Eastern District of New York

BROOKLYN, NY - Earlier today, an indictment was unsealed in federal court in Brooklyn charging Joel David Forney, also known as “Sirbar,” with three counts of sex trafficking, Mann Act transportation for purposes of commercial sex and coercion and enticement of a minor.  The charges in the indictment arise from the defendant’s trafficking of women to work as prostitutes in New York, including along an open-air sex trafficking market on a stretch of Pennsylvania Avenue in Brooklyn, New York known as the Penn Track, as well as the defendant’s alleged transportation of women from New York to multiple other states, including Connecticut and Missouri, with the intent that they engage in commercial sex for his financial benefit. The charges also arise from the defendant’s alleged rape of a teenage girl in 2014.  Forney was arrested this morning in Kissimmee, Florida and is scheduled to be arraigned this afternoon in the Middle District of Florida.

Breon Peace, United States Attorney for the Eastern District of New York, Kristen M. Clarke, Assistant Attorney General for Civil Rights at the Justice Department, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charges.

“As alleged, the defendant raped a minor, and preyed on vulnerable women to sell their bodies for his own profit, while subjecting them to constant acts and threats of violence,” stated United States Attorney Peace.  “With today’s arrest, this Office seeks to hold Forney accountable for his cruel and depraved crimes.  We will continue working with our law enforcement partners to eradicate the degradation of women forced into sex work at the Penn Track and elsewhere in the district.”

Mr. Peace expressed his thanks to the New York City Police Department/FBI Child Exploitation Human Trafficking Task Force for their outstanding investigative work on the case. 

“These charges represent the darkest side of the criminal world. Not only did Joel Forney allegedly force several victims into commercial sex trafficking through repeated violence and death threats, but he also allegedly raped a female minor victim after luring her into his residence. Today’s arrest affirms the FBI’s promise to investigate those who commit such heinous crimes, and ensure they are brought to justice,” stated FBI Assistant Director-in-Charge Smith.

As alleged in court filings, between at least the summer of 2016 and continuing through at least 2022, Forney trafficked women to engage in commercial sex in Brooklyn, New York and in other states through force, fraud and coercion for his financial benefit.  The defendant trafficked his victims both in hotel rooms and on Pennsylvania Avenue in East New York, Brooklyn, a notorious location for commercial sex known as the Penn Track.  The defendant subjected the victims to his total control and forced them to adhere to a list of rules designed to maximize his profits and minimize their resistance. When his victims disobeyed his directives, he used physical violence, and sometimes death threats, as a form of punishment.

Forney allegedly began trafficking Jane Doe #1 in the summer of 2016, when he lured her to travel from her home in Wisconsin to New York City with false promises of a legitimate job offer.  When Jane Doe #1 arrived, he brought her to a hotel where he raped her and threatened her with violence.  He then photographed her and posted advertisements on the internet using her photo to promote commercial sex.  For the next several months, the defendant trafficked Jane Doe #1, bringing her to hotels in New York, Connecticut, Massachusetts and other locations, where he compelled her to engage in commercial sex.  The defendant retained the majority of the proceeds of her commercial sex work.  If Jane Doe #1 failed to earn enough money or acted in a way that he viewed as disrespectful, he would slap, punch, or sexually assault her.  He routinely threatened to kill Jane Doe #1. On one occasion, he showed Jane Doe #1 a photograph on his phone of a dismembered woman and told her that “this is what happens to bi-----s who leave their pimps.” 

Forney began trafficking Jane Doe #2 in October 2017 at the Penn Track and in other states where he forced her to perform commercial sex for his financial benefit.  As was the case with Jane Doe #1, Forney kept the majority of the financial proceeds of Jane Doe #2’s work. Forney would beat her if she violated his rules. On one occasion, angered by Jane Doe #2’s perceived disobedience, Forney punched her in the face, breaking her front tooth. 

Forney trafficked a third victim, Jane Doe #3, beginning in May 2017.  As with Jane Doe #2, the defendant compelled Jane Doe #3 to work in commercial sex largely on the Penn Track, and kept most of her earnings.  Like all the women the defendant trafficked, Jane Doe #3 was instructed to strictly adhere to the defendant’s rules, and any acts of disobedience were met with violence and threats. 

In addition to sex trafficking, Forney also engaged in sexually predatory conduct directed at a minor.  Specifically, in June 2014, when Forney was 31-years-old, he encountered Jane Doe #4, who was then 14 years-old, walking home in Queens.  He told her she was pretty; she told him her age.  After exchanging contact information, the defendant continued to communicate with the girl—regularly telling her she was beautiful—before inviting her to his home where he raped her. 

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Forney faces a minimum term of 15 years in prison, and up to life imprisonment.

If you are a victim of trafficking—whether by Forney or someone else—and have information to provide, please contact the FBI, which is prepared to help you regardless of your immigration status, at tips.fbi.gov or call 1-800-CALL-FBI.

The government’s case is being handled by the Office’s Civil Rights Section.  Assistant United States Attorneys Lauren Elbert and Antoinette N. Rangel and Trial Attorney Leah Branch of the Civil Rights Division’s Human Trafficking Prosecution Unit are in charge of the prosecution.

The Defendant: JOEL DAVID FORNEY (also known as “Sirbar”)
Age:  41
Kissimmee, Florida

E.D.N.Y. Docket No. 24-CR-146 (KAM)

An indictment was unsealed in Brooklyn, New York, today charging a Florida man with sex trafficking multiple women and coercion and enticement of a minor. 

Joel David Forney, 41, of Kissimmee, was charged with sex trafficking; interstate transportation for purposes of prostitution; and coercion and enticement of a minor. Forney was arrested today and is scheduled to be arraigned this evening in the Middle District of Florida.

Forney allegedly trafficked women to work in commercial sex in New York, including at an open-air sex trafficking market along a stretch of Pennsylvania Avenue in Brooklyn known as the Penn Track, as well as the defendant’s transportation of women from New York to multiple other states, including Connecticut and Missouri, with the intent that they engage in commercial sex for his financial benefit. Forney is also charged with coercion and enticement of a minor.

According to the indictment, for years, Forney preyed on vulnerable women in tough financial circumstances by sex trafficking them, violently assaulting them and subjecting them to constant threats of violence.

If convicted, Forney faces a mandatory minimum penalty of 15 years in prison and 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.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Breon Peace for the Eastern District of New York and Assistant Director in Charge James Smith of the FBI New York Field Office made the announcement.

The FBI New York Field Office is investigating the case.

Assistant U.S. Attorneys Lauren Elbert and Antoinette N. Rangel for the Eastern District of New York and Trial Attorney Leah Branch of the Civil Rights Division’s Human Trafficking Prosecution Unit are prosecuting the case.

If you are a victim of trafficking — whether by Forney or someone else — and have information to provide, please contact the FBI, which is prepared to help you regardless of your immigration status, at tips.fbi.gov or call 1-800-CALL-FBI.

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, at the federal courthouse in Central Islip, Donald Finley, a Locust Valley businessman and owner of the now-defunct Jekyll & Hyde theme restaurant in Manhattan and the Bayville Adventure Park on Long Island, was sentenced by United States District Judge Joan M. Azrack to 24 months in prison.  Finley pleaded guilty in May 2023 to disaster relief fraud and wire fraud in connection with his receipt of $3.2 million dollars in small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP).  As part of his sentence, Finley has paid in full $3.2 million in restitution. As part of his sentence, Finley was also ordered to pay a $15,000 fine and complete 500 hours of community service.

Breon Peace, United States Attorney for the Eastern District of New York, Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), and Daniel B. Brubaker, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the sentence.

“Finley viewed the deadly pandemic that was gripping the nation as a way to steal millions of dollars in COVID-19 relief funds that he used to purchase a vacation home in Nantucket,” stated United States Attorney Peace.  “Today the defendant learned the price to pay for such a shameful crime is a loss of his freedom and full restitution for the victims of his scam. Let this be a lesson to other lawbreakers who have engaged in similar conduct that this Office will not forgive and forget COVID-19 fraud.” 

“Donald Finley is an admitted criminal, pleading guilty to pocketing millions in COVID-19 relief funds.  While he was enjoying his spoils from his ill-gotten gains, many business owners with legitimate needs were just able to keep the doors open.  Today’s sentencing means that no one was amused by this Bayville Adventure Park owner’s criminal acts, and he will now face time in prison,” stated IRS-CI Special Agent-in-Charge Fattorusso.

USPIS Inspector-in-Charge Brubaker said, “Postal Inspectors and our law enforcement partners are committed to fighting fraud in whatever form it takes, and we will pursue criminals from the busy streets of Manhattan to the shores of a quiet seaside village. We want crooks to know that when you use the mail to defraud the public, justice will be served. Today’s sentencing is proof of that truth.”

Congress created the PPP and 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.  The PPP program was overseen by the Small Business Administration (“SBA”) and various financial institutions received and processed the PPP loan applications, which, if approved, would then be funded directly by the lenders and backed by the federal government.

One source of relief provided by the CARES Act was the allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other expenses through the PPP.  The PPP allowed qualifying small businesses to receive unsecured loans on favorable terms, which they were required to use for specified expenses, including payroll costs, interest on mortgages, rent and utilities. 

Another 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.  Under the program, EIDLP recipients were eligible to receive advances of up to $10,000 for small businesses within three days of applying for an EIDL Advance which did not have to be repaid.

As set forth in court filings, between March 2020 and March 2021, amid the COVID-19 pandemic, Finley fraudulently applied for, and received, at least 29 PPP and EIDLP loans totaling approximately $3.2 million on behalf of corporate entities he controlled. The applications contained false information, bogus financial data and fabricated supporting documentation, all of which was designed to fraudulently induce the SBA and the lenders administering the PPP and EIDL programs to approve the loans. Once the loans were approved, Finley sent the funds through more than 30 bank accounts to prevent tracing of the proceeds, with substantial portions of the stolen funds being used to purchase real property in Nantucket, Massachusetts in February 2021.

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

The Defendant:

DONALD FINLEY
Age:  61
Locust Valley, New York

E.D.N.Y. Docket No. 23-CR-181 (JMA)

Earlier today, in federal court in Brooklyn, Salvatore Rubino, also known as “Sal the Shoemaker,” an associate of the Genovese organized crime family of La Cosa Nostra, pleaded guilty to operating an illegal gambling business associated with the crime family.  Previously, on April 5, 2024, four co-defendant members and associates of the Genovese crime family pleaded guilty to various felony charges stemming from their long-running operation of several lucrative gambling operations in the Eastern District of New York.  Carmelo “Carmine” Polito, a former acting captain and a soldier within the Genovese crime family, pleaded guilty to racketeering involving the operation of an illegal gambling business and an attempted extortion.  Joseph Macario, also known as “Joe Fish,” a soldier within the Genovese crime family, also pleaded guilty to racketeering.  Joseph Rutigliano, also known as “Joe Box,” and Mark Feuer, associates of the Genovese crime family, pleaded guilty to felony charges relating to the operation of various illegal gambling businesses also associated with the crime family. The proceedings were held before United States District Judge Eric N. Vitaliano.

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Anne T. Donnelly, District Attorney, Nassau County District Attorney’s Office, announced the guilty pleas.

“With their guilty pleas, these five members and associates of the Genovese crime family have admitted they committed crimes to benefit a criminal enterprise notorious for inflicting harm on our communities for generations,” stated United States Attorney Peace.  “As long as the Mafia doesn’t get it that illegal gambling is a losing proposition, they can bet on this Office and our partners vigorously enforcing the law and flushing them out of the shadows, as in this case, where they operated secretly in a coffee bar and a shoe repair shop.”

Mr. Peace expressed his appreciation to the New York City Police Department and the Nassau County Police Department for their invaluable assistance in the investigation.

“These Mafia figures operated surreptitiously in back rooms of restaurants and retail locations in suburban Long Island, running underground gambling parlors and kicking up the profits to the Genovese crime family,” said Nassau County District Attorney Anne T. Donnelly. “For decades, organized crime families have steered violence and other illicit activities in our communities. With our partners at the EDNY, FBI, and the Nassau County Police Department, we are doubling down on driving out these illegal gambling operations.”

As detailed in earlier court filings and in facts presented at the guilty plea hearings, members of the Genovese and Bonanno organized crime families operated several illegal gambling operations in the Eastern District of New York.  Beginning in at least May 2012, the Genovese and Bonanno families jointly operated a lucrative illegal gambling operation in Lynbrook, New York called the Gran Caffe.  The profits earned through the Gran Caffe and other illegal gambling locations generated substantial revenue, which was then “kicked up” to the crime families’ leaders.  Rutigliano and Rubino collected the proceeds for the Genovese crime family and distributed them up to higher-ranking members, including Polito and Macario. In addition to the Gran Caffe, the Genovese crime family—through Polito, Macario, Rutigliano, Rubino and others—operated illegal gambling parlors at establishments called Sal’s Shoe Repair and the Centro Calcio Italiano Club. 

Carmelo Polito, a former acting captain in the Genovese crime family, also operated an illegal online gambling scheme in which bets were placed on sporting events through a website called “PGWLines.”  In connection with his operation of PGWLines, Polito attempted to extort an individual who lost several thousand dollars in bets he placed through the website.  For example, in an October 2019 call concerning a delinquent debtor whose “face” Polito had previously threatened to “break,” Polito instructed another individual to relay a new message to the debtor: “Tell him I’m going to put him under the f------g bridge.”

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Tanya Hajjar, Drew Rolle, Anna Karamigios and Sean Sherman are in charge of the prosecution. 

The Defendants:

JOSEPH MACARIO (also known as “Joe Fish”)
Age:  69
West Islip, New York

CARMELO POLITO (also known as “Carmine Polito”)
Age:  64
Whitestone, New York

SALVATORE RUBINO (also known as “Sal the Shoemaker”)
Age:  60
Bethpage, New York

JOSEPH RUTIGLIANO (also known as “Joe Box”)
Age:  65
Commack, New York

MARK FEUER
Age:  61
Oceanside, New York

E.D.N.Y. Docket No. 22-CR-356 (ENV)

Today, an indictment was unsealed charging Charles O. Parks III, also known as “CP3O,” with operating a large-scale illegal “cryptojacking” operation.  As part of the scheme, Parks defrauded two well-known providers of cloud computing services out of more than $3.5 million worth of computing resources in order to mine cryptocurrency worth nearly $1 million.  Parks was charged with wire fraud, money laundering and engaging in unlawful monetary transactions in connection with the scheme.  Parks was arrested on April 13, 2024 in Nebraska and is scheduled to make his initial appearance in federal court in Omaha on April 16, 2024.

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, 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 arrest and charges.

“As alleged, by hijacking cloud providers’ computing power, Parks stole millions worth of powerful computing resources to acquire cryptocurrency,” stated United States Attorney Peace. “This Office will continue to prioritize prosecuting criminal actors who use new, sophisticated technology to engage in the old scheme of fraud and deceit.”

Mr. Peace expressed his appreciation to the FBI’s New York Cyber Crimes Task Force (CCTF) and the United States Attorney’s Office for the District of Nebraska for their assistance on this case.

“Charles Parks, also known as CP3O, allegedly created a cryptojacking scheme to defraud prominent cloud service providers of millions and illegally mine approximately $1M in cryptocurrency for personal use. Criminals are becoming more adept at manipulating digital tools and hiding behind advanced technology, which often causes significant financial damage to their victims. The FBI is committed to the steadfast pursuit of those who attempt to develop innovative techniques to commit crimes,” stated FBI Assistant Director-in-Charge Smith. 

“This arrest illustrates the power of law enforcement joining forces with the private sector to identify and track down cybercriminals, and to put an end to their sophisticated thievery,” stated NYPD Commissioner Caban. “While the threat landscape in this space is growing in complexity and depth, the NYPD and our federal partners continue to ably confront malicious actors even as they adopt new tactics.”

“Cryptojacking,” also referred to as malicious cryptomining, is the unauthorized use or hijacking of another party’s resources, such as electricity, hardware or computing power to mine cryptocurrency.  As alleged in the indictment, from in or about January 2021 through August 2021, Parks created and used a variety of names, corporate affiliations and email addresses, including emails with domains from corporate entities he operated called “MultiMillionaire LLC” and “CP3O LLC,” to register numerous accounts with the cloud providers and to gain access to massive amounts of computing processing power and storage that he did not pay for.  Parks used those fraudulently obtained resources to mine various cryptocurrencies including Ether (ETH), Litecoin (LTC) and Monero (XMR).  Parks tricked the providers into approving heightened privileges and benefits, including elevated levels of cloud computing services and deferred billing accommodations, and deflected inquiries from the providers regarding questionable data usage and mounting unpaid subscription balances. 

Parks converted and laundered the cryptocurrency proceeds through cryptocurrency exchanges, a non-fungible token (NFT) marketplace, an online payment provider, and traditional bank accounts, in order to disguise the audit trail and disassociate the funds from the fraud.  Parks also structured various money movements to avoid transaction reporting requirements under federal law.  After converting the ill-gotten cryptocurrency into dollars, Parks used the proceeds of the scheme to make extravagant purchases, including a Mercedes Benz luxury car, jewelry and first-class hotel and travel expenses.

The charges in the indictment are allegations, and Parks is presumed innocent unless and until proven guilty.  If convicted, Parks faces a maximum sentence of 20 years’ imprisonment on the wire fraud and money laundering charges and 10 years’ imprisonment on the unlawful monetary transactions charges.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Andrew Reich and Artie McConnell are in charge of the prosecution.

The Defendant:

CHARLES O. PARKS III (also known as “CP3O”)
Age: 45
Omaha, Nebraska

E.D.N.Y. Docket No. 24-CR-105 (EK)

Earlier today, in federal court in Brooklyn, Jia Liu was sentenced by United States District Judge Diane Gujarati to 21 months in prison for conspiring to steal, forge and distribute fraudulent COVID-19 Vaccination Cards.  On June 9, 2023, co-defendant Steven Rodriguez, a Long Island nurse, was sentenced to 30 months’ imprisonment for his role in the same scheme.  Liu and Rodriguez pleaded guilty in April 2023 to conspiracies to defraud and obstruct the United States’ response to the COVID-19 pandemic.

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

“At the height of the COVID pandemic, Liu and Rodriguez brazenly fabricated vaccine cards and sold them for profit, thereby putting the safety of others at risk during this deadly health crisis” stated United States Attorney Peace.  “This prosecution demonstrates our Office’s ongoing commitment to holding accountable those who engaged in COVID-19 fraud.  These prison sentences should deter other lawbreakers who put their own interests above public health.”

Mr. Peace thanked the Federal Bureau of Investigation, New York Field Office, for their outstanding investigative work on the case.

According to court filings and facts presented at sentencing, in May 2021, Liu and Rodriguez conspired to steal, forge, sell and distribute COVID-19 Vaccination Cards to hundreds of unvaccinated persons.  In addition to the cards, Liu and Rodriguez also offered buyers and co-conspirators false entry into government immunization databases.   

Liu and Rodriguez went to great lengths to evade law enforcement and conceal the scheme.  Members of the scheme used code words such as “gift cards,” “Pokemon cards,” or “Cardi Bs” to refer to fraudulent COVID-19 Vaccine Cards.  Liu also instructed his co-conspirators to communicate by encrypted applications and hide payment records.  Liu and Rodriguez also disguised the source of mail items containing COVID-19 Vaccination Cards by omitting or using false sender names on envelopes. As Covid-19 raged and hundreds of thousands of Americans perished, Liu exploited the pandemic to enrich himself, and push his anti-vaccine agenda, messaging a co-conspirator: “f--- the vaccine”.

In addition, Liu specifically targeted the armed forces and their attempts to contain the COVID-19 pandemic.  From approximately August 2021 or earlier, the defendant created and distributed false COVID-19 Vaccination Cards to members of the U.S. Marine Corps Reserve to help them evade its vaccination requirements.  Liu boasted to a co-conspirator on an encrypted messaging app: “you have no idea how many documents I have faked in my usmc (United States Marine Corps) career.”

The government’s case is being prosecuted by Assistant United States Attorney Adam Amir with the assistance of Paralegal Specialist Sam Ronchetti.

Defendants:

JIA LIU
Age:  28
Queens, New York

STEVEN RODRIGUEZ
Age:  29
Long Beach, New York

E.D.N.Y. Docket No.: 22-CR-70 (DG)

Earlier today, in federal court in Brooklyn, Somorie Moses, also known as “Somorie Barfield,” “Sugar Bear,” “Bear” and “Daddy,” was sentenced by United States District Judge Carol Bagley Amon to 10 terms of life imprisonment to run concurrently for each of the 10 counts of conviction for sex trafficking eight women and for committing the January 2017 murder of one of the women, Leondra Foster.  At the sentencing hearing, the Court heard victim impact statements from several of the defendant’s victims.  This prosecution is the first use of the federal statute criminalizing murder in the course of sex trafficking. Moses pleaded guilty to the charges in September 2023.

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

“The life sentence imposed today on Somorie Moses is significant because it reflects the brutality and utter depravity of his crimes against vulnerable women and girls, which were committed over nearly two decades,” stated United States Attorney Breon Peace.  “The defendant forced his victims into prostitution through violence and beatings, and then murdered and dismembered Leondra Foster.  A lengthy prison sentence cannot undo the extreme and lasting harm Moses has inflicted on his victims, but incarceration will prevent this killer who clearly has no respect for human life from victimizing others.  It is my hope that today’s sentence brings some closure to the victims and their families.” 

Mr. Peace also expressed his appreciation to the Kings County District Attorney’s Office for their assistance in this investigation and prosecution.

“Today’s sentence reaffirms the commitment of the NYPD and our law enforcement partners to protect and support all the victims and survivors of sex trafficking, one of our society’s most exploitative and dehumanizing crimes,” stated NYPD Commissioner Caban.  “The defendant’s numerous offenses, including the heinous murder of Leondra Foster, were truly despicable. I thank the NYPD and FBI investigators for their dedication, and I commend everyone at the U.S. Attorney’s office for their tireless efforts to secure this meaningful prison term.”

Since at least 2003, Moses lured women and girls with false promises of love, but then used threats, violence, and psychological manipulation to force his victims into prostitution for his benefit.  Moses kept all the money his victims earned as prostitutes and required many of his victims to have his first name, “Somorie,” tattooed on their bodies. 

Moses used brutal beatings, rape, torture, and threats to coerce his victims to work in prostitution in Brooklyn and Queens.  Moses threatened to throw one victim, identified at the sentencing proceeding as Jane Doe #1, off a roof and raped her, and bit off a piece of her buttocks and spit it at her.  As to another victim, identified as Jane Doe #2, Moses slashed her arms and back with a razor and beat her with a belt before pouring lemon juice on her wounds, leaving her with extensive scarring over much of her body, including her arms, head, legs and back.  When a victim identified as Jane Doe #6 did not give Moses money as he demanded, Moses beat her with an extension cord, leaving her with numerous open, bleeding cuts, and told her that he “was a pimp, this is what [he] did.”  When a victim identified as Jane Doe #7 told Moses she did not want to work as a prostitute, he put a shotgun in her mouth and threatened to kill her and her child.

The Murder of Leondra Foster

In the early morning of January 13, 2017, Moses murdered Leondra Foster, one of his sex trafficking victims, by beating her until she died.  The defendant beat Foster all over her body, leaving bruises and abrasions on the front and back of her torso.  Moses inflicted at least five blunt force injuries to Foster’s head, either by hitting her directly or by banging her head into another surface.  The fatal blow was the blow to the back left of her head. She had been alive for all of the other injuries, but that last blow to her head fractured her skull, rendering her unconscious. Foster suffered a a seizure and died within minutes. The following morning, using a knife and a saw, Moses dismembered Foster’s body inside their shared apartment in Brooklyn.  Moses brought another woman back to his apartment for a sexual encounter while Foster’s dismembered body was concealed in it.  The woman later told law enforcement that there was a strong odor of bleach in the apartment.  Four days later, on the morning of January 17, 2017, Moses transported Foster’s torso and limbs to the Bronx for disposal at a garbage transfer station.  After disposing of most of Foster’s body parts, Moses texted another victim that he was on his way home from the Bronx and, “Just did 110 over the Brooklyn bridge.” Foster’s head, hands and feet — including a foot with the name “Somorie” tattooed on it — were subsequently recovered by law enforcement inside the freezer of Moses’s apartment.  Foster was 32-years-old at the time of her murder.

The government’s case is being handled by the Office’s Civil Rights Section.  Assistant United States Attorneys Jonathan Siegel and Tanya Hajjar are in charge of the prosecution, with the assistance of Paralegal Specialist Anna November.

The Defendant:

SOMORIE MOSES (also known as “Somorie Barfield,” “Sugar Bear,” “Bear” and “Daddy”)
Age:  48
Brooklyn, New York

E.D.N.Y. Docket No. 22-CR-232 (CBA)

Defendant Distributed Fentanyl that Caused the Death of a 49-Year-Old Man in Elmont

Earlier today, at the federal courthouse in Central Islip, a two-count indictment was unsealed charging Ryan Mueller with distributing fentanyl that caused the death of a victim (Victim‑1) and with conspiring to distribute heroin, cocaine, and oxycodone.  Mueller was arrested this morning and is scheduled to be arraigned this afternoon before Magistrate Judge Anne Y. Shields. 

Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration (DEA), Darren B. McCormack, Acting Special Agent-in-Charge, Homeland Security Investigations (HSI), and Patrick J. Ryder, Commissioner Nassau County Police Department (PDCN) announced the arrest and the charges. 

“As alleged, the defendant purposely disguised fentanyl to look like prescription drugs and sold them to unsuspecting customers, leading to the poisoning death of a Long Island resident,” stated United States Attorney Peace.  “The defendant’s callous disregard for human life in pushing deadly drugs on to the streets of Long Island concealed as prescription drugs has contributed to the alarming opioid epidemic that has continued to harm communities in this district.”  

“Today’s arrest shows the commitment the DEA and our law enforcement partners have in targeting those individuals who are poisoning our communities. Fentanyl is a lethal drug that dealers mix into their product knowing the harmful effects it presents to those using it, including death” stated DEA New York Division Special Agent in Charge Frank Tarentino. “We will continue to bring those responsible for this deadly distribution to justice.”

“It is appalling how criminals attempt to profit from the distribution of fentanyl which has led to a rising number of overdose and poisoning fatalities,” said HSI New York acting Special Agent in Charge Darren B. McCormack. “HSI New York continues to prioritize investigations into individuals and organizations that intentionally misrepresent fentanyl, heroin and other dangerous opioids as prescription drugs, having a devastating impact on the health of our citizens and the safety of our neighborhoods. Together with our law enforcement partners, HSI New York is committed to crippling and dismantling the illicit drug supply chains plaguing our American communities.”

“Today’s indictment of defendant Ryan Mueller for selling Fentanyl, Heroin, Cocaine and Oxycodone to numerous individuals and lead to the death of a 49 year old Elmont man is a clear message that these crimes will never be tolerated.  In addition, Defendant Mueller was also in possession of numerous illegal firearms in which he is also being charged with.  Law Enforcement continues to work together to bring these criminals to justice, thus keeping our communities and neighborhoods safe.  I would like to congratulate all of the dedicated law enforcement professionals and their agencies for a job well done,” stated Nassau County Police Department Commissioner Ryder. 

According to court filings, over the last several years, the defendant conspired with others to sell several controlled substances, including heroin, cocaine, oxycodone, and fentanyl.  The investigation revealed that in December 2022, a 49-year-old individual (Victim-1) died of a drug-related overdose at his residence in Elmont, Long Island.  Additional investigation showed that the fentanyl that killed Victim-1, which was in a pressed pill that made it appear to be oxycodone, was sold to the victim by the defendant.  During the investigation, law enforcement officers recovered several kilos of fentanyl from the defendant’s home. Law enforcement also recovered multiple pill press parts from another location controlled by the defendant, including powder dryers, blenders, and grinders.

According to the Centers for Disease Control and Prevention (CDC) and the Department of Justice, in 2019, nearly 71,000 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 2019, over 14,000 people died in the United States from a drug overdose involving heroin.  From 2013 to 2019, the synthetic opioid death rate increased by more than 1,000 percent.  Of those deaths, over 70% involved a prescription or illicit opioid.  Among New York State residents, the number of overdose deaths involving any opioid increased each year between 2010 and 2017, with an overall increase of 200.2 percent from 1,074 in 2010 to 3,224 in 2017, according to the New York State Health Department.   If you or someone you know is struggling with substance abuse, please contact the Substance Abuse and Mental Health Services Administration (SAMHSA) Helpline: 1-800-662-HELP (4357) or FindTreatment.gov.

If convicted on the charges in the indictment, the defendant faces a statutory mandatory minimum sentence of 20 years’ imprisonment and a maximum sentence of life.

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

The Defendant:

RYAN MUELLER
Age: 32
Lynbrook, New York

E.D.N.Y. Docket No. 24-CR-134

Today, in federal court in Central Islip, Edwin Rodriguez, also known as “Manicomio” (Rodriguez), a member of the violent transnational criminal organization La Mara Salvatrucha, also known as the “MS-13,” pleaded guilty to racketeering charges in connection with his participation in the April 11, 2017 murders of Justin Llivicura, Michael Lopez, Jorge Tigre, and Jefferson Villalobos.  After committing the murders, Rodriguez was a fugitive from justice before he was arrested in El Salvador and extradited to the United States in 2022.  The guilty plea proceeding was held before United States Circuit Judge Joseph F. Bianco, sitting by designation.  When sentenced, Rodriguez faces up to life in prison.

