Capital”), pled guilty in Manhattan federal court to a two-count Indictment charging him with defrauding investors and misappropriating investment funds. TOMAZIN and other principals at R2 Capital caused over $850,000 of investors’ funds to be withdrawn from bank accounts associated with the commodity pool and directed to bank accounts held in their own names or that of their respective holding companies. TOMAZIN was arrested on December 11, 2014 and pled guilty today before United States District Judge Paul A. Crotty.
Manhattan U.S. Attorney Preet Bharara said: “As Ryan Tomazin acknowledged today by pleading guilty to securities and commodities fraud, he lied to investors and used his company to line his own pockets with investors’ money.”
According to the Indictment, and other statements made in open court:
In late 2009, R2 Capital created a commodity pool, R2 Capital Partners I L.P. (the “Commercial Pool”) and began to solicit investors, eventually raising approximately $2.2 million. In early 2010, TOMAZIN solicited a potential investor in the Commercial Pool (“Investment Fund-1”) and provided Investment Fund-1 with documentation that stated, among other things, that R2 Capital would receive a management fee limited to 50% of the profits earned by the Commercial Pool. Investment Fund-1 invested over $1 million in the Commercial Pool. From June 2010 up to and including July 2011, the Commercial Pool experienced significant net losses. In July 2011, all trading activity in the Commercial Pool ceased. By August 2011, there was less than $5,000 remaining in bank accounts associated with the Commercial Pool. Nonetheless, between August 2011 and March 2013, TOMAZIN caused false “Trading Statements” to be sent to Investment Fund-1 reflecting false purported monthly trading profits and inaccurate trade balances. Furthermore, contrary to prior representations that R2 Capital’s management fee would be limited to 50% of profits earned, TOMAZIN and other principals at R2 Capital caused approximately $850,000 to be withdrawn from bank accounts associated with the Commercial Pool for their own personal benefit.
* * *
TOMAZIN, 35, of Stamford, Connecticut, pled guilty to one count of securities fraud and one count of commodities fraud. The securities fraud charge carries a maximum term of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The commodities fraud charge carries a maximum term of 10 years in prison and a maximum fine of $1 million, 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. As part of the plea agreement, TOMAZIN agreed to pay forfeiture and restitution to the victims of the offense in the amount of $288,000. TOMAZIN is scheduled to be sentenced by Judge Crotty on December 3, 2015.
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 thanked U.S. Commodity Futures Trading Commission for their assistance with the investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Harry Chernoff and Aimee Hector are in charge of the prosecution.
Sales Representative Pleads Guilty in Connection with Multi-Million Dollar Mortgage Modification SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JONATHAN LYONS, a former sales representative at a company purporting to provide mortgage modification services, pled guilty yesterday in Manhattan federal court for his role in a multimillion-dollar scheme that victimized more than 500 financially struggling homeowners across the country. LYONS, who was arrested in October 2013, pled guilty before U.S. District Judge George B. Daniels.
Manhattan U.S. Attorney Preet Bharara said: “Through his plea, Jonathan Lyons acknowledged his role in a multimillion dollar scheme that targeted and victimized hundreds of desperate, financially vulnerable homeowners weighed down by debt. We thank our partners, including the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, and the New York State Office of the Attorney General for their role in bringing Lyons to justice.”
According to the allegations contained in the Indictment and related Informations, the plea agreements, and statements made in court proceedings:
From approximately January 2009 to June 2011, LYONS and his co-conspirators perpetrated a scheme to defraud homeowners who were in danger of losing their homes because they could not afford to pay their residential mortgages. Through a company located in Long Island, New York (“Company-1”), and its successor companies (the “Mortgage Modification Companies”), LYONS, his co-conspirators, and other employees falsely promised to help financially struggling residential mortgage holders refinance their mortgages for lower interest rates and monthly payments. Despite the defendants’ claims, however, the Mortgage Modification Companies delivered little or no service to their customers, diverting most, if not all, of the customers’ payments to the Mortgage Modification Companies’ owners and employees rather than using those funds to assist customers in procuring mortgage modifications. Through their scheme, the Mortgage Modification Companies obtained at least $2.3 million from more than 500 homeowners throughout the United States.
The Mortgage Modification Companies charged customers thousands of dollars in up-front fees—in violation of New York State law—and made fraudulent claims about the companies’ services, including that the Mortgage Modification Companies guaranteed that they would either: (i) secure a mortgage modification that would result in a significant reduction in the customer’s interest rate and/or monthly payments; or (ii) provide the customer’s money back. Through the Mortgage Modification Companies, the defendants and other employees also falsely claimed to be affiliated with the federal government’s Home Affordable Modification Program (“HAMP”), a federally-funded mortgage assistance program that is part of the Troubled Asset Relief Program and is available to homeowners free of charge.
The Mortgage Modification Companies targeted homeowners who had fallen behind, or were in danger of falling behind, in making mortgage payments on their homes. LYONS and two other company sales representatives, AREN GOLDFADEN and DARRELL KEYS, spoke to hundreds of struggling homeowners on behalf of the Mortgage Modification Companies, repeatedly making materially false or misleading representations to convince these prospective clients to pay upfront fees to the companies. The false or misleading representations included that the Mortgage Modification Companies were associated with HAMP; that a mortgage modification was guaranteed and would take only approximately thirty to sixty days; and that the Mortgage Modification Companies would issue a full refund of the upfront fee to any client whose mortgage was not successfully modified in the stated time period. ANTHONY BLACKWELL, who held himself out as an attorney for the Mortgage Modification Companies, despite not having a valid law license for most of the relevant period, and ANGEL GONZALEZ, a sales manager who was involved in training sales representatives, instructed the companies’ sales representatives on how to lie to customers and routinely refused to provide refunds to customers despite the fact that those customers did not obtain mortgage modifications as promised.
BLACKWELL and GONZALEZ also personally met with and spoke directly to customers and told similar lies. They sought to cover up their fraudulent scheme by, among other things, directing sales representatives to assuage customers by falsely claiming that work was being done on the customer’s behalf and that the company just needed more time to obtain a mortgage modification, when, in fact, little or no work was being done to provide a mortgage modification to the customers.
* * *
LYONS, 53, of Rockville Center, New York, pled guilty to one count of conspiracy to commit wire fraud, and faces 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. LYONS is scheduled to be sentenced on by Judge Daniels on January 7, 2016.
BLACKWELL, GOLDFADEN, GONZALEZ, and KEYS also each pled guilty to one count of conspiracy to commit wire fraud. BLACKWELL, 49, of Manhattan, New York, pled guilty before Judge Daniels on July 8, 2015, and is scheduled to be sentenced on November 5, 2015. GOLDFADEN, 38, of East Rockaway, pled guilty before Judge Daniels on June 1, 2015, and is scheduled to be sentenced on October 15, 2015. GONZALEZ, 33, of Rosedale, New York, pled guilty before Judge Daniels on March 5, 2015. KEYS, 52, of Uniondale, New York, pled guilty before U.S. District Judge Robert W. Sweet on September 19, 2013.
In addition, a founder and co-owner of Company-1, SCOTT SCHREIBER, 32, of Brooklyn, New York, pled guilty for his role in the offense to one count of conspiracy to commit wire fraud and one count of wire fraud, before the late U.S. District Judge Robert P. Patterson on October 16, 2013. SCHREIBER’s case is now before U.S. District Judge Loretta A. Preska. Sentencing dates have not yet been set for GONZALEZ, KEYS or SCHREIBER.
Mr. Bharara praised the Special Inspector General for the Troubled Asset Relief Program and the Federal Bureau of Investigation for their outstanding work in the investigation. Mr. Bharara also thanked the New York State Office of the Attorney General for its assistance.
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’s 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 matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani are in charge of the case.
Former Senior Information Systems Engineer at National Law Firm Sentenced in Manhattan Federal Court to 24 Months in Prison for Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DIMITRY BRAVERMAN, a former senior information systems engineer at a prominent national law firm, was sentenced to 24 months in prison for insider trading. Specifically, BRAVERMAN repeatedly used material nonpublic information concerning planned merger and acquisition activity of at least eight clients of the law firm to acquire stocks and options, resulting in profits of more than $300,000. BRAVERMAN was originally charged in September 2014, and he was sentenced today by the Honorable Paul A. Engelmayer, United States District Judge.
U.S. Attorney Preet Bharara said: “Taking advantage of confidential, market-moving information that he got from his work at a major law firm, Dimitry Braverman made more than $300,000 in ill-gotten gains. Braverman’s sentencing today concludes yet another illegal insider trading scheme brought to light by the efforts of the Federal Bureau of Investigation and the Securities and Exchange Commission, working closely with securities prosecutors in my office.”
According to the Information, other documents filed in Manhattan federal court, and statements made during court proceedings:
From at least in or about September 2010 through December 2013, BRAVERMAN was engaged in an insider trading scheme. BRAVERMAN, who was a senior information systems engineer at a national, full-service law firm, had access to financial and billing databases of the firm, including information about, among other things, the law firm’s clients’ potential merger and acquisition activity, as well as information about the identities of the other parties to the potential deals.
Between about 2010 and 2011, BRAVERMAN engaged in at least four trades that were based on inside information concerning potential mergers and acquisition activity of clients of the law firm. In April 2011, however, BRAVERMAN closed out the last of these trades on the same day that another employee of the law firm, Matthew Kluger, was arrested on separate insider trading charges. In November 2012, BRAVERMAN opened a new brokerage account in the name of a relative living in Russia, and continued trading on the basis of inside information he obtained from the law firm. Specifically, between November 2012 and December 2013, BRAVERMAN engaged in at least four additional trades based on inside information. In total, BRAVERMAN made more than approximately $300,000 in profits from the trades between 2010 and December 2013.
* * *
BRAVERMAN, 42, of San Mateo, California, pled guilty to one count of securities fraud on November 13, 2014. BRAVERMAN was also sentenced to two years of supervised release, with 100 hours of community service.
Mr. Bharara praised the work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance.
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’s 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.
Thirty-Four 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”), Raymond Parmer Jr., the Special Agent in Charge of the Homeland Security Investigations New York, 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 today announced the unsealing of nine Indictments charging a total of 34 defendants with committing various narcotics and firearms offenses in Sullivan County, New York.
Manhattan U.S. Attorney Preet Bharara said: “With the coordinated narcotics and firearms charges brought today, we seek to neutralize at least four different drug rings that allegedly have been selling massive amounts of heroin and crack cocaine for years. The devastating impact that this type of drug dealing can have on the small, rural communities like those in Sullivan County cannot be overstated. Heroin is back, with a vengeance, but so are we. The law enforcement effort today is the product of remarkable cooperation among federal, state and local agencies and I thank all of our partners.”
Sullivan County District Attorney James R. Farrell said: “Sullivan County, like the rest of our country, is not immune from the scourge of heroin and other dangerous narcotics and the threats they pose to our rural community. These drugs destroy lives, rip apart families and fuel a cycle of violence in our communities that threatens our safety and security. Today, in close collaboration and partnership with our federal law enforcement counterparts, we have disrupted, dismantled, and put out of business significant heroin and crack cocaine trafficking operations in Sullivan County. Over the last year, this joint investigation, involving local, state, county and federal assets, has concentrated on local dealers and local suppliers of heroin and crack cocaine. The successful partnership that has been forged will continue moving forward, unabated. Individuals who engage in these dangerous criminal activities, and import and distribute dangerous narcotics like crack cocaine and heroin, should take notice: all of our law enforcement resources are committed to protecting our community, targeting those who put our safety in danger and holding those people accountable and responsible for their criminal acts. ”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Today’s charges describe alleged conspiracies to distribute crack and heroin in and around Monticello and other locations in Sullivan County. Infecting our neighborhoods with drugs peddled by criminals who arm their sales force with guns is a violent and dangerous combination. We’re here today to let the good people of Sullivan County know their streets are safer, their families are safer, and we’re one step closer to eliminating the drugs and violence that threaten the future and stability of their community.”
Homeland Security Investigations Special Agent in Charge Raymond Parmer Jr. said: “Today’s arrests help make the neighborhoods of Sullivan County a much safer place for its residents by taking violent drug dealers and other criminals off its streets. HSI will continue working with our law enforcement partners using every tool at our disposal to dismantle ruthless criminal organizations such as these.”
NYSP Superintendent Joseph A. D’Amico said: “The hard work and partnership between federal, state, county and local law enforcement are responsible for putting a stop to these drug operations. Thirty-four dangerous people are off the streets today, responsible for selling and distributing crack cocaine and heroin for money and firearms in and around Sullivan County. The State Police will continue to work closely with our law enforcement partners to make sure our neighborhoods are safe and the individuals who engage is this illegal activity are held accountable.”
Sullivan County Sheriff Michael A. Schiff said: “Today’s arrests are a clear indication of our resolve to address the drug epidemic that has besieged our community. Even though Sullivan County is the smallest population in the Southern District of New York, I would like to thank the U.S. Attorney’s Office and the Federal Bureau of Investigation for committing significant resources to our situation. We will continue to partner with federal, state and local agencies and use every tool at our disposal. All of the law enforcement agencies involved in this case should be commended for the outstanding job they have done.”
Village of Monticello Police Chief Robert Mir said: “I’m very appreciative and proud of the hard work of the law enforcement professionals that dedicated themselves to this operation. We have formed excellent working relationships with the U.S. Attorney’s Office, the FBI, Sullivan County District Attorney’s Office, New York State Police, Sullivan County Sheriff’s Office and the Liberty Police Department. The success of this mission would not have been possible had it not been for our collective resources. The arrests of these 34 individuals will make a significant dent in the criminal underworld of Sullivan County. The actions of those charged have been driving the violence and drug epidemic that have brought blight on our communities. Thanks to this concerted and continuing effort, we are creating a much safer place to live.”
Village of Liberty Police Chief Scott Kinne said: “This type of partnership and sharing of investigative resources is a necessity in modern day law enforcement, and the arrests of these individuals attests to this. I would like to thank all of the agencies that participated in this operation to help investigate, arrest, and prosecute these individuals who fueled crime and violence in our communities.”
As alleged in the Indictments unsealed today in White Plains federal court***
United States v. Errol Davis, et al., 15 Cr. 468
Between 2012 and 2015, ERROL DAVIS, a/k/a “MI,” 34, JAHMAL MCINTOSH, a/k/a “Blood,” 30, DARNELL SAUNDERS, a/k/a “Big D,” 36, CANDICE BROOKS, 30, ALFRED FRANKLIN, a/k/a “Junior,” 30, DEREK MOORER, a/k/a “D Moore,” 34, SCOTT MUSGRAVE, a/k/a “S,” 31, SAM REED, a/k/a “Elmo,” 25, JULIO RENTA, a/k/a “Tank,” 26, JAMES WILKES, a/k/a “Diamond,” 38, and SEAN YORK, a/k/a “Boogie,” 41, conspired to sell 280 grams or more of crack cocaine and 100 grams or more of heroin. The conspiracy was led, at different times, by DAVIS, MCINTOSH, and SAUNDERS. Members of the conspiracy distributed crack and heroin in and around Monticello and other locations in Sullivan County.
In October 2014, REED used and carried a firearm during and in relation to, and possessed a firearm in furtherance of, the narcotics conspiracy charged in the Indictment.
United States v. Damon Mitchell Sr., et al., 15 Cr. 463
Between 2013 and 2015, DAMON MITCHELL SR., a/k/a “Trip,” 40, LUIS GONZALEZ, 31, JULIO MARTINEZ, 36, KYRA MATAN, 33, PERNELL MOORE, a/k/a “Dog,” 48, HARMEEN NIX, a/k/a “Hollow,” 34, RAMON NUNEZ, a/k/a “Wellington,” 35, RONALD RIVERA, a/k/a “RJ,” 26, TYRELL SIMON, a/k/a “Shmeez,” 26, and GEORGE VEGA JR., a/k/a “Pito,” 29, conspired to sell one kilogram or more of heroin. MITCHELL, NIX, and NUNEZ served as sources of heroin supply to the conspiracy. The conspiracy was centered in Monticello, and members of the conspiracy distributed heroin in and around Sullivan County. MARTINEZ, MATAN, MOORE, RIVERA, SIMON, and VEGA distributed heroin in furtherance of the conspiracy. GONZALEZ helped NUNEZ transport and supply heroin to the conspiracy.
Between 2013 and 2015, RIVERA and SIMON each used and carried a firearm during and in relation to, and possessed a firearm in furtherance of, the narcotics conspiracy charged in the Indictment.
In the summer of 2014, MOORE possessed a firearm after having been convicted of a felony.
United States v. Darcy Copeland, et al., 15 Cr. 465
Between 2011 and 2015, DARCY COPELAND, a/k/a “Moey,” 33, JENILYN BOYCE, a/k/a “JL,” 31, PRISCILLA FRANKLIN, 33, and JERRELL CLARK, a/k/a “Rell,” 30, conspired to sell one kilogram or more of heroin. The conspiracy was based in Monticello and led by COPELAND. COPELAND distributed heroin to other drug dealers for resale, and on multiple occasions received firearms as payment for heroin. Since July 2014, COPELAND has been incarcerated on a state charge and has continued to maintain the drug distribution conspiracy while incarcerated. BOYCE distributed heroin for COPELAND and has helped him maintain his drug distribution operation while he is incarcerated. FRANKLIN and CLARK have also distributed heroin for COPELAND.
Between 2011 and 2015, COPELAND used and carried firearms during and in relation to, and possessed firearms in furtherance of, the narcotics conspiracy charged in the Indictment.
United States v. Frederick Gang, et al., 15 Cr. 471
Between 2007 and 2015, FREDERICK GANG, 55, APRIL WATSON, a/k/a “Nee Nee,” 30, and TYRONE HAGANS, a/k/a “Dirty T,” 38, conspired to sell 280 grams or more of crack cocaine. The conspiracy was based in Monticello and led by GANG. GANG supplied crack to other drug dealers for resale. WATSON maintained crack for GANG at her residence on Wood Avenue in Monticello and distributed crack in furtherance of the conspiracy. HAGANS distributed crack in furtherance of the conspiracy.
Between 2012 and 2013, WATSON used and carried firearms during and in relation to, and possessed firearms in furtherance of, the narcotics conspiracy charged in the Indictment.
United States v. Raheim Bolden, 15 Cr. 466
Between 2013 and 2015, RAHEIM BOLDEN, a/k/a “Red,” 32, conspired to sell 280 grams or more of crack cocaine.
United States v. Michael Hughes Jr., 15 Cr. 467
On January 10, 2015, MICHAEL HUGHES JR., 20, sold heroin. On February 6, 2015, HUGHES sold heroin and used and carried a firearm during and in relation to, and possessed a firearm in furtherance of, the sale of heroin.
United States v. Charles Gonzales, 15 Cr. 469
On May 5, 2015, CHARLES GONZALES, 39, possessed a firearm after having had three previous convictions for a violent felony or a serious drug offense.
United States v. Lamont McNeal and Gualberto Roman, Jr., 15 Cr. 470
On November 17, 2014, LAMONT MCNEAL, a/k/a “Ferl,” 42, possessed a firearm after having been convicted of a felony, and GUALBERTO ROMAN, JR., a/k/a “Bizzy Bert,” 31, possessed a firearm that had the manufacturer’s serial number obliterated.
United States v. Deon Morgan, 15 Cr. 464
On April 29, 2015, DEON MORGAN, 29, possessed a firearm after having been convicted of a felony.
* * *
32 of the 34 defendants are now in federal custody. The defendants will be presented in White Plains federal court today before U.S. Magistrate Judge Judith C. McCarthy and U.S. Magistrate Judge Paul E. Davison.
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 Department of Homeland Security, the United States Marshals Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Orange County Sheriff’s Office. Mr. Bharara also thanked the Sullivan County District Attorney’s Office for its ongoing assistance in the case.
These cases are being handled by the Office’s White Plains Division. Assistant United States Attorneys Michael Gerber, Max Nicholas, Won Shin, and Jennifer Beidel are in charge of the prosecutions.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
###
United States v. Errol Davis, et al., 15 Cr. 468
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Narcotics conspiracy
(Conspiracy to distribute and possess with intent to distribute 280 grams or more of crack cocaine and 100 grams or more of heroin.)
