Eastern District of New York

Breon Peace, the United States Attorney for the Eastern District of New York, and Anne Millgram, Administrator of the U.S. Drug Enforcement Administration (DEA), announced today that the online mental healthcare company Cerebral, Inc. (Cerebral) has entered into a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Eastern District of New York (the Office), and has agreed to pay more than $3.6 million for engaging in practices that encouraged the unauthorized distribution of controlled substances from 2019 to 2022.  An additional fine against Cerebral has been deferred in light of the company’s current financial condition.

Under the terms of the NPA, Cerebral agreed to forfeit $3,652,000 to the United States.  The NPA requires Cerebral to continue to cooperate with and provide information to the United States for at least the 30-month term of the agreement.  The NPA also requires Cerebral to pay a fine of $2,922,000, which the Office has determined that Cerebral does not currently have the ability to pay; as a result, it will be deferred for the term of the NPA, and waived at the expiration of the NPA if Cerebral is in compliance with the NPA and unless the Office determines that Cerebral’s financial performance has changed such that payment of all or a portion of the fine would be warranted.  In the event that Cerebral violates the NPA, the Office may prosecute Cerebral for any of the conduct that gave rise to the NPA and any newly discovered criminal activity.

“People seeking care for their mental health conditions should receive high-quality care that is not motivated or driven by greed,” stated United States Attorney Peace.  “Cerebral sought to increase its bottom line by increasing the prescription of drugs, including controlled substances that can be highly addictive and dangerous.  Since my Office’s investigation came to Cerebral’s attention, the company has cooperated fully and taken significant steps to remediate the institutional failures that allowed this situation to occur in the first place.  This resolution ensures that Cerebral will be financially accountable for its unacceptable conduct and serves as a reminder to the healthcare industry that my Office is committed to ensuring patient safety and protecting the public from business practices like those of Cerebral.”

“Today’s settlement holds Cerebral responsible for their failure to protect patients from the harms caused by the unnecessary or overprescribing of potentially-addictive ADHD medications,” said DEA Administrator Anne Milgram. “Cerebral’s exploitation of telemedicine flexibilities deceived patients who were legitimately seeking medical care, putting them at risk in exchange for profit. DEA remains committed to telemedicine accessibility that supports the health of all patients while also ensuring that telemedicine companies and practitioners prioritize patient health and safety above all else.”

Cerebral’s Operations

Cerebral is an online mental health company that operates primarily as a direct-to-consumer business.  Since October 2019, Cerebral has promoted or sold subscription services offering online health care treatment, including mental health treatment and medication management services, through its online platforms, to hundreds of thousands of patients struggling with depression, anxiety and other mental health issues.  Cerebral generated revenue by offering tiered monthly subscription plans to its patients.  Certain of Cerebral’s subscription plans offered patients the ability to obtain medication from Cerebral’s treatment providers. 

Attention-Deficit/Hyperactivity Disorder (ADHD) was one of the mental health conditions Cerebral offered treatment for.  Cerebral first launched its ADHD line of service in or around February 2021 and began offering ADHD treatment services to the public across the United States, rolling services out on a state-by-state basis.  Cerebral’s ADHD services were perceived to be a profitable line of business with the potential to increase patient retention at the company.

Beginning in October 2020, Cerebral expanded its medication offerings to include controlled substances.  In addition, beginning in February 2021, Cerebral permitted its treatment providers to prescribe stimulant medication, such as Adderall, to its patients.  Prescription stimulants, such as Adderall, are Schedule II drugs under the Controlled Substances Act.

Cerebral’s Prescription Practices

Between February 2021 and October 2022, Cerebral instituted internal measures to increase the prescriptions of medications with the goal of boosting patient retention and, by extension, Cerebral’s revenue.

Cerebral monitored the rates at which its providers prescribed medications, including controlled substances, primarily through two metrics which measured: (1) the number of drug prescriptions issued to patients who enrolled in a medication management subscription plan after their first 30-minute telehealth visit (the Initial Visit Rx Rate); and (2) the number of stimulant prescriptions prescribed to patients diagnosed with ADHD who had no comorbidities (the ADHD Stimulant Rx Metric).  Cerebral did not consult with any members of its clinical advisory board—which included multiple experts in the fields of psychology and psychiatry—prior to implementing targeted campaigns to improve both metrics.

Between May 2021 and May 2022, Cerebral sought to increase the Initial Visit Rx Rate to 95%. Cerebral recognized inherent problems with the Initial Visit Rx Rate, including the fact that the metric did not take into account whether patients were diagnosed with conditions where drug prescriptions were clinically appropriate, and that the 95% target goal was not based on any established data or benchmark in medical or scientific literature.  Cerebral also recognized that there were a variety of legitimate reasons why its treatment providers would not prescribe drugs to patients immediately after the patient’s first visit, and that the Initial Visit Rx Rate could perversely incentivize its treatment providers into prescribing medication that was not necessary. Nonetheless, the company reviewed treatment providers’ performance using the Initial Visit Rx Rate and engaged in coordinated efforts to increase the Initial Visit Rx Rate, including by implementing a bonus structure that awarded bonuses to supervisory individuals if they increased the Initial Visit Rx metric among their supervisees; and conducting regular reviews of providers’ individual Initial Visit Rx Rate.  Despite the Company’s efforts to increase its performance on the Initial Visit Rx metric, it did not improve after December 2021. Cerebral ceased using the Initial Visit metric in or about May 2022, after Cerebral’s former Chief Executive Officer was terminated.

Beginning in at least October 2021, Cerebral also took initiatives to measure the percentage of controlled substances prescriptions issued to patients who had been diagnosed with ADHD without comorbidities.  Cerebral subsequently developed an internal plan to increase the ADHD Stimulant Rx Metric to 100% or “near 100%” and regularly audited its providers’ ADHD prescription practices.  Cerebral also considered disciplinary measures, such as issuing “flags” and “strikes,” for individuals who the company considered to be underperformers for this metric.  Cerebral instituted these measures despite the fact that certain of its treatment providers had expressed concerns to Cerebral’s management about drug diversion risks with ADHD patients.  Cerebral ceased all use of the ADHD Stimulant Rx Metric by October 2022.

In addition to the above tactics, Cerebral also provided financial payments that incentivized its providers to issue stimulant medication for ADHD patients.  Specifically, prior to May 2022, Cerebral paid its providers an additional $10 to conduct required pre-prescription checks of Prescription Drug Monitoring Programs (PDMP)/Prescription Monitoring Program (PMP) databases.  Cerebral did not compensate its providers for conducting PDMP/PMP checks for patients with any other medical diagnoses or patient needs.

Cerebral’s Diversion Risks

According to Cerebral’s admissions, Cerebral also did not maintain effective controls against drug diversion, even when risks of drug diversion were elevated to or acknowledged by its management.  For example, Cerebral had thousands of duplicate patient accounts (i.e., multiple accounts that belonged to the same individual) that were not fully addressed internally until at least early 2022.  As a result of the failure to timely identify and remove duplicate accounts, at least one patient was able to obtain stimulant prescriptions from multiple providers at Cerebral, even after having been previously flagged as having misused stimulants.  As another example, prior to 2022, Cerebral also permitted drug-seeking patients who were not prescribed controlled substances in the first instance to seek reassignment to different providers.  

The Non-Prosecution Agreement

Cerebral has agreed to forfeit $3,652,000 to the United States, which represent the amount of proceeds that could be reasonably attributed to the monthly increase in ADHD revenue generated by patients who were diagnosed with ADHD and subsequently prescribed stimulant prescriptions. Cerebral has also agreed to pay a fine of $2,922,000, which the Office has determined that Cerebral does not currently have the ability to pay; as detailed above, it will be deferred for the term of the NPA.

The Office reached this resolution with Cerebral after carefully weighing all of the factors relevant to the appropriate corporate resolution.  The NPA recognizes that, although Cerebral’s serious misconduct was reported to the Office before Cerebral self-disclosed it, Cerebral voluntarily took a number of substantial remedial measures beginning in May 2022 to mitigate and correct the effects of the practices described above, including terminating its former Chief Executive Officer, stopping all use of the prescription metrics described above, and improving its compliance measures.  In October 2022, Cerebral voluntarily stopped prescribing controlled substances to all of its patients, and has agreed not to prescribe controlled substances in the future. Cerebral also has no prior criminal history in the United States.  Furthermore, Cerebral has cooperated extensively with the Office in its investigation, including through detailed disclosures, and has agreed to continue to cooperate fully with the Office.

The agreement announced today is the result of an investigation conducted by the Drug Enforcement Administration, New York Division, Buffalo Diversion Group, Tactical Diversion Squad.  The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section and Business and Securities Fraud Section.  Assistant United States  Attorneys Genny Ngai, Gillian Kassner and Miranda Gonzalez are in charge of the prosecution, with the assistance of the Office’s former Paralegal Specialists Sophia Cronin, Riley Martinez and Jordi Martinez.

The Defendant:

CEREBRAL, INC.
Claymont, Delaware

Earlier today in federal court in Brooklyn, Vadim Yermolenko, a national of both the U.S. and Russia, pleaded guilty to conspiracy to violate the Export Control Reform Act, conspiracy to commit bank fraud, and conspiracy to defraud the United States for his role in a transnational procurement and money laundering network that sought to acquire sensitive dual-use electronics for Russian military and intelligence services.  The proceeding was held before United States District Judge Hector Gonzalez.  When sentenced, Yermolenko faces up to 30 years in prison.

Merrick B. Garland, United States Attorney General, Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), Jonathan Carson, Special Agent in Charge, New York Field Office of the Office of Export Enforcement, Bureau of Industry and Security (BIS), US Department of Commerce (DOC), and Thomas M. Fattorusso, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI) announced the plea.

“This defendant joins the nearly two dozen other criminals that our Task Force KleptoCapture has brought to justice in American courtrooms over the past two and a half years for enabling Russia’s military aggression,” said Attorney General Merrick B. Garland. “This defendant admitted to playing a central role in a now-disrupted scheme with Russian intelligence services to smuggle sniper rifle ammunition and U.S. military grade equipment into Russia. The Justice Department will never stop working to aggressively disrupt and prosecute both the criminal networks and the individuals responsible for bolstering the Russian war machine.”

“To facilitate the Russian war machine, the defendant played a critical role in exporting sensitive, dual-use technologies to Russia, facilitating shipping and the movement of millions of dollars through U.S. financial institutions,” stated United States Attorney Peace.  “This plea highlights my Office and our law enforcement partners continued commitment to use all tools available to prosecute those who unlawfully procure U.S. technology to send to Russia.”

Mr. Peace thanked the U.S. Customs and Border Protection, the Department of Justice’s Office of International Affairs, and the Estonian authorities for their valuable assistance.

“As he admitted today, Vadim Yermolenko took part in a conspiracy to evade U.S. sanctions and assist the Russian war machine by unlawfully purchasing and exporting highly sensitive, export controlled electronic components. The FBI is determined to fulfill our mission of protecting the security of our nation. Any individual attempting to evade our national security laws will be held accountable in the criminal justice system,” stated FBI Assistant Director in Charge Dennehy.

“Yermolenko and his illicit network supported Russian intelligence services in attempting to procure sensitive American technology,” said Jonathan Carson, Special Agent in Charge, New York Field Office of the Office of Export Enforcement, Bureau of Industry and Security, US Department of Commerce. “You can add this guilty plea to the list of the many enforcement actions we’ve brought since the start of the Strike Force to target and dismantle Russian procurement networks.”

“Whether it was from misplaced foreign allegiance or pure greed, Yermolenko aided Russia’s military and intelligence agencies in circumventing policies meant to keep the Russian ‘war machine’ in check.  Through a sophisticated network of shell companies and bank accounts, he laundered more than twelve million dollars and purchased highly sensitive military equipment for Russia.  Law enforcement worked in close collaboration to share information and resources, ensuring that Yermolenko and his associates are no longer in operation, making the world safer,” said Thomas M. Fattorusso, Special Agent in Charge of IRS-CI New York.

As alleged in court documents, the defendant was affiliated with Serniya Engineering (Serniya) and Sertal LLC (Sertal), Moscow-based companies that operate under the direction of Russian intelligence services to procure advanced electronics and sophisticated testing equipment for Russia’s military industrial complex and research and development sector.  Serniya and Sertal operated a vast network of shell companies and bank accounts throughout the world, including in the United States, that were used in furtherance of the scheme to conceal the involvement of the Russian government and the true Russian end users of U.S.-origin equipment.

The defendant and his co-conspirators unlawfully purchased and exported highly sensitive, export controlled electronic components, some of which can be used in the development of nuclear and hypersonic weapons, quantum computing, and other military applications. Following Russia’s invasion of Ukraine in February 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the DOC BIS levied and imposed additional export restrictions on Serniya, Sertal, and several individuals and companies involved in the scheme, calling them “instrumental to the Russian Federation’s war machine.”

Sertal was licensed to conduct highly sensitive and classified procurement activities by Russia’s Federal Security Service (FSB), Russia’s principal security agency and the main successor agency to the Soviet Union’s KGB.  The Serniya network’s Russian clients included State Corporation Rostec, the state-owned defense conglomerate; State Atomic Energy Corporation Rosatom; the Ministry of Defense; the Foreign Intelligence Service; and various components of the FSB, including the Department of Military Counterintelligence and the Directorate for Scientific and Technological Intelligence, commonly known as “Directorate T.”

To carry out the scheme, the defendant helped set up numerous shell companies and dozens of bank accounts in the U.S. to illicitly move money and export-controlled goods. During the period charged in the indictment, more than $12 million passed through accounts owned or controlled by the defendant.  These funds were used in part to purchase sensitive equipment used in radar, surveillance, and military research and development.  In one instance, money from one of the defendant’s accounts was used to purchase export-controlled sniper bullets, which were intercepted in Estonia before they could be smuggled into Russia. 

Co-defendant Alexey Brayman previously pled guilty to conspiracy to defraud the United States and is awaiting sentence.  On July 29, 2024, Konoshchenok was removed from the United States as part of a prisoner exchange negotiated between the United States and Russia.  Defendants Boris Livshits, Alexey Ippolitov, Svetlana Skvortsova, and Yevgeniy Grinin remain at large.

This prosecution is coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force.  Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the U.S. has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.  The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States  Attorneys Artie McConnell, Andrew D. Reich, Matthew Skurnik, and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section, are in charge of the prosecution, along with assistance from Litigation Analysts Emma Tavangari and Mary Clare McMahon.

The Defendant:

VADIM YERMOLENKO
AGE: 43
Upper Saddle River, New Jersey

Other Defendants:

ALEXEY IPPOLITOV
AGE: 58
Moscow, Russia

YEVGENIY GRININ age: 46
Moscow, Russia

BORIS LIVSHITS
Age: 54
St. Petersburg, Russia

SVETLANA SKVORTSOVA
AGE: 43
Moscow, Russia

VADIM KONOSHCHENOK
AGE: 50
Tallin, Estonia

ALEXEY BRAYMAN
AGE: 37
Merrimack, New Hampshire

E.D.N.Y. Docket No. 22-CR-409 (S-3) (HG)

NIKOLAOS BOGONIKOLOS
AGE: 60
Athens, Greece

E.D.N.Y. Docket No. 23-MJ-412 

Vadim Yermolenko, 43, a dual U.S.-Russian national and resident of New Jersey, pleaded guilty to conspiracy to violate the Export Control Reform Act, conspiracy to commit bank fraud, and conspiracy to defraud the United States for his role in a transnational procurement and money laundering network that sought to acquire sensitive dual-use electronics for Russian military and intelligence services.

“This defendant joins the nearly two dozen other criminals that our Task Force KleptoCapture has brought to justice in American courtrooms over the past two and a half years for enabling Russia’s military aggression,” said Attorney General Merrick B. Garland. “This defendant admitted to playing a central role in a now-disrupted scheme with Russian intelligence services to smuggle sniper rifle ammunition and U.S. military grade equipment into Russia. The Justice Department will never stop working to aggressively disrupt and prosecute both the criminal networks and the individuals responsible for bolstering the Russian war machine.”

“The illegal export of sensitive, dual-use technologies in support of Russia’s war effort poses a significant threat to the United States and its allies and must not be tolerated,” said FBI Director Christopher Wray. “The defendant in this case played a key role in exporting U.S. technology that in the hands of our adversaries could pose great danger to our national security. The FBI and its partners will continue to focus on protecting strategic innovation at home and hold accountable anyone who facilitates illegal transfers to hostile nations like Russia.”

“To facilitate the Russian war machine, the defendant played a critical role in exporting sensitive, dual-use technologies to Russia, facilitating shipping and the movement of millions of dollars through U.S. financial institutions,” said U.S. Attorney Breon Peace for the Eastern District of New York. “This plea highlights my Office and our law enforcement partners continued commitment to use all tools available to prosecute those who unlawfully procure U.S. technology to send to Russia.”

“Today’s guilty plea is just the latest in a series of actions taken by the Commerce Department and our law enforcement partners to hold accountable those who illegally procure American technology for the Russian war machine,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod. “As this case demonstrates, we are continuing to focus our efforts on dismantling every node of these illicit procurement networks.”

According to court documents, the defendant was affiliated with Serniya Engineering and Sertal LLC, Moscow-based companies that operate under the direction of Russian intelligence services to procure advanced electronics and sophisticated testing equipment for Russia’s military industrial complex and research and development sector. Serniya and Sertal operated a vast network of shell companies and bank accounts throughout the world, including the United States, that were used in furtherance of the scheme to conceal the involvement of the Russian government and the true Russian end users of U.S.-origin equipment.

The defendant and his co-conspirators unlawfully purchased and exported highly sensitive, export controlled electronic components, some of which can be used in the development of nuclear and hypersonic weapons, quantum computing and other military applications. Following Russia’s invasion of Ukraine in February 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce (DOC) Bureau of Industry and Security (BIS) levied sanctions and imposed additional export restrictions on Serniya, Sertal, and several individuals and companies used in the scheme, calling them “instrumental to the Russian Federation’s war machine.”

Sertal was licensed to conduct highly sensitive and classified procurement activities by Russia’s Federal Security Service (FSB), Russia’s principal security agency and the main successor agency to the Soviet Union’s KGB. The Serniya network’s Russian clients included State Corporation Rostec, the state-owned defense conglomerate; State Atomic Energy Corporation Rosatom (Rosatom); the Ministry of Defense; the Foreign Intelligence Service (SVR); and various components of the FSB, including the Department of Military Counterintelligence and the Directorate for Scientific and Technological Intelligence, commonly known as “Directorate T.”

To carry out the scheme, the defendant helped set up numerous shell companies and dozens of bank accounts in the U.S. to illicitly move money and export-controlled goods. During the period charged in the indictment, more than $12 million passed through accounts owned or controlled by the defendant. These funds were used in part to purchase sensitive equipment used in radar, surveillance and military research and development. In one instance, money from one of the defendant’s accounts was used to purchase export-controlled sniper bullets, which were intercepted in Estonia before they could be smuggled into Russia.

Co-defendant Alexey Brayman previously pleaded guilty to conspiracy to defraud the United States and is awaiting sentence. The case against co-defendant Vadim Konoshchenok, a suspected FSB operative, was dismissed after Konoshchenok was removed from the United States as part of a prisoner exchange negotiated between the United States and Russia. Defendant Nikolaos Bogonikolos’ case remains pending. Defendants Boris Livshits, Alexey Ippolitov, Svetlana Skvortsova, and Yevgeniy Grinin remain at large.        

The FBI, BIS, and IRS are investigating the case.

The U.S. Customs and Border Protection, Department of Justice’s Office of International Affairs, and Estonian authorities provided valuable assistance.

Assistant U.S. Attorneys Artie McConnell, Andrew D. Reich, and Matthew Skurnik for the Eastern District of New York are prosecuting the case, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

Earlier today, at the federal courthouse in Brooklyn, Michael Kent was sentenced by United States District Judge Ann M. Donnelly to nine years in prison for his role in recruiting sham patients, paying off complicit pharmacists and illegally distributing oxycodone in a Brooklyn-based narcotics conspiracy.  Kent pleaded guilty to conspiring to distribute and to possess with intent to distribute oxycodone in September 2023. Kent also paid $635,875 in forfeiture in advance of his sentencing.

Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, Special Agent in Charge, U.S. Drug Enforcement Administration, New York Division (DEA), Naomi Gruchacz, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) and Thomas M. Fattorusso, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the sentence. 

“The opioid epidemic has destroyed countless families and communities in our district, New York City and across the country,” stated United States Attorney Peace.  “The proliferation of pill mill clinics, like the medical office involved in this case, significantly contributes to the opioid crisis. Today’s sentencing holds the defendant accountable for his role in callously diverting highly potent and addictive drugs from medical offices to the streets of New York.”

Mr. Peace also thanked the New York City Department of Investigation, the New York City Police Department and the New York State Department of Health, Bureau of Narcotic Enforcement, for their assistance on the case.

“Michael Kent knew the harmful effects of his pill mill scheme, and knowingly jeopardize the health and safety of those individuals he profited from, all while exacerbating the opioid crisis.  Today’s sentencing sends a clear message to those individuals putting profits over human lives and looking to capitalize from the illegal sale of addictive opioids” stated DEA Special Agent in Charge Tarentino.  “The DEA remains committed to fighting this opioid crisis head on and those who exploit it.”     

“The defendant in this case was involved in a scheme to steer controlled substances to the street, which is especially egregious given the ongoing opioid epidemic,” stated HHS-OIG Special Agent in Charge Gruchacz.  “HHS-OIG will continue to work with our law enforcement partners to ensure individuals involved in fraud schemes that exploit federal health care programs and threaten patient safety are held accountable.”

“Kent created an extravagant, multi-layered scheme in order to earn a simple title—drug dealer.  He had no regard for the welfare of those buying the oxy as long as he lined his pockets, which were fat enough to buy three buildings in New York City.  Unlucky for him, this elaborate scam was not too tricky for law enforcement to figure out, and he is now sentenced to time behind bars,” stated IRS-CI Special Agent in Charge Fattorusso.

As set forth in the indictment and publicly filed documents, between December 2018 and October 2022, Kent and his co-defendants operated a drug distribution ring out of a medical practice on Linden Boulevard in East New York, Brooklyn.  Together, they unlawfully distributed more than 11,000 prescriptions for oxycodone, amounting to more than 1.2 million oxycodone pills, which carry a street value of at least $24 million.  They made millions of dollars from the scheme.  Nine defendants have been charged in this matter, including one doctor and four Brooklyn-based pharmacists.  In addition to Kent, five co-defendants have pleaded guilty.  Three co-defendants are scheduled for trial in January 2025.

As part of his role in the scheme, Kent recruited approximately 45 sham patients who were prescribed more than six kilograms of medically unnecessary oxycodone over a four-year period.  Kent paid these individuals for the use of their names, picked up the oxycodone from pharmacists, whom he paid off, and sold the oxycodone to dealers for distribution on the street.  Kent then laundered the drug proceeds through a shell company he created called “Michael’s Cleaning Service,” using the money to buy three buildings in New York City.  When he was arrested in October 2022, law enforcement officers recovered two loaded firearms from his home and seized thousands of dollars in cash.

Oxycodone is a highly addictive opioid used to treat severe and chronic pain conditions.  Every year, millions of Americans abuse oxycodone, and the misuse of prescription painkillers like oxycodone leads to hundreds of thousands of annual emergency room visits.  More than 14,000 Americans died from prescription opioid overdoses in 2022, according to the Centers for Disease Control and Prevention (CDC).  Oxycodone prescriptions have enormous cash value to drug dealers.  For example, one oxycodone 30 mg tablet, which was the dosage prescribed in this case, can be sold by dealers on the street for between $20 and $30 in New York City.                       

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Laura Zuckerwise, Victor Zapana and Gilbert Rein are in charge of the prosecution, with assistance from paralegal specialists Rachel Friedman and Nadya Osman.  Assistant United States Attorney Claire Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters.

The Defendant:

MICHAEL KENT
Age:  51
Brooklyn, New York

E.D.N.Y. Docket No. 22-CR-464 (AMD)

United States Attorneys Breon Peace and Damian Williams announced today that Assistant United States Attorneys (AUSAs) will lead the efforts of their Offices in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 5, 2024 general election.  AUSA Erik Paulsen has been appointed to serve as the District Election Officer (DEO) for the Eastern District of New York, and AUSA David J. Kennedy has been appointed to serve as the DEO for the Southern District of New York.  In their capacity as DEOs, these AUSAs are responsible for overseeing the Districts’ handling of Election Day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.

“A free election is the cornerstone of our democracy and every citizen in the Eastern District of New York must be able to vote and have their votes counted fairly and without interference, discrimination or threat of violence,” said United States Attorney Peace.  “Election officials and their staff also must be able to perform their duties without being subjected to unlawful threats of violence or intimidation.  My Office will defend those rights with the full force of federal law.”

United States Attorney Williams said, “Free, fair, and accessible elections are critical to democracy, and every voter in the Southern District of New York deserves to cast their vote with confidence in the integrity of our electoral process.  It is the responsibility and privilege of this Office to work together with our law enforcement partners to ensure that New Yorkers are able to exercise their right to vote free of unlawful intimidation or hindrance.  We encourage anyone who finds their civic voting protections subject to any attempted undue interference to please contact the numbers below.”

The Department of Justice plays an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud.  The Department will address these violations wherever they occur. The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice.  The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or individuals who are limited English proficient).   

United States Attorneys Peace and Williams stated that: “The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise can exercise it if they choose, and that those who seek to corrupt it are brought to justice.  In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSAs will be on duty in this District while the polls are open.”

In order to respond to complaints of election fraud or voting rights concerns during the voting period that ends on November 5, 2024, and to ensure that such complaints are directed to the appropriate authorities, the United States Attorneys said that their Offices will be available to receive complaints at the following numbers through Tuesday, November 5, 2024:

(646) 369-4739 (for Manhattan, Bronx, Dutchess, Orange, Putnam, Rockland, Sullivan, and Westchester counties) and (718) 254-6085 (for Brooklyn, Queens, Staten Island, Nassau, and Suffolk counties).

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/ 

In addition, the Federal Bureau of Investigation (FBI) will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The local FBI field office can be reached by the public at (212) 384-1000.

In the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities.  State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.

The United States Attorneys also noted that the following additional telephone numbers are available on Election Day for citizens to call for routine inquiries, such as where to vote or how late the polls are open, or to register complaints that may concern violations of New York State election laws:

IN NEW YORK CITY

New York City Board of Elections

Main Office                             (866) 868-3692

                                                TTY #: 212-487-5496

IN COUNTIES OUTSIDE NEW YORK CITY

County Boards of Elections

Dutchess                                  (845) 486-2473

Nassau                                     (516) 571-8683

Orange                                     (845) 360-6500

Orange (Spanish language)   (855) 331-2444

Putnam                                    (845) 808-1300

Rockland                                 (845) 638-5172

Suffolk                                    (631) 852-4500

Sullivan                                   (845) 807-0400

Westchester                           (914) 995-5700

Earlier today, at the federal courthouse in Central Islip, Edgardo Mejia was sentenced by United States District Judge Joan M. Azrack to 28 years in prison for sexually exploiting minors.  The defendant was charged with causing an 11-year-old girl (“Jane Doe 1”) to create numerous sexually explicit videos of herself, as well as at least two sexually explicit images of Jane Doe 1’s two-year-old niece, all of which was sent to the defendant.  Mejia pleaded guilty in August 2022.

Breon Peace, United States Attorney for the Eastern District of New York, announced the sentence.

Mr. Peace expressed his appreciation to Homeland Security Investigations (HSI) and the Nassau County Police Department (NCPD) for their work on the case.

As set forth in the government’s sentencing memorandum and other court documents, on February 20, 2017, Facebook reported several cybertips to the National Center for Missing and Exploited Children regarding social media accounts that were being used to sexually exploit female minors.  One account was under the name “Bryan Gonsalez” and two other accounts were under the name “Eddie Mejia.”  Further investigation by law enforcement determined that the electronic device being used to access the accounts was registered to the defendant at an address in Uniondale, New York.  Mejia was using the accounts to communicate with numerous minors, sending them explicit images of himself and enticing them to engage in sexually explicit conduct and send him images of such conduct.  On December 15, 2017, Mejia, while posing as a 13-year-old boy, communicated with Jane Doe 1 asking her if she wanted to be his “gf” and send a picture of herself.  Mejia also asked her to perform sexually explicit acts and record them on video. On December 17, 2017, Mejia asked Jane Doe 1 to take sexually explicit images of her niece and send them to him.  The defendant engaged in similar conduct with numerous other minors, and frequently threatened and extorted those victims when they did not comply with his requests.

On January 25, 2018, the defendant was arrested in Port Washington, New York by HSI and NCPD, and has been detained since then.

This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.  Assistant U.S. Attorney Megan E. Farrell is in charge of the prosecution.

The Defendant:

EDGARDO MEJIA (also known as “Eddie Mejia,” “Eddie Reyes,” “Carlos Reyez,” and “Bryan Gonsalez”)
Age:  42
Uniondale, Long Island

E.D.N.Y. Docket No. 18-CR-81 (JMA)

Earlier today, a indictment was unsealed in federal court in Brooklyn charging Jerome Waters, also known as “the Engineer,” Calvin Israel and William Barnett for their alleged roles in the kidnapping, robbery and fatal shooting of a victim in Queens, New York on July 25, 2024.  Two of the defendants, Waters and Israel, were arrested today in Maryland, and will be arraigned in the Eastern District of New York at a later date.  Barnett remains at large.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), announced the arrests and charges.

“As alleged, the defendants’ premediated robbery and kidnapping that resulted in a violent death, demonstrates the significant threat of guns and drugs in our communities,” stated United States Attorney Peace.  “This Office continues to work nonstop with our law enforcement partners to hold these drivers of violent crime accountable and remove their means to wreak havoc.”

“The three defendants allegedly orchestrated the kidnapping and armed robbery of two individuals in the illicit drug trade, culminating in the murder of one victim. These alleged actions incorporated unnecessary terror and brutality to accomplish their greedy plot," stated FBI Assistant Director in Charge Dennehy. "With the assistance from our law enforcement partners, the FBI will continue its mission apprehending all interstate travelers who pollute our city with drugs and gun violence."