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, 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 guilty plea.

Mr. Peace expressed his appreciation to all the members of the FBI’s Long Island Gang Task Force and the FBI’s Legal Attaché in San Salvador for their outstanding collaboration in investigating, locating and apprehending this fugitive.  Mr. Peace also thanked the International Criminal Police Organization (INTERPOL) for their assistance in this case.

According to court filings and statements made during today’s guilty plea proceeding, Rodriguez was a member of the Normandie Locos Salvatruchas (Normandie) clique of the MS-13.  In order to maintain and increase his membership and status in the gang, in early 2017, he conspired with other MS-13 members and associates to orchestrate and execute the murders of perceived rival gang members who had disrespected the MS-13 in their social media postings.  On the evening of April 11, 2017, five young men, including the four murder victims, were lured to a wooded park in Central Islip by MS-13 associates, under the guise of smoking marijuana.  There, Rodriguez and nearly a dozen other MS-13 members and associates, armed with machetes, knives, an axe, and wooden clubs, surrounded the victims under the cover of darkness, and attacked them.  One of the intended victims was able to escape.  However, Llivicura, Lopez, Tigre and Villalobos were captured and then brutally hacked, stabbed and bludgeoned to death.  The victims’ bodies were discovered the following evening.  More than a dozen MS-13 members and associates have been charged in connection with the April 11, 2017 murders.

Rodriguez, who was three months’ shy of his eighteenth birthday at the time of these murders, was originally charged in a sealed Juvenile Information filed on March 16, 2018.  He remained a fugitive from justice until August 28, 2019, when he was arrested in El Salvador, pursuant to an INTERPOL Red Notice.  The United States formally requested his extradition on September 3, 2019.  Rodriguez was detained pending his extradition to the United States, which was formally authorized by the Supreme Court of Justice of El Salvador on July 7, 2022.  He was extradited to the United States, and made his first appearance in-district on August 10, 2022.  In connection with his guilty plea today, Rodriguez also agreed to be transferred to adult status for purposes of prosecution. 

Today’s guilty plea is the latest achievement 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 is based in El Salvador, Honduras, Guatemala and Mexico, but the gang has thousands of members across 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. 

This prosecution 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 Long Island Criminal Division.  Assistant United States Attorneys Paul G. Scotti, Justina L. Geraci, and Megan E. Farrell are in charge of the prosecution.  The Justice Department’s Office of International Affairs provided significant assistance in securing the arrest and extradition of Rodriguez.

The Defendant:

EDWIN RODRIGUEZ (also known as “Manicomio”)
Age: 24
El Salvador; and formerly of Central Islip, New York

E.D.N.Y. Docket No. 18-CR-135 (JFB)

Earlier today, at the federal courthouse in Brooklyn, a four-count indictment was unsealed charging Michael Kuilan and Antonio Venti with distributing the heroin and fentanyl that caused the death of New York transgender activist, Cecilia Gentili.  Kuilan is also charged with unlawful gun possession.  Kuilan and Venti are in custody 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, Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration (DEA) and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the charges.

“Cecilia Gentili, a prominent activist and leader of the New York transgender community was tragically poisoned in her Brooklyn home from fentanyl-laced heroin.  Today, the alleged perpetrators who sold the deadly dose of drugs to Gentili have been arrested,” stated United States Attorney Peace.  “Fentanyl is a public health crisis.  Our Office will spare no effort in the pursuit of justice for the many New Yorkers who have lost loved ones due to this lethal drug.”

“Today’s indictment delivers a strong message to anyone who profits from poisoning our communities with illicit drugs: There are dedicated investigators, across multiple agencies, working tirelessly to disrupt your shameful industry by pinpointing the source of these unlawful substances,” stated NYPD Commissioner Caban. “It is imperative that we continue to hold distributors accountable for their callous actions. I commend the NYPD’s partners at the DEA and the office of the U.S. Attorney for the Eastern District of New York for their ongoing commitment to this critical mission.”

“These arrests result in the charges brought against the defendants for causing the death of transgender rights activist Cecilia Gentile. Drug poisonings take too many lives too soon from communities nationwide and DEA is committed to bringing to justice those responsible.  Fentanyl is a deadly drug that dealers mix into their product and has accounted for 70% of drug related deaths nationwide.  The more people that know about the dangers of today’s drug landscape, the more lives can be saved” stated Special Agent in Charge Frank Tarentino of the Drug Enforcement Administration - New York Division “The death of Ms. Gentile is a reminder of the dangers that illicit drugs have on all communities, including the LGBTQ+ community.  I applaud the hard work by the DEA New York Division, NYPD Brooklyn South Narcotics and the U.S. Attorney’s Office Eastern District of New York.”

According to the indictment and court documents, on February 6, 2024, following a 911 call by Gentili’s partner, NYPD officers reported to Gentili’s home in Brooklyn, New York and found Gentili dead in her bedroom.  Gentili died due to the combined effect of fentanyl, heroin, xylazine, and cocaine.  Text messages, cell site data, and other evidence revealed that Venti sold the fentanyl and heroin mixture to Gentili on February 5, 2024, and Kuilan supplied Venti with those lethal narcotics.

In addition, law enforcement searched an apartment in Williamsburg, Brooklyn belonging to Kuilan and found hundreds of baggies of fentanyl, a handgun, and ammunition.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If found guilty, they face up to life in prison.

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, David Mccann and Calvin Tabron pleaded guilty at the federal courthouse in Brooklyn, New York to conspiring to traffic firearms.  Mccann also pleaded guilty to conspiring to distribute fentanyl.  Today’s proceedings took place before United States District Judge William F. Kuntz, II.  Co-defendants Raymond Minaya and Tajhai Jones pleaded guilty to conspiring to traffic firearms earlier this month.  When sentenced, Mccann faces up to 40 years in prison, Minaya faces up to 20 years in prison, and Jones and Tabron each face up to 15 years in prison.  The defendants were charged in January 2023 in the first case in New York to publicly charge the gun trafficking provisions of the Bipartisan Safer Communities Act.

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 Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the guilty pleas.

“With these guilty pleas, the defendants have admitted to bringing dozens of deadly weapons and dangerous drugs, including fentanyl, to the streets of Brooklyn,” stated United States Attorney Peace.  “This Office will vigorously use all tools available, such as Bipartisan Safer Communities Act, to ensure that no one is able to illegally feed the cycles of gun violence and drug abuse in our community.”

“These pleas resonate public sentiment that gun and drug trafficking will not be tolerated.   These deadly weapons have been removed from circulation, saving lives along the way.    I commend our law enforcement teams from the DEA Group D-41, NYPD and the U.S. Attorney’s Office Eastern District of New York for their diligent work,” stated DEA Special Agent-in-Charge Tarentino.  

“Today’s guilty pleas underscore the unwavering commitment of our investigators to disrupt the flow of illegal guns and deadly drugs coming into our communities,” stated NYPD Commissioner Caban. “I thank our colleagues at the DEA for their partnership, and I commend our NYPD undercover officer for their diligent work, performed under the most dangerous of circumstances. I also applaud everyone at the office of the U.S. Attorney for the Eastern District of New York for delivering this prosecution to its righteous conclusion.”

According to court filings and facts presented during the plea proceedings, the gun-trafficking operation involved the sale of at least 50 illegal firearms over multiple transactions in Brooklyn between January 2022 and August 2022.  The defendants conducted these firearms sales in broad daylight in a public park, in shopping center parking lots, and in vehicles in and around the New York City Housing Authority’s Breukelen Houses complex, located in Canarsie, Brooklyn, across from a church, and blocks away from a preschool and grade school.  Two members of the gun-trafficking operation obtained the firearms in Virginia and then transported them to New York to be sold on the streets of Brooklyn. Some of the firearms the defendants sold had defaced serial numbers or were made from ghost gun kits, making them harder for law enforcement to trace.  Two defendants also engaged in significant narcotics trafficking conspiracies, including a fentanyl distribution conspiracy that introduced thousands of lethal doses of fentanyl into the community.

Firearms sold in the conspiracy have also been linked to several shootings in Brooklyn.  For example, on June 22, 2022, a defendant sold an undercover officer a Glock 30, .45 caliber handgun.  The investigation revealed that this gun was used in an August 21, 2021 shooting in Bedford-Stuyvesant during which armed perpetrators shot into a large crowd gathered for a family day celebration.  In total, eight individuals were struck by gunfire.  Another gun trafficked by a defendant—a Glock 43, 9 millimeter caliber handgun—is linked to a December 18, 2021 shooting of an individual in Canarsie, in the blocks surrounding the Breukelen Houses complex.  That individual sustained multiple gunshot wounds to his body, including his right hand, shoulder, neck, and the base of his skull.

This prosecution is among the first in the country, and the first in New York, to charge the gun trafficking provisions of the Bipartisan Safer Communities Act, which Congress and the President enacted in June 2022.

Assistant United States Attorneys Adam Amir, Irisa Chen, and James R. Simmons are in charge of the prosecution.

The Defendants:

DAVID MCCANN
Age:  29
Brooklyn, New York

TAIJHAI JONES
Age:  29
Portsmouth, Virginia

RAYMOND MINAYA
Age:  27
Brooklyn, New York

CALVIN TABRON
Age:  26
Virginia Beach, Virginia

E.D.N.Y. Docket No. 23-CR-8 (WFK)

Earlier today, in federal court in Brooklyn, Yanki Misael Cruz-Mateo, a member of the 18th Street gang, pleaded guilty to racketeering conspiracy charges in connection with his participation in two murders: the October 25, 2017 murder of 20-year-old Jonathan Figueroa in Saugerties, New York and the February 2, 2018 murder of 20-year-old Oscar Antonio Blanco Hernandez in Queens.  The guilty plea proceeding was held before United States Magistrate Judge Sanket J. Bulsara.  When sentenced, Cruz-Mateo faces up to life in prison.

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

“Cruz-Mateo had boasted of his participation in the murders in a horrific video and in text messages, but today’s admission in a federal courtroom in Brooklyn holds him accountable for two savage killings committed for the purpose of instilling fear and promoting gang violence,” stated United States Attorney Peace.  “While the defendant’s guilty plea cannot bring back the two lives senselessly taken or undo the cruelty of his actions, it is my hope that it will bring a measure of closure to his victims’ families.” 

United States Attorney Peace also expressed his appreciation to the Federal Bureau of Investigation, New York Field Office (FBI), United States Attorney’s Office for the Northern District of New York, the Ulster County District Attorney’s Office, the Queens County District Attorney’s Office, the New York State Police, the Kingston Police Department, and the New York City Police Department for their assistance during the investigation.

According to court filings, proceedings, and statements made during today’s guilty plea proceeding, Cruz-Mateo was a member of the Queens-based Shatto Park Locos Sureños sect of 18th Street.  He committed the following crimes in order to maintain and increase his membership and status in the gang:

October 25, 2017 Murder of Jonathan Figueroa

In the late evening of October 24, 2017, Cruz-Mateo lured and travelled with Figueroa from Queens to Kingston, New York, planning to murder him because 18th Street members suspected he was an informant for law enforcement.  Upon their arrival in Kingston, they were met by other 18th Street members and associates who, into the early morning hours of October 25, 2017, brought Figueroa to Turkey Point State Forest, stabbed him to death, and buried him in a makeshift grave.  Cruz-Mateo ordered the murder to be video-recorded—capturing multiple 18th Street members and associates repeatedly stabbing Figueroa, slashing his throat, amputating his ear, and dragging his body.  In the video, Cruz-Mateo stated that Figueroa was being murdered for “being a rat.”  Cruz-Mateo then sent the video to other 18th Street members as a warning not to disrespect the gang or cooperate with law enforcement.  Figueroa’s body was discovered in February 2018 by the FBI, along with state and local law enforcement authorities, in a five-foot deep grave.  The victim sustained more than 100 stab wounds including at least one stab wound to the head that appears to have fractured his skull and a slash to his throat that ruptured his trachea. 

February 2, 2018 Murder of Oscar Antonio Blanco Hernandez

On February 2, 2018, Cruz-Mateo shot and killed Blanco Hernandez in Queens because 18th Street gang members suspected him of being a member of 18th Street’s principal rival, La Mara Salvatrucha, also known as the MS-13 gang.  Blanco Hernandez’s body was discovered on a residential street in the Jamaica Hills section of Queens.  He had been shot three times in the torso and head.  Cruz-Mateo fled the area and returned upstate to Kingston.  He was arrested by the FBI following a statewide manhunt.

Co-defendant Israel Mediola Flores previously pleaded guilty to Figueroa’s murder and was sentenced in June 2023 to 425 months in prison.  Co-defendants Yoni Alexander Sierra, Jose Jimenez Chacon, and Carolina Cruz previously pleaded guilty to Blanco Hernandez’s murder and are currently awaiting sentencing.

Today’s conviction is the latest in a series of recent convictions in this case of members and associates of 18th Street, a well-known and well-established international criminal organization and violent street gang with members and associates residing throughout New York State including Queens and Long Island, and elsewhere throughout the United States including Houston, Texas. 

This case is part of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the United States Attorney’s Office for the Eastern District of New York and the FBI. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply. OCDETF uses 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 Jonathan P. Lax, Erin Reid and Margaret Schierberl are in charge of the prosecution, with the assistance of Paralegal Specialist Tareva Torres.

The Defendant:

YANKI MISAEL CRUZ-MATEO (also known as “Yenki Misael Cruz Mateo,” “Yankee Mateo,” “Doggy” and “Wino”)
Age: 25
Jamaica, New York

Co-Defendants Previously Convicted:

ISRAEL MEDIOLA FLORES (also known as “Chapito” and “Sinaloa”)
Age: 29
Kingston, New York

YONI ALEXANDER SIERRA (also known as “Arca,” “Arc Angel” and “Wasson”)
Age: 25
Jamaica, New York

JOSE JIMENEZ CHACON (also known as “Little One”)
Age: 25
New Brunswick, New Jersey

CAROLINA CRUZ (also known as “La Fiera”)
Age: 30
Elizabeth, New Jersey

Co-Defendants Awaiting Trial:

WALTER FERNANDO ALFARO PINED (also known as “Clever”)
Age: 44
Houston, Texas

JOSE DOUGLAS CASTELLANO (also known as “Chino”)
Age: 25
Brooklyn, New York

JUNIOR ZELAYA-CANALES (also known as “Terco”)
Age: 27
Jamaica, New York

ERIC CHAVEZ (also known as “Lunatico”)
Age: 25
Jamaica, New York

E.D.N.Y. Docket No. 18-CR-139 (S-7) (LDH)

Earlier today, the United States unsealed a civil complaint seeking to forfeit two luxury apartments located in New York City at 21 East 61st Street and 230 West 56th Street, purchased for $14 million.  According to court documents, the apartments were purchased, in whole or in part, with the proceeds of unlawfully awarded Mongolian mining contracts, at the direction and for the benefit of then-Mongolian Prime Minister Sukhbaatar Batbold and his family.

Breon Peace, United States Attorney for the Eastern District of New York, Nicole M. Argentieri, Principal Deputy Assistant Attorney General, head of the Justice Department’s Criminal Division, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the forfeiture action.

“As alleged, former Mongolian Prime Minister Batbold used the profits from his illicit corruption scheme to purchase high-end real estate in violation of United States federal law. Today’s forfeiture action sends a message that corrupt officials will not use our real estate market to conceal proceeds of crimes,” stated United States Attorney Peace.  “My Office will not tolerate public corruption that undermines faith in government, wherever committed.”

“As alleged in the complaint, Sukhbataar Batbold — the former prime minister of Mongolia — abused his position as prime minster to profit from the sale of his country’s natural resources. He and his family used the proceeds of their corrupt scheme to buy $14 million in high-end real estate in the United States,” stated Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “With this action, those properties are subject to forfeiture. Kleptocrats should take note: the Criminal Division is unwavering in its resolve to recover proceeds of official corruption and take the profit out of crime.”

“Former Mongolian Prime Minister Sukhbaatar Batbold allegedly crafted a corruption scheme, funneling millions of dollars from mining contracts through illegitimate shell companies to finance his family’s lavish lifestyle including the purchase of two luxury apartments in Manhattan. Batbold’s alleged behavior – personally profiting off of public corruption comes at the expense of the law-abiding citizens he governed. Today’s action emphasizes the FBI’s commitment to dismantling public corruption and punishing those who utilize the U.S. banking system to illegally divert resources, wherever it may occur,” stated FBI Assistant Director-in-Charge Smith.

The civil forfeiture complaint alleges that while Batbold was Prime Minister of Mongolia, Catrison, an entity he owned through trusted intermediaries, was awarded a $68 million mining contract.  Prior to being awarded that contract, Catrison had no operational history, no mining expertise, and no financial or logistical infrastructure to execute commodity sales, and its sole director was a former linguistics teacher.  Millions of dollars from the mining contracts were then siphoned into foreign bank accounts, transferred through a series of shell companies, and, among other things, directed towards the purchase of the New York City apartments for the benefit of Batbold’s family, including his eldest son who used the apartments.

The civil forfeiture complaint further explains how Batbold and his family used state-owned mining contracts to funnel funds through shell companies for their personal use, consistent with the scheme used to purchase the apartments sought by the government for forfeiture.  Although it had no operational history or experience in commodities, one of the shell companies was awarded a mining contract worth $30 million, and proceeds were wired to an account in the United States held by Batbold’s eldest son that was earmarked for personal use, such as car payments, travel and an interior designer.

The government’s case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York, in coordination with the Office’s Bank Integrity Task Force, which is charged with investigating and prosecuting corporate and individual actors who launder criminal proceeds using the U.S. banking system and enforcing anti-money laundering controls under the Bank Secrecy Act, and the Kleptocracy Asset Recovery Initiative of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS).  Assistant United States Attorneys Tara McGrath and Brian Morris and Trial Attorney Adam J. Schwartz are handling the case with assistance from Paralegal Specialist Jacob Menz.  The Justice Department’s Office of International Affairs provided assistance.

A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of crime.  These allegations are not proven until a court enters judgment in favor of the United States.

The Defendants In Rem:

ANY AND ALL SHARES OF 21 EAST 61 STREET APARTMENT CORP. HELD IN THE NAME OF LOVITAS, INC., TOGETHER WITH THE APPURTENANT PROPRIETARY LEASE FOR COOPERATIVE UNIT 12E WITHIN THE REAL PROPERTY AND PREMISES LOCATED AT 21 EAST 61ST STREET, NEW YORK, NEW YORK 10065

CONDOMINIUM UNIT 58D, LOCATED AT 230 WEST 56TH STREET, NEW YORK, NEW YORK 10019

E.D.N.Y. Docket No. 24-CV-2147

The Justice Department filed a civil forfeiture complaint today in the U.S. District Court for the Eastern District of New York alleging that two apartments located in New York City were purchased for $14 million with the proceeds from an international corruption scheme and are subject to forfeiture based on violations of federal money laundering statutes.

“As alleged in the complaint, Sukhbataar Batbold — the former prime minister of Mongolia — abused his position as prime minister to profit from the sale of his country’s natural resources,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “He and his family used the proceeds of their corrupt scheme to buy $14 million in high-end real estate in the United States. With this action, those properties are subject to forfeiture. Kleptocrats should take note: the Criminal Division is unwavering in its resolve to recover proceeds of official corruption and take the profit out of crime.”

The civil forfeiture complaint alleges that Sukhbaatar Batbold, who previously served as Prime Minister of Mongolia and is a current member of Mongolia’s parliament, used his position as prime minister to award lucrative contracts to sell copper concentrates from a Mongolian state controlled mine to entities that were owned and controlled by his known associates or his son. These intermediaries, who had little to no experience in the copper trade, played no part in providing financing for the purchase of the copper concentrates or in arranging the sale or shipment of the commodities. They simply concealed the fact that Batbold and his family were violating Mongolian anti-corruption laws by benefiting from the sale of millions of dollars’ worth of Mongolian natural resources.

“As alleged, former Mongolian Prime Minister Batbold used high-end New York City real estate as a cover for his illicit corruption scheme,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s forfeiture action sends a message that criminal activity is never included in the homeowner’s agreement. My office will not tolerate public corruption that undermines faith in government, wherever committed.”

“While he was Prime Minister of Mongolia, the defendant allegedly used corrupt funds and a sophisticated money laundering scheme to purchase two luxury New York apartments,” said Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division. “Make no mistake, the FBI is dedicated to identifying assets gained through corruption and working with our partners to recover the funds, no matter how obscured.”

FBI New York’s International Corruption Squad is investigating the case. 

Deputy Chief Adam J. Schwartz of the Kleptocracy Asset Recovery Initiative of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Tara McGrath and Brian Morris for the Eastern District of New York are handing the case.

The Justice Department’s Office of International Affairs provided assistance.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov (link sends e-mail) or https://tips.fbi.gov/.

A civil complaint is merely an allegation. The government has the burden of establishing the assets are subject to forfeiture by a preponderance of the evidence.

Note: Concurrent with this announcement, the U.S. Department of the Treasury imposed sanctions against two of the defendants, and the U.S. Department of State announced a Reward for Justice up to $10 million for information on these individuals, their organization, and associated entities.

See also the UK Government attribution statement; the National Cyber Security Centre statement; and the U.S. State Department's diplomatic statement from the Office of the Spokesperson.

An indictment was unsealed today charging seven nationals of the People’s Republic of China (PRC) with conspiracy to commit computer intrusions and conspiracy to commit wire fraud for their involvement in a PRC-based hacking group that spent approximately 14 years targeting U.S. and foreign critics, businesses, and political officials in furtherance of the PRC’s economic espionage and foreign intelligence objectives.

The defendants are Ni Gaobin (倪高彬), 38; Weng Ming (翁明), 37; Cheng Feng (程锋), 34; Peng Yaowen (彭耀文), 38; Sun Xiaohui (孙小辉), 38; Xiong Wang (熊旺), 35; and Zhao Guangzong (赵光宗), 38. All are believed to reside in the PRC.

“The Justice Department will not tolerate efforts by the Chinese government to intimidate Americans who serve the public, silence the dissidents who are protected by American laws, or steal from American businesses,” said Attorney General Merrick B. Garland. “This case serves as a reminder of the ends to which the Chinese government is willing to go to target and intimidate its critics, including launching malicious cyber operations aimed at threatening the national security of the United States and our allies.”

“Over 10,000 malicious emails, impacting thousands of victims, across multiple continents. As alleged in today’s indictment, this prolific global hacking operation – backed by the PRC government – targeted journalists, political officials, and companies to repress critics of the Chinese regime, compromise government institutions, and steal trade secrets,” said Deputy Attorney General Lisa Monaco. “The Department of Justice will relentlessly pursue, expose, and hold accountable cyber criminals who would undermine democracies and threaten our national security.” 

"Today's announcement exposes China's continuous and brash efforts to undermine our nation's cybersecurity and target Americans and our innovation,” said FBI Director Christopher Wray. "As long as China continues to target the US and our partners, the FBI will continue to send a clear message that cyber espionage will not be tolerated, and we will tirelessly pursue those who threaten our nation’s security and prosperity. This indictment underscores our unwavering commitment to disrupt and deter malicious cyber activity, and safeguard our citizens, businesses, and critical infrastructure from threats in cyberspace."

“The indictment unsealed today, together with statements from our foreign partners regarding related activity, shed further light on the PRC Ministry of State Security’s aggressive cyber espionage and transnational repression activities worldwide,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s announcements underscore the need to remain vigilant to cybersecurity threats and the potential for cyber-enabled foreign malign influence efforts, especially as we approach the 2024 election cycle. The Department of Justice will continue to leverage all tools to disrupt malicious cyber actors who threaten our national security and aim to repress fundamental freedoms worldwide.”

“These allegations pull back the curtain on China’s vast illegal hacking operation that targeted sensitive data from U.S. elected and government officials, journalists, and academics; valuable information from American companies; and political dissidents in America and abroad. Their sinister scheme victimized thousands of people and entities across the world, and lasted for well over a decade,” said U.S. Attorney Breon Peace for the Eastern District of New York. “America’s sovereignty extends to its cyberspace. Today’s charges demonstrate my office’s commitment to upholding and protecting that jurisdiction, and to putting an end to malicious nation state cyber activity.”

“The recent indictments against the Chinese actors reaffirm the FBI’s relentless dedication to combating cyber threats,” said Assistant Director Bryan Vorndran of the FBI Cyber Division. “They serve as a reminder that cyber adversaries who seek to compromise our nation’s systems and target US officials cannot rely on the cloak of anonymity and will face consequences for their actions.”

“APT31 Group’s practices further demonstrate the size and scope of the PRC’s state-sponsored hacking apparatus,” said Special Agent in Charge Robert W. “Wes” Wheeler Jr. of the FBI Chicago Field Office. “FBI Chicago worked tirelessly to uncover this complex web of alleged foreign intelligence and economic espionage crimes. Thanks to these efforts, as well as our partnerships with the U.S. Attorneys’ Offices and fellow Field Offices, the FBI continues to be successful in holding groups accountable and protecting national security.”

Overview

As alleged in the indictment and court filings, the defendants, along with dozens of identified PRC Ministry of State Security (MSS) intelligence officers, contractor hackers, and support personnel, were members of a hacking group operating in the PRC and known within the cybersecurity community as Advanced Persistent Threat 31 (the APT31 Group). The APT31 Group was part of a cyberespionage program run by the MSS’s Hubei State Security Department, located in the city of Wuhan. Through their involvement with the APT31 Group, since at least 2010, the defendants conducted global campaigns of computer hacking targeting political dissidents and perceived supporters located inside and outside of China, government and political officials, candidates, and campaign personnel in the United States and elsewhere and American companies.

The defendants and others in the APT31 Group targeted thousands of U.S. and foreign individuals and companies. Some of this activity resulted in successful compromises of the targets’ networks, email accounts, cloud storage accounts, and telephone call records, with some surveillance of compromised email accounts lasting many years.

Hacking Scheme

The more than 10,000 malicious emails that the defendants and others in the APT31 Group sent to these targets often appeared to be from prominent news outlets or journalists and appeared to contain legitimate news articles. The malicious emails contained hidden tracking links, such that if the recipient simply opened the email, information about the recipient, including the recipient’s location, internet protocol (IP) addresses, network schematics, and specific devices used to access the pertinent email accounts, was transmitted to a server controlled by the defendants and those working with them. The defendants and others in the APT31 Group then used this information to enable more direct and sophisticated targeted hacking, such as compromising the recipients’ home routers and other electronic devices.

The defendants and others in the APT31 Group also sent malicious tracking-link emails to government officials across the world who expressed criticism of the PRC government. For example, in or about 2021, the conspirators targeted the email accounts of various foreign government individuals who were part of the Inter-Parliamentary Alliance on China (IPAC), a group founded in 2020 on the anniversary of the 1989 Tiananmen Square protests whose stated purpose was to counter the threats posed by the Chinese Communist Party to the international order and democratic principles. The targets included every European Union member of IPAC, and 43 United Kingdom parliamentary accounts, most of whom were members of IPAC or had been outspoken on topics relating to the PRC government.

To gain and maintain access to the victim computer networks, the defendants and others in the APT31 Group employed sophisticated hacking techniques including zero-day exploits, which are exploits that the hackers became aware of before the manufacturer, or the victim were able to patch or fix the vulnerability. These activities resulted in the confirmed and potential compromise of economic plans, intellectual property, and trade secrets belonging to American businesses, and contributed to the estimated billions of dollars lost every year as a result of the PRC’s state-sponsored apparatus to transfer U.S. technology to the PRC.

Targeting of U.S. Government Officials and U.S. and Foreign Politicians and Campaigns

The targeted U.S. government officials included individuals working in the White House, at the Departments of Justice, Commerce, Treasury, and State, and U.S. Senators and Representatives of both political parties. The defendants and others in the APT31 Group targeted these individuals at both professional and personal email addresses. Additionally in some cases, the defendants also targeted victims’ spouses, including the spouses of a high-ranking Department of Justice official, high-ranking White House officials, and multiple U.S. Senators. Targets also included election campaign staff from both major U.S. political parties in advance of the 2020 election.

The allegations in the indictment regarding the malicious cyber activity targeting political officials, candidates, and campaign personnel are consistent with the March 2021 Joint Report of the Department of Justice and the Department of Homeland Security on Foreign Interference Targeting Election Infrastructure or Political Organization, Campaign, or Candidate Infrastructure Related to the 2020 US Federal Elections. That report cited incidents when Chinese government-affiliated actors “materially impacted the security of networks associated with or pertaining to U.S. political organizations, candidates, and campaigns during the 2020 federal elections.” That report also concluded that “such actors gathered at least some information they could have released in influence operations,” but which the Chinese actors did not ultimately deploy in such a manner. Consistent with that conclusion, the indictment does not allege that the hacking furthered any Chinese government influence operations against the United States. The indictment’s allegations nonetheless serve to underscore the need for U.S. (and allied) political organizations, candidates, and campaigns to remain vigilant in their cybersecurity posture and in otherwise protecting their sensitive information from foreign intelligence services, particularly in light of the U.S. Intelligence Community’s recent assessment that “[t]he PRC may attempt to influence the U.S. elections in 2024 at some level because of its desire to sideline critics of China and magnify U.S. societal divisions.”

Targeting of U.S. Companies

The defendants and others in the APT31 Group also targeted individuals and dozens of companies operating in areas of national economic importance, including the defense, information technology, telecommunications, manufacturing and trade, finance, consulting, legal, and research industries. The defendants and others in the APT31 Group hacked and attempted to hack dozens of companies or entities operating in these industries, including multiple cleared defense contractors who provide products and services to the U.S. military, multiple managed service providers who managed the computer networks and security for other companies, a leading provider of 5G network equipment, and a leading global provider of wireless technology, among many others.

