Eastern District of New York

Earlier today, in federal court in Brooklyn, Marat Lerner, the former president of a debt relief services business, pleaded guilty to one count of wire fraud conspiracy and one count of committing wire fraud while he was on pre-trial release.  Lerner admitted that he lied to his victims and that he stole money that the victims had intended to use to pay off their home mortgages.  The proceeding was held before United States District Judge Nicholas G. Garaufis.  When sentenced, Lerner faces a maximum sentence of 50 years’ imprisonment.  Lerner has also agreed to pay $2,554,217.11 in restitution.   He was indicted in January 2023.

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

“As he admitted today, Marat Lerner turned the victims’ American dreams into a nightmare by promising mortgage and debt relief, and instead preyed on their hard-earned life savings for his own personal gain,” stated United States Attorney Peace. “My Office will continue to protect immigrant communities against those who choose to use their positions of trust to defraud and steal from them.”

“Marat Lerner operated as an underground broker in his local community; but instead of completing his end of the bargain by paying their mortgages, he pocketed the money of his unsuspecting victims to live a life of luxury. This wasn’t just a money scam, this fraud affected his own community’s homes and families.  Those who fell prey to Lerner’s deceit defaulted on their mortgage payments, and some fell into foreclosure.  Today’s guilty plea and agreed restitution is just one step towards his victims getting justice, and his sentencing is the next,” stated IRS CI Special Agent-in-Charge Fattorusso.

According to court documents and facts presented at the guilty plea proceeding, Lerner was the owner of the “Lerner Group,” a business that claimed to provide debt relief services, including mortgage modifications, principally to the Eastern European immigrant community in Brooklyn.  Many of the victims that the defendant defrauded were already experiencing financial hardship and had specifically sought Lerner’s assistance to help reduce their monthly mortgage payments.  Lerner, in turn, promised that he could help them lower their monthly mortgage payments by working with their mortgage lenders to secure a mortgage loan modification or federal homeowner assistance.  To carry out his fraud, Lerner instructed the victims that he needed access to their bank accounts so that he could directly transmit payments to the mortgage banks on the victims’ behalf, and that the payments would be addressed to either an escrow agent that would hold the funds until their mortgages had been modified, or to entities affiliated with their mortgage lenders.  Lerner further instructed the victims not to contact their mortgage lenders directly and that he would serve as the liaison between the victims and the victims’ lenders.    

In reality, Lerner stole over $2.5 million from the victims – money that the victims had intended to use to pay their mortgages.  Once Lerner gained access to the victims’ bank accounts, Lerner transmitted funds from their accounts to companies and/or bank accounts that he himself controlled.  Lerner kept the majority of the victims’ money, spending it on personal and business expenses, including a BMW, luxury goods, and expensive meals.  To conceal his fraud, Lerner told the victims to disregard notifications from their mortgage lenders regarding delinquent payments and past due balances.  

In January 2023, Lerner was indicted by a federal grand jury in the Eastern District of New York and arrested in connection with the above fraud.  Pursuant to an order of the United States District Court for the Eastern District of New York, Lerner was released on bail and instructed, among other things, not to commit additional crimes.  However, Lerner continued to steal from his victims even after being arrested for the same conduct.  After his arrest in this case, between January 2023 and May 2023, Lerner stole at least $10,000 from his victims.  Lerner’s bail was subsequently revoked. 

As a result of Lerner’s years-long fraud, mortgage lenders have initiated foreclosure proceedings against several of the victims.  As part of his guilty plea, Lerner has agreed to pay approximately $2,554,217.11 in restitution to the victims. 

The government’s case is being handled by the Office’s Business and Securities Fraud Section.   Assistant United States Attorneys Nicholas Axelrod and Genny Ngai are prosecuting the case with assistance from Paralegal Specialist Jacob Menz.

The Defendant:

MARAT LERNER
Age: 41
Brooklyn, New York

E.D.N.Y. Docket No. 23-CR-15 (NGG)

An indictment was filed today in federal court in Brooklyn charging Abolfazl Bazzazi and Mohammad Resa Bazzazi, father and son respectively, with conspiring to illegally export U.S. goods and technology to end users in Iran, including the Government of Iran, in violation of the International Emergency Economic Powers Act (IEEPA), and with attempted smuggling of U.S. goods and technology to Iran.  The defendants, who are citizens of Iran, remain 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 Brian Dugan, Special Agent-in-Charge, Federal Bureau of Investigation, Norfolk Field Office, announced the indictment.

“As alleged, the Bazzazis devised an intricate scheme to evade U.S. export laws in obtaining U.S. equipment and technology to be exported to Iran for the Government of Iran which has been designated by the United States government as a state sponsor of terrorism.  The defendants allegedly attempted to obtain commercial and military aircraft items from multiple U.S. companies that supply the military, aerospace, and firefighting industries,” stated United States Attorney Peace.  “These charges demonstrate the resolve of this Office and the Department of Justice to prosecute those who seek to aid the Government of Iran, in violation of U.S. sanctions.”

“In its first year, the Disruptive Technology Strike Force has strengthened enforcement and disrupted numerous criminal schemes to smuggle highly-sensitive technology that foreign adversaries wield to advance their military and other malign agendas,” stated Assistant Attorney General Olsen.  “The case announced today underscores the commitment of the Justice Department and our partners to disrupt illegal efforts to siphon off U.S. ingenuity and to safeguard American security and innovation.”

“Our foreign adversaries use many tactics to gain access to critical U.S. technologies and innovation. In this instance, it’s alleged that the Bazzazi’s illegally attempted to export U.S. goods and technology to the Iranian government. Any circumvention of U.S. export control law is simply unacceptable. The FBI will continue to work diligently with its partners across the globe to hold all accountable who jeopardize national security,” stated FBI Special Agent-in-Charge Dugan.

As set forth in the indictment, between January 2008 and August 2019, the Bazzazis and their co-conspirators sought to evade U.S. sanctions and export laws by working to procure goods and technology from U.S. companies for end users in Iran, including the Government of Iran, without obtaining required licenses or other authorization from the U.S. Department of the Treasury’s Office of Foreign Assets Control.  The defendants sought to obtain components that could be used for commercial and/or military aircraft.  Additionally, they disguised the final destination of U.S. goods by attempting to forward them through intermediaries in Europe and elsewhere.  The Bazzazis acted on behalf of an arm of the Government of Iran, which has been designated by the United States government as acting for or on behalf of terrorist organizations. 

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

The government’s case is being handled by Assistant United States Attorneys Francisco J. Navarro, Jonathan P. Lax, Nomi D. Berenson, and Adam Amir, with assistance provided by Trial Attorney Adam Small of the Justice Department’s Counterintelligence and Export Control Section.