“These arrests are another example of police and their federal partners’ unrelenting pursuit of crews that monetize drugs and brutality," stated NYPD Interim Commissioner Donlon.  “I commend our NYPD investigators and all of our law enforcement colleagues for their unwavering commitment to end such barbaric, senseless violence in our communities and for their tireless work to hold all those responsible for it accountable.”

As alleged in court filings, the defendants are members of a Baltimore-based violent robbery crew that conspired to commit an armed robbery and kidnapping of marijuana dealers in Queens, New York. On the night of July 24, 2024 and into July 25, 2024, the defendants drove up from Maryland to New York City for the purpose of kidnapping and robbing at gunpoint John Doe #1 and John Doe #2, who were both drug dealers.  Once in New York, Waters and Barnett met with John Doe #1 and John Doe #2 at a stash house in Queens under the guise of purchasing marijuana.

Moments later, Waters and Barnett pulled out guns and held up John Doe #1 and John Doe #2.  Next, they invited their co-conspirators into the stash house to assist in the robbery and kidnapping.  While in the stash house, the defendants and their co-conspirators tied up John Doe #1 and John Doe #2 with zip ties and forced them outside and into the back of a Jeep and a U-Haul van at gunpoint.  At the same time, the defendants and their co-conspirators stole approximately 30 pounds of marijuana from the stash house.

The defendants and their co-conspirators drove John Doe #1 and John Doe #2, who were still tied up, through Queens at gunpoint, demanding drugs and money.  Israel drove the U-Haul van containing John Doe #1, who was shot to death multiple times in the head in the back of the U-Haul van.  When his body was found by first responders, John Doe #1 still had a zip tie binding one of his hands and was surrounded by bags of marijuana. After the shooting, the defendants fled back to Maryland.

If convicted, Waters, Israel, and Barnett each face mandatory sentences of life imprisonment.  The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.

This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  As part of the program, U.S. Attorneys’ Offices work in partnership with federal, state, local and tribal law enforcement and their local communities to develop effective, locally based strategies to reduce violent crime.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant U.S.  Attorneys Chand Edwards-Balfour and Adam Amir are in charge of the prosecution.

The Defendants:

JEROME WATERS (also known as “the Engineer”)
Age:  23
Maryland

CALVIN ISRAEL
Age:  23
Maryland

WILLIAM BARNETT
Age:  27
Maryland

E.D.N.Y. Docket No. 24-CR-413 (KAM)

Earlier today, Renee Hoberman, a licensed social worker, was arrested on charges of distribution of child pornography.  The defendant was arraigned this afternoon at the federal courthouse in Central Islip before United States Magistrate Judge Arlene R. Lindsay on a complaint and ordered detained.

Breon Peace, United States Attorney for the Eastern District of New York, and William S. Walker, Special Agent in Charge, Homeland Security Investigations, New York (HSI) and Patrick Ryder, Commissioner, Nassau County Police Department announced the charges.

“As alleged, Hoberman distributed heinous and disturbing child pornography, including videos showing infants being restrained and raped.  Additionally, while posing as a man, Hoberman, who is a therapist serving children, claimed to have produced child pornography and offered others the opportunity to sexually abuse children,” stated United States Attorney Peace.  “Our investigation into Hoberman is ongoing, and we urge anyone with information to contact HSI’s tip line.  Together with our law enforcement partners, we will relentlessly pursue predators who victimize children and prosecute them to the fullest extent of the law.”

“Renee Hoberman worked in a trusted position as a therapist with children, making the allegations against her for the possession and distribution of incredibly dark and depraved child sexual abuse materials even more disturbing,” said Special Agent in Charge William S. Walker for Homeland Security Investigations in New York. “HSI is working around the clock with our partners to identify and investigate those who possess and distribute child sexual abuse imagery. Protecting children from predators is of the utmost concern to HSI and the law enforcement community. I urge the public to contact the HSI tip line with any information about this defendant.”

“This case is an example of the vital work our investigators do every day in cooperation with our dedicated partners in federal law enforcement,” said Nassau County Police Commissioner Patrick Ryder. “The hard working and diligent detectives of the Nassau County Police Department will continue to work tirelessly to protect the innocent, and we will never stop fighting to bring those who victimize children to justice.”

As set forth in the complaint, between June 2024 and October 2024, Hoberman allegedly used social media messaging apps to upload digital videos depicting one or more minors engaging in sexually explicit conduct, including several videos of infants six months to one year of age being physically restrained and raped by an adult male, as the infants cried and frantically screamed for the duration of the videos.  As recently as on or about October 16, 2024, the defendant uploaded child pornography and engaged in multiple chats concerning child sexual molestation.  In these chats, the defendant, purporting to be a man, claimed to have multiple minor children and stated that “he” would have anal sex with the children and would punish them by getting naked, stripping the children naked, and spanking them while the other children watched.  The defendant invited another user to visit “his” family in New York to spank the children.  In addition, the defendant described sexually abusing “his” children and their friends, and then sent two videos containing child sexual abuse material, claiming that these videos depicted the user’s own children.

According to public records and as alleged in the complaint, Hoberman works as a therapist with an organization based in Melville, New York and serves children aged 0-17.

Anyone with information about sexual exploitation by the defendant is asked to contact HSI at HSI’s tip line: 1-877-4-HSI-TIP  or via HSI’s website: https://www.ice.gov/webform/ice-tip-form.

The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Hoberman faces a mandatory minimum sentence of five years in prison.                       

This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.  Assistant United States Attorneys James R. Simmons and Russell Noble are in charge of the prosecution.

The Defendant:

Renee Hoberman, also known as “Rina Hoberman”
Age:  36
Plainview, New York

E.D.N.Y. Docket No. 24-MJ-588

Earlier today, in federal court in Brooklyn, Hafizullah Ebady pleaded guilty to health care fraud conspiracy.  The proceeding was held before United States District Judge William F. Kuntz, II.  Ebady is the seventh defendant to plead guilty in connection with a sprawling international health care fraud and money laundering scheme.  Ebady’s co-defendants Joshua Manuel Alegria, David Gary Bishoff, Brycen Kay Millett, Dela Saidazim, Anthony Santamaria and Hershel Tsikman previously pleaded guilty.  An eighth co-defendant and the leader of the organization, Brian Sutton, a U.S. citizen residing in Russia, remains at large.

The defendants participated in an international scheme to acquire pharmacies across the United States with pre-existing relationships with private health insurance companies.  Using those pharmacies, in conjunction with call centers to induce individuals to accept unnecessary medications and a network of recruited physicians, the defendants generated more than $1.7 billion in fraudulent prescriptions purportedly filled by the scheme pharmacies.  The charges against Sutton and others were announced on November 7, 2023.

Breon Peace, United States Attorney for the Eastern District of New York, and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty pleas.

“Using aliases, shell companies and straw owners, moving their operations overseas, and laundering millions of dollars through foreign countries, the defendants conducted a sophisticated, multi-faceted scheme, employing scores in call centers and remote billing teams to line their pockets to the tune of more than a billion dollars,” stated United States Attorney Peace.  “Health care fraud victimizes American businesses and drives up the cost of care for all.  Let these convictions serve as a message: we will work tirelessly to investigate and prosecute those who exploit American health care plans no matter where in the world they operate.”

Mr. Peace expressed his appreciation to the Port Authority of New York and New Jersey, Office of Inspector General, for its work on the case.

As alleged, between 2017 and 2022, Sutton, a U.S. citizen residing in Russia, led his co-defendants in carrying out an international scheme to bill private insurers for over $1.7 billion in fraudulent prescriptions.  At Sutton’s direction, the co-conspirators oversaw call centers initially based in Utah, but later operated from Russia and other foreign nations.  Call center employees telephoned beneficiaries enrolled in private insurers’ health care plans and offered prescription medications at little to no cost to the beneficiaries and without any medical exam to determine whether the medications were medically necessary.  The defendants also recruited doctors purportedly to review prescriptions by nurse practitioners and physician’s assistants after telemedicine visits.  Contrary to what the recruited doctors were told, in many cases there were no telemedicine visits between the beneficiaries and any medical professionals.  The co-conspirators generated fraudulent prescriptions under the physicians’ names and National Provider Identifier (NPI) numbers. Despite the prescriptions, many beneficiaries never received the medications.

To conceal their involvement, the defendants operated under multiple aliases, funneled hundreds of millions of dollars through pass-through shell companies and straw owners, used end-to-end encrypted communications and moved operations overseas.  Specifically, the defendants purchased and operated dozens of existing brick-and-mortar pharmacies through straw owners including in Brooklyn, Staten Island, Manhattan, Long Island, New Jersey, Pennsylvania, Texas, Michigan and Alabama.  The co-conspirators also laundered millions of dollars in fraudulent proceeds from overseas through pass-through shell companies that they used to purchase the scheme pharmacies and conceal the defendants’ involvement.

After acquiring the brick-and-mortar pharmacies, the co-conspirators oversaw the installation of pharmacy management software that allowed for the remote submission of reimbursement requests by the scheme pharmacies to private insurers; they also trained and supervised a team of “billers” that remotely submitted hundreds of thousands of reimbursement requests.

Under Sutton’s direction, the defendants played various roles in the scheme, including as follows:

• Alegria oversaw development of custom software and forwarded fraudulent prescriptions to licensed physicians for approval;
• Bishoff coordinated logistics for the operations of multiple scheme pharmacies;
• Ebady coordinated the purchase and directed the day-to-day operations of multiple scheme pharmacies;
• Millett oversaw call centers in Utah, Russia and elsewhere overseas;
• Saidazim recruited licensed physicians and acted as Sutton’s personal assistant;
• Santamaria trained and managed a team of billers to input data and electronically submit fraudulent requests for reimbursement to insurers; and
• Tsikman coordinated the laundering of fraud proceeds through straw owners and shell entities.

Ultimately, the co-conspirators submitted over $1.7 billion in reimbursement requests for over 50 pharmacies.  Private insurers paid over $500 million as a result of the fraudulent billing.

When sentenced, the defendants face the following sentences:

• Ebady faces a maximum sentence of 10 years’ imprisonment as well as restitution of more than $195 million and forfeiture of over $1.8 million;
• Alegria faces a maximum sentence of 30 years;
• Bishoff faces a maximum sentence of 10 years as well as forfeiture of $8 million;
• Millett faces a maximum sentence of 30 years as well as forfeiture of over $2.3 million;
• Santamaria faces a maximum sentence of 10 years as well as restitution of more than $520 million and $3.2 million in forfeiture;
• Tsikman faces a maximum sentence of 10 years; and
• Saidazim was sentenced to time served.

The charges pending against Sutton in the superseding indictment are merely allegations and he is presumed innocent unless and until proven guilty.

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including health care fraud charges, such as the crimes that the defendants committed.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys John Vagelatos, Jessica K. Weigel, Tara B. McGrath and Jonathan P. Lax are in charge of the prosecution, with assistance from Paralegal Specialists Madison Bates and Asher Martin-Rosenthal.  Claire S. Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters.

The Defendant:

HAFIZULLAH EBADY (also known as “Hafiz Ebady”)
Age:  45
Parsippany, New Jersey

Co-Conspirators Who Previously Pleaded Guilty (Awaiting Sentencing):

JOSHUA MANUEL ALEGRIA (also known as “Jboy,” “Jaxon Asher” and “Turk Malloy”)
Age:  32
Woodland Hills, California

DAVID GARY BISHOFF (also known as “Bobby Fischer”)
Age:  39
Saint George, Utah

BRYCEN KAY MILLETT (also known as “Brett Johnson” and “Tommy Wilkinson”)
Age:  33
Saint George, Utah

ANTHONY SANTAMARIA (also known as “Big Boy,” “Wade Watts,” “Pablo Rodriguez,” “Ryan Rusty” and “Bruce Peter”)
Age:  31
North Hollywood, California

DELA SAIDAZIM (also known as “Delila,” “Gina Payne” and “Olivia Rothstein”)
Age:  34
Moscow, Russia

HERSHEL TSIKMAN (also known as “Andrew Milner,” “Andrew M.,” “Linus Caldwell,” “Adam Schneider,” “Jonathan Martin” and “H”)
Age:  30
Studio City, California

Co-Conspirator Who Remains At Large:

BRIAN MICHAEL SUTTON (also known as “Mike Summers,” “Mike Miller” and “Ryan White”)
Age:  31
Moscow, Russia

E.D.N.Y. Docket No. 21-CR-564 (S-3) (WFK)

A 16-count indictment was unsealed today in federal court in Central Islip charging former Abercrombie & Fitch Co. (Abercrombie) Chief Executive Officer Michael Jeffries, along with Matthew Smith and James Jacobson, with sex trafficking and engaging in interstate prostitution.  The indictment alleges that between December 2008 and March 2015, Jeffries, Smith and Jacobson used a combination of force, fraud and coercion to traffic men while operating a prostitution enterprise.  All three defendants were arrested this morning. Jeffries and Smith are scheduled to make their initial appearances this afternoon in federal court in the Southern District of Florida, and Jacobson is scheduled to make his initial appearance this afternoon in federal court in St. Paul, Minnesota. They will be arraigned in the Eastern District of New York at a later date.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, New York Field Office (FBI) and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), announced the arrests and charges.

“As alleged in the indictment, former CEO of Abercrombie Michael Jeffries, his partner Matthew Smith and their recruiter James Jacobson used their money and influence to prey on vulnerable men for their own sexual gratification,” stated United States Attorney Peace.  “Today’s arrests show that my Office and our law enforcement partners will not rest until anyone who engages in sex trafficking or interstate prostitution, regardless of their wealth or power, is brought to justice.”

Mr. Peace expressed his thanks to the FBI Miami Field Office, West Palm Beach Resident Agency; the FBI Milwaukee Field Office, Eau Clair Resident Agency; the Barron County, Wisconsin, Sheriff’s Office; and the United States Attorney’s Offices for the Southern District of Florida and the District of Minnesota, for their assistance with the case.

“Today’s indictment highlights the alleged abhorrent behavior of Michael Jeffries, Matthew Smith, and James Jacobson.  The defendants allegedly preyed on the hopes and dreams of their victims by exploiting, abusing, and silencing them to fulfill their own desires, with insidious secret intentions.  This case is yet another example of individuals using their wealth, power, or reputation to manipulate and control others for their personal gratification.   The FBI and our partners won’t allow these criminal acts to go unchecked, we remain committed to investigating and bringing these cases forward to prosecution,” stated FBI Assistant Director in Charge Dennehy.

“Sex trafficking remains a pressing issue nationwide and New York City is no exception,” stated NYPD Interim Commissioner Donlon. “Through our continued partnership with the FBI and the U.S. Attorney for the Eastern District of New York, the NYPD is able to enhance our investigations and secure convictions. Importantly, our close collaboration also allows us to connect survivors of this abhorrent crime with the necessary support and services they deserve.”

From approximately 1992 to 2014, Jeffries was the CEO of Abercrombie, a fashion clothing retailer that owned and operated retail stores around the world.  Smith was Jeffries’ life partner.  The indictment alleges that Jacobson was employed by Jeffries and Smith to recruit, interview and hire men to perform commercial sex acts for Jeffries and Smith.

As set forth in the indictment, from approximately 2008 to 2015, Jeffries, Smith and Jacobson, together with others, operated an international sex trafficking and prostitution enterprise.  Jeffries and Smith not only relied on their financial resources and Jeffries’ power as the CEO of Abercrombie, but also on numerous others, including Jacobson and a network of employees, contractors and security professionals, to operate this venture, which was dedicated to fulfilling their sexual desires.

As further alleged in the indictment, Jeffries and Smith paid for dozens of men to travel within the United States and internationally to various locations, including the Hamptons on Long Island, New York City and hotels in England, France, Italy, Morocco and Saint Barthélémy, for the purpose of engaging in commercial sex acts with Jeffries, Smith and others (the “Sex Events”). Jacobson allegedly traveled throughout the United States and internationally to recruit and interview men for the Sex Events.  During “tryouts” of potential candidates, Jacobson typically required that the candidates first engage in commercial sex acts with him.

The indictment alleges that Jeffries, Smith and Jacobson used coercive, fraudulent and deceptive tactics in connection with their sex trafficking and prostitution venture. For example, among other things, Jeffries, Smith, Jacobson and others acting at their direction:

• Employed a referral system and interview process that did not inform men of the details of the Sex Events before they attended, including the full extent and nature of the sexual activity that would be required of the men at the Sex Events;
• Caused men to believe that attending the Sex Events could yield modeling opportunities with Abercrombie or otherwise benefit their careers;
• Caused men to believe that not complying with requests for certain acts during the Sex Events could harm their careers;
• Required men to relinquish their personal items, including clothing, wallets and cellular phones, and store them in an inaccessible location during the Sex Events;
• Required men to sign non-disclosure agreements;
• On more than one occasion when men did not or could not consent, Jeffries and Smith violated the bodily integrity of the men by subjecting them, or continuing to subject them, to invasive sexual and violent contact by body parts and other objects;
• On more than one occasion, Jeffries and Smith directed others to inject, or personally injected, men with an erection-inducing substance for the purpose of causing the men to engage in sex acts the men were incapable or unwilling to engage in.

Many of the victims, at least one of whom was as young as 19 years old, were financially vulnerable and aspired to become models in the fashion industry.  Some victims recruited by the defendants had previously worked at Abercrombie stores or had modeled for Abercrombie.

If convicted of the sex trafficking charge, the defendants each face a maximum sentence of life imprisonment and a mandatory minimum sentence of 15 years’ imprisonment.  If convicted of the interstate prostitution charges, the defendants face a maximum sentence of 20 years’ imprisonment.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.

If you believe you are victim of a crime perpetrated by Michael Jeffries, Matthew Smith or James Jacobson, please contact the FBI at 1-800-CALL-FBI.

The government’s case is being handled by the Office’s Civil Rights Section and the Criminal Section of the Office’s Long Island Division.  Assistant United States Attorneys Megan Farrell, Erin Reid and Philip Pilmar are in charge of the prosecution with the assistance of Bilingual Victim Witness Specialist Stephanie Marroquin and Fact Witness Services Unit Supervisor/Victim Witness Coordinator Huda Abouchaer.

The Defendants:

MICHAEL JEFFRIES
Age: 80
West Palm Beach, FL

MATTHEW SMITH
Age: 61
West Palm Beach, FL

JAMES JACOBSON
Age:  71
Rice Lake, WI

E.D.N.Y. Docket No. 24-CR-423 (NJC)

Earlier today at the federal courthouse in Central Islip, Lameek Everette, also known as “La,” a member of the Bloods Street gang, was sentenced by United States District Court Judge Gary R. Brown, to 40 years’ imprisonment. On November 27, 2017, Everette was convicted of racketeering, including predicate acts of murder, robbery and attempted robbery.  Those charges stemmed from his participation in the September 2, 2016 murders of David Arzu and Janelle Curella, who were each shot by Everette during a robbery as the victims walked to the Long Island Rail Road train station in Bayshore, New York. 

Breon Peace, United States Attorney for the Eastern District of New York, William S. Walker, Special Agent in Charge, Homeland Security Investigations (HSI), James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Robert Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the sentence. 

“What started out as a robbery, turned into a double murder with the defendant pulling the trigger over and over to kill his victims simply because they resisted a holdup.  Today the defendant faced a reckoning for the devastating harm he has caused,” stated United States Attorney Peace.  “Gang members’ violent choices­­­­­­­­­­­­­­­­­ will not go unpunished in our district.  The substantial sentence handed down today provides some measure of justice following the defendant’s senseless murder of a young man and woman whose families still grieve for the loss of their loved ones.  I hope it will also deter others from joining gangs and committing brutal crimes that terrorize our community.”

“Lameek Everette’s blatant disregard for human life was clear not only by the execution of two young victims in cold blood, but also by his decision to spend the remainder of his night at a local club,” stated HSI New York Special Agent in Charge Walker.  “While no amount of time or justice can bring back David Arzu and Janelle Curella, preventing future violence is of the utmost priority for HSI New York. We will continue to work alongside our law enforcement partners to aggressively pursue violent street gangs and bring them to justice for the greater good of our Long Island community.”

FBI Assistant Director in Charge Dennehy stated, “Lameek Everette personally appraised the lives of two innocent victims to be less than the potential value of their belongings. His callous actions demonstrate the senseless gang violence that can target random civilians. May today's sentencing reflect the FBI's unwavering commitment to eradicate all gang members threatening the welfare of our communities.”

“Gang violence has no place in Suffolk County, and we will continue to work with our law enforcement partners to hold accountable dangerous individuals like Everette whose plan for robbery escalated to murder,” stated Acting SCPD Commissioner Waring.  “I hope today’s sentence brings some sense of closure to the victims’ family and serves as a reminder we will pursue justice for all victims.”

At approximately 9:30 p.m. on September 2, 2016, David Arzu, Janelle Curella and two friends were walking towards the Bay Shore train station.  Unbeknownst to them, Everette and a fellow Bloods member had devised a plan to rob them at gunpoint, and were lying in wait for them.  When Everette and his coconspirator spied Arzu, Curella and their friends, they approached the group, brandished firearms and demanded the victims’ money and valuables.  Arzu resisted, and a struggle ensued.  When Curella attempted to come to Arzu’s assistance, Everette shot and killed her.  Everette then shot Arzu multiple times, killing him.  Everette later posted pictures of himself of Facebook, flashing hand signals that signified his affiliation with the Bloods and wearing a necklace he had stolen from Arzu when he murdered him.

Everette’s coconspirator in the robbery, Taheem Smith, was previously sentenced to 27 years’ incarceration for his role in the killings. 

This case is part of Project Safe Neighborhoods (PSN), a Department of Justice program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer. The Department of Justice reinvigorated PSN in 2017 as part of a renewed focus on targeting violent criminals, directing all U.S. Attorneys’ Offices to work in partnership with federal, state, local and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime.

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.  Assistant United States Attorneys Mark E. Misorek and Anthony Bagnuola are in charge of the prosecution.   

The Defendant:

LAMEEK EVERETTE
Age: 31
Bay Shore, Long Island

E.D.N.Y. Docket No. 17-CR-504 (GRB)

BROOKLYN, NY – Raytheon Company (Raytheon), a subsidiary of Arlington, Virginia-based defense contractor RTX (formerly known as Raytheon Technologies Corporation), entered into a three-year deferred prosecution agreement (DPA) with the Department of Justice in connection with a criminal information unsealed today in the Eastern District of New York charging Raytheon with two counts: conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA) for engaging in a scheme to bribe a government official in Qatar and conspiracy to violate the Arms Export Control Act (AECA) by willfully failing to disclose the bribes in export licensing applications with the Department of State. 

Separately, Raytheon will enter into a three-year deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of Massachusetts charging Raytheon with two counts of major fraud against the United States. As part of that resolution, Raytheon admitted to engaging in two separate schemes to defraud the Department of Defense (DOD) in connection with the provision of defense articles and services, including PATRIOT missile systems and a radar system.

Both agreements require that Raytheon retain an independent compliance monitor for three years, enhance its internal compliance program, report evidence of additional misconduct to the Justice Department, and cooperate in any ongoing or future criminal investigations. 

Raytheon also reached a separate False Claims Act settlement with the department relating to the defective pricing schemes. The Justice Department’s FCPA and ITAR resolution is coordinated with the Securities and Exchange Commission (SEC).

In addition, the Justice Department’s resolutions ensure that the appropriate federal agencies can proceed with determining whether Raytheon or any other individuals or entities associated with the company should be suspended or debarred as federal contractors. Pursuant to the Federal Acquisition Regulations (FAR), when more than one agency has an interest in an entity’s potential suspension or debarment, the FAR requires that the Interagency Suspension and Debarment Committee (ISDC) identify the lead agency for conducting government-wide suspension or debarment proceedings. In connection with this resolution, the Justice Department has referred Raytheon’s factual admissions to the appropriate officials within the Department of Defense to initiate the process with the ISDC to identify which federal agency will take the lead in such administrative proceedings, which occur independently of the Justice Department’s criminal and civil resolutions.

Breon Peace, United States Attorney for the Eastern District of New York; Kevin Driscoll, Deputy Assistant Attorney General Kevin Driscoll of the Justice Department’s Criminal Division; Matthew G. Olsen, Assistant Attorney General for the Justice Department’s National Security Division; Chad Yarbrough, Assistant Director, Criminal Investigative Division, Federal Bureau of Investigation (FBI) and William S. Walker, Special Agent in Charge, U.S. Department of Homeland Security, Homeland Security Investigations (HSI), New York,  announced the resolution.

“Over the course of several years, Raytheon employees bribed a high-level Qatari military official to obtain lucrative defense contracts and concealed the bribe payments by falsifying documents to the government, in violation of laws including those designed to protect our national security,” stated United States Attorney Peace.  “We will continue to pursue justice against corruption, and as this agreement establishes, enforce meaningful consequences, reforms and monitorship to ensure this misconduct is not repeated.”

Mr. Peace expressed his appreciation to the Securities and Exchange Commission (SEC) and the U.S. Department of State for their work on the case.

“Raytheon engaged in criminal schemes to defraud the U.S. government in connection with contracts for critical military systems and to win business through bribery in Qatar,” stated Deputy Assistant Attorney General Driscoll. “Such corrupt and fraudulent conduct, especially by a publicly traded U.S. defense contractor, erodes public trust and harms the Department of Defense, businesses that play by the rules, and American taxpayers. Today’s resolutions, with criminal and civil penalties totaling nearly $1 billion, reflect the Criminal Division’s ability to tackle the most significant and complex white-collar cases across multiple subject matters.”

“International corruption in military and defense sales is a violation of our national security laws as well as an anti-bribery offense,” stated Assistant Attorney General Olsen.  “Raytheon willfully failed to disclose bribes made in connection with contracts that required export licenses. Today’s resolution should serve as a stark warning to companies that violate the law when selling sensitive military technology overseas.”

“The Raytheon Company set out to intentionally defraud the U.S. government,” stated FBI Assistant Director Yarbrough.  “This agreement highlights the importance of integrity when it comes to government contracting. The FBI, with its law enforcement partners, will continue to investigate these types of crimes that waste taxpayer dollars and prosecute all those who are intent on cooking up these major fraud schemes.”

“Raytheon Corporation engaged in a systematic and deliberate conspiracy that knowingly and willfully violated U.S. fraud and export laws,” stated HSI New York Special Agent in Charge Walker.  “Raytheon’s bribery of government officials, specifically those involved in the procurement of U.S. military technology, posed a national security threat to both the U.S. and its allies. As this investigation reflects, national security continues to be a top priority for HSI New York. The global threats facing the U.S. have never been greater, and HSI New York is committed to working with our federal and international partners to assure sensitive U.S. technologies are not unlawfully and fraudulently acquired.”

The FCPA Case

According to admissions and court documents filed in the Eastern District of New York, between approximately 2012 and 2016, Raytheon, through certain of its employees and agents, engaged in a scheme to bribe a high-level official at the Qatar Emiri Air Force (QEAF), a branch of Qatar’s Armed Forces (QAF) that was primarily responsible for the conduct of air warfare, to assist Raytheon in obtaining and retaining business from the QEAF and QAF.  Raytheon entered into and made payments on sham contracts for air defense operations-related studies to corruptly obtain the Qatari official’s assistance in securing certain air defense contracts.  Raytheon also entered into a teaming agreement with a Qatari entity to corruptly obtain the Qatari official’s assistance in directly awarding a contract to Raytheon, without a competitive bid, to build a joint operations center that would interface with Qatar’s several military branches. 

Under the terms of the DPA, Raytheon will pay a criminal monetary penalty of over $252.3 million, criminal forfeiture of over $36.6 million and retain an independent compliance monitor for three years.  In addition, as part of the resolution of the SEC’s parallel investigation, Raytheon will pay approximately $49.1 million in disgorgement and prejudgment interest and a civil penalty of $75 million, $22.5 million of which will be credited against the criminal monetary penalty.  The Department has agreed to credit approximately $7.4 million of the disgorgement Raytheon pays to the SEC against the criminal forfeiture.

As part of the DPA, Raytheon and RTX have agreed to continue to cooperate with the U.S. Attorney’s Office for the Eastern District of New York, the Criminal Division’s Fraud Section and the National Security Division’s Counterintelligence and Export Control Section in any ongoing or future criminal investigations relating to this and other conduct.  In addition, Raytheon and RTX have agreed to continue to enhance Raytheon’s compliance program.

The Department reached this resolution with Raytheon based on a number of factors, including, among others, the nature and seriousness of the offense.  Raytheon received credit for its cooperation with the Department’s investigation, which included:

• Providing information obtained through its internal investigation, which allowed the government to preserve and obtain evidence as part of its own independent investigation;
• Facilitating interviews with current and former employees;
• Making detailed factual presentations to the government;
• Proactively disclosing certain evidence of which the government was previously unaware and identifying key documents in materials it produced; and
• Engaging experts to conduct financial analyses. 

Raytheon also engaged in timely remedial measures, including:

• Recalibrating third party review and approval processes to lower company risk tolerance;
• Implementing enhanced controls over sales intermediary payments;
• Hiring empowered subject matter experts to oversee its anti-corruption compliance program and third party management;
• Implementing data analytics to improve third party monitoring; and
• Developing a multipronged communications strategy to enhance ethics and compliance training and communications.

However, in determining the appropriate cooperation credit, the government also took into account the fact that, in the initial phases of the investigation, prior to in or around 2022, Raytheon was at times slow to respond to the government’s requests and failed to provide relevant information in its possession; for example, Raytheon withheld relevant, material information from the government and gave incomplete and misleading presentations regarding the nature and scope of a relevant third-party intermediary relationship.

In light of these considerations, as well as Raytheon’s prior history, which includes three prior civil or regulatory enforcement actions: (i) a 2013 consent agreement with the U.S. State Department concerning civil ITAR and Arms Export Control Act violations, in connection with which Raytheon agreed to hire an independent special compliance officer to oversee the four-year consent decree while at the same time engaging in the conduct described in the DPA; (ii) a civil settlement with the Environmental Protection Agency in 2007 concerning payments to clean up contamination sites; and (iii) a resolution with the SEC in 2006 concerning false and misleading disclosures and improper accounting practices, the criminal penalty calculated under the U.S. Sentencing Guidelines reflects a 20% reduction off the twentieth percentile above the low end of the otherwise applicable Guidelines fine range.