Targeting for Transnational Repression of Dissidents

The defendants and the APT31 Group also targeted individual dissidents around the world and other individuals who were perceived as supporting such dissidents. For example, in 2018, after several activists who spearheaded Hong Kong’s Umbrella Movement were nominated for the Nobel Peace Prize, the defendants and the APT31 Group targeted Norwegian government officials and a Norwegian managed service provider. The conspirators also successfully compromised Hong Kong pro-democracy activists and their associates located in Hong Kong, the United States, and other foreign locations with identical malware.

The charged defendants’ roles in the conspiracy consisted of testing and exploiting the malware used to conduct these intrusions, managing infrastructure associated with these intrusions, and conducting surveillance and intrusions against specific U.S. entities. For example:

• Cheng Feng, Sun Xiaohui, Weng Ming, Xiong Wang, and Zhao Guangzong were involved in testing and exploiting malware, including malware used in some of these intrusions.
• Cheng and Ni Gaobin managed infrastructure associated with some of these intrusions, including the domain name for a command-and-control server that accessed at least 59 unique victim computers, including a telecommunications company that was a leading provider of 5G network equipment in the United States, an Alabama-based research corporation in the aerospace and defense industries, and a Maryland-based professional support services company.
• Sun and Weng operated the infrastructure used in an intrusion into a U.S. company known for its public opinion polls. Sun and Peng Yaowen conducted research and reconnaissance on several additional U.S. entities that were later the victims of the APT31 Group’s intrusion campaigns.
• Ni and Zhao sent emails with links to files containing malware to PRC dissidents, specifically Hong Kong legislators and democracy advocates, as well as targeting U.S. entities focusing on PRC-related issues.

Assistant U.S. Attorneys Douglas M. Pravda, Saritha Komatireddy, and Jessica Weigel for the Eastern District of New York are prosecuting the case, with valuable assistance from Matthew Anzaldi and Matthew Chang of the National Security Division’s National Security Cyber Section.

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 – An indictment was unsealed today charging seven nationals of the People’s Republic of China (PRC) with conspiracy to commit computer intrusions and conspiracy to commit wire fraud for their involvement in a PRC-based hacking group that spent approximately 14 years targeting U.S. and foreign critics, businesses and political officials in furtherance of the PRC’s economic espionage and foreign intelligence objectives.

The defendants are Ni Gaobin (倪高彬), Weng Ming (翁明), Cheng Feng (程锋), Peng Yaowen (彭耀文), Sun Xiaohui (孙小辉), Xiong Wang (熊旺), and Zhao Guangzong (赵光宗).

Merrick B. Garland, United States Attorney General; Breon Peace, United States Attorney for the Eastern District of New York; Lisa O. Monaco, United States Deputy Attorney General; Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge, FBI, Chicago Field Office (FBI), announced the indictment.

“The Justice Department will not tolerate efforts by the Chinese government to intimidate Americans who serve the public, silence the dissidents who are protected by American laws, or steal from American businesses,” said Attorney General Merrick B. Garland. “This case serves as a reminder of the ends to which the Chinese government is willing to go to target and intimidate its critics, including launching malicious cyber operations aimed at threatening the national security of the United States and our allies.”

“These allegations pull back the curtain on China’s vast illegal hacking operation that targeted sensitive data from U.S. elected and government officials, journalists and academics; valuable information from American companies; and political dissidents in America and abroad.  Their sinister scheme victimized thousands of people and entities across the world, and lasted for well over a decade,” stated U.S. Attorney Peace. “America’s sovereignty extends to its cyberspace. Today’s charges demonstrate my Office’s commitment to upholding and protecting that jurisdiction, and to putting an end to malicious nation state cyber activity.”

“Over 10,000 malicious emails, impacting thousands of victims, across multiple continents. As alleged in today’s indictment, this prolific global hacking operation – backed by the PRC government – targeted journalists, political officials, and companies to repress critics of the Chinese regime, compromise government institutions, and steal trade secrets,” said Deputy Attorney General Lisa Monaco. “The Department of Justice will relentlessly pursue, expose, and hold accountable cyber criminals who would undermine democracies and threaten our national security.” 

“The indictment unsealed today, together with statements from our foreign partners regarding related activity, shed further light on the PRC Ministry of State Security’s aggressive cyber espionage and transnational repression activities worldwide,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s announcements underscore the need to remain vigilant to cybersecurity threats and the potential for cyber-enabled foreign malign influence efforts, especially as we approach the 2024 election cycle. The Department of Justice will continue to leverage all tools to disrupt malicious cyber actors who threaten our national security and aim to repress fundamental freedoms worldwide.”

“These defendants were part of a Chinese government sponsored hacking group, targeting U.S. businesses and U.S. political officials for intrusion for over a decade as part of a larger, malicious global campaign. These charges are yet another example of hostile actions taken by the PRC to attack not only American businesses and infrastructure, but the security of our nation. FBI New York is united with our partners - internationally, federally, and the private sector – to protect our common goals and ideals from antagonistic nation state actors,” stated FBI Assistant Director-in-Charge Smith.

“APT31 Group’s practices further demonstrate the size and scope of the PRC’s state-sponsored hacking apparatus,” said Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. “FBI Chicago worked tirelessly to uncover this complex web of alleged foreign intelligence and economic espionage crimes. Thanks to these efforts, as well as our partnerships with the U.S. Attorney’s Offices and fellow Field Offices, the FBI continues to be successful in holding groups accountable and protecting national security.”

Overview

As alleged in the indictment and court filings, the defendants, along with dozens of identified PRC Ministry of State Security (MSS) intelligence officers, contractor hackers, and support personnel, were members of a hacking group operating in the PRC and known within the cyber security community as Advanced Persistent Threat 31 (the APT31 Group).  The APT31 Group was part of a cyberespionage program run by the MSS’s Hubei State Security Department, located in the city of Wuhan.  Through their involvement with the APT31 Group, since at least 2010, the defendants conducted global campaigns of computer hacking targeting political dissidents and perceived supporters located inside and outside of China, government and political officials, candidates and campaign personnel in the United States and elsewhere, and American companies.

The defendants and others in the APT31 Group targeted thousands of U.S. and foreign individuals and companies.  Some of this activity resulted in successful compromises of the targets’ networks, email accounts, cloud storage accounts, and telephone call records, with some surveillance of compromised email accounts lasting many years. 

Hacking Scheme

The more than 10,000 malicious emails that the defendants and others in the APT31 Group sent to these targets often appeared to be from prominent news outlets or journalists and appeared to contain legitimate news articles.  The malicious emails contained hidden tracking links, such that if the recipient simply opened the email, information about the recipient, including the recipient’s location, internet protocol (IP) addresses, network schematics, and specific devices used to access the pertinent email accounts, was transmitted to a server controlled by the defendants and those working with them.  The defendants and others in the APT31 Group then used this information to enable more direct and sophisticated targeted hacking, such as compromising the recipients’ home routers and other electronic devices. 

The defendants and others in the APT31 Group also sent malicious tracking-link emails to government officials across the world who expressed criticism of the PRC government.  For example, in or about 2021, the Conspirators targeted the email accounts of various foreign government individuals world who were part of the Inter-Parliamentary Alliance on China (IPAC), a group founded in 2020 on the anniversary of the 1989 Tiananmen Square protests whose stated purpose was to counter the threats posed by the Chinese Communist Party to the international order and democratic principles.  The targets included every European Union member of IPAC, and 43 United Kingdom parliamentary accounts, most of whom were members of IPAC or had been outspoken on topics relating to the PRC government.

To gain and maintain access to the victim computer networks, the defendants and others in the APT31 Group employed sophisticated hacking techniques including zero-day exploits, which are exploits that the hackers became aware of before the manufacturer or the victim were able to patch or fix the vulnerability. These activities resulted in the confirmed and potential compromise of economic plans, intellectual property, and trade secrets belonging to American businesses, and contributed to the estimated billions of dollars lost every year as a result of the PRC’s state-sponsored apparatus to transfer U.S. technology to the PRC. 

Targeting of U.S. Government Officials and U.S. and Foreign Politicians and Campaigns

The targeted U.S. government officials included individuals working in the White House, at the Departments of Justice, Commerce, Treasury, and State, and U.S. Senators and Representatives of both political parties.  The defendants and others in the APT31 Group targeted these individuals at both professional and personal email addresses. Additionally in some cases, the defendants also targeted victims’ spouses, including the spouses of a high-ranking Department of Justice official, high-ranking White House officials, and multiple United States Senators.  Targets also included election campaign staff from both major U.S. political parties in advance of the 2020 election.

The allegations in the indictment regarding the malicious cyber activity targeting political officials, candidates, and campaign personnel are consistent with the March 2021 Joint Report of the Department of Justice and the Department of Homeland Security on Foreign Interference Targeting Election Infrastructure or Political Organization, Campaign, or Candidate Infrastructure Related to the 2020 US Federal Elections.  That report cited incidents when Chinese government-affiliated actors “materially impacted the security of networks associated with or pertaining to US political organizations, candidates, and campaigns during the 2020 federal elections.”  That report also concluded that “such actors gathered at least some information they could have released in influence operations,” but which the Chinese actors did not ultimately deploy in such a manner.  Consistent with that conclusion, the indictment does not allege that the hacking furthered any Chinese government influence operations against the U.S.  The indictment’s allegations nonetheless serve to underscore the need for U.S. and allied political organizations, candidates, and campaigns to remain vigilant in their cybersecurity posture and in otherwise protecting their sensitive information from foreign intelligence services, particularly in light of the U.S. Intelligence Community’s recent assessment that “[t]he PRC may attempt to influence the U.S. elections in 2024 at some level because of its desire to sideline critics of China and magnify U.S. societal divisions.”

Targeting of U.S. Companies

The defendants and others in the APT31 Group also targeted individuals and dozens of companies operating in areas of national economic importance, including the defense, information technology, telecommunications, manufacturing and trade, finance, consulting, legal, and research industries.  The defendants and others in the APT31 Group hacked and attempted to hack dozens of companies or entities operating in these industries, including multiple cleared defense contractors who provide products and services to the U.S. military, multiple managed service providers who managed the computer networks and security for other companies, a leading provider of 5G network equipment, and a leading global provider of wireless technology, among many others. 

Targeting for Transnational Repression of Dissidents

The defendants and the APT31 Group also targeted individual dissidents around the world and other individuals who were perceived as supporting such dissidents.  For example, in 2018, after several activists who spearheaded Hong Kong’s Umbrella Movement were nominated for the Nobel Peace Prize, the defendants and the APT31 Group targeted Norwegian government officials and a Norwegian managed service provider.  The conspirators also successfully compromised Hong Kong pro-democracy activists and their associates located in Hong Kong, the United States, and other foreign locations with identical malware.

The charged defendants’ roles in the conspiracy consisted of testing and exploiting the malware used to conduct these intrusions, managing infrastructure associated with these intrusions, and conducting surveillance and intrusions against specific U.S. entities.  For example, defendants Cheng Feng, Sun Xiaohui, Weng Ming, Xiong Wang, and Zhao Guangzong were involved in testing and exploiting malware, including malware used in some of these intrusions.  Cheng and Ni Gaobin managed infrastructure associated with some of these intrusions, including the domain name for a command-and-control server that accessed at least 59 unique victim computers, including a telecommunications company that was a leading provider of 5G network equipment in the United States, an Alabama-based research corporation in the aerospace and defense industries, and a Maryland-based professional support services company.  Sun and Weng operated the infrastructure used in an intrusion into a U.S. company known for its public opinion polls.  Sun and Peng Yaowen conducted research and reconnaissance on several additional U.S. entities that were later the victims of the APT31 Group’s intrusion campaigns.  Ni and Zhao sent emails with links to files containing malware to PRC dissidents, specifically Hong Kong legislators and democracy advocates, as well as targeting U.S. entities focusing on PRC-related issues.

The government’s case is being prosecuted by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Douglas M. Pravda, Saritha Komatireddy, and Jessica Weigel are in charge of the prosecution, with assistance from Matthew Anzaldi and Matthew Chang of the National Security Division’s National Security Cyber Section and from the Office’s Litigation Analyst Mary Clare McMahon.

The Defendants:

Ni Gaobin (倪高彬)
Age:  38
People’s Republic of China

Weng Ming (翁明)
Age:  37
People’s Republic of China

Cheng Feng (程锋)
Age:  34
People’s Republic of China

Peng Yaowen (彭耀文)
Age:  38
People’s Republic of China

Sun Xiaohui (孙小辉)
Age:  38
People’s Republic of China

Xiong Wang (熊旺)
Age:  35
People’s Republic of China

Zhao Guangzong (赵光宗)
Age:  38
People’s Republic of China

E.D.N.Y. Docket No. 24-CR-42 (RER)

Earlier today, in federal court in Central Islip, Devon Thurmond pleaded guilty to conspiring to distribute fentanyl from 2021 through 2023 and to distribution of fentanyl in April 2021that ultimately caused the overdose death of a victim (Victim-1).  As part of his plea, Thurmond admitted that he knowingly conspired with his codefendant Cartier Funderburke to sell fake oxycodone pills that actually contained fentanyl and on or about April 29, 2021 sold fake oxycodone pills containing fentanyl to Victim-1, leading to their death.  Additionally, Thurmond also admitted at his plea proceeding, that while he was incarcerated on an unrelated state charge, he caused fake oxycodone pills containing fentanyl to be distributed by codefendant Melissa Trimarchi which ultimately led to the overdose death of another victim (Victim-2) on or about January 9, 2023.  The plea proceeding was held before United States District Gary R. Brown.  Both codefendants previously pleaded guilty and are awaiting sentencing.  When sentenced, Thurmond faces up to 40 years’ imprisonment.  

Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and, William Whitton, Chief of Police, Glen Cove Police Department (GCPD), announced the guilty plea.

“As he admitted today, Thurmond’s conspiracy and sale of fentanyl disguised as prescription pain pills directly led to the poisoning deaths of two Long Island residents,” stated United States Attorney Peace. “My Office and our law enforcement partners will continue to prosecute traffickers for their callous disregard for human life in pushing deadly drugs and contributing to the alarming opioid epidemic that has continued to harm this District.”

"Fentanyl is the greatest threat to our nation. The men and women of DEA New York Division continue to do everything we can, along with our law enforcement partners, to target those responsible for poisoning and destroying our communities” stated DEA New York Division Special Agent in Charge Frank Tarentino. “While this guilty plea doesn’t bring back the lives lost, it sends a message that we will do everything we can to make sure those responsible face the consequences.”

“The Glen Cove Police Department will continue to collaborate with agents of the DEA and the U.S. Department of Justice to identify, arrest, and prosecute those who believe they can profit from selling lethal drugs in our community,” stated GCPD Chief of Police Whitton.

Between April 2021 and February 2023, Thurmond conspired with Funderburke and Trimarchi to sell fentanyl disguised as oxycodone pain pills and sold such pills to Victim-1 and Victim-2.  The investigation revealed that on April 29, 2021, a 34-year-old individual (Victim-1) died of a drug-related overdose at his residence in Glen Cove, Long Island.  Cellular telephone analysis and additional investigation, showed that the fentanyl that Victim-1 used was purchased from Thurmond and Funderburke earlier that same day and that Thurmond personally delivered the drugs to Victim-1.  On January 9, 2023, a 27-year-old individual (Victim-2) died of a drug-related overdose at his residence in Locust Valley, Long Island.   A search of Victim-2’s phone revealed text messages between Trimarchi and Victim-2, which related to Victim-2’s purchase of fentanyl in the form of a single fake oxycodone pill in the hours before his overdose death.  In recorded jail calls between Thurmond and Trimarchi, Trimarchi admitted to selling the fatal dose of fentanyl in the form of a fake oxycodone pill to Victim-2, which pill came from the supply of fake oxycodone pills provided by Thurmond to Trimarchi to sell on his behalf while he was incarcerated. 

According to the Centers for Disease Control and Prevention (CDC) and the Department of Justice, in 2019, nearly 71,000 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 2019, over 14,000 people died in the United States from a drug overdose involving heroin.  From 2013 to 2019, the synthetic opioid death rate increased by more than 1,000 percent.  Of those deaths, over 70% involved a prescription or illicit opioid.  Among New York State residents, the number of overdose deaths involving any opioid increased each year between 2010 and 2017, with an overall increase of 200.2 percent from 1,074 in 2010 to 3,224 in 2017, according to the New York State Health Department.  If you or someone you know is struggling with substance abuse, please contact the Substance Abuse and Mental Health Services Administration (SAMHSA) Helpline: 1-800-662-HELP (4357) or Findtreatment.gov.

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

The Defendant:

DEVON THURMOND (also known as “D Rock”)
Age: 23
Glen Cove, New York

Defendants Who Previously Pleaded Guilty:

CARTIER FUNDERBURKE (also known as “Kartier,” “Kar” and “Slim”)
Age: 24
Glen Cove, New York

MELISSA TRIMARCHI (also known as “Mel”)
Age: 37
Glen Cove, New York

E.D.N.Y. Docket No. 23-CR-232 (GRB)

Earlier today, at the federal courthouse in Central Islip, Arthur Cornwall, a former signal maintainer with the New York City Transit Authority, and Sean Williams, a former New York State Court Officer, were each sentenced by United States District Judge Joan M. Azrack to 18 months in prison for conspiring to commit wire fraud in connection with their receipt of approximately $770,000 in small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP).  The Court also ordered the defendants to pay $770,000 in restitution to the United States Small Business Administration.  The defendants pleaded guilty to the charge in June 2023.

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 sentences.

“Abuse of public benefits programs, particularly shameful when those defrauding the government are public servants, will not be tolerated and not forgotten with the passage of time from the darkest days of the COVID-19 pandemic,” stated United States Attorney Peace.  “The defendants’ theft of relief money, despite holding jobs with good salaries and benefits, so they could purchase real estate, cryptocurrency and pay off credit card bills with the stolen funds, is deserving of jail sentences.  This Office and our agency partners will continue working to bring to justice those fraudsters who take advantage of a national emergency, and recover every dollar that they stole from the government.”

Inspector in Charge of the New York Division Daniel B. Brubaker said, “The sentencing today of these two defendants should serve as a clear message to anyone who schemes to steal the public’s money, Postal Inspectors and our law enforcement partners will track you down and see you prosecuted to the fullest extent of the law. What makes this case even more egregious is that the defendants were employed in positions of public trust when they stole money specifically intended for those struggling to keep their businesses afloat during the pandemic. Today is a win for the good guys and the people we protect, but the fight is far from over and we will continue to use every resource at our disposal to pursue anyone who attempts to defraud the public.”

Between May 2020 and July 2020, amid the COVID-19 pandemic, Cornwall and Williams fraudulently applied for, and received, at least six PPP and EIDLP loans, totaling approximately $770,000, on behalf of purported corporate entities they controlled.  As part of the scheme designed to mislead the SBA and a financial institution disbursing the funds, the defendants submitted supporting documentation that contained false information, including the identity of the individual applying for the loan, the number of employees, revenue, payroll costs, and the intended use of the loan proceeds. Instead of using the funds for disaster relief, Cornwall and Williams diverted them for their personal use, including the discharge of personal credit card debt and the purchase of cryptocurrency.  Following their guilty pleas, the defendants resigned from their respective government jobs.

Congress created the PPP and 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 allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other expenses through the PPP.  The PPP allowed qualifying small businesses to receive unsecured loans on favorable terms, which they were required to use for specified expenses, including payroll costs, interest on mortgages, rent and utilities.  The PPP provided for forgiveness of the loan if the recipient businesses spent the proceeds on these specified expenses within a limited time period and used a certain percentage for payroll costs.

Another 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.  Under the program, EIDLP recipients were eligible to receive advances of up to $10,000 for small businesses within three days of applying for an EIDL (EIDL Advance).  The amount of an EIDL Advance was determined based on the number of employees working for the applicant.  The EIDL Advance did not have to be repaid.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Bradley T. King is in charge of the prosecution with assistance from Paralegal Specialist Samantha Schroder and Legal Assistants Danielle Casey and Janelle Robinson.

The Defendants:

ARTHUR CORNWALL
Age:  43
West Babylon, New York

SEAN WILLIAMS
Age:  42
Valley Stream, New York

E.D.N.Y. Docket No. 23-CR-238 (JMA)

Klaus Pflugbeil, 58, a Canadian national and resident of the People’s Republic of China (PRC), was arrested today in Nassau County, New York, for conspiring with co-defendant Yilong Shao, 47, of Ningbo, China, to send to undercover law enforcement officers trade secrets that belonged to a leading U.S.-based electric vehicle company (Victim Company-1).

“The defendants stand accused of stealing valuable proprietary technology from a U.S. electric car manufacturer and using it to set up a rival business overseas,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “This blatant theft of advanced trade secrets relating to battery components and assembly blunts America’s technological edge, and the Justice Department will hold accountable those who would try to cheat our country of its economic potential and threaten our national security.”

“As alleged, the defendants set up a company in China, blatantly stole trade secrets from an American company that are important to manufacturing electric vehicles, and which cost many millions of dollars in research and development, and sold products developed with the stolen trade secrets,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Rather than invest their own resources into competitive technology, the defendants looted Victim Company-1’s trade secrets for their own financial gain. Today’s arrest demonstrates that this office will prosecute those who engage in theft of trade secrets that places U.S. businesses at a competitive disadvantage, undermines innovation and creates a potential national security risk.”

“Klaus Pflugbeil and Yilong Shao allegedly used stolen confidential information – developed by their previous employers – to establish their own Chinese-based competitor,” said Assistant Director in Charge James Smith of the FBI New York Field Office. “When American economic intelligence is stolen by foreign businesses, it not only harms the victim companies, but also threatens our financial infrastructure. The FBI will bring to justice anyone who steals our proprietary trade secrets in an effort to both safeguard the American economy and our national security.”

According to court documents, Pflugbeil and Shao are operators of a PRC-based business (Business-1) that sold technology used for the manufacture of batteries, including batteries used in electric vehicles. The defendants built Business-1 using Victim Company-1’s sensitive and proprietary information, and marketed their business as a replacement for Victim Company-1’s products. Pflugbeil was arrested this morning after he sent multiple Victim Company-1 trade secrets to an undercover agent and traveled to Nassau County for a meeting with who he believed to be Long Island-based businesspeople, but who in reality were undercover law enforcement agents. Pflugbeil is scheduled to make his initial appearance today before U.S. Magistrate Judge Peggy Kuo. His co-defendant Shao remains at large.

Victim Company-1 is a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems. In 2019, Victim Company-1 acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly lines (the Canadian Manufacturer). Prior to its purchase by Victim Company-1, the Canadian Manufacturer sold battery assembly lines to customers who manufactured alkaline and lithium-ion batteries for consumer use. The battery assembly lines contained or utilized a proprietary technology now owned by Victim Company-1: continuous motion battery assembly (the Battery Assembly Trade Secret).

The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the battery manufacturing process. Victim Company-1 spent at least $13 million developing the Battery Assembly Trade Secret.

Both Pflugbeil and Shao are former employes of the Canadian Manufacturer. The complaint alleges that, by no later than 2019, Pflugbeil and Shao planned to make use of Victim Company-1 trade secrets for their own business activities. For example, between October and November 2019, Pflugbeil and Shao discussed “set[ting] up” a company in Canada and China that would rely on the sensitive and confidential information needed to make and sell their own battery technology. Pflugbeil told Shao that he had “a lot of original documents” related to the technology and sought out more “original drawings” from Victim Company-1 that they could copy for their planned business. Shao subsequently confirmed that “we have all of original assembly drawings by PDF.”

In or about July 2020, Pflugbeil and Shao opened Business-1, which has since expanded to locations in China, Canada, Germany, and Brazil. Business‑1 makes the same precision dispensing pumps and battery assembly lines that Victim Company-1 manufactured using its proprietary technology. Business-1 is marketed by Pflugbeil as an alternative source for the sale of products that rely upon Victim Company-1 trade secrets, publishing online advertisements that state, for example, “Are you looking for [Victim Company-1] Metering pumps and spare parts? Look no further.” 

In operating Business-1, Pflugbeil and Shao relied upon the Battery Assembly Trade Secret. For example, in September 2020, Pflugbeil emailed a series of drawings to a gears manufacturer in order to produce several parts and wrote “please keep the attached information confidential.” The attachment contained drawings belonging to Victim Company-1 related to the Battery Assembly Trade Secret. The drawings that Pflugbeil sent were identical to Victim Company-1’s drawings, except the name of the company was changed, the date of the drawing was changed, and the drawing identifying number was written in reverse of Victim Company-1’s drawing identifying number.

On or about Sept. 11, 2023, undercover agents attended a trade show for the packaging and processing industries in Las Vegas, Nevada. The undercover agents posed as businesspeople who were interested in purchasing a battery assembly line from Business-1 to manufacture batteries at a facility on Long Island, New York. The undercover agents were introduced to Shao at the trade show and later to Pflugbeil via email. Subsequently, on or about Nov. 17, 2023, Pflugbeil sent, via email, a detailed 66-page technical documentation proposal to an undercover agent (UC-1) while UC-1 was in the Eastern District of New York. The proposal notes, “this technical documentation package contains [Business-1] proprietary information which must be kept confidential.” In reality, the proposal contained Battery Assembly Trade Secret information belonging to Victim Company-1:  at least half a dozen drawings Pflugbeil used in the proposal and sent to UC-1 were, in fact, Victim Company-1’s information related to the Battery Assembly Trade Secret.

If convicted, Pfugbeil faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI is investigating the case. The Criminal Division’s Computer Crime and Intellectual Property Section provided valuable assistance.

Assistant U.S. Attorneys Ellen H. Sise and Samantha Alessi for the Eastern District of New York are prosecuting the case, with valuable assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

This action was coordinated through the Disruptive Technology Strike Force, 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. Under the leadership of the Assistant Attorney General for National Security and the Assistant Secretary of Commerce for Export Enforcement, the Strike Force leverages tools and authorities across the U.S. government to enhance the criminal and administrative enforcement of export control laws.

A complaint was unsealed today in federal court in Brooklyn charging Klaus Pflugbeil, a resident of the People’s Republic of China (the “PRC” or “China”) and Canadian national, and Yilong Shao, a Chinese national, with conspiring to send trade secrets that belonged to a leading U.S.-based electric vehicle company (“Victim Company-1”).  Pflugbeil and Shao are operators of a PRC-based business (“Business-1”) that sold technology used for the manufacture of batteries, including batteries used in electric vehicles.  The defendants built Business-1 using Victim Company-1’s sensitive and proprietary information, and even marketed their business as a replacement for Victim Company-1’s products.  Pflugbeil was arrested this morning after he sent multiple Victim Company-1 trade secrets to an undercover agent and traveled to Nassau County for a meeting with what he believed to be Long Island-based businesspeople, who in reality were undercover law enforcement agents.  Pflugbeil is scheduled to make his initial appearance today before United States Magistrate Judge Peggy Kuo.  His co-defendant Shao remains at large.

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, and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.

“As alleged, the defendants set up a company in China, blatantly stole trade secrets from an American company that are important to manufacturing electric vehicles, and which cost many millions of dollars in research and development, and sold products developed with the stolen trade secrets,” stated United States Attorney Peace.  “Rather than invest their own resources into competitive technology, the defendants looted Victim Company-1’s trade secrets for their own financial gain.  Today’s arrest demonstrates that this Office will prosecute those who engage in theft of trade secrets that places U.S. businesses at a competitive disadvantage, undermines innovation and creates a potential national security risk.”

Mr. Peace also thanked the Justice Department’s Computer Crime and Intellectual Property Section (CCIPS) for its assistance.

“The defendants stand accused of stealing valuable proprietary technology from a U.S. electric car manufacturer and using it to set up a rival business overseas,” stated Assistant Attorney General Olsen. “This blatant theft of advanced trade secrets relating to battery components and assembly blunts America’s technological edge, and the Justice Department will hold accountable those who would so try cheat our country of its economic potential and threaten our national security.”

“Klaus Pflugbeil and Yilong Shao allegedly used stolen confidential information—developed by their previous employers—to establish their own Chinese-based competitor. When American economic intelligence is stolen by foreign businesses, it not only harms the victim companies, but also threatens our financial infrastructure. The FBI will bring to justice anyone who steals our proprietary trade secrets in an effort to both safeguard the American economy and our national security,” stated FBI Assistant Director-in-Charge Smith.

Victim Company-1 is a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems.  In 2019, Victim Company-1 acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly lines (the “Canadian Manufacturer”).  Prior to its purchase by Victim Company-1, the Canadian Manufacturer sold battery assembly lines to customers who manufactured alkaline and lithium-ion batteries for consumer use.  The battery assembly lines contained or utilized a proprietary technology now owned by Victim Company-1: continuous motion battery assembly (the “Battery Assembly Trade Secret”).[1]  The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the battery manufacturing process.  Victim Company-1 spent at least $13 million developing the Battery Assembly Trade Secret.

Both Pflugbeil and Shao are former employees of the Canadian Manufacturer.  The evidence reveals that, by no later than 2019, Pflugbeil and Shao planned to make use of Victim Company-1 trade secrets for their own business activities.  For example, between October and November 2019, Pflugbeil and Shao discussed “set[ting] up” a company in Canada and China that would rely on the sensitive and confidential information needed to make and sell their own battery technology.  Pflugbeil told Shao that he had “a lot of original documents” related to the technology, and sought out more “original drawings” from Victim Company-1 that they could copy for their planned business.  Shao subsequently confirmed that “we have all of original assembly drawings by PDF.”