Defendants:

ABOLFAZI BAZZAZI
Age: 79
Iran

MOHAMMAD RESA BAZZAZI
Age: 43
Iran

E.D.N.Y. Docket No.: 24-CR-60 (DG)

Earlier today, at the federal courthouse in Brooklyn, two indictments were unsealed charging six defendants with defrauding court-appointed criminal defense attorneys.  As alleged in the indictments, the defendants deposited stolen checks intended to reimburse the attorneys for their time and expenditures representing indigent defendants in federal court.  Three defendants also allegedly stole the identity of an attorney and opened bank accounts using the attorney’s stolen identity.  Five defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Taryn A. Merkl at the federal courthouse in Brooklyn.  One defendant is still at large.

Today’s indictments are the first charges brought in the government’s ongoing criminal investigation into the widespread theft and depositing of checks issued to participants in the federal criminal justice system.  The investigation has identified over $1 million in checks issued by the Department of the Treasury on behalf of the Administrative Office of the United States Courts that have been stolen and deposited into unauthorized accounts since 2021.  The intended recipients of these checks include court-appointed criminal defense attorneys, paralegals, investigators, translators, court reporters, and jurors.

Breon Peace, United States Attorney for the Eastern District of New York, Daniel Brubaker, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS) and Tammy Whitcomb Hull, Inspector General, United States Postal Service Office of Inspector General (USPS OIG) announced the charges.

Mr. Peace expressed his appreciation for the New York City Police Department and United States Marshals Service for their assistance in this case.

Overview

The stolen checks charged in the two indictments were intended to pay private attorneys who serve on the Criminal Justice Act (CJA) Panel in the Eastern and Southern Districts of New York.  When a criminal defendant cannot afford an attorney, the court often appoints a member of the CJA Panel to handle the representation.  The Department of the Treasury issues checks to the CJA attorney on behalf of the Administrative Office of the United States Courts, which is sent by mail to the CJA attorney’s address of record.  In particularly complex criminal cases, reimbursement checks can exceed $100,000.  When a reimbursement check is lost or stolen, issuance of a replacement check typically takes several months—a process that leaves the CJA attorneys uncompensated for a significant time as they await a new check.

United States v. Tyquan Robinson, Ada Tavarez, and Markel Washington

As alleged in the indictment and court documents, Ada Tavarez impersonated a CJA attorney and then opened bank accounts using that CJA attorney’s stolen identity.  In or about June 2023, Tavarez presented fraudulent identification documents to a bank teller with the CJA attorney’s personal data, including a driver’s license with Tavarez’s photograph along with the CJA attorney’s name and birthdate.  On the account opening paperwork, Tavarez listed a fraudulent email account containing the CJA attorney’s personal identifiers in the email account name.

After the bank opened the accounts in the name of the CJA attorney, Tavarez returned to the branch several days later.  She then attempted to deposit a stolen $125,386.81 check containing a forged signature for the CJA attorney.

The defendants Markel Washington and Tyquan Robinson facilitated this scheme with Tavarez.  Washington accessed the fraudulent bank accounts online.  When the bank placed a hold on the check, Washington made several calls to the bank asking that the funds be released.  Also, saved in Washington’s iCloud account were several versions of the same photograph of Tavarez printed on the fraudulent driver’s license with the CJA attorney’s name and personal data. 

Robinson contributed to this scheme by accessing the fraudulent email account that had been created using the CJA attorney’s personal identifiers and submitted to the bank at account opening.  Robinson also listed his telephone number as the fraudulent email account’s recovery telephone number.  In addition, a note in Robinson’s iCloud account contained the CJA attorney’s personal data.

The defendants have been charged with bank fraud and conspiracy to commit wire fraud and bank fraud.  Tavarez has also been charged with one count of aggravated identity theft.

United States v. Nicholas Barton, et al.

As alleged in the indictment and court documents, between at least November 2020 and October 2022, the defendants Nicholas Barton, Richard Reid and a third co-defendant participated in a scheme to cash checks issued to third parties into accounts over which the defendants had access and control.  One of the stolen checks they deposited was issued to a CJA attorney in the amount of $14,856.  After the CJA attorney’s stolen check was cashed in Reid’s bank account, all three defendants benefited from its proceeds, by withdrawing cash from ATMs, making purchases at stores and restaurants, transmitting payments among each other and to others through cash transfer mobile applications, and booking flight tickets.  Each defendant has been charged with conspiracy to commit wire fraud and bank fraud; wire fraud; and bank fraud.

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

Assistant United States Attorney James R. Simmons is in charge of the prosecutions, with assistance from EDNY Special Agents Anthony Cunder and Rebecca Sidhu. 

The Defendants:

TYQUAN ROBINSON
Age:  29
East Orange, New Jersey

ADA TAVAREZ
Age:  58
Bronx, New York

MARKEL WASHINGTON
Age:  28
Bronx, New York

E.D.N.Y. Docket No. 24-CR-51 (AMD) (LB)

NICHOLAS BARTON
Age:  27
Brooklyn, New York

RICHARD REID
Age:  26
New York, New York

E.D.N.Y. Docket No. 24-CR-49 (NRM)(RML)

# # #

Earlier today, in federal court in Central Islip, a complaint was unsealed charging Levar Jackson and Jaclyn Misuraca with conspiring to distribute fentanyl.  As alleged, Jackson and Misuraca sold approximately 270 grams of fentanyl—often in broad daylight and in public locations across Long Island including outside of a nursing home where Misuraca worked.  They are being arraigned this afternoon before Magistrate Judge James M. Wicks.

Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino III, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, and Robert Waring, Acting Commissioner, Suffolk County Police Department, announced the charges.

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

As alleged in the complaint and court filings, between May 2023 and January 2024, Jackson and Misuraca sold approximately 270 grams of fentanyl—often in broad daylight and in public locations across Long Island, including in residential areas and outside of stores.  In several transactions, Misuraca sold significant quantities of fentanyl to an undercover officer in the parking lot of the nursing home where she worked.  When the undercover officer arrived, Misuraca exited the nursing home, completed the sale, and then returned to work inside. 

Several fentanyl doses sold by the defendants tested positive for xylazine, an animal tranquilizer that is of similar potency to fentanyl but not susceptible to treatment with Narcan, a medication that can reverse overdoses.  Known by its street names “tranq” and the “zombie drug,” xylazine can cause users to blackout in a stupor and kill skin tissue by burning the flesh, which leads to deep sores. 