ERROL DAVIS,
a/k/a “MI,”
JAHMAL MCINTOSH,
a/k/a “Blood,”
DARNELL SAUNDERS,
a/k/a “Big D,”
CANDICE BROOKS,
ALFRED FRANKLIN,
a/k/a “Junior,”
DEREK MOORER,
a/k/a “D Moore,”
SCOTT MUSGRAVE,
a/k/a “S,”
SAM REED,
a/k/a “Elmo,”
JULIO RENTA,
a/k/a “Tank,”
JAMES WILKES,
a/k/a “Diamond,” and
SEAN YORK,
a/k/a “Boogie”Life in prison
Mandatory minimum:
10 years in prisonPossession of a firearm in furtherance of a drug trafficking crime
SAM REED,
a/k/a “Elmo”Life in prison
Mandatory minimum:
five years in prison, to be imposed consecutively to any other sentenceUnited States v. Damon Mitchell Sr., et al., 15 Cr. 463
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Narcotics conspiracy
(Conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.)
DAMON MITCHELL SR.,
a/k/a “Trip,”
LUIS GONZALEZ,
JULIO MARTINEZ,
KYRA MATAN,
PERNELL MOORE,
a/k/a “Dog,”
HARMEEN NIX
a/k/a “Hollow,”
RAMON NUNEZ,
a/k/a “Wellington,”
RONALD RIVERA,
a/k/a “RJ,”
TYRELL SIMON,
a/k/a “Shmeez,” and
GEORGE VEGA JR.,
a/k/a “Pito”Life in prison
Mandatory minimum:
10 years in prisonPossession of a firearm in furtherance of a drug trafficking crime
RONALD RIVERA,
a/k/a “RJ,” and
TYRELL SIMON,
a/k/a “Shmeez”Life in prison
Mandatory minimum:
five years in prison, to be imposed consecutively to any other sentencePossession of a firearm after having been convicted of a felony
PERNELL MOORE,
a/k/a “Dog”10 years in prison
United States v. Darcy Copeland, et al., 15 Cr. 465
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Narcotics conspiracy
(Conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.)
DARCY COPELAND,
a/k/a “Moey,”
JENILYN BOYCE,
a/k/a “JL,”
PRISCILLA FRANKLIN, and
JERRELL CLARK,
a/k/a “Rell,”Life in prison
Mandatory minimum:
10 years in prisonPossession of a firearm in furtherance of a drug trafficking crime
DARCY COPELAND,
a/k/a “Moey”Life in prison
Mandatory minimum:
five years in prison, to be imposed consecutively to any other sentenceUnited States v. Frederick Gang, et al., 15 Cr. 471
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Narcotics conspiracy
(Conspiracy to distribute and possess with intent to distribute 280 grams or more of crack cocaine.)
FREDERICK GANG,
APRIL WATSON,
a/k/a “Nee Nee,”
TYRONE HAGANS,
a/k/a “Dirty T,” and
RAHEIM BOLDEN,
a/k/a “Red”Life in prison
Mandatory minimum:
10 years in prisonPossession of a firearm in furtherance of a drug trafficking crime
APRIL WATSON,
a/k/a “Nee Nee”Life in prison
Mandatory minimum:
five years in prison, to be imposed consecutively to any other sentenceUnited States v. Raheim Bolden, 15 Cr. 466
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Narcotics conspiracy
(Conspiracy to distribute and possess with intent to distribute 280 grams or more of crack cocaine.)
RAHEIM BOLDEN,
a/k/a “Red”Life in prison
Mandatory minimum:
10 years in prisonUnited States v. Michael Hughes Jr., 15 Cr. 467
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Distribution and possession with intent to distribute heroin
MICHAEL HUGHES JR. (two counts)
20 years in prison
Possession of a firearm in furtherance of a drug trafficking crime
MICHAEL HUGHES JR.
Life in prison
Mandatory minimum:
five years in prison, to be imposed consecutively to any other sentenceUnited States v. Charles Gonzales, 15 Cr. 469
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Possession of a firearm after having had three previous convictions for a violent felony or a serious drug offense
CHARLES GONZALES
Life in prison
Mandatory minimum:
15 years in prisonUnited States v. Lamont McNeal and Gualberto Roman, Jr., 15 Cr. 470
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Possession of a firearm after having been convicted of a felony
LAMONT MCNEAL,
a/k/a “Ferl”10 years in prison
Possession of a firearm that had the manufacturer’s serial number obliterated
GUALBERTO ROMAN, JR.,
a/k/a “Bizzy Bert”5 years in prison
United States v. Deon Morgan, 15 Cr. 464
CHARGE(S)
DEFENDANT(S)
MAXIMUM PENALTIES
Possession of a firearm after having been convicted of a felony
DEON MORGAN
10 years in prison
***As the introductory phrase signifies, the entirety of the text of the Indictments and the descriptions of the Indictments set forth below constitute only allegations, and every fact described should be treated as an allegation.Manhattan U.S. Attorney and EPA Announce Lawsuit Against Accolade Construction Group Inc., for Violating Lead Paint Safety RulesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Judith Enck, Regional Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States has filed a civil lawsuit against Accolade Construction Group Inc. (“Accolade”), alleging that Accolade repeatedly violated provisions of the Toxic Substances Control Act (“TSCA”) and EPA’s Renovation, Repair, and Painting Rule (“RRP Rule”). The provisions violated by Accolade are designed to protect public health by minimizing the risk of lead exposure during renovations of residential buildings.
Manhattan U.S. Attorney Preet Bharara said: “As alleged in the complaint, Accolade has repeatedly violated rules designed to protect children and others from lead poisoning during renovation of residential buildings. The complaint demonstrates a blatant disregard by Accolade of its responsibilities, and the public health. Through this lawsuit, we aim to protect the public from future violations and ensure that Accolade does not keep the money it took for work that allegedly skirted the law and put people at risk.”
EPA Regional Administrator Judith Enck stated: “Exposure to lead-based paint and paint dust is the leading cause of lead poisoning in the country. Lead is extremely toxic and even low levels of lead in children’s blood affect their IQ and ability to learn. Time after time, this company has violated EPA regulations designed to protect people from lead exposure and, in doing so, has shown little regard for the health of people in buildings they were renovating or for their own workers.”
The lawsuit alleges that in the course of renovating six different Manhattan apartment buildings in 2013 and 2014, Accolade violated the TSCA and the RRP Rule by failing to hire renovators trained and certified in lead-safe renovation work practices, failing to seal off renovation work areas to prevent lead from contaminating other apartments or common areas, and failing to warn building owners and occupants of the risks of lead exposure from its renovations. Accolade also violated the TSCA and the RRP Rule by failing to provide EPA with the records required by the regulations to enable EPA to monitor Accolade’s compliance.
Accolade had previously entered into an administrative Consent Agreement and Final Order with EPA to settle other TSCA and RRP Rule violations. As part of that settlement, Accolade agreed to obey the law in the future. Despite that agreement, Accolade went on to commit additional violations of the same laws designed to prevent lead poisoning.
* * *
The Complaint filed by the United States seeks an order enjoining Accolade from conducting further renovation work until it demonstrates compliance with the TSCA and the RRP Rule and a permanent injunction compelling Accolade to comply with the TSCA and the RRP Rule in the future. The United States also seeks the proceeds received by Accolade for renovation work on jobs in which it failed to comply with TSCA and the RRP Rule.
This case is being handled by the Office’s Environmental Protection Unit. Assistant U.S. Attorney Mónica P. Folch is in charge of the case.
###
Former Chief of Mount Pleasant Police Department Pleads Guilty in White Plains Federal Court to Possession of Child PornographyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that BRIAN FANELLI, the former Chief of the Mount Pleasant, New York, Police Department, pled guilty today to one count of possession of child pornography. FANELLI, who was arrested in January 2014, entered his plea before United States District Judge Kenneth M. Karas.
Manhattan U.S. Attorney Preet Bharara stated: “By his guilty plea to downloading and possessing child pornography, Brian Fanelli, a former police chief who swore to protect and serve, admitted to a crime that victimizes and exploits some of the most vulnerable in our community.”
According to the Complaint and Indictment:
From at least as early as October 2013, through January 2014, FANELLI used a Peer-to-Peer File Sharing Program (“the “P2P Network”) to download more than 120 files containing images and videos believed to be child pornography; certain of those files were made available to other P2P Network users through FANELLI’s computer’s shared folder on the P2P Network program. On three occasions, agents with the Department of Homeland Security (“DHS”), Homeland Security Investigations (“HSI”), acting in an undercover capacity, used the P2P Network to download from FANELLI’s computer files containing images and videos believed to contain child pornography.
* * *
FANELLI, 56, of Mahopac, New York, pled guilty to one count of possessing child pornography, which carries a maximum sentence of 10 years in prison. The count also carries a maximum fine of $250,000 or twice the gross gain or loss from the offense. The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the Department of Homeland Security.
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 prosecution is being overseen by the Office’s White Plains Division and the Public Corruption Unit. Assistant United States Attorneys Anden F. Chow and Andrew D. Goldstein are in charge of the prosecution.
###
Statement of U.S. Attorney Preet Bharara on the Guilty Verdict in U.S. v. Thomas LibousRead the Press Release
“Public corruption is a scourge. Every New Yorker wants us to work as hard as possible to end it. But lies to law enforcement make the job of fighting corruption doubly difficult. Today, a jury unanimously found that Tom Libous, the second highest ranking New York Senator, told lie after lie to hide the truth from federal agents investigating corruption in Albany. Libous’s lies have been exposed, his crime has been proven, and Albany will be the better for it.”
New York State Senator Thomas W. Libous Found Guilty by White Plains Federal Jury for Lying to the FBIRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced today that New York State Senator THOMAS W. LIBOUS was found guilty of making false statements to the Federal Bureau of Investigation (“FBI”) following a seven-day trial in White Plains before the Hon. Vincent L. Briccetti, United States District Judge.
Manhattan U.S. Attorney Preet Bharara said: “Public corruption is a scourge. Every New Yorker wants us to work as hard as possible to end it. But lies to law enforcement make the job of fighting corruption doubly difficult. Today, a jury unanimously found that Tom Libous, the second highest ranking New York Senator, told lie after lie to hide the truth from federal agents investigating corruption in Albany. Libous’s lies have been exposed, his crime has been proven, and Albany will be the better for it.”
The evidence at trial proved that a federal grand jury in White Plains was investigating allegations that THOMAS LIBOUS had obtained a job for a family member at a Westchester law firm (“the Law Firm”) in exchange for a promise to refer business to the firm, and had arranged for an Albany lobbying firm that regularly lobbied him to secretly pay the law firm $50,000 per year to defray the cost of the family member's salary and lease of a Range Rover. The lobbying firm specialized in transportation issues and THOMAS LIBOUS served as the Chairman of the Senate's Transportation Committee at the time. The evidence also showed that THOMAS LIBOUS told a partner of the Law Firm that the firm would have to "build a new wing" to accommodate the business he would refer to it if it hired the member of his family.
Special Agents of the FBI interviewed THOMAS LIBOUS on June 24, 2010, as part of the grand jury's investigation. The evidence at trial showed THOMAS LIBOUS made the following false statements to the agents during the interview:
- he could not recall how the family member began to work at the Law Firm;
- no deals were made to get the family member the job at the Law Firm;
- he was not aware that the lobbying firm had paid any part of the family member's salary at the Law Firm;
- he never promised to refer work to the Law Firm;
- he was not involved in the family member's decision to work at the Law Firm;
- he had no business or personal relationship with the Law Firm; and
- he did know of any relationship between the lobbying firm and the Law Firm.
* * *
LIBOUS, 62, of Binghamton, New York, is scheduled to be sentenced by Judge Briccetti on October 30, 2015. LIBOUS faces a maximum sentence of five years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes, as any sentencing of the defendant will be determined by the judge.
* * *
Mr. Bharara praised the investigative work of the FBI.
The prosecution is being handled by the Office's White Plains Division. Assistant U.S. Attorneys Benjamin R. Allee and James McMahon are in charge of the prosecution.
Manhattan U.S. Attorney Announces Arrests of Two North Carolina Men for Conspiring to Kidnap and Murder as Part of A Murder-For-Hire Scheme OverseasRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Mark Hamlet, the Special Agent in Charge of the Special Operations Division of the United States Drug Enforcement Administration (“DEA”), today announced the arrests of two defendants – ADAM SAMIA and CARL DAVID STILLWELL, both citizens of the United States and residents of North Carolina. SAMIA and STILLWELL were arrested in Roxboro, North Carolina, and will be presented tomorrow before U.S. Magistrate Judge L. Patrick Auld of the Middle District of North Carolina.
SAMIA and STILLWELL are charged in three separate counts with conspiracy to kidnap and murder in the Philippines; discharging a firearm in furtherance of a crime of violence; and conspiracy to launder the proceeds of committing murder-for-hire.
Manhattan U.S. Attorney Preet Bharara said: “As alleged in the indictment, Samia and Stillwell traveled as hired guns from North Carolina to the Philippines to commit a cold-blooded murder, ultimately shooting their victim in the face several times and dumping her body on a pile of garbage. After their contract killing, they allegedly covered their tracks by conspiring to launder the blood-money back to the United States. Thanks to the DEA’s exemplary investigative work and the cooperation of local and federal law enforcement in North Carolina, Samia and Stillwell are now in custody,”
Special Operations Division Special Agent in Charge Mark Hamlet said: “U.S. citizens who murder and commit crimes overseas are not immune from justice. Adam Samia and Carl Stillwell are accused of heinous crimes and DEA is pleased that they will stand trial in a U.S. court of law.”
According to the Indictment against SAMIA and STILLWELL unsealed today[1]:
SAMIA is a self-described “Personal Protection/Security Industry” professional. According to SAMIA’s resume, he has worked as an “Independent Contractor” for clients in the Philippines, China, Papua New Guinea, the Democratic Republic of the Congo, and the Republic of the Congo; and has training in tactics and weapons, including handguns, shotguns, rifles, sniper rifles, and machineguns. According to STILLWELL’s resume, he has training and experience in the field of information technology and has worked at a firm in North Carolina that provides firearms training.
In 2011 and 2012, SAMIA and STILLWELL agreed to commit murders-for-hire in overseas locations in exchange for monthly salaries and bonus payments for each victim. In early 2012, SAMIA and STILLWELL traveled from North Carolina to the Philippines, where they obtained, among other things, information about their intended victims and firearms to use to commit the murders.
In January and February 2012, SAMIA and STILLWELL conducted surveillance on their intended victims in the Philippines as they formulated their plans for the murders. On or about February 12, 2012, SAMIA and STILLWELL killed one of their intended victims – a Filipino woman – in the Philippines by shooting her in the face multiple times (“Victim-1”). After killing Victim-1, SAMIA and STILLWELL disposed of her body on a pile of garbage. SAMIA and STILLWELL were to be paid $35,000 each for completing the murder, and they sent thousands of dollars from the payments they received to the United States using, among other methods, structured wire transfers in amounts under $10,000.
In or about late February and early March 2012, SAMIA and STILLWELL returned from the Philippines to North Carolina, where they continued to reside until their arrests today.
* * *
SAMIA, 41, and STILLWELL, 47, have each been charged with conspiracy to murder and kidnap in a foreign country (Count One), using and carrying a firearm during and in relation to a crime of violence (Count Two), and conspiracy to commit money laundering (Count Three). Counts One and Two each carry a maximum penalty of life in prison and Count Three carries a maximum penalty of 20 years in prison. Count Two also carries a mandatory consecutive sentence of 10 years in prison. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge. The case is assigned to U.S. District Judge Laura Taylor Swain.
The arrests of the defendants were 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, Bilateral Investigations Unit; DEA’s Atlanta Field Division, Raleigh Resident Office; the Durham Police Department; the Raleigh Police Department; the Harnett County Sherriff’s Office; the Wake County Sherriff’s Office; the Person County Sherriff’s Office; the Cary Police Department; the North Carolina State Bureau of Investigations; and Customs and Border Protection’s National Targeting Center. Mr. Bharara also thanked the United States Attorney’s Office for the Middle District of North Carolina for its support and assistance.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Anna Skotko, Emil Bove, and Michael D. Lockard are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Former Branch Manager of Bank Who Cashed over $400,000 in Fraudulently Obtained Tax Refund Checks Sentenced in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that EDWIN MEJIA was sentenced today in Manhattan federal court to 44 months in prison for his participation in a scheme to cash more than $400,000 in fraudulently obtained federal tax refund checks issued in other people’s names. MEJIA pled guilty to one count of theft of public funds and one count of aggravated identity theft in December 2014 before U.S. District Judge Paul A. Engelmayer, who imposed today’s sentence.
According to the allegations in the Complaint and Information filed in this case, and statements made at related court proceedings:
Until March 2014, MEJIA worked at branches of a bank (“Bank-1”) in Yonkers and Manhattan. MEJIA initially was a banker and later became the branch manager of multiple branches of Bank-1. From 2010 through 2013, MEJIA participated in a scheme to fraudulently obtain and cash tax refund checks issued by the United States Treasury. The fraudulent refund checks were generated by the filing of false and fraudulent tax returns in the names of other people (the “Purported Filers”), and the checks were made payable to the Purported Filers. As part of this scheme, MEJIA helped facilitate the cashing of the fraudulent refund checks.
In particular, MEJIA obtained personal identification information for the Purported Filers, including their Social Security numbers and dates of birth. MEJIA then cashed the fraudulent checks himself or by paying a co-conspirator to do so. When cashing a fraudulent check himself, MEJIA presented the refund check, along with the corresponding Social Security number and date of birth of the Purported Filer, to a complicit bank employee. Other times, MEJIA paid a co-conspirator to open bank accounts in the names of the Purported Filers and cash the checks. As part of the scheme, MEJIA cashed, or caused others to cash, more than $400,000 in fraudulent Treasury checks.
In imposing the sentence, Judge Engelmayer told MEJIA: “You played a central role in a fraud that cost the IRS more than $442,000. That was money that the IRS uses to pay for the public good; it pays for first responders, it pays for teachers, it pays for other government employees, it goes to clean our streets, it goes to clean our parks, it goes to fund our military. Tax fraud is a very serious matter. It should be taken every bit as seriously as fraud directed to individual victims.”
* * *
In addition to the term of prison, MEJIA, 31, was sentenced to three years of supervised release and was ordered to pay $442,642.58 in forfeiture and $442,642.58 in restitution.
Mr. Bharara praised the outstanding efforts of the Internal Revenue Service Criminal Investigation Division and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in this investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Jonathan Cohen is in charge of the prosecution.
Manhattan U.S. Attorney Announces Charges Against Two Florida Men for Operating an Underground Bitcoin ExchangeRead 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 Robert Sica, Special Agent-in-Charge of the New York Field Office of the United States Secret Service, announced today the unsealing of criminal complaints charging ANTHONY R. MURGIO and YURI LEBEDEV with running an unlicensed Internet Bitcoin exchange, which they operated through a phony front-company and, at times, a federal credit union that MURGIO acquired for purposes of the scheme. The defendants were arrested today at their residences in Florida, and are expected to be presented today in federal court in the Middle District of Florida.
According to the allegations contained in the criminal complaints unsealed today in Manhattan federal court[1]:
Since at least late 2013, MURGIO, LEBEDEV, and their co-conspirators have knowingly operated Coin.mx, a Bitcoin exchange service, in violation of federal anti-money laundering (“AML”) laws and regulations, including those requiring money services businesses like Coin.mx to meet registration and reporting requirements set forth by the United States Treasury Department. Through Coin.mx, MURGIO, LEBEDEV, and their co-conspirators enabled their customers to exchange cash for Bitcoins, charging a fee for their service. In doing so, they knowingly exchanged cash for people whom they believed may be engaging in criminal activity. MURGIO and his co-conspirators have also knowingly exchanged cash for Bitcoins for victims of “ransomware” attacks, that is, cyberattacks in which criminals (here, distributors of the ransomware known as “Cryptowall”) electronically block access to a victim’s computer system until a sum of “ransom” money, typically in Bitcoins, is paid to them. In doing so, MURGIO, and his co-conspirators knowingly enabled the criminals responsible for those attacks to receive the proceeds of their crimes, yet, in violation of federal anti-money laundering laws, MURGIO never filed any suspicious activity reports regarding any of the transactions.
In total, between approximately October 2013 and January 2015, Coin.mx exchanged at least $1.8 million for Bitcoins on behalf of tens of thousands of customers. In addition, in the course of the scheme, MURGIO transferred hundreds of thousands of dollars to bank accounts in Cyprus, Hong Kong, and Eastern Europe, and received hundreds of thousands of dollars from bank accounts in Cyprus and the British Virgin Islands, in furtherance of the operations of his unlawful business.