The ITAR Case

According to admissions and court documents filed in the Eastern District of New York, between approximately 2012 and 2016, Raytheon, through certain of its employees and agents, engaged in a scheme to willfully violate the AECA and ITAR Part 130 by failing to disclose to the United States Department of State, Directorate of Defense Trade Controls, fees and commissions paid in connection with two Qatar-related contracts – specifically, the bribes Raytheon paid to the high-level QEAF official through sham subcontracts.

The Department reached this resolution with Raytheon based on a number of factors, including, among others, the nature and seriousness of the offense.  Raytheon received credit for its cooperation with the Department’s investigation, which included:

• Gathering evidence of interest to the government and proactively identifying key documents related to willful ITAR-related misconduct;
• Making factual presentations concerning the ITAR-related misconduct; and
• Facilitating witness interviews and expediting the government’s ability to meet with witnesses. 

Raytheon also received credit for remediation, which included, in addition to the remediation described above in connection with the FCPA case:

• Hiring additional empowered subject matter experts in legal and compliance;
• Developing a multipronged communications strategy to enhance ethics and compliance training and communications; and
• Making enhancements to its ITAR-related compliance program.

Raytheon did not receive full credit for its cooperation because in the initial phase of the investigation, it failed to provide information relevant to the ITAR violations beyond what was requested in the FCPA investigation.

In light of these considerations, the ITAR-related financial penalty of $21,904,850 includes a cooperation and remediation credit of 20 percent off the otherwise applicable penalty.

The Defective Pricing Case

According to admissions and court documents filed in the District of Massachusetts, from 2012 through 2013 and again from 2017 through 2018, Raytheon employees provided false and fraudulent information to the DOD during contract negotiations concerning two contracts with the United States for the benefit of a foreign partner — one to purchase PATRIOT missile systems and the other to operate and maintain a radar system. In both instances, Raytheon employees provided false and fraudulent information to DOD in order to mislead DOD into awarding the two contracts at inflated prices. These schemes to defraud caused the DOD to pay Raytheon over $111 million more than Raytheon should have been paid on the contracts.

Under the terms of the DPA, Raytheon will pay a criminal monetary penalty of $146,787,972, pay $111,203,009in victim compensation, and retain an independent compliance monitor for three years. The Justice Department has agreed to credit the victim compensation amount against restitution Raytheon pays to the Civil Division in its related, parallel False Claims Act proceeding.

Pursuant to the DPA, in addition to the independent compliance monitor, Raytheon and RTX have agreed to continue to implement a compliance and ethics program at Raytheon designed to prevent and detect fraudulent conduct throughout its operations. Raytheon and RTX have also agreed to continue to cooperate with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the District of Massachusetts in any ongoing or future criminal investigations.

The Justice Department reached this resolution with Raytheon based on a number of factors, including, among others, the nature and seriousness of the offense conduct, which involved two separate schemes to defraud the U.S. government. Raytheon received credit for its affirmative acceptance of responsibility and cooperation with the department’s investigation, which included (i) facilitating interviews with current and former employees; (ii) providing information obtained through its internal investigation, which allowed the department to preserve and obtain evidence as part of its own independent investigation; (iii) making detailed presentations to the department; (iv) proactively identifying key documents in the voluminous materials collected and produced; (v) engaging experts to conduct financial analyses; and (vi) demonstrating its willingness to disclose all relevant facts by analyzing whether the crime-fraud exception applied to certain potentially privileged documents and releasing the documents that it deemed fell within the exception. However, in the initial phases of the investigation prior to March 2022, Raytheon’s cooperation was limited by unreasonably slow document productions.

Raytheon also engaged in timely remedial measures, including (i) terminating certain employees who were responsible for the misconduct; (ii) establishing a broad defective pricing awareness campaign; (iii) developing and implementing policies, procedures, and controls relating to defective pricing compliance; and (iv) engaging additional resources with appropriate expertise to evaluate and test the new policies, procedures, and controls relating to defective pricing compliance.

In light of these considerations, as well as Raytheon’s prior history, the criminal penalty calculated under the U.S. Sentencing Guidelines reflects a 25% reduction off the tenth percentile above the low end of the otherwise applicable guidelines fine range.

The False Claims Act Settlement

Raytheon also entered into a civil False Claims Act settlement to resolve allegations that it provided untruthful certified cost or pricing data when negotiating prices with the DOD for numerous government contracts and double billed on a weapons maintenance contract.

Under the False Claims Act settlement, which is the second largest government procurement fraud recovery under the Act, Raytheon will pay $428 million for knowingly failing to provide truthful certified cost and pricing data during negotiations on numerous government contracts between 2009 and 2020, in violation of the Truth in Negotiations Act (TINA). Congress enacted TINA in 1962 to help level the playing field in sole source contracts — where there is no price competition — by making sure that government negotiators have access to the cost or pricing data that the offeror used when developing its proposal. As part of the settlement, Raytheon admitted that it failed to disclose cost or pricing data, as required by TINA, regarding its labor and material costs to supply weapon systems to DOD. 
 
Raytheon also admitted that by misrepresenting its costs during contract negotiations it overcharged the United States on these contracts and received profits in excess of the negotiated profit rates. Further, Raytheon admitted that it failed to disclose truthful cost or pricing data on a contract to staff a radar station. Raytheon also admitted that it billed the same costs twice on a DOD contract.

As part of the civil resolution, Raytheon received credit under the Justice Department’s guidelines for taking disclosure, cooperation, and remediation into account in False Claims Act cases for cooperation provided by RTX. That cooperation included conducting and disclosing the results of an internal investigation, disclosing relevant facts and material not known to the government but relevant to its investigation, providing the department with inculpatory evidence, conducting a damages analysis, identifying and separating individuals responsible for or involved in the misconduct, admitting liability and accepting responsibility for the misconduct, and improving its compliance programs.

The civil settlement includes the resolution of a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit was filed by Karen Atesoglu, a former Raytheon employee, and is captioned United States ex rel. Atesoglu v. Raytheon Technologies Corporation, 21-CV-10690-PBS (D. Mass.). Ms. Atesoglu will receive $4.2 million as her share of the settlement.

* * * * *

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including the FCPA.

The FCPA and ITAR investigation was conducted by HSI and the FBI’s International Corruption Unit.  The government’s case is being handled by the Office’s Business and Securities Fraud Section, the Criminal Division’s Fraud Section and the National Security Division’s Counterintelligence and Export Control Section.  Assistant United States Attorneys David Pitluck, Hiral Mehta and Jessica Weigel are prosecuting the case with Acting Assistant Chief Katherine Raut and Trial Attorney Elina A. Rubin-Smith of the Fraud Section, and Trial Attorneys Christine Bonomo and Leslie Esbrook of the Counterintelligence and Export Control Section, with assistance from Eastern District of New York Paralegal Specialist Liam McNett.

The Defendant:

THE RAYTHEON COMPANY 
Waltham, Massachusetts

E.D.N.Y. Docket No.: 24-CR-399 (RER)

Hoy en el Distrito de Columbia se hizo pública una acusación formal que señala a líderes de la violenta organización de narcotráfico, conocida como Los Zetas, y su organización sucesora, el Cartel del Noreste (CDN), de participar en una empresa criminal continua; asociación ilícita para traficar drogas; delitos de armas de fuego; y asociación ilícita para lavado de dinero internacional.

Según la acusación, Miguel Treviño Morales, de 51 años, y su hermano, Omar Treviño Morales, de 48 años, también conocidos respectivamente como Z-40 y Z-42, presuntamente asumieron el control de Los Zetas después de más de una década de ser miembros de la violenta organización de narcotráfico. Los Zetas anteriormente sirvieron como un brazo armado militarista para el Cartel del Golfo para mantener el control de las rutas de narcotráfico en todo México. Desde que se convirtieron en líderes de Los Zetas en 2012, que luego renombraron como Cartel del Noreste, se alega que los acusados han continuado su historia y patrón de utilizar violencia extrema para controlar grandes extensiones del norte de México, incluso por la frontera con EE. UU. Según las denuncias en la acusación formal, Miguel y Omar Treviño Morales fueron encarcelados en México en 2013 y 2015, respectivamente, pero continuaron controlando el CDN por diversos medios, entre ellos la colocación de varios familiares para dirigir las operaciones en su representación. Se alega que Miguel y Omar Treviño Morales son personalmente responsables de cometer decenas de asesinatos y de dirigir asesinatos, secuestros y actos de tortura por parte de miembros de Los Zetas y CDN para promover y proteger las actividades de narcotráfico del Cartel y enriquecer a sus miembros.

De ser condenados, los acusados enfrentan una pena máxima de cadena perpetua. Un juez de un tribunal de distrito federal determinará la sentencia correspondiente tras considerar las Pautas de Sentencia de EE. UU. y otros factores legales.

“Como se alega en la acusación formal, los acusados dirigieron una organización de narcotráfico transnacional que fue responsable de cometer violencia extrema y de traficar enormes cantidades de narcóticos a Estados Unidos,” dijo Nicole Argentieri, vicefiscal general adjunta principal, jefa de la División Penal del Departamento de Justicia. “El Departamento de Justicia se compromete a responsabilizar a los líderes de carteles, como los acusados, por envenenar comunidades estadounidenses y alimentar la violencia aquí y en el extranjero. También estamos comprometidos a colaborar con nuestros colegas nacionales e internacionales en este esfuerzo y agradecemos a nuestros colegas, las autoridades mexicanas de procuración de justicia, por su continua colaboración en este caso.”

“Esta formulación complementaria de cargos reitera el compromiso del Departamento de Justicia de perseguir a los líderes de los carteles de drogas más peligrosos del mundo, sin importar el tiempo que lleve,” dijo Breon Peace, fiscal de EE. UU. para el Distrito Este de Nueva York. “Los prolíficos crímenes y actos extremos de violencia de los acusados han convulsionado al Distrito Este de Nueva York y a todo el país, y anticipamos responsabilizar a los acusados en un tribunal de justicia de EE. UU.”

“Durante décadas, estas personas han controlado una de las organizaciones de drogas más violentas de México, cometiendo y dirigiendo la comisión de atrocidades horribles contra nuestros vecinos, el pueblo de México, y también en Estados Unidos,” dijo Jaime Esparza, el fiscal de EE. UU. para el Distrito Oeste de Texas. “Nada es más importante que llevar ante la justicia a individuos peligrosos como estos. Esperamos trabajar con el gobierno de México para llevar a estos brutales líderes del Cartel ante la justicia por los numerosos crímenes que han cometido.”

“La Oficina de Investigaciones de Seguridad Nacional (HSI) se une a nuestros colegas en la lucha contra organizaciones criminales transnacionales para proteger a nuestros ciudadanos de las acciones ilegales de estas,” dijo Katrina W. Berger, directora ejecutiva asociada de HSI. “El daño causado por el cartel de Los Zetas va mucho más allá de nuestras fronteras, perjudicando comunidades y arruinando vidas aquí en Estados Unidos.”

“Durante décadas, Los Zetas operaron como una de las organizaciones de narcotráfico más violentas en Estados Unidos y México bajo la dirección de los hermanos Miguel (Zeta 40) y Omar (Zeta 42) Treviño Morales. La DEA no ha flaqueado nunca en la lucha global contra este brutal y despiadado cartel, que prosperó a raíz de la devastación que causaron en las comunidades estadounidenses,” dijo Daniel C. Comeaux, el agente especial a cargo de la División de Houston de la DEA. “A través de innumerables investigaciones, la DEA ha llevado ante la justicia a miembros de alto rango de esta organización destructiva. Estas últimas acusaciones formales continuarán debilitando a esta violenta organización y la forzarán a dejar el control que han ejercido a lo largo de la frontera suroeste de Estados Unidos.”

La División de Houston de la DEA lideró esta investigación con la asistencia de la Oficina de la DEA en Ciudad de México. La Oficina de HSI Nueva York contribuyó sustancialmente a la investigación, al igual que las siguientes: DEA San Antonio, DEA Eagle Pass, DEA Del Río, DEA Laredo, DEA Nueva York, la Oficina Regional del FBI en Washington, FBI El Paso, FBI San Antonio, FBI Laredo, FBI Del Río, HSI San Antonio, HSI Del Río, HSI Laredo, el Departamento de Seguridad Pública de Texas, los Rangers de Texas, el Departamento de Policía de San Antonio, la Oficina del Sheriff del Condado de Bexar [Texas], la Oficina de Alcohol, Tabaco, Armas de Fuego y Explosivos (ATF) San Antonio, ATF Laredo, Investigación Criminal del IRS (IRS-CI) San Antonio, IRS-CI Waco y la Patrulla Fronteriza de EE. UU.

La Oficina de Asuntos Internacionales del Departamento de Justicia y la Oficina de Operaciones de Cumplimiento de la División Criminal proporcionaron asistencia significativa en este caso.

Los fiscales litigantes Kirk Handrich y Tara Arndt de la Unidad de Narcóticos y Drogas Peligrosas de la División Penal, numerosos fiscales del Distrito Oeste de Texas y el fiscal adjunto de EE. UU. Andrew Wang para el Distrito Este de Nueva York están procesando el caso.

Este caso es parte de una operación de la Fuerza Especial de Lucha contra la Droga y la Delincuencia Organizada (OCDETF). La OCDETF identifica, interrumpe y desmantela a los narcotraficantes de más alto nivel, lavadores de dinero, pandillas y organizaciones criminales transnacionales que amenazan a Estados Unidos, utilizando un enfoque multiinstitucional, liderado por fiscales e informado por datos de inteligencia.

Una acusación formal es tan solo una denuncia. Todos los acusados se presumen inocentes hasta que se demuestre su culpabilidad más allá de toda duda razonable en un tribunal de justicia.

Note: View the fifth superseding indictment here.

An indictment was unsealed in the District of Columbia charging leaders of the violent drug trafficking organization known as Los Zetas, and its successor organization, Cartel del Noreste (CDN), with engaging in a continuing criminal enterprise; drug trafficking conspiracy; firearms offenses; and international money laundering conspiracy.

According to the indictment, Miguel Trevino Morales, 51, also known as Z-40, and his brother, Omar Trevino Morales, 48, also known as Z-42, allegedly assumed control of Los Zetas after more than a decade as members of the violent drug trafficking organization. Los Zetas previously served as an armed militaristic wing for the Gulf Cartel to maintain control of drug trafficking routes throughout Mexico. Since becoming leaders of Los Zetas in 2012, which they later renamed the Cartel del Noreste, the defendants have allegedly continued its history and pattern of using extreme violence to control large swaths of Northern Mexico, including along the U.S. border. Based on allegations in the indictment, Miguel and Omar Trevino Morales were incarcerated in Mexico in 2013 and 2015, respectively, but continued to control the CDN through various means, including by installing various family members to run operations at their behest. Miguel and Omar Trevino Morales are alleged to be personally responsible for committing dozens of murders and for directing assassinations, kidnappings, and acts of torture by Los Zetas and CDN members to promote and protect the Cartel’s drug trafficking activities and enrich its members.

“As alleged in the indictment, the defendants ran a transnational drug trafficking organization that was responsible for committing extreme violence and trafficking massive quantities of narcotics into the United States,” said Principal Deputy Assistant Attorney General Nicole Argentieri, head of the Justice Department’s Criminal Division. “The Justice Department is committed to holding cartel leaders like the defendants accountable for poisoning American communities and fueling violence here and abroad. We are also committed to working with our domestic and international colleagues in this effort, and we are grateful to our Mexican law enforcement partners for their ongoing collaboration in this case.”

“This superseding indictment underscores the Justice Department’s commitment to pursuing the leaders of the world’s most dangerous drug cartels, no matter how long it takes,” said U.S. Attorney Breon Peace for the Eastern District of New York. “The defendants’ prolific crimes and extreme acts of violence have wreaked havoc in the Eastern District of New York and across the country, and we look forward to holding the defendants accountable in a U.S. court of law.”

“For decades, these individuals have controlled one of the most violent drug organizations in Mexico, committing and directing the commission of horrible atrocities against our neighbors, the people of Mexico, and also in the United States,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “Nothing is more important than bringing dangerous individuals like this to justice. We look forward to working with the government of Mexico in bringing these brutal Cartel leaders to justice for the numerous crimes they have committed.”

“Homeland Security Investigations (HSI) stands with our partners in the fight against transnational criminal organizations to protect our citizens from their unlawful actions,” said HSI Executive Associate Director Katrina W. Berger. “The harm caused by the Los Zetas cartel reaches well beyond our borders, hurting communities and ruining lives here in the United States.”

“For decades, Los Zetas operated as one of the most violent drug trafficking organizations in the United States and Mexico under the direction of brothers Miguel (Zeta 40) and Omar Trevino Morales (Zeta 42),” said Special Agent in Charge Daniel C. Comeaux of the Drug Enforcement Administration (DEA) Houston Field Division. “The DEA has never wavered from the global fight against this vicious, ruthless cartel which thrived on the devastation they imparted on American communities. Through countless investigations, DEA brought high-ranking members of this destructive organization to justice. These latest indictments will continue to cripple this violent organization and force them to release the stranglehold they have exerted along the southwest border of the United States.”

If convicted, the defendants face a maximum penalty of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The DEA Houston Division investigated the case, with assistance from the DEA Mexico City Country Office. HSI New York contributed substantially to the investigation, as did the following: DEA San Antonio Division, DEA Eagle Pass Division, DEA Del Rio Division, DEA Laredo Division, DEA New York Division, FBI Washington Field Office, FBI El Paso Field Office, FBI San Antonio Field Office, FBI Laredo Field Office, FBI Del Rio Field Office, HSI San Antonio, HSI Del Rio, HSI Laredo, Texas Department of Public Safety, Texas Rangers, San Antonio Police Department, Bexar County Sherriff’s Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) San Antonio Field Division, ATF Laredo Field Division, IRS Criminal Investigation (IRS-CI) San Antonio, IRS-CI Waco, and the U.S. Border Patrol.

The Justice Department’s Office of International Affairs and Criminal Division’s Office of Enforcement Operations provided significant assistance in this case.

Trial Attorneys Kirk Handrich and Tara Arndt of the Criminal Division’s Narcotic and Dangerous Drug Section, numerous prosecutors for the Western District of Texas, and Assistant U.S. Attorney Andrew Wang for the Eastern District of New York are prosecuting the case.

This case is part of an Organized Crime and Drug Enforcement Task Force (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Genaro Garcia Luna, the former Secretary of Public Security in Mexico from 2006 to 2012, was sentenced today by United States District Judge Brian M. Cogan to 460 months’ imprisonment and a $2 million fine for his decade-long assistance to the Sinaloa Cartel in exchange for millions of dollars in bribes.  Following a four-week trial in February 2023, Garcia Luna was convicted by a jury of engaging in a continuing criminal enterprise, international cocaine distribution conspiracy, conspiracy to distribute and possess with intent to distribute cocaine, conspiracy to import cocaine and making false statements.

Breon Peace, United States Attorney for the Eastern District of New York, Anne Milgram, Administrator, U.S. Drug Enforcement Administration (DEA), and Katrina W. Berger, Executive Associate Director, Homeland Security Investigations (HSI), announced the verdict.

“Today’s sentencing of Genaro Garcia Luna is a critical step in upholding justice and the rule of law.  His betrayal of the public trust and the people he was sworn to protect resulted in more than one million kilograms of lethal narcotics imported into our communities and unleashed untold violence here and in Mexico. This sentence sends a strong message that no one, regardless of their position or influence, is above the law.” stated United States Attorney Peace.  “After years of destructive narcotrafficking and deceit, Garcia Luna will spend nearly 40 years where he belongs: federal prison.”

“Today’s sentencing of Mexico’s former Secretary of Public Security, Genaro Garcia Luna, sends a clear message to corrupt leaders around the world who use their positions of power to help the cartels: no amount of power will shield you from justice,” said DEA Administrator Anne Milgram. “Garcia Luna accepted millions of dollars in bribes from the Sinaloa Cartel to allow millions of kilograms of cocaine to flood the streets of the United States.  Instead of protecting the citizens of Mexico, Garcia Luna was protecting drug cartels.  The DEA will continue to relentlessly pursue drug trafficking organizations and those who protect them.”

“Today’s sentencing sends a powerful message that no one is above the law,” said HSI Executive Associate Director Katrina W. Berger. “HSI continues its partnered commitment to disrupting and dismantling the criminal networks responsible for bringing deadly narcotics into the U.S.”

As proven at trial, from 2006 to 2012, Garcia Luna was Mexico’s top law enforcement official, serving as Secretary of Public Security and, in that capacity, controlled Mexico’s Federal Police Force.  Previously, from 2001 to 2005, the defendant was the head of Mexico’s Federal Investigative Agency (AFI).  The defendant used his official positions to assist the violent Sinaloa Cartel (the Cartel) in exchange for millions of dollars in bribes.  Garcia Luna’s conduct included facilitating safe passage of the Cartel’s drug shipments, providing sensitive law enforcement information about investigations into the Cartel and helping the Cartel attack rival drug cartels, thereby facilitating the importation of multi‑ton quantities of cocaine and other drugs into the United States.

In exchange for bribes, the defendant’s Federal Police Force acted as bodyguards and escorts for the Cartel, allowing Cartel members to wear police uniforms and badges and helping to unload shipments of cocaine from planes at Mexico City’s airport, then delivering the cocaine to the Cartel. The defendant was paid in U.S. currency, stuffed variously in suitcases, briefcases and duffel bags.  The bribe amounts increased over the years as the Sinaloa Cartel grew in size and power through the assistance of the defendant.   Former members of the Cartel testified that bribe money was handed off to the defendant in a variety of locations, including at a “safe house” located in Mexico City where large amounts of cash were hidden in a false wall, at a car wash in Guadalajara and at a French restaurant in Mexico City across the street from the U.S. Embassy.  Further, in exchange for the millions of dollars in bribes, the defendant’s Federal Police Force leaked sensitive information that enabled the Cartel to evade detection by law enforcement or use the information in attacks on rival traffickers.  Finally, after moving to the United States in 2012, Garcia Luna submitted an application for naturalization in 2018, in which he lied about his past criminal conduct on behalf of the Cartel in an attempt to become a U.S. citizen.

In connection with post-trial proceedings, the Court also found that, while he was awaiting sentencing, Garcia Luna obstructed justice when he sought to bribe fellow inmates to provide false testimony in an attempt to overturn the jury’s verdict.

The investigation was led by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.  The Strike Force is based at the DEA’s New York Division and includes agents and officers of the DEA, New York City Police Department, New York State Police, Homeland Security Investigations, U.S. Internal Revenue Service Criminal Investigation Division, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Customs and Border Protection, U.S. Secret Service, United States Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision.

HSI New York’s El Dorado Task Force (EDTF) played an important role in this investigation. The EDTF is comprised of more than 200 law enforcement personnel representing approximately thirty-five (35) federal, state, and local law enforcement and regulatory agencies, including the DEA.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant U.S. Attorneys Saritha Komatireddy, Erin Reid, Ryan C. Harris, Philip Pilmar and Adam Amir are in charge of the prosecution, with the assistance of Paralegal Specialists Huda Abouchaer and Melissa Bennett.

The Defendant:

GENARO GARCIA LUNA
Age:  56
Miami, Florida

E.D.N.Y. Docket No. 19-CR-576 (S-1) (BMC)

Genaro García Luna, ex secretario de Seguridad Pública de México de 2006 a 2012, ha sido condenado hoy por el juez de distrito de Estados Unidos Brian M. Cogan a 460 meses de prisión y una multa de 2 millones de dólares por su ayuda durante una década al cártel de Sinaloa a cambio de millones de dólares en sobornos. Tras un juicio de cuatro semanas en febrero de 2023, García Luna fue declarado por un jurado culpable de participar en una organización criminal continue, conspiración para la distribución internacional de cocaína, conspiración para distribuir y posesión con intención de distribuir cocaína, conspiración para importar cocaína, y hacer declaraciones falsas.

Breon Peace, Fiscal de los Estados Unidos para el Distrito Este de Nueva York, Anne Milgram, Administradora de la Agencia Antidroga de los Estados Unidos (DEA), y Katrina W. Berger, Directora Ejecutiva Asociada de Investigaciones de Seguridad Nacional (HSI), anunciaron el veredicto.

"La sentencia dictada hoy contra Genaro García Luna es un paso fundamental en la defensa de la justicia y el Estado de Derecho. Su traición a la confianza pública y a las personas a las que había jurado proteger dio lugar a la importación de más de un millón de kilogramos de estupefacientes letales en nuestras comunidades y desató una violencia incalculable aquí y en México. Esta sentencia envía un mensaje contundente de que nadie, independientemente de su posición o influencia, está por encima de la ley," declaró el Fiscal de los Estados Unidos Peace. "Tras años de engaño y narcotráfico destructivo, García Luna pasará casi 40 años donde debe de estar: en una prisión federal".

"La sentencia dictada hoy contra el ex Secretario de Seguridad Pública de México, Genaro García Luna, envía un mensaje claro a los líderes corruptos de todo el mundo que utilizan sus posiciones de poder para ayudar a los cárteles: ningún poder les protegerá de la justicia", declaró la administradora de la DEA, Anne Milgram. "García Luna aceptó millones de dólares en sobornos del Cártel de Sinaloa para permitir que millones de kilogramos de cocaína inundaran las calles de Estados Unidos. En lugar de proteger a los ciudadanos de México, García Luna protegía a los cárteles de la droga. La DEA seguirá persiguiendo implacablemente a las organizaciones de narcotraficantes y a quienes las protegan."

"La sentencia dictada hoy envía un poderoso mensaje de que nadie está por encima de la ley", declaró Katrina W. Berger, Directora Ejecutiva Asociada de HSI. "HSI continúa con su compromiso conjunto de desarticular y desmantelar las redes delictivas responsables de introducir narcóticos mortales en Estados Unidos."

Como se demostró en el juicio, de 2006 a 2012, García Luna fue el máximo responsable de la aplicación de la ley en México, ocupando el cargo de Secretario de Seguridad Pública y, como tal, controlaba la Policía Federal de México. Anteriormente, de 2001 a 2005, el acusado fue jefe de la Agencia Federal de Investigación (AFI) de México. El acusado utilizó sus cargos oficiales para ayudar al violento Cártel de Sinaloa (el Cártel) a cambio de millones de dólares en sobornos. Las actividades de García Luna incluían facilitar el paso seguro de los cargamentos de droga del Cártel, proporcionar información confidencial acerca de las fuerzas de seguridad y sus investigaciones del Cártel, y ayudar al Cártel a atacar a otros cárteles de droga rivales, facilitando así la importación de cantidades de varias toneladas de cocaína y otras drogas a Estados Unidos.

A cambio de sobornos, la Policía Federal del acusado actuaba como guardaespaldas y escolta del cártel, permitiendo a los miembros del cártel llevar uniformes e insignias policiales y ayudando a descargar los cargamentos de cocaína de los aviones en el aeropuerto de Ciudad de México, para después entregar la cocaína al Cártel. Al acusado se le pagó en moneda estadounidense, metida en varias maletas, portafolios, y bolsas de lona. Las cantidades de los sobornos aumentaron a lo largo de los años a medida que el cártel de Sinaloa crecía en tamaño y poder gracias a la ayuda del acusado. Antiguos miembros del cártel testificaron que el dinero de los sobornos se le entregaba al acusado en diversos lugares, como en una "casa segura" situada en Ciudad de México, donde se ocultaban grandes cantidades de dinero en efectivo en una pared falsa, en un lavadero de coches de Guadalajara, y en un restaurante francés de Ciudad de México situado frente a la embajada de Estados Unidos. Además, a cambio de los millones de dólares en sobornos, la Policía Federal que el demandado lideraba filtró información confidencial que permitió al Cártel eludir la detección por parte de las fuerzas de seguridad, o utilizar dicha información en ataques contra traficantes rivales. Finalmente, después de mudarse a Estados Unidos en 2012, García Luna presentó una solicitud de naturalización en 2018, en la que mintió sobre su conducta criminal pasada en nombre del Cártel en un intento por convertirse en ciudadano estadounidense.

En relación con los procedimientos posteriores al juicio, el Tribunal también determinó que, mientras esperaba la sentencia, García Luna obstruyó la justicia cuando intentó sobornar a otros reclusos para que prestaran falso testimonio en un intento de anular el veredicto del jurado.

La investigación fue dirigida por la New York Strike Force, una unidad de lucha contra la delincuencia compuesta por organismos policiales federales, estatales y locales que cuenta con el apoyo de la Organized Crime Drug Enforcement Task Force y la New York/New Jersey High Intensity Drug Trafficking Area. La Strike Force tiene su base en la División de Nueva York de la DEA y cuenta con agentes y funcionarios de la DEA, el Departamento de Policía de la Ciudad de Nueva York, la Policía del Estado de Nueva York, Investigaciones de Seguridad Nacional, la División de Investigación Criminal del Departamento de Hacienda, la Oficina de Alcohol, Tabaco, Armas de Fuego y Explosivos, Aduanas y Protección de Fronteras de EE.UU., el Servicio Secreto de EE.UU., el Servicio de Alguaciles de Estados Unidos, la Guardia Nacional de Nueva York, el Departamento de Policía de Clarkstown, la Guardia Costera de EE.UU., el Departamento de Policía de Port Washington, y el Departamento de Correccionales y Supervisión Comunitaria del Estado de Nueva York.

La El Dorado Task Force (EDTF) de HSI en Nueva York desempeñó un papel importante en esta investigación. La EDTF está compuesta por más de 200 miembros de las fuerzas del orden que representan a unos treinta y cinco (35) organismos policiales y reguladores federales, estatales y locales, incluida la DEA.

El caso del gobierno está siendo tramitado por la Sección Internacional de Estupefacientes y Lavado de Dinero de la Oficina. Los fiscales adjuntos Saritha Komatireddy, Erin Reid, Ryan C. Harris, Philip Pilmar y Adam Amir están a cargo de la acusación, con la asistencia de las paralegales especialistas Huda Abouchaer y Melissa Bennett.