In or about July 2020, Pflugbeil and Shao opened Business-1, which has since expanded to locations in China, Canada, Germany, and Brazil.  Business‑1 makes the same precision dispensing pumps and battery assembly lines that Victim Company-1 manufactured using its proprietary technology.  Business-1 is marketed by Pflugbeil as an alternative source for the sale of products that rely upon Victim Company-1 trade secrets, publishing online advertisements that state, for example, “Are you looking for [Victim Company-1] Metering pumps and spare parts?  Look no further.” 

In operating Business-1, Pflugbeil and Shao relied upon the Battery Assembly Trade Secret.  For example, in September 2020, Pflugbeil emailed a series of drawings to a gear manufacturer in order to produce several parts, and wrote, “please keep the attached information confidential.”  The attachment contained drawings belonging to Victim Company-1 related to the Battery Assembly Trade Secret.  The drawings that Pflugbeil sent were identical to Victim Company-1’s drawings, except the name of the company was changed, the date of the drawing was changed, and the drawing identifying number was written in reverse of Victim Company-1’s drawing identifying number.

On or about September 11, 2023, undercover agents attended a trade show for the packaging and processing industries (the “Trade Show”) in Las Vegas, Nevada.  The undercover agents posed as businesspeople who were interested in purchasing a battery assembly line from Business-1 to manufacture batteries at a facility on Long Island.  The undercover agents were introduced to Shao at the trade show and later to Pflugbeil via email.  Subsequently, on or about November 17, 2023, Pflugbeil sent, via email, a detailed 66-page technical documentation proposal (the “Proposal”) to an undercover agent (“UC-1”) while UC-1 was in the Eastern District of New York.  The Proposal notes, “this technical documentation package contains [Business-1] proprietary information which must be kept confidential.”  In reality, the Proposal contained Battery Assembly Trade Secret information belonging to Victim Company-1: at least half a dozen drawings Pflugbeil used in the Proposal and sent to UC-1 were, in fact, Victim Company-1’s information related to the Battery Assembly Trade Secret.

The charge in the complaint is an allegation, and the defendants are presumed innocent unless and until proven guilty.  If convicted, Pflugbeil faces up to 10 years in prison.

The government’s case is being handled by the Office’s National Security and Cybercrime Section and Long Island Criminal Division.  Assistant United States Attorneys Ellen H. Sise and Samantha Alessi are in charge of the prosecution, along with Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section, with assistance from Litigation Analyst Joseph Levin. 

Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force.  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 Defendants:

KLAUS PFLUGBEIL
AGE:  58
Ningbo, China

YILONG SHAO
AGE:  47
Ningbo, China

E.D.N.Y. Docket No. 24-MJ-226

[1]           Although some of the conduct described in the Complaint occurred before the Canadian Manufacturer was acquired by Victim Company-1, the Battery Assembly Trade Secret belongs to, and is the proprietary information of, Victim Company-1.  Accordingly, unless otherwise indicated, the government refers to Victim Company-1 even where relevant conduct occurred when the Canadian Manufacturer was an independent entity.

CENTRAL ISLIP, NY – Earlier today, Aventura Technologies, Inc. (Aventura) pleaded guilty to committing mail and wire fraud conspiracy and illegal importation in federal court in Central Islip.  The guilty plea reflects Aventura’s long-running, lucrative scheme to purchase Chinese-made security equipment (such as networked surveillance cameras) and resell it as U.S.-made, including to multiple agencies of the U.S. government, branches of the military and to customers overseas in the public and private sectors.  The scheme began in 2006, ending in 2019 when charges were brought in this case.  Aventura made more than $112 million in sales during that time.  Today’s proceeding was held before United States Magistrate Judge Arlene R. Lindsay.

In connection with its guilty plea, the company agreed to dissolve itself and to forfeit more than $3 million in seized assets, including Aventura’s headquarters and a seventy-foot yacht partially owned by the defendants, as well as more than 7,000 seized items of merchandise.   All seven individuals charged in this case have pleaded guilty, including Aventura’s nominal president Frances Cabasso and its true chief executive, her husband Jack Cabasso.

In addition to Aventura’s fraudulent resale of Chinese-made goods, the company defrauded customers by falsely claiming that Frances Cabasso was in charge of Aventura in order to obtain access to valuable government contracts reserved for women-owned businesses.  Frances Cabasso pled guilty to wire fraud conspiracy in connection with that scheme.

The individual defendants who pled guilty in the case were Frances Cabasso, Jack Cabasso, and senior executives Jonathan Lasker, Christine Lavonne Lazarus and Eduard Matulik, as well as employees Wayne Marino and Alan Schwartz. 

The charges were announced by Breon Peace, United States Attorney for the Eastern District of New York; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Robert C. Erickson, Jr., Deputy Inspector General, General Services Administration Office of Inspector General (GSA OIG); Brian J. Solecki, Acting Special Agent in Charge, Defense Criminal Investigative Service, Northeast Field Office (DCIS); Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI); Francis J. Russo, Director, Customs and Border Protection, New York Field Office (CBP); William W. Richards, Special Agent in Charge, Air Force Office of Special Investigations, Office of Procurement Fraud Investigations (AFOSI); Heather Hill, Acting Inspector General, Treasury Inspector General for Tax Administration (TIGTA); Greg Gross, Special Agent in Charge, Naval Criminal Investigative Service, Economic Crimes Field Office (NCIS); Keith K. Kelly, Special Agent-in-Charge, Army Criminal Investigation Division’s Fraud Field Office (Army CID); and Teri L. Donaldson, Inspector General for the Department of Energy (DOE IG).

“For years, the defendants, while pretending to be a women-owned business, intentionally corrupted the U.S. military supply chain by passing off Chinese-made networked electronics with known vulnerabilities as American-made,” stated United States Attorney Peace.  “This case highlights the importance of national and international inter-agency cooperation in securing our cyber supply chain and protecting our military readiness.  We will spare no effort in holding accountable those who undermine and threaten the national security of the United States.” 

“This GSA contractor lied about its surveillance and security equipment being made in the United States when it was actually being made in China,” stated GSA Deputy Inspector General Erickson.  “Company executives also misrepresented to GSA that the company was woman-owned to gain access to government contracts they otherwise would not have been eligible to receive. We remain committed to investigating contract fraud such as this and holding criminals accountable.”

“The introduction of misbranded parts and materials into the DoD’s supply chain poses a significant risk to America’s military readiness and our national security,” stated DCIS Acting Special Agent-in-Charge Solecki.  “We remain committed to working with our law enforcement partners and the Department of Justice, to ensure that individuals and companies who engage in fraudulent activity, at the expense of our nation’s military members, are investigated and prosecuted.”

“Executives of Aventura Technologies have already pled guilty, detailing how the company fronted illegal importations and wire fraud by the sale of thousands of goods that entered the U.S. under fraudulent circumstances to federal entities,” stated IRS-CI Special Agent-in-Charge Fattorusso.  “Their scheme went further to purport that Aventura was a woman-owned business simply to win additional government contracts.  It is not common to see both the executives and the company face prosecution, but in this case, today’s guilty plea is proof of the significant amount of evidence present in this case.”

“U.S. Customs and Border Protection provided the critical link to an ongoing investigation that resulted in the takedown of an elaborate criminal enterprise,” stated CBP Director Russo.  “This case serves as a great example of collaborative law enforcement efforts to uncover and dismantle criminal enterprises that seek to defraud the United States government for personal gain while jeopardizing our national defense and causing economic harm to their competitors.”  

“This outcome demonstrates the Office of Procurement Fraud’s commitment to identify and hold accountable those who engage in fraudulent behavior that places our warfighters at risk,” stated AFOSI Special Agent-in-Charge Richards.   “AFOSI, alongside our joint investigative and prosecutorial partners, will work tirelessly to combat fraud threatening the Department of the Air Force.”

“The Treasury Inspector General for Tax Administration (TIGTA) is the nation’s tax watchdog agency committed to ensuring the integrity of the IRS contracting and procurement process,” stated TIGTA’s Acting Inspector General Hill. “We are aggressively investigating individuals who attempt to defraud the IRS, like the individuals in this case. Companies working with the IRS and the Department of Treasury must conduct themselves with integrity and honesty. Thank you to the U.S. Attorney’s Office and law enforcement partners for their support in this investigation.”

“Falsely misrepresenting the country of origin for equipment sold to the U.S. Government that is directly used in support of the safety and readiness of our warfighters is a serious crime,” said NCIS Special Agent-in-Charge Gross.  “NCIS is committed to protecting the integrity of the Department of the Navy’s procurement and acquisitions process.”

“Today's plea is a fitting end for those who conspire to defraud the government,” stated Army CID Special Agent-in-Charge Kelly.  “We are proud to work alongside our federal law enforcement partners to protect the United States Government from those who seek to misrepresent themselves and their product, thereby threatening the readiness of the U.S. Army and potentially risking the lives of countless soldiers.”

“The installation of the material provided by Aventura in a Department of Energy facility would have provided a possible pathway for the PRC to gather information on the personnel who work at one of the Nation’s most advanced research facilities,” said DOE Inspector General Donaldson.  “I thank our law enforcement partners who supported our Special Agents to ensure this equipment didn’t make its way into the lab, and the US Attorney’s Office in the Eastern District of New York for holding the company who put our national security at risk, accountable for its actions.”

The Country of Origin Fraud and Unlawful Importation Scheme

As admitted in court, Aventura lied for over a decade to its customers, including the U.S. military, the federal government, numerous private customers in the United States, and public and private sector customers abroad.  Between 2008 and November 2019, Aventura made upwards of $112 million, including over $20 million in federal government contracts, while claiming that it was manufacturing its products at its headquarters in Commack, New York.  In fact, since at least 2006, Aventura imported goods, primarily from the People’s Republic of China (PRC), then resold them as American-made or manufactured in a small number of other countries. 

The company’s marketing relied heavily on U.S. flags and “American-made” branding, and its sales force routinely asserted that Aventura was the sole U.S. manufacturer of security equipment.  As described below, Jack Cabasso went to extreme lengths to conceal the Chinese origin of his products, while at the same time writing to U.S. government procurement officials to accuse his competitors of reselling Chinese-made goods.  Visitors to Aventura’s corporate headquarters were shown a fictitious “lab,” and were told that a separate building was reserved for classified government work and was off-limits to visitors.  In fact, Aventura did not own or occupy the building in question.

In the course of its investigation, the government intercepted and covertly marked numerous shipments from PRC sources to Aventura’s Commack, New York headquarters.  In some cases, cameras shipped from the PRC were pre-marked with Aventura’s logo and the phrase “Made in USA,” accompanied by an American flag.  In many instances, the items were later resold to government agencies to whom the defendants falsely represented that the products were American-made.  Examples include:

• In March 2019, the U.S. Navy ordered from Aventura a $13,500 laser night vision camera that was specified as American-made on Aventura’s U.S. General Services Administration (GSA) price list.  In April 2019 at a shipping facility in Jamaica, Queens, a team led by Customs and Border Protection (CBP) officers intercepted a shipment from a PRC manufacturer to Aventura that contained a camera matching the Navy’s order, and surreptitiously marked it for later identification.  Two weeks later, that same camera was delivered to Naval Submarine Base New London in Groton, Connecticut. 
• In September 2018, the Department of Energy (DOE) ordered approximately $156,000 worth of supposed American-made networked automated turnstiles from Aventura, to be installed at a facility in Tennessee.  In January 2019, turnstiles matching DOE’s order were intercepted in a shipment from a PRC manufacturer and marked by CBP; one month later, they arrived at the DOE facility in Tennessee.  The crates shipped by Aventura to the DOE appeared identical to those that the CBP-led team had inspected, except that the shipping labels from the PRC directing the crates to Aventura had been peeled off, leaving behind visible traces of paper and glue.  A special agent with the Department of Energy Office of Inspector General placed a call to Lazarus regarding the turnstile shipment in May 2019.  During the call, Lazarus falsely stated that the turnstiles were “U.S. made [in] New York.” 
• In 2018, Aventura sold the U.S. Air Force 25 body cameras.  Aventura was contractually required to provide goods from a limited set of countries that did not include the PRC.  In August 2018, however, an Air Force service member observed Chinese characters on the built-in screen of one of the body cameras.  The body camera was sent for analysis to a specialist, who downloaded its firmware and found numerous indications that the camera was manufactured in the PRC.  The camera contained multiple preloaded images that were apparently designed to display on the built-in screen—including the U.S. Air Force logo, the logo of the PRC Ministry of Public Security, and the logo of a PRC manufacturer of security equipment.  All three logos had been saved to the camera’s firmware using the same software, on a computer that was set to a time zone in the PRC—indicating that the camera’s manufacturer in the PRC had been aware that the U.S. Air Force was a likely end user of the camera.

Coverup of the Country of Origin Fraud and Unlawful Importation Scheme

The defendants, working with counterparts in the PRC, went to extraordinary lengths to conceal this scheme.  For example: 

• In November 2018, Jack Cabasso exchanged emails with an employee of a PRC manufacturer of surveillance equipment (PRC Manufacturer-2), identifying the need to “hide” the name of PRC Manufacturer-2 from Aventura’s customers.  One week later, Cabasso stressed the need to take steps so that “they cannot trace” the product to PRC Manufacturer-2.  Cabasso added that “the biggest problem” was that PRC Manufacturer-2’s initials were marked on its circuit boards, and said that he had “lost several potential customers” because of similar practices by another PRC manufacturer (PRC Manufacturer-1).  The employee responded that the company’s initials would be removed from all circuit boards shipped to Aventura. 
• Similarly, in December 2018, Aventura executives exchanged emails with employees of another PRC-based digital video equipment manufacturer (PRC Manufacturer-4).  They complained to the employees that “communication from the server to the client contains [PRC Manufacturer-4’s name] visible in clear text.  This should be changed.”  When one of the employees wrote that this could not be changed, Jack Cabasso responded: “WE CANNOT HAVE CUSTOMERS ABLE TO SEE [PRC Manufacturer-4’s name]”, later adding: “we also sent a sample to a customer and he found [PRC Manufacturer-4] … branding in the [operating system] which is a problem.” 

On or about November 23, 2016, Jack Cabasso sent an email to a GSA representative accusing 12 other GSA contractors of selling products to the U.S. Government that were manufactured by a PRC manufacturer of surveillance equipment (PRC Manufacturer-1).  Cabasso asserted that this was a “big problem” and “doesn’t get any worse,” because PRC Manufacturer-1 was “actually the Communist Chinese Government and ha[d] ‘significant’ cybersecurity issues aside from” compliance with U.S. laws specifying country-of-origin requirements for government purchases.   Cabasso stated that PRC Manufacturer-1 “will acknowledge they manufacture no products outside of China,” and appended an article about the removal of cameras manufactured by PRC Manufacturer-1 from the U.S. Embassy in Afghanistan.

Notably, Aventura was importing security equipment from PRC Manufacturer-1 while Jack Cabasso was complaining to GSA about other contractors’ supposed dealings with the company.  For example, bank records show that Aventura wired funds to PRC Manufacturer-1 in the PRC on or about October 31, 2016 and November 29, 2016, and law enforcement records show that on or about December 13, 2016, Aventura imported from PRC Manufacturer-1 in PRC an approximately 1,800-pound shipment of goods manifested as “digital video.”

In November 2018, Aventura executives communicated with a potential distributor in Qatar who asked for assurance that Aventura’s cameras were American-made.  Cabasso responded: “I believe Ed [Matulik] confirmed that they are made in the Aventura factory here in New York and [anyone] may visit at any time.”  Cabasso attached what purported to be a photograph of Aventura’s assembly line, depicting a row of seated individuals in blue lab coats and protective hairnets working at laboratory benches—a photograph that also appeared on Aventura’s website.  In reality, this photograph first appeared in a trade publication article recounting a reporter’s visit to PRC Manufacturer-1’s manufacturing facility in Hangzhou, PRC, and it depicts PRC Manufacturer-1’s assembly line—not Aventura’s.

The Scheme to Misrepresent Aventura as a Woman-Owned Small Business

In a parallel scheme, Jack and Frances Cabasso, along with other Aventura executives, falsely represented on numerous occasions that Frances Cabasso was the chief executive of Aventura.  In fact, Frances Cabasso was in charge only on paper; the true chief executive officer of Aventura was Jack Cabasso, and Frances Cabasso played a minimal role at the company.  This misrepresentation gave Aventura access to government contracts that were set aside for women-owned small businesses, a category that is legally defined to include only businesses owned by women where management and daily operations are also controlled by one or more women. 

Aventura’s website and its GSA webpage identify Aventura as a woman-owned business, and the defendants repeatedly certified to the GSA and stated to government procurement officers that Aventura is a woman-owned business.  For example, on or about January 13, 2014, a GSA employee emailed Frances Cabasso to “verify if Aventura Technologies, Inc. is a Woman-Owned business.”  She replied: “Yes we are still a certified women-owned business.”  Aventura won multiple contracts from the federal government on the strength of its status as a woman-owned business.

In fact, real control at Aventura was exercised by Jack Cabasso.  Frances Cabasso worked as a bookkeeper at a nearby business and was rarely present at Aventura’s offices.  At times, emails sent to Frances Cabasso’s email address were auto-forwarded to Jack Cabasso, who sometimes signed his responses in Frances’s name.  The defendants openly joked about the fact that Frances Cabasso did not work at Aventura.  For example, in an instant message exchange on December 5, 2016 between Jack Cabasso and Lazarus, both defendants discussed moving another employee into “Fran’s office”--the office of the purported owner of the company—putting the word “Fran’s” in quotation marks.

* * * *

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Alexander Mindlin, Kayla Bensing and Claire Kedeshian are in charge of the prosecution.  Significant contributions were made by former Assistant United States Attorney Ian Richardson, now Chief Counsel for Corporate Enforcement within the Department’s National Security Division.

The Defendant: AVENTURA TECHNOLOGIES, INC.
Commack, New York

E.D.N.Y. Docket No. 19-CR-582 (JMA)

Earlier today, in federal court in Central Islip, Hui Qin, also known as “Qin Hui,” “Hui Quin,” “Muk Lam Li” and “Karl,” a citizen of the People’s Republic of China (PRC), who was listed on Forbes Magazine’s List of Billionaires and who operated SMI Culture, a Hong Kong-based entertainment entity, pleaded guilty to an Information charging him with making political contributions in the names of others, immigration fraud and producing a false identification document.  The proceeding was held before United States Magistrate Steven L. Tiscione.  As part of his plea agreement, Qin agreed to abandon his status as a Lawful Permanent Resident (LPR) of the United States and to be removed to a country outside of the United States.  When sentenced, Qin faces up to 27 years’ imprisonment.  Qin has been incarcerated since his arrest on October 2, 2023.

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), and Erin Keegan, Acting Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the guilty plea.

“Qin pleaded guilty today to engaging in a brazen web of deception, spreading lies to federal election and immigration authorities and a state agency,” stated United States Attorney Peace.  “Ensuring election integrity and rooting out campaign contribution fraud are priorities of the Department of Justice, including my Office.  No one is above the law, no matter their wealth or station in society, and this Office will vigorously prosecute all criminals who lie to government agencies to further their own ends.”

 “Today, Hui Qin pled guilty to several fraudulent schemes. Qin admitted to making straw donations to multiple elected officials at both federal and local levels.  Qin’s guilty plea underscores the FBI’s commitment to ensuring integrity and transparency in campaign donations and election security. Any individual attempting to illegally influence our election process will be held accountable in the criminal justice system,” stated FBI Assistant Director-in-Charge Smith.

 “Qin is a citizen of the People’s Republic of China, but made straw donations to major political campaigns, hiding the true source of the political contribution from the public,” stated IRS-CI Special Agent-in-Charge Fattorusso.  “Not only is this unethical, it’s illegal.  Qin travelled to the United States, obtained a false visa, willfully violated our laws, then sought to conceal his behavior.  IRS Criminal Investigation remains committed to using our expertise, working alongside our law enforcement partners, to detect and hold those accountable who believe rules of law simply do not apply to them.”  

 “Hui Qin's guilty plea underscores the federal law enforcement system's painstaking, methodical investigative capabilities when faced with a threat to our safety and democracy. Today and always, HSI New York stands united with our partners against any subjects in their attempts to jeopardize our national security," stated HSI New York Acting Special Agent-in-Charge Keegan.  

As set forth in court filings and facts presented at the plea proceeding, between December 2021 and December 2022, Qin agreed to reimburse other individuals who made contributions on his behalf to the campaign committees for a candidate for a New York City-wide political office, a member of the United States House of Representatives for a congressional district in the Eastern District of New York and candidate for a House of Representatives seat in a Rhode Island congressional district.  During the scheme, without the knowledge of these campaign committees, straw donors made approximately $11,600 in contributions on Qin’s behalf, which caused the campaign committees to unwittingly file false contribution reports with the Federal Election Commission in 2022.

Additionally, as part of his plea Qin admitted that, in April 2019, he filed a false application for LPR status with United States Citizenship and Immigration Services.  In the application, Qin falsely swore, under penalty of perjury, that he had never used another name.  In fact, in 2008, a PRC government official provided Qin with the alias “Muk Lam Li” and between 2008 and the filing of Qin’s LPR application, Qin obtained identification documents, including a Hong Kong identification card, a PRC identification card and a Hong Kong passport in the name of the Li alias, which contained Qin’s photograph, but a date of birth different than Qin’s.  Around September 2017, Qin used the Li alias to transfer more than $5 million from the PRC to a United States bank account, a portion of which was used to purchase a luxury Manhattan apartment where Qin resided.  

Qin also pleaded guilty to engaging in interstate travel to fraudulently obtain a Florida Driver’s License.  In December 2020, Qin travelled from New York to Florida and applied for a Driver’s License at Florida Department of Highway Safety and Motor Vehicles (FLHSMV).  At the time of his travel, Qin was a resident of Old Westbury, Long Island and Manhattan, but he signed an application stating that it was “true and correct” that he resided at an address in Miami, where he had never lived.  To bolster this false assertion, Qin presented FLHSMV officials with fake bank and credit card statements bearing the name “Hui Quin” and the false Miami address.  After FLHSMV issued Qin a Florida Driver’s License, he presented it to banks and a motor vehicle insurer as identification.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Bradley T. King and Adam Toporovsky are in charge of the prosecution.

The Defendant:

HUI QIN (also known as “Qin Hui,” “Hui Quin,” “Muk Lam Li” and “Karl”)
Age:  56
Old Westbury, New York and Manhattan, New York

E.D.N.Y. Docket No. 24-CR-100 (JMA)

Mustafa Goklu, also known as “Mustangy,” was sentenced yesterday in federal court in Brooklyn by United States District Judge Pamela K. Chen to 16 months’ imprisonment for money laundering and operating an unlicensed money transmitting business as part of a scheme to launder Bitcoin that the defendant believed to be the proceeds of drug trafficking.  Goklu was convicted of those charges after a jury trial in October 2022.

Breon Peace, United States Attorney for the Eastern District of New York, and Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the sentence.

“Drug trafficking would be less pervasive and lucrative if money launderers like the defendant did not enable washing the illegal proceeds of the deadly trade,” stated United States Attorney Peace.  “In this case, Goklu used an online peer-to-peer cryptocurrency exchange to advertise his cryptocurrency for cash exchange services.  Facilitating the ability of drug traffickers to distribute narcotics in the United States is fully deserving of a prison sentence.”

“Technology may change the manner in which money laundering takes place; but not the motive,” said DEA Special Agent in Charge Frank Tarentino.  “Money launderers' true nature is to conceal criminality and this sentence shines a light on Mustafa Goklu’s conviction.   DEA is focused on bringing drug traffickers and those who support the distribution of poison through money laundering to justice. I commend the DEA NY Cyber Investigative Unit and our partners at the U.S. Attorney’s Office for the Eastern District of New York for their diligent work throughout this investigation.”

In July 2018, DEA Special Agents identified an advertisement posted on the website “localbitcoins.com” where an individual with the username “Mustangy” offered to purchase up to $99,999 worth of Bitcoins (BTC), a type of digital currency also known as cryptocurrency, and convert them into U.S. currency for a fee.  Law enforcement agents later identified Goklu as the individual using the username Mustangy. On July 11, 2018, a DEA Special Agent acting in an undercover capacity (the “UC”) began exchanging encrypted text messages with Goklu to arrange in-person exchanges of BTC to U.S. currency.  The UC and the defendant subsequently met and engaged in seven transactions or attempted exchanges of BTC to cash over a nine-month period, culminating in Goklu’s arrest in April 2019.  The UC indicated to the defendant on multiple occasions that the source of the BTC the defendant was exchanging was narcotics trafficking and that as part of the UC’s business he sold oxycodone, Adderall, and marijuana.  The transactions occurred in the defendant’s parked Mercedes-Benz, at a coffee shop in Sunnyside, Queens, and at locations in Manhattan.  The amounts exchanged at each transaction ranged from approximately $5,000 to $50,000 for a total of $133,000.  During each transaction, the UC transferred BTC to Goklu’s cryptocurrency wallet, after which the defendant retained a seven or eight percent commission fee and provided the UC with the remaining amount in cash. The evidence introduced at trial also showed that the defendant was engaged in similar illicit Bitcoin exchanges with multiple other individuals.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Gillian Kassner and Francisco J. Navarro are in charge of the prosecution with the assistance of Paralegal Specialist Bridget Donovan.

The Defendant:

MUSTAFA GOKLU (also known as “Mustangy”)
Age:  50
Sunnyside, Queens

E.D.N.Y. Docket No. 19-CR-386 (PKC)

Earlier today, at the federal courthouse in Central Islip, Rami Saab, also known as “Rami Hasan,” was sentenced by United States District Judge Gary R. Brown to 10 years in prison for his role as the mastermind of a sprawling conspiracy to fraudulently obtain disaster relief loans amid the COVID-19 pandemic.  As part of the sentence he is also required to pay restitution of approximately $9.6 million. Saab pleaded guilty in July 2023 to conspiracy to commit wire fraud, stemming from his operation of a yearlong scheme to defraud banks and the Small Business Association (SBA) of millions of dollars’ worth of small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL).  A second defendant charged in the indictment remains at large.

Breon Peace, United States Attorney for the Eastern District of New York, Thomas M. Fattorusso, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), Erin Keegan, Acting Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Christopher Gust, Acting Special Agent in Charge, Treasury Inspector General for Tax Administration (TIGTA) announced the sentence.

“This defendant used fraud and deceit on an extraordinary scale to exploit government programs designed to keep struggling small businesses afloat during an unprecedented public health crisis,” stated United States Attorney Peace. “Today’s sentence sends a strong message to all those who saw the public response to the COVID-19 pandemic as little more than a get-rich-quick scheme: this Office will find you and prosecute you to the fullest extent of the law.”

Mr. Peace expressed his appreciation to the Nassau County Police Department for their assistance on the case.

“Opportunists like Saab continue to victimize the American taxpayer by pulling from benefits they don’t legitimately qualify for just to satisfy their own greed.  Saab manipulated the COVID-19 loan program so he could fill his pockets with nearly ten million dollars meant for those who suffered as a result of the pandemic.  But now, thanks to strong law enforcement partnerships and an incredible prosecution team, Saab is not only going to spend years behind bars, but he is also required to pay millions in restitution,” said Thomas M. Fattorusso, Special Agent in Charge of IRS-CI New York.

“Rami Saab showed a blatant disregard for all legal — and moral — responsibility in the midst of an unprecedented crisis. COVID-19 relief fraud is far from a victimless crime,” said HSI New York acting Special Agent in Charge Erin Keegan. “The defendant not only stole from hardworking taxpayers, but took advantage of a federal program meant to truly help those experiencing tremendous financial difficulties due to the pandemic. Today’s sentencing is the result of outstanding coordination between our law enforcement partners to address COVID-19 related fraud.”

“The Treasury Inspector General for Tax Administration aggressively pursues those who attempt to abuse the Coronavirus Aid, Relief, and Economic Security Act and its Paycheck Protection Program, which was created to assist legitimate business owners during the pandemic,” stated acting Special Agent in Charge Christopher Gust.  “We appreciate the efforts of our law enforcement partners and the U.S. Attorney’s Office to ensure individuals engaged in criminal activity are held to account.”

As set forth in court filings, between May 2020 and May 2021, at the height of the COVID-19 pandemic, Saab and a network of co-conspirators fraudulently applied for more than $32 million in PPP and EIDL loans on behalf of shell corporations they controlled.  Relying on false information and fabricated documentation supplied by Saab and his coconspirators, the SBA and private banks administrating the PPP and EIDL programs granted at least 20 such applications, resulting in the disbursement to Saab and his coconspirators of more than $9.6 million in emergency-relief funds intended for distressed small businesses.  Using a web of more than 50 otherwise dormant bank accounts, Saab and his coconspirators laundered the fraud proceeds to conceal their true nature and source, before using the funds for their own self-enrichment, withdrawing large portions of the loan proceeds in cash, and transferring sums to associates overseas in Turkey and elsewhere.

PPP and EIDL provided qualifying small businesses with low-interest loans.  The Coronavirus Aid, Relief and Economic Security (CARES) Act expanded EIDL to provide economic support to help offset the temporary loss of revenue experienced by businesses due to the COVID-19 pandemic. The EIDL payments did not have to be repaid.