MURGIO, LEBEDEV, and their co-conspirators engaged in substantial efforts to evade detection of their scheme by operating through a phony front-company, “Collectables Club,” and maintaining a corresponding phony “Collectables Club” website. In doing so, they sought to trick the major financial institutions through which they operated into believing that their unlawful Bitcoin exchange business was simply a members-only association of individuals who discussed, bought, and sold collectable items, such as sports memorabilia.
More recently, in an effort to evade potential scrutiny from these institutions and others, MURGIO obtained beneficial control of a New Jersey-based federal credit union (the “Credit Union”) which served primarily low-income local residents. MURGIO then installed LEBEDEV and others on the Credit Union’s Board of Directors, and transferred Coin.mx’s banking operations to the Credit Union, which MURGIO, LEBEDEV and other co-conspirators operated, at least until early 2015, as a captive bank for their unlawful business. At that time, after discovering that substantial payment processing activity was being conducted through the Credit Union, the National Credit Union Administration forced the Credit Union to cease engaging in such activity, and MURGIO thereafter found new, overseas payment processing channels for his unlawful business.
***
MURGIO, 31, of Tampa, Florida, and LEBEDEV, 37, of Jacksonville, Florida, are each charged with one count of conspiracy to operate an unlicensed money transmitting business, and one count of operating an unlicensed money transmitting business, each of which carries a maximum sentence of five years in prison. MURGIO is also charged with one count of money laundering, which carries a maximum sentence of 20 years in prison and one count of willful failure to file a suspicious activity report, which carries a maximum sentence of five years in prison.The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and the Secret Service. He also thanked the National Credit Union Administration for their assistance with the investigation.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit.Assistant U.S. Attorneys Nicole Friedlander, Sarah Lai, and Eun Young Choi are in charge of the prosecution.Assistant U.S. Attorney Alexander Wilson of the Office’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The charges contained in the criminal complaints 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 complaints, and the description of the complaints set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Manhattan U.S. Attorney Announces Charges Against Three Defendants in Multimillion-Dollar StockRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Robert J. Sica, Special Agent in Charge of the US Secret Service New York Field Office (“USSS”) announced today the unsealing of an indictment charging GERY SHALON, JOSHUA SAMUEL AARON, and ZIV ORENSTEIN with orchestrating a scheme to manipulate the price and volume of traded shares in numerous publicly traded stocks by means of deceptive and misleading email campaigns, and manipulative, prearranged stock trading. SHALON and ORENSTEIN were arrested today in Israel by the Israel Police. The United States Attorney's Office will seek their extradition to stand trial in the United States. AARON remains at large.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, the defendants manipulated trading in U.S. securities from overseas, using fake identities to funnel millions of dollars in unlawful proceeds through a web of international shell companies. Using false and misleading spam emails sent to millions of people, these defendants allegedly directed their pump-and-dump scheme from their computers halfway around the world.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Crimes, such as the ones alleged herein, are multinational and complex in nature. The defendants are alleged to have profited in the millions of dollars and defrauded innocent investors for their own gain. The FBI is committed to working with our partners, both foreign and domestic, to ensure the integrity of our markets and protect our communities from fraud and deception, regardless of the scheme, means, or medium.”
USSS Special Agent in Charge Robert J. Sica said: “This case highlights the Secret Service’s investigative skills and our commitment to collaborate with our partners in detecting and dismantling highly sophisticated transnational criminal enterprises targeting the United States. These crimes can have a detrimental impact to our nation’s critical financial infrastructure. The Secret Service, in conjunction with its many law enforcement partners across the United States and around the world, is committed to deploying cutting edge investigative practices and technology in order to bring these offenders to justice.”
In a separate action, the United States Securities and Exchange Commission (“SEC”) announced civil charges against SHALON, AARON and ORENSTEIN.
According to the allegations contained in the indictment unsealed today in Manhattan federal court[1]:
Since 2011, SHALON, AARON, ORENSTEIN, and their co-conspirators have orchestrated multi-million dollar stock manipulation -- or “pump and dump” -- schemes to manipulate the price and trading volume of numerous publicly traded microcap stocks (“penny stocks”) in order to enable members of the conspiracy to sell their holdings in those stocks at artificially inflated prices. In furtherance of the conspiracy, SHALON and AARON partnered with “promoters” who identified the companies whose stock would be targeted for manipulation. In doing so, AARON acted as the scheme’s “front-man,” using the alias “Mike Shields” (including false identification and a Social Security Number belonging to another person) to communicate with the promoters and others at SHALON’s direction. In some instances, at the time SHALON and AARON partnered with the promoters, the targeted companies were already publicly traded, and in other instances, SHALON and AARON worked with the promoters to cause the companies to become publicly traded in furtherance of the scheme. In either case, upon partnering with the promoters, SHALON, AARON and the promoters agreed upon the compensation SHALON and AARON would receive for their role in the scheme, which typically amounted to either hundreds of thousands of dollars, or to shares in the targeted stock that SHALON and AARON typically sold for hundreds of thousands or millions of dollars in profits in the course of the scheme.
Also in furtherance of the conspiracy, the promoters -- along with, at certain times, SHALON and AARON -- acquired control over all or substantially all of the free-trading shares of the targeted stock, that is, shares that the owner could trade without restriction on a national stock exchange or in the over-the-counter market. At certain times, in furtherance of the scheme, when they acquired such free-trading shares, SHALON and AARON held the shares in brokerage accounts in the United States, which were opened in the names of shell companies (the “Brokerage Accounts”) and managed in part at SHALON’s direction by ORENSTEIN under aliases that ORENSTEIN supported with false and fraudulent passports and other false personal identification information.
As a further part of the scheme to defraud, after members of the conspiracy acquired control of a substantial portion of the free-trading shares of the targeted stock, SHALON, AARON, and their co-conspirators artificially inflated the stock’s price and trading volume through two fraudulent and deceptive means. First, certain members of the conspiracy typically executed pre-arranged manipulative trades to cause the stock’s price to rise small amounts on successive days. Second, in connection with that trading, SHALON and AARON began disseminating materially misleading, unsolicited (“spam”) emails – emailing up to millions of recipients per day – that falsely touted the stock in order to trick others into buying it. As orchestrated by SHALON and AARON, these emails contained materially false and fraudulent statements including, for example, (i) that the stock’s recent trading activity reflected legitimate demand for the stock (when in fact, and as AARON and SHALON well knew, the trading activity was caused in whole or in part by the manipulative trading of their co-conspirators) and (ii) that the emails were being distributed and financed by certain third parties when, in fact, and as AARON and SHALON well knew, the emails were being distributed and financed by SHALON, AARON, and their co-conspirators, who controlled all or nearly all of the free-trading shares of the stock.
After causing the stock’s price and trading volume to increase artificially during the days or weeks of the email promotional campaign, members of the conspiracy (including, when they owned shares, SHALON and AARON) began dumping, or selling, their shares in a coordinated fashion, often resulting in huge profits to members of the conspiracy. SHALON and AARON alone earned millions of dollars in illicit profits this way, selling shares of manipulated stocks from the Brokerage Accounts in coordination with their email promotional campaigns and co-conspirators. The co-conspirators’ massive coordinated sales typically placed downward pressure on the stock’s price and caused its trading volume to plummet, exposing unsuspecting investors to significant losses. SHALON and AARON then laundered their criminal proceeds overseas, directing millions of dollars of their criminal profits to a shell company bank account in Cyprus for further distribution in part to another Cyprus-based shell company account owned and controlled by AARON, and to other overseas shell company accounts beneficially owned and controlled by SHALON and other members of the conspiracy.
***
For this alleged conduct, SHALON, AARON, and ORENSTEIN are charged with the following offenses, which carry the maximum prison terms listed below:
Count
Defendants
Charge
Maximum Prison Term
One
SHALON, AARON, and ORENSTEIN
Conspiracy to commit securities fraud
Five years
Two
SHALON, AARON, and ORENSTEIN
Conspiracy to commit wire fraud
20 years
Three
SHALON, AARON, and ORENSTEIN
Securities fraud
20 years
Four
SHALON and AARON
Securities fraud
20 years
Five
SHALON and AARON
Securities fraud
20 years
Six
SHALON and AARON
Securities fraud
20 years
Seven
SHALON, AARON, and ORENSTEIN
Securities fraud
10 years
Eight
SHALON, AARON, and ORENSTEIN
Wire fraud
20 years
Nine
SHALON, AARON, and ORENSTEIN
Conspiracy to commit identification document fraud
15 years
Ten
SHALON and AARON
Aggravated Identity Theft
Mandatory two years
Eleven
SHALON and AARON
Conspiracy to commit money laundering
20 years
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.
SHALON, 31, of Savyon, Israel, and ORENSTEIN, 40, of Bat Hefer, Israel, are Israeli nationals, and were arrested earlier today at their residences. AARON, 31, a U.S. citizen who resides in Moscow, Russia, and Tel Aviv, Israel, remains at large.
Mr. Bharara praised the investigative work of the FBI, the USSS, and expressed his sincere gratitude to the Israel Police and the Israel Ministry of Justice for their support and assistance with the investigation. He also thanked the SEC.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit.Assistant U.S. Attorneys Nicole Friedlander, Sarah Lai, and Eun Young Choi are in charge of the prosecution.Assistant U.S. Attorney Alexander Wilson of the Office’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the indictment and the description of the indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Florida Man Charged in Manhattan Federal Court with Concealing an Offshore Bank Account in Liechtenstein Worth More Than $1 MillionRead 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 Field Office of the Internal Revenue Service’s Criminal Investigation Division (“IRS”), announced today the unsealing of an indictment (the “Indictment”) charging HARRY FALTERBAUER, a United States citizen and resident of Florida, for failing to disclose a bank account worth more than $1 million that he maintained in Liechtenstein, and for lying to federal agents who questioned him about this offshore account. FALTERBAUER was arrested this morning at his residence in Coconut Creek, Florida, and was presented in federal court in Fort Lauderdale, Florida.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, in order to evade taxes, Harry Falterbauer hid from the U.S. authorities a million-dollar offshore bank account he maintained in Liechtenstein. The indictment unsealed today is part of our ongoing efforts, with our partners at the IRS, to ensure that taxpayers do not use a foreign country’s bank-secrecy laws to avoid their tax obligations.”
IRS-CI Special Agent-in-Charge Shantelle P. Kitchen said: “The Internal Revenue Service has made the investigation of individuals who allegedly conceal assets in offshore accounts and who willfully fail to report the income that those accounts generate a priority. Such actions undermine our nation’s tax system and essentially make law abiding taxpayers pay more than their fair share. In a similar way, individuals who allegedly lie to government investigators undermine our nation’s justice system. As a law enforcement agency, IRS-CI will pursue the prosecution of anyone who lies to a Special Agent during the course of a criminal investigation.”
According to the allegations contained in the Indictment unsealed today in Manhattan federal court[1]:
From approximately 1988 to 2008, FALTERBAUER maintained an undeclared bank account at Liechtensteinische Landesbank AG, a bank based in Vaduz, Liechtenstein (“LLB-Vaduz”). FALTERBAUER opened the account in his own name, presenting his United States passport so LLB-Vaduz could verify his identity. To conceal the connection to FALTERBAUER, the bank then referred to the account exclusively by its account number. In an affidavit provided to the bank in 2003, FALTERBAUER declared that he was a United States citizen and that he was not authorizing LLB-Vaduz to disclose his name to U.S. tax authorities.
The undeclared account generated capital gains and losses from investments. It reached a high balance of more than $1.5 million in approximately 2007, and had a balance of more than $1.1 million before its closure in 2008.
For the calendar year 2008, FALTERBAUER willfully failed to disclose on his tax returns both his interest in the offshore account and the income that account generated. For the same year, FALTERBAUER also willfully failed to file with the IRS a Report of Foreign Bank and Financial Accounts, or FBAR, as the law required him to do.
In 2012, Liechtenstein amended its laws to permit banks to produce documents relating to certain United States taxpayers to the Department of Justice. LLB-Vaduz subsequently provided files from undeclared accounts, including FALTERBAUER’s, to this Office.
IRS Special Agents from Manhattan interviewed FALTERBAUER about the undeclared account in or about April 2013. During that interview, FALTERBAUER falsely stated that he had not opened an account at LLB-Vaduz. After being shown documents indicating otherwise, FALTERBAUER falsely stated that he never reported the account to the IRS because he had opened it for another person whose identity he did not know.
* * *
FALTERBAUER, 59, of Coconut Creek, Florida, is charged with willful failure to disclose an offshore bank account for the calendar year 2008, and with making false statements to IRS Special Agents. Each charge carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of IRS-CI. Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for its assistance.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Sarah Paul and David Abramowicz are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Colombian Narcotics Trafficker Sentenced in Manhattan Federal Court to 25 Years in Prison for Conspiring with West African Military Officials to Engage in Narco-TerrorismRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that RAFAEL ANTONIO GARAVITO-GARCIA was sentenced to 25 years in prison for his participation in a conspiracy to engage in narco-terrorism (Count One), a conspiracy to distribute five kilograms or more of cocaine, knowing or intending that the cocaine would be imported into the United States (Count Two), a conspiracy to provide material support and resources to the Fuerzas Armadas Revolucionarios de Colombia (the “FARC”) (Count Three), and a conspiracy to acquire and transfer anti-aircraft missiles (Count Four). Garavito was arrested in April 2013, following a long-term investigation conducted by the Drug Enforcement Administration’s (“DEA”) Special Operations Division, and arrived in the Southern District of New York on July 22, 2014. On March 26, 2015, Garavito was convicted on all four counts with which he was charged following an eight-day trial before U.S. District Judge Jed S. Rakoff, who imposed sentence. GARAVITO-GARCIA’s conviction marked the first time in the District that a defendant had been convicted at trial of conspiring to engage in narco-terrorism.
Manhattan U.S. Attorney Preet Bharara said: “Rafael Antonio Garavito-Garcia was at the hub of a narco-terrorism conspiracy that targeted the United States. His aims were to import massive quantities of cocaine into the U.S., while at the same time arming the FARC with sophisticated weaponry to be used against U.S. forces in Colombia. I want to thank our partners at the National Security Division and the DEA for their excellent work in this investigation and prosecution.”
According to court documents and the evidence presented at trial:
Beginning in the summer of 2012, GARAVITO-GARCIA communicated with confidential sources (the “CSs”) working with the DEA who purported to be representatives and/or associates of the FARC. The communications occurred by telephone, over e-mail, and in a series of audio-recorded and videotaped meetings. Following initial recorded meetings in Brazil, GARAVITO-GARCIA accompanied the CSs to Guinea Bissau, where he introduced them to two local men, whom he indicated were his associates in that country. GARAVITO-GARCIA later introduced the CSs to a Colombian man, whom GARAVITO-GARCIA identified as his drug trafficking partner.During meetings in Guinea-Bissau beginning in June 2012, and continuing through November 2012, GARAVITO-GARCIA agreed to receive and store multi-ton shipments of FARC-owned cocaine in Guinea-Bissau. He agreed, in particular, to receive the cocaine in Guinea-Bissau and to store the cocaine there pending the eventual shipment of some of the cocaine to the United States, where it would be sold for the financial benefit of the FARC. GARAVITO-GARCIA also agreed to sell some of the cocaine himself, and to provide the FARC with some of the proceeds of his drug sales. Also during those meetings, GARAVITO-GARCIA and his associates agreed to help arrange to purchase weapons for the FARC, including surface-to-air missiles, by importing them into Guinea-Bissau for the nominal use of the Guinea-Bissau military.
For example, on June 30, 2012, during a recorded meeting in Guinea Bissau with the CSs, GARAVITO-GARCIA and his Guinea Bissau-based associates agreed to assist in the distribution of FARC cocaine by facilitating the shipment of cocaine to Guinea Bissau inside loads of military uniforms. They also agreed to establish a front company in Guinea Bissau to facilitate the export of cocaine from Guinea Bissau to the United States. On July 2, 2012, GARAVITO-GARCIA introduced the CSs to General Antonio Indjai,[1] who was then head of the Guinea-Bissau Armed Forces, and helped win Indjai’s support for the drug and weapons deal. During another recorded meeting in Guinea Bissau the following day, GARAVITO-GARCIA met with the CSs and a Guinea Bissau military representative and discussed the benefits of using Guinea Bissau as a transshipment point for cocaine obtained in South America and destined for the United States. GARAVITO-GARCIA also discussed with the others the process for offloading the cocaine once it arrived in Guinea Bissau, and the nature of the weapons to be supplied to the FARC to combat American forces in Colombia, including surface-to-air missiles and AK-47 assault rifles.
Thereafter, on August 31, 2012, during a recorded meeting in Bogota, Colombia, GARAVITO-GARCIA and his Colombian partner agreed to facilitate the receipt of approximately 4,000 kilograms of cocaine from the FARC in Guinea Bissau, with the understanding that approximately 500 kilograms of that cocaine would later be sent to customers in the United States and Canada. During a recorded meeting in Guinea Bissau on November 13, 2012, GARAVITO-GARCIA explained to a Guinea Bissau military official that the FARC needed anti-aircraft missiles to be used against United States helicopters operating in Colombia. The military official then advised one of the CSs that the weapons transaction could be executed once the FARC brought money to Guinea Bissau.
GARAVITO-GARCIA was arrested in Bogota, Colombia, on April 5, 2013.
* * *
In addition to the term of imprisonment, GARAVITO-GARCIA, 70, was sentenced to five years of supervised release.
The conviction 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 and DEA’s Foreign-deployed Advisory Support Team, the DEA Lisbon Country Office, the DEA Bogota Country Office, the U.S. Department of Justice’s Office of International Affairs and National Security Division, and the U.S. State Department.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Aimee Hector, Shane Stansbury, and Ilan Graff are in charge of the prosecution.
[1] In April 2013, an indictment was unsealed charging Indjai with conspiracy to commit narco-terrorism, conspiracy to import cocaine into the United States, conspiracy to provide material support to the FARC, and conspiracy to acquire and transfer anti-aircraft missiles. Indjai is currently a charged defendant located outside the arrest jurisdiction of the United States. The charges against Indjai are merely accusations and he is presumed innocent unless and until proven guilty
Manhattan U.S. Attorney Announces the Arrest of Afghan Narcotics Traffickers for Conspiring to Import Heroin into the United StatesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Mark Hamlet, Special Agent in Charge of the Special Operations Division of the United States Drug Enforcement Administration (“DEA”), today announced the unsealing of an indictment charging HAJI LAJAWARD, AMAL SAID SAID ALAM SHAH, a/k/a “Haji Zar Mohammad,” and HABIBULLAH with conspiring to import heroin into the United States. LAJAWARD and SHAH were arrested in Thailand on June 13, 2015, and subsequently brought to the United States. They will be presented and arraigned before U.S. Magistrate Judge Ronald L. Ellis this afternoon. HABIBULLAH remains at large.
Manhattan U.S. Attorney Preet Bharara said: “At a time when heroin use and overdose deaths are on the rise in our communities, these three men allegedly conspired to import into this country kilogram quantities of heroin from Afghanistan. I want to thank the DEA for their excellent work in investigating this matter.”
DEA Special Agent in Charge Mark Hamlet said: “Like many international criminal networks, these alleged drug traffickers have no respect for borders, and no regard for either the rule of law or who they harm as a result of their criminal endeavors. This investigation highlights the significance of Afghanistan as a source for heroin around the world. I wish to thank all of our international law enforcement partners for their outstanding efforts and partnership in dismantling this sophisticated and dangerous international criminal enterprise.”
According to the allegations in the Indictment,[1] the defendants and others conspired between May 2014 and April 2015 to violate U.S. narcotics laws prohibiting the importation of heroin. Specifically, the Indictment charges LAJAWARD, SHAH, and HABIBULLAH with conspiring to (i) import one or more kilograms of heroin into the United States from a foreign country; and (ii) distribute one or more kilograms of heroin knowing and intending that it would be imported into the United States.
As alleged in the Indictment, on January 15, 2015, Lajaward caused the delivery of three kilograms of heroin to another individual in Kabul, Afghanistan, while, on the same day, Habibullah received payment for that heroin in the United Arab Emirates. Later that day, Lajaward and Shah spoke on the phone regarding the heroin transaction.
The charge in the Indictment carries a maximum penalty of life 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 defendants will be determined by a judge
Mr. Bharara praised the outstanding investigative work of the DEA’s Special Operations Division; the DEA’s Kabul, Dubai, Tokyo, and Bangkok Country Offices; the DEA’s New York Field Division; the CNP-A Sensitive Investigative Unit of the Afghan Ministry of the Interior; the Dubai Police Department and the Anti-Narcotics Unit of the Emirati Ministry of Interior; Japan’s National Police Agency and the Saitama Prefectural Police; Thailand’s Sensitive Investigative Unit of the Royal Thai Police Narcotics Suppression Bureau; Thailand’s Attorney General’s Office; Thailand’s Ministry of Foreign Affairs; INTERPOL; the U.S. Department of State; and the U.S. Department of Justice Office of International Affairs.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorney Brendan F. Quigley is in charge of the prosecution.