El Acusado:

GENARO GARCIA LUNA
Edad: 56
Miami, Florida

E.D.N.Y. Expediente No.: 19-CR-576 (S-1) (BMC)

Today, a federal jury in Brooklyn convicted John Ragano, also known as “Bazoo,” a member of the Bonanno organized crime family, for the extortionate collection of credit from a victim.  The verdict followed a four-day trial before United States District Judge Hector Gonzalez. When sentenced, Ragano faces up to 20 years in prison. The defendant was acquitted of extortionate collection of credit conspiracy, witness harassment and witness tampering.

Breon Peace, United States Attorney for the Eastern District of New York, and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the verdict.

“The defendant’s extortion of a victim while on pre-trial release, carried out even in the sanctity of the federal courthouse, is an affront to the criminal justice system and a glaring example of this Bonanno mobster’s flagrant disrespect for the law,” stated United States Attorney Peace.  “With today’s verdict, the jury has delivered a clear message that the rule of law will prevail over extortionate threats.”

“Despite previous arrests and detention, John Ragano tormented his victim to make weekly exorbitant loan payments and enforced humiliating methods when faced with resistance,” stated FBI Assistant Director in Charge Dennehy.  “His actions reflected his apathy to the criminal justice system as he repeatedly attempted to extort his victims in the midst of active legal proceedings.  Today’s verdict emphasizes the FBI’s intolerance of the mob’s historical inclination to utilize coercive and threatening tactics to fulfill their greedy demands.”

In early 2021, John Doe (“the victim”) borrowed $150,000 from Ragano and made interest payments of approximately $1,800 a week to him.  On September 14, 2021, Ragano was arrested in connection with the extortionate loan to the victim, as well as separate schemes to traffic marijuana and commit fraud. While Ragano was on pre-trial detention in that case, and after he was released on bond from the Metropolitan Detention Center in December 2021, he continued to try to collect the 2021 loan from the victim. On November 28, 2022, Ragano pleaded guilty in connection with his loan to the victim.  In 2022 and 2023, despite Ragano’s arrest, court supervision, guilty plea and sentence of 57 months’ imprisonment, he continued to extort the victim on the 2021 loan, including at status conferences held at the federal courthouse. 

On March 25, 2023, the victim recorded a meeting with Co-Conspirator #1 who explained that Ragano wanted the entire amount of the loan repaid and that “nobody’s looking for anybody to get hurt.”  On July 5, 2023, the victim went to a used auto parts yard where Ragano worked to discuss the loan and recorded the meeting.  The victim told Ragano that he was going to stop repaying the loan.  Ragano accused the victim of cooperating with the government and demanded that he remove all his clothes.  Ragano stated: “Okay, well then take off your f-----g s—t right now my man.  Take off your f-----g pants right now, lemme see, I want to see.”  At Ragano’s insistence, the victim complied and took off all his clothing.  At that point, two men at the business walked up behind Ragano, one of whom was holding metal tools.  Ragano then demanded the victim pay the money the defendant believed he was owed.  Despite being forced to strip naked, the victim was still able to record the confrontation.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Devon Lash and Andrew D. Reich are in charge of the prosecution with the assistance of Paralegal Specialist Kristina Kim.

The Defendant:

JOHN RAGANO
Age:  62
Franklin Square, Long Island

E.D.N.Y. Docket No. 24-CR-50 (HG)

An indictment was unsealed today in federal court in Brooklyn charging eight defendants for their alleged roles in a scheme to defraud Medicaid of approximately $68 million through the operation of two Brooklyn-based social adult day cares and a home health care financial intermediary that were paying kickbacks and bribes for services that were not provided.  The defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Lois Bloom.

Breon Peace, United States Attorney for the Eastern District of New York; Nicole M. Argentieri, Principal Deputy Assistant Attorney General and head of the Justice Department’s Criminal Division; Naomi Gruchacz, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); William S. Walker, Special Agent in Charge, Homeland Security Investigations, New York (HSI); and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), announced the arrests and charges.

“Social adult day care and home health services are meant to help seniors, but as alleged, the defendants allegedly turned their businesses into a brazen cash grab of millions of dollars from the Medicaid program,” stated United States Attorney Peace. “My Office is committed to investigating and prosecuting those who plunder taxpayer-funded, federal health care programs dollars while purporting to offer health care services.”

“As alleged in the indictment, these defendants orchestrated a years-long scheme to defraud Medicaid of tens of millions of dollars for social adult day care and home care services for seniors that they did not provide,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The defendants allegedly paid cash bribes and kickbacks to recruiters and Medicaid recipients as part of a scheme to enrich themselves at the expense of vital programs for senior citizens. Today’s charges make clear that the Criminal Division will not tolerate schemes that brazenly steal from federal health care programs.”

“HHS-OIG is committed to working with our law enforcement partners to investigate allegations that bribes and kickbacks are paid with Medicaid monies,” stated HHS-OIG Special Agent in Charge Gruchacz.  “Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”

“As alleged, the defendants saw nothing beyond the dollar signs associated with their crimes, and in turn defrauded the U.S. government of $68 million in welfare funds meant for one of our country’s most vulnerable populations,” stated HSI New York Special Agent in Charge Walker.  “Today’s announcement underscores the HSI New York El Dorado Task Force’s unrelenting focus on dismantling and disrupting financial fraud schemes that exploit the American public and hurt our economy.”

“The crimes outlined in this indictment take advantage of a network that offers essential health care and other services to those in need,” stated Interim NYPD Commissioner Donlon.  “Let it be clear: Anyone who attempts to profit by defrauding the system will face consequences, as these schemes drain already limited resources and deprive beneficiaries of crucial funds. I commend our NYPD investigators and federal law enforcement partners for their successful and continued collaboration.”

According to court documents, beginning in approximately October 2017, the defendants Zakia Khan and Ahsan Ijaz owned and operated two Brooklyn-based social adult day cares, Happy Family Social Adult Day Care, Inc. (Happy Family) and Family Social Adult Day Care, Inc. (Family Social), and a financial intermediary, Responsible Care Staffing, Inc. (Responsible Care), for the New York Medicaid Consumer Directed Personal Assistance Program (CDPAP), which permits family members of Medicaid recipients to receive payment for assisting Medicaid recipients with activities of daily living.  In exchange for kickbacks and bribes, marketers Elaine Antao, Omneah Hamdi, and Manal Wasef referred Medicaid recipients to Happy Family, Family Social and/or Responsible Care.  The marketers in turn allegedly paid kickbacks and bribes to Medicaid recipients for social adult day care and CDPAP services that Happy Family, Family Social and Responsible Care billed to Medicaid but were not provided or were induced by kickbacks and bribes.  Ansir Abassi and Amran Hashmi managed Happy Family and Family Social and the marketers. To carry out the kickback scheme, Khan, Antao, Ijaz, Abassi and Hamdi allegedly used business entities to launder the fraud proceeds and generate the cash used to pay kickbacks and bribes. Seema Memon, an employee of Happy Family who was previously charged by complaint on July 1, 2024, was also indicted for conspiracy to commit health care fraud.

Most of the New York Medicaid recipients enrolled at Happy Family and Family Social were paid illegal cash kickbacks and bribes and did not actually visit Happy Family or Family Social or receive CDPAP services arranged through Responsible Care on the purported dates of service as claimed to New York Medicaid/Managed Long Term Care plans.  In some instances, the Medicaid recipients were outside the United States on the purported dates of service.

Khan is charged with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks, paying health care kickbacks, conspiracy to commit money laundering and money laundering. If convicted, she faces a maximum penalty of 20 years in prison for each count of conspiracy to commit money laundering and money laundering, 10 years in prison for each count of conspiracy to commit health care fraud, health care fraud and paying health care kickbacks and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

Abassi, Antao, Hamdi and Ijaz are charged with conspiracy to commit health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks, conspiracy to commit money laundering and money laundering.  If convicted, they each face a maximum penalty of 20 years in prison for each count of conspiracy to commit money laundering and money laundering, 10 years in prison for conspiracy to commit health care fraud and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

Hashmi is charged with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks and paying health care kickbacks.  If convicted, he faces a maximum penalty of 10 years in prison for each count of conspiracy to commit health care fraud, health care fraud and paying health care kickbacks and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

Memon is charged with conspiracy to commit health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks and paying health care kickbacks.  If convicted, she faces a maximum penalty of 10 years in prison for each count of conspiracy to commit health care fraud and paying health care kickbacks and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

Wasef is charged with conspiracy to commit health care fraud and conspiracy to defraud the United States and to pay and receive health care kickbacks.  If convicted, she faces a maximum penalty of 10 years in prison for conspiracy to commit health care fraud and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.

Trial Attorney Patrick J. Campbell of the Criminal Division’s Fraud Section is prosecuting the case with Assistant United States Attorney Tanisha R. Payne of the Eastern District of New York’s Asset Recovery Section, who is handling forfeiture matters and Paralegal Specialist Jonah Levine. 

The Defendants:

KHAN, ZAKIA
Age:  53
Brooklyn, New York

ABASSI, ANSIR (also known as “Zaib Abassi” and “Ansir Zaib”)
Age:  38
Brooklyn, New York

ANTAO, ELAINE (also known as “Aleena”)
Age:  45
Brooklyn, New York

HAMDI, OMNEAH
Age:  61
Brooklyn, New York

HASHMI, AMRAN
Age:  53
Brooklyn, New York

IJAZ, AHSAM
Age:  27
Brooklyn, New York

MEMON, SEEMA
Age:  30
Brooklyn, New York

WASEF, MANAL
Age:  44
Brooklyn, New York
 

E.D.N.Y. Docket No.: 24-CR-409 (AMD)

An indictment was unsealed today in Brooklyn, New York, charging eight defendants for their alleged roles in a scheme to defraud Medicaid of approximately $68 million through the operation of two social adult day cares and a home health care financial intermediary that were paying kickbacks and bribes for services that were not provided.

According to court documents, Zakia Khan, 53, of Brooklyn, and Ahsan Ijaz, 27, of Brooklyn, owned two social adult day cares, Happy Family Social Adult Day Care Center Inc. (Happy Family) and Family Social Adult Day Care Center Inc. (Family Social), and a financial intermediary, Responsible Care Staffing Inc. (Responsible Care), for the New York Medicaid Consumer Directed Personal Assistance Services Program (CDPAP), which permits family members of Medicaid recipients to receive payment for assisting Medicaid recipients with activities of daily living. Beginning in approximately October 2017, in exchange for kickbacks and bribes, marketers Elaine Antao, 45, also known as Aleena, of Brooklyn, Omneah Hamdi, 61, of Brooklyn, and Manal Wasef, 44, of Brooklyn, allegedly referred Medicaid recipients to Happy Family, Family Social, and/or Responsible Care. The marketers in turn allegedly paid kickbacks and bribes to Medicaid recipients for social adult day care and CDPAP services that Happy Family, Family Social, and Responsible Care billed to Medicaid but were not provided or were induced by kickbacks and bribes. Ansir Abassi, 38, also known as Zaib Abassi and Ansir Zaib, of Brooklyn, and Amran Hashmi, 53, of Brooklyn, allegedly managed Happy Family and Family Social and the marketers. To carry out the kickback scheme, Khan, Antao, Ijaz, Abassi, and Hamdi allegedly used business entities to launder the fraud proceeds and generate the cash used to pay kickbacks and bribes. Seema Memon, 30, of Brooklyn, an employee of Happy Family who was previously charged by complaint on July 1, was also indicted.

“As alleged in the indictment, these defendants orchestrated a years-long scheme to defraud Medicaid of tens of millions of dollars for social adult day care and home care services for seniors that they did not provide,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The defendants allegedly paid cash bribes and kickbacks to recruiters and Medicaid recipients as part of a scheme to enrich themselves at the expense of vital programs for senior citizens. Today’s charges make clear that the Criminal Division will not tolerate schemes that brazenly steal from federal health care programs.”

“Social adult day care and home health services are meant to help seniors, but as alleged, the defendants allegedly turned their businesses into a brazen cash grab of millions of dollars from the Medicaid program,” said U.S. Attorney Breon Peace for the Eastern District of New York. “My office is committed to investigating and prosecuting those who plunder taxpayer-funded, federal health care programs dollars while purporting to offer health care services.” 

“HHS-OIG is committed to working with our law enforcement partners to investigate allegations that bribes and kickbacks are paid with Medicaid monies,” said Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”

“The crimes outlined in this indictment took advantage of a network that offers essential health care and other services to those in need,” said Interim Commissioner Thomas G. Donlon of the New York City Police Department (NYPD). “Let it be clear: anyone who attempts to profit by defrauding the system will face consequences, as these schemes drain already limited resources and deprive beneficiaries of crucial funds. I commend our NYPD investigators and federal law enforcement partners for their successful and continued collaboration.”

“As alleged, the defendants saw nothing beyond the dollar signs associated with their crimes, and in turn defrauded the U.S. government of $68 million in welfare funds meant for one of our country’s most vulnerable populations,” said Special Agent in Charge William S. Walker of Homeland Security Investigations (HSI) New York. “Today’s announcement underscores the HSI New York El Dorado Task Force’s unrelenting focus on dismantling and disrupting financial fraud schemes that exploit the American public and hurt our economy.”

Khan is charged with conspiracy to commit health care fraud, three counts of health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks, paying health care kickbacks, conspiracy to commit money laundering, and money laundering. If convicted, she faces a maximum penalty of 20 years in prison for each count of conspiracy to commit money laundering and money laundering, 10 years in prison for each count of conspiracy to commit health care fraud, health care fraud, and paying health care kickbacks, and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

Abassi, Antao, Hamdi, and Ijaz are charged with conspiracy to commit health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks, conspiracy to commit money laundering, and money laundering. If convicted, they face a maximum penalty of 20 years in prison for each count of conspiracy to commit money laundering and money laundering, 10 years in prison for conspiracy to commit health care fraud, and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

Hashmi is charged with conspiracy to commit health care fraud, three counts of health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks, and paying health care kickbacks. If convicted, he faces a maximum penalty of 10 years in prison for each count of conspiracy to commit health care fraud, health care fraud, and paying health care kickbacks, and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

Memon is charged with conspiracy to commit health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks, and paying health care kickbacks. If convicted, she faces a maximum penalty of 10 years in prison for each count of conspiracy to commit health care fraud and paying health care kickbacks and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

Wasef is charged with conspiracy to commit health care fraud and conspiracy to defraud the United States and to pay and receive health care kickbacks. If convicted, she faces a maximum penalty of 10 years in prison for conspiracy to commit health care fraud and five years in prison for conspiracy to defraud the United States and to pay and receive health care kickbacks.

HHS-OIG, NYPD, and HSI are investigating the case.

Trial Attorney Patrick J. Campbell of the Criminal Division’s Fraud Section is prosecuting the case. Assistant U.S. Attorney Tanisha R. Payne for the Eastern District of New York is assisting with forfeiture matters.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Earlier today, a 17-count superseding indictment was unsealed in federal court in Central Islip charging seven members of the violent transnational criminal organization La Mara Salvatrucha, also known as the MS-13, with multiple racketeering offenses including two murders, one attempted murder, murder conspiracies, a narcotics trafficking conspiracy and related firearms offenses (the “Superseding Indictment”).  Two of those defendants, William Lainez-Duran, also known as “Chino” and “Spanky,” and Elvin Eulises Vasquez-Lopez, also known as “Pikachu,” were arrested this morning in Hempstead, New York and will be arraigned this afternoon before United States Magistrate Judge Steven L. Tiscione.  Another defendant, Jose Omar Yanes-Romero, also known as “Jose Pineda,” “Chino” and “Iron,” was arrested this morning in Culpeper, Virginia, and will be arraigned at the Charlottesville federal courthouse in the Western District of Virginia. Two of the remaining three defendants are in custody on criminal charges, and the third is in immigration custody and will be arraigned at a later date.

Defendants Henry Aquino-Hernandez, also known as “Zancudo,” an associate of the Herndon City clique, Yanes-Romero, a member of the Coronados clique and Lainez-Duran, a member of the Hempstead clique, have been charged with participating in the July 19, 2022 murder of Walter Ochoa. Defendant Gerson Hernandez, also known as “Steven Jefferson,” “Jeffrey,” “Serio,” “Serioso” and “Necio,” a member of the Hempstead clique, was previously charged with participating in the murder.  Henry Canales, also known as “Thunder” and “Cruzito,” a member of the Coronados clique who is currently in New York State custody, has been charged with a related murder conspiracy, as well as with being an accessory after the fact. Additionally, Jairo Cornejo-Crespin, also known as “Flaco,” a member of the Hempstead clique, has been charged with a December 15, 2023 attempted murder, which occurred adjacent to Hempstead High School.  Separately, Canales and Vasquez-Lopez, a member of the Coronados clique, are charged with a May and June 2022 conspiracy to murder rival gang members.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), William S. Walker, Special Agent in Charge, U.S. Department of Homeland Security, Homeland Security Investigations, New York (HSI), Anne T. Donnelly, Nassau County District Attorney and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the charges. 

“The racketeering offenses alleged in the superseding indictment, including murder, murder conspiracies, drug trafficking, and a brazen shooting outside Hempstead High School at dismissal time demonstrate the MS-13 gang members’ brutality and utter disregard for human life,” stated United States Attorney Peace.  “The relentless efforts of the prosecutors in my Office and our local and federal law enforcement partners to bring these offenders to justice will help reduce violence on Long Island and make our communities safer.”

Mr. Peace expressed his appreciation to the FBI’s Long Island Gang Task Force, the United States Attorney’s Office for the Western District of Virginia, the Richmond Division of the FBI, the Culpeper County Sheriff's Office and the Culpeper Police Department.

“These six MS-13 members allegedly conducted a series of retaliatory murders, shootings, and drug trafficking in furtherance of the gang’s nefarious tactics and criminal operations on Long Island,” stated FBI Assistant Director in Charge Dennehy. “This alleged violence recklessly jeopardized public safety as it encroached on neighborhoods, school properties, and recreational spaces, placing innocent bystanders in the crosshairs. With the assistance of our law enforcement and prosecutorial partners, the FBI will continue to dismantle all MS-13 cliques plaguing our communities.”

“Today’s charges underscore our unwavering focus on public safety and the continued collaboration with our law enforcement partners to address the threat posed by MS-13 to Long Island communities.  HSI New York will not stand idly by as the MS-13 gang attempts to strengthen its presence in Nassau County,” stated HSI New York Special Agent in Charge Walker.  “With each new indictment, we continue to whittle away at MS-13 on Long Island and at its false notion of impunity from the law.”

“For years, the Nassau County District Attorney’s Office has worked with our federal and local law enforcement partners to cripple MS-13 and other criminal organizations and has successfully diminished their impact in our communities,” stated Nassau County District Attorney Donnelly.  “The defendants targeted in this wide-ranging indictment have been involved in multiple violent crimes in Hempstead and ruthless gang violence that has cost so many individuals their lives. We will continue to collaborate with our federal and local partners to take down dangerous gang members and protect our residents.”

As set forth in the superseding indictment and a detention memorandum filed earlier today, six defendants are charged with participating in the July 19, 2022 murder of Ochoa in Uniondale Park in Uniondale, New York.  Ochoa was targeted by the MS-13 because he was suspected of being a member of a rival street gang.   Hernandez, Aquino-Hernandez, Canales, Lainez-Duran, Vasquez-Lopez, Yanes-Romero and other MS-13 members also allegedly plotted the murder in retaliation for the killing of an MS-13 member 11 days earlier, which the MS-13 blamed on the 18th Street gang.  On the evening of July 19, Ochoa was with another individual in Uniondale Park when they were approached by Hernandez, Yanes-Romero and a third MS-13 member who were armed with a .45 caliber handgun and at least one knife.  The three gang members shot Ochoa to death and stabbed him in the neck, and then fled the park.

The superseding indictment also charges Cornejo-Crespin, who was previously charged in Nassau County and is currently incarcerated, with an attempted murder in Hempstead.  Specifically, on December 15, 2023, near Hempstead High School, Cornejo-Crespin used a 9-millimeter semiautomatic pistol bearing no make, model or serial number (also known as a “ghost gun”) to shoot an 18-year-old male that he believed to be a rival gang member.  The victim was shot five times but survived.  The shooting took place at approximately 3:22 p.m., shortly after school dismissal, when numerous students were walking around the neighboring area.

Finally, the superseding indictment charges six of the defendants with conspiring to distribute cocaine and marijuana.  These charges stem from the MS-13 cliques’ street-level sales of cocaine and marijuana on Long Island, the proceeds of which were used to help finance the MS-13’s criminal operations including purchasing firearms, ammunition and other weapons and sending money to MS-13 leadership in Central America.

The superseding indictment is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent transnational criminal organization.  The MS-13’s leadership traditionally has been based in El Salvador, Honduras, Guatemala and Mexico, but the organization also has thousands of members and an increasing number of leaders in the United States.  With numerous branches, or “cliques,” the MS-13 is the most violent criminal organization on Long Island.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York. A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2010 alone, this Office has obtained indictments charging MS-13 members with carrying out more than 70 murders in the Eastern District of New York, and it has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, the NCPD, the Suffolk County Police Department, the Nassau County Sheriff’s Department, the Suffolk County Sheriff’s Office, the Suffolk County Probation Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department and the New York State Department of Corrections and Community Supervision.

If convicted, Hernandez, Aquino-Hernandez, Lainez-Duran and Yanes-Romero face up to life in prison, or the death penalty; Cornejo-Crespin faces up to life in prison; Canales faces up to 55 years in prison; and Vasquez-Lopez face up to 50 years in prison.  The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.  Assistant United States Attorneys Megan E. Farrell, Justina L. Geraci and Paul G. Scotti are in charge of the prosecution.

New Defendants:

HENRY AQUINO-HERNANDEZ (also known as “Zancudo”)
Age: 20
Bowling Green, Virginia (formerly of Uniondale, New York)

HENRY CANALES (also known as “Thunder” and “Cruzito”)
Age: 24
Auburn, New York (formerly of Hempstead, New York)

JAIRO CORNEJO-CRESPIN (also known as “Flaco”)
Age: 24
Brooklyn, New York (formerly of Freeport, New York)

WILLIAM LAINEZ-DURAN (also known as “Chino” and “Spanky”)
Age: 24
Uniondale, New York

Elvin Eulises Vasquez-Lopez (also known as “Elvin Amaya” and “Pikachu”)
Age: 23
Hempstead, New York

Jose Omar Yanes-Romero (also known as “Jose Pineda,” “Iron,” “Speedy” and “Chino”)
Age: 24
Culpeper, Virginia (formerly of Hempstead, New York)

Defendant Previously Indicted:

GERSON HERNANDEZ (also known as “Steven Jefferson,” “Jeffrey,” “Serio,” “Serioso” and “Necio”)
Age: 23
East Meadow, New York (formerly of Hempstead, New York)

E.D.N.Y. Docket No. 23-CR-369 (S-1)(JMA)

Earlier today, in federal court in Central Islip, John B. Mensch, the former owner and operator of East End Bus Lines, Inc. and its affiliated entities (East End), pleaded guilty in connection with a nearly year-long bank fraud conspiracy.  The proceeding was held before United States District Judge Nusrat J. Choudhury.  When sentenced, Mensch faces up to five years’ imprisonment as well as financial penalties, including restitution to two victim banks of approximately $9.6 million.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Patrick J. Freaney, Special Agent in Charge, U.S. Secret Service, New York Office, announced the guilty plea.

“Rather than take lawful steps to wind down his failing businesses, John Mensch resorted to criminality, operating a scheme to defraud two banks into advancing him millions of dollars that neither Mensch nor his company ever had, or had any realistic expectation of obtaining,” stated United States Attorney Peace.  “Mensch’s fraud resulted in the banks unwittingly subsidizing several months of his financial mismanagement.  This Office will continue to aggressively investigate and prosecute criminals like Mensch who, through fraud and deception, seek to use financial institutions as a personal piggy bank.”

“This lengthy investigation brings down a ringleader who willfully swindled banking partners through the extensive use of fraudulent checks – siphoning millions of dollars in ill-gotten gains to his own coffers,” stated Secret Service Special Agent in Charge Freaney. “"I want to commend the many investigators who saw this comprehensive case to a successful conclusion. From the Secret Service Long Island Resident Office to the Federal Bureau of Investigation, and our prosecutorial partners at the Eastern District of New York, the law enforcement community in New York remains steadfast in its commitment to hold these types of insidious criminals accountable.”

FBI Assistant Director in Charge Dennehy stated, "Desperate to restore his failing business, John Mensch, the owner of East End Lines, defrauded two banks of more than $9 million through an elaborate check-bouncing scheme. He exploited company privileges to immediately access fraudulent funds while his business was running on empty. The FBI will continue to investigate individuals who deceptively cash in on financial assistance programs."

As set forth in the information and statements made during the plea proceeding, Mensch was the owner and operator of East End, a transportation company that provided busing services for students on Long Island and elsewhere.  Between 2017 and September 2018, East End maintained numerous accounts—and was granted expedited check-clearing privileges—at banks located in Suffolk County and Orange County, New York.  Those privileges meant that when East End deposited a check, the company would have near-immediate access to the deposited funds, even before the check cleared.  Mensch and other East End executives abused those privileges by engaging in an elaborate “check-kiting” scheme—that is, passing fraudulent checks between East End’s various accounts to keep East End operational despite being effectively insolvent. 

Specifically, Mensch and other East End executives drew checks on East End’s bank accounts at Financial Institution #1, despite those accounts having insufficient funds to cover the checks.  Those bad checks were deposited into East End’s bank accounts at Financial Institution #2, which, unaware that the checks would eventually bounce, allowed East End immediate access to the funds.  East End withdrew those funds to meet various financial obligations and then, before the checks bounced, conducted the same process in the reverse, drawing bad checks on its Financial Institution #2 accounts and depositing them into its Financial Institution #1 accounts to create the false impression that funds were available to cover the earlier checks.  This reciprocal process continued, with the banks advancing East End non-existent funds for several months until the scheme was detected in September 2018.  By that time, East End had obtained millions of dollars from Financial Institution #1 and Financial Institution #2, all of which it had spent while continuing to operate at a deficit. 

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including frauds directed at financial institutions, such as those Mensch committed.

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.  Assistant United States Attorneys Anthony Bagnuola and Adam R. Toporovsky are in charge of the prosecution.

The Defendant:

JOHN B. MENSCH
Age:  54
Quogue, New York

E.D.N.Y. Docket No. 24-CR-334 (NJC)

Earlier today, in federal court in Brooklyn, Erlene King was charged with wire fraud in connection with her attempt to steal funds from New York City’s Campaign Finance Board (CFB).

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the charge.

Mr. Peace expressed his appreciation to the New York City CFB for its cooperation and assistance during the investigation.

CFB Overview

The CFB oversees and administers a publicly funded campaign finance system in connection with municipal elections in New York City.  This includes a “matching funds program” that provides eligible candidates with public funds based on the number and amount of certain donor contributions. According to the CFB, the program “empowers New Yorkers in every neighborhood to make their voices heard in city elections” and “by encouraging candidates to raise small-dollar contributions from average New Yorkers, the program increases engagement between voters and those who seek to represent them.”

Candidates running for the Office of the Brooklyn Borough President in the 2021 election cycle were eligible to participate in the CFB’s matching funds program if they met certain criteria.  Among other things, to be eligible to receive public funds, candidates were required to meet a two-part fundraising threshold. Specifically, a candidate had to collect a minimum number of donations and raise a minimum amount of money from New York City residents before the CFB paid any matching funds.

For candidates who ran for the Office of the Brooklyn Borough President during the 2021 election cycle, candidates received up to $8 in matching funds for each $1 of eligible contributions, up to $175 per contributor.  In other words, if a candidate received an eligible contribution of $175, a candidate for the Office of the Brooklyn Borough President could collect up to $1,400 in matching funds.  In total, the matching funds program provided up to $1,457,777 in public matching funds to a candidate for the Office of the Brooklyn Borough President.  Because campaigns for Brooklyn Borough President during the 2021 election cycle needed to raise at least $50,000 in eligible contributions to receive any matching funds, any candidate who was eligible to receive matching funds necessarily received at least $400,000 in matching funds from the CFB.

The Scheme

As alleged in court documents, King served as the campaign treasurer for a candidate who ran in a primary for the Office of the Brooklyn Borough President during the 2021 election cycle (Candidate #1).  King obtained fraudulent donations for the purpose of inducing the CFB to provide matching funds to the campaign.  A number of those contributions, which were obtained at King’s direction, were fraudulent nominee contributions made in the names of individuals who either did not personally fund the contributions or were later reimbursed for their contributions (i.e., straw donors).  For example, King used CashApp to send money to intermediaries and instructed them to distribute the money to fund contributions from straw donors to Candidate #1.  Other fraudulent contributions were made in the names of individuals whose identities were stolen and who had not personally contributed to Candidate #1.  The CFB ultimately determined that the campaign submitted fictitious records and did not pay any public matching funds to the campaign.

The charges in the information are merely allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, the defendant faces up to 20 years in prison.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States  Attorneys Philip Pilmar and Eric Silverberg are in charge of the prosecution.

The Defendant:

ERLENE KING
Age:  71
Brooklyn, NY

E.D.N.Y. Docket No. 24-CR-374 (CBA)

Earlier today, at the federal courthouse in Central Islip, Leniz Escobar, also known as “Diablita,” an associate of the Leeward Locos Salvatruchas (Leeward) and Brentwood Locos Salvatruchas (Brentwood) cliques of La Mara Salvatrucha, also known as the MS-13, a violent transnational criminal organization, was sentenced by United States Second Circuit Judge Joseph F. Bianco, sitting by designation, to 600 months’ imprisonment.  On April 8, 2022, Escobar was convicted after a four-week trial of racketeering, including predicate acts of murder, conspiracy to murder rival gang members, and obstruction of justice, and murder in aid-of racketeering.  Those charges stemmed from her participation in the April 11, 2017 murders of Justin Llivicura, Michael Lopez, Jorge Tigre and Jefferson Villalobos, who were hacked to death with machetes and other sharp objects after Escobar lured them to a local Central Islip park.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Robert E. Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the sentence.