The government’s case is being prosecuted by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Anthony Bagnuola and Michael Maffei are in charge of the prosecution. Assistant United States Attorney Madeline O’Connor is handling forfeiture matters in the case.

The Defendant:

RAMI SAAB, also known as “Rami Hasan”
Age: 44
Glen Cove, New York

E.D.N.Y. Docket No. 22-CR-344 (S-1) (GRB)

Earlier today, in federal court in Central Islip, David Scotese pleaded guilty to operating an unlicensed money transmitting business.  As part of his plea agreement, Scotese agreed to forfeit cryptocurrency, cash, and precious metals worth in excess of $1.3 million at current valuation.  The proceeding was held before United States District Judge Joan M. Azrack.  When sentenced, Scotese faces up to five years in prison.

Breon Peace, United States Attorney for the Eastern District of New York, Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), Erin Keegan, Acting Special Agent-in-Charge, Homeland Security Investigations, New York (HSI New York), Edward A. Caban, Commissioner, New York City Police Department (NYPD), and Daniel B. Brubaker, Inspector-in-Charge, United States Postal Inspection Service (USPIS), announced the guilty plea.

“With his guilty plea today, Scotese is taking responsibility for operating a money exchanging and transmitting business in defiance of the critical legal requirements that are intended to secure our financial system from corruption by drug traffickers and other criminals,” stated United States Attorney Peace.  “This prosecution should serve as a warning to other ask-no-questions, black-market money transmitting businesses that FinCEN registration and regulatory compliance are not mere technicalities, but a necessary part of our collective efforts against crime, and that we will prosecute unlicensed money transmitters who flout these rules.”

“While operating an unlicensed money transmitting business, Scotese moved money for his clients with no questions asked.  Without ‘knowing the customer,’ crypto was bought and sold through his exchange with no regard of whether or not the initial funds were legitimate.  This business practice can set a dangerous precedent, and with today’s guilty plea, Scotese will soon learn the consequences of his actions,” stated IRS-CI Special Agent-in-Charge Fattorusso.

“David Scotese defied vital financial regulations in posing as a legitimate cryptocurrency dealer despite having received no such accreditation. Such legal requirements were established to not only ensure fairness, but also oversight in what is undoubtedly a new and emerging market,” said HSI New York Acting Special Agent in Charge Erin Keegan. “I thank HSI New York’s El Dorado Task Force Darkweb and Cryptocurrency investigators, HSI San Diego, and HSI Riverside, in addition to our remarkable law enforcement partners, for ensuring the public remains protected from those attempting to skirt the rules at their expense.”

“Today’s admission of guilt makes abundantly clear that individuals who facilitate the illegal transfer of money will be held accountable; the security of our banking system depends on it,” stated NYPD Commissioner Caban. “The NYPD will continue to work hand in hand with all of our law enforcement partners to identify and stop these criminals. Our message is clear: Using new technology to put profits over compliance is not a path to riches; it is a path to federal prosecution.”

“At the core of our mission as Postal Inspectors is our duty to ensure a secure mail system for the American public. Scotese allegedly used the U.S. Mail to violate federal banking regulations by running an illegal cash for crypto scheme. His plea today should serve as a clear example to anyone who will attempt to evade the law and use the mail to commit a crime. Postal Inspectors and our law enforcement partners will see to it that you are prosecuted to the fullest extent of the law,” said Daniel B. Brubaker, Postal Inspector in Charge of the New York Division.

As alleged in public filings and statements made in court, since at least 2016, Scotese worked and advertised himself online as a cryptocurrency exchanger and transmitter but never registered with the Department of the Treasury, Financial Crimes Enforcement Network (FinCEN) or obtained a state license, as required by law in order to ensure effective financial reporting and anti-money laundering compliance.  At the time of his arrest in California, Scotese had over $130,000 in cash in his home and vehicle, as well as hundreds of thousands of dollars in coins and precious metals obtained through the operation of his unlicensed money transmitting business. Scotese has agreed to forfeit these assets in addition to hundreds of thousands of dollars of various cryptocurrency assets.

The investigation was conducted in coordination with HSI San Diego’s Costa Pacifico Money Laundering Task Force and HSI Riverside’s Inland Commercial Enforcement and Financial Interdiction Team.

Assistant United States Attorney Robert M. Pollack is in charge of the prosecution, and Assistant United States Attorney Tanisha R. Payne of the Office’s Asset Recovery Section is handling forfeiture matters.

The Defendant:

DAVID SCOTESE
Age:  54
Murietta, California

E.D.N.Y. Docket No. 23-CR-231 (JMA)

Breon Peace, United States Attorney for the Eastern District of New York, announced today a settlement agreement with New York-Presbyterian/Brooklyn Methodist Hospital. The settlement agreement requires the hospital to pay $17.3 million to resolve allegations that it paid unlawful kickbacks to physicians at the hospital’s chemotherapy infusion center.  The payments were made pursuant to a contractual arrangement that linked the compensation physicians received to the number of referrals the physicians made for services at the Center.  The agreement also resolves claims that physicians at the infusion center failed to adequately supervise the chemotherapy services.  The settlement resolves claims under the federal and New York State False Claims Acts.  Of the total settlement amount, $16.410 million is to be paid to the federal government, and $890,000 is to be paid to New York State.  The Hospital voluntarily self-disclosed the issues to the United States.

“This settlement addresses a compensation scheme that incentivized physicians to make referrals for services based on how much they would be paid and were essentially kickbacks,” stated United States Attorney Peace.  “New York-Presbyterian/Brooklyn Methodist Hospital voluntarily self-disclosed the conduct to the United States, which allowed it to mitigate the penalties associated with the conduct.”

To ensure that physicians make medical decisions based solely on the needs of their patients, Medicare and Medicaid rules prohibit physicians from receiving any kind of remuneration in exchange for patient referrals for services.  The United States’ investigation of New York-Presbyterian/Brooklyn found that physicians at a chemotherapy infusion center affiliated with the hospital were paid based, in part, on the volume of referrals they generated for it.

Medicare and Medicaid rules also require that those billing for medical services be involved in the services. A hospital, for instance, cannot bill for the services of a physician if that physician did not participate in the patient care. The rules recognize that non-physicians, like nurses, provide care to patients; such care is permissible and, often, desirable. But, in many instances, such care must be provided under the supervision of a physician who is available to assist in the care if need be. At the infusion center at issue in this matter, Medicare and Medicaid were billed for services provided by non-physicians even in instances in which physicians were not available to adequately supervise the services.

The matter was handled by Assistant United States Attorney Michael Blume of the Office’s Civil Division.

Earlier today, in federal court in Central Islip, Cornell Bozier, the former Chairman of the Board of Commissioners (Board) at the Village of Hempstead Housing Authority (VHHA) was sentenced by United States District Judge Joan M. Azrack to 10 years in prison for conspiracy to commit honest services fraud and three counts of federal program bribery.  Bozier was convicted by a federal jury in April 2019. 

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and William Woolard, Acting Special Agent-in-Charge, Department of Housing and Urban Development, Office of the Inspector General (HUD-OIG), Northeast Region, announced the sentence.  

“The defendant exploited his official position as Chairman of the Village of Hempstead Housing Authority to enrich himself at the expense of the elderly, disabled and low-income residents whom he was meant to serve,” stated United States Attorney Peace.  “Corruption at any level of government erodes public confidence in the institution and will not be tolerated in this district as the defendant learned the hard way.”

“Cornell Bozier and his co-conspirators engaged in an egregious false billing and kickback scheme resulting in the theft of critical taxpayer dollars,” stated HUD-OIG Acting Special Agent-in-Charge Woolard.  “Moreover, they risk damaging the integrity of HUD programs and violate the trust of the communities who rely on them.  HUD OIG will continue to work with its law enforcement partners to vigorously pursue those who seek to profit by abusing HUD-funded programs.”

The VHHA was established to provide low-income families, disabled residents, and senior citizens in Hempstead with safe, sanitary, and affordable housing, and received nearly $1 million in federal funds from the Department of Housing and Urban Development (HUD) during the defendant’s tenure as Board Chairman from 2011 to 2013.  The funding from HUD included money needed for capital improvements, major repairs, and other large-scale construction projects.  Before HUD would release funds for the more expensive construction projects, the VHHA was required to follow a Procurement Policy designed to ensure open and transparent competition in the bidding process and contract awards to the lowest responsible bidder.

As proven at Bozier’s trial and set forth in court filings, rather than providing his residents with the honest services they needed, the defendant used his official position to orchestrate a bid-rigging and kickback scheme by filling numerous positions in the Housing Authority with either co-conspirators who were actively participating in the scheme, or people he believed could be manipulated and would not interfere.  Bozier relied on bribes, threats and intimidation to pressure other Board members into supporting his fraudulent schemes.  Bozier also fraudulently induced the Board to declare numerous projects as emergencies to sidestep the normal procedure process by which the VHHA obtained HUD funding. During the conspiracy, the defendant and his co-conspirators submitted grossly inflated bids to the Board for repair projects at properties throughout the VHHA and Bozier used his de facto control over the Board to secure the acceptance of those bids.  The work related to those projects was then subcontracted out at a fraction of the amount paid by the VHHA for nominal and, in many cases, substandard repairs and work.  Bozier demanded and received numerous cash payments from his co-conspirators, who prepared and submitted the fraudulent bids as kickbacks for his role in the scheme, which totaled more than $100,000.

For example, the VHHA paid a co-conspirator company, Devlin Mac Construction, $273,900 to replace the roof at one of its apartment buildings.  Rather than replacing the roof, a subcontractor was paid $23,000 to patch and repair certain sections.  The rest of the VHHA’s money was split between the defendant and his co-conspirators, with the defendant receiving $55,000 in kickbacks for his role.  This scheme was repeated and fraudulent bids were submitted for more than a half dozen construction projects during Bozier’s tenure, as he tried to steal as much of the VHHA’s money as he could.  In total, the defendant steered more than $800,000 of VHHA funds to co-conspirator companies as part of his fraudulent scheme and received more than $100,000 in kickback payments. 

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Paul G. Scotti and Artie McConnell are in charge of the prosecution.  Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division handled forfeiture matters. 

The Defendant:

CORNELL BOZIER
Age:  63
North Baldwin,  Long Island

E.D.N.Y. Docket No. 15-CR-303 (S-1) (JMA)

Earlier today, in federal court in Central Islip, Michael Watts, a former registered broker who participated in a criminal conspiracy to promote and manipulate the price of shares in Hydrocarb Energy Corp. and other companies, was sentenced by United States District Judge Joanna Seybert to 60 months’ imprisonment for conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, money laundering conspiracy and money laundering.  At an earlier proceeding, the Court ordered Watts to pay more than $560,000 in forfeiture and $4,430,354.03 in restitution.  Watts was convicted by a federal jury in October 2019 following a three-week trial.

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

“Michael Watts and his co-conspirators lined their pockets with the lifetime savings of hard-working folks across the country with ruinous results,” stated United States Attorney Peace.  “Today’s sentence holds Watts accountable for the economic harm he intentionally inflicted on the victims, many of them senior citizens living on a fixed income, and should serve as a warning to others like him that there will be consequences for crimes of greed.” 

Mr. Peace thanked the Federal Bureau of Investigation, New York Field Office, for its hard work and dedication in leading the investigation and expressed his appreciation to the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG), for their cooperation and assistance.

From 2014 to 2016, Watts and others working with a Melville, New York-based boiler room artificially inflated the price and trading volume of Hydrocarb stock.  They did so through an illegal cold call campaign that used lies and high-pressure sales tactics to lure victims, including the elderly and the vulnerable, into purchasing stock.  Watts, who was one of the largest shareholders in Hydrocarb and therefore knew that the business was in a downward spiral, also used the boiler room to dump more than $2 million of Hydrocarb shares that he owned or controlled on unsuspecting investors in the months leading to the company’s April 2016 bankruptcy.  The conspiracy’s market manipulation fraudulently inflated the stock price of Hydrocarb and four other companies by more than $147 million. 

All 16 defendants charged in this case have been convicted.  Among those who have been sentenced, Jeffrey Chartier, Ronald Hardy and Brian Heepke each received 10 years’ imprisonment; Dennis Verderosa received six years; Lawrence Isen received five years; McArthur Jean received four years; Paul Ewer received three years; and Emin Cohen received two years.

The government’s case is being prosecuted by Assistant United States Attorneys Whitman G.S. Knapp and Kaitlin T. Farrell with assistance from Paralegal Specialist Peyton Jefferson.  Assistant United States Attorney Tanisha Payne of the Office’s Asset Recovery Section is handling forfeiture matters in the case. 

The Defendant:

MICHAEL WATTS
Age: 68
Sugarland, Texas

Docket No. 17-CR-372 (JS)

Earlier today in federal court in Brooklyn, Joseph Modile, a Nigerian national, was sentenced by United States District Judge Diane Gujarati to 145 months in prison for his participation in two separate schemes to defraud victim homeowners and a corporation and launder the proceeds of those frauds. In February 2023, Modile pleaded guilty to charges of conspiracy to commit bank fraud, wire fraud and aggravated identity theft that were filed in the Eastern District of New York, and to charges of money laundering and wire fraud that were filed in the Southern District of Texas and subsequently transferred to the Eastern District of New York. As part of the sentence, Modile was also ordered to pay more than $1.5 million in restitution and more than $1.5 million in forfeiture. Modile pleaded guilty to both charging documents in February 2023.

Breon Peace, United States Attorney for the Eastern District of New York, and Alamdar S. Hamdani, United States Attorney for the Southern District of Texas, Erin Keegan, Acting Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), and Douglas Williams, Special Agent-in-Charge, Federal Bureau of Investigation, Houston Field Office (FBI), announced the sentence.

“Modile checked all the boxes for a sophisticated fraud–stealing, deception, money laundering and identity theft. Today’s sentence checks the box for an appropriate penalty for his crimes of greed from Brooklyn to Texas,” stated United States Attorney Peace. “I commend the prosecutors from my Office, the United States Attorney’s Office for the Southern District of Texas and the Special Agents for their outstanding work unraveling Modile’s scheme.”

Mr. Peace also expressed his thanks to the New York City Police Department which conducted this investigation as part of an enterprise Priority Transnational Organized Crime (PTOC) of the Organized Crime Drug Enforcement Task Forces (OCDETF), the FBI’s Boston Field Office, U.S. Postal Inspection Service, Department of State, Diplomatic Security Service, New York County District Attorney’s Office, the Houston Police Department, and the Harris County District Attorney’s Office for their substantial assistance.

“While Modile took part in a complicated scheme, involving a cadre of runners and a series of fake documents and bank accounts, his goal was simple - steal from unsuspecting victims,” stated United States Attorney Hamdani for the Southern District of Texas. “Although his crimes stretched to all parts, from Brooklyn to Houston, thanks to the work of two U.S. Attorney’s Offices, Modile will spend several years in one place, a prison cell, no longer able to help fellow criminals prey on the innocent.”

“Today’s sentencing is a positive step toward justice for Joseph Modile’s victims – homeowners, business owners, and the everyday email users alike who were defrauded of over $15 million as a result of his sophisticated schemes. The defendant spearheaded at least three fraud schemes across the country and over the course of several years. His tactics, while sophisticated, were no match for HSI New York’s El Dorado Task Force Cyber investigators,” stated HSI New York Acting Special Agent-in-Charge Keegan. “I commend HSI New York, the New York City Police Department, the U.S. Attorney’s Offices for the Eastern District of New York and the Southern District of Texas, as well as FBI Houston, for a job well done.”

“FBI Houston, along with our domestic and international law enforcement partners, led an OCDETF investigation on numerous prolific organized crime figures. Modile, for years, was an orchestrator of multi-million-dollar fraud schemes who stole from countless victims around the world,” stated FBI Special Agent-in-Charge Williams. “Dismantling largescale criminal enterprises is what the FBI does and Modile’s sentence should send a message to greedy criminals like him still out there, it’s just a matter of time before we get you too.”

In a scheme that was charged in the Eastern District of New York, from January 2014 and September 2018, Modile and others defrauded victims, businesses, and financial institutions in the United States through a sophisticated home equity line of credit (HELOC) scheme involving a series of bank account takeovers. During this time, Modile and others also laundered proceeds from the bank account takeovers. In furtherance of the HELOC fraud scheme, Modile and others acquired personal identifying information (PII) of the actual holders of the targeted bank accounts at the financial institutions. The co-conspirators then used the PII to impersonate the actual holders of the targeted bank accounts, thereby gaining control of the accounts. In some cases, members of the conspiracy recruited “runners,” who impersonated the actual account holders inside bank branches using forged and fraudulent identification documents created at the direction of Modile. In most instances, the stolen funds were first deposited into fraudulent bank accounts set up and controlled by co-conspirators in the names of the actual victims from whom the money had been stolen. In other cases, the bank accounts into which the stolen funds were first deposited were in the names of sham corporations, which were opened using false and fraudulent identification. In total, Modile and others stole at least $5 million as part of the HELOC fraud scheme.

In a related scheme charged in the Eastern District of New York, in May 2018, Modile and others engaged in a separate Business Email Compromise scheme, using fraudulent emails and telephone calls to steal approximately $10.2 million from a victim company. The coconspirators used a fraudulent email address to impersonate a  contractor of an entity located in St. Paul, Minnesota, and directed representatives of that entity to deposit the funds in an account controlled by members of the conspiracy. Modile and others then laundered those stolen funds through bank accounts controlled by members of the conspiracy.

Finally, as set forth in the information filed in the Southern District of Texas, from November 2017 until May 2018, Modile knowingly devised a scheme to defraud victims.
Modile used his cellular phone to communicate with others about financial transactions for the purpose of executing his scheme. Modile directed an individual already convicted in Houston, Texas to withdraw cash from their bank account and provide it to others. Modile also directed the individual in Houston to lie to their financial institution regarding the reason for withdrawing money from their account. In February 2018, Modile orchestrated and directed a substantial amount of money into an account of the individual in Houston. The money derived from wire fraud and Modile was aware the money came from unlawful activity.

This effort is part of an 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 Business and Securities Fraud Section. Assistant United States Attorney David Pitluck is in charge of the prosecution, with assistance from Paralegal Specialist William Daniels, along with Assistant United States Attorney Rodolfo Ramirez of the Southern District of Texas.

The Defendant: JOSEPH MODILE
Age: 45
Los Angeles, California

E.D.N.Y. Docket Nos. 21-CR-108 and 23-CR-50 (DG)

Today, a federal jury in Brooklyn returned a guilty verdict against Cory Martin on all counts of a superseding indictment charging him with murder-for-hire, murder-for-hire conspiracy, wire fraud conspiracy, aggravated identify theft and fraudulent use of identification relating to a scheme to fraudulently obtain life insurance policies in the name of a woman, murder her and collect the insurance proceeds.  The verdict followed a two-week trial before United States District Judge Ann M. Donnelly.  When sentenced, Martin faces a mandatory sentence of life imprisonment.

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, 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 verdict.

“It is fitting that that Martin faces a mandatory sentence to spend the rest of his life in prison for this ghastly, cold-blooded crime that was motivated by greed and executed after extensive planning,” stated United States Attorney Peace.  “Martin saw the victim as a moneymaker, trafficking her for commercial sex, then after killing her with his bare hands, tossing out her slaughtered body parts like trash so he could profit from her death.  Brandy Odom suffered an unthinkable death at the defendant’s hands, but her life mattered and I hope that this verdict holding the defendant responsible brings some measure of closure to her family.” 

“Today’s guilty verdict is a message to anyone who, without fear of being held accountable, commits heinous acts of criminality in New York City,” stated NYPD Commissioner Caban. “The NYPD will continue to collaborate with the FBI and the office of the U.S. Attorney for the Eastern District of New York to conduct meticulous investigations that lead to successful prosecutions, and ultimately deliver justice to victims.”

As proved at trial, Martin resided at a house in Rosedale, Queens, with the then-26-year-old victim, Brandy Odom, and a co-conspirator who were engaged in commercial sex work for the defendant who operated as their pimp.  In March and December 2017, Martin and the co-conspirator fraudulently obtained two life insurance policies in Odom’s name.  They made premium payments to the life insurance companies by Western Union money orders and by using a debit card in Odom’s name. At trial, Martin’s co-conspirator testified that prior to Odom’s murder, she and the defendant watched “The First 48,” a true-crime TV show about police tactics and they discussed “what not to do, and what things to do to avoid being caught by the police.”  The co-conspirator testified that Martin also watched “Dexter,” a TV show about a serial killer who dismembered his victims, because the defendant was “looking for ways to commit the crime when he got rid of Brandy.”

In early April 2018, Martin strangled Odom in her bedroom.  Martin and the co-conspirator then purchased cleaning supplies and a vacuum— to clean up the murder scene—at the Green Acres Mall on Long Island.  On April 6, 2018, Martin searched Home Depot’s website for a “Dewalt 12-Amp Corded Reciprocating Saw,” described as featuring a “powerful 12 Amp motor designed for heavy-duty applications.”  Later that evening, Martin searched YouTube for “how to insert blade for reciprocating saw” and “using reciprocating saw.”  The co-conspirator testified that Martin used an electric saw to dismember the victim’s corpse in the bathtub after covering every surface in the bathroom with heavy-duty, black garbage bags to eliminate evidence of the killing.

In the early morning of April 8 and April 9, 2018, Martin disposed of Odom’s body parts in Canarsie Park with the assistance of his co-conspirator.  On April 10, 2018, Martin conducted dozens of Internet searches for news articles, including “Search area expands after dismembered body found in Canarsie Park in Brooklyn.”  Martin also accessed a Twitter post titled “Person walking dog discovers remains of woman in Brooklyn park.”  The following day on April 11, 2018, Martin searched YouTube using the search term “exclusive interview of mother of girl found in park.”  After Odom’s murder, at Martin’s direction, his co-conspirator made several unsuccessful attempts to claim benefits under Odom’s life insurance policies.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Tanya Hajjar, Emily Dean and Andy Palacio are in charge of the prosecution, with the assistance of Paralegal Specialist Theodore Rader.

The Defendant:

CORY MARTIN
Age:  36
Rosedale, Queens

E.D.N.Y. Docket No. 20-CR-549(S-1) (AMD)

Earlier today, at the federal courthouse in Central Islip, Quincy Homere was sentenced by United States District Judge Gary R. Brown to 18 years in prison for his role as the mastermind of a November 9, 2015 armed takeover bank robbery of a Wells Fargo Bank branch in Hempstead, New York, which netted Homere and his co-conspirators more than $375,000 in proceeds. Homere pleaded guilty in December 2017 to armed bank robbery and brandishing a firearm during a crime of violence.

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.

“Homere has been held accountable for committing a violent bank robbery while brandishing an assault rifle, terrorizing the employees and customers, including an elderly woman and young child—actions that easily could have resulted in the loss of life either inside the bank or to the brave responding officers,” stated United States Attorney Peace. “Homere has now learned that the true payoff for robbing a bank is a long-term stay in prison.”

Mr. Peace thanked the Hempstead Police Department and the Suffolk County Police Department for their assistance on the case.

"The sentencing of defendant Quincy Homere for an armed robbery in Hempstead should set an example to anyone considering a similar crime that law enforcement and its partners will never stop and will continue with their investigations until the subject(s) are apprehended.  Our communities are safer with defendant Homere incarcerated.  Congratulations to all the dedicated investigators and their agencies for a job well done," stated NCPD Commissioner Ryder.

On November 9, 2015, following extensive planning, Homere and his co-conspirators, including Anael Sainfil, executed the robbery of a Wells Fargo Bank branch on Fulton Avenue in Hempstead, New York. Homere entered the bank brandishing an AK-47 rifle accompanied by three armed co-conspirators, while a fourth co-conspirator stood guard. An armed takeover of the bank ensued. Tellers and customers, including an 8-year-old boy, were zip-tied and held captive, as the bank’s vault was emptied of over $375,000. A fifth co-conspirator monitored encrypted NCPD police radio frequencies in an effort to facilitate the defendants’ escape.

Homere was unaware that a teller had placed a wireless GPS tracker with the stolen money. Hempstead Police Department officers initiated a chase of the getaway vehicle that ended with the arrest of one of the co-conspirators that day and recovery of most of the bank proceeds.

In November 2016, Homere was arrested in Miami, Florida following an investigation by the FBI, NCPD and SCPD.

Co-defendant Sainfil was arrested in December 2016 by members of the FBI and SCPD. In January 2018, Sainfil was convicted by a federal jury of conspiracy to commit armed bank robbery and brandishing firearms during a crime of violence. He was sentenced on February 26, 2020 to 219 months’ imprisonment for his role as a lookout in the robbery.

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

The Defendant Sentenced Today:

QUINCY HOMERE
Age: 38
Hempstead, New York

The Defendant Previously Sentenced: ANAEL SAINFIL
Age: 38
Bay Shore, New York

E.D.N.Y. Docket No. 16-CR-652 (S-1) (GRB)

Plus tôt dans la journée, au palais de justice fédéral de Brooklyn, Frantz Simeon a été condamné par le juge de district américain Brian M. Cogan à 24 mois de prison pour avoir mis en place une escroquerie en utilisant sa société, First Black Enterprises, Inc. et cibler des membres de la communauté haïtienne-américaine de Brooklyn et du Queens.  Dans le cadre de la sentence, Simeon a été condamné à payer plus de 200 000 $ de dédommagement.  L'accusé a plaidé coupable de fraude postale en février 2023. 

Breon Peace, procureur des États-Unis pour le district est de New York, et Daniel B. Brubaker, inspecteur en charge, Service d'inspection postale des États-Unis (USPIS), ont annoncé la sentence.

« Aujourd'hui, Frantz Simeon a mesuré les conséquences de l'exploitation de sa réputation de personne de confiance au sein de la communauté haïtienne-américaine », a déclaré le procureur des États-Unis Peace.  « Siméon a attiré ses victimes avec de fausses promesses de retours sur investissements substantiels pour détourner les sommes à son propre bénéfice, jusqu'à ce que son stratagème s'effondre. Ce bureau poursuivra sans relâche les auteurs d’escroquerie par affinité et cette affaire est un signal fort pour ceux qui veulent investir, de se méfier des membres de leur propre communauté qui proposeraient des investissements trop beaux pour être vrais. »

« Les inspecteurs des postes se consacrent à enquêter sur les stratagèmes d’escroquerie de victimes innocentes tout en profitant du la poste officielle U.S. Mail. L'USPIS s'engage à protéger et à informer en permanence le public sur la manière d'éviter ce type de stratagèmes », a déclaré l'inspecteur Brubaker en charge de l'USPIS.  « Simeon a ciblé des individus de sa propre communauté à son propre bénéfice financier. Si une opportunité apparait trop belle pour être vraie, c'est probablement le cas ! »

Entre février 2019 et décembre 2020, Simeon a orchestré une escroquerie dans lequel il a faussement vanté son expérience dans les affaires et son sens du commerce, incitant les investisseurs à investir avec lui sur la base de promesses prétendument sans risque et qui généreraient des rendements mensuels de 10 %.  Simeon s'est spécifiquement adressé aux haïtiens-américains résidant à Brooklyn et dans le Queens, tirant parti de ses relations dans la communauté pour générer plus de 350 000 $ d'investissements liés à ses fausses assurances.  Contrairement à ses promesses, Simeon n’a mené que peu ou pas d'activités commerciales ou d'investissement réels, utilisant l'argent des nouveaux investisseurs pour simuler les paiements des intérêts mensuels aux investisseurs précédents dans ce qu’on appelle communément une pyramide de Ponzi.  Ces prétendus paiements d'intérêts étaient conçus pour dissimuler la fraude et drainer de nouveaux investissements, dont Siméon avait besoin pour poursuivre le stratagème.  De plus, Simeon a détourné des milliers de dollars de fonds d'investisseurs à son profit personnel, y compris l'achat d'une voiture pour sa fille et des retraits en espèces de plus de 60 000 $.  Les victimes de Simeon, qui étaient en grande partie des immigrants, ont finalement subi des pertes de plus de 200 000 $ à la suite de cette escroquerie.

Le cas poursuivi par le gouvernement est traité par la section des fraudes commerciales et aux valeurs mobilières du Bureau.  Le procureur adjoint des États-Unis, Dylan A. Stern, est chargé des poursuites.

Le Défendeur:

Frantz Siméon
Âge:  67
Brooklyn, New York

EDNY Numéro de dossier 21-CR-479 (BMC)

Today, in federal court in Brooklyn, Gunvor S.A. (Gunvor), a part of the Gunvor Group, one of the largest commodities trading firms in the world, pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA).  The charge arises out of a scheme to bribe officials of the Ecuadorian Ministry of Hydrocarbons and Petroecuador, the Ecuadorian state-owned oil company, in order to obtain contracts to purchase oil products.  The proceeding was held before United States District Judge Eric N. Vitaliano.  As part of the company’s sentence, Gunvor was ordered to pay a criminal penalty of approximately $661 million. 

Breon Peace, United States Attorney for the Eastern District of New York, Brent S. Wible, Acting Senior Counselor of the Justice Department’s Criminal Division, and Jeffrey B. Veltri, Special Agent-in-Charge, Federal Bureau of Investigation, Miami Field Office (FBI), announced the guilty plea and sentence.    

“Today’s guilty plea and sentencing marks yet another example of this office’s efforts to combat widespread corruption,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Corruption erodes the public’s trust in their government, prevents government officials from acting in the best interests of the people they represent and harms businesses that play by the rules, driving up prices for consumers. The Justice Department, including my Office, will not tolerate bribes being paid by American companies or foreign companies misusing the U.S. financial system.”