The charge contained in the Indictment is merely an accusation and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Lawyer Who Conspired to Obtain Immigration Visas for Clients Based on Fraudulent Diplomas Sentenced in Manhattan Federal CourtRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced that RICHARD KASSEL, an immigration lawyer who conspired to obtain immigration visas for his clients based on fraudulent advanced-degree diplomas and transcripts, was sentenced today in Manhattan federal court to 27 months in prison, a $6,000 fine, 2 years supervised release, and $187,000 in forfeiture. The sentence was imposed by U.S. District Judge Paul G. Gardephe. KASSEL pled guilty to conspiring to commit immigration fraud on April 15, 2015.
Manhattan U.S. Attorney Preet Bharara said: “As a lawyer, Richard Kassel had a duty to know and uphold the law. Instead, he violated the law and advised his clients do the same. Kassel helped his clients fraudulently obtain immigration visas through fake diplomas and advanced degrees, including from schools they did not even attend.”
According to the allegations in documents filed in Manhattan federal court, and statements made at today’s sentencing and other court proceedings:
Federal immigration law provides that alien workers who are professionals holding advanced degrees may apply for employment-based immigration visas. Applicants must submit advanced-degree diplomas and other related documents to U.S. immigration authorities in support of their applications for such visas.
From at least January 2008 until his arrest in August 2014, KASSEL, a lawyer and graduate of the City University of New York (“CUNY”) Law School, orchestrated a scheme to submit to U.S. immigration authorities false advanced-degree diplomas and supporting documents on behalf of his clients. KASSEL, who practiced at his own law firm, instructed certain of his clients to obtain fraudulent diplomas and transcripts representing that they obtained degrees that they had not in fact earned from schools that they had not in fact attended. KASSEL directed his clients to a co-conspirator who provided the fraudulent diplomas and supporting documents, which were created by another co-conspirator on a home computer and printer. KASSEL and an assistant at his law firm helped coordinate the manufacturing of the fraudulent documents. KASSEL then prepared and submitted fraudulent visa applications to U.S. immigration authorities on behalf of his clients based on the false documents.
KASSEL’s law firm typically charged, and in many cases received, thousands of dollars from clients in exchange for these fraudulent services. These fees were on top of money paid by KASSEL’s clients directly to KASSEL’s co-conspirators for the creation of the fraudulent documents.
* * *
KASSEL, 51, of New York, New York, was arrested in August 2014. In addition to the prison term, KASSEL was sentenced to 2 years of supervised release, a $6,000 fine, and the forfeiture of $187,000, which represents the proceeds of the fraudulent scheme.
Vaclav Haloda, who created false documents, pled guilty to conspiring to commit immigration fraud and substantive immigration fraud in May 2015 before U.S. Magistrate Judge Kevin Nathaniel Fox and is awaiting sentencing.
Rosanna Almonte, KASSEL’s office assistant who helped coordinate the creation of false documents, pled guilty to conspiring to commit immigration fraud in May 2015 before U.S. Magistrate Judge Kevin Nathaniel Fox and is awaiting sentencing.
Mr. Bharara praised the outstanding investigative work of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Andrea Griswold and Drew Johnson-Skinner are in charge of the prosecution.
Former U.S. Soldier Sentenced in Manhattan Federal Court to 20 Years in Prison for Conspiring to Murder A DEA Agent and A DEA Informant, to Import Cocaine, and to Possess A FirearmRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, today announced that TIMOTHY VAMVAKIAS, a former member of the U.S. Army, was sentenced to 20 years in prison for his participation in a conspiracy to murder a Drug Enforcement Administration (“DEA”) agent and a confidential informant working at the direction of the DEA, a conspiracy to import cocaine into the United States, and a conspiracy to possess a firearm in furtherance of the murder conspiracy. VAMVAKIAS was arrested in September 2013 along with co-defendants Joseph Hunter, Dennis Gogel, Slawomir Soborski, and Michael Filter following a long-term DEA undercover investigation. VAMVAKIAS pled guilty on January 9, 2015, before U.S. District Judge Laura Taylor Swain, who imposed the sentence.
Manhattan U.S. Attorney Preet Bharara said: “Timothy Vamvakias’s callous disregard for human life made him an ideal member of an international mercenary team that conspired in an elaborate and diabolical scheme to murder a DEA agent and an informant. Vamvakias went from serving his country in the military to serving the interests of drug lords and contract killers. Thanks to the investigative efforts of the DEA, Vamvakias’s descent into the criminal underworld has been put to an end.”
According to the Indictment filed against VAMVAKIAS, Hunter, Gogel, Soborski, and Filter, and other documents filed in Manhattan federal court:
All five defendants have previously served in the armed forces of their respective nations. VAMVAKIAS served in the U.S. Army between approximately 1991 and 2004; Gogel served in the German armed forces until 2010; Hunter served in the U.S. Army between approximately 1983 and 2004; Filter served in the German armed forces until 2009; and Soborski served in the Polish armed forces until 2011. VAMVAKIAS attained the rank of sergeant and served both as infantryman and a military police officer. Gogel was trained as a sniper. Hunter served as a sniper instructor and a senior drill sergeant, training other soldiers in marksmanship and tactics; and Soborski and Filter were also trained as snipers.
In 2013, VAMVAKIAS was recruited by Hunter to serve as security for a Colombian drug trafficking organization and to perform contract killings. Hunter recruited VAMVAKIAS based on their prior experiences working together for a transnational criminal organization. During meetings in Asia, Africa, and the Caribbean, beginning in January 2013 and continuing 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 also told the CSs that he had previously been involved in contract killings – referred to as “bonus jobs” – and that some team members wanted to do as much “bonus work” as possible.
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. Furthermore, VAMVAKIS, Gogel, and Hunter agreed to commit murder-for-hire in Liberia by assassinating both a Special Agent of the DEA 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 his leadership role. Communications between the defendants and the CSs occurred by telephone, over email, and in a series of surreptitiously audio-recorded and videotaped meetings over a nine-month period.
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.
With respect to the murder-for-hire scheme, in mid-May 2013, at a meeting with the CSs in Thailand, VAMVAKIAS, Gogel, Hunter, 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 an informant (a boat captain) who was providing information to U.S. law enforcement authorities. Hunter confirmed by email that his team would kill both the DEA agent and the informant who was providing information to law enforcement about the CSs’ narcotics trafficking organization. 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 email 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, VAMVAKIS, Gogel, and Hunter 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.
* * *
In addition to prison, VAMVAKIAS, 43, was sentenced to five years of supervised release.
The remaining defendants, Hunter, 50, Gogel, 29, Soborski, 43, and Filter, 30, each pled guilty to conspiracy to import cocaine into the United States. Hunter and Gogel also pled guilty to conspiracy to murder a law enforcement agent and a person assisting a law enforcement agent; and conspiracy to possess a firearm in furtherance of a crime of violence. Each defendant faces a maximum possible term of life in prison. The maximum potential sentences faced by these remaining defendants are prescribed by Congress and are provided here for informational purposes only, as any sentencing of these defendants will be determined by the judge.
Soborski is scheduled to be sentenced on July 29, 2015; Gogel is scheduled to be sentenced on August 4, 2015; Hunter is scheduled to be sentenced on August 5, 2015; and Filter is scheduled to be sentenced on September 9, 2015. Each of the defendants will be sentenced by Judge Swain.
The prosecution 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 Romanian National Police; Interpol; and the U.S. Department of Justice Office of International Affairs.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael Lockard, Anna Skotko, Aimee Hector, and Emil Bove are in charge of the prosecution.
Yonkers Gang Member Sentenced in White Plains Federal Court to Life in Prison for Racketeering, Murder, Conspiracy to Murder, Attempted Murder, Narcotics, and Firearms OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that STEVEN KNOWLES, 27, was sentenced on July 10, 2015, for various racketeering charges, murder, conspiracy to murder, attempted murder, narcotics conspiracy, and firearms charges. KNOWLES was sentenced to life in prison plus 35 consecutive years arising out of his involvement, from 2000 through 2013, in the criminal activities of the Elm Street Wolves gang (the “Wolves”) – a violent street gang that was involved in drug trafficking and multiple acts of violence, including murder and attempted murder, in Yonkers, New York. KNOWLES was convicted on July 1, 2013, after a four-week jury trial before U.S. District Judge Kenneth M. Karas, who imposed the sentence. In imposing sentence, Judge Karas emphasized the seriousness of Knowles’s criminal conduct, which included over 20 shootings of rival gang members, and the impact of the terror caused by Knowles and the Wolves on the community of southwest Yonkers.
According to the Superseding Indictment and evidence admitted at trial:
From 2000 through 2013, KNOWLES was a member, and then leader, of a racketeering enterprise – the Elm Street Wolves. As part of his participation in that enterprise, KNOWLES conspired to murder a member of a rival gang, the Strip Boyz, which culminated in the violent murder, by KNOWLES and others, of Christopher Cokley on July 4, 2009. KNOWLES also participated in a number of other gang-related shootings, including the October 14, 2007, attempted murder of Tremaine Garrison, a/k/a “Triggermain,” also a member of the Strip Boyz. KNOWLES also participated in more than a decade-long conspiracy to distribute kilograms of crack cocaine within a several block radius of Elm Street and Oak Street in Southwest Yonkers, New York. The evidence at trial also showed that KNOWLES and other members of the Wolves possessed, brandished, and discharged a number of firearms in connection with their drug trafficking and racketeering activities with the Elm Street Wolves gang.
KNOWLES was convicted of one count of racketeering, one count of racketeering conspiracy, one count of conspiracy to murder in aid of racketeering, one count of murder in aid of racketeering, one count of conspiracy to distribute or possess with intent to distribute 280 grams and more of crack cocaine, two counts of discharging a firearm in furtherance of a crime of violence or a drug-trafficking crime, and one count of discharging a firearm in connection with the murder of Christopher Cokley on July 4, 2009.
* * *
Since 2011, as part of the “Yonkers Gang Initiative,” this Office has charged over 150 members and associates of Yonkers street gangs, including 48 members and associates of the Elm Street Wolves.
Mr. BHARARA praised the outstanding investigative work of the FBI and the Yonkers Police Department. He also thanked the Westchester County Department of Public Safety and the Westchester County District Attorney’s Office for their assistance in the case. He added that the investigation into Yonkers gang activity is continuing.
The case is being handled by the Office’s Violent and Organized Crime Unit and the White Plains Division. Assistant U.S. Attorneys Andrew Bauer and Jessica Ortiz are in charge of the prosecution.
Investment Executive Sentenced in Manhattan Federal Court to 21 Months in Prison for Multimillion-Dollar Insurance Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALLEN REICHMAN, a former Executive Director of Investments at a New York investment bank and financial services company, was sentenced today to 21 months in prison and $10 million in restitution for defrauding his employer in connection with the fraudulent purchase of an Oklahoma-based insurance company. REICHMAN pleaded guilty in February 2015 before Magistrate Judge Henry B. Pitman. U.S. District Judge Naomi Reice Buchwald imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “To line his own pockets, Allen Reichman fraudulently induced his investment firm to enter into a $30 million loan transaction with an Oklahoma insurance company. His dishonest scheme caused the collapse of the insurance company, and has now led to his loss of liberty.”
According to the Information, other documents filed in Manhattan federal court, and statements made during court proceedings:
Background
During the relevant time period, REICHMAN was an executive at an investment bank and financial services company headquartered in New York, New York (the “Investment Firm”). From July 2008 to November 2009, REICHMAN conspired with Charles J. Antonucci, Sr., and Matthew L. Morris, the President and Senior Vice President, respectively, of Park Avenue Bank, a New York bank, and Wilbur Anthony Huff, a Kentucky businessman who controlled numerous entities located throughout the United States, to defraud the Investment Firm and Oklahoma insurance regulators regarding Antonucci’s purchase of Providence Property and Casualty Insurance Company (“Providence P&C”), an Oklahoma-based insurance company that was owed $5 million by a company Huff controlled. Providence P&C was licensed to operate by the Oklahoma Insurance Department (“OID”), which regulated various practices of Oklahoma insurance companies. Under the OID’s regulations and applicable Oklahoma law, Providence P&C was required to maintain a certain amount of assets to ensure that adequate funds were on hand to pay policyholders’ claims and anticipated claims.
REICHMAN and his co-conspirators schemed to defraud the Investment Firm into providing a $30 million loan to finance Antonucci’s purchase of Providence P&C and to defraud Oklahoma insurance regulators into approving the purchase. Antonucci’s purchase of Providence P&C was financed by a $30 million loan from the Investment Firm, which used Providence P&C’s own assets, including the reserve assets, as collateral for the loan. Because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, REICHMAN, Huff, Morris, and Antonucci made, and conspired to make, a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for the purchase. Specifically, Investment Firm executives and others warned REICHMAN on several occasions that using Providence P&C’s assets as collateral for the loan was illegal and that he should not cause the loan to be issued.
At his guilty plea, REICHMAN admitted that he attended a meeting where he was advised by Providence P&C’s general counsel that “under Oklahoma regulations Providence's assets could not be pledged to secure a loan.” Reichman “never passed on to [the Investment Firm] what Providence’s lawyers had said at the meeting.” Instead, he provided misleading information to various individuals at the Investment Firm and elsewhere regarding the loan, including directing Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan. Despite the warnings from Investment Firm executives and others, and REICHMAN’s knowledge that the loan was in fact illegal, on January 30, 2009, REICHMAN caused the Investment Firm to issue the illegal $30 million loan, which was secured by the very assets that were supposed to be unencumbered and maintained in reserve to pay Providence P&C’s policyholder claims.
After deceiving the Investment Firm into issuing the $30 million loan, REICHMAN received at least $200,000 in commissions from the Investment Firm as a result of the illegal loan. Ultimately, in November 2009, encumbered by the $30 million loan, the insurance company became insolvent and was placed in receivership. The Investment Firm incurred losses totalling $10 million as a result of the insurance company’s insolvency. The amount of restitution ordered today as part of the sentencing is based on the $10 million loss.
* * *
In addition to prison, REICHMAN, 54, of Irvington, New York, was sentenced to two years of supervised release, and ordered to forfeit $200,000 to the United States and to pay $10 million in restitution to the Investment Firm, his former employer.
Wilbur Anthony Huff, who pled guilty to his role in the above-described offense and other interrelated frauds in December 2014, was sentenced by Judge Buchwald on June 4, 2015, to 12 years in prison. Charles Antonucci and Matthew Morris pled guilty for their roles in the criminal conduct on October 8, 2010, and October 17, 2013, respectively. They are scheduled to be sentenced before Judge Buchwald on August 19, 2015, and August 20, 2015, respectively.
Mr. Bharara praised the investigative work of the Special Inspector General for the Troubled Asset Relief Program, the Federal Bureau of Investigation, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC.
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.
The case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella are in charge of the criminal case.
Twelve Members and Associates of Brooklyn Gang Indicted for Committing Bank Fraud Involving More Than 350 Bank Accounts and More Than $1.5 Million in LossRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Raymond R. Parmer, Jr., Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), Robert J. Sica, the Special Agent-in-Charge of the New York Office of the United States Secret Service (“USSS”), Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), today announced the unsealing of an Indictment charging twelve defendants, all of whom are members or associates of the Van Dyke Money Gang, with committing bank fraud and aggravated identity theft. Eight defendants were taken into custody today. The eight defendants who were arrested today will be presented and arraigned before U.S. Magistrate Judge Ronald L. Ellis later today. Four defendants remain at large. The case has been assigned to U.S. District Court Judge Lewis A. Kaplan.
Manhattan U.S. Attorney Preet Bharara said: “Today’s allegations suggest that members of street gangs, like the Van Dyke Money Gang, have expanded their criminal repertoire to include white collar crimes like bank fraud and identity theft. I want to thank our law enforcement partners at HSI, the Secret Service, the Postal Inspection Service and the NYPD for the great work in this case.”
HSI Special Agent-in-Charge Raymond R. Parmer, Jr., stated: “Today’s arrests dismantle a gang that allegedly used bank fraud and identity theft to line their pockets with cash using a scheme that cost New York banks over $1.5 million dollars. HSI will continue to use every tool at our disposal to combat financial crimes that support gangs and their illegal activity.”
U.S. Secret Service Special Agent-in-Charge Robert J, Sica stated: “This case demonstrates the effectiveness of multijurisdictional partnerships in the dismantling of criminal enterprises that inflict damage to our nation’s financial infrastructure and the safeguarding of our citizens’ identity. This investigation and the resulting indictment should serve as a warning to criminals that law enforcement will not cease to pursue them.”
USPIS Inspector in Charge Philip R. Bartlett said, “This was a straight up larceny scheme where fraudsters allegedly used stolen Postal Money Orders to steal from financial institutions through the use of hundreds of bank accounts. Gang members underestimated the resolve of federal law enforcement working together to bring those responsible before the court to answer for their crimes.”
Police Commissioner William J. Bratton said: “Through collaboration with our partners, an organization whose alleged purpose was to lie, cheat and steal was dismantled and taken off the streets of New York this morning. I want to thank the investigators, agents and prosecutors involved in this long term investigation for bringing those responsible to justice. ”
As alleged in the Indictment unsealed today in Manhattan federal court:[1]
The Van Dyke Money Gang (“VDMG”) is an organization composed of principally young men aged 20 to 30 years old. The VDMG operates primarily out of a housing project called the Van Dyke Houses, located at 370 Blake Avenue, in the Brownsville neighborhood of Brooklyn, New York.
From in or about December 2013 up to and including in or about June 2015, the VDMG conducted a fraudulent money order scheme (the “Money Order Scheme”) at banks in the New York area, specifically, in Manhattan, Brooklyn, and Queens, and along the east coast, as far north as Boston, Massachusetts, and as far south as Washington, D.C. Other individuals who were not members of the VDMG also participated in the Money Order Scheme.
In furtherance of the Money Order Scheme, members of the VDMG and others recruited bank account holders and then used the accounts of those individuals to deposit fraudulent money orders. Members of the VDMG and others then withdrew the money from the bank accounts. The Money Order Scheme entailed, among other things, fraudulently obtaining blank Postal Money Orders and Western Union Money Orders. Members of the VDMG and others printed a specific dollar amount, usually under $1,000, onto the money orders and then deposited those fraudulent money orders into bank accounts.
ANGEL VILLALBA, a/k/a “Ace,” ANTHONY FABERS, a/k/a “Ant,” CURTIS CONGRESS, a/k/a “Murda,” MELIEK SANDERS, a/k/a “Mickey,” JUNIOR ANTWI, a/k/a “OG Rob,” GEORGE FANDAL, a/k/a “Panama,” ISAAC GONZALEZ, a/k/a “K-Tone,” TYRONE BAKER, a/k/a “Pumpkin,” STANLEY CURRIE, a/k/a “Stan,” LEROY SMITH, a/k/a “Pops,” ERIC BALLINGER, a/k/a “Boogs Von Swavy,” and TERELL STEWART, a/k/a “Lil Biscuit,” the defendants, are members of the VDMG and/or participated in the Money Order Scheme.
In furtherance of the Money Order Scheme, the defendants and others have used more than 350 bank accounts. The loss amount to the banks affected by the Money Order Scheme exceeds $1.5 million.
* * *
The defendants are each charged with one count of conspiring to commit bank fraud and one count of bank fraud, each of which carries a maximum term of 30 years in prison, as well as one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. The Indictment also seeks forfeiture of crime proceeds.
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.
A chart containing the names, ages, and residence information of the defendants who were arrested today is below.
Mr. Bharara praised the outstanding investigative work of HSI, the USSS, the USPIS, and the NYPD, and also thanked the New York City Department of Investigation’s Office of the Inspector General for the New York City Housing Authority for their assistance.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jessica Lonergan and Rebekah Donaleski 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.
NAME
AGE
RESIDENCE
Angel Villalba, a/k/a “Ace”
28
Brooklyn
Anthony Fabers, a/k/a “Ant”
32
Brooklyn
Meliek Sanders, a/k/a “Mickey”
30
Brooklyn
George Fandal, a/k/a “Panama”
32
Brooklyn
Isaac Gonzalez, a/k/a “K-Tone”
27
Brooklyn
Leroy Smith, a/k/a “Pops”
24
Brooklyn
Eric Ballinger, a/k/a “Boogs Von Swavy”
26
Brooklyn
Terell Stewart, a/k/a “Lil Biscuit”
23
Brooklyn
[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.