According to the DEA, fentanyl is approximately 100 times more potent than morphine and 50 times more potent than heroin as an analgesic.  From 2011 through 2021, fatal overdoses associated with misuse of clandestinely produced fentanyl and fentanyl analogs increased markedly.  According to the Centers for Disease Control and Prevention (CDC), overdose deaths involving synthetic opioids, excluding methadone were involved in roughly 2,600 drug overdose deaths each year in 2011 and 2012, but from 2013 through 2021, the number of drug overdose deaths involving synthetic opioids, excluding methadone increased dramatically each year, to more than 68,000 in 2021.  The total number of overdose deaths for this category was greater than 258,000 for 2013 through 2021.  Overdose deaths involving synthetic opioids are primarily driven by illicitly manufactured fentanyl, including fentanyl analogs.

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

The Defendants:

LEVAR JACKSON
Age:  44
Islip Terrace, New York

JACLYN MISURACA
Age: 45
Islip Terrace, New York

E.D.N.Y. Docket No. 24-MJ-112

Earlier today, in federal court in Brooklyn, Alan John Hanke, the sole member of IOLO Capital (IOLO), was arraigned before United States Magistrate Judge Joseph A. Marutollo on a nine-count indictment charging him with securities fraud conspiracy, wire fraud conspiracy, money laundering conspiracy, wire fraud, bankruptcy fraud, and filing a false bankruptcy declaration, in connection with schemes to induce investors to purchase speculative investments, to misappropriate the funds, and then to use the bankruptcy system to discharge his debts to his victims.  Hanke was arrested on January 25, 2024, in Cape Canaveral, Florida, as he was boarding an international cruise.  The defendant made his initial appearance on January 26, 2024 in United States District Court for the Middle District of Florida and was released on a $250,000 bond.

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

“As alleged, the victims trusted Hanke with millions of dollars for what they were assured would be safe investments,” stated United States Attorney Peace.  “In reality, the defendant deceived the victims and used their money to enrich himself with vacations and a luxury car, and then sought to abuse bankruptcy proceedings to shield his ill-gotten gains.  This Office will hold the defendant accountable for his criminal acts of greed and dishonesty and seek justice for his victims.” 

Mr. Peace thanked the Office of the United States Trustee for the Northern District of Illinois and the United States Attorney’s Office for the Middle District of Florida for their assistance in the matter.  

"Alan Hanke took a gamble by allegedly defrauding investors out of millions of dollars, which he ultimately used to fund his own personal expenses while also lying to bankruptcy court.  Hanke’s luck eventually ran out. He will now be forced to answer for his alleged false promises, lies, and misrepresentations.  You can bet the FBI will continue to make sure swindlers face just punishment for their attempted frauds," stated FBI Assistant Director-in-Charge Smith.

As alleged in the indictment, between November 2018 and August 2021, Hanke persuaded numerous investors, often in meetings in New York City, to invest in IOLO or related Hanke-run companies.  Hanke promised investors high returns within short periods of time by investing in, among other things, “standby letters of credit,” “medium term notes,” and “high yield bonds.”  Hanke also assured investors that their investments would be insured against losses.  However, nearly all of the money that the victims invested with Hanke went to the defendant’s personal expenses, including cruises, airfare, hotels, gambling expenses, and a luxury car.  Hanke also paid co-conspirators and other investors with money that he wrongfully obtained during the scheme.  The indictment further alleges that Hanke filed a bankruptcy petition in June 2021 in Illinois, in which he sought to discharge the debts that he owed to his victims.  In the bankruptcy petition, Hanke disclosed that he was paid monthly Social Security and Disability checks, but did not disclose the millions of dollars of income he received from his victims.  Hanke also did not disclose the proceeds from the sale of an airplane, or that he used the proceeds for personal expenses, including gambling and repairs to a close relative’s home, as well as $180,000 that was withdrawn in cash. 

If convicted, Hanke faces a maximum sentence of 20 years’ incarceration on the wire fraud, wire fraud conspiracy, and money laundering conspiracy counts and five years’ imprisonment on the securities fraud conspiracy, bankruptcy fraud, and false bankruptcy declaration charges.

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

The government’s case is being handled by the Office’s Business and Securities Fraud Unit.  Assistant United States Attorneys Nicholas J. Moscow and Matthew Skurnik are in charge of the prosecution, with assistance from Paralegal Specialist Madison Bates. 

The Defendant:

ALAN JOHN HANKE
Age: 50
Crystal Lake, Illinois

E.D.N.Y. Docket No. 24-CR-27 (RER)

Earlier today, in federal court in Brooklyn, Melinda Jacob, the former owner of a tax preparation business, pleaded guilty to a criminal Information charging her with the preparation of false tax returns.  The proceeding was held before United States Magistrate Judge James R. Cho.  When sentenced, Jacobs faces a maximum penalty of three years in prison as well as restitution and monetary penalties.

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

“With the tax season upon us, today’s guilty plea underscores the message that tax preparers have an obligation to perform their duties honestly, and when they abuse their position by filing false information that defrauds the IRS, the return will be a felony conviction like this and additional penalties,” stated United States Attorney Peace.

“While most tax preparers are reputable, it is the bad apples like Melinda Jacob who spoil the bunch.  She took advantage of her role and her clients by using their returns to steal money from the government. Jacob’s plea puts her a step closer the consequences of her dishonesty and deceit,” stated IRS-CI Special Agent-in-Charge Fattorusso.

Jacob owned and operated Melinda Jacob Tax Services, a tax preparation business located in her home in Brooklyn, New York.  Between 2019 and 2022, Jacobs prepared false and fraudulent Forms 5695 for multiple clients.  Form 5695 was an IRS form on which a taxpayer reported expenditures or costs associated with clean energy or energy efficient improvements to their home, and claimed one or both of the “Residential Clean Energy Credit” and the “Energy Efficient Home Improvement Credit” against their tax liability. A Form 5695, where applicable, is filed as an attachment to a taxpayer’s Form 1040.  Jacob inflated her clients’ tax refunds by preparing and submitting to the IRS false tax returns that claimed fictitious expenses relating to solar water heaters and geothermal heat pumps that resulted in the clients receiving fraudulent Residential Energy Credits. In most cases, Jacob made up the energy expenses listed on her clients’ tax returns and did not discuss the Residential Energy Credit with her clients. As a result of these false Forms 5695, the IRS suffered an aggregate tax loss of approximately $1,151,761.

The case is being prosecuted by Assistant United States Attorney Raffaela S. Belizaire.

The Defendant:

Melinda Jacob
Age: 48
Lake Mary, Florida

E.D.N.Y. Docket No. 24-CR-35 (RER)

A New York man was sentenced today to 12 years in prison and ordered to pay over $336 million in restitution for a years-long fraud scheme in which he and his co-conspirators, including physicians throughout the country, defrauded multiple health insurance companies out of hundreds of millions of dollars.