“The defendant demonstrated her allegiance to the MS-13 gang by luring four young men to their slaughter,” stated United States Attorney Peace.  “Today’s significant sentence reflects not only the seriousness of her conduct but also the consequences of her actions including the terror and suffering experienced by the victims, and the life-altering grief that their families continue to suffer.  It is my hope that the justice meted out today will provide some comfort to those who lost loved ones to this senseless gang violence.”

“In April 2017, Leniz Escobar ensnared four young men in a lethal ambush where fellow MS-13 associates ruthlessly murdered them due to assumed allegiance with a rival gang. Her subsequent bragging of her inhumane trap to ranked members exemplifies Escobar's perverted prioritization of gang status over human life. May today's sentencing provide some justice to the victims' families, and serve as a promise that the FBI will continue to eradicate the MS-13 presence terrorizing our communities,” stated FBI Assistant Director in Charge Dennehy.

"The senseless and brutal murder of four young people by members of the transnational gang MS-13, terrorized the Central Islip community and sent shockwaves across the nation," Suffolk County Police Acting Commissioner Robert Waring said. "Leniz Escobar played a significant role in leading four victims to their deaths and will pay the necessary price for her part. We hope that today's sentencing brings some measure of closure to the families who have suffered unimaginable grief. We will continue to pursue those who threaten the safety and well-being of members of our community with relentless determination."

The evidence at trial proved that on the evening of April 11, 2017, Escobar and a co-conspirator, Keyli Gomez, lured five young men, including the four murder victims, to a park in Central Islip where they were attacked by members of the MS-13, including Josue Portillo, Freiry Martinez, Alexis Hernandez, Edwin Rodriguez, Sergio Segovia-Pineda, Omar Antonio Villalta, Henry Salmeron, Anderson Sanchez and others.  The MS-13 members believed the victims to be members of a rival gang; at least two of the victims had offended the MS-13 by posting photos on social media in which they wore certain items and flashed hand signs that signified membership in the MS-13 gang.  Escobar and Gomez showed the gang-related photos to members of the MS-13, who confirmed the young men did not belong to MS-13, and it was decided that the victims would be killed.  Gomez testified at the trial that she and Escobar drove with the victims to the park, led them to a predetermined wooded area and sent the MS-13 members text-messages notifying them of their arrival.  The MS-13 members and associates proceeded to the designated location and encircled the victims under the cover of darkness.  One of the intended victims immediately fled and was able to escape.  Llivicura, Lopez, Tigre and Villalobos were surrounded by MS-13 members, who attacked them with machetes, knives, an axe, and wooden clubs.  After the attack, the MS-13 members dragged the victims’ bodies to a more secluded spot in the woods, piled them up, and then fled.  The victims’ bodies were discovered the following evening.

In the days following the murders, Escobar bragged to other MS-13 members about her role in the killings and, in recorded calls with her boyfriend, who was a high-ranking member of the Brentwood clique, discussed the attack in detail.  Using barely coded language, and referring to the victims who were killed, she said, “four individuals took the train and who knows when they’ll be back, got me?” Escobar then shared how that plan went awry when one person escaped, adding “But one of them, one of them managed to still be here on the map” and “he knows stuff about me.”  In a separate call, Escobar told her boyfriend that she was “happy for this to happen.”  Of the four victims, she said they were “never coming back . . . somewhere else . . . seeing the light . . . no more . . . out of here . . . not on the map.”

Additionally, Escobar destroyed evidence of her involvement in the murders by disposing of a sweatshirt stained with the blood of a victim, tossing her cellular phone from a moving vehicle when she was being followed by the police and falsely telling detectives that she and Gomez were victims of a random robbery in the park on the night of the murders.

More than a dozen MS-13 members and associates have been charged in connection with the April 11, 2017 murders, including the individuals listed above.  Of these defendants, Escobar is the fifth person to be sentenced.  Josue Portillo was sentenced to 55 years’ incarceration, Freiry Martinez was sentenced to 50 years’ incarceration, Anderson Sanchez was sentenced to 32 years’ incarceration, Alexis Hernandez was sentenced to 29 years’ incarceration, and the remaining defendants are pending sentence.

Today’s sentencing is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13.  The MS-13’s leadership traditionally has been based in El Salvador, Honduras, Guatemala and Mexico, but the organization also has thousands of members and an increasing number of leaders in the United States.  With numerous branches, or “cliques,” the MS-13 is the most violent criminal organization on Long Island.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 70 murders in the Eastern District of New York, resulting in the convictions of dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, which is comprised of agents and officers of the FBI, SCPD, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation Office, Suffolk County Sheriff’s Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department and the New York State Department of Corrections and Community Supervision. 

The government’s case is being handled by the  Criminal Section of the Office’s Long Island Division.  Assistant United States Attorneys Paul G. Scotti, Justina L. Geraci and Megan E. Farrell are in charge of the prosecution, with the assistance of Automated Litigation Support Specialist Michael Compitello.

The Defendant:

LENIZ ESCOBAR
Age: 24
Islip Terrace, New York

E.D.N.Y. Docket No. 21-CR-101 (JFB)

Earlier today, in federal court in Brooklyn, Da’Vante Bolton, an employee of the New York City Administration for Children’s Services (ACS), pleaded guilty to accepting bribes, admitting that he smuggled contraband into a juvenile detention facility in exchange for illegal payments. On September 3, 2024, September 10, 2024 and September 26, 2024, ACS employees Octavia Napier, Christopher Craig and Nigel King pleaded guilty, respectively, to Travel Act bribery charges in connection with the same conduct.  Today’s proceeding was held before United States District Judge Orelia E. Merchant.  All four defendants were Youth Development Specialists at the Crossroads Juvenile Center in Brownsville, Brooklyn (Crossroads).  When sentenced, Bolton faces a maximum sentence of 10 years’ imprisonment, and Napier, Craig and King each face a maximum sentence of five years’ imprisonment.

Breon Peace, United States Attorney for the Eastern District of New York, Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI) and James E. Dennehy, Assistant Director in Charge, New York Field Office (FBI) announced the charges.

“These defendants prioritized their own financial interests above the safety and security of residents and co-workers at the Crossroads Juvenile Center, giving dangerous contraband to juveniles in their care in exchange for bribes,” stated United States Attorney Peace.  “This Office and our law enforcement partners will not stop rooting out and prosecuting corruption in our City’s jails and juvenile detention facilities.”

DOI Commissioner Jocelyn E. Strauber said, “These four City Youth Development Specialists were responsible for the safety and well-being of juveniles at the Crossroads Center in Brooklyn.   They failed the juveniles in their care, and the City, when they took bribes to smuggle dangerous items into Crossroads, including razor blades, prescription pills, and alcohol.  I thank the FBI and the U.S. Attorney’s Office for the Eastern District of New York for their partnership in the investigation that led to guilty pleas of these four defendants.”

Approximately 120 residents, ranging in age from 14 to 20, are detained at Crossroads.  Residents at Crossroads are prohibited from possessing any contraband, including narcotics, cellular telephones, cigarettes, weapons and alcohol, among other prohibited items. ACS employees at Crossroads are trained to confiscate any contraband they find and must notify a supervisor if any contraband is discovered.  Although staff members are supposed to undergo a security screening whenever they enter the facility, a significant amount of contraband has recently been recovered from Crossroads residents.   Between approximately March 2022 and May 2024, at least 75 cell phones and more than 340 scalpels or blades were recovered from the facility, as well as narcotics and tobacco.

The defendants are or were Youth Development Specialists at Crossroads, who were responsible for supervising residents. Their responsibilities are similar to those of a correction officer at a jail facility, except, among other differences, Youth Development Specialists are restricted in the type of force they may use and are not permitted to carry pepper spray or restraints.

Da’Vante Bolton has been employed by ACS since March 2020.  Bolton accepted more than $20,000 in bribes from Crossroads residents or their associates and, in exchange, smuggled in razor blades and marijuana.

Christopher Craig has been employed by ACS since August 2018.  Craig received more than $5,000 in bribes to smuggle in contraband, including marijuana and tobacco.

Nigel King was employed by ACS from October 2021 to August 2024.  King accepted more than $6,000 in bribes for smuggling in marijuana, prescription pills and alcohol.

Octavia Napier was employed by ACS from June 2022 to May 2023.  Napier received more than $2,000 in bribes to both smuggle in contraband and allow a Crossroads resident to use Napier’s Cash App account to run the resident’s contraband distribution business from within Crossroads.

A fifth defendant, Roger Francis, is currently awaiting trial on the same charges.

The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States  Attorneys Philip Pilmar and Andrew D. Grubin and Special Assistant United States Attorney Cassie Perez of the Bronx District Attorney’s Office are in charge of the prosecution, with assistance from Legal Assistant Thomas Englert.

Defendants Who Have Pled Guilty:

DA’VANTE BOLTON
Age: 31
Queens, NY

E.D.N.Y. Docket No. 24-CR-383 (OEM)

CHRISTOPHER CRAIG
Age:  37
Brooklyn, NY

E.D.N.Y. Docket No. 24-CR-345 (OEM)

NIGEL KING
Age:  45
Queens, NY

E.D.N.Y. Docket No. 24-CR-368 (RPK)

OCTAVIA NAPIER
Age: 26
Brooklyn, NY

E.D.N.Y. Docket No. 24-CR-328 (FB)

Defendant Awaiting Trial:

ROGER FRANCIS
Age: 58
Brooklyn, NY

E.D.N.Y. Docket No. 24-CR-342 (NCM)

Earlier today, a complaint was unsealed in Brooklyn federal court charging Leon Wilson, a correctional officer at the Metropolitan Detention Center (MDC-Brooklyn), with willfully depriving an individual of his constitutional rights while acting under color of law.  Last fall, Wilson, while on duty and driving a Bureau of Prisons (BOP)-issued minivan, allegedly chased a civilian vehicle from the MDC-Brooklyn staff parking lot and through a large section of Brooklyn before firing three gunshots towards the car, at least one of which struck one of its occupants.  Wilson was taken into federal custody yesterday and is scheduled to be arraigned this afternoon before United States Magistrate Judge Marcia M. Henry.

Breon Peace, United States Attorney for the Eastern District of New York, Ryan T. Geach, Special Agent in Charge, Department of Justice, Office of the Inspector General, Northeast Region (DOJ-OIG) and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

“Correctional officers are sworn to uphold the law but, as alleged, this defendant violated his oath and position by starting a dangerous car chase through the streets of Brooklyn ending with him shooting wildly at the passengers in the other car without justification, and wounding one,” stated United States Attorney Peace. “My Office is committed to protecting the civil rights of everyone in this district and will hold accountable those who violate them.”

Mr. Peace expressed his appreciation to the New York City Police Department (NYPD) and the United States Department of Justice Civil Rights Division for their work in this case.

“Today’s complaint alleges that Wilson recklessly pursued another vehicle through the streets of Brooklyn and fired a weapon three times, harming a passenger and endangering countless New Yorkers.  His alleged conduct was dangerous, illegal, and antithetical to the behavior we expect from an officer of the law,” said Ryan T. Geach, Special Agent in Charge, Department of Justice Office of the Inspector General, Northeast Region.

“Leon Wilson, a correctional officer, allegedly failed to report an unlawful on-duty shooting to the Bureau of Prisons following an unauthorized high-speed vehicle pursuit from the Metropolitan Detention Center. The defendant’s alleged actions exceeded the boundaries of his authority and recklessly endangered countless civilians. The FBI is committed to pursuing those who willingly disregard public safety and violate policies designed to protect constitutional rights,” stated FBI Assistant Director in Charge Dennehy.

As alleged in court documents, Wilson was on duty at MDC-Brooklyn on September 4, 2023 when he chased a BMW out of the facility’s staff parking lot and off MDC-Brooklyn property.  Wilson had no authority to pursue the BMW past MDC-Brooklyn’s property line, but he did so anyway, ultimately chasing the BMW to the edge of the Brooklyn Bridge, approximately five miles from the facility. During the chase, Wilson exceeded the speed limit, passed other vehicles, and ran red lights. Approximately two minutes after the chase began—and nearly a mile from MDC-Brooklyn—Wilson fired three shots at the BMW, one of which penetrated the rear of the vehicle and struck a passenger in the back seat.  Wilson continued to chase the BMW for several minutes after firing his weapon.  He never reported the on-duty shooting to the NYPD, MDC-Brooklyn, or BOP personnel.   

The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Wilson faces up to ten years in prison.

The government’s case is being handled by the Office’s Civil Rights and Public Integrity Sections.  Assistant United States Attorneys Erin Reid and Eric Silverberg are in charge of the prosecution, with assistance from Eastern District of New York Special Agent Anthony Cunder and Paralegal Specialist Nadya Osman.

The Defendant:

LEON WILSON
Age:  49
Bronx, New York

E.D.N.Y. Docket No. 24-MJ-553 (SJB)

Today in Brooklyn, the United States Attorney’s Office for the Eastern District of New York announced charges in five cases addressing violence at New York City’s federal pretrial detention facility, the Metropolitan Detention Center (MDC-Brooklyn), located in Sunset Park, Brooklyn.  These include charges against inmates for the murder of Uriel Whyte on June 7, 2024, the murder of Edwin Cordero on July 17, 2024, an attempted murder on April 27, 2024 and two violent assaults on August 24 and 27, 2024.  The defendants, all of whom were previously ordered detained at MDC-Brooklyn on other charges, will be arraigned in the coming days.

Breon Peace, United States Attorney for the Eastern District of New York, Lisa O. Monaco, United States Deputy Attorney General and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

“Violence will not be tolerated in our federal jails.” stated United States Attorney Peace.  “As alleged, in June and July of this year, two men detained at MDC-Brooklyn—Uriel Whyte and Edwin Cordero—were murdered by fellow inmates using makeshift weapons.  Others at MDC-Brooklyn have been viciously assaulted by inmates, as alleged in the three other cases announced today.  As the only federal pretrial facility in New York City, MDC-Brooklyn houses pretrial inmates accused of some of the most serious crimes in our region.  No matter the reason for their detention, my Office will work tirelessly to vindicate the rights of victims who suffer violence within MDC-Brooklyn and prosecute to the fullest extent of the law those who choose to commit such heinous acts.  Let these charges serve as a warning to those who would engage in criminal conduct behind bars, and anyone else who facilitates those crimes: your conduct will be exposed, and you will be held accountable.”

Mr. Peace thanked the United States Attorney’s Office for the Southern District of New York, the United States Attorney’s Office for the Eastern District of Pennsylvania and the U.S. Bureau of Prisons for their assistance with the investigations.

“Today’s charges demonstrate the Justice Department’s commitment to rooting out violence and criminal behavior at federal detention facilities—a critical component of our work to improve conditions across the Federal Bureau of Prisons,” stated Deputy Attorney General Monaco.  “Violence and contraband in our prisons are unacceptable, and the Department will hold accountable those who threaten the safety of anyone in our custody.”

“Several inmates of Brooklyn’s Metropolitan Detention Center allegedly orchestrated a series of distinct violent assaults, including the murders of fellow inmates, Uriel Whyte and Edwin Cordero. While this federal jail houses dangerous pretrial inmates, order and safety must remain paramount. Awaiting potential criminal charges is not a warranted justification to subject a detained individual to unnecessary attacks. May today’s indictments reflect the FBI’s determination to apprehend violent criminals, regardless of where the incidents may occur,” stated FBI Assistant Director in Charge Dennehy.

United States v. Andrew Simpson and Devone Thomas, 24-CR-360 (EK)

The defendants Andrew Simpson and Devone Thomas, who were previously detained at MDC-Brooklyn on racketeering and robbery charges, respectively, have been indicted by a grand jury for their roles in the June 7, 2024 murder of inmate Uriel Whyte.

On the morning of June 7, 2024, following a verbal dispute between Simpson and Whyte, cellmates Simpson and Thomas armed themselves with makeshift weapons and proceeded to engage in a series of two-on-one attacks against Whyte.  The escalating violent attacks, which took place over a span of approximately 15 minutes, were committed against Whyte inside Simpson and Thomas’s shared cell, which served to hide their conduct from guards and surveillance cameras. The attacks culminated with Whyte suffering a severe stab wound to his neck, which severed his carotid artery. While Whyte was able to exit the cell and seek medical aid, he succumbed to his wounds shortly thereafter despite the efforts of onsite medical personnel and responding paramedics.

Simpson and Thomas are charged with murder in a federal detention facility, assault in a federal detention facility, obstruction of justice and possession of contraband in prison for their roles in fatally stabbing Whyte at MDC-Brooklyn.

If convicted, Simpson and Thomas face mandatory sentences of life in prison.

The government’s case against Simpson and Thomas is being handled by the Office’s Organized Crime and Gangs and General Crimes Sections.  Assistant United States Attorneys Michael Maffei, Sophia Suarez and Elizabeth D’Antonio are in charge of the prosecution.

United States v. Jamaul Aziz, James Bazemore and Alberto Santiago, 24-CR-380 (NCM)   

The defendants Jamaul Aziz, also known as “bugz,” James Bazemore, also known as “TJ” and “RS,” and Alberto Santiago, also known as “Kom” and “dotcom,” have been indicted by a grand jury for their roles in the July 17, 2024 murder of Edwin Cordero, a fellow inmate at MDC-Brooklyn. Aziz and Santiago were both previously detained at MDC-Brooklyn for various serious gun and drug-trafficking crimes; Bazemore was detained for racketeering conspiracy, murder in-aid-of racketeering, use of a firearm resulting in death and being a felon in possession of a firearm.  All three have admitted their guilt or been found guilty in their underlying cases.     

In the afternoon of July 17, 2024—following an earlier altercation between Cordero and Santiago—Santiago, Aziz and Bazemore met with each other intermittently over approximately half an hour.  Cordero then reengaged with Santiago—both of them armed with makeshift weapons—when shortly after Aziz and Bazemore, also armed, joined in.  Aziz, Bazemore and Santiago cornered Cordero while swinging and stabbing at him. After Cordero was able to escape, Bazemore continued to attack him, which allowed Santiago to approach Cordero from behind and stab him in the center of his chest, perforating various parts of his heart.  Cordero then staggered forward, and Bazemore stabbed him in the back.  Aziz and Bazemore next cornered the victim again next to a table and repeatedly stabbed, struck and kicked him, including after he fell to the ground and tried to shield himself with the table.  Staff members quickly responded to the commotion and delivered emergency medical care but were unable to save the victim.   

The indictment charges Aziz, Bazemore and Santiago with premeditated murder within a federal detention facility, conspiracy to commit murder within a federal detention facility, assault resulting in serious bodily injury within a federal detention facility and possession of one or more objects designed to be used as weapons within a prison.

If convicted, the defendants face mandatory sentences of life in prison.

The government’s case against Aziz, Bazemore and Santiago is being handled by the Office’s Organized Crime and Gangs and General Crimes Sections.  Assistant United States  Attorneys Irisa Chen and Elizabeth D’Antonio are in charge of the prosecution.

United States v. Luis Rivas, 24-CR-390 (OEM)

The defendant Luis Rivas has been indicted by a grand jury with attempted murder in a federal detention facility, assault in a federal detention facility and possession of contraband in prison, for his role in the April 27, 2024 assault of another inmate at MDC-Brooklyn.  At the time of the attack, Rivas was detained at MDC-Brooklyn after being convicted of racketeering and assault in-aid-of-racketeering charges related to his membership in the gang La Mara Salvatrucha (MS-13).  On the morning of April 27, 2024, Rivas and two other MS-13 members brutally attacked another inmate in their housing unit.  Prior to the attack, the victim was sitting peacefully, relaxing with his feet up.  Rivas then approached the victim, took a makeshift weapon from his waistband, and stabbed the victim with it.  Two other MS-13 members then came to Rivas’ aid and assisted him in punching and stabbing the victim repeatedly.  After the assault, the victim was taken to MDC- Brooklyn’s medical unit and then to a hospital to treat the approximately 44 stab wounds to his back, chest, abdomen, right arm and legs.

If convicted, Rivas faces up to 45 years in prison.

The government’s case against Rivas is being handled by the Office’s General Crimes Section.  Assistant United States Attorney Sean M. Sherman is in charge of the prosecution. 

United States v. Bruce Silva and Hassan Elliott, 24-MJ-556 (MMH)

The defendants Bruce Silva and Hassan Elliott have been charged by complaint with assault in a federal detention facility for their roles in the August 27, 2024 assault of another inmate at MDC-Brooklyn.  At the time of the attack, Silva was detained at MDC-Brooklyn in connection with pending charges including racketeering conspiracy, narcotics conspiracy, firearms charges, attempted murder and assault in-aid-of racketeering in connection with his participation in multiple shootings in the Bronx, and other crimes related to his membership in “Dub City,” a street gang based in the Bronx.  Elliott was detained at MDC-Brooklyn at the time of the attack in connection with 29 pending charges related to his membership in “1700 Scattergood,” a violent drug trafficking organization operating in Northeast Philadelphia, including the murder in-aid-of racketeering of a Philadelphia police sergeant (who was seeking to execute search and arrest warrants for Elliott at the time of his murder), racketeering conspiracy, three other murders in-aid-of racketeering, multiple charges related to multiple other shootings and related firearms and narcotics offenses.

On the morning of August 27, 2024, Silva and Elliott tried to attack another inmate in their housing unit.  They took makeshift weapons from their waistbands and tried to stab and slash their intended victim.  When a fourth inmate interceded, Silva stabbed the fourth inmate in the spine with a makeshift icepick, leaving the icepick protruding from the inmate’s back.  Silva and Elliott then continued to try to attack both the stabbing victim and their original intended victim.  After the assault, the stabbing victim was taken to MDC-Brooklyn’s medical unit and then to a hospital to remove the weapon from his spine and treat him.

If convicted, Silva and Elliott each face up to 10 years in prison.

The government’s case against Silva and Elliott is being handled by the Office’s General Crimes Section.  Assistant United States Attorney Amanda Shami is in charge of the prosecution. 

United States v. Leury Mojica, 24-MJ-559 (MMH)

Defendant Leury Mojica was charged by complaint with assaulting a federal officer.  As alleged in the complaint, on August 24, 2024, Mojica punched a corrections officer in the face after the victim offered Mojica breakfast.  Mojica was originally detained at MDC-Brooklyn in connection with a Hobbs Act robbery charge, and also previously participated in a violent stabbing of another inmate, which conduct was taken into account in his May 2024 sentencing in the Southern District of New York.

If convicted, Mojica faces up to 20 years in prison.

The government’s case against Mojica is being handled by the Office’s General Crimes Section.  Assistant United States Attorney David Berman is in charge of the prosecution. 

The charges in all of the indictments and complaints are allegations, and the defendants are presumed innocent unless and until proven guilty.

The Defendants:

ANDREW SIMPSON
Age:  26
Brooklyn, New York

DEVONE THOMAS
Age:  24
Queens, New York

E.D.N.Y. Docket No. 24-CR-360 (EK)

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JAMAUL AZIZ
Age: 44
New York, New York

JAMES BAZEMORE
Age: 42
Bronx, New York

ALBERTO SANTIAGO
Age: 28
Queens, New York

E.D.N.Y. Docket No. 24-CR-380 (NCM)   

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LUIS RIVAS
Age:  29
Jamaica, New York

E.D.N.Y. Docket No. 24-CR-390 (OEM)   

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BRUCE SILVA 
Age:  28
Bronx, New York

HASSAN ELLIOTT 
Age:  26
Philadelphia, Pennsylvania

E.D.N.Y. Docket No. 24-MJ-556 (MMH)

----------------

LEURY MOJICA
Age: 21
Bronx, New York

E.D.N.Y. Docket No. 24-MJ-559 (MMH) 

The Justice Department today announced charges in five cases addressing violence at New York City’s federal pretrial detention facility, the Metropolitan Detention Center, (MDC), located in Sunset Park, Brooklyn. These include charges against inmates for the murder of Uriel Whyte on June 7, the murder of Edwin Cordero on July 17, an attempted murder on April 27, and two violent assaults on Aug. 24 and 27. The defendants, all of whom were previously ordered detained at the MDC on other charges, will be arraigned in the coming days.

“Today’s charges demonstrate the Justice Department’s commitment to rooting out violence and criminal behavior at federal detention facilities — a critical component of our work to improve conditions across the Federal Bureau of Prisons,” said Deputy Attorney General Lisa Monaco. “Violence and contraband in our prisons are unacceptable, and the Department will hold accountable those who threaten the safety of anyone in our custody.”

“Violence will not be tolerated in our federal jails,” said U.S. Attorney Breon Peace for the Eastern District of New York. “As alleged, in June and July of this year, two men detained at the MDC — Uriel Whyte and Edwin Cordero — were murdered by fellow inmates using makeshift weapons. Others at the MDC have been viciously assaulted by inmates, as alleged in the three other cases announced today. As the only federal jail in New York City, the MDC houses pretrial inmates accused of some of the most serious crimes in our region. No matter the reason for their detention, my office will work tirelessly to vindicate the rights of victims who suffer violence within the MDC and prosecute all those who choose to commit such heinous acts to the full extent of the law. Let these charges serve as a warning to those who would continue their criminal conduct behind bars, and anyone else who facilitates those crimes: your conduct will be exposed, and you will be held accountable.”

“Several inmates of Brooklyn’s Metropolitan Detention Center allegedly orchestrated a series of distinct violent assaults, including the murders of fellow inmates, Uriel Whyte and Edwin Cordero,” said Assistant Director in Charge James E. Dennehy of the FBI New York Field Office. “While this federal jail houses dangerous pretrial inmates, order and safety must remain paramount. Awaiting potential criminal charges is not a warranted justification to subject a detained individual to unnecessary attacks. May today’s indictments reflect the FBI’s determination to apprehend violent criminals, regardless of where the incidents may occur.”

The U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Prisons provided assistance in the investigations.

United States v. Simpson and Thomas, 24-CR-360

Andrew Simpson and Devone Thomas, who were previously detained at the MDC on racketeering and robbery charges, respectively, were indicted by a grand jury for their roles in the June 7, murder of inmate Uriel Whyte.

On the morning of June 7, following a verbal dispute between Simpson and Whyte, cellmates Simpson and Thomas armed themselves with makeshift weapons and proceeded to engage in a series of two-on-one attacks against Whyte. The escalating violent attacks, which took place over a span of approximately 15 minutes, were committed against Whyte inside Simpson and Thomas’ shared cell, which served to hide their conduct from guards and surveillance cameras. The attacks culminated with Whyte suffering a severe stab wound to his neck, which severed his carotid artery. While Whyte was able to exit the cell and seek medical aid, he succumbed to his wounds shortly thereafter despite the efforts of onsite medical personnel and responding paramedics.

Simpson and Thomas are charged with murder in a federal detention facility, assault in a federal detention facility, obstruction of justice, and possession of contraband in prison for their roles in fatally stabbing Whyte at the MDC.

Assistant U.S. Attorneys Michael Maffei, Sophia Suarez, and Elizabeth D’Antonio for the Eastern District of New York are prosecuting the case.

United States v. Aziz, Bazemore and Santiago, 24-CR-380

On Sept. 24, a grand jury in the Eastern District of New York returned an indictment charging Jamaul Aziz, also known as bugz; James Bazemore, also known as TJ and RS; and Alberto Santiago, also known as Kom and dotcom, with four crimes related to their roles in the July 17 murder of Edwin Cordero, a fellow inmate at the MDC. Aziz and Santiago were both previously detained in the MDC for various serious gun and drug-trafficking crimes; Bazemore was detained for racketeering conspiracy, murder in-aid-of racketeering, use of a firearm resulting in death, and being a felon in possession of a firearm. All three have admitted their guilt in their underlying cases.   

In the afternoon of July 17 — following an earlier altercation between the victim and Santiago — Santiago, Aziz, and Bazemore met with each other intermittently over approximately half an hour. Santiago then reengaged with the victim — both of them armed with makeshift weapons — when shortly after Aziz and Bazemore, also armed, joined in. Aziz, Bazemore, and Santiago cornered the victim while swinging and stabbing at him. After the victim was able to escape, Bazemore continued to attack the victim, which allowed Santiago to approach the victim from behind and stab the victim in the center of his chest, perforating various parts of his heart. The victim then staggered forward, and Bazemore grabbed the victim and stabbed him in the back. Aziz and Bazemore next cornered the victim again next to a table and repeatedly stabbed, struck, and kicked the victim, including after he fell to the ground and tried to shield himself with the table. Staff members quickly responded to the commotion and delivered emergency medical care but were unable to save the victim.

Aziz, Bazemore, and Santiago are charged with premeditated murder within a federal detention facility, conspiracy to commit murder within a federal detention facility, assault resulting in serious bodily injury within a federal detention facility, and possession of one or more objects designed to be used as weapons within a prison.

Assistant U.S. Attorneys Irisa Chen and Elizabeth D’Antonio for the Eastern District of New York are prosecuting the case.

United States v. Luis Rivas, 24-CR-390

A grand jury indicted Luis Rivas today on attempted murder in a federal detention facility, assault in a federal detention facility, and possession of contraband in prison for his role in the April 27, assault of another inmate at the MDC. At the time of the attack, Rivas was detained at the MDC after being convicted of racketeering and assault in-aid-of-racketeering charges related to his membership in the gang La Mara Salvatrucha (MS-13). On the morning of April 27, Rivas and two other MS-13 members brutally attacked another inmate in their housing unit. Prior to the attack, the victim was sitting peacefully, relaxing with his feet up. Rivas then approached the victim, took a makeshift weapon from his waistband, and stabbed the victim with it. Two other MS-13 members then came to Rivas’ aid and assisted him in punching and stabbing the victim repeatedly. After the assault, the victim was taken to MDC’s medical unit and then to a hospital to treat the approximately 44 stab wounds to his back, chest, abdomen, right arm and legs.

Assistant U.S. Attorney Sean M. Sherman for the Eastern District of New York is prosecuting the case.