Alleged Armed Robber of Three Manhattan Banks Arrested and Charged in Manhattan Federal CourtRead 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 Police Department for the City of New York (“NYPD”), announced the arrest last night of LEONID KAZIYEV by agents and detectives of the FBI-NYPD Joint Violent Crimes Task Force (the “Task Force”). KAZIYEV is charged with the armed robberies of three Manhattan banks over the last six months.
Manhattan U.S. Attorney Preet Bharara said: “In this day and age of electronic banking, old-fashioned, stickup bank robberies still happen. As alleged in the Complaint, Leonid Kaziyev went on an armed bank robbery spree over the last several months, targeting two banks in Manhattan on three different occasions, putting innocent people at risk. Thanks to the work of the FBI-NYPD Joint Violent Crimes Task Force, Kaziyev is now in custody.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Leonid Kaziyev brandished a weapon to obtain cash from bank tellers carrying out their daily duties. This dangerous situation happened not once, but at least three times. Thanks to the diligent work of FBI Special Agents and NYPD Detectives assigned to the FBI/NYPD Joint Violent Crimes Task Force, Kaziyev was arrested yesterday."
NYPD Commissioner William J. Bratton said: “There is no better example of collaboration: NYPD detectives and FBI agents working together to address a crime problem. Diligent investigative work has led to the arrest of Mr. Kaziyev for holding up banks across Manhattan, as alleged. I want to thank the agents, detectives and prosecutors who have been working to make this possible.”
A six-count Complaint was unsealed in Manhattan federal court.[1] According to the Complaint, on two different occasions, on December 9, 2014 and June 5, 2015, KAZIYEV robbed the same branch of HSBC bank located on Fifth Avenue and East 21st Street in Manhattan, while brandishing a firearm; and robbed a branch of Bank of America, on Broadway and West 63rd Street in Manhattan, while brandishing a firearm, on May 21, 2015. During each of these robberies, KAZIYEV demanded money from the bank teller working at the window, while displaying a firearm. He escaped with over $10,000 cash each time. KAZIYEV was captured on surveillance video footage during each of the three armed robberies, and a vehicle registered to KAZIYEV was captured on Automatic License Plate Reader (“LPR”) data, arriving to, and leaving, the scenes of the robberies.
KAZIYEV was arrested last night in Queens, New York, by the Task Force, which comprises FBI agents and NYPD detectives. He will be presented later today in Manhattan federal court before U.S Magistrate Judge Ronald L. Ellis. KAZIYEV is charged with three counts of bank robbery, each of which carries a maximum term of 20 years in prison, and three counts of brandishing a firearm in connection with each robbery, each of which carries a mandatory minimum term of seven years in prison consecutive to any other term of imprisonment, up to life in prison. 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-NYPD Joint Violent Crimes Task Force. He added that the investigation is continuing.
The Office’s Violent and Organized Crime Unit is overseeing the case. Assistant U.S. Attorney Justina L. Geraci is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Brooklyn Man Pleads Guilty in Manhattan Federal Court to Securities Fraud in Connection with Multimillion-Dollar Fraudulent Investment SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that MARCELLO TREBITSCH pled guilty in Manhattan federal court to an Information charging him with one count of securities fraud in connection with his operation of a Ponzi scheme that defrauded investors of nearly $6 million over the course of seven years. Among other things, TREBITSCH admitted that he lied to investors by telling them that he would invest their money through an investment fund he controlled that would generate double-digit returns with very low risk. To that end, TREBITSCH provided investors with phony account statements and federal tax forms that reflected significant gains, when, in reality, TREBITSCH invested only a portion of the investors’ money and suffered enormous trading losses, and used the remainder of the investors’ money for his own personal benefit and to pay back other investors. TREBITSCH was arrested on April 13, 2015, and pled guilty today before United States District Judge Vernon S. Broderick.
U.S. Attorney Preet Bharara said: “As Marcello Trebitsch admitted in court today, he ran a multimillion-dollar Ponzi scheme, defrauding investors who put their faith in him and entrusted him with their hard-earned savings. He returned their faith with deceit and self-dealing, lying about his trading losses and using investor money on himself. I want to thank the FBI for their outstanding investigative work on this case.”
According to the Complaint, the Information that was filed today in Manhattan federal court, and other statements made in open court:
From 2007 through 2014, TREBITSCH engaged in a multimillion-dollar fraudulent investment scheme, during which he solicited money from investors based on materially false and misleading representations. Specifically, TREBITSCH told the investors that he, through an investment fund he created called Allese Capital LLC, would (a) create and perfect public shell companies to sell to private companies; (b) execute specific trades at the direction of an investor; and (c) purchase and sell stocks on a daily basis, with little or no funds remaining invested in the market at the end of each trading day. In some cases, TREBITSCH told the investors that they would receive double digit returns with minimal risk of loss. In fact, TREBITSCH did not invest the money as he said he would, and instead principally used the investors’ money for his own personal benefit, including to repay other investors.
With respect to the portion of investor funds that he did use to purchase securities, TREBITSCH suffered net trading losses, which he did not disclose to the investors. Rather, TREBITSCH sent the investors false and misleading monthly account statements and tax forms, which purported to show positive annual returns.
During the course of the fraudulent scheme, TREBITSCH solicited more than $8 million from four investors.
* * *
TREBITSCH, 37, of Brooklyn, New York, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison, a maximum fine of $5 million, 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. As part of the plea agreement, TREBITSCH agreed to pay forfeiture and restitution to the victims of the offense in the amount of $5,905,949. TREBITSCH is scheduled to be sentenced by Judge Broderick on November 2, 2015, at 10:00 a.m.
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. Attorneys Daniel S. Goldman and Amy Lester are in charge of the prosecution.
Three Bronx Gang Members Sentenced to Life in Prison in Manhattan Federal Court for Racketeering, Murder, Conspiracy to Murder, Attempted Murder, Narcotics, and Firearms ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that CARLOS LOPEZ, 27, was sentenced on July 7, 2015, and FELIX LOPEZ-CABRERA, 25, and LUIS BELTRAN, 27, were sentenced on Wednesday, July 8, 2015, for racketeering, murder, conspiracy to murder, attempted murder, narcotics, and firearms charges. LOPEZ and LOPEZ-CABRERA were each sentenced to life in prison plus 35 consecutive years. BELTRAN was sentenced to life in prison. LOPEZ, LOPEZ-CABRERA, and BELTRAN were sentenced for charges arising out of their involvement, from 2003 through 2012, in the criminal activities of the Bronx Trinitarios Gang (“BTG”), a violent street and prison gang that engaged in drug trafficking and multiple acts of violence, including murder and attempted murder, throughout the New York region. All three were convicted after a 12-week jury trial before U.S. District Judge Paul A. Engelmayer, who imposed the sentences.
In imposing sentence, Judge Engelmayer stated that “it doesn’t get more serious than premeditated murder, murder in cold blood,” and that the murders in this case had left a “permanent hole” in the lives of surviving family members of the murder victims, several of whom spoke at the sentencing hearings about the impact the defendants’ crimes have had on their lives and their families.
According to the Superseding Indictment and evidence admitted at trial:
The BTG operated primarily in the Bronx, New York. It started in the prison system in the late 1980’s and subsequently spread to the streets. LOPEZ-CABRERA was a member, and a leader, of the BTG who directed other members to carry out illegal and other activities as part of the racketeering conspiracy. As part of their membership and participation in that enterprise, LOPEZ-CABRERA and LOPEZ murdered Raffy Tavares and Irving Cruz, both 19, in the vicinity of 81 East 181st Street, Bronx, New York, on May 23, 2010. BELTRAN and LOPEZ-CABRERA murdered Raymond Casul, 23, in the vicinity of 271 West Kingsbridge Road, Bronx, New York, on March 31, 2009. LOPEZ-CABRERA was also involved in the September 4, 2009, murder of David Avila-Gomez, 23, in the vicinity of 15 Mount Carmel Place, Yonkers, New York. CARLOS LOPEZ was also involved in the November 20, 2010, murder of Freddy Polanco, 19, in the vicinity of 75 West 190th Street, Bronx, New York. LOPEZ-CABRERA, LOPEZ, and BELTRAN also carried out multiple assaults and attempted murders of individuals believed to be members of rival gangs, including the Latin Kings, Dominicans Don’t Play, and the Bloods. LOPEZ-CABRERA and LOPEZ also participated in a more than decade-long conspiracy to distribute kilograms of marijuana and crack cocaine in the Bronx. The evidence at trial also showed that LOPEZ-CABRERA, LOPEZ, BELTRAN, and other members of the BTG possessed, brandished, and discharged a number of firearms in connection with their drug trafficking and racketeering activities with the Trinitarios gang.
FELIX LOPEZ-CABRERA was convicted of one count of racketeering; one count of racketeering conspiracy; two counts of conspiracy to murder in aid of racketeering; four counts of murder in aid of racketeering; two counts of assault and attempted murder in aid of racketeering; one count of conspiracy to distribute or possess with intent to distribute 100 kilograms and more of marijuana, 28 grams and more of crack cocaine, quantities of cocaine and oxycodone; two counts of discharging a firearm in furtherance of a crime of violence or a drug-trafficking crime; and four counts of discharging a firearm in connection with the murders of Raymond Casul, Raffy Taveras, Irving Cruz, and David Avila-Gomez.
CARLOS LOPEZ was convicted of one count of racketeering; one count of racketeering conspiracy; two counts of conspiracy to murder in aid of racketeering; three counts of murder in aid of racketeering; one count of assault and attempted murder in aid of racketeering; one count of conspiracy to distribute or possess with intent to distribute 100 kilograms and more of marijuana, 28 grams and more of crack cocaine, quantities of cocaine and oxycodone; two counts of discharging a firearm in furtherance of a crime of violence or a drug-trafficking crime; and three counts of discharging a firearm in connection with the murders of Raffy Taveras, Irving Cruz, and Freddy Polanco.
LUIS BELTRAN was convicted of one count of racketeering conspiracy; one count of conspiracy to murder in aid of racketeering; one count of murder in aid of racketeering; and one count of discharging a firearm in connection with the murder of Raymond Casul.
* * *
In addition to the prison sentences, LOPEZ, LOPEZ-CABRERA, and BELTRAN were sentenced to five years of supervised release.
Since 2009, as part of “Operation Patria” and “Operation Green Haze,” this Office has charged at least 147 members and associates of the Trinitarios Gang.
Mr. Bharara praised the work of the New York City Police Department’s Bronx Gang Squad, the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ Joint Firearms Task Force, the Drug Enforcement Administration, and Immigration and Customs Enforcement’s Homeland Security Investigations.
The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Jessica Ortiz, Rachel Maimin, Micah W. J. Smith, Nola B. Heller, Sarah Krissoff, and Matthew Laroche are in charge of the prosecution.
Captain of Genovese Crime Family Sentenced in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DANIEL PAGANO, a Captain of the Genovese Organized Crime Family of La Cosa Nostra (the “Genovese Crime Family”) was sentenced to a term of 27 months in prison for his leadership role in the Genovese Crime Family. PAGANO pled guilty to participating in a racketeering conspiracy in March 2015 and was sentenced today before by U.S. District Judge Ronnie Abrams.
Manhattan U.S. Attorney Preet Bharara said: “Danny Pagano, a Captain in the Genovese Crime Family, has been sentenced today for his leadership role in a racketeering conspiracy. Pagano’s conviction and sentence reinforce a simple truth: if you join the mob and choose a life of crime, you end up behind bars.”
According to the Indictment and other documents filed in this case, and statements made during the plea and sentencing proceedings:
The Genovese Crime Family is part of a nationwide criminal organization known by various names, including the “Mafia” and “La Cosa Nostra” (“LCN”), which operates through entities known as “Families.” The Genovese Crime Family operates through groups of individuals known as “crews” and “regimes,” most of which are based in New York City. Each “crew” has as its leader a person known as a “Caporegime,” “Capo,” “Captain,” or “Skipper,” who is responsible for supervising the criminal activities of his crew and providing “Soldiers” and associates with support and protection. In return, the Capo typically receives a share of the illegal earnings of each of his crew’s Soldiers and associates, which is sometimes referred to as Atribute.@ DANIEL PAGANO is a Caporegime or Captain in the Genovese Crime Family.
Each crew consists of “made” members, sometimes known as “Soldiers,” “wiseguys,” “friends of ours,” and “good fellows.” Soldiers are aided in their criminal endeavors by other trusted individuals, known as “associates,” who sometimes are referred to as “connected” or identified as “with” a Soldier or other member of the Family. Associates participate in the various activities of the crew and its members. In order for an associate to become a made member of the Family, the associate must first be of Italian descent and typically needed to demonstrate the ability to generate income for the Family and/or the willingness to commit acts of violence.
From 2009 through August 2014, PAGANO, along with other members and associates of the Genovese Crime Family, committed a wide array of crimes including operating an illegal gambling business. PAGANO, a Captain, exercised a leadership role within the Family by, among other things, settling disputes between and among associates of the Family.
As the Court noted, PAGANO had previously been convicted of racketeering conspiracy and served a term of over eight years in prison. As a repeat offender, a sentence of incarceration was warranted to deter him from future crimes.
* * *
In addition to the prison term, Judge Abrams sentenced PAGANO, 61, of Rockland County, to a term of three years of supervised release, and ordered him to pay a fine of $5,000 and forfeiture of $2,000.
Mr. Bharara thanked the Federal Bureau of Investigation, the Rockland County District Attorney’s Office, the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the New York City Police Department, and the New York State Police.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Jennifer Burns, Rahul Mukhi, and Abigail Kurland are in charge of the prosecution.
Three Charged in Manhattan Federal Court in Connection with June 18, 2015, Upper West Side MurderRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Delano A. Reid, Special Agent in Charge of the New York Division of the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of charges against ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS.
U.S. Attorney Preet Bharara stated: “A shopkeeper at a small store on the Upper West Side of Manhattan tragically lost his life last month when he was shot and killed during a robbery of his store. My Office and our law enforcement partners will ensure that those responsible for such senseless violence will be held to account.”
ATF Special-Agent-in-Charge Delano A. Reid stated: “With the arrest of Michael Adams, the reign of terror this alleged murderous robbery crew perpetrated on our streets comes to an end. The crew’s violent acts necessitated a quick response from law enforcement. I am grateful to all the investigators and prosecutors involved. Their hard work made it possible to quickly identify and arrest each of the crew members so that they no longer pose a threat to the citizens of New York City. The ATF is committed to combating violent crime and will invest its resources and personnel as needed to ensure that the quality of life in this great city is not diminished by those who have little or no regard for human life.”
NYPD Commissioner William J. Bratton stated: “Investigators wasted no time in tracking down and holding those persons allegedly responsible for this violent robbery, which ended in the senseless death of shopkeeper Bubacarr Camera. I want to thank the NYPD detectives and our law enforcement partners who were integral to these arrests, which I hope will offer some consolation to the family who lost their loved one to a meaningless criminal act.”
According to the allegations in the Indictment unsealed today in Manhattan federal court and other documents in the public record[1]:
On June 18, 2015, ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS shot and killed a shopkeeper, Bubacarr Camera, in the course of a robbery of a store located at 906 Amsterdam Avenue on the Upper West Side of Manhattan.
Two days before that murder, on June 16, 2015, ZUBEARU BETTIS and STEPHEN ADAMS robbed another shopkeeper at a store located at 2251 7th Avenue, in Manhattan. During that robbery, BETTIS brandished and discharged a firearm, while ADAMS physically accosted the victim.
* * *
BETTIS, 44, and STEPHEN ADAMS, 27, both of the Bronx, are charged with robbery and conspiracy to commit robbery, possessing a firearm in furtherance of a crime of violence, which firearm was brandished and discharged, and possessing a firearm in furtherance of a crime of violence resulting in death. MICHAEL ADAMS, 29, of the Bronx, is charged with robbery and conspiracy to commit robbery, and possessing a firearm in furtherance of a crime of violence resulting in death. If convicted, all three defendants face a maximum of life in prison or death, 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 defendants would be determined by the judge.
MICHAEL ADAMS was arrested this morning in the Bronx and was presented this afternoon before United States Magistrate Judge Michael H. Dolinger and ordered detained. BETTIS and STEPHEN ADAMS were previously arrested on June 26, 2015, and ordered detained.
Mr. Bharara praised the outstanding investigative work of the SPARTA Task Force – which comprises agents and detectives of the ATF, the NYPD, and the U.S. Marshals Service – and of detectives from the NYPD’s Manhattan North Homicide Squad and the 24th Precinct Detective Squad. He also thanked the New York County District Attorney’s Office for their assistance.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Jared Lenow is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Zubearu Bettis et al., 15 Cr. 410 (LAK)
COUNT
CHARGE
DEFENDANTS
MAXIMUM PENALTIES
1
Conspiracy to commit robbery
ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS
20 years in prison
2
Robbery
ZUBEARU BETTIS and STEPHEN ADAMS
20 years in prison
3
Robbery
ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS
20 years in prison
4
Carrying and using a firearm during and in relation to, and possessing a firearm in furtherance of, a crime of violence, which was brandished and discharged
ZUBEARU BETTIS and STEPHEN ADAMS
Life in prison
Mandatory minimum 10 years in prison consecutive to any other sentence
5
Carrying and using a firearm during and in relation to, and possessing a firearm in furtherance of, a crime of violence, resulting in the death of another
ZUBEARU BETTIS, STEPHEN ADAMS, and MICHAEL ADAMS
Life in prison or the death penalty
Mandatory minimum 10 years in prison consecutive to any other sentence
[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.
Manhattan U.S. Attorney Recovers $360,000 in Civil Penalties from A Rochester Pharmaceutical Company That Violated the Controlled Substances ActRead 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 Field Division of the U.S. Drug Enforcement Administration (“DEA”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced today that the United States has filed and settled a civil lawsuit against ROCHESTER DRUG COOPERATIVE, INC., (“RDC”), a Rochester, New York, pharmaceutical distributor of controlled substances. Under the settlement, RDC admitted and accepted responsibility for numerous violations of the Controlled Substances Act (the “CSA” or the “Act”), and agreed to pay $360,000 in penalties and to re-submit to DEA corrected record-keeping reports required by the CSA. The settlement agreement, in the form of a consent order, was approved today in Manhattan federal court by United States District Judge Ronnie Abrams.
Manhattan U.S. Attorney Preet Bharara stated: “Pharmaceutical distributors are supposed to be one of the first lines of defense in the growing oxycodone epidemic. Today’s consent order demonstrates that distributors that do not properly track and report the purchase and sale of drugs with a high potential for abuse will be held accountable.”
DEA Special Agent-in-Charge James J. Hunt said: “The Controlled Substances Act is the cornerstone of preventing prescription drug diversion and drug abuse. Today’s announcement has a dual purpose; to remind pharmaceutical distributors of their reporting requirements, and to reiterate law enforcement’s ongoing efforts to curtail opioid abuse throughout our nation.”
Commissioner William J. Bratton said: “The law mandates that pharmaceutical companies track their distribution of controlled substances, allowing law enforcement to investigate and stop the exploitation of highly addictive prescription drugs, especially those which have led to numerous opioid addictions and overdose deaths. The NYPD, along with our law enforcement partners, remain committed to stopping the distribution of illegal narcotics.”
According to the Complaint filed in federal court: The CSA creates a comprehensive distribution and monitoring system for those authorized to handle controlled substances, at the heart of which are registration and tracking requirements. The DEA tracks the commercial distribution of substances with a high potential for abuse through its Automation of Reports and Consolidated Orders System, or “ARCOS.” The Complaint alleges that, following an audit of various pharmacies in the New York City area, the DEA discovered that the pharmacies had reported thousands of purchase orders from RDC that RDC did not correspondingly report to the DEA through ARCOS. In response, in 2013, the DEA’s New York Field Division Tactical Diversion Squad conducted an on-site investigation and audit at RDC’s headquarters in Rochester, New York. The DEA’s audit confirmed that RDC’s ARCOS reporting system was underreporting many thousands of drug sales to pharmacies throughout the northeast region.
RDC responded that it expected to be able to resolve this issue through the pending acquisition of a new computer ordering system. But in 2014, DEA re-assessed RDC’s compliance, and discovered that RDC had not implemented the new order system. As a result, RDC’s failure to electronically report thousands of shipments of CSA-controlled substances, including Oxycodone and its variants, continued. During this time, the DEA also determined that RDC had failed to report the theft or significant loss of controlled substances in ARCOS, as required by the CSA and its implementing regulations.