“Over nearly a decade, Gunvor representatives bribed high-level government officials at Ecuador’s state-owned oil company to enter into business transactions with other state-owned entities that ultimately benefited Gunvor. As a result of this complex bribery scheme, Gunvor obtained hundreds of millions of dollars in illicit profits,” said Acting Senior Counselor Wible. “Foreign bribery emboldens corrupt officials and undermines the rule of law. Gunvor’s guilty plea demonstrates that the Criminal Division remains resolute in our efforts to root out bribery and official corruption. We will continue to hold both corporations and individuals who bribe foreign officials to account, in coordination with our international partners.”

“Gunvor’s years long bribery scheme involving high-level Ecuadoran officials was both detrimental to the business environment and eroded the public’s trust and confidence in their government,” stated FBI Special Agent-in-Charge Veltri. “This guilty plea and significant fine would not have been possible without significant cooperation from our international partners in the Cayman Islands, Colombia, Curacao, Ecuador, Panama, Portugal, Singapore, and Switzerland. This truly was an international effort.”

In connection with the resolution, Gunvor entered into a plea agreement with the government and pleaded guilty to an information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.  Following the plea, Judge Vitaliano sentenced Gunvor to pay a criminal monetary penalty of more than $374 million and to forfeit more than $287 million in ill-gotten gains.  The sentence includes credits of up to $93 million each for amounts Gunvor pays to resolve investigations by Swiss and Ecuadorian authorities into the same misconduct so long as the payments are made within 12 months of today’s date.   

According to the company’s admissions and court documents, between 2012 and 2020, Gunvor and its co-conspirators paid more than $97 million to intermediaries understanding that some of the money would be and in fact was used to bribe numerous Ecuadorian officials, including Nilsen Arias, a then-high ranking official at Petroecuador.  The bribe payments were routed through banks in the United States using shell companies in Panama and the British Virgin Islands controlled by Gunvor’s co-conspirators.  A Gunvor employee directed one of the intermediaries to use the bribe money to purchase an 18-karat gold Patek Philippe wristwatch for Arias.   

In exchange for these bribe payments, high-level Ecuadorian officials helped Gunvor win contracts to provide a series of oil-backed loans to Petroecuador.  The oil-backed loans were made through other state-owned entities, which acted as “fronts” for Gunvor.  Because the contracts were with other state-owned entities, Petroecuador rules did not require a competitive bidding process, allowing Gunvor and co-conspirators to obtain contracts it would not have been able to obtain directly.  Gunvor also received confidential Petroecaudor information. 

In total, Gunvor earned more than $384 million in profits from the business it corruptly obtained related to Petroecuador. 

The department reached this resolution with Gunvor based on a number of factors including the nature and seriousness of the offense, which involved a multi-year scheme to bribe numerous senior Ecuadorian government officials in order to obtain lucrative business resulting in more than $384 million in profits to Gunvor; and that Gunvor has a history of misconduct.  In October 2019, Gunvor reached a resolution with the Office of the Attorney General of Switzerland concerning a corrupt scheme to bribe officials in Congo-Brazzaville and Côte d’Ivoire to secure oil contracts. The conduct that is the subject of today’s guilty plea occurred, in part, at the same time as the prior Swiss investigation and resolution.  Accordingly, taking into account these and other factors, including Gunvor’s cooperation and remediation, the total criminal penalty reflects a 25% reduction off the 30th percentile of the applicable U.S. sentencing guidelines fine range.

The department previously secured convictions in the Eastern District of New York of four individuals who were implicated in Gunvor’s bribery scheme, including:

• Antonio Pere Ycaza, a former consultant for Gunvor, pleaded guilty on Oct. 7, 2020, to one count of conspiracy to violate the FCPA and one count of conspiracy to commit money laundering.
• Enrique Pere Ycaza, a former consultant for Gunvor, also pleaded guilty on Oct. 7, 2020, to one count of conspiracy to commit money laundering and to violate the FCPA.
• Raymond Kohut, a former Gunvor employee and agent, pleaded guilty on April 6, 2021, to one count of conspiracy to commit money laundering.
• Nilsen Arias Sandoval, a former senior Petroecuador official, pleaded guilty on Jan. 19, 2022, to one count of conspiracy to commit money laundering.

The investigation was conducted by FBI Miami’s International Corruption Squad.  The government’s case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section and the Money Laundering and Asset Recovery Section (MLARS) Special Financial Investigations Unit.  Assistant United States Attorneys Jonathan P. Lax, Nick M. Axelrod and Matthew R. Galeotti of the Eastern District of New York are prosecuting the case with Assistant Chiefs Derek J. Ettinger and Jonathan P. Robell and Trial Attorney Clayton P. Solomon of the Fraud Section, Deputy Chief Adam J. Schwartz and Trial Attorney D. Hunter Smith of MLARS. Assistant United States Attorneys Laura Mantell and Brendan King of the Eastern District of New York’s Asset Recovery Section are handling forfeiture matters.

The Justice Department’s Office of International Affairs and authorities in the Cayman Islands, Colombia, Curacao, Ecuador, Panama Portugal, Singapore and Switzerland provided valuable assistance in this matter. 

The Defendant:

GUNVOR S.A.
Switzerland

E.D.N.Y. Docket No. 24-CR-85 (ENV)

Earlier today, at the federal courthouse in Brooklyn, Frantz Simeon was sentenced by United States District Judge Brian M. Cogan to 24 months in prison for his operation of a fraudulent scheme that used his company, First Black Enterprises, Inc., to target members of the Haitian American community in Brooklyn and Queens.  As part of the sentence, Simeon was ordered to pay over $200,000 in restitution.  The defendant pleaded guilty to mail fraud in February 2023. 

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

“Today, Frantz Simeon learned the consequences for exploiting his position of trust in the Haitian American community,” stated United States Attorney Peace.  “Simeon lured his victims with false promises of substantial returns on investments so that he could fleece them for his own benefit, until his scheme collapsed.  This Office will aggressively prosecute perpetrators of affinity fraud schemes, and this case alerts investors to be wary of community members touting investments that sound too good to be true.”

“Postal Inspectors are dedicated to investigating schemes designed to defraud innocent victims while taking advantage of the U.S. Mail. USPIS vows to continuously protect and educate the public on how to avoid these types of schemes,” stated USPIS Inspector-in-Charge Brubaker.  “Simeon targeted individuals from his own community for his personal financial gain. If something sounds too good to be true, it probably is!”

Between February 2019 and December 2020, Simeon orchestrated a fraudulent scheme in which he falsely advertised his business experience and acumen, enticing investors to invest with him based on promises that their investments were risk-free and would generate 10% monthly returns.  Simeon specifically preyed on Haitian Americans residing in Brooklyn and Queens, leveraging his relationships in the community to induce over $350,000 in investments with his false assurances.  Contrary to his promises, Simeon conducted little or no actual business or investment activities, instead using the money from new investors to mail monthly interest payments to them and earlier investors in a Ponzi-like scheme.  These purported interest payments were designed to conceal the fraud and to induce further investments, which Simeon needed to continue the scheme.  In addition, Simeon misappropriated thousands of dollars of investor funds for his own personal benefit, including the purchase of a car for his daughter and making over $60,000 in cash withdrawals.  Simeon’s victims, who were largely immigrants, ultimately sustained over $200,000 in losses as a result of the scheme.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Dylan A. Stern is in charge of the prosecution.

The Defendant:

Frantz Simeon
Age:  67
Brooklyn, New York

E.D.N.Y. Docket No. 21-CR-479 (BMC)

Gunvor S.A. (Gunvor), an international commodities trading company based in Switzerland, has pleaded guilty and will pay over $661 million to resolve an investigation by the U.S. Justice Department into violations of the Foreign Corrupt Practices Act (FCPA).

Gunvor’s guilty plea stemmed from the company’s corrupt scheme to pay substantial bribes to Ecuadorean government officials to secure business with Ecuador’s state-owned and state-controlled oil company, Petroecuador.

In connection with the resolution, Gunvor entered into a plea agreement with the government and pleaded guilty to an information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Following the plea, the court sentenced Gunvor to pay a criminal monetary penalty of $374,560,071 and to forfeit $287,138,444 in ill-gotten gains. The sentence includes credits of up to one-quarter of the criminal fine each for amounts Gunvor pays to resolve investigations by Swiss and Ecuadorean authorities into the same misconduct so long as the payments are made within one year of today’s date.  

The Office of the Attorney General of Switzerland announced today a parallel resolution of its investigation into Gunvor’s misconduct that involved payment of approximately $98 million by Gunvor to Swiss authorities.

“Over nearly a decade, Gunvor representatives bribed high-level government officials at Ecuador’s state-owned oil company to enter into business transactions with other state-owned entities that ultimately benefited Gunvor. As a result of this complex bribery scheme, Gunvor obtained hundreds of millions of dollars in illicit profits,” said Acting Senior Counselor Brent S. Wible of the Justice Department’s Criminal Division. “Foreign bribery emboldens corrupt officials and undermines the rule of law. Gunvor’s guilty plea demonstrates that the Criminal Division remains resolute in our efforts to root out bribery and official corruption. We will continue to hold both corporations and individuals who bribe foreign officials to account, in coordination with our international partners.”

“Today’s guilty plea and sentencing marks yet another example of this office’s efforts to combat widespread corruption,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Corruption erodes the public’s trust in their government, prevents government officials from acting in the best interests of the people they represent and harms businesses that play by the rules, driving up prices for consumers. The Justice Department, including my office, will not tolerate bribes being paid by American companies or foreign companies misusing the U.S. financial system.”

“Gunvor’s years-long bribery scheme involving high-level Ecuadoran officials was both detrimental to the business environment and eroded the public’s trust and confidence in their government,” said Special Agent in Charge Jeffrey B. Veltri of the FBI Miami Field Office. “This guilty plea and significant fine would not have been possible without significant cooperation from our international partners in the Cayman Islands, Colombia, Curacao, Ecuador, Panama, Portugal, Singapore, and Switzerland. This truly was an international effort.”

According to the company’s admissions and court documents, between 2012 and 2020, Gunvor and its co-conspirators paid more than $97 million to intermediaries knowing that some of the money would be and in fact was used to bribe Ecuadorean officials, including Nilsen Arias Sandoval, a then-high ranking official at Petroecuador. As part of the scheme, Gunvor managers and agents attended meetings in the United States and elsewhere. The bribe payments were routed through banks in the United States using shell companies in Panama and the British Virgin Islands controlled by Gunvor’s co-conspirators. Among other things, a Gunvor employee also directed one of the intermediaries to use the money to purchase an 18-karat gold Patek Philippe watch for Arias.  

In exchange for these bribe payments, high-level Ecuadorian officials helped various state-owned entities, which were acting as front companies for Gunvor, win the rights to a series of oil-backed loan contracts with Petroecuador. This structure allowed Gunvor and its co-conspirators to avoid a competitive bidding process and to obtain contractual terms that it could not have obtained otherwise. Gunvor also received confidential Petroecuador information in exchange for the bribes. In total, Gunvor earned more than $384 million in profits from the contracts it obtained corruptly from Petroecuador. 

The department reached this resolution with Gunvor based on a number of factors, including, among others, the nature and seriousness of the offense. Gunvor received credit for its cooperation with the department’s investigation, which included: (i) producing documents to the department from multiple foreign countries expeditiously while navigating foreign data privacy and criminal laws; (ii) providing information obtained through its own internal investigation to the department, which allowed the department to preserve and obtain evidence as part of the department’s investigation; (iii) making detailed, factual presentations to the department; (iv) arranging for the interview of an employee based outside the United States; (v) promptly collecting, analyzing, and organizing voluminous information, including complex financial information, at the request of the department, and producing an analysis of trading activity conducted by multiple outside forensic accounting firms retained by Gunvor; (vi) translating foreign language documents to facilitate and expedite review by the department; and (vii) imaging the phones of relevant custodians at the beginning of Gunvor’s internal investigation, thus preserving business communications sent on mobile messaging applications.

Gunvor also engaged in timely and appropriate remedial measures, including: (i) eliminating the use of third-party business origination agents; (ii) enhancing its third party due-diligence process; (iii) developing and implementing a control framework for internal business developers and additional layers of review and approval for counterparty payments; (iv) enhancing the independent compliance committee with responsibility for reviewing high-risk transactions; (v) engaging resources to review its compliance program and test the effectiveness of its overall reporting process, its reporting hotline and the effectiveness of the investigation of reports made through the hotline; (vi) evaluating and updating its compensation policy to better incentivize compliance with the law and corporate policies; (vii) hiring additional compliance personnel; (viii) testing and enhancing its compliance program, including by conducting compliance culture reviews, testing new third party due diligence process and payment controls, and evaluating controls around business development activities; and (ix) developing and implementing a risk-based business communications policy that addresses the use of ephemeral and encrypted messaging applications.

The department also considered Gunvor’s history of misconduct. In October 2019, Gunvor reached a resolution with the Office of the Attorney General of Switzerland concerning a corrupt scheme to bribe officials in Congo-Brazzaville and Côte d’Ivoire to secure oil contracts obtained between approximately 2009 and 2012. As part of the 2019 Swiss resolution, Gunvor admitted that it lacked sufficient controls to prevent the underlying misconduct and failed to take “all the reasonable organizational measures” required to prevent Gunvor’s employees and agents from engaging in bribery. The conduct that is the subject of today’s guilty plea occurred, in part, at the same time as the prior Swiss investigation and resolution.

In light of these considerations, the department determined that the appropriate resolution in this case was for Gunvor to plead guilty to one count of conspiracy to violate the FCPA. The criminal fine calculated under the U.S. Sentencing Guidelines reflects a 25% reduction off the 30th percentile of the applicable guidelines fine range, taking into account Gunvor’s cooperation and remediation, as well as its prior history.

The department previously secured convictions in the Eastern District of New York of four individuals who were implicated in Gunvor’s bribery scheme, including:

• Antonio Pere Ycaza, a former consultant for Gunvor, pleaded guilty on Oct. 7, 2020, to one count of conspiracy to violate the FCPA and one count of conspiracy to commit money laundering.
• Enrique Pere Ycaza, a former consultant for Gunvor, also pleaded guilty on Oct. 7, 2020, to one count of conspiracy to commit money laundering and to violate the FCPA.
• Raymond Kohut, a former Gunvor employee and agent, pleaded guilty on April 6, 2021, to one count of conspiracy to commit money laundering.
• Nilsen Arias Sandoval, a former senior Petroecuador official, pleaded guilty on Jan. 19, 2022, to one count of conspiracy to commit money laundering.

The FBI Miami Field Office is investigating the case, with assistance from the FBI’s International Corruption Unit.

Trial Attorney Clayton P. Solomon and Assistant Chiefs Derek J. Ettinger and Jonathan P. Robell of the Criminal Division’s Fraud Section, Trial Attorney D. Hunter Smith and Deputy Chief Adam J. Schwartz of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorneys Nick M. Axelrod, Jonathan P. Lax, and Matthew R. Galeotti for the Eastern District of New York are prosecuting the case. Assistant U.S. Attorneys Laura Mantell and Brendan King for the Eastern District of New York are handling forfeiture matters.

The Justice Department’s Office of International Affairs and authorities in the Cayman Islands, Colombia, Ecuador, Panama, Portugal, Singapore, and Switzerland provided valuable assistance.

The Criminal Division’s Fraud Section is responsible for investigating and prosecuting FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorneys’ Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.

Earlier today, at the federal courthouse in Brooklyn, an indictment charging defendants with fraud and aggravated identity theft for various ATM skimming-related crimes perpetrated between May 2022 and February 2023, was partially unsealed.  To execute the fraud, the defendants allegedly installed devices and cameras on ATMs, capturing victim account information and personal identification numbers (PINs).  The defendants then transferred data obtained by those devices onto counterfeit debit cards, which the defendants used to make purchases and withdraw cash.  As a result, the defendants compromised over 600 victim accounts and stole thousands of dollars.  

Five defendants were arrested earlier this morning in New York, and are scheduled to be arraigned this afternoon before United States Magistrate Judge Vera M. Scanlon at the federal courthouse in Brooklyn. 

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Patrick Freaney, Special Agent-in-Charge, United States Secret Service (USSS), New York Field Office and Edward A. Caban, Commissioner, New York City Police Department (NYPD) announced the charges.

“As alleged, the defendants engaged in a sophisticated scheme by installing cameras and devices in ATM card slots to surreptitiously steal victim bank account information and use that stolen information to cash out for their own personal gain,” stated United States Attorney Peace.  “The arrests today demonstrate that this Office will continue to investigate and prosecute fraudulent activity compromising victims’ financial safety and security.”

“The five defendants allegedly illegally obtained financial information using hidden devices implanted in ATMs to create counterfeit debit cards and steal thousands of dollars from over 600 unsuspecting victims. The defendants' concerted efforts to conceal this fraudulent activity allowed the scam to plague the community for almost a year, highlighting the pervasive nature of criminal financial schemes. The FBI will continue to aggressively investigate all methods of fraud to protect financial privacy,” stated FBI Assistant Director-in-Charge Smith.

“The defendants allegedly targeted hundreds of victims, exploiting their trust in routine elements of our financial systems and stealing thousands from their hard-earned savings,” said Patrick J. Freaney, Special Agent in Charge of the U.S. Secret Service’s New York Field Office. “The success of this investigation is a testament to our strong partnerships with both federal and local law enforcement, and the U.S. Secret Service remains committed to pursuing justice for victims of financial crimes here in New York and across the country.” “Today’s indictment underscores the importance of investigators from multiple law enforcement agencies working together to protect the financial well-being of good, hardworking New Yorkers,” said NYPD Commissioner Edward A. Caban. “I commend our partners at the FBI, the Secret Service, and the office of the U.S. Attorney for the Eastern District of New York for their dedication to our shared public safety mission.”

As set forth in the indictment and other filings, the defendants committed these crimes in two phases, installations and removals, and “cash-outs.”  In the first phase, the defendants installed deep-insert skimming devices in the ATMs, which are thin devices the defendants implanted in ATM card slots.  These sophisticated devices captured and stored data from debit cards used by unsuspecting victims who conducted transactions at the ATMs while the skimming device was implanted.  The defendants simultaneously installed hidden cameras to record victims inputting their PINs.  After recovering the cameras and skimming devices, the defendants used the data captured by the skimming devices to create counterfeit debit cards.  In the second phase, the defendants then used the counterfeit debit cards and the corresponding PINs, which were captured by the hidden cameras, to “cash out,” or make purchases and withdraw cash.  From these skimming and “cash out” crimes, the defendants appropriated account information from over 600 unsuspecting victims.

Users of ATMs are cautioned that advanced skimming devices and pinhole cameras installed on ATMs, like those used by the defendants, may be well disguised and undetected by the ATM user.  Law enforcement agents encourage ATM users to shield the ATM keypad when entering PINs and other user information to prevent their accounts from being compromised.

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

Assistant United States Attorneys Irisa Chen and Raffaela Belizaire are in charge of the prosecution.  The investigation is being conducted by the FBI, USSS and NYPD.

The Defendants:

IOAN-ANTON GHERASIM, also known as “Ryan Anthony”
Age: 38
Queens, New York

ELVIS DAN ATOMEI
Age: 34
Queens, New York

DAN ADRIAN AGAFITEI, also known as “Federico Cousa,” “Luciano Manzatti” and “Coval Tiago”
Age: 25
Queens, New York

BOBI BORCEA, also known as “Bobi Agafitei”
Age: 49
Queens, New York

RAZVAN VICOL, also known as “Razvan Neagu,” “Geoffrey Pasek” and “Ruben Robles de la Torre”
Age:  36
Queens, New York

E.D.N.Y. Docket No. 24-CR-78 (MKB)

An indictment was unsealed today in federal court in Brooklyn charging Jason Rodriguez with conspiracy to commit wire fraud.  The indictment relates to Rodriguez’s role as the Chief Operating Officer of Technical Trading Team, LLC (Technical Trading Team), a foreign exchange-focused (forex) investment fund he founded in 2020.  Rodriguez was arrested this morning and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Cheryl L. Pollak.

Breon Peace, United States Attorney for the Eastern District of New York; James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced arrest and indictment.

“As alleged, the victims trusted Rodriguez with millions of dollars for what they were assured would be safe investments, supported by the defendant’s claim that he had quit the NYPD because he had become so successful at trading, which was untrue,” stated United States Attorney Peace.  “Rodriguez also falsely promised the victims that their investments would be safe because there would be guardrails over his trading activity to limit the risks.  In reality, Rodriguez ignored those guardrails and lost millions in investor funds and also misappropriated hundreds of thousands of dollars which he used to pay for luxury car rentals, travel and other personal expenses.”

“Jason Rodriguez falsely represented his time as an NYPD officer to earn the trust of prospective investors, to whom he then made alleged false promises that cost his victims millions of dollars. He withheld the reality of his failed trades and used the investment funds on his personal desires. The FBI will hold accountable anyone who manipulates others, especially for financial gain in the criminal justice system,” stated FBI Assistant Director-in-Charge Smith.

According to the indictment, Rodriguez founded Technical Trading Team in April 2020.  Rodriguez pitched the fund as a forex-focused investment fund, with Rodriguez, who served as Chief Operating Officer, in charge of all trading.  Rodriguez promised investors that Technical Trading Team would have a “loss reserve account” that could be used to repay investors if the company lost money trading, that Rodriguez would never risk more than 1% of assets under management on any single trade and would not hold positions open overnight.  Each of these promises was meant to assure investors that their investment would be safe.  Rodriguez and Technical Trading Team broke all of these promises and as Rodriguez lost more and more money in the forex markets, he used new investor money to pay older investors promised investment returns. 

Prior to founding Technical Trading Team, Rodriguez served as an NYPD officer for approximately seven years. During the solicitation process, Rodriguez told prospective Technical Trading Team investors that he had quit the NYPD because he had become so successful at forex trading. The Technical Trading Team presentation similarly represented that Rodriguez’s “zealous ambition for trading took precedence resulting in the end of his law enforcement career . . .”  Rodriguez failed to disclose that he resigned from the NYPD after pleading guilty to a misdemeanor crime and incurring a number of disciplinary infractions.

To date, of the approximately $4.8 million in investor funds wired to accounts controlled by Rodriguez between April 2020 and September 2022, approximately $3.5 million has never been paid back to the investors.

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

The government’s case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York.  Assistant United States Attorney Benjamin Weintraub is in charge of the prosecution.

The Defendant:

JASON RODRIGUEZ
Age:  37
Bellerose, Queens

E.D.N.Y. Docket No. 24-CR-79

Earlier today, Vincent Ricciardo, also known as “Vinny Unions,” was sentenced to 51 months in prison, $350,000 in forfeiture and $280,890 in restitution by United States District Judge Hector Gonzalez at the federal courthouse in Brooklyn, New York, for his participation in the long-running extortion of a senior official of a Queens-based labor union (the “Labor Union”) and other criminal schemes he carried out as a captain in the Colombo crime family of La Cosa Nostra.  Ricciardo pled guilty to racketeering in July 2023, and admitted to his participation in the extortion of the Labor Union and various conspiracies to commit money laundering, loansharking and fraud in connection with workplace safety certificates.

Vincent Ricciardo is the tenth defendant sentenced in the case for conduct in connection with the scheme to infiltrate and divert funds from the Labor Union and other schemes.  Four defendants still await sentencing.

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

“This prosecution represents our continued commitment to combatting organized crime and prosecuting the individuals who seek to enrich themselves at the expense of hardworking union members and their employers,” stated United States Attorney Peace.  “Today’s sentence holds Vincent Ricciardo accountable for his long-running extortion scheme, as well as for his yearslong participation in the wide range of crimes committed by the Colombo crime family.”

Mr. Peace expressed his appreciation to the New York City Police Department, the Nassau County District Attorney’s Office, the Nassau County Police Department, the New York City Department of Investigation, the U.S. Department of Labor, and the Department of Justice’s Organized Crime and Gang Section for their valuable assistance in the investigation.

As set forth in court filings and facts presented during the sentencing proceedings, Vincent Ricciardo and his co-conspirators committed a variety of crimes – including extortion, loansharking, fraud and drug-trafficking – to enrich themselves and to promote the continued operation of the Colombo crime family.  The Colombo crime family’s administration, including then-boss Andrew Russo (who passed away during the pendency of the case), underboss Benjamin “Benji” Castellazzo and consigliere Ralph DiMatteo, as well as captains Theodore Persico, Jr. and Richard Ferrara, and solider Michael Uvino, agreed to use extortionate means, including threats of bodily harm, to force the senior union official to give over a portion of his salary and ultimately to make decisions that would financially benefit the Colombo crime family’s administration.  This included pressure from the defendants to force the trustees of the Labor Union’s associated healthcare benefit fund (the “Health Fund”) to select vendors who were associated with the Colombo crime family and handpicked by some of the defendants.  Among other goals, the crime family’s administration sought to divert more than $10,000 per month from the Health Fund’s assets to themselves. 

In one consensually recorded conversation, Vincent Ricciardo threatened to kill the senior union official, stating that the senior union official would continue to obey him because he knew Ricciardo would “put him in the ground right in front of his wife and kids, right in front of his fucking house, you laugh all you want pal, I’m not afraid to go to jail, let me tell you something, to prove a point? I would f*****g shoot him right in front of his wife and kids, call the police, f**k it, let me go, how long you think I’m gonna last anyway?”

In addition, Ricciardo and fellow Colombo crime family members Castellazzo, DiMatteo, Persico, Ferrara and Uvino joined with others — co-defendants Albert Alimena, Erin Thompkins and Joseph Bellantoni — who assisted other labor unions and health funds to devise a scheme to launder money from Health Fund contracts and vendor payments.  These defendants attempted to re-bid Health Fund vendor contracts for claims administration, pharmaceuticals and other health services to persons and companies affiliated with Bellantoni, and to select a company run by Alimena as the Health Fund’s third-party administrator.

Vincent Ricciardo also worked with Bonanno crime family solider John Ragano, who was also known as “Bazoo” and the “Maniac,” in a scheme to issue fraudulent workplace safety training certifications from two occupational safety schools Ragano purported to operate in Long Island.   Rather than provide workplace safety trainings required to obtain Occupational Safety and Health Administration certification, Ragano, along with John Glover and Domenick Ricciardo, falsified paperwork submitted to the U.S. Department of Labor and other government agencies which represented that hundreds of workers had completed construction safety training courses when they had not.  Vincent Ricciardo plotted to funnel various Union workers to Ragano’s schools for fraudulent certifications and used the facilities to conduct meetings involving members of La Cosa Nostra.

Nine defendants were previously sentenced.  Persico, Jr., who the government alleged was slated to be the family’s next crime boss, pled guilty to racketeering and was sentenced to 60 months’ imprisonment and restitution in the amount of $280,890.  Underboss Castellazzo pled guilty to money laundering conspiracy and was sentenced to 15 months’ imprisonment.  Consigliere DiMatteo pled guilty to racketeering and was sentenced to 36 months’ imprisonment and restitution in the amount of $280,890.  Solider Michael Uvino pled guilty to racketeering and was sentenced to 41 months’ imprisonment, forfeiture of $66,000 and restitution in the amount of $280,890.  Associate Domenick Ricciardo pled guilty to racketeering and was sentenced to 28 months’ imprisonment, forfeiture of $25,000 and restitution in the amount of $280,890.  Alimena and Bellantoni pled guilty to health care fraud conspiracy and received two years’ probation and fines of $20,000 each.  Ragano was sentenced to 57 months’ custody, as well as forfeiture of $500,000.  Four defendants await sentencing, including Colombo crime family captain Richard Ferrara and associate Thomas Costa.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Devon Lash, Michael W. Gibaldi and Andrew Reich are in charge of the prosecution.

The Defendant:

VINCENT RICCIARDO (also known as “Vinny Unions”)
Age: 77
Franklin Square, New York

Other Defendants:

ALBERT ALIMENA
Age: 69
Pompano Beach, Florida

JOSEPH BELLANTONI
Age: 41
Massapequa, New York

BENJAMIN CASTELLAZZO (also known as “Benji”)
Age: 85
Manahawkin, New Jersey

THOMAS COSTA
Age: 54
West Islip, New York

RALPH DIMATTEO
Age: 68
Merrick, New York

RICHARD FERRARA
Age: 61
Brooklyn, New York

JOHN GLOVER
Age: 64
Queens, New York

VINCENT MARTINO
Age: 45
Medford, New York

THEODORE PERSICO, JR. (also known as “Teddy”)
Age: 59
Brooklyn, New York

JOHN RAGANO (also known as “Bazoo” and the “Maniac”)
Age: 61
Franklin Square, New York

DOMENICK RICCIARDO
Age: 57
Franklin Square, New York

ERIN THOMPKINS
Age: 55
Franklin Square, New York

MICHAEL UVINO
Age: 57
Garden City, New York

E.D.N.Y. Docket No. 21-CR-466 (S-1) (HG)

Today, a federal jury in Brooklyn returned a guilty verdict against Karl Jordan, Jr., and Ronald Washington for the October 30, 2002, murder of Jason Mizell, also known as “Jam Master Jay,” a member of the famed hip hop group Run-DMC.  Both defendants were charged with murder while engaged in a narcotics trafficking conspiracy and firearm-related murder for the fatal shooting of Mizell inside the victim’s recording studio in Hollis, Queens. The verdict followed a four-week trial before United States District Judge LaShann DeArcy Hall.  When sentenced, Jordan and Washington face a minimum of 20 years’ imprisonment and a maximum term of life imprisonment.