United States v. Bruce Silva and Hassan Elliott, 24-MJ-556

Bruce Silva and Hassan Elliott were charged by complaint with assault in a federal detention facility for their role in the Aug. 27, assault of another inmate at the MDC. At the time of the attack, Silva was detained at the MDC in connection with pending charges in the Southern District of New York, including racketeering conspiracy, narcotics conspiracy, firearms charges, attempted murder and assault in-aid-of racketeering in connection with his participation in multiple shootings in the Bronx, and other crimes related to his membership in “Dub City,” a street gang based in the Bronx, New York. Elliott was detained at the MDC at the time of the attack in connection with 29 pending charges in the Eastern District of Pennsylvania, including the murder in-aid-of racketeering of a Philadelphia Police Sergeant (who was seeking to execute search and arrest warrants for Elliott at the time of his murder), racketeering conspiracy, three other murders in-aid-of racketeering, multiple charges related to multiple other shootings, and related firearms and narcotics offenses related to his membership in “1700 Scattergood,” a violent drug trafficking organization operating in Northeast Philadelphia.

On the morning of Aug. 27, Silva and Elliott tried to attack another inmate in their housing unit. They took makeshift weapons from their waistbands and tried to stab and slash their intended victim. When a fourth inmate interceded, Silva stabbed the fourth inmate in the spine with a makeshift icepick, leaving the icepick protruding from the inmate’s back. Silva and Elliott then continued to try to attack both the stabbing victim and their original intended victim. After the assault, the stabbing victim was taken to the MDC’s medical unit and then to a hospital to remove the weapon from his spine and treat him.

Assistant U.S. Attorney Amanda Shami for the Eastern District of New York is prosecuting the case.

United States v. Leury Mojica, 24-MJ-559

Leury Mojica was charged by complaint with assaulting a federal officer. As alleged in the complaint, on Aug. 24, Mojica punched a corrections officer in the face after the victim offered Mojica breakfast. Mojica was originally detained at the MDC in connection with a Hobbs Act robbery charge, and also previously participated in a violent stabbing of another inmate, which conduct was taken into account in his May sentencing in the Southern District of New York.

Assistant U.S. Attorney David Berman for the Eastern District of New York is prosecuting the case.

An indictment or criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Breon Peace, United States Attorney for the Eastern District of New York, and Letitia James, New York State Attorney General, announced settlement agreements with Brooklyn-based licensed home care service agencies (LHCSAs) Edison Home Health Care of New York LLC (Edison) and Preferred Home Health Care of New York LLC (Preferred) today. The settlement agreements address allegations that Edison and Preferred, which were related companies, violated the federal False Claims Act and New York State’s False Claims Act in claiming that they paid their home care aides the minimum wages required under New York State law. The agencies received payments from Medicaid, which is funded in part by the federal government, and much of that money was meant to pay the wages and benefits of their aides.

Today’s settlement with Edison and Preferred follows similar settlements with the LHCSAs All American Homecare Agency, Crown of Life Care NY LLC, and White Glove Community Care, Inc.

“Home health aides work long hours at difficult, often thankless tasks to ensure that the vulnerable individuals who they provide services to are properly cared for,” stated United States Attorney Peace. “These aides deserve the hard-earned benefits guaranteed them under the law and my Office will ensure that they are accurately compensated.”

Mr. Peace thanked the Medicaid Fraud Control Unit of the Office of the New York State Attorney General for its partnership in the government’s investigation and resolution of this important case.

“Home health aides provide crucial care to our most vulnerable neighbors and loved ones, and they deserve to be paid for their hard work,” said Attorney General James. “Edison and Preferred cheated employees out of years of pay and cheated New York taxpayers by defrauding Medicaid for their own benefit. This is a tremendous victory for our ongoing efforts to protect hardworking New Yorkers’ rightfully earned wages. My office will do everything in our power to ensure that companies cannot steal wages and take advantage of the system. Thank you to U.S. Attorney Breon Peace for his continued partnership in rooting out Medicaid fraud.”

The New York Wage Parity Act sets minimum wage and benefits requirements for LHCSAs that employ home care aides who render services to Medicaid recipients in New York City and in Nassau, Suffolk, and Westchester counties. Under the Wage Parity law, aides are to be paid a minimum amount in total compensation; only then will the LHCSAs receive Medicaid reimbursement for home care services. The required compensation comes in the form of a base wage and a supplemental benefit. The base wage must be paid in cash. The benefit portion can include the value of vacation, holiday, and sick pay, among other things. It can also include health insurance, pension plans, or educational assistance. Today, the minimum amount of total compensation for an aide in New York City is $19.09 per hour; for Nassau, Suffolk, and Westchester counties, the minimum is $18.22 per hour.

Home health aides perform all aspects of personal care for sick or homebound patients and frequently work long shifts lasting up to 24 hours. The tasks performed in caring for patients are demanding and can consist of assisting or lifting patients out of bed and bathing, dressing, grooming, preparing meals for and, in some instances, feeding them. Patients may suffer from physical or mental disorders that can make the work of the aides physically and emotionally taxing. In fact, it was in recognition of the difficulty of this work that New York passed the Wage Parity Act.

The Settlement

This Office, in coordination with the New York State Attorney General’s Office’s Medicaid Fraud Control Unit, commenced an investigation after whistleblowers alleged that certain LHCSAs had knowingly defrauded the federal government and New York State by underpaying home health aides in violation of the Wage Parity Act. The government’s investigation determined that Edison and Preferred certified their compliance with the law and sought and received reimbursement from Medicaid, even though the government determined that their payments to their aides fell short of the requisite compensation.

Under the terms of the agreements with the United States and New York State, Edison and Preferred have agreed to pay $3.9 million to the United States and $5.85 million to New York State for conduct that took place from 2012 to 2022.

In addition to the payments to resolve the government’s fraud claims, Edison and Preferred are required to pay $7.5 million to current and former aides who were and are entitled to compensation under the Wage Parity Act. Moreover, Edison and Preferred have admitted to conduct that led the government to determine that they fell short of Wage Parity Act requirements.

The case is being handled by Assistant U.S. Attorney Michael Blume of the Office’s Civil Division.

Earlier today, at the federal courthouse in Central Islip, Carmine G. Agnello pleaded guilty to wire fraud in connection with his receipt of approximately $1.1 million in small business loans under the United States Small Business Administration’s Economic Injury Disaster Loan Program (EIDLP).  Today’s proceeding was held before United States District Judge Nusrat J. Choudhury.  When sentenced, Agnello faces up to 30 years in prison, as well as restitution totaling more than $940,000 and a fine of up to $2.2 million.

Breon Peace, United States Attorney for the Eastern District of New York, and Daniel Brubaker, Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS), announced the guilty plea.

“The defendant shamefully used the public health and economic crisis of the COVID-19 pandemic as an opportunity to line his pockets with stolen funds,” stated United States Attorney Peace.  “The reality is, those who engaged in blatant theft of taxpayer dollars intended to assist legitimate businesses and their employees during the COVID-19 pandemic should know that despite the passage of time, there is no free pass for their crimes and they will be vigorously prosecuted by the Office.”

“Agnello allegedly used over $1 Million in COVID relief funds for his own financial gain. Government money that was intended to assist struggling businesses during the COVID-19 pandemic.  Postal Inspectors will relentlessly pursue any individuals who scheme to defraud the government and steal taxpayer funds. We, along with our law enforcements partners, will not end this pursuit of justice until those who take advantage of the U.S. Mail to commit fraud are held fully accountable. Today’s guilty plea is proof of that fact. I would like to thank our partners in Homeland Security Investigations and the United States Attorney's Office, Eastern District of New York, for their work on this investigation,” stated USPIS Inspector in Charge Brubaker.

Congress created the EIDLP as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  Enacted on March 29, 2020, the CARES Act provided emergency financial assistance in connection with economic effects of the COVID-19 pandemic.  One source of relief provided by the CARES Act was the EIDLP, which provided low-interest financing to small businesses, renters and homeowners in regions affected by declared disasters. 

As set forth in court filings, between April 2020 and November 2021, amid the COVID-19 pandemic, Agnello fraudulently applied for, and received, at least three EIDLP loans totaling approximately $1.1 million that he submitted on behalf of Crown Auto Parts & Recycling, LLC (Crown), a Jamaica, Queens-based business that he operated.  As part of the scheme, Agnello submitted documentation to the Small Business Administration and financial institution responsible for disbursing the funds, that falsely claimed he had no criminal record when, in reality, he had a  2018 misdemeanor conviction.  Agnello also submitted false information about the number of employees that worked for Crown and the intended use of the loan proceeds. Instead of using the funds for disaster relief, Agnello diverted them for his personal use, including by investing approximately $420,000 in a cryptocurrency business.

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.  Assistant United States Attorney Bradley T. King is in charge of the prosecution.

The Defendant:

CARMINE G. AGNELLO
Age:  38 
Smithtown, New York

E.D.N.Y. Docket No. 24-CR-366 (NJC)

Attorney General Merrick B. Garland has approved an initial set of 78 communities across 47 states, territories, and the District of Columbia for designation under Section 1103 of the Violence Against Women Act Reauthorization Act of 2022.

The Justice Department – through its United States Attorney’s Offices (USAOs) and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Field Divisions – will partner with each designated jurisdiction to develop a plan to reduce intimate partner gun violence and to prioritize prosecutions of domestic violence offenders prohibited under 18 U.S. Code Section 922(g) from owning firearms.  In the Eastern District of New York, the borough of Brooklyn has been designated as one of the jurisdictions.

“My Office will continue to use every tool and resource available to address domestic violence in our communities and hold violent actors accountable,” stated United States Attorney for the Eastern District of New York Breon Peace.  “Strong community partnerships are key to our ability to meaningfully engage in this endeavor, and we thank all of our partners for their untiring efforts.”

“ATF is committed to our continued partnerships in aggressively pursuing prohibited possession of firearms due to domestic violence convictions and certain protective orders. Community safety is our top priority and combatting prohibited firearms possession by domestic abusers is another way we prevent violent gun crime within our communities,” stated ATF New York Special Agent in Charge Bryan Miller.

Communities have been designated in close coordination with community stakeholders. They include rural areas, suburban areas, urban areas, and Tribal communities. The Justice Department used data to identify communities that could benefit from increased focus on intimate partner violence resources and where the local jurisdiction is committed to partnering with the Department to increase the use of federal tools to prosecute offenders under 18 U.S.C. 922(g). The designation represents the partnership and coordination between the Department and the local jurisdiction to ensure federal resources are being leveraged effectively to address intimate partner gun violence.

In the EDNY, this initiative will not only support the Office’s close work with its federal and state law enforcement partners, especially ATF, the Federal Bureau of Investigation and the New York City Police Department, but it will also bolster its partnerships with local nonprofit organizations, such as The Salvation Army and Restore NYC, as well as the New York State Office of Victim Services and the Mayor’s Office to End Domestic & Gender-Based Violence, which operates the New York City Family Justice Centers, to provide needed support to victims of domestic violence.

The Justice Department anticipates additional jurisdictions to be designated as USAOs continue coordination with their local stakeholders.  All USAOs, with or without specific community designations under Section 1103, will continue to combat intimate partner gun violence and prioritize prosecutions of domestic violence offenders as part of their Project Safe Neighborhoods strategy and in support of the Department’s Comprehensive Strategy for Reducing Violent Crime. 

Earlier today, at the federal courthouse in Central Islip, Christian Brazoban, also known as “Bison,” was sentenced by United States District Judge Joan M. Azrack to 151 months in prison for distributing child pornography to three minor victims.  Brazoban pleaded guilty to the charge in January 2024.

Breon Peace, United States Attorney for the Eastern District of New York, William S. Walker, Special Agent-in-Charge, U.S. Department of Homeland Security, Homeland Security Investigations, New York (HSI), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.

“Today’s sentence brings justice to a minor victim whom the defendant terrorized with a barrage of sickening images of child pornography and death threats,” stated United States Attorney Peace.  “The defendant’s actions with respect to this victim, and others with whom he also communicated, illustrate the menace of sexual predators preying on children on the Internet.  I urge parents and caregivers to talk to their children about the dangers of communicating online with strangers and anyone who may exploit them.” 

“Christian Brazoban’s depraved crimes are among every parent’s worst nightmare. This case highlights HSI's commitment to protect the most vulnerable members of our community, especially against a perpetrator like Brazoban who not only exploited young children, but threatened their lives through his sextortion scheme,” stated HSI New York Special Agent in Charge Walker.  “HSI New York stands united with our law enforcement partners in our mission to protect the public wherever and whenever possible.”

“Thanks to the hard work of detectives from the NCPD Special Victim’s Unit, in cooperation with HSI and all our federal partners, a dangerous threat to the children of Nassau County has been caught and brought to justice,” stated NCPD Commissioner Ryder.  “We are dedicated to keeping the internet safe from disturbed individuals like the defendant who prey on the vulnerable and we hope this case serves as a warning to those that target children that we will never lower our resolve. You will be found and punished.”

As set forth in court filings, between approximately March 2021 and March 2023, Minor Victim 1, a minor who resided in Nassau County, engaged in online communications, including video chats, with Brazoban.  On March 3, 2023, after Minor Victim 1 rebuked Brazoban for expressing sexual interest in a friend of Minor Victim 1’s who was in the seventh grade, Brazoban sent online messages to Minor Victim 1 and Minor Victims 2 and 3 (a relative and a friend of Minor Victim 1), which contained numerous images of child pornography.  When Minor Victim 1 told Brazoban to stop, he sent her additional online messages threatening to kill her and her family.  For example, Brazoban wrote: “lil girl shot dead on Long Island”; “I’m thinkin I tie you and just beat you to death with a mallet.” 

On March 15, 2023, HSI agents and NCPD officers executed a search warrant at Brazoban’s residence in the Bronx and recovered a cellphone containing images of child pornography and threats that he had sent to Minor Victim 1. The search also revealed that the defendant had distributed child pornography to two other minor victims.   

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States  Attorney Bradley T. King is in charge of the prosecution.

The Defendant:

CHRISTIAN BRAZOBAN (also known as “Bison”)
Age:  26
Bronx, New York

E.D.N.Y. Docket No. 23-CR-138 (JMA)

Today, a federal jury in Brooklyn returned a guilty verdict against John Pena, leader of the Gorilla Stone Mafia (GSM), a subgroup of the Untouchable Gorilla Stone Nation (UGSN), which is a faction of the nationwide Bloods street gang. The jury convicted Pena, also known as “Tragedy,” “Don Tragg,” “Last Don” and “Money Baggz,” on all six counts of a second superseding indictment charging him with racketeering; murder in-aid-of racketeering; causing death through use of a firearm; unlawful possession, brandishing and discharge of a firearm; being a felon in possession of ammunition; and conspiring to distribute and possess with intent to distribute marijuana and crack cocaine.  Pena was convicted of murdering Mark Bajandas on March 10, 2021, and Francisco Gonzalez on June 22, 2021, on behalf of GSM.  The verdict followed a seven-day trial before United States District Judge Ann M. Donnelly.  When sentenced, Pena faces a mandatory sentence of life in prison.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), announced the verdict.

As the evidence proved, Pena was consumed by seeking revenge against rivals and maintaining his leadership position in the Gorilla Stone Mafia gang by any means necessary,” stated United States Attorney Peace.  “Killing a man as he slept in bed and shooting another man with a dozen bullets are shocking examples of Pena’s ruthlessness.  Today’s verdict ensures he will spend the rest of his life in prison for his direct role in the extreme violence and drug trafficking wreaked on a Staten Island community.” 

Mr. Peace thanked the U.S. Marshals Service for their assistance.

“Today’s guilty verdict is a direct result of the focused and collaborative efforts of dedicated investigators from the NYPD, FBI, and the office of the U.S. Attorney for the Eastern District of New York,” stated Interim NYPD Commissioner Donlon.  “Gang activity, especially the carrying and indiscriminate shooting of illegal guns on our streets, instills fear in the daily lives of New Yorkers. It is crucial that we and our law enforcement partners continue to target and dismantle these criminal groups, and work toward preventing the violence that is so often associated with their activities.”

As proven at trial, Pena committed the crimes of conviction in connection with his leadership of GSM, which operated out of the Stapleton Houses, a public housing development on Staten Island.  Members of GSM use intimidation, threats of violence and acts of violence to preserve and protect GSM’s power, territory and criminal activities.  They also use drug trafficking as a means of obtaining money.

In the early morning hours of March 10, 2021, Pena fired multiple gunshots from close range at Mark Bajandas, also known as “Drama,” a former GSM associate and perceived rival, killing him.  Bajandas, a former GSM member who had defected to the rival Bugatti set of USGN, suffered at least 12 gunshot wounds.  The murder occurred after Pena and Bajandas had attended a memorial earlier in the evening to commemorate the death of Avanti Brock, a former GSM member who was murdered allegedly by Bugatti approximately one year earlier. 

On June 22, 2021, Pena murdered Francisco Gonzalez, a former GSM member, by shooting him three times in the head while Gonzalez was asleep in bed next to Pena’s ex-girlfriend. 

Law enforcement recovered writings from Pena’s jail cell at the Metropolitan Detention Center that included statements in which he took responsibility for the murders of Bajandas and Gonzalez, such as: “Kuz I Turn all my opps into ghost / Francisco I mix them N / Mark / A … shhh / Gotta chill … they don’t Know / Lately how I feel / Like the reaper / If I spot em I’m snatching his soul.”  Pena also wrote about killing Gonzalez, including: “left his brains on them sheets man what was he thinkin’?,” referring to the fact that he had shot Gonzalez in the head while Gonzalez was asleep in bed.

Witness testimony and evidence obtained from cell phones proved that GSM members enriched themselves by selling controlled substances in and around the Stapleton Houses and also in Vermont, and that Pena was involved in the sale and distribution of marijuana, crack cocaine and heroin.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  As part of the program, U.S. Attorney’s Offices work in partnership with federal, state, local and tribal law enforcement and their local communities to develop effective, locally based strategies to reduce violent crime.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States  Attorneys Dana Rehnquist, Andrew Roddin and Elias Laris are in charge of the prosecution, with the assistance of Paralegal Specialist Elizabeth Reed and Assistant United States Attorney Matthew Galeotti.

The Defendant:

JOHN PENA (also known as “Tragedy,” “Don Tragg,” “Last Don” and Money Baggz”)
Age:  32
Staten Island, New York

E.D.N.Y. Docket No.:  21-CR-176 (S-2) (AMD)

Earlier today, in federal court in Brooklyn, Michael Kuilan pled guilty before United States District Judge Brian M. Cogan to a charge that he distributed and possessed with intent to distribute heroin and fentanyl.  The plea arises out of Kuilan’s distribution of narcotics that led to the death of Cecilia Gentili.  Kuilan also pled guilty to a charge of being a felon in possession of a firearm.  On July 30, 2024, Kuilan’s co-defendant, Antonio Venti, pled guilty before Judge Cogan to the same drug offense.  Kuilan and Venti were indicted together in March 2024.

Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, III, Special Agent in Charge, Drug Enforcement Administration (DEA) and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), announced the plea.

“The perpetrators of the tragic poisoning of Cecilia Gentili, a prominent leader of the New York transgender community, have now both admitted their guilt in selling the lethal drugs that have caused this heartbreaking death,” stated United States Attorney Peace.  “These drugs, heroin and fentanyl, have caused so much pain throughout our community.  I hope this case will bring a sense of closure to Gentili’s family and serve as a warning that this Office will be relentless in holding fentanyl dealers accountable.”

“While these guilty pleas can't undo the tragic loss of transgender rights activist Cecelia Gentili, it sends a message that we will do everything we can to make sure those responsible for drug related deaths face the consequences for their actions, and the families of those who lost their lives receive justice. The men and women of DEA New York Division, along with our law enforcement partners, will continue to target those responsible for poisoning our communities” stated DEA New York Division Special Agent in Charge Frank Tarentino.

“The resolution of this case should serve as a warning to those who seek to profit from the distribution of fentanyl-laced drugs in our communities,” stated Interim NYPD Commissioner Donlon. “Dedicated investigators from all levels of government are working together every day to identify, investigate, and prosecute individuals involved in these heinous crimes. I commend the collaborative efforts of the NYPD, DEA, and the office of the U.S. Attorney for the Eastern District of New York for their ongoing commitment to ensuring the safety, security, and well-being of all New Yorkers.”

According to court documents and facts presented at the guilty plea proceeding, on February 6, 2024, Gentili was found dead in her bedroom in Brooklyn.  Gentili died due to the combined effect of controlled substances, including fentanyl, xylazine, cocaine, and heroin.  Text messages, cell site data, and other evidence revealed that Venti sold the fentanyl and heroin mixture to Gentili on February 5, 2024, and that Kuilan supplied Venti with those lethal narcotics.  As part of their plea agreements, Kuilan and Venti agreed that they caused Gentili’s death. In addition, law enforcement searched an apartment in Williamsburg, Brooklyn belonging to Kuilan and found hundreds of baggies of fentanyl, as well as a handgun and ammunition.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant U.S. Attorney Adam Amir is in charge of the prosecution, with the assistance of Paralegal Specialist Samuel Ronchetti.

The Defendants:

MICHAEL KUILAN
Age:  44
Brooklyn, New York

ANTONIO VENTI
Age:  52
West Babylon, New York

E.D.N.Y. Docket No. 24-CR-130 (BMC)

Earlier today, in federal court in Central Islip, Tyheim Smith was sentenced by United States District Judge Gary R. Brown to 17 years in prison for distribution of fentanyl.  As part of his guilty plea, Smith admitted his fentanyl caused the death of a 25-year-old Suffolk County man (the “Victim”), and that he used firearms in furtherance of his drug trafficking activity.   

Breon Peace, United States Attorney for the Eastern District of New York, announced the sentence.

“This prosecution demonstrates my Office’s commitment to confronting the deadly fentanyl epidemic in this district,” stated United States Attorney Peace. “Today, the defendant, a drug dealer who carried out his illicit business using illegal guns, was held accountable for distributing fentanyl that caused the tragic poisoning death of a young man on Long Island. The large quantities of fentanyl the defendant distributed all over Suffolk County had a devastating impact on the community, including by taking this young man away from his family.  We will continue to work tirelessly to investigate and prosecute those who contribute to this epidemic.”

Mr. Peace thanked the U.S. Department of Homeland Security, Homeland Security Investigations, New York, and the Suffolk County Police Department, for their work on the case.

In July 2021, Smith sold the Victim “blues,” pills that the Victim believed were oxycodone, when in fact, the defendant knew the pills were fentanyl.  The Victim’s family found him dead in their Bay Shore residence after the Victim ingested the pills. Shortly after the Victim’s death, over the course of one month, Smith sold fentanyl pills to undercover officers on five separate occasions. In October 2021, the Suffolk County Police Department executed a search of Smith’s home and recovered 72 fentanyl pills marked as oxycodone and two loaded firearms, high-capacity magazines and ammunition.  After being charged by the Suffolk County District Attorney’s Office, Smith continued to sell fentanyl while out on bail, until his federal arrest and remand in April 2022. 

According to the Centers for Disease Control and Prevention (CDC) and the Department of Justice, in 2023, nearly 108,000 people died from drug overdoses, making it a leading cause of injury-related death in the United States.  The increase in overdose deaths has been driven in large part by fentanyl, a drug that has been described as 50 to 100 times more potent than morphine.   In 2023, over 74,000 people died from a drug overdose involving synthetic opioids such as fentanyl, a figure that was around 2,000 less than the more than 76,000 synthetic opioid overdose deaths that occurred in 2022.  Between 2022 and 2023, overall drug overdose deaths declined approximately 3% from around nearly 111,000 such deaths in 2022.

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.  Assistant United States Attorney Samantha Alessi is in charge of the prosecution.

The Defendant:

TYHEIM SMITH
Age: 23
Central Islip, New York

E.D.N.Y. Docket No. 22-CR-183 (GRB)

Lebanese national Mohammad Ibrahim Bazzi, 60, pleaded guilty today to conspiracy to conduct and to cause U.S. persons to conduct unlawful transactions with a Specially Designated Global Terrorist.

In May 2018, the Department of the Treasury, Office of Foreign Assets Control (OFAC) designated Bazzi as a Specially Designated Global Terrorist for assisting in, sponsoring and providing financial, material and technological support and financial services to Hizballah. Hizballah is a foreign terrorist organization that, since the 1980s, engaged in numerous terrorist activities, including attacks against American military members, government employees and civilians abroad.

According to the OFAC designation, Bazzi is a key Hizballah financier who has provided millions of dollars to Hizballah over the years, generated from his business activities in Belgium, Lebanon, Iraq and throughout West Africa. As a result of the designation, Bazzi’s interest in any property in the United States were blocked, and all U.S. persons were generally prohibited from transacting business with, or for the benefit of, Bazzi.

Following Bazzi’s designation and according to the court documents, Bazzi and his co-defendant, Talal Chanine, who remains at large in Lebanon, conspired to force or induce an individual located in the United States (U.S. Person) to liquidate their interests in certain real estate assets located in Michigan and covertly transfer hundreds of thousands of dollars in proceeds of the liquidation out of the United States to Bazzi and Chahine in Lebanon without the required OFAC licenses, in violation of the International Emergency Economic Powers Act (IEEPA).

During recorded communications, Bazzi and Chahine proposed numerous methods to conceal from OFAC and law enforcement officials that Bazzi was both the source and destination of the proceeds of the sale and to create the false appearance that the U.S. Person was conducting legitimate arms-length transactions unrelated to Bazzi and Chahine. For example, Bazzi and Chahine proposed that the funds be transferred through:

• A third party in China as part of a fictitious purchase of restaurant equipment from a Chinese manufacturer;
• A third party in Lebanon as part of a fictitious real estate purchase;
• Chahine’s family members in Kuwait as part of fictitious intra-family loans; and
• As part of a fictitious franchising agreement as payment for the rights to operate a Lebanese-based restaurant chain throughout the United States.

Bazzi was arrested in February 2023 by Romanian law enforcement authorities and subsequently extradited to the Eastern District of New York. The Justice Department thanks the Romanian authorities for their assistance in this matter.

A sentencing hearing will be scheduled at a later date. Bazzi faces a maximum penalty of 20 years in prison. He has also agreed to forfeit the nearly $830,000 that was involved in the illegal transaction, and to be removed from the United States upon completion of his sentence. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Matthew G. Olsen of the National Security Division, U.S. Attorney Breon Peace for the Eastern District of New York and Executive Assistant Director Robert Wells of the FBI’s National Security Branch made the announcement.

Assistant U.S. Attorneys Francisco J. Navarro, Jonathan P. Lax, Nomi D. Berenson, Claire Kedeshian and Robert M. Pollack for the Eastern District of New York are prosecuting the case with assistance provided by Trial Attorney Charles Kovats of the National Security Division’s Counterterrorism Section and Scott Claffee of the National Security Division’s Counterintelligence and Export Section. The Justice Department’s Office of International Affairs assisted with the extradition in this case.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.

Earlier today, in federal court in Brooklyn, Mohammad Ibrahim Bazzi pleaded guilty to conspiracy to conduct and to cause United States persons to conduct unlawful transactions with a Specially Designated Global Terrorist.  The proceeding was held before United States District Judge Dora L. Irizarry.  Bazzi also agreed to forfeit the nearly $830,000 that was involved in the illegal transaction, and to be removed from the United States upon completion of his sentence.  When sentenced, Bazzi faces a  maximum sentence of 20 years’ imprisonment.

Breon Peace, United States Attorney for the Eastern District of New York and Cheryl Ortiz, Special Agent in Charge, Drug Enforcement Administration (DEA), New Jersey Field Division announced the charges.

“Today, Specially Designated Global Terrorist Mohammad Bazzi accepted responsibility for his role in conspiring to secretly move hundreds of thousands of dollars from the United States to Lebanon in violation of sanctions placed on him for assisting the terrorist group Hizballah,” stated United States Attorney Peace.  “This outcome demonstrates our commitment to enforcing sanctions imposed to starve terrorism financiers of funds, and the stark consequences that will be enforced when they are ignored.”

Mr. Peace expressed his appreciation to the Federal Bureau of Investigation and Romanian authorities for its assistance on the case.

“The guilty plea from Mohammed Bazzi is a result of the collaborative effort DEA New Jersey has with our law enforcement partners, and foreign counterparts, in effectively targeting those individuals and organizations that violate sanctions by providing financial assistance to terrorist organizations, like Hizballah.” stated DEA New Jersey Field Division Special Agent in Charge Cheryl Ortiz.  “The DEA remains committed to disrupting and dismantling these organizations and those who choose to support them financially.”

In May 2018, the United States Department of the Treasury, Office of Foreign Assets Control (OFAC) designated Bazzi as a Specially Designated Global Terrorist for assisting in, sponsoring, and providing financial, material, and technological support and financial services to Hizballah, a foreign terrorist organization that, since the 1980s, has engaged in numerous terrorist activities, including attacks against American military members, government employees, and civilians abroad.  According to the OFAC designation, Bazzi is a key Hizballah financier who has provided millions of dollars to Hizballah over the years, generated from his business activities in Belgium, Lebanon, Iraq, and throughout West Africa.  As a result of the designation, Bazzi’s interest in any property in the United States were blocked, and all U.S. persons were generally prohibited from transacting business with, or for the benefit of, Bazzi.

Following Bazzi’s designation, Bazzi and his co-defendant Talal Chahine, who remains at large in Lebanon, conspired to force or induce an individual located in the United States (U.S. Person) to liquidate their interests in certain real estate assets located in Michigan and covertly transfer hundreds of thousands of dollars in proceeds of the liquidation out of the United States to Bazzi and Chahine in Lebanon without the requisite OFAC licenses, in violation of the International Emergency Economic Powers Act (IEEPA).

During recorded communications, Bazzi and Chahine proposed numerous methods to conceal from OFAC and law enforcement officials that Bazzi was both the source and destination of the proceeds of the sale and to create the false appearance that the U.S. Person was conducting legitimate arms-length transactions unrelated to Bazzi and Chahine. For example, Bazzi and Chahine proposed that the funds be transferred through:

• a third party in China as part of a fictitious purchase of restaurant equipment from a Chinese manufacturer;
• a third party in Lebanon as part of a fictitious real estate purchase;
• Chahine’s family members in Kuwait as part of fictitious intra-family loans; and
• as part of a fictitious franchising agreement as payment for the rights to operate a Lebanese-based restaurant chain throughout the United States.