In the settlement agreement, RDC admitted that between July 2013 and July 2014, it failed to report any electronic distribution transactions in its DEA ARCOS reports, and admitted that between July 2012 and July 2014, it failed to provide the required theft or significant loss reporting in ARCOS to the DEA. Under the Consent Order, RDC must pay $360,000 in civil penalties to the United States and reconstruct complete and correct historical ARCOS data for the last five years for submission to the DEA.
Mr. Bharara praised the DEA New York Division Tactical Diversion Squad for their invaluable work on this case. The DEA Tactical Diversion Squad comprises agents, investigators, and officers from the DEA, the New York City Police Department, the Orangetown Police Department, and the Westchester County Police Department.
The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorney Louis A. Pellegrino is in charge of the case.
Ringleader of Extortion Ring Sentenced to More Than 14 Years in Manhattan Federal Prison for Massive “Call Center” Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director in Charge New York Field Office of the Federal Bureau of Investigation (“FBI”), and Timothy P. Camus, Deputy Inspector General for Investigations of the United States Treasury Inspector General for Tax Administration (“TIGTA”), announced today that SAHIL PATEL was sentenced to 175 months in prison and $1 million in forfeiture for his role in organizing the U.S. side of a massive fraud and extortion ring run through various “call centers” located in India, through which PATEL and his coconspirators impersonated American law enforcement officials and threatened victims with arrest and financial penalties unless those victims made payments to avoid purported charges. PATEL pleaded guilty in January 2015 before U.S. District Judge Alvin Hellerstein, who imposed the sentence today.
Manhattan U.S. Attorney Preet Bharara said: “Sahil Patel’s elaborate scheme involved impersonating law enforcement officers and using intimidation and fear to bilk over a million dollars from hundreds of unsuspecting victims. I want to thank the FBI and the Treasury Inspector General for Tax Administration for their excellent work in this investigation.”
Assistant Director in Charge Diego Rodriguez said: “This duplicitous consumer fraud scheme preyed on the vulnerabilities of victims who were forced to pay false penalties for fear of retribution. Wreaking havoc on hundreds of innocent Americans, Patel and his co-conspirators also called into question the integrity of the federal law enforcement community by falsely portraying themselves as government officials. Today’s sentencing serves as a fine example of how the FBI and our partners are successfully combining efforts to eliminate sophisticated impersonation scams.”
Deputy Inspector General Timothy P. Camus said: “Through his ruthless criminal enterprise, Mr. Patel has inflicted harm on thousands of innocent Americans who fell victim to his impersonation scheme. Victimizing taxpayers by impersonating the IRS is a serious crime and individuals who do so will be prosecuted to the fullest extent of the law.”
According to the Superseding Indictment, other documents filed in Manhattan federal court, and statements made at related court proceedings:
From December 2011 through the day of his arrest on December 18, 2013, PATEL participated as a leader in a sophisticated scheme to intimidate and defraud hundreds of innocent victims of hundreds of dollars apiece.
Throughout the course of the fraud, telephone call centers located in India hired English-speaking employees to place telephone calls to individuals living in the U.S. Armed with long lists of potential victims, referred to by PATEL and his co-conspirators as “lead sheets,” those India-based callers systematically placed thousands of calls to individuals in the U.S. in the hopes of intimidating the call recipients into providing a payment to the co-conspirators. In order to extort these victims, the India-based callers impersonated law enforcement officials of the FBI and IRS and threatened their victims with financial penalties and arrest in connection with fabricated financial crimes.
In order to receive funds in a manner that would mask the identity of PATEL and his co-conspirators, the ring undertook several measures to anonymize itself, including by using anonymized voice-over-internet technology, which was subscribed under fraudulent names in order to give the appearance of being related to U.S. law enforcement agencies.
Patel and his co-conspirators also used several layers of wire transactions in order to conceal the destination and nature of the extorted payments, which totaled at least $1.2 million dollars.
* * *
In addition to the prison sentence, PATEL, 36, of Tatamy, Pennsylvania, was sentenced to three years of supervised release.
In imposing today’s sentence, Judge Hellerstein said: “The nature of this crime robbed people of their identities and their money in a way that causes people to feel they have been almost destroyed.”
If you have been targeted by this scam, you can report the incident to TIGTA at www.tigta.gov and clicking on the IRS Impersonation Scam Reporting tab in the upper right corner, or call the TIGTA hotline at 1-800-366-4484.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Andrew C. Adams is in charge of the prosecution.
Estonian National Pleads Guilty in Manhattan Federal Court to Charges Arising from Massive Cyber Fraud Scheme That Infected Millions of Computers WorldwideRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that VLADIMIR TSASTSIN pled guilty to wire fraud and computer intrusion charges arising from his operation of a massive and sophisticated Internet fraud scheme that infected with malware more than four million computers located in over 100 countries. The malware secretly altered the settings on infected computers, enabling TSASTSIN and the six other charged defendants – Timur Gerassimenko, Dmitri Jegorov, Valeri Aleksejev, Konstantin Poltev, Andrey Taame, and Anton Ivanov – to digitally hijack Internet searches, re-route computers to certain websites and advertisements, and receive payment for the hijacked Internet traffic. TSASTSIN pled guilty today to one count of conspiracy to commit wire fraud and one count of conspiracy to commit computer intrusion before U.S. Magistrate Judge Michael H. Dolinger. Sentencing is scheduled for October 14, 2015, before U.S. District Judge Lewis A. Kaplan.
Manhattan U.S. Attorney Preet Bharara said: “Vladimir Tsastsin has admitted to his role in a massive cyber hack and fraud scheme that infected millions of computers in over one hundred countries and netted Tsastsin and his co-conspirators over fourteen million dollars. Today’s guilty plea highlights not just the international scope of the threat posed by cyber criminals, but also the global reach of this Office and our law enforcement partners here and around the world to track down and prevent such criminals.”
According to the Indictment and other court documents previously filed in Manhattan federal court, and today’s plea proceeding:
From 2007 until October 2011, TSASTSIN, Gerassimenko, Jegorov, Aleksejev, Poltev, Taame, and Ivanov controlled and operated various companies that masqueraded as legitimate publisher networks (the “Publisher Networks”) in the Internet advertising industry. The Publisher Networks entered into agreements with ad brokers under which they were paid based on the number of times Internet users clicked on the links for certain websites or advertisements, or based on the number of times certain advertisements were displayed on certain websites. Thus, the more traffic that went to the advertisers’ websites and display ads, the more money the defendants earned under their agreements with the ad brokers. The defendants fraudulently increased the traffic to the websites and advertisements that would earn them money and made it appear to advertisers that the Internet traffic came from legitimate clicks and ad displays on the defendants’ Publisher Networks when, in actuality, it had not.
To carry out the scheme, the defendants and their co-conspirators used what are known as “rogue” Domain Name System (“DNS”) servers, and malware (“the Malware”) that was designed to alter the DNS server settings on infected computers. Victims’ computers became infected with the Malware when they visited certain websites or downloaded certain software to view videos online. The Malware altered the DNS server settings on victims’ computers to route the infected computers to rogue DNS servers controlled and operated by the defendants and their co-conspirators. The re-routing took two forms that are described in detail below: “click hijacking” and “advertising replacement fraud.” The Malware also prevented the infected computers from receiving anti-virus software updates or operating system updates that otherwise might have detected the Malware and stopped it. In addition, the infected computers were also left vulnerable to infections by other viruses.
Click Hijacking
When the user of an infected computer clicked on a search result link displayed through a search engine query, the Malware caused the computer to be re-routed to a different website. Instead of being brought to the website to which the user asked to go, the user was brought to a website designated by the defendants. Each “click” triggered payment to the defendants under their advertising agreements. This click hijacking occurred for clicks on unpaid links that appeared in response to a user’s query as well as clicks on “sponsored” links or advertisements that appeared in response to a user’s query – often at the top of, or to the right of, the search results – thus causing the search engines to lose money. For example, when the user of an infected computer clicked on the domain name link for the official website of Apple-iTunes, the user was instead taken to a website for a business unaffiliated with Apple Inc. that purported to sell Apple software.
Advertising Replacement Fraud
Using the DNS changer Malware and rogue DNS servers, the defendants also replaced legitimate advertisements on websites with substituted advertisements that triggered payments to the defendants. For example, when the user of an infected computer visited the home page of the Wall Street Journal, a featured advertisement for the American Express “Plum Card” had been fraudulently replaced with an ad for “Fashion Girl LA.”
The defendants earned millions of dollars under their advertising agreements, not by legitimately displaying advertisements through their Publisher Networks, but rather by using the Malware to fraudulently drive Internet traffic to the websites and ads that would earn them more money. As a result, the defendants and their co-conspirators earned at least $14 million in ill-gotten gains through click hijacking and advertisement replacement fraud. The defendants laundered the proceeds of the scheme through numerous companies including, among others, Rove Digital, an Estonian corporation, and others listed in the Indictment.
* * *
TSASTSIN, 35, of Estonia, faces a maximum sentence of 20 years in prison on the wire fraud conspiracy count and five years in prison on the computer intrusion conspiracy count. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Estonian nationals Gerassimenko, Jegorov, Poltev, and Aleksejev have each pled guilty to the same wire fraud and computer intrusion conspiracy counts.Aleksejev was sentenced to 48 months in prison.Ivanov pled guilty to all charges and was sentenced to time served.Judge Kaplan has scheduled the sentencings of Gerassimenko, Jegorov and Poltev for July 23, 2015. The last defendant, Taame, who is a Russian national, remains at large. The charges against Taame are merely accusations and he is presumed innocent unless and until proven guilty.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation, the National Aeronautics and Space Administration-Office of the Inspector General, and the Estonian National Police and Border Guard Board.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah Lai and Alexander Wilson are in charge of the prosecution.
Brooklyn Man Pleads Guilty in Manhattan Federal Court to Defrauding Elderly Victims Across New York StateRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALLAH JUSTICE MCQUEEN pled guilty today in Manhattan federal court to conspiracy to commit wire fraud and wire fraud in connection with a scheme that targeted and victimized elderly people across New York State. MCQUEEN, who was arrested in December 2014, entered his plea before U.S. Magistrate Judge Michael H. Dolinger.
Manhattan U.S. Attorney Preet Bharara said: “Allah Justice McQueen had a key role in a conspiracy that preyed on the emotions of vulnerable grandparents, falsely convincing them that their grandchildren were in legal trouble and needed bail money. With his guilty plea, McQueen will be held to account for his role in a heartless scheme that exploited familial love for personal gain.”
According to the Complaint, Superseding Indictment, and plea proceeding:
In or about August and September 2013, MCQUEEN and his co-conspirators perpetrated a scheme to defraud elderly victims around the United States by tricking them into believing their grandchildren had been imprisoned and needed immediate bail money. In particular, in each case, a member of the conspiracy contacted the victim by phone, purported to be a law enforcement official or attorney, and falsely claimed that the victim’s grandchild had been taken into custody for a narcotics offense and would not be released unless the victim paid thousands of dollars, and in some cases tens of thousands of dollars, in purported bail money. A member of the conspiracy also frequently posed on the call as the victim’s grandchild, typically crying and pleading with the elderly victim to send money to secure the grandchild’s release from jail, and asking the victim not to contact any other family members because the grandchild felt ashamed. In each case, in extreme distress, the victim sent thousands of dollars, at a minimum, as instructed, to certain individuals who, among other things, provided that money to MCQUEEN at his direction. In each case, after paying the “bail” money as directed, the victim directly contacted his or her grandchild and thereupon learned that the grandchild had not, in fact, been arrested, that the grandchild knew nothing about the claims made on the call to the victim, and that the call was fraudulent.
For example, a 79-year-old victim in New York received a phone call in August 2013 from an individual who identified himself as a police sergeant and claimed that the victim’s grandson had been arrested after drugs were discovered in a car in which the grandson was a passenger. The purported sergeant said the grandson would be released if the victim sent $6,000 in bail money as directed. The victim, who briefly heard, on the phone, an individual who sounded like the victim’s grandson, wired the money as directed. The victim subsequently spoke directly with the victim’s grandson, and learned that he had not been arrested, and knew nothing about the purported sergeant or the basis for his request for bail money. The victim never received any money back from the purported sergeant.
In fact, the victim’s money was wired to particular individuals working with and at the direction of MCQUEEN who collected the wired funds on MCQUEEN’s behalf and provided the money to MCQUEEN and his co-conspirators. As to a portion of the victim’s money, MCQUEEN appeared personally at a particular location in Brooklyn to arrange for the collection of the proceeds. MCQUEEN subsequently deposited another portion of the money sent by the victim directly into his personal bank account.
* * *
MCQUEEN, 33, of Brooklyn, New York, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud. He faces a maximum sentence of 40 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing has been scheduled for November 2, 2015, at 4:30 p.m., before U.S. District Judge Shira A. Scheindlin.
Mr. Bharara praised the outstanding investigative work of the FBI. Mr. Bharara also thanked the Bronx District Attorney’s Office for its assistance.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Elisha Kobre is in charge of the prosecution.
Members and Associates of Violent Yonkers Street Gang Charged in White Plains Federal Court with Racketeering Offenses, Including May 2014 Murder in Greenacres, FloridaRead 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 yesterday of a Second Superseding Indictment charging 11 members and associates of a Yonkers-based street gang, “Cruddy 650,” with participation in a racketeering conspiracy, murder in aid of racketeering, Hobbs Act robbery conspiracy, bank robbery, firearms offenses, and witness tampering. The original Indictment, filed in November 2014, charged four Cruddy 650 affiliates with Hobbs Act robbery conspiracy, bank robbery, and witness tampering. The First Superseding Indictment, filed in February 2015, charged eight Cruddy 650 affiliates with Hobbs Act robbery conspiracy, bank robbery, firearms offenses, and witness tampering. Yesterday’s Superseding Indictment charges three additional Cruddy 650 members and associates (as well as the eight defendants previously charged) and adds racketeering charges, including charges relating to the murder of Andre Folsom, who was shot through the head in the parking lot of a Walmart store in Greenacres, Florida, on May 26, 2014.
Nine of the eleven defendants charged in the Superseding Indictment unsealed yesterday were previously in state or federal custody. PAUL NEGRIN was arrested yesterday in Hollywood, Florida, and was presented in federal court in Ft. Lauderdale, Florida. JAMES MORRIS was arrested yesterday in Yonkers and was presented in White Plains federal court. The case is assigned to U.S. District Judge Vincent Briccetti.
U.S. Attorney Preet Bharara said: “As alleged, members of the Cruddy 650 gang terrorized the streets and businesses of southwest Yonkers with countless robberies and other acts of violence. Members of the gang also allegedly took their criminal activities on the road, traveling to Florida, leading to tragic consequences for murder victim Andre Folsom and his family. I want to commend and thank the FBI and the Yonkers Police Department on their outstanding investigation.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “We now have all 11, herein identified, members of the Cruddy 650 enterprise in custody where they can answer for the full extent of their alleged criminal activities. The FBI thanks all its law enforcement partners, with whom we worked tirelessly, not only in the New York area, but up and down the East Coast. We will continue to protect our communities from senseless violence, such as that alleged in the indictments, which serves only to promote illegal operations and terrify anyone who threatens their activities.”
Yonkers Police Commissioner Charles Gardner stated: “This group of individuals recklessly engaged in numerous violent crimes against our residents. These indictments will remove these violent gang members from our community and make our city a safer place. Ongoing investigations with our federal law enforcement partners will continue to target those persons who choose to engage in this type of activity. I would like to thank the US Attorney’s Office for the Southern District of New York and the FBI Violent Crimes Task force for their tireless efforts in this investigation.”
According to the allegations in the Second Superseding Indictment and other documents in the public record[1]:
Cruddy 650 is a criminal enterprise operating principally in and around the City of Yonkers, New York. Cruddy 650 was founded in 2013 as the result of an alliance between gang members hailing from various parts of Yonkers, including Riverdale Avenue, Woodworth Avenue, Warburton Avenue, and Cottage Place Gardens. Even after the alliance, members of the gang hailing from Cottage Place Gardens continued to identify primarily as “Cruddy,” while members of the gang hailing from Riverdale Avenue identified primarily as “650.”
Cruddy 650 members and associates protected and promoted the gang’s power and territory, and sought to enrich its members, through acts of violence, intimidation, and the sale of illegal drugs. During the time period relevant to the Superseding Indictment, members and associates of Cruddy 650 were responsible for multiple shootings and attempted murders, street robberies, robberies of banks and other businesses, bank fraud, witness tampering, and the distribution of narcotics, including crack cocaine and marijuana. Victims of the shootings and other acts of violence perpetrated by members of Cruddy 650 included both rival gang members and innocent bystanders.
The violence of the Cruddy 650 enterprise and its members spread from Yonkers, New York, to Florida. On or about May 26, 2014, KEVIN WILTSHIRE murdered Andre Folsom in Greenacres, Florida, shooting him in the head during a dispute in the parking lot of a Walmart store. The Second Superseding Indictment alleges that WILTSHIRE committed the murder in order to maintain and increase his position in Cruddy 650.
* * *
Counts One and Two of the Second Superseding Indictment charge DIONDRE CARLISLE, MYKAI DAVIS, RAKEEM FLOWERS, TYRONE SMITH, WILTSHIRE, SAUDY GUERRERO, DARNELL KIDD, JAMES MORRIS, and PAUL NEGRIN with racketeering conspiracy and firearms offenses in connection with that conspiracy. As alleged, various combinations of those defendants committed at least four shootings, and 11 robberies or attempted robberies, six of which were armed, in furtherance of the conspiracy. Counts Three and Four of the Second Superseding Indictment charge WILTSHIRE with murder in aid of racketeering activity and a related firearms offense. Count Five charges CARLISLE, DAVIS, FLOWERS, CESAR MUNGUIA, ISAIAH WASHINGTON, WILTSHIRE, GUERRERO, KIDD, and MORRIS with Hobbs Act robbery conspiracy. Count Six charges CARLISLE, DAVIS, FLOWERS, CESAR MUNGUIA, WILTSHIRE, GUERRERO, KIDD, and MORRIS with a firearms offense related to the Hobbs Act robbery conspiracy. As in the initial Indictment, CARLISLE, WASHINGTON, and WILTSHIRE are charged with bank robbery in connection with the October 27, 2014, robbery of a Citibank branch in Yonkers; CARLISLE is charged with attempted bank robbery in connection with the November 3, 2014, attempted robbery of a Chase Bank branch in Yonkers; and FLOWERS and TYRONE SMITH, are charged with witness tampering in connection with their threats against an individual who provided information to law enforcement relating to the November 3 attempted robbery of the Chase Bank branch.
Charts containing the names, ages, residences, charges, and maximum penalties for the defendants are set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI’s Westchester Violent Crimes Task Force, which comprises agents and detectives of the FBI, the City of Yonkers Police Department, the Westchester County Police, the Westchester County District Attorney’s Office, and the City of Peekskill Police Department. He also thanked the FBI’s Miami Division and the Greenacres Department of Public Safety for their assistance.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Scott Hartman, George Turner, and Jessica Feinstein are in charge of the prosecution.
The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
15-168 ###
United States v. Diondre Carlisle, et al., S2 14 Cr. 768 (VB)
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Racketeering conspiracy, 18 U.S.C. § 1962(d)
DIONDRE CARLISLE
MYKAI DAVIS
RAKEEM FLOWERS
TYRONE SMITH
KEVIN WILTSHIRE
SAUDY GUERRERO
DARNELL KIDD
JAMES MORRIS
PAUL NEGRIN
20 years in prison
2
Using or carrying a firearm during and in relation to a crime of violence and drug trafficking crime,
18 U.S.C. § 924(c)
DIONDRE CARLISLE
MYKAI DAVIS
RAKEEM FLOWERS
KEVIN WILTSHIRE
SAUDY GUERRERO
DARNELL KIDD
JAMES MORRIS
PAUL NEGRIN
Life in prison
Mandatory minim of seven years in prison (brandishing), or mandatory minimum 10 years in prison (shooting) consecutive to any other sentence on the first offense; or mandatory 25 years consecutive on the second offense.