According to court documents and evidence presented at trial, Mathew James, 54, of East Northport, operated medical billing companies to provide billing services for physicians — primarily plastic or orthopedic surgeons throughout the United States — and used his companies to carry out a massive scheme to defraud insurance companies. As a third-party medical biller, James submitted claims to insurance companies and, when necessary, requested reconsideration or appeals of denied claims, typically earning a percentage of the amount paid by the insurance companies. The evidence showed that James billed for procedures that were either more serious or entirely different than those his doctor-clients performed. In addition, James made thousands of calls in which he impersonated patients and patients’ relatives to induce insurance companies to reconsider denied claims or pay more on approved claims, resulting in tens of millions of dollars in additional reimbursement to his doctor-clients and from which he received a percentage of the fraudulent proceeds.

James also directed his doctor-clients to schedule elective surgeries through the emergency room so that insurance companies would reimburse at substantially higher rates. When insurance companies denied the inflated claims, James impersonated patients to demand that the insurance companies pay the outstanding balances of tens or hundreds of thousands of dollars.

A federal jury convicted James on July 13, 2022, of health care fraud, conspiracy to commit health care fraud, wire fraud, and aggravated identity theft.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal 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 investigated the case.

Trial Attorney Miriam Glaser Dauermann of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Catherine Mirabile and Antoinette Rangel for the Eastern District of New York prosecuted the case. Assistant U.S. Attorney Tanisha Payne for the Eastern District of New York is handling asset forfeiture.

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

CENTRAL ISLIP, NY – Mathew James was sentenced today by United States District Judge Joanna Seybert to 12 years in prison for a massive health care fraud scheme in which he and his co-conspirators, including physicians throughout the country, defrauded multiple health insurance companies out of hundreds of millions of dollars.  James was sentenced to 10 years on the fraud charges and two years to be served consecutive on the aggravated ID theft charges.  The Court also ordered restitution in the amount of $336,996,416.85 and forfeiture of $63,382,049.02. 

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

“James went to great lengths to carry out a complex fraud scheme that caused insurance companies to pay hundreds of millions of dollars in fraudulent claims,” stated United States Attorney Peace.  “The defendant not only falsified medical records and forged signatures, but also brazenly impersonated patients and their family members, all of which justifies a significant jail sentence to deter others from such audacious conduct.”

“Today, Mathew James was justly punished with a lengthy sentence in prison for his immense and brazen health care fraud scheme.  James took extreme steps to carry out his more than half-billion-dollar fraud – faking signatures, impersonating well known figures in the world of sports, and utilizing fraudulent documents,” stated FBI Assistant Director-in-Charge Smith.  “The FBI will continue to take the lead in investigating and holding accountable anyone attempting to illegally profit from deceptive and fraudulent health care schemes.”

James operated medical billing companies to provide billing services for physicians, primarily plastic surgeons throughout the United States, and used his companies to carry out a massive scheme to defraud insurance companies. As a third-party medical biller, James submitted claims to insurance companies and when necessary, requested reconsideration or appeals of denied claims. James billed for procedures that were either more serious or entirely different than those his doctor-clients performed. For example, the government presented evidence that James impersonated Jeff Pash, the National Football League’s general counsel, and Marcus Smart, a professional basketball player then of the Boston Celtics of the National Basketball Association, in calls the defendant made to insurance companies in which he exaggerated medical procedures. James made thousands of impersonation calls resulting in over tens of millions of dollars in additional reimbursement to his doctor-clients and from which he received a percentage of the fraudulent proceeds.

James also directed his doctor-clients to schedule elective surgeries through the emergency room so that insurance companies would reimburse at substantially higher rates. When insurance companies denied the inflated claims, James impersonated patients to demand that the insurance companies pay the outstanding balances of tens or hundreds of thousands of dollars.

Assistant U.S. Attorneys Catherine Mirabile and Antoinette N. Rangel of the Eastern District of New York, and Trial Attorney Miriam Glaser Dauermann of the Justice Department’s Fraud Section are prosecuting the case.  Assistant U.S. Attorney Tanisha Payne of the Eastern District of New York’s Asset Recovery Section is handling forfeiture matters.

The Defendant:

MATHEW JAMES
Age:  54
East Northport, Long Island

E.D.N.Y. Docket No. 19-CR-382 (JS)

Earlier today, in federal court in Brooklyn, a superseding indictment was unsealed charging Aasim Boone, Jarrett Bruce and Lesly Valentin with one count of kidnapping conspiracy and Valentin with one count of transmission of interstate communications with intent to extort.  The charged crimes arise from the December 2022 abduction and attack on a victim from the Astoria neighborhood of Queens, New York.  Valentin was previously arrested and charged in the underlying indictment with transmission of interstate communications with intent to extort and is currently in custody.  Boone was arrested yesterday, and Bruce was arrested today. Both will be arraigned on the superseding indictment this afternoon before United States Magistrate Judge Robert M. Levy.  Valentin was previously arrested and is being held in custody pending trial.  Valentin will be arraigned on the superseding indictment at a later date.       

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 arrests and charges.

“As alleged, the crimes in this case are very disturbing.  The defendants targeted an unsuspecting victim, abducted him outside of his home and subjected him to unimaginable cruelty—all in their efforts for financial gain,” stated United States Attorney Peace.  “My office will continue to work tirelessly to ensure that the victim here receives justice and that our community is safe from these senseless acts of violence.”

Mr. Peace thanked the Joint Violent Crimes Task Force, which is comprised of agents from the FBI and detectives from the NYPD, for their assistance with the investigation.

“A victim subjected to kidnapping, brutal beatings, inhumane torture, and cash demands – this not a plot from a movie – these three defendants allegedly conspired and carried out these despicable acts on their target. The alleged actions of Boone, Bruce, and Valentin are disturbing and will not be tolerated.  FBI New York is determined to ensure brazen individuals willing to use inconceivable violence for financial gain are brought to justice,” stated FBI Assistant Director-in-Charge Smith.

As set forth in court filings, Boone, Bruce and Valentin conspired to kidnap the victim on December 9, 2022.  The victim was seized from outside of his apartment complex in Astoria.  After forcing the victim at gunpoint into a vehicle, the assailants drove the victim to New Jersey, subjected him to escalating forms of torture, and held him for nearly five hours.  Among other things, the assailants beat the victim with a gun, poured bleach on him, burned his back and legs with a blowtoch, and also sliced the victim’s ear with a knife.  The victim was ultimately released on the Upper East Side of Manhattan.  A few days after the kidnapping, one of the defendants—Valentin—sent text messages to the victim, threatening further harm to him and his family if he failed to pay the defendants $150,000 in cash and 50 lbs. of marijuana.