Breon Peace, United States Attorney for the Eastern District of New York, Edward A. Caban, Commissioner, New York City Police Department (NYPD), John B. DeVito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announced the verdict. 

“More than two decades after they killed Jason Mizell in his recording studio, Jordan and Washington have finally been held accountable for their cold-blooded crime driven by greed and revenge,” stated United States Attorney Peace.  “That the victim, professionally known as Jam Master Jay, was a hip hop icon and Run-DMC’s music was born in Hollis, Queens, in this very district, and beloved by so many, adds to the tragedy of a life senselessly cut short.  I thank the jurors for their service, and I commend our prosecutors, the NYPD detectives, both active and retired, and the Special Agents and investigators from the ATF and my office, for their relentless pursuit of justice for the victim, his family, and the community.”

Mr. Peace also expressed his thanks to the NYPD Intelligence Division, Suffolk County District Attorney’s Office, Queens County District Attorney’s Office, and Dominican Republic National Police for their assistance.

“Today’s guilty verdicts provides proof that the passage of time provides no safe harbor to those who commit murder.  For us in ATF, our memory is long, and our resolve is steadfast.  We have no tolerance for those who would take a life, and we are committed to seeing justice done.  We thank our partners who are a part of ATF NY Joint Firearms Task Force -Long Island, NYPD, U.S. Marshals and the U.S. Attorney’s Office of Eastern District of NY who share the same commitment and resolve.  We offer our hope to the family, friends, and fans of Jason Mizell that today’s verdict gives some closure,” stated ATF Special Agent-in-Charge DeVito.

“In every homicide investigation, NYPD detectives are meticulous, patient, and tireless in their efforts to help secure guilty verdicts like these rendered today,” stated NYPD Commissioner Edward A. Caban. “A cold case is never a forgotten case. In the decades since Mr. Mizell was brutally murdered, the greatest detectives in the world followed every lead until arrests could be made, and a solid case could be brought to our partners in the office of the U.S. Attorney for the Eastern District of New York. Mr. Mizell’s loved ones – who long-expected and deserved justice to be delivered – were patient, too, and we hope the jury’s decisions today advance a small measure of closure.”

As proven at trial, between the 1990s and 2002, separate from his music career, Mizell was involved in arranging for the sale of kilogram-quantities of cocaine in the Eastern District of New York and elsewhere. In August 2002, Mizell acquired approximately 10 kilograms of cocaine on consignment from a supplier based in California. The cocaine was intended to be distributed in Maryland by Washington, Jordan and other co-conspirators. A dispute between Washington and one of the co-conspirators in Baltimore resulted in Mizell cutting Washington and Jordan out of the Maryland drug deal worth almost $200,000. Following this betrayal, Washington and Jordan continued in the larger narcotics conspiracy until they could ultimately cut out Jason Mizell by murdering him on October 30, 2002.

On Wednesday, October 30, 2002, Mizell was present at his recording studio, “24/7,” located on Merrick Boulevard in Jamaica, Queens, playing a video game with a friend and reviewing paperwork with his business manager.  At approximately 7:30 p.m., the defendants’ co-conspirator opened a locked fire escape exit door allowing Washington and Jordan to enter the building without being seen by Mizell.  Jordan, who was the victim’s godson, and Washington went upstairs to the recording studio where Jordan greeted Mizell, who was sitting on the couch and initially appeared happy to see him.  Things turned quickly, with Jordan pointing a gun at Mizell and firing two shots at close range.  One shot hit Mizell in the head, killing him instantly.  The second shot struck Mizell’s friend in the leg.  Mizell’s business manager tried to flee and was met by Washington, who pointed a gun at her face and demanded that she lay on the floor. The three defendants fled the scene.  The defendants variously made admissions to associates implicating themselves in the fatal shooting or bragging about being the shooter.  For example, a witness who lived in a residence owned by Jordan’s father, testified that he overheard Jordan say that if Mizell “were still alive he would kill him again.”  Washington’s former girlfriend testified that several days after the murder, he admitted killing Mizell. Additionally at trial, Jordan was identified as the shooter by the individual who was shot in the leg, and Mizell’s business manager identified Washington as being present in the recording studio during the murder and pointing a firearm at her and ordering her to get down on the floor.

The co-conspirator who allowed the defendants to enter through the fire escape door will be tried separately for his role in Mizell’s murder in January 2026 and remains innocent until proven guilty.  Jordan is also charged with conspiracy to distribute cocaine and cocaine distribution and will be tried on those counts at a later date.

Assistant United States Attorneys Artie McConnell, Mark E. Misorek and Miranda Gonzalez are in charge of the prosecution with the assistance of Paralegal Specialists Anna November and Samantha Schroder.

The Defendants:

KARL JORDAN, JR. (also known as “Little D” and “Noid”)
Age:  40
Hollis, Queens

RONALD WASHINGTON (also known as “Tinard”)
Age:  59
Hollis, Queens

E.D.N.Y. Docket No. 20-CR-305 (LDH)

Earlier today, at the federal courthouse in Brooklyn, an indictment was unsealed charging Dawood Kassim and Dia Alqalisi with trafficking and stealing millions of dollars in benefits from the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program.  To carry out the fraud, the defendants allegedly engaged in thousands of SNAP transactions out of a bodega in the Bedford-Stuyvesant neighborhood in Brooklyn which Kassim owned.  The defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak.  One defendant charged in the indictment remains at large.

Breon Peace, United States Attorney for the Eastern District of New York, Erin Keegan, Acting Special Agent-in-Charge, Homeland Security Investigations (HSI) and Charmeka Parker, Acting Special Agent-in-Charge, United States Department of Agriculture, Office of Inspector General, Northeast Region (USDA-OIG), announced the charges.

“As alleged, the defendants trafficked and stole a massive amount of SNAP benefits from thousands of victims, illegally profiting from federally funded benefits intended for those in need of nutritious meals—which is especially vital in these times of high food costs,” stated United States Attorney Peace.  “The arrests today should be a wakeup call to those who think government programs are a piggy bank they can pillage without fear of consequences.”

“The defendants are accused of robbing the food stamps program of millions of dollars intended to assist the well-meaning public in feeding their families. Through this Brooklyn corner store, they allegedly defrauded unsuspecting food stamp recipients in several states across the country, and to the tune of $20 million," said HSI New York Acting Special Agent in Charge Erin Keegan. "I commend HSI New York’s El Dorado Task Force and our law enforcement partners for their outstanding coordination in ensuring these vital benefits go to those who truly need them.”

According to the indictment and court filings, SNAP is administered by the USDA’s Food and Nutrition Service and utilizes federal tax dollars to subsidize low-income households, affording such households the opportunity to achieve a more nutritious diet by increasing their food purchasing power.  Individuals who receive SNAP benefits no longer redeem their benefits using paper food stamp coupons but use what is known as an Electronic Benefit Transfer (EBT) card.  Using EBT cards, recipients can make authorized purchases, and the total amount of the purchase is electronically deducted from the recipient’s card balance.  The same amount of the transaction is electronically transferred to the retailer’s designated bank account, using federal funds that originate from the USDA.

From April 2022 through December 2022, the defendants allegedly conducted fraudulent SNAP transactions out of Throop Farm Market, a bodega located at the corner of Throop and Greene Avenues in Bedford-Stuyvesant.  First, the defendants engaged in trafficking SNAP benefits by allowing SNAP recipients to exchange SNAP benefits for cash or non-SNAP eligible goods, such as beer, with the defendants keeping a portion of the benefits for themselves as payment.  Second, Kassim stole SNAP benefits from unsuspecting victims by using counterfeit and stolen SNAP EBT cards at Throop Farm Market.  The victims of the defendants’ crimes included recipients of SNAP benefits residing in Tennessee, Virginia and California, among other states. Through these transactions, the defendants received over $20 million dollars in federally funded SNAP benefits, including over $7 million dollars’ worth of SNAP benefits from accounts of recipients living outside of New York.

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

Assistant United States Attorney Irisa Chen is in charge of the prosecution.  The investigation is being conducted by HSI’s El Dorado Task Force in New York together with the USDA-OIG.

Law enforcement agents have identified numerous recipients of SNAP benefits whose benefits were stolen by the defendants. If any SNAP benefit recipients believe their benefits were stolen and used at Throop Farm Market or other businesses, they should contact the USDA-OIG at https://usdaoig.oversight.gov/resources/hotline-information or 1-800-424-9121.

The Defendants:

DAWOOD KASSIM (also known as “Badr al din Kassim”)
Age:  31
Brooklyn, New York

DIA ALQALISI (also known as “Diaaldeen Alqalisi”)
Age:  26
Brooklyn, New York

E.D.N.Y. Docket No. 24-CR-67 (KAM)

A federal jury in Brooklyn convicted an oil and gas trader today for his role in a scheme to bribe Ecuadorean and Mexican government officials and to launder money to secure contracts worth hundreds of millions of dollars for his then-employer, Vitol Inc. (Vitol), the U.S. affiliate of the largest independent energy trading firm in the world.

According to court documents and evidence presented at trial, Javier Aguilar, 49, of Houston, paid more than $1 million in bribes to officials of Petroecuador, the Ecuadorean state-owned oil and gas company, and PEMEX Procurement International (PPI), a subsidiary of PEMEX, the Mexican state-owned oil and gas company, to obtain lucrative contracts for Vitol.

“Javier Aguilar bribed officials at state-owned oil and gas companies in Ecuador and Mexico using shell companies and sham invoices to obtain business for Vitol Inc., where he worked as an oil and gas trader,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “With today’s verdict, the jury has held him accountable for his role in a sophisticated bribery and money laundering scheme that netted Vitol hundreds of millions of dollars in contracts. Foreign bribery erodes the rule of law, disadvantages honest companies, and emboldens corrupt government officials. The Criminal Division will continue to vigorously pursue wrongdoers who bribe foreign officials and bring them to justice.”

“Today’s verdict represents another victory in this office’s commitment to rooting out corruption in the international marketplace,” said U.S. Attorney Breon Peace for the Eastern District of New York. “The defendant and his co-conspirators sought to enrich themselves through criminal backroom deals. The people of Ecuador and Mexico deserved better and companies that play by the rules should know that the process is not rigged. The Justice Department and my office will continue to prioritize holding to account individuals who enrich themselves through bribery.” 

“As demonstrated by this case, the Foreign Corrupt Practices Act has a long reach,” said Special Agent in Charge Jeffrey B. Veltri of the FBI Miami Field Office. “Aguilar’s egregious attempt to get away with bribing officials in Ecuador and Mexico failed, and he will now face tough penalties. I want to commend our partners in the Justice Department’s Criminal Division and at the U.S. Attorney’s Office for the Eastern District of New York for their close cooperation on this case.”

The trial evidence showed that, between 2015 and 2020, Aguilar was a trader in Vitol’s Houston office. As a part of the scheme, Aguilar and his co-conspirators agreed to bribe senior Ecuadorian officials to obtain a $300 million contract to purchase fuel oil for Vitol. Aguilar and his co-conspirators used another Middle Eastern state-owned entity to circumvent Petroecuador’s restrictions on contracts with private companies. In return for the promise and payments of bribes, the Ecuadorian officials then ensured that the Middle Eastern state-owned entity and Vitol were awarded the contract. Following the 2017 Ecuadorean presidential election, the officials who received bribes were replaced by new senior officials. To ensure continuity under the then-existing fuel oil contract and to obtain additional business, Aguilar and his co-conspirators agreed to bribe them as well.

To conceal the scheme, Aguilar and his co-conspirators used a series of fake contracts, sham invoices, and shell entities incorporated in Curacao, Panama, and Cayman Islands. Aguilar also used alias email accounts to communicate with his co-conspirators rather than his Vitol email.

The evidence at trial also demonstrated that Aguilar used the same system of shell entities and sham invoices to launder bribe payments to two officials at PPI. In total, Aguilar paid approximately $600,000 in bribes to these officials to obtain numerous contracts for Vitol to supply hundreds of millions of dollars of ethane gas to PEMEX.   

The jury convicted Aguilar of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), violating the FCPA, and conspiracy to commit money laundering. He faces a maximum penalty of five years in prison on each of the FCPA counts and 20 years in prison on the money laundering count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Seven of Aguilar’s co-conspirators have pleaded guilty to their roles in the scheme and are awaiting sentencing. These individuals have agreed to forfeit more than $63 million. 

In December 2020, Vitol admitted to bribing officials in Ecuador, Mexico, and Brazil in violation of the anti-bribery provisions of the FCPA. Vitol entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS) and the U.S. Attorney’s Office for the Eastern District of New York. As a part of the resolution, Vitol agreed to pay a combined $135 million in penalties as part of a coordinated resolution with the Justice Department, the Commodity Futures Trading Commission, and authorities in Brazil.

FBI Miami’s International Corruption Squad investigated the case.

Trial Attorney Clayton P. Solomon and Assistant Chiefs Derek J. Ettinger and Jonathan P. Robell of the Fraud Section, Deputy Chief Adam J. Schwartz and Trial Attorney D. Hunter Smith of MLARS, and Assistant U.S. Attorneys Jonathan P. Lax, Matthew R. Galeotti, and Nick M. Axelrod for the Eastern District of New York are prosecuting the case. The MLARS Special Financial Investigations Unit and Justice Department’s Office of International Affairs also provided substantial assistance.

The Criminal Division’s Fraud Section is responsible for investigating and prosecuting FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Earlier today, at the federal courthouse in Brooklyn, United States District Judge LaShann DeArcy Hall sentenced Ronald Delaespada to 10 years in prison for his role in a firearms trafficking scheme and for possession with intent to distribute fentanyl, heroin, cocaine and crack cocaine.  Delaespada pleaded guilty to the charges in February 2023.

Delaespada’s co-defendant Rayon Lovett pleaded guilty to firearms trafficking charges in February 2023 and was sentenced to 85 months’ imprisonment in October 2023. Delaespada’s co-defendant and brother Owen Welch pleaded guilty to firearms trafficking charges in July 2023 and is currently awaiting sentencing. 

Breon Peace, United States Attorney for the Eastern District of New York, Bryan DiGirolamo, Assistant Special Agent-in-Charge, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, New York (ATF), and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the sentence.

“Delaespada is a career criminal who sold illegal guns, including an assault-type rifle, near a school, a church and on bustling streets in the heart of Brooklyn, without regard for how these lethal weapons could be used,” stated United States Attorney Peace.  “Today’s sentence will keep the defendant off the street for years, a punishment he deserves for his blatant disrespect for the law and his dangerous conduct.  I commend the brave NYPD undercover officer, along with the Special Agents of ATF, whose excellent work kept 17 lethal weapons off the streets of our community.”

“While communities across this country are coming together in grief because of the devastation of gun violence — some people are unlawfully selling firearms to others with blatant disregard for the impact on the lives of others. ATF will continue to do all we can to reduce gun violence by stopping the traffickers who flood our communities with illegal firearms. Crime gun intelligence enhances our ability to identify both amateur and prolific traffickers,” stated ATF Assistant Special Agent-in-Charge DiGirolamo.  “Every crime gun off the streets is a potential life saved.  Excellent work by the men and women of ATF NY Joint Firearms Task Force, our partners at NYPD and EDNY.”

“This kind of meaningful prison sentence shows our courageous police officers that New Yorkers will not tolerate such lawless behavior in our neighborhoods,” stated NYPD Commissioner Caban.  “I commend our dedicated undercover officer, and I thank our colleagues at the ATF and the office of the U.S. Attorney for the Eastern District of New York for continuing to be highly effective partners in our public safety mission.”

Between February and June 2022, Delaespada, Lovett and Welch were jointly responsible for selling 17 firearms, including the semi-automatic weapons depicted above, to an undercover NYPD officer in Brooklyn.

The defendants conducted these firearms sales in vehicles outside of homes in the Prospect Park South neighborhood of Brooklyn, including in locations near Prospect Park, across from a church, and near an elementary school.  The firearms sales often occurred in the middle of the afternoon and in broad daylight, with the defendants brazenly walking down public streets carrying bags of dangerous firearms.  On June 15, 2022, Lovett and Welch sold the undercover officer a KelTec KS7 shotgun and an American Tactical AR-15-style rifle, with a high-capacity magazine attachment, for several thousand dollars. 

Delaespada, who was convicted in 2015 in the Eastern District of Virginia for narcotics trafficking and possessing a firearm as a felon, was on federal supervised release when he committed the instant offense and has multiple felony convictions in the State of New York.

When Delaespada was arrested, he possessed more than 80 pills containing fentanyl, more than 38 grams of a heroin/fentanyl mixture, and more than 50 grams of cocaine and more than 30 grams of crack cocaine.      

Assistant United States Attorneys Benjamin Weintraub and Andrew Reich are in charge of the prosecution.

The Defendants:

RONALD DELAESPADA
Age: 48
Brooklyn, New York

RAYON LOVETT
Age:  37
Brooklyn, New York

OWEN WELCH
Age: 44
Brooklyn, New York

E.D.N.Y. Docket No. 22-CR-341 (LDH)

BROOKLYN, NY – Javier Aguilar, a former trader at Vitol, Inc. (Vitol), was convicted today by a federal jury in Brooklyn on all counts of a superseding indictment relating to violations of the Foreign Corrupt Practices Act (FCPA) by paying bribes to officials of Petroecuador, the Ecuadorian state-owned oil company.  Aguilar was also convicted of laundering money used to bribe Ecuadorian officials and officials at PEMEX Procurement International (PPI), a wholly owned affiliate of the Mexican state-owned oil company, PEMEX.  The verdict followed an eight-week trial before Senior United States District Judge Eric N. Vitaliano.  When sentenced, Aguilar faces up to 30 years in prison.

Breon Peace, United States Attorney for the Eastern District of New York, Nicole M. Argentieri, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Jeffrey B. Veltri, Special Agent-in-Charge, Federal Bureau of Investigation, Miami Field Office (FBI), announced the verdict.

“Today’s verdict represents another victory in this Office’s commitment to rooting out corruption in the international marketplace,” stated United States Attorney Peace.  “The defendant and his co-conspirators sought to enrich themselves through criminal backroom deals.  The people of Ecuador and Mexico deserved better and companies that play by the rules should know that the process is not rigged.  The Department of Justice and my Office will continue to prioritize holding to account individuals who enrich themselves through bribery.” 

“Javier Aguilar bribed officials at state-owned oil and gas companies in Ecuador and Mexico using shell companies and sham invoices to obtain business for Vitol, Inc., where he worked as an oil and gas trader.  With today’s verdict, the jury has held him accountable for his role in a sophisticated bribery and money laundering scheme that netted Vitol hundreds of millions of dollars in contracts,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division.  “Foreign bribery erodes the rule of law, disadvantages honest companies, and emboldens corrupt government officials.  The Criminal Division will continue to vigorously pursue wrongdoers who bribe foreign officials and bring them to justice.”

“As demonstrated by this case, the Foreign Corrupt Practices Act has a long reach,” stated FBI Special Agent-in-Charge Veltri.  “Aguilar’s egregious attempt to bribe officials in Ecuador and Mexico failed and he will now face tough penalties. I want to commend our partners at the U.S. Attorney’s Office for the Eastern District of New York and at the Department of Justice for their close cooperation on this case.”

As proven at trial, Aguilar paid more than $1 million in bribes to Petroecuador and PPI officials to obtain lucrative contracts for Vitol.

Between 2015 and 2020, Aguilar was a trader in Vitol’s Houston office.  As a part of the scheme, Aguilar and his co-conspirators agreed to bribe senior Ecuadorian officials to obtain a $300 million contract to purchase fuel oil for Vitol.  Aguilar and his co-conspirators used another Middle Eastern state-owned entity to circumvent Petroecuador’s restrictions on contracts with private companies.  In return for the promise and payments of bribes, the Ecuadorian officials then ensured that the Middle Eastern state-owned entity and Vitol were awarded the contract.  Following the 2017 Ecuadorean presidential election, the officials who received bribes were replaced by new senior officials.  To ensure continuity under the then-existing fuel oil contract and to obtain additional business, Aguilar and his co-conspirators agreed to bribe them as well.

To conceal the scheme, Aguilar and his co-conspirators used a series of fake contracts, sham invoices and shell entities incorporated in Curacao, Panama, and Cayman Islands.  The defendant also used alias email accounts rather than his Vitol email to communicate with his co-conspirators.  

The evidence at trial also demonstrated that Aguilar used the same system of shell entities and sham invoices to launder bribe payments to two officials at PEMEX Procurement International.  In total, Aguilar paid approximately $600,000 in bribes to these officials to obtain numerous contracts for Vitol to supply hundreds of millions of dollars of ethane gas to PEMEX.   

The evidence at trial included testimony from 10 witnesses, including three of the former Mexican and Ecuadorian officials who received bribes from the defendant, as well as consultants who facilitated the bribes, and an intermediary who laundered the bribes for the defendant; bribe payments ledgers; emails, including from the defendant’s alias email accounts; recorded calls and meetings; travel records; and bank records showing how the defendant and his co-conspirators moved money to bribe officials through offshore shell companies.  In one of the recorded phone calls played at trial, the defendant told a co-conspirator that his money launderer in Curacao “has to make up some fake contracts.” 

Aguilar faces a maximum penalty of five years in prison on each of the FCPA counts and 20 years in prison on the money laundering count.

Seven of the defendant’s co-conspirators have pleaded guilty to their role in the scheme and are awaiting sentencing.  These individuals have agreed to forfeit more than $63 million. 

In December 2020, Vitol admitted to bribing officials in Ecuador, Mexico, and Brazil in violation of the anti-bribery provisions of the FCPA.  Vitol entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS) and the U.S. Attorney’s Office of the Eastern District of New York.  As a part of the resolution, Vitol agreed to pay a combined $135 million in penalties as part of a coordinated resolution with the Department of Justice, the Commodity Futures Trading Commission (CFTC) and authorities in Brazil.

The investigation was conducted by FBI Miami’s International Corruption Squad. 

The government’s case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section and MLARS.  Assistant United States Attorneys Jonathan P. Lax, Matthew R. Galeotti, and Nick M. Axelrod of the Eastern District of New York are prosecuting the case with Assistant Chiefs Derek J. Ettinger and Jonathan P. Robell and Trial Attorney Clayton P. Solomon of the Fraud Section, Deputy Chief Adam J. Schwartz and Trial Attorney D. Hunter Smith of MLARS, and Paralegal Specialist Peyton Jefferson.  The MLARS Special Financial Investigations Unit and the Justice Department’s Office of International Affairs provided substantial assistance in this case. 

The Defendant:

JAVIER AGUILAR
Age:  49
Houston, Texas

E.D.N.Y. Docket No. 20-CR-390 (ENV)

Today in federal court in Brooklyn, Terry Dor was arraigned on an eight-count indictment charging him with wire fraud, theft of public funds and money laundering in connection with a scheme to steal funds from the Economic Injury Disaster Loan program (EIDL), a United States Small Business Administration (SBA) program that provided emergency funding to distressed businesses during the Covid-19 pandemic.  Dor was arrested this morning and arraigned before United States Chief Magistrate Judge Lois Bloom who released him on a $50,000 bond.

Breon Peace, United States Attorney for the Eastern District of New York, and Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the arrest and indictment.

“As alleged, the defendant submitted applications filled with fabricated information in order to steal more than $1 million dollars in government funds intended to help hard-hit small businesses and their employees survive the economic fallout of the COVID-19 pandemic,” stated United States Attorney Peace.  “The defendant then laundered and used the stolen funds to buy jewelry and for personal securities trading.  Today’s indictment shows that this Office remains committed to identifying and prosecuting those who stole pandemic relief funds.”

“Dor is an alleged opportunist who took advantage of a program meant to help business owners who suffered loss with the pandemic.  He allegedly used a sham business to steal more than a million dollars from the EIDL program, decreasing the amount of available funds for those in need,” stated IRS-CI Special Agent-in-Charge Fattorusso.  “IRS Criminal Investigation New York remains committed to working with the U.S. Attorney’s Office for the Eastern District of New York to ensure that those who steal from the American taxpayer—to adorn themselves with lavish gifts—are arrested and prosecuted.”

The EIDL provided qualifying small businesses with low-interest loans.  The Coronavirus Aid, Relief and Economic Security (CARES) Act expanded EIDL to provide economic support to help offset the temporary loss of revenue experienced by businesses due to the COVID-19 pandemic. 

As alleged in the indictment, Dor applied for EIDL loans in 2020 and 2021.  In the initial application and subsequent modification requests, Dor claimed that he operated a Brooklyn-based consulting business called Terry Dor Professional Consultants, LLC (TDPC), which, according to the defendant, had more than $575,000 in revenue and $535,000 in expenses during calendar year 2019.  In reality, TDPC was a sham business with no legitimate revenue or expenses.  Based on Dor’s false claims, the SBA deposited approximately $1,151,000 in EIDL funds to a bank account controlled by Dor via three installments.  Dor then wired the EIDL proceeds to other accounts he controlled and used the proceeds to fund personal and non-TDPC expenses.  For example, on December 13, 2021, Dor used $125,000 of the EIDL proceeds referenced above to make a purchase at a premium jewelry vendor located in New York City.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Dor faces a maximum sentence of 20 years’ imprisonment. 

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorney David Berman is in charge of the prosecution, with the assistance of Financial Investigator Analyst John Gagliardo and Paralegal Specialist Katrina Batista. 

The Defendant:

TERRY DOR
Age: 36
Jamaica, Queens

E.D.N.Y. Docket No. 24-CR-75 (OEM)

Hoy se presentó una quinta acusación formal sustitutiva en un tribunal federal de Brooklyn atribuyendo a Ismael Zambada García, también conocido como El Mayo, el delito de unirse en asociación delictuosa para fabricar y distribuir una sustancia que contenía N-fenil-N-[1-(2-feniletil)-4-piperidinil] propanamida (fentanilo), una sustancia controlada de categoría II con la intención y a sabiendas de que dichas sustancias serían importadas ilegalmente a los Estados Unidos. Zambada fue imputado anteriormente en múltiples acusaciones formales sustitutivas por dirigir una actividad delictiva continuada, así como por asociación delictuosa para cometer homicidio, asociación delictuosa para lavar dinero, asociación delictuosa para fabricar y distribuir cocaína, heroína, metanfetamina y fentanilo, así como por otros delitos relacionados con drogas, a través de su liderazgo continuado del Cártel de Sinaloa, una de las organizaciones de narcotráfico más violentas y poderosas del mundo. La quinta acusación formal sustitutiva extiende las fechas de finalización de la actividad delictiva continuada y varias asociaciones delictuosas desde mayo de 2014 hasta enero de 2024. Zambada García permanece prófugo.

El fiscal federal Breon Peace para el Distrito Este de Nueva York, la administradora Anne Milgram de la Administración para el Control de Drogas (DEA), el subdirector interino Iván J. Arvelo de Operaciones Nacionales de Investigaciones de Seguridad Nacional (HSI), el subdirector a cargo David Sundberg de la Oficina de Campo de Washington del FBI, el comisario Edward A. Caban del Departamento de Policía de la Ciudad de Nueva York (NYPD) y el superintendente Steven G. James de la Policía Estatal de Nueva York (NYSP) anunciaron la quinta acusación formal sustitutiva.

“Tal como se alega, Zambada García está acusado de numerosos delitos relacionados con drogas, que ahora incluyen la fabricación y distribución de fentanilo, una droga mortal que era en gran medida desconocida cuando fundó el Cártel de Sinaloa hace más de tres décadas y que hoy es responsable de un daño inconmensurable”, señaló el fiscal federal Peace. “Si bien Zambada García continúa siendo un líder principal de la actividad delictiva responsable de importar enormes cantidades de narcóticos a los Estados Unidos, esta quinta acusación formal sustitutiva demuestra nuestra firme determinación de llevarlo ante la justicia, tal como lo hicimos con su ex cómplice El Chapo, y tal como continuaremos haciendo con todos aquellos que trafican con drogas y buscan lucrar con la devastación infligida a nuestras comunidades”.

El fiscal federal Peace también expresó su agradecimiento a la Sección de Narcóticos y Drogas Peligrosas de la División Penal del Departamento de Justicia por su asistencia en el caso.

“El fentanilo es la amenaza de drogas más letal que los estadounidenses hayan enfrentado jamás, y el Cártel de Sinaloa sigue siendo el mayor traficante de fentanilo para los Estados Unidos”, señaló la administradora de la DEA, Milgram. “Siendo el fentanilo la principal causa de muerte entre los estadounidenses entre 18 y 45 años, debemos seguir responsabilizando a Zambada García y otros líderes, miembros y asociados de los cárteles por las personas que han matado”. 

“Como cofundador y actual líder de la organización de narcotráfico más grande y poderosa del mundo, Ismael Zambada García está acusado de suministrar fentanilo a los Estados Unidos en un momento en que el narcótico letal se ha cobrado vidas a un ritmo devastador”, comentó Arvelo, subdirector interino de HSI. “Durante décadas, el despiadado y violento Cártel de Sinaloa ha continuado su flagelo mortal con el tráfico generalizado de fentanilo, cocaína, heroína, metanfetamina y otras drogas sintéticas para los Estados Unidos. HSI de Nueva York y nuestros colaboradores del orden público no se detendrán hasta que llevemos a Zambada García ante la justicia en nombre de sus innumerables víctimas”.