3
Murder in aid of racketeering activity, 18 USC 1959(a)(1)
KEVIN WILTSHIRE
Mandatory life in prison or death
4
Carrying and using firearms during and in relation to and possessing firearms in furtherance of a crime of violence resulting in the death of another, 18 U.S.C. § 924(j)
KEVIN WILTSHIRE
Life in prison or death
Mandatory minimum of 25 years
5
Conspiracy to commit Hobbs Act robbery
18 U.S.C. § 1951
DIONDRE CARLISLE
RAKEEM FLOWERS
MYKAI DAVIS
CESAR MUNGUIA
KEVIN WILTSHIRE
DARNELL KIDD
SAUDY GUERRERO
JAMES MORRIS
20 years in prison
6
Brandishing a firearm during and in relation to a crime of violence
18 U.S.C. § 924(c)
DIONDRE CARLISLE
RAKEEM FLOWERS
MYKAI DAVIS
CESAR MUNGUIA
KEVIN WILTSHIRE
DARNELL KIDD
SAUDY GUERRERO
JAMES MORRIS
Life in prison
Mandatory minimum of seven years in prison, consecutive to any other sentence
7
Bank robbery
18 U.S.C. § 2113(a)
DIONDRE CARLISLE
ISAIAH WASHINGTON
KEVIN WILTSHIRE
20 years in prison
8
Attempted bank robbery
18 U.S.C. § 2113(a)
DIONDRE CARLISLE
20 years in prison
9
Witness tampering
18 U.S.C. § 1513(b)
RAKEEM FLOWERS
TYRONE SMITH
20 years in prison
Defendant
Age
Residence
DIONDRE CARLISLE
18
Yonkers, NY
MYKAI DAVIS
19
Yonkers, NY
RAKEEM FLOWERS
19
Yonkers, NY
CESAR MUNGUIA
20
Yonkers, NY
TYRONE SMITH
24
Yonkers, NY
ISAIAH WASHINGTON
19
Yonkers, NY
KEVIN WILTSHIRE
19
Yonkers, NY
SAUDY GUERRERO
20
Yonkers, NY
DARNELL KIDD
23
Yonkers, NY
JAMES MORRIS
24
Yonkers, NY
PAUL NEGRIN
22
Hollywood, FL
[1] As the introductory phrase signifies, the entirety of the text of the Second Superseding Indictment, and the description of the Second Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Marijuana Dealer Convicted in Manhattan Federal Court of Two 1996 MurdersRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSE ISMAEL VENTURA was found guilty yesterday of murder in connection with a marijuana distribution conspiracy, conspiracy to commit murder-for-hire, and murder-for-hire. The verdict came following a 13-day jury trial in Manhattan federal court before U.S. District Judge John G. Koeltl.
According to the Indictment and the evidence at trial:
From the 1980s through the mid-1990s, JOSE ISMAEL VENTURA owned and operated a marijuana distribution business in the vicinity of 207th Street and Sherman Avenue in northern Manhattan. In the fall of 1995, VENTURA placed his nephew, Eugene Garrido, in charge of the day-to-day operations of the marijuana business while VENTURA’s son, Kevin Ventura, who had previously managed the business, was on home detention for a pending murder charge. In the spring of 1996, Kevin Ventura’s murder charge was dismissed by state authorities and VENTURA told his nephew Eugene Garrido that his services were no longer needed. Garrido refused to give up his management role, and instead began efforts to take over the entire marijuana business from VENTURA. Because of this dispute over VENTURA’s marijuana business, in the summer of 1996, VENTURA ordered the murder of Garrido. On VENTURA’s order, his son Kevin Ventura hired two brothers to kill Garrido in exchange for $10,000, derived from the VENTURA marijuana business. On August 19, 1996, one of the two brothers shot and killed Garrido in the lobby of his apartment building in northern Manhattan. A bystander, Carlos Penzo, who attempted to stop the fleeing shooter, was also shot and died a week later of his injuries.
Kevin Ventura was convicted of these murders, as well as one additional murder, following a jury trial in Manhattan federal court in December 2013.
The two brothers who were hired to commit the Garrido murder, Jorge Lafontaine and Jose Lafontaine, have both been charged federally and have entered pleas of guilty to their roles in the Garrido and Penzo murders. They have not yet been sentenced.
* * *
JOSE ISMAEL VENTURA, 62, of Manhattan, faces a mandatory sentence of life in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. A sentencing hearing has been scheduled for October 2, 2015, at 3:00 p.m. before Judge Koeltl.
Mr. Bharara praised the investigative work of the Homeland Security Investigations Division of Immigration and Customs Enforcement, and the New York City Police Department.
This case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Margaret Garnett and Micah W.J. Smith are in charge of the prosecution.
Manhattan U.S. Attorney Announces Arrest of Postal Carrier for Theft of over $1 Million in Tax Refund ChecksRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, Eileen Neff, Special Agent-in-Charge of the Northeast Area Field Office of the U.S. Postal Service, Office of Inspector General (“USPS-OIG”), Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), and Shantelle P. Kitchen, Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service’s Criminal Investigation Division (“IRS”), announced today the arrest of OSCAR LOPEZ in connection with a conspiracy to obtain over $1 million in fraudulently-issued tax refund checks from his U.S. Postal Service (“USPS”) delivery route. The defendant, a USPS mail carrier, was arrested this morning and is expected to be presented later today in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Oscar Lopez used his position as a U.S. Postal Service mail carrier to steal over $1 million in taxpayer funds. The exemplary investigative work of the Postal Service Inspector General’s Office, the Postal Inspection Service, and the IRS put an end to Lopez’s alleged involvement in this scheme.”
USPS-OIG Special Agent in Charge said: “The U.S. Postal Service Office of Inspector General aggressively investigates Postal Service employees who would abuse their position of trust. We value our law enforcement partners who work closely with us in matters like these.”
USPIS Inspector in Charge Philip R. Bartlett said: “As a taxpayer and a United States Postal Service employee, I find the allegations against the defendant disturbing. I have little tolerance for those who would use their position of public trust to facilitate criminal activity, as is alleged in this investigation. Postal Inspectors and their law enforcement partners will put a stop to crime wherever it exists; keeping the mail safe and secure for its employees and customers.”
IRS-CI Special Agent-in-Charge Shantelle P. Kitchen said: “A fraudulent tax refund scheme is, essentially, the use of false pretenses to steal money from the U.S Treasury. Yet, despite this simple description, fraudulent tax refund fraud schemes can involve a web of co-conspirators who obtain taxpayer information, file the tax returns and secure and negotiate the refund checks. IRS-Criminal Investigation is responsible for investigating the abusers of our nation’s tax system, with the goals of safeguarding public funds and maintaining public confidence in the system.”
According to the allegations contained in the Complaint filed today in Manhattan federal court[1]:
From at least June 2010 to May 2012, LOPEZ typically delivered mail on an assigned route in ZIP code 10460 in the Bronx. LOPEZ obtained fraudulently-issued tax refund checks that had been mailed by the IRS to addresses along his delivery route. He then provided those checks to his co-conspirators, who returned a portion of the value of the checks to him. In total, over $1 million in fraudulently-issued tax refund checks that were mailed to LOPEZ’s delivery route ended up being negotiated against, or deposited into, a bank account associated with one of LOPEZ’s co-conspirators.
* * *
LOPEZ, 36, of Brooklyn, New York, is charged with one count of conspiring to steal government funds, which carries a maximum term of five years in prison, and one count of theft of government funds, which carries a maximum term of ten years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding work of the USPS-OIG, the USPIS, and the IRS in the investigation.
The case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Drew Johnson-Skinner is in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Two Labor Union Officers and One Former Labor Union Officer Indicted in Manhattan Federal Court for Accepting More Than One Million Dollars in Kickbacks and Embezzling Union FundsRead 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”), Cheryl Garcia, the Special Agent-in-Charge of the New York Regional Office of the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (“DOL-OIG”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of charges against ROCCO MIRANTI, the business manager of the International Union of Allied Novelty and Production Workers, Local 223 (“Local 223”), JOHNNIE MIRANTI, the recording secretary-treasurer of Local 223, and LOUIS SMITH, the former president of the International Brotherhood of Teamsters, Local 810 (“Local 810”), for allegedly accepting more than one million dollars in kickback payments and embezzling money from Local 223 and Local 810. ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH were arrested today and arraigned in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn.
Manhattan U.S. Attorney Preet Bharara said: “Rocco Miranti, Johnnie Miranti, and Louis Smith, by allegedly accepting more than a million dollars in bribes and embezzling union funds, put their self-interest above the interests of the union members they were supposed to represent. Rank-and-file union members are entitled to leadership that is supportive, not criminally exploitive, as alleged here.”
FBI Assistant Director Diego Rodriguez said: “Union leaders are supposed to represent workers for fair wages, benefits, and working conditions, not take kickback payments. As alleged, the defendants received more than $1 million in payments over 10 years. The FBI will continue to investigate those who seek to use their organization and their position as a way to personally profit illegally.”
DOL-OIG SAC Cheryl Garcia said: “The Office of Inspector General will continue to work cooperatively with our law enforcement partners to investigate these types of allegations.”
NYPD Commissioner William J. Bratton said: “As alleged, the defendants betrayed their union colleagues by using their influence within the health care plan to gain more than a million dollars in kickbacks. The NYPD has no tolerance for corruption at any level. I want to thank all of the investigators, agents and prosecutors involved in this case for weeding out this criminal behavior.”
According to the allegations in the Indictment filed in Manhattan federal court on Monday, June 29, 2015[1]:
Local 223 is headquartered in Manhattan and represents factory workers. Local 810 is headquartered in Long Island City and represents workers in many industries, including freight drivers and warehouse workers.
From at least 2004 up to and including the present, ROCCO MIRANTI and JOHNNIE MIRANTI were both officers of Local 223. From at least 2000 through 2013, SMITH was the president of Local 810; from 2013 through December 2014, SMITH was a trustee of Local 810. While they were officers of their respective unions, ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH were trustees of the unions’ health care benefit programs. In that capacity, they owed fiduciary duties to Local 223 and Local 810, respectively.
Claims for the Local 223 and Local 810 health care benefit programs were processed by Business-1, a third-party administrator. The president of Business-1, who is cooperating with the Government (the “CW”), told the Government that ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH demanded monthly kickback payments in exchange for Local 223 and Local 810 doing business with Business-1. At first, the CW made kickback payments solely to ROCCO MIRANTI; in or about 2005, ROCCO MIRANTI arranged for Business-1 to become the third-party administrator for Local 810, in exchange for kickback payments to SMITH. Initially, the kickback payments to ROCCO MIRANTI and SMITH were approximately five percent of the fees paid by Local 223 and Local 810, respectively, to Business-1; in or about 2006, ROCCO MIRANTI and SMITH increased the kickback payments that they required from the CW to approximately 10 percent of the fees paid by Local 223 and Local 810, respectively, to Business-1.
Beginning in or about October 2014, ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH each had conversations and meetings, which were recorded by the FBI, with the CW about the monthly kickback payments. During some of these meetings, the CW made kickback payments to ROCCO MIRANTI, JOHNNIE MIRANTI, and SMITH, including, in December 2014, a $10,000 cash payment to ROCCO MIRANTI and JOHNNIE MIRANTI and a $12,000 cash payment to SMITH.
In total, the kickback payments for the Local 223 account have exceeded $500,000, as have the kickback payments for the Local 810 account.
* * *
ROCCO MIRANTI, 70, of Howard Beach, New York, JOHNNIE MIRANTI, 39, of Rockville Centre, New York, and SMITH, 73, of Pearl River, New York, are each charged with one count of conspiring to solicit and receive kickbacks to influence the operation of an employee benefit plan, one count of conspiring to embezzle from an employee benefit plan, and one count of conspiring to commit theft or embezzlement in connection with a health care benefit program, each of which carries a maximum term of five years in prison. The Indictment also seeks forfeiture of crime proceeds. U.S. v. Rocco Miranti et al. Indictment (562.41 KB)
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 Federal Bureau of Investigation, the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, the U.S. Department of Labor’s Office of Labor-Management Standards, and the New York City Police Department’s Organized Crime Investigation Division.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Jessica Lonergan is in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Statements by Head of the Civil Rights Division Vanita Gupta and U.S. Attorney Preet Bharara of the Southern District of New York on the Filing of the Proposed Settlement Agreement Regarding Rikers IslandRead the Press Release
Principal Deputy Assistant Attorney General Vanita Gupta, Head of the Civil Rights Division, issued the following statement today in connection with the filing of the proposed settlement agreement among the parties in Nunez v. City of New York:
“The unprecedented reforms announced today further the Civil Rights Division’s goals of protecting youth from unconstitutional conditions of confinement, whether in the juvenile or criminal justice system. This proposed consent judgment is unprecedented in the detail and comprehensiveness of its use of force remedies. Those remedies are highly appropriate, given the breadth of Rikers Island’s operations and the culture of excessive use of force that we found there. In addition, the prohibitions restricting the use of isolation and reforming the disciplinary system for inmates under the age of 19 provide essential protections for the complicated, and often underserved, population of youth charged in the adult criminal justice system.”
U.S. Attorney Preet Bharara of the Southern District of New York issued the following statement today:
“Today marks another important step toward meaningful and lasting reform at Rikers Island. The parties have executed, and we have submitted for the court’s approval, a 63-page agreement establishing a detailed and comprehensive framework of practices, systems and policies designed to reduce violence in the jails and to keep inmates and correction officers safe. This agreement reflects the commitment of all involved to dismantle the culture of violence that has for too long denied those at Rikers Island the protections of the Constitution. We look forward to the court’s approval of this landmark agreement, and through its vigilant enforcement, ensuring that the city lives up to its promises.”
Statements of Manhattan U.S. Attorney Preet Bharara and Head of the Civil Rights Division Vanita Gupta on the Filing of the Proposed Settlement Agreement Regarding Rikers IslandRead the Press Release
Manhattan U.S. Attorney Preet Bharara issued the following statement today in connection with the filing of the proposed settlement agreement among the parties in Nunez v. City of New York:
“Today marks another important step toward meaningful and lasting reform at Rikers Island. The parties have executed, and we have submitted for the Court’s approval, a 63-page agreement establishing a detailed and comprehensive framework of practices, systems and policies designed to reduce violence in the jails and to keep inmates and correction officers safe. This agreement reflects the commitment of all involved to dismantle the culture of violence that has for too long denied those at Rikers Island the protections of the Constitution. We look forward to the Court’s approval of this landmark agreement, and through its vigilant enforcement, ensuring that the City lives up to its promises.”
Principal Deputy Assistant Attorney General Vanita Gupta, Head of the Civil Rights Division, issued the following statement today:
“The unprecedented reforms announced today further the Civil Rights Division's goals of protecting youth from unconstitutional conditions of confinement, whether in the juvenile or criminal justice system. This proposed Consent Judgment is unprecedented in the detail and comprehensiveness of its use of force remedies. Those remedies are highly appropriate, given the breadth of Rikers Island's operations and the culture of excessive use of force that we found there. In addition, the prohibitions restricting the use of isolation and reforming the disciplinary system for inmates under the age of 19 provide essential protections for the complicated, and often underserved, population of youth charged in the adult criminal justice system.”
Former State Senate Leader Malcolm Smith and Former Queens GOP Leader Vincent Tabone Sentenced in White Plains Federal Court for Bribery and Fraud Charges Connected to 2013 New York City Mayor’s RaceRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that former New York State Senate leader MALCOLM SMITH was sentenced today to seven years in prison for bribing New York City Republican Party leaders, including Queens County Republican Party Vice Chairman VINCENT TABONE, as part of a scheme to allow SMITH, a Democrat, to run as a Republican candidate for New York City Mayor in 2013 and for his role in obtaining New York State funding for a real estate project in Spring Valley, New York, in exchange for cash bribes paid on his behalf to the New York City Republican Party officials. TABONE was sentenced to 42 months in prison for receiving bribes and witness tampering. Both were convicted after a three-and-a-half week jury trial before U.S. District Judge Kenneth M. Karas, who imposed today’s sentences.
Manhattan U.S. Attorney Preet Bharara said: “Bribes and kickbacks should never play a role in the selection of candidates for public office. By attempting to buy and sell a spot on New York City’s Mayoral ballot, Malcolm Smith and Vincent Tabone corrupted one of the most fundamental tenets of the democratic process, that candidates cannot bribe their way onto a ballot. Today’s sentences make clear that the cost of violating the public trust in this way will be measured in years in a federal prison.”
According to the Complaint and the Indictment filed in federal court and the evidence presented at trial:
The Bribery and Extortion Schemes
SMITH was first elected to the New York State Senate in November 2000, and represented a district within Queens, New York. He was chairman of the Independent Democratic Conference of the State Senate and, among other positions, has served as the State Senate’s minority leader, majority leader, and acting lieutenant governor. From about November 2012, through April 2, 2013, SMITH agreed with former New York City councilman Daniel Halloran, who was convicted in a separate trial, and an undercover FBI agent posing as a wealthy real estate developer (the “UC”), and a cooperating witness (“CW”) to bribe New York City Republican Party county leaders, including TABONE, in exchange for their authorization for SMITH to appear as a Republican candidate for New York City Mayor in 2013, even though SMITH is a registered Democrat.
SMITH participated in two overlapping criminal schemes that involved the payment of bribes to obtain official action. First, SMITH, a registered Democrat, authorized the payment of $110,000 in cash bribes to be paid to leaders of the New York City Republican Party, including TABONE, so that they would allow SMITH to run for mayor on the Republican Party’s ballot line. Second, SMITH agreed to use his influence to help steer at least $500,000 in New York State transportation funding to a real estate project the UC and CW had proposed to develop in Spring Valley, New York, in exchange for the UC and CW paying bribes on SMITH’s behalf to the New York City Republican Party Chairs.
In furtherance of the scheme, SMITH authorized the UC and the CW to meet TABONE, the Executive Vice Chairman of the Queens County Republican Party, Joseph Savino, the Chairman of the Bronx County Republican Party, and other party leaders. During a meeting with the UC, TABONE accepted a $25,000 cash bribe in a dimly lit SUV parked in front of a Manhattan restaurant and agreed to accept another $25,000 after his committee authorized SMITH to compete in the Republican primary. Savino similarly accepted a $15,000 cash bribe and agreed to accept another $15,000 after he voted to authorize SMITH to compete for the Republican ballot line. In return for his efforts in negotiating the bribes, Daniel Halloran accepted $15,500 as a down payment on a “broker’s” fee of at least $75,000 and expected to be appointed First Deputy Mayor if Smith was elected mayor.
Witness Tampering
Shortly before the start of a previously scheduled trial, the Government sought permission from the Court to take the deposition of Philip Ragusa, the former Chairman of the Queens County Republican Party. Ragusa, who was gravely ill at the time, was expected to testify favorably to the Government. Over TABONE’s objections, the Court ordered the deposition to take place. TABONE unexpectedly appeared at Ragusa’s home an hour before the scheduled start of the deposition and attempted to pressure Ragusa not to testify against him.
* * *
SMITH, 58, of Queens, was also sentenced to two years of supervised release. TABONE, 48, of Queens, was sentenced to one year supervised release and ordered to forfeit $25,000. SMITH was ordered to surrender to the Bureau of Prisons on September 21, 2015. TABONE was ordered to surrender October 1, 2015.
Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation and the Rockland County District Attorney’s Office.
This case is being handled by the Office’s White Plains Division and Public Corruption Unit. Assistant United States Attorneys Douglas B. Bloom, Justin Anderson and Perry Carbone are in charge of the prosecution.
Former Ceo of Paramount Management Sentenced in Manhattan Federal Court to Seven Years in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALEX V. EKDESHMAN, the Chief Executive Officer of Paramount Management, LLC, was sentenced yesterday to eighty-seven months in prison for his role in a commodities fraud scheme. EKDESHMAN ran a fraudulent scheme in which he solicited over $1.5 million from over 100 investors for the purpose of investing in foreign exchange currency transactions and then misappropriated the majority of investors’ funds to pay for personal and business expenses. EKDESHMAN was originally charged in May 2014, and he was sentenced yesterday by the Honorable Vernon S. Broderick, United States District Judge.
According to the Information, other documents filed in Manhattan federal court, and statements made during court proceedings:
From at least May 2011 through May 2013, EKDESHMAN ran a fraudulent commodities trading scheme. EKDESHMAN, who was chief executive officer of Paramount Management, LLC (“Paramount Management”), located in New York, New York, represented to investors that Paramount Management was in the business of investing in foreign exchange currency transactions, or “forex.” Through various employees of Paramount Management, EKDESHMAN solicited investor funds on the understanding that the funds would be solely invested in forex. As a result of these solicitations, EKDESHMAN and his employees collected at least $1.38 million from approximately 115 investors.