Bazzi was arrested in February 2023 by Romanian law enforcement authorities and subsequently extradited to the Eastern District of New York.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States  Attorneys Francisco J. Navarro, Jonathan P. Lax, Nomi D. Berenson, and Robert M. Pollack are in charge of the prosecution, with assistance provided by Trial Attorney Charles Kovats of the National Security Division’s Counterterrorism Section and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.  Assistant United States Attorney Claire Kedeshian and Senior Law Clerk Alfred Pelargu of the Office’s Asset Recovery Section are handling forfeiture matters. The Justice Department’s Office of International Affairs assisted with the extradition in this case.

The Defendant:

MOHAMMAD BAZZI
Age: 60
Lebanon, Belgium, and United Kingdom

E.D.N.Y. Docket No. 23-CR-041 (DLI)

Earlier today in federal court in Brooklyn, Leo Oliver, also known as “Gam,” was sentenced by United States District Judge Dora L. Irizarry to 10 years in prison for being a felon in possession of ammunition related to a shooting in 2021. Oliver pleaded guilty to the charge in December 2023. The Court also found that Oliver was responsible for a second shooting in a convenience store in Brooklyn in 2020. As part of the sentence, Oliver was ordered to pay restitution in the amount of $12,000 to the victims.

Breon Peace, United States Attorney for the Eastern District of New York, announced the sentence.

“Today, Oliver has been justly punished for the harm he inflicted upon two people in separate, callous shootings in Brooklyn,” stated United States Attorney Peace.  “Fortunately, these victims survived.  My Office will continue to work tirelessly with our federal and local law enforcement to reduce gun-related violence in our communities.”

Mr. Peace thanked the U.S. Department of Homeland Security, Homeland Security Investigations New York, and the New York City Police Department for their outstanding investigative work on the case.

According to court filings and facts presented in court, Oliver shot a victim (“Victim-1”) on September 25, 2021 following an argument with Victim-1 on the sidewalk on Van Siclen Avenue in East New York, Brooklyn.  Oliver shot Victim-1 in his torso, before fleeing on foot.  Victim-1 was hospitalized for gunshots to his torso, a lacerated spleen, and fractured ribs, but he survived.  Two .380 shell casing were recovered at the scene. 

Judge Irizarry also found today that Oliver committed a second shooting on July 8, 2020 inside a convenience store in East New York, Brooklyn.  Victim-2 was working behind the counter when, after a dispute, Oliver pulled a black gun from his pocket and shot Victim-2 in the chest and hand before fleeing in an SUV.  A .380 shell casing was recovered from the scene.

Victim-2 was hospitalized with gunshot wounds, fractured ribs, lung bruising, and a fractured hand from the shooting.  Victim-2’s injuries left him unable to earn a living. 

After the shootings, Oliver took steps to destroy evidence and conceal his crimes.  Specifically, he deleted an image of two guns from his cell phone and threw the handgun used in the 2020 shooting into the East River.

The defendant has a criminal history of at least seven felony convictions.

Assistant United States Attorney Adam Amir is in charge of the prosecution.

The Defendant:

LEO OLIVER (also known as “Gam”)
Age:  44
Mechanicsburg, Pennsylvania

E.D.N.Y. Docket No. 23-CR-279 (DLI)

United States Attorney Breon Peace today announced that the U.S. Attorney’s Office for the Eastern District of New York (the “Office”) has implemented a new Whistleblower Non-Prosecution Pilot Program (the “Whistleblower Pilot Program”).  The Whistleblower Pilot Program, which is effective immediately, is designed to encourage individuals to disclose original and actionable information about previously unknown criminal conduct undertaken by or through public or private entities or organizations.  It does so by providing transparency regarding the conditions under which an individual’s voluntary self-disclosure of criminal conduct to the Office, coupled with the agreement to fully cooperate in the investigation of others involved, may make the individual eligible for a non-prosecution agreement (“NPA”).  The Whistleblower Pilot Program will enable the Office to investigate and hold wrongdoers accountable more quickly, particularly with respect to criminal conduct that might otherwise go undetected or be impossible to prove, and will, in turn, further encourage companies to create and enforce compliance programs that help prevent, detect, and remediate misconduct and to report misconduct when it occurs.

The program applies to circumstances where an individual voluntarily discloses to the Office information regarding criminal conduct undertaken by two or more individuals, or by or through public or private entities or organizations, including corporations, partnerships, non-profits, exchanges, money services businesses, banks, financial institutions, investment advisers, or investment funds, involving: (1) fraud or corporate control failures; (2) intellectual property theft and related violations; (3) market integrity; (4) state or local bribery or fraud relating to federal, state, or local funds; (5) obstruction of justice, perjury, or false statements; (6) healthcare fraud, including violations of the Anti-Kickback statute; and (7) money laundering related to any of the prior-listed crimes.  Pursuant to the Whistleblower Pilot Program, the Office will enter into an NPA in exchange for the individual’s cooperation where the following conditions are met:

• The misconduct has not previously been made public and is not already known to the Department of Justice (“DOJ”);

• The individual discloses the criminal conduct voluntarily to EDNY and not in response to a government inquiry or obligation to report misconduct to EDNY or any other component of DOJ, and prior to imminent threat of disclosure or government investigation;

• The individual provides substantial assistance in the investigation and prosecution of one or more equally or more culpable persons, and is prepared to cooperate fully with this Office in its investigation and prosecution of the disclosed conduct, including testifying in any proceeding in the Eastern District of New York or elsewhere as requested by the Office;

• The individual provides complete, truthful, and accurate information, and discloses all criminal conduct in which the individual has participated and of which the individual is aware;

• The individual is not an elected, or appointed and confirmed, federal, state, local or foreign official; a federal law enforcement official; the highest-ranking person within the organization where the misconduct occurred (e.g., the Chief Executive Officer) or the person who, regardless of title, exercises primary control over the operations of such organization; or the head of a public agency or entity;

• The individual’s role in the alleged misconduct did not involve: leading or originating the illegal activity; violence or the threat of violence; any federal or state sex offense involving fraud, force, coercion, or a minor; or any federal or state offense involving terrorism; and

• The individual has not been previously convicted of any felony involving: violence or the threat of violence; any sex offense involving force, fraud, coercion, or a minor; terrorism; or fraud or dishonesty.

If an individual discloses information to the Office regarding the covered crimes but does not meet the requirements set forth above, the Office will nevertheless consider exercising discretion to extend a non-prosecution agreement, taking into account certain factors outlined in the Whistleblower Pilot Program, including, but not limited to, information provided by the individual about individuals or entities located outside the United States of America that could lead to the investigation and prosecution of such individuals or entities; whether the individual has information about criminal conduct by a federal elected or appointed and confirmed official, or by a senior officer and/or member of the board of directors of a publicly traded company; and the adequacy of non-criminal sanctions.

Finally, to receive a non-prosecution agreement under the Whistleblower Pilot Program, the reporting individual will be required to forfeit or disgorge any proceeds from the criminal wrongdoing and pay restitution to victims.

The specific terms of the Whistleblower Pilot Program, along with a form for voluntary self-disclosures and the email address to which such forms should be sent, is available on the Office’s website here.

Ismael “El Mayo” Zambada Garcia, a citizen of Mexico, was arraigned this morning in federal court in Brooklyn on a fifth superseding indictment charging him with conspiring to manufacture and distribute fentanyl.  The superseding indictment relates to Zambada Garcia’s decades-long leadership of the Sinaloa Cartel, one of the most violent and powerful drug trafficking organizations in the world.  Zambada Garcia was previously charged with running a continuing criminal enterprise, as well as murder conspiracy, money laundering conspiracy, cocaine, heroin, methamphetamine, and fentanyl manufacture and distribution conspiracy, as well as other drug-related crimes.  Today’s proceeding was held before United States Magistrate Judge James R. Cho.  Zambada Garcia was ordered detained pending trial.  If convicted of the continuing criminal enterprise count, Zambada Garcia faces a mandatory life sentence.

Zambada Garcia was transferred yesterday to the Eastern District of New York from the Western District of Texas, following his arrest in New Mexico on July 25, 2024.

Merrick B. Garland, United States Attorney General; Lisa O. Monaco, United States Deputy Attorney General; Breon Peace, United States Attorney for the Eastern District of New York; Markenzy Lapointe, United States Attorney for the Southern District of Florida; Nicole M. Argentieri, Principal Deputy Assistant Attorney General and head of the Criminal Division; David Sundberg, Assistant Director in Charge, Federal Bureau of Investigation, Washington Field Office (FBI); Anne Milgram, Administrator, Drug Enforcement Administration; Katrina W. Berger, Executive Associate Director, U.S. Department of Homeland Security, Homeland Security Investigations (HSI); and Steven G. James, Superintendent, New York State Police (NYSP), announced the arraignment.

“El Mayo, the co-founder and leader of the Sinaloa Cartel, has been charged with overseeing a multi-billion-dollar conspiracy to flood American communities with narcotics, including deadly fentanyl,” said Attorney General Merrick B. Garland. “We allege that El Mayo built, and for decades led, the Sinaloa Cartel’s network of manufacturers, assassins, traffickers, and money launderers responsible for kidnapping and murdering people in both the United States and Mexico, and importing lethal quantities of fentanyl, heroin, meth, and cocaine into the United States. Now, El Mayo joins the many other Sinaloa Cartel leaders who have faced charges in an American courtroom for the immeasurable harm they have inflicted on families and communities across our country.”

“For decades, the Sinaloa Cartel has profited from poisoning and killing Americans, and fueling violence on both sides of our southern border,” stated Deputy Attorney General Monaco.  “Today’s arraignment of Zambada Garcia is the latest step in a whole-of-government effort to strike back against one of the world’s most dangerous criminal organizations and protect our communities from the fentanyl epidemic.”

“Zambada Garcia’s day of reckoning in a U.S. courtroom has arrived and justice will follow,” stated United States Attorney Peace.  “If convicted, never again will he deliver fentanyl, cocaine, and other deadly drugs and associated violence into our country or make millions as hundreds of thousands of innocent lives are lost.  It is my hope that the countless family members and friends of victims who succumbed to his cartel’s poisons, and the countless members of law enforcement who fearlessly risked their lives fighting this scourge, should take comfort in knowing that Zambada Garcia will be held accountable for his multitude of crimes.”

Mr. Peace also expressed his thanks to the U.S. Attorney’s Office for the Western District of Texas, and the United States Marshals Service for their assistance on the case.

“Zambada Garcia can no longer hide from the American justice system,” stated United States Attorney Lapointe.  “His arrest means that he will now have to face charges for leading the Sinaloa Cartel’s multi-billion dollar criminal enterprise that funneled drugs onto our streets and violence and despair into our communities.  But our work is not done.  We will continue to go after the leaders of the Sinaloa Cartel and the drug trafficking organizations around the world.”

“Defeating the Sinaloa cartel is DEA’s top operational priority and today, with the capture and additional charges filed against Ismael Zambada Garcia we are that much closer.  Better known as ‘El Mayo,’ Zambada Garcia is the co-founder and leader of the Sinaloa Cartel, one of the most ruthless and dangerous cartels in Mexico and responsible for the unprecedented drug crisis facing the United States,” stated DEA Administrator Milgram.  “With Zambada Garcia no longer in power we have struck at the heart of the Sinaloa cartels’ operations. He may have eluded capture for three decades, but today he is seeing what it means to face justice in America. Let this be a reminder to his associates and others, American lives depend on DEA remaining laser focused on destroying the cartel, their networks, and their global supply chain and that is what we will continue to do.”

“Today’s arraignment sends a clear message to drug traffickers around the world — you will be brought to justice,” said Homeland Security Investigations Executive Associate Director Katrina W. Berger. “The men and women of HSI are active partners in investigating, intercepting and halting the flow of illegal drugs into the United States and keeping them off our streets.”

“The arraignment of this individual is a result of the relentless work of law enforcement partners at all levels to stem the tide of illegal drugs and drug related violence in our country,” stated NYSP Superintendent James.  “Strong partnerships are key, and as a result, a dangerous international drug trafficking operation, and the organized crime perpetuated by it, has been shut down. The State Police will continue to tenaciously work in conjunction with our partners to seek out those who deliberately put others in danger.”

Zambada Garcia was first indicted in the Eastern District of New York in 2009 and most recently in the fifth superseding indictment in February 2024.  As alleged, Zambada Garcia was a co-founder of the Sinaloa Cartel together with his co-defendant Joaquin Guzman Loera (El Chapo), and the two of them ran the Sinaloa Cartel together from Mexico until El Chapo’s arrest in 2016.  Following a trial, El Chapo was convicted in the Eastern District of New York in 2019 and sentenced to life imprisonment plus 30 years.  Zambada Garcia, however, continued his brutal reign until his arrest just weeks ago. 

According to the superseding indictment, from 1989 to 2024, Zambada Garcia led a continuing criminal enterprise responsible for the importation and distribution of massive quantities of narcotics and which generated billions of dollars in profits.  To ensure the success of the Sinaloa Cartel, Zambada Garcia employed thousands of people in South and Central America, throughout Mexico and in the United States.  Through a complex, layered structure, Zambada Garcia was able to assure transportation routes for the narcotics he sold from source of supply to distribution on the streets of the United States; this included securing corrupt officers, transportation routes, and storage facilities to ensure that narcotics safely transited through various countries for ultimate distribution in the United States.  Zambada Garcia also employed groups of “sicarios” or hit men, who at his orders carried out kidnappings and murders in Mexico and elsewhere—including murders in the United States—to eliminate anyone who threatened this valuable narcotics pipeline and to retaliate against rivals and those suspected of cooperating with the United States government.  The billions of dollars generated from the drug sales were then transported and laundered back to Mexico. 

As set forth in the superseding indictment and other court filings, the Sinaloa Cartel under Zambada Garcia’s leadership expanded its drug business into fentanyl manufacturing and distribution no later than 2012 and is responsible for the distribution of many thousands of kilograms of fentanyl into the United States. Zambada Garcia also expanded the power and influence of the Sinaloa Cartel by making millions of dollars each year in corruption payments and conducting regular campaigns of brutal violence, including retaliatory murders that were allegedly committed on his orders as recently as just weeks prior to his arrest.

The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. 

This superseding indictment is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.  OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Francisco J. Navarro, Robert M. Pollack, Adam Amir, and Lauren A. Bowman are leading the prosecution for the Eastern District of New York with the assistance of Paralegal Specialist Melissa Bennett.  Assistant United States Attorney Andrea Goldbarg of the Southern District of Florida and Trial Attorneys Melanie Alsworth and Kirk Handrich of the U.S. Department of Justice Criminal Division’s Narcotic and Dangerous Drug Section are leading the prosecution for their respective offices.

The case was investigated by the FBI, HSI and DEA.  Substantial assistance was provided by the U.S. Attorneys’ Offices for the Northern District of Illinois, Central District of California, Southern District of California, and Western District of Texas.

The Defendant:

Ismael Zambada Garcia (also known as “El Mayo”)
Age:  76
Mexico

E.D.N.Y. Docket No. 9-CR-466 (BMC) (S-5)

Earlier today, at the federal court in Brooklyn, a five-count indictment was unsealed charging John Cangialosi, Peter Girgis, Gene Sarabella, also known as “Jerry,” Enrico Carini, also known as “Ed,” and Caner Otar, also known as “John,” with conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud, investment adviser fraud, and money laundering conspiracy in connection with their scheme to defraud investors in Max Infinity Management LLC, Elder Fund Management LLC, and a related series of funds (collectively, “Max Infinity”).  The defendants’ fraudulent misrepresentations about the operation of the funds, including excessive and undisclosed share price markups charged to investors, allowed them to raise more than approximately $60 million from investors and divert approximately $27 million for the benefit of the defendants and other Max Infinity salespeople. 

Breon Peace, United States Attorney for the Eastern District of New York, and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the charges.

“As alleged, based on false promises the defendants bilked investors out of millions of dollars,” stated United States Attorney Breon Peace.  “They lied about how they made money and promised near-certain returns on investment when, in truth, they charged astonishing markups, at times greater than 95%, and defrauded investors.  My office will vigorously prosecute those who seek to take advantage of the investing public for their own greed.”

Mr. Peace expressed his appreciation to the Securities and Exchange Commission (SEC), Washington, D.C. Home Office, for its significant cooperation and assistance during the investigation. 

“These five defendants allegedly charged undisclosed markup fees to defraud almost $60 million from investors of Max Infinity, routing nearly half of the proceeds to their personal wallets. Luring in investors based on false success stories and concealing additional expenses betrays their belief that the money is being handled appropriately. The FBI will continue to disrupt fraudulent schemes rooted in deceit and investigate anyone seeking to make an unlawful quick buck at the cost of another,” stated FBI Director Curtis.

As set forth in the indictment, Max Infinity was a New York City based manager of investment funds that bought and sold stock issued by privately held companies that anticipated an initial public offering (IPO).  Principals Cangialosi, Girgis, and Sarabella, along with sales team leaders Carini and Otar, engaged in a scheme to defraud investors and prospective investors in Max Infinity by misrepresenting, among other things, that Max Infinity took no upfront fees, was registered with the SEC, and sourced pre-IPO shares directly from the issuing companies.  The defendants also fabricated Max Infinity’s track record – claiming on their website and to investors that Max Infinity had returned significant profits to investors in prior successful IPOs—when in reality, Max Infinity had no such previous investments.   Additionally, Cangialosi and Girgis were both, at various times, under suspension by the Financial Industry National Regulatory Authority (FINRA) and hid their involvement in Max Infinity from investors. 

Even though investors were told that Max Infinity did not make money until customers made money, Cangialosi, Girgis, and Sarabella paid themselves distributions and paid salespeople commissions out of excessive, undisclosed markups charged to investors.  From these distributions, Sarabella directed the purchase of more than a million dollars in luxury watches.  Salespeople also utilized scripts that falsely assured investors that the firm had an impressive track record of success in prior IPO deals, conducted extensive due diligence, and had specialized access to top deals.  At the principals’ direction, salespeople lulled investors into a false sense of security by falsely claiming SEC oversight over their fund and its investments. 

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. 

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including wire fraud, such as the crimes that defendants allegedly committed.

If you believe that you or someone you know was victimized by the defendants, please contact the FBI by email at: maxinfinitytips@fbi.gov or by calling 1-800-CALL-FBI.

The government’s case is being handled by the Office’s Business & Securities Fraud Section. Assistant United States Attorneys Sarah M. Evans, Eric Silverberg, John O. Enright and Lorena Michelen are in charge of the prosecution, with assistance from Paralegal Specialists Sarah Burn and Liam McNett.

The Defendants:

JOHN CANGIALOSI
Age:  43
Manalapan, New Jersey

PETER GIRGIS
Age: 43
Staten Island, New York

GENE SARABELLA (also known as “Jerry”)
Age: 36
Monroe, New Jersey

ENRICO CARINI (also known as “Ed”)
Age: 39
Staten Island, New York

CANER OTAR (also known as “John”)
Age: 37
Brooklyn, New York

E.D.N.Y. Docket No. 24-CR-363

Yesterday, in federal court in Brooklyn, an indictment was filed charging Asif Merchant, also known as “Asif Raza Merchant,” with attempting to commit an act of terrorism transcending national boundaries and murder-for-hire as part of a scheme to assassinate a politician or U.S. government official on U.S. soil.  Law enforcement foiled the plot before any attack could be carried out.  Merchant was previously arrested and charged by complaint in July 2024.  Merchant was ordered detained and is currently in federal custody. If convicted, Merchant faces up to life in prison.

Merrick B. Garland, United States Attorney General; Breon Peace, United States Attorney for the Eastern District of New York; and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the indictment.

“The Justice Department will not tolerate Iran’s efforts to target our country’s public officials and endanger our national security,” said Attorney General Merrick B. Garland.  “As these terrorism and murder for hire charges against Asif Merchant demonstrate, we will continue to hold accountable those who would seek to carry out Iran’s lethal plotting against Americans.”

“As alleged, Merchant orchestrated a plot to assassinate U.S. politicians and government officials.  Today’s indictment is a message to terrorists here and abroad that my Office and the Department of Justice will continue to take all steps necessary to protect the country against foreign threats,” stated United States Attorney Peace.

Mr. Peace expressed his appreciation to the FBI’s Field Offices in Dallas, Houston, Tampa, Boston, Washington D.C., Chicago and Albany for their partnership on this case.  Mr. Peace also expressed his appreciation to the New York City Police Department, the U.S. Attorney’s Office for the Southern District of Texas and the U.S. Customs and Border Protection for their assistance.

“Merchant’s efforts to allegedly recruit criminal associates for the murder of American politicians are representative of the various threats our nation can face from afar. The formidable efforts of our office ensured that the defendant was unsuccessful in executing his plan and demonstrate FBI New York’s commitment to curtailing the threats to our country and its citizens that come from both within and outside our borders,” stated FBI Assistant Director in Charge Curtis.

As set forth in court filings, in approximately April 2024, after spending time in Iran, Merchant arrived in the United States from Pakistan and contacted a person he believed could assist him with the scheme to kill a politician or government official. That person reported Merchant’s conduct to law enforcement and became a confidential source (the CS).

In early June, Merchant met the CS in New York and explained his assassination plot.  Merchant told the CS that the opportunity he had for the CS was not a one-time opportunity and would be ongoing.  Merchant then made a “finger gun” motion with his hand, indicating that the opportunity was related to a killing.  Merchant further stated that the intended victims would be “targeted here,” meaning in the United States. Merchant instructed the CS to arrange meetings with individuals whom Merchant could hire to carry out these actions.  Merchant explained that his plot involved multiple criminal schemes: (1) stealing documents or USB drives from a target’s home; (2) planning a protest; and (3) killing a politician or government official.

At that meeting, Merchant began planning potential assassination scenarios and quizzed the CS on how he would kill a target in the various scenarios.  Specifically, Merchant asked the CS to explain how the target would die in different scenarios.  Merchant told the CS that there would be “security [] all around” the person.

Merchant stated that the assassination would occur after he left the United States and he would communicate with the CS from overseas using code words.  The CS asked whether Merchant had spoken to the unidentified “party” back home with whom Merchant was working.  Merchant responded that he had and that the party back home told him to “finalize” the plan and leave the United States.

In mid-June, Merchant met with the purported hitmen, who were in fact undercover U.S. law enforcement officers (the UCs) in New York.  Merchant advised the UCs that he was looking for three services from them: theft of documents, arranging protests at political rallies and for them to kill a “political person.”  Merchant stated that the hitmen would receive instructions on who to kill either the last week of August or the first week of September, after Merchant had departed the United States.

Merchant then began arranging means to obtain $5,000 in cash to pay the UCs as an advance payment for the assassination, which he eventually received with assistance from an individual overseas.  On June 21, Merchant met with the UCs in New York and paid them the $5,000 advance.  After Merchant paid the $5,000 to the UCs, one of the UCs stated, “now we’re bonded,” to which Merchant responded “yes.”  The UC then stated “Now we know we’re going forward. We’re doing this,” to which Merchant responded “Yes, absolutely.”

Merchant subsequently made flight arrangements and planned to leave the United States on Friday, July 12, 2024.  On July 12, law enforcement agents placed Merchant under arrest before he could leave the country.  

The charges in the indictment are allegations and Merchant is presumed innocent unless and until proven guilty.

The case is being handled by the Office’s National Security & Cybercrime Section.  Assistant United States Attorneys Sara K. Winik, Gilbert Rein and Douglas Pravda are in charge of the prosecution, with assistance from Trial Attorneys David Smith and Joshua Champagne of the Department of Justice’s Counterterrorism Section of the National Security Division.

The Defendant:

ASIF MERCHANT (also known as “Asif Raza Merchant”)
Age:  46
Karachi, Pakistan; Tehran, Iran

E.D.N.Y. Docket No. 24-CR-362 (EK)

A four-count indictment was unsealed today in the United States District Court for the Eastern District of New York charging Kwyme Waddell, Paolo Alfarobarber, Rahim Frank, Mikey Jemison, Sebastian Jocelyn, Joel Myrie and Jahi Nimmons with violent crimes in-aid-of racketeering — including murder conspiracy and attempted murder — and related firearms offenses.  As alleged, the defendants are members and associates of the Folk Nation Gangster Disciples (GD), and specifically of GD subset No Love City (NLC).    

Defendants Alfarobarber, Frank, Jemison, Jocelyn, and Nimmons were arrested this morning in Brooklyn and Bridgeport, Connecticut and are scheduled to be arraigned this afternoon before United States Magistrate Judge Joseph A. Marutollo at the federal courthouse in Brooklyn.  Defendant Waddell was already in federal custody on a prior charge of being a felon-in-possession of ammunition after a March 2022 shooting and will be arraigned at a later date.  Myrie is still at large.

Breon Peace, United States Attorney for the Eastern District of New York and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Edward A. Caban, Commissioner, New York City Police Department (NYPD) announced the charges and arrests.

“We allege that, rather than celebrating families on Father’s Day, the defendants terrorized Brooklyn residents by spraying bullets onto a residential street with total disregard for human life,” stated U.S. Attorney Peace. “My Office will continue to use all tools available to dismantle violent gangs, like the Folk National Gangster Disciples, and hold their members accountable for the havoc they cause to our communities.”

Mr. Peace expressed his appreciation to FBI/NYPD Metro Safe Streets Task Force and the NYPD’s Gun Violence Suppression Division for their work and assistance in this investigation and prosecution.

“Seven members and associates of Folk Nation Gangster Disciples allegedly conspired to orchestrate the attempted murder of a rival member by firing two firearms into a crowded neighborhood street. Their alleged actions fueled a decade-long rivalry and posed an extreme threat to the innocent bystanders celebrating Father’s Day. With our law enforcement partners, the FBI remains dedicated to investigating and apprehending all gangs who utilize gun violence to satisfy territorial disputes and threaten the safety of our communities,” stated FBI Assistant Director in Charge Curtis.

“Targeting and tearing down gangs, as well as preventing the violence associated with their illegal activities, remains a top priority for the NYPD,” stated NYPD Commissioner Caban. “I commend the tireless efforts of our Gun Violence Suppression Division and express gratitude to all of our law enforcement partners for their unwavering dedication to our shared mission of public safety.”

As alleged in the indictment and other court documents, on June 19, 2022 – which was Father’s Day – the defendants engaged in a drive-by shooting during which a 28-year-old victim was shot and injured.  NLC leaders Waddell and Alfarobarber jumped into a stolen Dodge Charger with younger gang members Jocelyn and Myrie.  The foursome drove to Canarsie in a three-car convoy with Frank, Jemison and Nimmons to continue a decade’s long feud with rivals in the area.  After identifying a group of people on residential East 94th Street between Avenues L and K, the defendants shot multiple times into the group on the sidewalk using two firearms, striking the victim, who survived his injuries after being hospitalized.

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

This indictment is part of the United States Attorney’s Office for the Eastern District of New York’s focus on dismantling the Folk Nation Gangster Disciples (GD), under which the Office has brought numerous prosecutions against members and associates of GD in coordination with federal and state law enforcement partners, including United States v. Britton, No. 23-CR-406 (LDH) (GD leader charged with false statements and obstruction); United States v. Zeigler, No. 23-CR-114 (MKB) (GD member charged with firearm possession in connection with a shooting); United States v. Oluwagbenga Agoro, No. 21-CR-166 (WFK) (relating to a March 14, 2021 use of threatened use of force in furtherance of a plan to commit extortion); United States v. Powell, No. 21-CR-205 (LDH) (GD member charged with firearm possession in connection with a shooting); United States v. Cummings, No. 21-CR-406 (CBA) (GD associate charged with possessing multiple firearms on multiple separate occasions); United States v. Apollon, No. 21-CR-636 (DG) (GD member charged with robbery of vehicles from parking garage where parking attendant was permanently injured); and United States v. Brown, No. 20-CR-293 (WFK) (eleven GD defendants charged with racketeering offenses for seven gang-related shootings in 2020).

This case is also part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Attorney General Merrick Garland has enhanced PSN as part of the Department’s focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Dana Rehnquist, Sophia Suarez and Daniel Marcus are in charge of the prosecution, with the assistance of Paralegal Specialist Theodore Rader. 

The Defendants:

KWYME WADDELL
Brooklyn, New York

PAOLO ALFAROBARBER
Bridgeport, Connecticut

RAHIM FRANK
Brooklyn, New York

MIKEY JEMISON
Brooklyn, New York

SEBASTIEN JOCELYN
Bridgeport, Connecticut

JOEL MYRIE
Brooklyn, New York

JAHI NIMMONS
Brooklyn, New York

E.D.N.Y. Docket No. 24-CR-351 (FB)

Earlier today, in federal court in Brooklyn, Eric Goldstein, the former Chief Executive Officer of the New York City Department of Education’s (NYC DOE) Office of School Support Services, and Blaine Iler, Michael Turley and Brian Twomey, the owners of SOMMA Food Group (SOMMA), were sentenced by U.S. Circuit Judge Denny Chin sitting by designation to prison terms for multiple counts of bribery and bribery conspiracy relating to programs receiving federal funds.  Goldstein was sentenced to 2 years, Iler to 12 months and a day along with a $10,000 fine, Turley to 15 months, and Twomey to 15 months and a $10,000 fine.  The four defendants were convicted by a federal jury in June 2023 following a four-week trial.

Breon Peace, United States Attorney for the Eastern District of New York, and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentences.   

“Eric Goldstein corruptly abused his high-ranking position of trust as a public official and pursued lucrative bribes at the expense of school children, many of whom rely on healthy meals provided by the New York City Department of Education,” stated United States Attorney Peace.  “Great responsibility came with overseeing the school system’s food operations, but shamefully, Goldstein prioritized lining his pockets with payoffs from his co-defendants to ensure the DOE purchased their products and that their food stayed in the schools even after plastic, bones and metal were found in the chicken served to schoolchildren and teachers.  Today’s jail sentences should serve as a lesson to these defendants and others that public corruption, especially acts that jeopardize the well-being of our children, will be punished.”