All three defendants have extensive criminal histories, and are believed to have participated in a series of residential burglaries committed by a violent street gang operating out of New Jersey.  Valentin had also previously pled guilty in New Jersey state court to aggravated assault in connection with a prior kidnapping.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of kidnapping conspiracy, the defendants face a maximum sentence of life imprisonment. 

The government’s case is being prosecuted by Assistant United States Attorneys Joshua B. Dugan and Lorena Michelen.

The Defendants:

AASIM BOONE
Age: 41
Englewood, New Jersey

JARRETT BRUCE (also known as “Inf,” “Infinite” and “Infamous”)
Age: 40
Englewood, New Jersey

LESLY VALENTIN
Age: 38
Asbury Park, New Jersey

E.D.N.Y. Docket No. 23-CR-292 (S-1) (RPK)

A New York man pleaded guilty today to failure to maintain an anti-money laundering program in violation of the Bank Secrecy Act as part of a scheme to bring lucrative and high-risk international financial business to a small, unsophisticated credit union.

According to court documents, from 2014 to 2016, Gyanendra Asre, 56, of New York, was a member of the supervisory board of the New York State Employees Federal Credit Union (NYSEFCU), a financial institution that was required to have an anti-money laundering program. Through the NYSEFCU and other entities, Asre participated in a scheme that brought over $1 billion in high-risk transactions, including millions of dollars of bulk cash transactions from a foreign bank, to the NYSEFCU. 

In addition, Asre was a certified anti-money laundering specialist who was experienced in international banking and trained in anti-money laundering compliance and procedures, and represented to the NYSEFCU that he and his businesses would conduct appropriate anti-money laundering oversight as required by the Bank Secrecy Act. Based on Asre’s representations, the NYSEFCU, a small credit union with a volunteer board that primarily served New York state public employees, allowed Asre and his entities to conduct high-risk transactions through the NYSEFCU. Contrary to his representations, Asre willfully failed to implement and maintain an anti-money laundering program at the NYSEFCU. This failure caused the NYSEFCU to process the high-risk transactions without appropriate oversight and without ever filing a single Suspicious Activity Report, as required by law.

He is scheduled to be sentenced on May 3. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, and Acting Special Agent in Charge Erin Keegan of Homeland Security Investigations (HSI) New York made the announcement.

HSI investigated the case.

Acting Chief Margaret Moeser of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorneys Ryan C. Harris and Francisco J. Navarro for the Eastern District of New York are prosecuting the case.

MLARS’ Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.

Earlier today, in federal court in Central Islip, Jonathan Hernandez, also known as “Kraken” and “Travieso,” a member of the Sailors Locos Salvatruchas Westside (Sailors) clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, was sentenced by United States District Judge Gary R. Brown to 520 months’ imprisonment.  Hernandez pleaded guilty in May 2022 to racketeering charges in connection with his participation in the January 28, 2016 murder of Michael Johnson, the April 29, 2016 murder of Oscar Acosta, an attempted murder on August 10, 2016, and a conspiracy to distribute cocaine and marijuana.    

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 Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the sentence.

“Today’s sentence is the result of choices the defendant made to commit serious crimes on behalf of the Sailors clique of the MS-13, including the brutal premeditated murders of two young men, assaults with dangerous weapons, attempted murders, and the distribution of drugs,” stated United States Attorney Peace.  “The substantial period of incarceration imposed today will protect the public from more crimes committed by the defendant and it is my hope, deter young men from joining this depraved gang.”

“The significant sentence handed down today hopefully provides a sense of justice and closure for the families of the victims murdered by Jonathan Hernandez.  The FBI’s Long Island Gang Task Force, along with our law enforcement partners, will remain relentless in our efforts to eliminate the threat posed by MS-13’s barbaric violence,” stated FBI Assistant Director-in-Charge Smith.

“The actions of this murderer were barbaric, lack humanity and robbed families of a loved one,” stated SCPD Acting Police Commissioner Waring said.  “This sentence ensures Hernandez will never have an opportunity to brutalize another person again. We will continue to collaborate with our law enforcement partners to disband this criminal enterprise and prioritize the safety of our community.”

According to court filings and statements made during Hernandez’s sentencing and guilty plea proceedings, Hernandez is a member of the Sailors clique of the MS-13 – one of the more powerful, violent, and well-established cliques on the East Coast of the United States – and committed the following crimes in order to maintain or increase his status in the gang:  The January 28, 2016 Murder of Michael Johnson

On January 28, 2016, the local leader of the Sailors clique and other MS-13 members and associates were at the Jocorena Deli in Brentwood, where they saw 29-year-old Michael Johnson, and claimed to recognize him as a member of the rival Bloods street gang.  At that point, Johnson was marked as their “food” – a reference to their intention to kill him.  

After receiving the requisite approval from the New York leader of the Sailors clique to commit this murder, Hernandez and several other MS-13 members were contacted by the local clique leader, informed of the plan to kill Johnson and instructed to bring weapons, including a machete and a baseball bat, to a wooded area in Brentwood.  Johnson was then lured to that secluded meeting location by the local clique leader under the guise of smoking marijuana.  The MS-13 members and associates, including Hernandez, ambushed him from behind – striking Johnson with the baseball bat, stabbing him with a knife, and taking turns hacking him with the machete.  They fled after hearing police sirens in the area.  Subsequently, Hernandez and other MS-13 associates were promoted in rank for their participation in this murder. 

Johnson was reported missing by family members.  Less than one week after his murder, on February 2, 2016, members of the SCPD responded to a 911 call about a body found in the woods by a passerby, and recovered Johnson’s body.  An autopsy determined Johnson’s cause of death to be sharp and blunt force injuries.    

The April 29, 2016 Murder of Oscar Acosta

In early 2016, Hernandez and his fellow Sailors clique members decided to “green light” 19-year-old Oscar Acosta for murder because they suspected that he was associating with the rival 18th Street gang after previously aligning himself with the MS-13.  The New York Sailors clique leader assigned roles as to which members would take the lead in planning and carrying out the murder. 

On April 29, 2016, a number of MS-13 members met Acosta in a wooded area near an elementary school in Brentwood where he had been lured under the guise of smoking marijuana.  They brutally beat Acosta with tree limbs, knocking him unconscious.  They bound Acosta’s hands and feet, wrapped an article of clothing around his mouth to prevent him from making noise, and summoned other MS-13 members, including the local Sailors clique leader and Hernandez, who arrived together.  The MS-13 members loaded Acosta into the trunk of a car and drove to a more secluded area in Brentwood near the abandoned Pilgrim State Psychiatric Hospital.  They removed Acosta, who was still alive, from the car trunk and carried him into the woods where they took turns hacking him to death with a machete.  The murder was supervised by the local Sailors clique leaders.  The MS-13 members then buried Acosta’s body in a shallow grave.   