“Tal como se alega, Zambada García ha supervisado durante décadas el tráfico de decenas de miles de libras de cocaína, heroína, metanfetamina y fentanilo para los Estados Unidos junto con decenas de actos de violencia relacionados”, dijo el subdirector a cargo del FBI, Sundberg. “Esta acusación formal sustitutiva es otro ejemplo más de nuestro compromiso de llevar a los líderes de los cárteles ante la justicia. Prometemos continuar trabajando con nuestros colaboradores nacionales y extranjeros para desmantelar organizaciones violentas de delincuencia transnacional como el Cártel de Sinaloa”.

“Después de la detención y condena de Joaquín ‘El Chapo’ Guzmán Loera, los investigadores del NYPD permanecieron totalmente dedicados a nuestra colaboración con el orden público enfocada en llevar ante la justicia a los líderes que quedan del Cártel de Sinaloa”, comentó el comisario Caban del NYPD. “Este último cargo contra Zambada García demuestra aún más nuestro compromiso de impedir que los productos ilícitos de su masiva y violenta actividad delictiva ingresen a nuestro país y plaguen las calles de nuestras ciudades”.

“Sencillamente, no toleraremos este tipo de actividad de tráfico ilegal de drogas en nuestro país y en el estado de Nueva York”, dijo el superintendente James del NYSP. “Quiero agradecer a la fiscalía federal y a todos nuestros colaboradores del orden público por su tenaz trabajo en este caso. Es gracias a su colaboración continua y su firme compromiso que estamos un paso más cerca de acabar con esta peligrosa actividad y poner a Zambada García tras las rejas”.

Tal como se alega, Zambada García fue cofundador del Cártel de Sinaloa con su ex coacusado Joaquín “El Chapo” Guzmán Loera. Guzmán Loera fue declarado culpable por un jurado federal en Brooklyn en febrero de 2019 y sentenciado a cadena perpetua más 30 años. Zambada García ha seguido evadiendo la captura y, tal como se alega, continúa dirigiendo el Cártel de Sinaloa desde México. Según la acusación formal sustitutiva, desde 1989 hasta 2024, Zambada García dirigió una actividad delictiva continuada responsable de la importación y distribución de cantidades masivas de narcóticos y que generó miles de millones de dólares en ganancias. Para asegurar el éxito del cártel, Zambada García empleó a personas para obtener rutas de transporte y bodegas para importar y almacenar narcóticos, y a sicarios para llevar a cabo secuestros y homicidios en México y tomar represalias contra rivales que amenazaban al cártel. Los millones de dólares generados por la venta de drogas fueron luego transportados de regreso a México. El nombre de Guzmán Loera ha sido eliminado de la quinta acusación formal sustitutiva a la luz de su condena en juicio de 2018.

Según lo especificado en la ley, la cantidad de fentanilo involucrada en la asociación delictuosa atribuible al acusado como resultado de su propia conducta y de la conducta de otros razonablemente previsible para él, fue de al menos 400 gramos o más, pero se demostrará en el juicio que se trató de una cantidad bastante más grande.

El Departamento de Estado de Estados Unidos ofrece una recompensa de hasta $15 millones de dólares estadounidenses por información que conduzca a la detención y/o condena de Zambada García. Si tiene información, comuníquese con la DEA al +1-619-540-6912, donde se pueden aceptar mensajes de aplicaciones de mensajería social, o por correo electrónico en TIPS@usdoj.gov. Si se encuentra fuera de los Estados Unidos, comuníquese con la embajada o el consulado de los Estados Unidos más cercano.

Los fiscales federales adjuntos Francisco J. Navarro, Robert M. Pollack y Lauren A. Bowman para el Distrito Este de Nueva York están procesando el caso. 

Esta acusación formal sustitutiva es parte de una investigación de la Fuerza de Tarea de Control de Drogas contra la Delincuencia Organizada (OCDETF). La OCDETF identifica, desarticula y desmantela a los narcotraficantes, lavadores de dinero, pandillas y organizaciones delictivas transnacionales de más alto nivel que amenazan a los Estados Unidos mediante el uso de un enfoque multiagencial dirigido por fiscales e impulsado por inteligencia que aprovecha las fortalezas de las agencias del orden público federales, estatales y locales contra las redes delictivas.

Una acusación formal es simplemente un alegato. Todos los acusados se presumen inocentes hasta que se demuestre su culpabilidad en un tribunal de justicia. 

A fifth superseding indictment was filed today in federal court in Brooklyn charging Ismael Zambada Garcia, also known as “El Mayo,” with conspiring to manufacture and distribute a substance, containing N-phenyl-N-[1-(2-phenylethyl)-4-piperidinyl] propanamide (“fentanyl”), a Schedule II controlled substance intending and knowing that such substances would be unlawfully imported into the United States.  Zambada was previously charged in multiple superseding indictments 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, through his continuing leadership of the Sinaloa Cartel, one of the most violent and powerful drug trafficking organizations in the world.  The fifth superseding indictment extends the end-dates of the continuing criminal enterprise and several conspiracies from May 2014 to January 2024. Zambada Garcia remains at large.

Breon Peace, United States Attorney for the Eastern District of New York; Anne Milgram, Administrator, U.S. Drug Enforcement Administration (DEA), Ivan J. Arvelo, Acting Assistant Director of Domestic Operations, Homeland Security Investigations (HSI); David Sundberg, Assistant Director-in-Charge, Federal Bureau of Investigation, Washington Field Office (FBI); Edward A. Caban, Commissioner, New York City Police Department (NYPD); and Steven G. James, Superintendent, New York State Police (NYSP), announced the fifth superseding indictment.

“As alleged, Zambada Garcia is charged with numerous drug offenses, now including the manufacture and distribution of fentanyl, a deadly drug that was largely unheard of when he founded the Sinaloa Cartel more than three decades ago and today is responsible for immeasurable harm,” stated United States Attorney Peace.  “While Zambada Garcia continues to be a principal leader of the criminal enterprise responsible for importing enormous quantities of narcotics into the United States, this fifth superseding indictment demonstrates our firm resolve to bring him to justice, just as we did with his former co-conspirator El Chapo, and just as we will continue to do to all those who traffic drugs and seek to profit from the devastation inflicted on our communities.”

Mr. Peace also expressed his thanks to the Justice Department Criminal Division’s Narcotic and Dangerous Drug Section for its assistance on the case.

“Fentanyl is the deadliest drug threat Americans have ever faced, and the Sinaloa Cartel continues to be the largest trafficker of fentanyl into the United States,” stated DEA Administrator Milgram.  “With fentanyl the leading cause of death for Americans between the ages of 18 and 45, we must continue to hold Zambada Garcia and other cartel leaders, members, and associates accountable for the people they have killed.” 

“As the co-founder and current leader of the largest, most powerful drug trafficking organization in the world, Ismael Zambada Garcia is accused of supplying fentanyl to the United States at a time when the lethal narcotic has claimed lives at a devastating rate. For decades, the ruthlessly violent Sinaloa Cartel has continued its deadly scourge with the pervasive trafficking of fentanyl, cocaine, heroin, methamphetamine, and other synthetic drugs into the U.S,” stated HSI Acting Assistant Director Arvelo.  “HSI New York and our law enforcement partners will not stop until we bring Zambada Garcia to justice on behalf of his countless victims.”

“As alleged, Zambada Garcia has, for decades, overseen the trafficking of tens of thousands of pounds of cocaine, heroin, methamphetamine, and fentanyl into the U.S. along with scores of related violence,” stated FBI Assistant Director-in-Charge Sundberg. “This superseding indictment is yet another example of our commitment to bringing cartel leaders to justice. We vow to continue to work with our domestic and foreign partners to dismantle violent transnational criminal organizations like the Sinaloa Cartel.”

“After the arrest and successful conviction of Joaquin ‘El Chapo’ Guzman Loera, NYPD investigators remained fully dedicated to our law enforcement partnership focused on bringing the Sinaloa Cartel’s remaining leadership to justice,” stated NYPD Commissioner Caban.  “This latest charge against Mr. Zambada Garcia further demonstrates our commitment to keeping the illicit products of his massive, violent criminal enterprise from entering our country and plaguing our cities’ streets.”

“We simply will not tolerate this type of illegal drug trafficking activity in our country and New York State. I want to thank the U.S. Attorney’s Office and all our law enforcement partners for their tenacious work on this case. It is because of their ongoing collaboration and steadfast commitment that we are one step closer to shutting down this dangerous enterprise and placing Mr. Garcia behind bars,” stated NYSP Superintendent James.

As alleged, Zambada Garcia was a co-founder of the Sinaloa Cartel with his former co-defendant Joaquin “El Chapo” Guzman Loera.  Guzman Loera was convicted by a federal jury in Brooklyn in February 2019 and sentenced to life in prison plus 30 years.  Zambada Garcia has continued to evade capture, and, as alleged, continues to run the Sinaloa Cartel from Mexico.  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 cartel, Zambada Garcia employed individuals to obtain transportation routes and warehouses to import and store narcotics, and “sicarios,” or hit men, to carry out kidnappings and murders in Mexico to retaliate against rivals who threatened the cartel.  The millions of dollars generated from the drug sales were then transported back to Mexico.  Guzman Loera’s name has been removed from the fifth superseding indictment in light of his 2018 trial conviction.

Under the statute, the amount of fentanyl involved in the conspiracy attributable to the defendant as a result of his own conduct, and the conduct of others reasonably foreseeable to him, was at least 400 grams or more, but a vastly larger quantity would be proven at trial.

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

The U.S. Department of State is offering a reward of up to $15 million for information leading to the arrest and/or conviction of Zambada Garcia.  If you have information, please contact the DEA at +1-619-540-6912, which can accept messages from social messaging applications, or via email at TIPS@usdoj.gov.  If you are located outside of the United States, please contact the nearest U.S. Embassy or Consulate.

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, and Lauren A. Bowman are in charge of the prosecution.

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 Defendant:

ISMAEL ZAMBADA GARCIA (also known as “El Mayo”)
Age:  76
Mexico

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

Earlier today in federal court in Brooklyn, Kristina Puzyreva pleaded guilty to money laundering conspiracy for her role in a multimillion-dollar scheme to send components used in unnamed aerial vehicles (UAVs) and guided missile systems and other weapons to sanctioned entities in Russia.  The components shipped in violation of export control and sanctions laws were later found in Russian weapons platforms and signals intelligence equipment in Ukraine.  At sentencing, Puzyreva faces up to twenty years in prison.  Prosecution against the other defendants remains pending.

Breon Peace, United States Attorney for the Eastern District of New York, Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, Erin Keegan, Acting Special Agent-in-Charge, Homeland Security Investigations New York (HSI), James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement (BIS), announced the plea.

“As she admitted today, the defendant was a key part of the plan, laundering proceeds from the scheme to evade sanctions and ship UAV and missile components to Russia that were later found on the battlefield in Ukraine,” stated United States Attorney Peace.  “Today’s plea demonstrates that the Eastern District of New York will not allow criminals to endanger national security by supplying Russia with U.S.-sourced military technology.”

“Kristina Puzyreva and her co-defendants allegedly purchased and dispatched millions of dollars in U.S.-sourced electronics to support the Kremlin in its ongoing attacks of Ukraine. Her money laundering conspiracy was directly linked to 298 shipments of restricted technology, valued at $7 million, to the Russian battlefield,” said HSI New York Acting Special Agent in Charge Erin Keegan. “While today’s guilty plea remains a positive step toward justice, HSI New York will continue to relentlessly pursue those who seek to exploit U.S. export control laws for financial gain.”

“Following the money is a law enforcement imperative.  This defendant laundered money on behalf of several Brooklyn front companies to ship U.S.-origin electronics to sanctioned entities in Russia,” said Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement.  “As today’s guilty plea makes clear, we are unyielding in our efforts to help prevent American electronics from being used in Russian missiles and drones that kill innocent civilians in Ukraine.”

"Kristina Puzyreva admitted today she willingly played a key role in a global procurement scheme, which ultimately helped the government of Russia obtain sanctioned equipment for its war efforts. Puzyreva chose to turn a blind eye to the law to enrich herself, compromising the national security of the United States. This plea reminds anyone willing to help the Russian government evade sanctions that the FBI will pursue swift punishment in the criminal justice system," stated FBI Assistant Director-in-Charge Smith. 

As alleged in the indictment and other court filings, the defendant laundered money as part of a sophisticated export control and sanctions evasion scheme involving SH Brothers Inc. (SH Brothers) and SN Electronics, Inc. (SN Electronics), two companies registered in Brooklyn, New York.  Using the SH Brothers and SN Electronics corporate entities, the defendant’s co-conspirators unlawfully sourced, purchased and shipped millions of dollars in dual-use electronics from U.S. manufacturers to end users, including sanctioned entities, in Russia.  The electronic components and integrated circuits shipped were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine, including in UAVs and guided missiles.  During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia. 

Puzyreva and her husband, co-defendant Nikolay Goltsev, traveled on multiple occasions from Canada to meet with their co-defendant Salimdzhon Nasriddinov in Brooklyn.  During such trips, Puzyreva utilized numerous bank accounts to make financial transactions in furtherance of the scheme.  For example, Puzyreva is the signatory on two New York accounts, including one that lists Nasriddinov’s home address in Brooklyn (also the registered address of SH Brothers) as the address of record.  Records for these accounts reflect large, structured cash deposits in Brooklyn and Manhattan that correspond with trips that Puzyreva and Goltsev made to New York.  These deposits were then transferred to accounts held and used by Puzyreva and Goltsev in Canada.

The scheme involved millions of dollars in transactions and was lucrative for the defendants.  For example, in a text message exchange on or about January 13, 2023, Goltsev complained to Puzyreva that a co-conspirator “asked me to make 80 accounts . . . I am making accounts for 3 mln [i.e., million].  Fingers hurting already from the laptop.”  Puzyreva responded, “Lot of money?  We will get rich.”  Later, on or about January 20, 2023, Goltsev messaged Puzyreva, “Dasha (a co-conspirator) paid. 700k.”  Notably, financial records revealed wire transfers totaling approximately $700,000 into an SH Brothers account in or around January 2023 from a Hong Kong-based entity as part of an order for a sanctioned Russian entity.

The government seized $20,000 in cash from the New York hotel room in which the defendant was arrested.  In total, the government has seized approximately $1.68 million dollars in connection with this export scheme.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Artie McConnell and Ellen H. Sise are in charge of the prosecution, along with Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section, with assistance from Litigation Analysts Mary Clare McMahon and Joseph Levin.  Assistant United States Attorney Laura Mantell of the Office’s Asset Recovery Section is handling forfeiture matters.

The FBI, Department of Commerce’s Office of Export Enforcement’s New York Field Office, and Department of Homeland Security Homeland Security Investigations are investigating the case.

Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. 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. 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 Defendant:

KRISTINA PUZYREVA
AGE: 32
Montreal, Canada

E.D.N.Y. Docket No. 23-CR-452

Earlier today in federal court in Brooklyn, Kristina Puzyreva, 32, of Montreal, pleaded guilty to money laundering conspiracy for her role in a multimillion-dollar scheme to send components used in unmanned aerial vehicles (UAVs) and guided missile systems and other weapons to sanctioned entities in Russia. The components shipped in violation of export control and sanctions laws were later found in Russian weapons platforms and signals intelligence equipment in Ukraine.

“The defendant in this case flouted our sanctions and export control laws by scheming to send sensitive U.S.-sourced missile and other weapons components to Russia that were later found in Russian weapons systems on the battlefield in Ukraine,” said Deputy Attorney General Lisa O. Monaco. “She now faces time in a United States prison for her actions. As we approach the two-year anniversary of Russia’s unlawful invasion of Ukraine, through our Disruptive Technology Strike Force and our Task Force KleptoCapture, the Justice Department will continue using all available legal tools and authorities to hold accountable those who supply the Russian war machine with critical U.S. technology.”

“Ms. Puzyreva admitted to taking part in an elaborate scheme to smuggle millions of dollars’ worth of restricted U.S. components for use in Russian weapons deployed against Ukraine,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Justice Department is committed to denying Moscow the resources it needs to prosecute its unjust invasion of Ukraine, and we will hold accountable covert enablers and profiteers who violate U.S. law to further Russian aggression.”

“The defendant was a necessary player in a scheme to evade export controls and sanctions and ship UAV and missile components to Russia that were later found on the battlefield in Ukraine,” stated United States Attorney Peace. “Without the defendant laundering the proceeds of the scheme, the export scheme would not have worked. Today’s plea demonstrates that the Eastern District of New York will not allow criminals to endanger national security by supplying Russia with U.S.-sourced military technology. This Office will faithfully prosecute every member of a conspiracy to the fullest extent of the law.”

“The FBI and our partners will hold accountable those who violate our laws and enable adversarial nations to obtain U.S. technology to be used in foreign weapon systems,” said Deputy Director Paul Abbate. “In this case, the defendant laundered funds in a scheme which allowed Russia to obtain components used in guided missiles and other systems against Ukraine, and she is now facing the consequences of her actions.”

“Following the money is a law enforcement imperative.  This defendant laundered money on behalf of several Brooklyn front companies to ship U.S.-origin electronics to sanctioned entities in Russia,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod of the Department of Commerce. “As today’s guilty plea makes clear, we are unyielding in our efforts to help prevent American electronics from being used in Russian missiles and drones that kill innocent civilians in Ukraine.”

As alleged in the indictment and other court filings, the defendant laundered money as part of a sophisticated export control and sanctions evasion scheme involving SH Brothers Inc. (SH Brothers) and SN Electronics, Inc. (SN Electronics), two companies registered in Brooklyn, New York. Using the SH Brothers and SN Electronics corporate entities, the defendant and her co-conspirators unlawfully sourced, purchased and shipped millions of dollars in dual-use electronics from U.S. manufacturers to end users, including sanctioned entities, in Russia. The electronic components and integrated circuits shipped were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine, including in UAVs and guided missiles. During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia.

Puzyreva and her husband, co-defendant Nikolay Goltsev, traveled on multiple occasions from Canada to meet with their co-defendant Salimdzhon Nasriddinov in Brooklyn. During such trips, Puzyreva utilized numerous bank accounts to make financial transactions in furtherance of the scheme. For example, Puzyreva is the signatory on two New York accounts, including one that lists Nasriddinov’s home address in Brooklyn (also the registered address of SH Brothers) as the address of record. Records for these accounts reflect large, structured cash deposits in Brooklyn and Manhattan that correspond with trips that Puzyreva and Goltsev made to New York. These deposits were then transferred to accounts held and used by Puzyreva and Goltsev in Canada.

The scheme involved millions of dollars in transactions and was lucrative for the defendants. For example, in a text message exchange on or about Jan. 13, 2023, Goltsev complained to Puzyreva that a co-conspirator “asked me to make 80 accounts . . . I am making accounts for 3 mln [i.e., million]. Fingers hurting already from the laptop.” Puzyreva responded, “Lot of money?  We will get rich.” Later, on or about Jan. 20, 2023, Goltsev messaged Puzyreva, “Dasha (a co-conspirator) paid. 700k.”  Notably, financial records revealed wire transfers totaling approximately $700,000 into an SH Brothers account in or around January 2023 from a Hong Kong-based entity as part of an order for a sanctioned Russian entity.

The government seized $20,000 in cash from the New York hotel room in which the defendant was arrested. In total, the government has seized approximately $1.68 million dollars in connection with this export scheme.

When sentenced, Puzyreva faces a maximum penalty of up to 20 years in prison. A U.S. district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorneys Artie McConnell and Ellen H. Sise for the Eastern District of New York and Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with assistance from Litigation Analysts Mary Clare McMahon and Joseph Levin. Assistant U.S. Attorney Laura Mantell of the Eastern District of New York’s Asset Recovery Section is handling forfeiture matters.

The FBI, Department of Commerce’s Office of Export Enforcement’s New York Field Office, and Department of Homeland Security Homeland Security Investigations are investigating the case.

Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. 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. 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.

Ранее сегодня в федеральном суде Бруклина Марат Лернер [Marat Lerner], бывший президент компании, занимающейся оказанием услуг по облегчению бремени задолженности, признал себя виновным по одному пункту обвинения в заговоре с целью совершения мошенничества с использованием электронных средств и по одному пункту обвинения в совершении мошенничества с использованием электронных средств в период досудебного освобождения. Лернер признал, что он обманывал своих жертв и украл денежные средства, которые они намеревались использовать для погашения ипотечных кредитов. Судебное слушание проходило перед окружным судьей США Николасом Гарауфисом [Nicholas G. Garaufis]. При вынесении приговора Лернеру грозит максимальное наказание в виде 50 лет тюремного заключения. Лернер также согласился выплатить 2 554 217,11 долларов в качестве компенсации. Обвинение было предъявлено ему в январе 2023 года.

Бреон Пис [Breon Peace], прокурор США по Восточному округу Нью-Йорка, Джеймс Смит [James Smith], помощник директора Федерального бюро расследований (FBI) в Региональном управлении Нью-Йорка, и Томас Фатторуссо [Thomas Fattorusso], руководящий специальный агент в Региональном управлении Нью-Йорка (Налоговое управление США – Отдел расследований по уголовным делам), объявили о признании обвиняемым своей вины.

«Как сегодня признал обвиняемый, Марат Лернер превращал американскую мечту своих жертв в настоящий кошмар, давая ложные обещания об облегчении бремени задолженности по ипотечным кредитам, а на самом деле занимаясь хищением их с трудом заработанных сбережений ради собственной выгоды, — заявил прокурор США Пис. — Прокуратура продолжит защищать сообщества иммигрантов от преступников, использующих свое доверительное положение для совершения мошенничества против них и хищения их денежных средств».

«Марат Лернер действовал в качестве подпольного посредника в своем местном сообществе, но вместо добросовестного выполнения своих обязательств путем выплаты ипотечных кредитов он незаконно присвоил деньги своих ничего не подозревающих жертв, чтобы жить в роскоши. Это было не просто мошенничество с денежными средствами; эти мошеннические действия затронули дома и семьи в его сообществе. Лица, ставшие жертвами обмана Лернера, не смогли выплатить свои ипотечные платежи, а некоторые столкнулись с лишением права собственности за просроченные задолженности. Сегодняшнее признание ответчиком своей вины и согласованное возмещение ущерба — это лишь один шаг на пути обеспечения полной справедливости для жертв его преступлений, а следующий шагом будет вынесение приговора».

Согласно судебным документам и фактам, представленным в ходе слушания о признании вины, Лернер был владельцем Lerner Group, компании, заявлявшей, что она предоставляет услуги по облегчению бремени задолженности, включая изменение ипотечных кредитов, главным образом, в сообществах иммигрантов из Восточной Европы в Бруклине. Многие из жертв, обманутые ответчиком, уже испытывали финансовые затруднения и специально обратились за помощью к Лернеру в надежде на снижение ежемесячных выплат по ипотечным кредитам. Лернер, в свою очередь, обещал им, что он поможет им снизить ежемесячные выплаты по ипотечным кредитам, работая с их ипотечными кредиторами с целью изменения ипотечного кредита или получения федеральной помощи домовладельцам. Для совершения мошенничества Лернер давал указания жертвам о том, что ему необходим доступ к их банковским счетам для прямого перевода платежей в ипотечные банки от их имени; он также заявлял, что платежи будут адресованы либо распорядителю условного депозита, который будет удерживать денежные средства до тех пор, пока их ипотечные кредиты не будут изменены, либо организациям, аффилированным с их ипотечными кредиторами. Лернер также давал указания жертвам не связываться напрямую со своими ипотечными кредиторами, поскольку он будет выступать в качестве связующего звена между ними и их кредиторами.

На самом же деле Лернер украл у потерпевших более 2,5 миллионов долларов — деньги, которые они намеревались использовать для выплаты своих ипотечных кредитов. Как только Лернер получил доступ к банковским счетам потерпевших, он перевел денежные средства с их счетов в подконтрольные ему компании и/или банковские счета. Лернер удержал большую часть денежных средства жертв, тратя их на личные и деловые расходы, включая автомобиль BMW, предметы роскоши и дорогую еду. С целью скрытия фактов мошенничества Лернер давал указания жертвам игнорировать уведомления от их ипотечных кредиторов о просроченных платежах и задолженностях. 

В январе 2023 года большое жюри федерального суда Восточного округа Нью-Йорка предъявило Лернеру обвинение и арестовало его в связи с вышеуказанным мошенничеством. Во исполнение постановления Окружного суда США Восточного округа Нью-Йорка Лернер был освобожден под залог и, помимо прочего, получил указание не совершать дополнительных преступлений. Однако Лернер продолжил хищение средств у потерпевших даже после того, как был арестован ранее за те же преступные деяния. После ареста по этому делу, в период с января 2023 года по май 2023 года, Лернер украл у потерпевших не менее 10 тысяч долларов. Впоследствии постановление об освобождении Лернера под залог было отменено. 

В результате многолетнего мошенничества Лернера ипотечные кредиторы возбудили дело о взыскании задолженности в отношении нескольких потерпевших. В рамках своего признания вины Лернер согласился выплатить потерпевшим около 2 554 217,11 долларов в качестве компенсации.

Государственное обвинение находится в ведении Отдела по борьбе с мошенничеством в сфере бизнеса и ценных бумаг Прокуратуры США. За уголовное преследование отвечают помощники прокурора США Николас Аксельрод [Nicholas Axelrod] и Дженни Нгай [Genny Ngai] при содействии помощника юриста Джейкоба Менца [Jacob Menz].

Ответчик:

МАРАТ ЛЕРНЕР
Возраст: 41
Бруклин, Нью-Йорк 

№ дела E.D.N.Y. 23-CR-15 (NGG)

Earlier today, in federal court in Brooklyn, Luis Rivas, a member of the Centrales Locos Salvatruchas (CLS) clique of La Mara Salvatrucha, also known as MS-13, a transnational criminal organization was sentenced by United States District Judge Rachel P. Kovner to 35 years in prison for the May 16, 2017 fatal stabbing of 16-year-old Julio Vasquez in Alley Pond Park in Queens, and Hobbs Act robberies in Jamaica, Queens, after pleading guilty on July 14, 2023.  Previously, co-defendant Josue Leiva, also a member of the CLS clique was sentenced on January 23, 2024 by Judge Kovner to 35 years in prison for the murder of Vasquez and Hobbs Act Robberies.  Their co-defendant, and the leader of CLS, Melvi Amador-Rios, was convicted of the murder, the robberies and other charges after a three-week jury trial August 2023, and was sentenced to life in prison plus 38 years in November 2023.

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

“The sentencings sends a powerful message to the defendants, other MS-13 members, and the community that gratuitous and senseless violence of this nature will not be tolerated in our district,” stated United States Attorney Peace.  “We hope that today brings some measure of closure to the victims and their families.”

“There is no place in our communities for barbaric violence being used to threaten and intimidate.  Luis Rivas and Josue Leiva were rightly sentenced today for their roles in a senseless murder and other callously violent actions in the name of MS-13.  The FBI’s New York Safe Streets Task Force is determined to ensure members of MS-13 or any other gang using violence in an attempt to control territory and people face significant punishment in the criminal justice system,” stated FBI Assistant Director-in-Charge Smith.

“Meaningful prison sentences like this are why the men and women of the NYPD, in close partnership with our colleagues at the FBI and the office of the U.S. Attorney for the Eastern District of New York, continue to aggressively pursue anyone who senselessly commits violent crimes and puts our communities at risk,” stated NYPD Commissioner Caban. “We vow to remain relentless in our efforts to dismantle gangs and hold their individual members fully accountable for their actions.”

As proven at Amador-Rios’ trial, beginning in fall 2016, the CLS clique, led by Amador-Rios, decided to kill John Doe 3, a CLS chequeo, or low-level MS-13 member, who had been violating the clique’s rules, including by associating with members of the rival 18th Street gang.  Amador-Rios ordered Julio Vasquez, also an MS-13 chequeo, to carry out the killing of John Doe 3.  Vasquez was tasked with killing John Doe 3 because Vasquez had been violating the clique’s rules and was suspected of cooperating with law enforcement.  After Vasquez failed to kill John Doe 3, Amador-Rios ordered Vasquez to be killed.  On May 16, 2017, Rivas and Leiva lured Vasquez to a wooded area of Alley Pond Park where they stabbed him more than 30 times, nearly decapitating him and ultimately killing him. Vasquez’s body was discovered by a bird watcher in the park on May 21, 2017.  Leiva and Rivas pleaded guilty on July 14, 2023 to racketeering charges, including Vasquez’s murder.

Leiva and Rivas also each participated in separate armed robberies of small businesses in Jamaica, Queens.  In 2017, Rivas, accompanied by Amador-Rios and other gang members, robbed at gunpoint a money transfer business, during which Rivas pistol whipped an employee in the face.  In 2018, Leiva, accompanied by Amador-Rios and other gang members, committed a robbery involving holding the owner and a customer of a convenience store at gunpoint.

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.

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 gang has thousands of members across the United States.  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 45 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 including the FBI’s Safe Streets Task Force, comprising agents and officers of the FBI and NYPD.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Nadia E. Moore, Anna L. Karamigios, and Raffaela S. Belizaire are in charge of the prosecution, with the assistance of Paralegal Specialist Emily Moosher.

The Defendant:

LUIS RIVAS (also known as “Inquieto” and “Kiko”)
Age:  28
Jamaica, New York

JOSUE LEIVA (also known as “Colocho”)
Age:  27
Jamaica, New York

E.D.N.Y. Docket No. 18-CR-398 (S-3) (RPK)