Contrary to EKDESHMAN’s promise to invest the investors’ funds in forex, EKDESHMAN misappropriated the large majority of investor funds. More than $1 million in investor funds were never traded in forex. Instead, EKDESHMAN used those funds to make payments to himself and his family members, to buy personal items, to pay for business expenses related to Paramount Management, and to pay employees of Paramount Management.
EKDESHMAN, 42, of Holmdel, New Jersey, pled guilty to one count of commodities fraud on February 5, 2015.
Mr. Bharara praised the work of the Federal Bureau of Investigation, and thanked the United States Commodity Futures Trading Commission for its assistance.
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 Jessica A. Masella is in charge of the prosecution.
New York City Private Investigator Who Hacked into E-Mail Accounts Sentenced in Manhattan Federal Court to Three Months in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ERIC SALDARRIAGA, a private investigator in New York City, was sentenced today in Manhattan federal court to three months in prison. The sentence was imposed by U.S. District Judge Richard J. Sullivan. SALDARRIAGA pled guilty to conspiracy to commit computer hacking before Judge Sullivan on March 6, 2015.
According to the allegations in documents filed in Manhattan federal court, and statements made at today’s sentencing and other court proceedings:
The defendant, a private investigator, owned a company that provided private investigation services to members of the public for a fee. Beginning in 2009, SALDARRIAGA, through services advertised on the Internet (the “Hacking Services”), hired individuals to hack into the e-mail accounts of almost 50 different victims. For certain victims, SALDARRIAGA attempted to gain unlawful access to more than one email account. SALDARRIAGA used the Hacking Services to access, unlawfully and secretly, the e-mail accounts of individuals he investigated on behalf of his clients, as well as individuals in whom SALDARRIAGA was interested for personal reasons.
SALDARRIAGA paid the Hacking Services to provide him with login credentials, including usernames and passwords, for victims’ e-mail accounts. SALDARRIAGA then unlawfully accessed and reviewed victims’ e-mail communications. In total, SALDARRIAGA hired the Hacking Services to hack into, and provide unauthorized access to, at least 60 different e-mail accounts.
* * *
In addition to the prison term, SALDARRIAGA, 41, of Queens, New York, was also sentenced to three years of supervised release and ordered to forfeit $5,000 and pay a $1,000 fine.
Mr. Bharara praised the FBI for their outstanding work in the investigation.
This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Daniel Noble is in charge of the case.
Twelve Charged in Manhattan Federal Court with Narcotics Trafficking and Firearms Possession in Vermont and New York CityRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Eugenia Cowles, Acting United States Attorney for the District of Vermont, Delano A. Reid, Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), Michael Greco, the United States Marshal for the Southern District of New York, and Colonel Thomas L’Esperance, Director of the Vermont State Police (“VSP”), announced the unsealing yesterday of an indictment charging 12 defendants with participating in a conspiracy to transport large quantities of crack cocaine and heroin from locations in New York City, to Bennington, Vermont, for resale in Bennington. Seven of the 12 defendants were also charged with possessing and using firearms in connection with the narcotics trafficking conspiracy. Seven defendants were taken into custody on June 23 and June 24, 2015. Six of them were presented in Manhattan federal court on June 24, 2015, before U.S. Magistrate Judge Debra Freeman. One is expected to be presented today.
Manhattan U.S. Attorney Preet Bharara stated: “Yesterday’s arrests show once again that guns and illegal drugs seem to go hand in hand. These defendants allegedly peddled crack cocaine and heroin, shuttling from Manhattan and the Bronx to Bennington, Vermont. Illegal drugs, and the guns that go with them, are not just an urban problem or a local problem but a national one. I thank my colleagues from the U.S. Attorney’s Office in Vermont, as well as all of our law enforcement partners, for their partnership and their dedication to fighting the dangers of drug trafficking in our communities.”
Acting U.S. Attorney Eugenia Cowles stated: “The District of Vermont is pleased to be working with our law enforcement colleagues in New York City to prosecute those who come to Vermont to traffic in guns and drugs. For too long, heroin from New York City and guns from Vermont have been exchanged with lethal consequences in both districts.”
ATF Special Agent in Charge Reid stated: “Up until yesterday, the illicit trade of narcotics for weapons flourished from the streets of New York City to Bennington, Vermont. The United States Attorney's Office, the ATF and its law enforcement partners swiftly gathered the evidence necessary and now, in one fell swoop, have cast a wide, multi-State and multi-jurisdictional net over the alleged illegal activities of the Cory Harris et. al. conspiracy. Their arrests should serve as a stark reminder that the long arm of the law can easily extend into other States when necessary and remove from society those who don't deserve to inhabit it.”
NYPD Commissioner Bratton stated: “These arrests and indictments are the result of our coordinated efforts to stop the sale and distribution of illegal firearms and narcotics. I want to commend the NYPD investigators involved in this case, the U.S. Attorney’s Office, Southern District, and our many law enforcement partners for their cooperation in this case and the resulting arrests.”
U.S. Marshal Michael Greco stated: “My office is completely committed to supporting our local, city, state and federal partners in apprehending the most dangerous criminals on our streets. The continued cooperation of our agencies is paramount to the success of these complex missions. I’m proud to be able to combine our resources and collaborate efforts in order to achieve our common goal.”
Vermont Sate Police Director Thomas L’Esperance stated: “I appreciate the collaboration between the Vermont Drug Task Force, NYPD, The U.S. Attorney’s Offices, ATF and the United Sates Marshals Service. This is a great example of the positive results that are achieved when law enforcement agencies and prosecutors work cooperatively across jurisdictional lines and all levels of government to ensure the safety of our communities.”
As alleged in the Indictment unsealed yesterday in Manhattan federal court and statements made at yesterday’s court proceedings[1]:
From at least 2014 up to and including 2015, CORY HARRIS, 31, DANIEL HERRING, 25, FRANK JENKINS, JR., 21, JARON LANGHORNE, 20, MITCHELL MALDONADO, 24, RAHEEM MALDONADO, 23, UNIQUE NEWELL, 22, ADAM PHILLIPS, 32, KRYSTAL PINSONNEAULT, 32, ANDREW ROBLES, 21, MIGUEL ROBLES, 31, and LUIS ZABALA, 31, conspired to sell controlled substances, including crack cocaine and heroin, in Vermont and elsewhere. Specifically, the Indictment charges (1) HERRING, JENKINS, LANGHORNE, MITCHELL MALDONADO, NEWELL, ANDREW ROBLES, and ZABALA with conspiring to distribute at least 280 grams of crack cocaine, and at least 100 grams of heroin; (2) HARRIS, RAHEEM MALDONADO, and MIGUEL ROBLES with conspiring to distribute at least 100 grams of heroin; (3) PHILLIPS with conspiring to distribute at least 280 grams of crack cocaine; and (4) PINSONNEAULT with conspiring to distribute mixtures and substances containing crack cocaine and heroin. HARRIS, JENKINS, LANGHORNE, MITCHELL MALDONADO, NEWELL, ANDREW ROBLES, and ZABALA are charged with using and possessing firearms between 2014 and 2015, in furtherance of the narcotics trafficking conspiracy. HARRIS is also charged with using firearms in April 2012 in furtherance of possession with intent to distribute marijuana.
During the time period charged in the Indictment, members of the conspiracy obtained crack and heroin from locations in New York City, including Manhattan and the Bronx, and then transported the crack and heroin to Vermont, for distribution in and around Bennington, Vermont. The members of the conspiracy sold crack and heroin from private apartments and certain motels in the Bennington area. Many of the members of the conspiracy used firearms in connection with their narcotics trafficking.
Members of the conspiracy also provided heroin, crack, and other controlled substances to certain women in and around Bennington, who were addicted, or became addicted, to those controlled substances. These women assisted members of the conspiracy with the transportation, storage, and distribution of crack and heroin in exchange for additional controlled substances, or in exchange for cash that the women used, in part, to purchase additional controlled substances.
* * *
Apart from PINSONNEAULT, all of the defendants face mandatory minimum prison terms ranging from five years to 35 years, and maximum prison terms ranging from 40 years to life. PINSONNEAULT faces no mandatory term of imprisonment and faces a maximum term of 20 years in prison.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentences imposed on the defendants will be determined by the Court.
A chart containing the names of the defendants who were arrested today, and the charges and maximum penalties they face, is attached.
Mr. Bharara praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York City Police Department, the United States Marshals Service, the Vermont State Police, and the Bennington Police Department.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Hadassa Waxman and Michael Gerber are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
CHARGE(S)
DEFENDANTS
MAXIMUM PENALTIES
Conspiracy to distribute and possess with intent to distribute 280 grams and more of crack cocaine, and 100 grams and more of heroin.
DANIEL HERRING, FRANK JENKINS JR., JARON LANGHORNE, MITCHELL MADONADO, UNIQUE NEWELL, ANDREW ROBLES and LUIS ZABALA
Life in prison
Mandatory minimum: 10 years in prison
Conspiracy to distribute and possess with intent to distribute 100 grams and more of heroin
CORY HARRIS, RAHEEM MALDONADO and MIGUEL ROBLES.
Life in prison
Mandatory minimum: five years in prison
Conspiracy to distribute and possess with intent to distribute 280 grams and more of crack cocaine
ADAM PHILLIPS
Life in prison
Mandatory minimum: 10 years in prison
Conspiracy to distribute and possess with intent to distribute crack cocaine and heroin
KRYSTAL PINSONNEAULT
20 years in prison
Possession of a firearm in furtherance of a narcotics trafficking offense
CORY HARRIS (2 counts), FRANK JENKINS JR., JARON LANGHORNE, MITCHELL MADONADO, UNIQUE NEWELL, ANDREW ROBLES and LUIS ZABALA
Life in prison
Mandatory minimum: five 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 description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
New York City Employee and Nine Others Charged in Manhattan Federal Court with Food Stamp Bribery SchemeRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, Mark G. Peters, the Commissioner of the New York City Department of Investigation (“DOI”), and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of HARRY FLETCHER, an employee of the New York City Human Resources Administration (“HRA”), along with STANLEY HILL, KAREEM WASHINGTON, JAMES FORD, KENNETH WILLIAMSON, MARSHA RALPH, JASON BRYCE, KEVIN WHYTE, YESENIA VELAZQUEZ, and JOSEPH BULL, in connection with a food stamp fraud scheme. The Complaint alleges that FLETCHER, an HRA Eligibility Specialist whose job involved evaluating the issuance of Supplemental Nutrition Assistance Program (“SNAP”) benefits for New York City residents, solicited and accepted cash payments in exchange for issuing SNAP benefits to numerous individuals, including the remaining charged defendants. The defendants were arrested today and presented in Manhattan federal court before U.S. Magistrate Debra Freeman.
Manhattan U.S. Attorney Preet Bharara said: “Harry Fletcher allegedly stole directly from the tables of some of the most vulnerable of our citizens, pocketing and misusing federal aid resources meant to help the less fortunate New York City residents feed their families.”
DOI Commissioner Peters said: “City workers who steal public funds undercut the effectiveness of government and its ability to help some of the neediest New Yorkers. This is fraud at its most shameful: HRA employees who used their public positions to enrich themselves and their associates, rather than the eligible individuals who willingly and diligently went through the vetting process, according to the charges. DOI will continue to work with its federal, state and City law enforcement partners to make arrests in these types of crimes.”
FBI Assistant Director-in-Charge Rodriquez said: “As alleged today, public funds were allocated to ineligible recipients of social service benefit programs. In a scheme to divert this money to those who did not qualify for assistance, those charged breached the trust of the public and will be held accountable for their actions.”
According to the allegations in the Complaint unsealed today in Manhattan federal court:[1]
The New York City Human Resources administration 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, providing food stamps to low-income families and individuals. Although the SNAP benefits program is administered locally through HRA, it is funded entirely by the federal government. To apply for SNAP benefits, an applicant must complete and sign an application form listing, among other things, the applicant’s income and financial assets. HRA Eligibility Specialists such as FLETCHER are supposed to interview SNAP program applicants and review applicant documentation in order to determine if the applicant is eligible to receive SNAP benefits.
Beginning in 2009, FLETCHER approached two landlords, who are referred to in the Complaint as CW-1 and CW-2, and who have pled guilty and are cooperating with the Government, and offered to provide CW-1 and CW-2 with monthly SNAP benefits in return for reoccurring payments of hundreds of dollars in bribes. CW-1 and CW-2 agreed to pay the bribes and, as a result, received tens of thousands of dollars of SNAP benefits for which they were not eligible from 2009 through 2015. CW-1 and CW-2 then recruited other individuals to take part in the scheme – including, but not limited to, the other defendants charged in the complaint – each of whom obtained monthly SNAP benefits arranged by FLETCHER, and without regard to whether the applicant qualified for such benefits, in return for continual bribes. In total, FLETCHER accepted more than $20,000 in bribes for improperly approving over $240,000 in SNAP benefits to CW-1, CW-2 and the remaining defendants. The applicants bribing FLETCHER were ineligible for SNAP benefits due to their income and/or the fact that they did not reside in New York City and thus were not eligible for New York City social service programs.
* * *
FLETCHER, 44, of the Bronx, New York, is charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison; one count of solicitation and receipt of bribes, which carries a maximum sentence of 10 years in prison; one count of honest services fraud, which carries a maximum sentence of 20 years in prison; and one count of theft of government funds, which carries a maximum sentence of 10 years in prison.
The following defendants were each charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison and one count of theft of government funds, which carries a maximum sentence of 10 years in prison:
- HILL, 48, Walkill, New York,
- WASHINGTON, 34, White Plains, New York
- FORD, 52, Jamaica, New York
- WILLIAMSON, 51, the Bronx, New York
- RALPH, 38, New Rochelle, New York
- BRYCE, 42, New Rochelle, New York
- WHYTE, 30, Wappingers Falls, New York
- VELAZQUEZ, 37, the Bronx, New York
- BULL, 39, the Bronx, New York
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 investigative work of the DOI and the FBI in the investigation. He also expressed his thanks to the Bronx County District Attorney’s Office for its assistance in the investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorney Robert L. Boone is in charge of the prosecution.
The charges contained in the Complaints 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 City Employee and Nine Others Charged in Manhattan Federal Court with Food Stamp Bribery SchemeRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, Mark G. Peters, the Commissioner of the New York City Department of Investigation (“DOI”), and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of HARRY FLETCHER, an employee of the New York City Human Resources Administration (“HRA”), along with STANLEY HILL, KAREEM WASHINGTON, JAMES FORD, KENNETH WILLIAMSON, MARSHA RALPH, JASON BRYCE, KEVIN WHYTE, YESENIA VELAZQUEZ, and JOSEPH BULL, in connection with a food stamp fraud scheme. The Complaint alleges that FLETCHER, an HRA Eligibility Specialist whose job involved evaluating the issuance of Supplemental Nutrition Assistance Program (“SNAP”) benefits for New York City residents, solicited and accepted cash payments in exchange for issuing SNAP benefits to numerous individuals, including the remaining charged defendants. The defendants were arrested today and presented in Manhattan federal court before U.S. Magistrate Debra Freeman.
Manhattan U.S. Attorney Preet Bharara said: “Harry Fletcher allegedly stole directly from the tables of some of the most vulnerable of our citizens, pocketing and misusing federal aid resources meant to help the less fortunate New York City residents feed their families.”
DOI Commissioner Peters said: “City workers who steal public funds undercut the effectiveness of government and its ability to help some of the neediest New Yorkers. This is fraud at its most shameful: HRA employees who used their public positions to enrich themselves and their associates, rather than the eligible individuals who willingly and diligently went through the vetting process, according to the charges. DOI will continue to work with its federal, state and City law enforcement partners to make arrests in these types of crimes.”
FBI Assistant Director-in-Charge Rodriquez said: “As alleged today, public funds were allocated to ineligible recipients of social service benefit programs. In a scheme to divert this money to those who did not qualify for assistance, those charged breached the trust of the public and will be held accountable for their actions.”
According to the allegations in the Complaint unsealed today in Manhattan federal court:[1]
The New York City Human Resources Administration 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, providing food stamps to low-income families and individuals. Although the SNAP benefits program is administered locally through HRA, it is funded entirely by the federal government. To apply for SNAP benefits, an applicant must complete and sign an application form listing, among other things, the applicant’s income and financial assets. HRA Eligibility Specialists such as FLETCHER are supposed to interview SNAP program applicants and review applicant documentation in order to determine if the applicant is eligible to receive SNAP benefits.
Beginning in 2009, FLETCHER approached two landlords, who are referred to in the Complaint as CW-1 and CW-2, and who have pled guilty and are cooperating with the Government, and offered to provide CW-1 and CW-2 with monthly SNAP benefits in return for reoccurring payments of hundreds of dollars in bribes. CW-1 and CW-2 agreed to pay the bribes and, as a result, received tens of thousands of dollars of SNAP benefits for which they were not eligible from 2009 through 2015. CW-1 and CW-2 then recruited other individuals to take part in the scheme – including, but not limited to, the other defendants charged in the complaint – each of whom obtained monthly SNAP benefits arranged by FLETCHER, and without regard to whether the applicant qualified for such benefits, in return for continual bribes. In total, FLETCHER accepted more than $20,000 in bribes for improperly approving over $240,000 in SNAP benefits to CW-1, CW-2 and the remaining defendants. The applicants bribing FLETCHER were ineligible for SNAP benefits due to their income and/or the fact that they did not reside in New York City and thus were not eligible for New York City social service programs.
* * *
FLETCHER, 44, of the Bronx, New York, is charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison; one count of solicitation and receipt of bribes, which carries a maximum sentence of 10 years in prison; one count of honest services fraud, which carries a maximum sentence of 20 years in prison; and one count of theft of government funds, which carries a maximum sentence of 10 years in prison.
The following defendants were each charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison, and one count of theft of government funds, which carries a maximum sentence of 10 years in prison:
- HILL, 48, Walkill, New York,
- WASHINGTON, 34, White Plains, New York
- FORD, 52, Jamaica, New York
- WILLIAMSON, 51, the Bronx, New York
- RALPH, 38, New Rochelle, New York
- BRYCE, 42, New Rochelle, New York
- WHYTE, 30, Wappingers Falls, New York
- VELAZQUEZ, 37, the Bronx, New York
- BULL, 39, the Bronx, New York
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 investigative work of the DOI and the FBI in the investigation. He also expressed his thanks to the Bronx County District Attorney’s Office for its assistance in the investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorney Robert L. Boone is in charge of the prosecution.
The charges contained in the Complaints 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.
Former Amtrak Police Officer Pleads Guilty in Manhattan Federal Court to Embezzlement of Union FundsRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced that ERIC GIVENS, a former police officer with the National Railroad Passenger Corporation (“Amtrak”), and the former treasurer of the national union for Amtrak police officers, pled guilty yesterday in Manhattan federal court to embezzlement of union funds. GIVENS, who was arrested last summer, entered his plea before U.S. District Judge Analisa Torres.
According to the Complaint, Indictment, and plea proceeding:
At the time of his arrest, GIVENS had been employed as a police officer with Amtrak since May 1997, and was most recently assigned to Penn Station, in New York, New York. GIVENS served as the elected treasurer of the Amtrak Police Lodge 189 Labor Committee (the “Labor Committee”), the national union for Amtrak police officers, from 2003 through January 2010. During the same period, and continuing until November 2013, GIVENS also served as the elected treasurer of Amtrak Police Lodge 189 Inc. (the “Lodge”), a fraternal organization affiliated with the Labor Committee.
Starting in at least 2008, GIVENS improperly took more than $100,000 in total from the Labor Committee and Lodge by fraudulently charging personal expenses to the Labor Committee and Lodge and by withdrawing cash for his own purposes, and took steps to hide what he had done. During this period, GIVENS used the debit card of the Labor Committee to pay for, among other things, gasoline and food, and used the debit card of the Lodge to pay for, among other things, travel, hotels in multiple cities, and entertainment in New York and New Jersey. GIVENS also withdrew thousands of dollars in cash from Labor Committee and Lodge bank accounts.
* * *
GIVENS, 52, of East Stroudsburg, Pennsylvania, pled guilty to embezzling union funds. He faces a maximum sentence of five years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing has been scheduled for September 24, 2015, at 4:00 p.m., before U.S. District Judge Analisa Torres.
Mr. Bharara praised the outstanding work of the U.S. Department of Labor’s Office of Labor-Management Standards and its Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations. Mr. Bharara also thanked the Amtrak Police Department’s Office of Internal Affairs for its assistance.
The case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorney Daniel C. Richenthal is in charge of the prosecution.