Acosta’s body was discovered by law enforcement nearly five months later, on September 16, 2016, during a search for another MS-13 victim.  His cause of death was homicidal violence, including sharp and blunt force injuries to his head and torso.

The August 10, 2016 Attempted Murder of Rival Gang Members

In 2016, members of the MS-13 were engaged in a series of disputes with members of the Goon Squad, a rival gang in Brentwood.  On August 10, 2016, two armed MS-13 members, including the local leader of the Sailors clique, drove through the neighborhood around Lukens Avenue in Brentwood, and spotted several men who they believed were members of the Goon Squad, outside of a house.  The MS-13 members then rallied other members of the Sailors clique, including Hernandez, to kill the rivals.  

The MS-13 members divided into two vehicles, and drove towards the house where the suspected Goon Squad members had been spotted.  Hernandez and another MS-13 member, armed with a .40 caliber and .45 caliber handgun, exited the car and approached the group of suspected rivals.  Both fired numerous shots in their direction.  No one was hit, although a stray bullet entered a neighbor’s house and struck the headboard of a bed in which the neighbor was sleeping. 

Conspiracy to Distribute Cocaine and Marijuana

For a year and a half, from approximately April 2016 through October 2017, in order to finance the illegal operations of the Sailors clique, Hernandez and his fellow MS-13 members and associates regularly sold street-level quantities of cocaine and marijuana in Brentwood and its surrounding areas, which they obtained from clique leaders.  After the sales, the profits were turned over to the clique leaders, for use in, among other things, purchasing firearms for use by clique members, wiring money to MS-13 leaders in El Salvador and buying additional narcotics for further distribution.  A conservative estimate of the amount of marijuana distributed attributable to Hernandez and his clique during this time period is between five and 10 kilograms. 

Hernandez was previously sentenced in March 2018 by then-United States District Judge Joseph F. Bianco to 51 months’ imprisonment in connection with his earlier guilty plea to assault with dangerous weapons in aid of racketeering.  That conviction related to assaults that Hernandez and several other MS-13 members and associates carried out at athletic fields adjacent to the Brentwood East Elementary and Brentwood East Middle Schools in October 2015.  Hernandez and his fellow MS-13 gang members confronted a group of individuals who they suspected of being members of a rival gang, and when that group attempted to leave the area, Hernandez and several other MS-13 members surrounded them and began viciously attacking the group with baseball bats and pipes.  Today’s sentence credited Hernandez for the time he spent in custody on the previously-imposed 51-month sentence toward the 520 months’.   

Today’s sentence 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 65 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 Defendant:

JONATHAN HERNANDEZ (also known as “Kraken” and “Travieso”)
Age: 26
Brentwood, New York

E.D.N.Y. Docket No. 16-CR-403 (GRB)

Earlier today, in federal court in Brooklyn, Gyanendra Asre pleaded guilty to failing to maintain an anti-money laundering program in violation of the Bank Secrecy Act, as part of a scheme to bring lucrative and high-risk international financial business to a small, unsophisticated credit union. Today’s proceeding took place before United States District Judge Diane Gujarati.  When sentenced, Asre faces up to 10 years in prison.Earlier today, in federal court in Brooklyn, Gyanendra Asre pleaded guilty to failing to maintain an anti-money laundering program in violation of the Bank Secrecy Act, as part of a scheme to bring lucrative and high-risk international financial business to a small, unsophisticated credit union. Today’s proceeding took place before United States District Judge Diane Gujarati.  When sentenced, Asre faces up to 10 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 Erin Keegan, Acting Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations, New York (HSI) announced the guilty plea.

“Asre was an experienced anti-money laundering specialist well-versed in the Bank Secrecy Act’s provisions and deliberately ignored these protections, exposing financial institutions to the risk of illicit criminal activity,” stated United States Attorney Peace.  “This Office will vigorously enforce these laws to ensure the integrity of the U.S. financial system and to hold responsible those who would deliberately disregard them for financial gain.” 

“Gyanendra Asre was specifically trained in proper banking protocols and procedures. Yet, instead of following the necessary steps, the defendant took advantage of a small New York financial institution, which primarily served state employees, to the tune of $1 billion," said HSI New York Acting Special Agent in Charge Erin Keegan. "I commend HSI New York and our law enforcement partners for their dedication to ensuring vitally integral regulations — the foundation of our banking system — are upheld.”

According to court filings, from 2014 to 2016, Asre devised a scheme to bring lucrative and high-risk international financial business lines such as international currency trading to small, unsophisticated financial institutions.  Asre was trained in anti-money laundering compliance and procedures, and represented to the financial institutions that, because of his experience and training, he understood the risks associated with the high-risk business lines and would conduct appropriate anti-money laundering oversight as required by the Bank Secrecy Act.

Based on Asre’s representations, the New York State Employees Federal Credit Union (NYSEFCU), a small financial institution with a volunteer board that primarily served New York state public employees, allowed Asre to conduct high-risk transactions through the NYSEFCU.  Asre then caused the transfer of more than $1 billion in high-risk transactions, including hundreds of millions of dollars originating from high-risk foreign jurisdictions, through the NYSEFCU and other entities.  Asre, who was a certified anti-money laundering specialist with experience in international banking and anti-money laundering compliance and procedures, was a member of the NYSEFCU’s supervisory board during this time period.  However, contrary to his representations, Asre willfully failed to implement and maintain the requisite anti-money laundering programs or conduct oversight required to detect, identify and report suspicious transactions.  This caused, among other things, the NYSEFCU to process more than $1 billion in high-risk transactions during Asre’s tenure, without ever filing a single Suspicious Activity Report as required by law.

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

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section, in coordination with the Office’s Bank Integrity Task Force, which is charged with investigating and charging 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. Assistant United States Attorneys Ryan C. Harris and Francisco J. Navarro of the Eastern District of New York are prosecuting the case with Acting Chief Margaret Moeser of the Criminal Division’s Money Laundering and Asset Recovery Section.  The investigation is being conducted by HSI’s El Dorado Task Force in New York.

The Defendant:

GYANENDRA ASRE
Age:  56
Greenwich, Connecticut

E.D.N.Y. Docket No. 21-CR-174 (DG)

WASHINGTON – Fourteen Assistant United States Attorneys (AUSAs), two paralegal specialists, a Special Agent and two former AUSAs from the Eastern District of New York (EDNY) were recognized by Attorney General Merrick B. Garland for their extraordinary public service at the 70th and 71st Attorney General’s Awards Ceremony.  Recipients from both 2022 and 2023 were selected from a group of more than 800 nominees.