FBI Acting Assistant Director in Charge Curtis stated: “Eric Goldstein abused his position as the DOE Chief Executive Officer of Office of School Support Services to accept nearly $100,000 in bribes from co-defendants to knowingly serve unfit lunch choices for consumption to students and teachers. Goldstein ignored numerous complaints from the school and valued personal profits over the wellbeing of our city’s schoolchildren, allowing them to ingest plastic and other inedible items. May today’s sentencing reiterate the FBI’s continued determination to target any public official who prioritizes illicit financial compensation over the health of our city.”

In 2015 and 2016, Iler, Turley and Twomey entered into a corrupt arrangement with Goldstein, whereby SOMMA would provide the capital to a business named Range Meats Supply Co. (RMSCO).  Specifically, over a period of 14 months, Iler, Turley and Twomey transferred approximately $96,670 to RMSCO for Goldstein’s benefit, including payments to Goldstein’s divorce attorney and father.  In exchange, Goldstein, who served as the CEO of the NYC DOE’s Office of Food and Nutrition Services (SchoolFood), used his position to ensure that the NYC DOE purchased and served SOMMA’s products to thousands of schoolchildren, including chicken tenders that were found to contain foreign objects, including plastic.  Goldstein also made sure that SchoolFood’s approval of SOMMA’s products was expedited and that disputes between SOMMA and the NYC DOE were resolved in SOMMA’s favor. 

The largest bribe payment was made in the fall of 2016, when SchoolFood had stopped serving SOMMA’s chicken tenders because a NYC DOE employee choked on a bone that had not been removed from a SOMMA chicken tender.  Goldstein, who, as CEO, had final approval as to whether and when SOMMA’s chicken tenders would be allowed back in schools, delayed making any decision until Iler, Turley, and Twomey had agreed to transfer SOMMA’s ownership interest in RMSCO to him, as well as to transfer $66,670 to a bank account in RMSCO’s name that Goldstein had opened and controlled.  Following weeks of negotiations, on November 29, 2016, Iler, Turley and Twomey agreed to pay the bribe Goldstein was soliciting and, one day later, on November 30, 2016, Goldstein approved reintroduction of SOMMA’s chicken products in schools.  SOMMA’s products were served in schools until April 2017 when, following repeated complaints from students and staff that the chicken tenders continued to contain foreign objects, SchoolFood decided to remove all SOMMA food products from New York City public schools.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Robert Polemeni, Andrew Grubin, Laura Zuckerwise and Kaitlin McTague are in charge of the prosecution, with assistance from Paralegal Specialists Kavya Kannan and Rachel Friedman.   

The Defendants:

ERIC GOLDSTEIN
Age: 56
New Rochelle, New York

BLAINE ILER
Age: 37
Dallas, Texas

MICHAEL TURLEY
Age: 54
Fayetteville, Arkansas

BRIAN TWOMEY
Age: 51
Dallas, Texas

E.D.N.Y. Docket No. 21-CR-550 (DC)

Juan Amaya-Ramirez and Oscar Flores-Mejia pleaded guilty today in connection with the April 23, 2018 murder of 17-year-old Andy Peralta in Kissena Park in Flushing, Queens.  As part of their guilty pleas, the defendants admitted to murdering Peralta to gain entrance into MS-13 and also admitted to crimes including cyberstalking resulting in death, murder conspiracy in-aid-of racketeering, assault conspiracy in-aid-of racketeering, and assault in-aid-of racketeering.  Under the terms of their plea agreements, the defendants will be sentenced to at least 30 years’ imprisonment and could be sentenced up to life imprisonment.  The proceeding was held before United States Magistrate Judge Joseph A. Marutollo.

Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), Darren B. McCormack, Acting Special Agent in Charge, Homeland Security Investigations, New York (HSI), and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the guilty pleas.

“The senseless murder of Andy Peralta exemplifies the casual cruelty of MS-13’s violence, and with their pleas today the defendants acknowledge their role in this brutal event,” stated United States Attorney Peace.  “This Office and our law enforcement partners will continue to bring justice and safety to affected victims and communities by holding MS-13 members and associates accountable for their terrible crimes.”

“MS-13’s ruthless violence is boundless. The defendants’ admissions to murder serve as a reminder of how the violent nature of street gangs results in countless, senseless deaths,” said HSI New York Acting Special Agent in Charge McCormack.  “HSI New York and the entire law enforcement community remain committed to disrupting and dismantling MS-13 and other violent gangs in furtherance of public safety in our communities.” 

“NYPD investigators, in close collaboration with our law enforcement colleagues, pledge to remain tireless in pursuing justice against gang members, wherever and whenever their barbaric acts are committed,” stated NYPD Commissioner Caban. “I applaud and commend our various federal partners for their vital efforts, which ultimately delivered today’s successful outcome.”

As detailed in court documents, Amaya-Ramirez, Flores-Mejia and a third MS-13 associate plotted to kill Peralta because they wanted to join MS-13 and mistakenly believed that Peralta was a member of a rival gang.  The defendants recruited Amaya-Ramirez’s then-girlfriend, Leyla Carranza, to lure Peralta to Kissena Park in Flushing, Queens, so he could be murdered.  Carranza communicated with Peralta on social media and eventually convinced him to meet her in Kissena Park on April 23, 2018.  Once inside the park, Peralta was confronted by Amaya-Ramirez, Flores-Mejia, and the third MS-13 associate.  The three men beat, stabbed, and strangled Peralta to death. After the murder, Amaya-Ramirez took a photograph of himself and his coconspirators flashing MS-13 hand signs over Peralta’s body.  

Carranza previously pleaded guilty to cyberstalking resulting in the death of Peralta and faces a maximum sentence of life imprisonment at sentencing.

This case was investigated as part of the ongoing efforts of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership that brings together the combined expertise of federal, state and local law enforcement agencies.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking, gangs and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

Today’s guilty pleas are the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2009, this Office has obtained indictments charging MS-13 members with carrying out more than 65 murders in the district and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by our law enforcement partners.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Jonathan Siegel, Michael W. Gibaldi, Anna Karamigios and Sophia Suarez are in charge of the prosecution, with the assistance of Paralegal Specialist Eleanor Jaffe-Pachuilo.

Defendants:

JUAN AMAYA-RAMIREZ (also known as “Cadaver”)
Age:  26
Fresh Meadows, Queens

OSCAR FLORES-MEJIA (also known as “Chamuco”)
Age:  24
Elmhurst, Queens

Defendant who previously pleaded guilty:

LEYLA CARRANZA
Age:  23
Richmond, Virginia

E.D.N.Y. Docket No. 20-CR-228 (S-2) (LDH)

UPDATE

The defendant’s conviction for the conduct described in the press release below was vacated by the United States Court of Appeals for the Second Circuit on January 23, 2026.  See 20-CR-219 (DLI) ECF No. 169.

Earlier today, at the federal courthouse in Brooklyn, Paul Belloisi, a former American Airlines mechanic at John F. Kennedy International Airport (JFK Airport), was sentenced by United States District Judge Dora L. Irizarry to 108 months in prison for his role in a conspiracy to import and possess cocaine.  Belloisi was convicted in May 2023 following a one-week jury trial of all three counts of an indictment charging him with conspiring to possess and import cocaine, and importing cocaine.

Breon Peace, United States Attorney for the Eastern District of New York, Darren B. McCormack, Acting Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Francis J. Russo, Director of Field Operations, U.S. Customs and Border Protection, New York Field Office (CBP), announced the sentence.

“The defendant abused his insider position at JFK Airport to help smuggle more than 25 pounds of cocaine into the United States in a highly sensitive electronics compartment of an international aircraft,” stated United States Attorney Peace.  “This conduct not only furthers the trafficking of drugs that harms our communities, but also poses a serious threat to the security of a vital border crossing in our district and our transportation infrastructure.  Today’s sentence demonstrates that the government takes these threats very seriously, and those who work in trusted positions at our airports and in other critical industries must know that they face serious consequences for crimes of corruption.”

“Paul Belloisi put his personal gain before the safety of the aviation industry by abusing his position to participate in a scheme to import over 25 pounds of cocaine into the U.S., storing smuggled narcotics within sensitive areas of passenger airplanes. His demise should send a message to anyone attempting to exploit the aviation industry: HSI New York and our law enforcement partners are committed to maintain the safety of the U.S. domestic and international transportation infrastructure,” stated HSI New York Acting Special Agent in Charge McCormack. “I am proud to stand alongside the Eastern District of New York and CBP in bringing this corrupt ‘inside man’ to justice.”

“This case serves as a great example of collaborative law enforcement efforts to combat international narcotics trafficking conspirators. U.S. Customs and Border Protection thanks our partners at HSI and the USAO for their continued cooperation,” stated CBP Director of Field Operations Russo.

On February 4, 2020, American Airlines flight 1349 arrived at JFK Airport’s Terminal 8 from Montego Bay, Jamaica.  The aircraft was selected for a routine search by CBP officers from the JFK Airport Anti-Terrorism Contraband Enforcement Team.  The officers found 10 bricks of cocaine weighing 25.56 pounds hidden inside an electronics compartment on the underside of the cockpit.  The cocaine was replaced with fake bricks and sprayed with a substance that glows when illuminated with a special black light.  CBP officers and HSI special agents placed the aircraft under surveillance from a distance and shortly before it was scheduled to take off for its next flight, they observed Belloisi drive up and pull himself inside the electronics compartment.  Belloisi was confronted by law enforcement who observed his gloves glowing under the black light indicating he had handled the fake bricks.  Belloisi was also carrying an empty tool bag and the lining of his jacket had cutouts sufficiently large enough to hold the bricks.  The cocaine found in the aircraft had a street value of more than $250,000.

The case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Robert Pollack and Margaret Schierberl are in charge of the prosecution, with the assistance of Paralegal Specialist Sophia Cronin.

The Defendant:

PAUL BELLOISI
Age:  56
Smithtown, New York

E.D.N.Y. Docket No. 20-CR-219 (DLI)

Earlier today, in federal court in Brooklyn, Davis Burgos-Collazo was sentenced by United States District Judge Pamela K. Chen to 45 years in prison for five counts of attempted sexual exploitation of a minor, two counts of distributing child pornography, one count of accessing child pornography with intent to view it and one count of committing a felony sexual offense involving minors while being a registered sex offender.  As part of the sentence, the Court ordered Burgos-Collazo to pay restitution of $33,000.  Burgos-Collazo was convicted by a federal jury in July 2022 following a one-week trial.

Breon Peace, United States Attorney for the Eastern District of New York and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.

“It has been proven that the defendant is an extremely dangerous predator, who, while being a registered sex offender, coerced a 10 year old child to perform sex acts for him on Instagram and threatened the child when she pleaded that he leave her alone.  And sadly, she was not the only vulnerable victim,” stated United States Attorney Peace.  “With today’s sentence, the goal of incapacitating this master manipulator and sextortionist has been achieved.  We are dedicated to protecting our children from those who weaponize social media in order to sexually exploit and harm them.” 

As set forth in the government’s sentencing memorandum and related court proceedings, in 2020, Burgos-Collazo used at least 26 Instagram accounts to attempt to sexually exploit children as young as nine years old.  The defendant enticed the victims by pretending to be a modeling scout and by using accounts with names like “future models” and “preteen beauty pics.”  After the defendant coerced a 10 year old victim into performing live sex acts for him on Instagram and she pleaded with him to leave her alone, he threatened to post a naked picture of her online for her friends to see if she refused to provide him with additional sexually explicit materials.  The FBI recovered over 100 photos and videos of child pornography on the defendant’s phone.  Burgos-Collazo committed these crimes while he was a registered sex offender.  In March 2006, he was convicted of sexually abusing and attempting to sexually abuse multiple minors, all of whom were under the age of eleven, and one as young as seven. 

This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.

The government’s case is being handled by the Office’s Civil Rights Section.  Assistant United States Attorneys Rachel A. Bennek and John O. Enright are in charge of the prosecution, with the assistance of Paralegal Specialist Anna November. 

The Defendant:

DAVIS BURGOS-COLLAZO
Age:  45
Queens, New York

E.D.N.Y. Docket No.: 20-CR-492 (PKC)

Alexander Almaraz, the owner of Design Concepts Group LLC (DCG) in Freeport, New York, pleaded guilty today in federal court in Central Islip to conspiracy to commit wire fraud in connection with a scheme to induce individuals to hire him and pay DCG to repair their Hurricane Sandy-damaged homes.  The proceeding was held before United States District Judge Joan M. Azrack.  When sentenced, Almaraz faces a maximum penalty of 30 years in prison and mandatory restitution to his victims. 

Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Anne T. Donnelly, Nassau County District Attorney, announced the guilty plea.

“After Hurricane Sandy turned their lives upside down, the individuals who hired Almaraz to repair their homes were further harmed by the defendant’s unconscionable fraudulent scheme, which extended the time they were deprived of a livable home,” stated United States Attorney Peace.  “With his guilty plea today, Almaraz is no longer outrunning the damage that his personal greed inflicted on a shattered Long Island community and it is my hope that the victims will find some solace in the defendant being held accountable and making full restitution.” 

“This defendant took advantage of vulnerable Long Island homeowners at a time of unimaginable loss, purchasing luxury cars and paying off credit cards with funds meant to repair their storm-damaged homes after Hurricane Sandy battered our shores,” stated Nassau District Attorney Donnelly.  “Today’s plea holds Almaraz accountable for his greedy scheme, and the restitution he will be ordered to pay is a necessary step towards making his victims whole. I thank our federal partners at the U.S. Attorney’s Office for the Eastern District of New York and the FBI for their continued dedication to investigating and prosecuting fraudsters who exploited Long Island residents in the aftermath of this devastating storm.”

On October 29, 2012, Hurricane Sandy struck New York and New Jersey, causing catastrophic damage to low-lying and coastal areas, including many neighborhoods in the Eastern District of New York.  New York residents whose homes were damaged were eligible to receive funding from the Governor’s Office of Storm Recovery through the New York Rising (NYR) program.

According to court documents and Almaraz’s own admissions today, Almaraz entered contracts with homeowners who qualified to receive funds from NYR.  As part of these contracts, Almaraz agreed to lift the victims’ homes and set them down on temporary support structures which would permit the foundations of the damaged homes to be removed and new foundations to be installed. After the new foundations were installed, Almaraz was supposed to lower the homes and reconnect the homes’ appliances.  Between October 2015 and June 2019, Almaraz agreed to lift the homes of at least 20 customers who had received NYR funding and who collectively paid him approximately $2.5 million.  Almaraz convinced many of these victims to move out of their homes and pay him rent to live elsewhere, all the while neglecting their projects and causing greater loss.  Additionally, instead of performing the agreed-upon work, Almaraz used the victims’ monies to pay for personal expenses, including credit card bills, land purchased in Kansas City, Missouri, and luxury automobiles, including a Lamborghini, a Porsche and a Jaguar.  The defendant’s fraudulent scheme caused more than $1.5 million in losses to NYR and the defendant’s individual victims.

The government’s case is being handled by the Office’s Long Island Criminal Section.  Assistant United States Attorney Megan E. Farrell is in charge of the prosecution. 

The Defendant:

ALEXANDER ALMARAZ
Age: 56
San Antonio, Texas; formerly of Freeport, Long Island

E.D.N.Y. Docket No. 23-CR-17 (JMA)

Note: View the indictment here. 

An indictment was unsealed today charging Linda Sun, 41, with violating and conspiring to violate the Foreign Agents Registration Act, visa fraud, bringing in aliens, and money laundering conspiracy. Sun is alleged to have acted on behalf of the government of the People’s Republic of China (PRC) and the Chinese Communist Party (CCP). Sun’s husband and co-defendant, Chris Hu, 40, was also charged with money laundering conspiracy, as well as conspiracy to commit bank fraud and misuse of means of identification. Sun and Hu were arrested earlier this morning and were arraigned in federal court in Brooklyn. 

“As alleged, while appearing to serve the people of New York as Deputy Chief of Staff within the New York State Executive Chamber, the defendant and her husband actually worked to further the interests of the Chinese government and the CCP,” said U.S. Attorney Breon Peace for Eastern District of New York. “The illicit scheme enriched the defendant’s family to the tune of millions of dollars. Our office will act decisively to prosecute those who serve as undisclosed agents of a foreign government.”

“These indictments demonstrate, yet again, the brazen attempts of the PRC to corrupt our political processes,” said Assistant Director Kevin Vorndran of the FBI's Counterintelligence Division. “As alleged in the indictment, Linda Sun and Chris Hu deceived the highest leadership of New York government to further the political agenda of the Government of China. The FBI, along with our partners, remain committed to protection our democratic institutions from the manipulation of the PRC.”

“Sun is alleged to be an undisclosed agent of the PRC and CCP, using Chinese money and her influence within the state of New York to benefit the Chinese government. Sun and her husband then laundered millions of dollars for the foreign country and used the monetary benefits of this scheme to buy luxury vehicles and million-dollar properties here in New York,” said Special Agent in Charge Thomas M. Fattorusso of IRS Criminal Investigation (IRS-CI) New York. “It is with the unwavering determination of federal law enforcement to root out foreign agents and their schemes that Sun and Hu will now face justice for their criminal acts.”

According to court documents, while working for the New York State (NYS) government – including in high-ranking posts in the Executive Chamber of the New York State government and in multiple state agencies – Sun also acted as an undisclosed agent of the PRC and CCP. Acting at the request of PRC government officials and CCP representatives, Sun engaged in numerous political activities in the interests of the PRC and the CCP, including blocking representatives of the Taiwanese government from having access to high-level New York State officers; changing high-level New York State officers’ messaging regarding issues of importance to the PRC and the CCP; obtaining official New York State proclamations for PRC government representatives without proper authorization; attempting to facilitate a trip to the PRC by a high-level New York State politician and arranging meetings for visiting delegations from the PRC government with NYS government officials. 

Additionally, Sun repeatedly violated internal rules and protocols within the New York State government to provide improper benefits to PRC and CCP representatives, including by providing unauthorized invitation letters from the office of high-level New York State officers that were used to facilitate travel by PRC government officials into the United States for meetings with New York State government officials. Sun’s unauthorized invitation letters for the PRC government delegation constituted false statements made in connection with immigration documents and induced the foreign citizens into unlawfully entering the United States.

Sun never registered as a foreign agent with the Attorney General, and in fact actively concealed that she took actions at the order, request or direction of PRC government and CCP representatives. 

In return for these and other actions, Sun received substantial economic and other benefits from representatives of the PRC government and the CCP, including the facilitation of millions of dollars in transactions for the PRC-based business activities of Sun’s husband and co-defendant Chris Hu; travel benefits; tickets to events; promotion of a close family friend’s business; employment for Sun’s cousin in the PRC; and Nanjing-style salted ducks prepared by a PRC government official’s personal chef that were delivered to the residence of Sun’s parents. Sun and Hu laundered the monetary proceeds of this scheme to purchase, among other items, real estate property in Manhasset, New York, currently valued at $4.1 million, a condominium in Honolulu, currently valued at $2.1 million, and various luxury automobiles, including a 2024 Ferrari. Sun never disclosed any benefits she received from representatives of the PRC government and the CCP to the New York State government, as she was required to do as a New York State government employee. 

As alleged, Hu also laundered unlawful proceeds through bank accounts opened in the name of a close relative but that were actually for Hu’s exclusive use. To open these accounts, Hu unlawfully used an image of the relative’s driver’s license.

The FBI is investigating the case with assistance from the IRS.

Assistant U.S. Attorneys Alexander A. Solomon, Robert Pollack and Laura Mantell for the Eastern District of New York are prosecuting the case with the assistance of Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section and Litigation Analyst Mary Clare McMahon.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

BROOKLYN, NY – Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Linda Sun with violating and conspiring to violate the Foreign Agents Registration Act, visa fraud, alien smuggling, and money laundering conspiracy. Sun is alleged to have acted on behalf of the government of the People’s Republic of China (the “PRC”) and the Chinese Communist Party (the “CCP”). Sun’s husband and co-defendant Chris Hu was also charged with money laundering conspiracy, as well as conspiracy to commit bank fraud and misuse of means of identification.

Sun and Hu were arrested this morning and are scheduled to be arraigned later today before United States Magistrate Judge Peggy Kuo.

Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division, Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas M. Fattorusso, Special Agent in Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), announced the prosecution.

“As alleged, while appearing to serve the people of New York as Deputy Chief of Staff within the New York State Executive Chamber, the defendant and her husband actually worked to further the interests of the Chinese government and the CCP,” stated United States Attorney Breon Peace.  “The illicit scheme enriched the defendant’s family to the tune of millions of dollars.  Our Office will act decisively to prosecute those who serve as undisclosed agents of a foreign government.”

Mr. Peace expressed his appreciation to the Department of Justice’s National Security Division, the New York State Office of the Inspector General, the New York State Police and the U.S. Department of State’s Diplomatic Security Service (DSS) for their work on the case.  He also thanked the New York State Executive Chamber for its cooperation with the investigation.

“As alleged in the indictment, Linda Sun, a former New York State government employee, acted as an undisclosed agent of the Chinese government while her husband, Christopher Hu, facilitated the transfer of millions of dollars in kickbacks for personal gain. Sun wielded her position of influence among executives to covertly promote PRC and CCP agendas, directly threatening our country’s national security. The FBI is committed to protect the American people from any threat actors who seek to influence officials at the direction of foreign entities,” stated FBI Acting Assistant Director Curtis.

“Sun is alleged to be an undisclosed agent of the PRC and CCP, using Chinese money and her influence within the state of New York to benefit the Chinese government. Sun and her husband then laundered millions of dollars for the foreign country and used the monetary benefits of this scheme to buy luxury vehicles and million dollars properties here in New York,” Thomas M. Fattorusso, Special Agent in Charge of IRS CI New York.  “It is with the unwavering determination of federal law enforcement to root-out foreign agents and their schemes that Sun and Hu will now face justice for their criminal acts.”

As alleged in the indictment, while working for the New York State government – including in high-ranking posts in the Executive Chamber of the New York State government and in multiple state agencies – Sun also acted as an undisclosed agent of the PRC and the CCP. Acting at the request of PRC government officials and the CCP representatives, Sun engaged in numerous political activities in the interests of the PRC and the CCP, including blocking representatives of the Taiwanese government from having access to high-level New York State officers; changing high-level New York State officers’ messaging regarding issues of importance to the PRC and the CCP; obtaining official New York State proclamations for PRC government representatives without proper authorization; attempting to facilitate a trip to the PRC by a high-level New York State politician; and arranging meetings for visiting delegations from the PRC government with New York State government officials. 

Sun also repeatedly violated internal rules and protocols within the New York State government to provide improper benefits to PRC and the CCP representatives, including by providing unauthorized invitation letters from the office of high-level New York State officers that were used to facilitate travel by PRC government officials into the United States for meetings with New York State government officials.  Sun’s unauthorized invitation letters for the PRC government delegation constituted false statements made in connection with immigration documents and induced the foreign citizens into unlawfully entering the United States.

Sun never registered as a foreign agent with the Attorney General, and in fact actively concealed that she took actions at the order, request, or direction of PRC government and the CCP representatives. 

In return for these and other actions, Sun received substantial economic and other benefits from representatives of the PRC government and the CCP, including the facilitation of millions of dollars in transactions for the PRC-based business activities of Hu; travel benefits; tickets to events; promotion of a close family friend’s business; employment for Sun’s cousin in the PRC; and Nanjing-style salted ducks prepared by a PRC government official’s personal chef that were delivered to the residence of Sun’s parents.  Sun and Hu laundered the monetary proceeds of this scheme to purchase, among other items, real estate property in Manhasset, New York currently valued at $4.1 million, a condominium in Honolulu, Hawaii currently valued at $2.1 million, and various luxury automobiles, including a 2024 Ferrari.  Sun never disclosed any benefits she received from representatives of the PRC government and the CCP to the New York State government, as she was required to do as a New York State government employee. 

Hu also laundered unlawful proceeds through bank accounts opened in the name of a close relative but that were actually for Hu’s exclusive use.  To open these accounts, Hu unlawfully used an image of the relative’s driver’s license.

The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s National Security & Cybercrime Section.  Assistant United States Attorneys Alexander A. Solomon and Robert Pollack are in charge of the prosecution, with the assistance of Trial Attorney Scott Claffee from the National Security Division’s Counterintelligence and Export Control Section and Litigation Analyst Mary Clare McMahon.  Assistant U.S. Attorney Laura Mantell of the Office’s Asset Recovery Section is handling forfeiture matters.

The Defendants:

LINDA SUN
Age: 41
Manhasset, New York

CHRIS HU
Age: 40
Manhasset, New York

E.D.N.Y. Docket No. 24-CR-346 (BMC)

Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Eliahou Paldiel and Carlos Arturo Suarez Palacios (Suarez) with wire fraud and money laundering conspiracies relating to a wide-ranging scheme in which the defendants sold hacked smartphones and fraudulent applications to more than 800 rideshare drivers (Driver Co-conspirators). The applications enabled the Driver Co-conspirators to “spoof” GPS locations to fraudulently obtain “surge” fees and to otherwise manipulate legitimate rideshare applications to enrich themselves to the detriment of riders, law-abiding drivers and rideshare companies. If convicted, the defendants face up to 20 years in prison on each of the two counts.

This morning, Paldiel was arrested in Brooklyn and Suarez was arrested in Brick Township, New Jersey. The defendants will be arraigned later this afternoon before United States Magistrate Judge Marcia M. Henry.

Breon Peace, United States Attorney for the Eastern District of New York, and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrests and charges.

“As alleged, the defendants sought to enrich themselves by corrupting the rideshare market at the expense of unsuspecting passengers and hardworking drivers who play by the rules,” stated United States Attorney Peace. “My Office remains steadfast in ensuring that, no matter how complex the scheme, individuals who violate the law will be caught and held accountable. The defendants learned an important lesson in these charges: there is no such thing as a free ride.”

“Eliahou Paldiel and Carlos Suarez allegedly developed a rideshare application that fraudulently manipulated a driver’s GPS location to obtain unlawful surge fare pricing, defrauding customers and legitimate drivers. For almost six years, this alleged conspiracy offered an unfair financial advantage to more than 800 participants and disrupted the integrity of nationwide rideshare services, earning the participants more than $40 million. The FBI will continue to dismantle all fraudulent schemes, even as criminals attempt to create innovative scams for selfish gains,” stated FBI Acting Assistant Director in Charge Curtis.

Rideshare Company-1 is a multinational company headquartered in the United States that provides ridesharing services. It operates primarily through its smartphone application (the Rideshare Company-1 Application), connecting users with drivers for on-demand transportation and delivery services.

As alleged in the indictment and other court filings, between November 2018 and August 2024, Paldiel and Suarez engaged in a scheme to defraud Rideshare Company-1’s users and drivers by causing passengers to collectively pay millions of dollars in fraudulent “surge” fees to hundreds of participating Driver Co-conspirators, and depriving legitimate rideshare drivers of their true share of “surge” fares and the most lucrative trips. In addition, the fraudulent devices and applications sold by the defendants for profit enabled the Driver Co-conspirators to cherry-pick high-fare rides by obtaining proprietary information and to “queue” in areas where they were not physically present.

The defendants allegedly sold scheme applications to Driver Co-conspirators on manipulated—also known as “jailbroken” or “rooted”—cellular devices (the Scheme Devices). A jailbroken or rooted cellular device has had its operating system security restrictions modified or removed, thereby allowing the installation of software, including applications, that the device manufacturer had not made available for the device. Driver Co-conspirators utilized the Rideshare Company-1 Application on their Scheme Devices.

Fake GPS “Spoofing” App
Fake GPS was a GPS spoofing application developed by the defendants and others. Fake GPS enabled Driver Co-conspirators to manipulate or “spoof” their locations within the Rideshare Company-1 Application and make it appear as if they were located in an area with surging fares when, in fact, they were not.

Screwber App
Screwber is an application developed by the defendants and others that provided Driver Co-conspirators with information about prospective Rideshare Company-1 rides that was not otherwise available to Rideshare Company-1 drivers prior to accepting such rides. For example, Screwber enabled Driver Co-conspirators to obtain prospective riders’ destinations and approximate fares for prospective trips, thereby allowing Driver Co-conspirators to accept or decline the prospective rides based on information to which they were otherwise not entitled and, in turn, cherry-pick only the most profitable and lucrative rides offered to them through the Rideshare Company-1 Application.

Rideshare Application
The defendants caused outdated versions of the Rideshare Company-1 Application to be downloaded onto the Scheme Devices provided to Driver Co-conspirators. By installing outdated versions of the Rideshare Company-1 Application, the defendants ensured that the Fake GPS and Screwber applications were not detected by security features implemented in newer versions of the Rideshare Company-1 Application.

As part of the scheme, the defendants sent Driver Co-conspirators information about how to avoid detection, such as the following: “Using 2 iphones with FakeGPS is very very risky. If you need FakeGPS for airport I recommend doing it one time a day. Do it when you wake up in the morning before you go to the airport.” The defendants also spoke with one another about their strategy to profit from the Driver Co-conspirators. For example, on or about November 2, 2018, Suarez wrote to Paldiel, “You know Screwber is like drugs .. once you get into it you’ll get withdrawals when you can’t get your fix.” In another message, Paldiel wrote to Suarez regarding the Driver Co-conspirators, “I get them hooked on the software, even a drug deal[er] throws in a few extra grams of weed in the beginning.”

During the course of the scheme, the Driver Co-conspirators, using the defendants’ fraudulent devices and applications, allegedly earned over approximately $40 million from rideshare customers. The defendants received more than $1.5 million from Driver Co-conspirators through one peer-to-peer payment service alone.

If you have information related to this case, please contact FBI at NY_RideShareTips@fbi.gov 

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to 20 years in prison on each of the two counts.

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including wire fraud and money laundering conspiracies—the crimes that the defendants committed in this case.

The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Matthew R. Galeotti, Dana Rehnquist and Elias Laris are in charge of the prosecution, with assistance from Paralegal Specialist Madison Bates.

The Defendants: ELIAHOU PALDIEL
Age: 52
Queens, New York

CARLOS ARTURO SUAREZ PALACIOS
Age: 54
Brick Township, New Jersey

E.D.N.Y. Docket No. 24-CR-329 (MMH) (ARR)