“Each of today’s recipients has served with distinction, and in so doing, they have enabled the Justice Department to advance its work on behalf of the American people,” stated Attorney General Merrick B. Garland.  “Their exceptional leadership, heroism, and dedication have benefited people and communities across the country.” 

“The outstanding work of EDNY attorneys, professional staff and our law enforcement partners in service to our district and our country, has been breathtaking, prosecuting complex economic crime, high-level drug trafficking, foreign terrorism, insurrection, cybercriminals and litigating the expert defense of our cases appealed to the Second Circuit,” stated United States Attorney Breon Peace.  “Their excellence and dedication are boundless, and as a result, they have made the world, a safer place.”

This year’s program honors individuals across the department and our federal, state, local, and tribal partners for their selfless efforts, protecting our national security and our civil rights, addressing rising violent crime in our communities, and prosecuting gangs and those trafficking in dangerous narcotics and human beings.  The awards also honor the work of civil and environmental litigation, which enforces the rule of law and upholds our Constitution.  They also recognize employees whose ideas and efforts save taxpayer dollars and help our government operate more effectively and efficiently, among other contributions to public safety and good governance.

70th Annual Attorney General Awards

The Attorney General’s Award for Outstanding Work in the Investigation, Extradition and Prosecution of ISIS Senior Leader

            United States v. Kandic

AUSAs Matt Haggans and Saritha Komatireddy, former AUSA Josh Hafetz and Paralegal Specialist Huda Abouchaer, together with law enforcement partners from the FBI and HSI, are being recognized for their outstanding work obtaining a trial conviction of Mirsad Kandic of Brooklyn, on charges of conspiring to provide, and providing material support to the Islamic State of Iraq and al-Sham (ISIS).  Kandic was a high-ranking member of ISIS, a designated foreign terrorist organization.  He had multiple responsibilities within ISIS, including recruiting foreign fighters, trafficking foreign fighters from the West through Turkey and into Syria, and obtaining weapons, military equipment, maps, money and false identifications for ISIS fighters. In carrying out these responsibilities, Kandic worked directly with ISIS emirs and battlefield commanders.

The Attorney General’s Award for Distinguished Service for 35 Years of Outstanding Work in Litigating Criminal Cases Before the Second Circuit Court of Appeals

             AUSA David James

Throughout AUSA David James’s 35-year career with the U.S. Attorney’s Office for the Eastern District of New York, he has represented the government in the Second Circuit in hundreds of cases with skill and dedication.  He has worked on some of the most significant and important appeals of the last few decades, from John Gotti in 1993 to Joaquin Guzman-Loera, aka “El Chapo,” in 2022. 

The Attorney General’s Award for Exceptional and Successful Work in the Trial Against Roger Ng

            United States v. Roger Ng

AUSAs Alixandra Smith, Drew Rolle and Dylan Stern, in partnership with colleagues from DOJ’s Fraud Section and Money Laundering and Asset Recovery Section, are recognized for securing the trial conviction of Roger Ng, a former managing director of the Goldman Sachs Group Inc. (Goldman Sachs) for his role in a multibillion-dollar bribery and money laundering scheme involving Malaysia’s state-owned investment and development fund, 1Malaysia Development Berhad.  As part of the scheme, Ng and his co-conspirators, including Tim Leissner, the former Southeast Asia Chairman and participating managing director of Goldman Sachs, paid more than $1 billion in bribes to 12 government officials in Malaysia and the United Arab Emirates to obtain and retain lucrative business for Goldman Sachs.  They also conspired to, and did, launder the proceeds of their criminal conduct through the U.S. financial system, including funding major Hollywood films such as “The Wolf of Wall Street.”

The Attorney General’s Award for Outstanding Entrepreneurism and Dedication in the Criminal Prosecution in the Digital Advertising Industry Inflicted by Foreign Cybercriminals

            United States v. Zhukov

AUSAs Saritha Komatireddy, Alex Mindlin and Artie McConnell brought a first-of-its-kind prosecution, exposing rampant fraud in the digital advertising industry inflicted by foreign cybercriminals seeking to steal from American companies and weaken American economic power.  This case exposed a fraud that affected nearly every American business and consumer and converted America’s own internet infrastructure and innovations into weapons for cybercrime.  The prosecution led to significant reforms and increased security controls among digital advertising platforms, cybersecurity companies and the entities that run the global registration system for IP addresses.  The team secured the indictment of 10 cybercriminals from two separate international cybercrime rings and the conviction of five of those cybercriminals, including the leader of each ring.

71st Annual Attorney General Awards

Attorney General’s Award for Distinguished Service

            U.S. v. Garcia Luna Trial Team

AUSAs Saritha Komatireddy, Phil Pilmar, Adam Amir, Erin Reid and Ryan Harris, EDNY Special Agent George Dietz, Paralegal Specialists Huda Abouchaer and Melissa Bennett, together with law enforcement partners from DEA and HSI, successfully investigated and obtained a trial conviction against the former Mexican cabinet official Genaro Garcia Luna for his corrupt assistance to the Sinaloa Cartel, one of the largest and most violent criminal organizations in the world.  Garcia Luna is the highest-ranking Mexican government official to have been prosecuted in a U.S. court.  The six-week trial included testimony from high-level Sinaloa Cartel leaders, Mexican public officials who had themselves engaged in corruption, former Mexican law enforcement officers who worked under Garcia Luna, and a former U.S. Ambassador. 

Operation Disruptive Capture

            United States v. Orekhov et al. and United States v. Grinin et al.

AUSAs Artie McConnell and Madeline O’Connor and SAUSA Scott Claffee teamed with law enforcement partners from FBI and DOJ task forces to disrupt Russia’s ability to illegally acquire sensitive U.S. technology and enforce sanctions imposed on Russia for their invasion of Ukraine. The initiative resulted in two indictments involving charging 15 defendants and arrests in Germany, Italy, Estonia, and France. The investigation also led to administrative enforcement actions, civil forfeiture involving millions of dollars in multiple foreign jurisdictions, and additional sanctions against individuals and companies. 

The Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security Operation Medusa

            Former AUSA Ian Richardson

Through Operation MEDUSA, former EDNY AUSA Ian Richardson, together with the FBI, completed a court-authorized operation to disrupt a global peer-to-peer network of computers compromised by sophisticated malware, called “Snake,” that the United States Government attributes to a unit within Center 16 of the Federal Security Service of the Russian Federation.  For nearly 20 years, this unit, referred to in court documents as “Turla,” used versions of the Snake malware to steal sensitive documents from hundreds of computer systems in at least 50 countries, which have belonged to North Atlantic Treaty Organization member governments, journalists, and other targets of interest to the Russian Federation.  After stealing these documents, Turla exfiltrated them through a covert network of unwitting Snake-compromised computers in the United States and around the world.  Operation MEDUSA disabled Turla’s Snake malware on compromised computers through the use of an FBI-created tool named PERSEUS, which issued commands that caused the Snake malware to overwrite its own vital components. 

January 6th Proud Boys Prosecution Team

            AUSA Nadia Moore

EDNY AUSA Nadia Moore was a vital member of the trial team, which included prosecutors from the U.S. Attorney’s Office in D.C. and the Organized Crime and Gang Section, and agents from the FBI, that secured convictions against five members of the Proud Boys for their actions before and during the breach of the U.S. Capitol on Jan. 6, 2021.  According to the trial evidence, in the months leading up to Jan. 6, the defendants plotted to oppose by force the lawful transfer of presidential power, and to prevent the Members of Congress, and the federal law enforcement officers who protect them, from discharging their duties. 

A New York woman was sentenced today to two years and one month in prison for her role in a multi-year visa fraud, identity theft, and immigrant smuggling conspiracy that brought Armenian citizens into the United States for profit.

According to court documents, Stella Boyadjian, 53, of Rego Park, led a transnational network of co-conspirators who engaged in a widespread visa fraud scheme to bring Armenian citizens into the United States by fraudulently claiming to the U.S. Citizenship and Immigration Services (USCIS) that the Armenians were members of performance groups, and thus qualified for P-3 “Culturally Unique Artist” visas. The P-3 nonimmigrant visa classification allows foreign nationals to temporarily travel to the United States to perform, teach, or coach as artists or entertainers, under a program that is culturally unique. A U.S. employer or sponsoring organization is required to submit a USCIS Form I-129 Petition for a Non-Immigrant Worker, along with supporting documentation, attesting that the performances in the United States are culturally unique.

Boyadjian ran a non-profit organization called Big Apple Music Awards (BAMA) Foundation based in Rego Park. She used the BAMA Foundation as well as formal and informal music industry contacts in the United States and Armenia to perpetuate the scheme. Boyadjian and others solicited Armenian citizens who wanted to come to the United States and charged them between $3,000 and $15,000 for P-3 visas facilitated by Boyadjian and others submitting fraudulent Form I-129 Petitions to the USCIS. To accomplish this, Boyadjian and other associates in Armenia acquired fraudulent performer certificates and organized staged photo sessions where the aliens wore traditional Armenian folk outfits to appear to be traditional Armenian performers. After being trained by Boyadjian and her conspirators on how to answer questions from USCIS visa adjudicators, the individual aliens presented these certificates and photos to U.S. consular officers during their visa interviews. Once the Armenians entered the United States, some would pay Boyadjian and her associates additional money to be included in another fraudulent petition asking for P-3 visa extensions. Some aliens overstayed their visas and remain unlawfully in the United States.

Boyadjian previously pleaded guilty in March 2019 to one count of conspiracy to defraud the United States, commit visa fraud, and unlawfully bring aliens to the United States, one count of visa fraud, and one count of aggravated identity theft.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, and Director of the Diplomatic Security Service (DSS) Carlos F. Matus made the announcement.

The DSS’ Criminal Fraud Investigations and Overseas Criminal Investigations Divisions investigated the case, with assistance from the USCIS Fraud Detection and National Security, Center Fraud Detection Operations in Vermont. 

Deputy Chief Rami S. Badawy of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney John O. Enright for the Eastern District of New York prosecuted the case.

BROOKLYN, NY – Earlier today, in federal court in Brooklyn, Stella Boyadjian was sentenced by United States Chief District Judge Margo K. Brodie to 25 months in prison for her role in a multi-year visa fraud, identity theft, and immigrant smuggling conspiracy that brought Armenian citizens into the United States for profit.  Boyadjian pleaded guilty in March 2019 to conspiracy to defraud the United States, commit visa fraud, and unlawfully bring aliens to the United States, visa fraud and aggravated identity theft.

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 Carlos F. Matus, Director of the U.S. Department of State’s Diplomatic Security Service (DSS), announced the sentence.

Boyadjian led a transnational network of co-conspirators who engaged in a widespread visa fraud scheme to bring Armenian citizens into the United States by fraudulently claiming to the U.S. Citizenship and Immigration Services (USCIS) that the Armenians were members of performance groups and thus qualified for P-3 “Culturally Unique Artist” visas. The P-3 nonimmigrant visa classification allows foreign nationals to temporarily travel to the United States to perform, teach, or coach as artists or entertainers, under a program that is culturally unique. A U.S. employer or sponsoring organization is required to submit a USCIS Form I-129 Petition for a Non-Immigrant Worker, along with supporting documentation, attesting that the performances in the United States are culturally unique.

Boyadjian ran a non-profit organization called Big Apple Music Awards (BAMA) Foundation based in Rego Park, Queens. She used the BAMA Foundation as well as formal and informal music industry contacts in the United States and Armenia to perpetuate the scheme. Boyadjian and others solicited Armenian citizens who wanted to come to the United States and charged them between $3,000 and $15,000 to be included on the Form I-129 Petitions. Boyadjian and other associates in Armenia acquired fraudulent performer certificates and organized staged photo sessions where the aliens wore traditional Armenian folk outfits to appear to be traditional Armenian performers. After being trained by Boyadjian and her conspirators on how to answer questions from USCIS visa adjudicators, the individual aliens presented these certificates and photos to U.S. consular officers during their visa interviews.  Once the Armenians entered the United States, some would pay Boyadjian and her associates additional money to be included in another fraudulent petition asking for P-3 visa extensions. Some aliens overstayed their visas and remained unlawfully in the United States.

The DSS’ Criminal Fraud Investigations and Overseas Criminal Investigations Divisions investigated the case, with assistance from the USCIS Fraud Detection and National Security, Center Fraud Detection Operations in Vermont.

Assistant United States Attorney John O. Enright of the Eastern District of New York and Rami S. Badawy, Chief of the Criminal Division’s Human Rights and Special Prosecutions Section are in charge of the prosecution.

The Defendant:

STELLA BOYADJIAN
Age:  53
Rego Park, Queens

E.D.N.Y. Docket No. 18-CR-57 (MKB)

United States Attorney Breon Peace announced today that the Eastern District of New York collected a total of $1,787,750,466.06 in criminal and civil actions filed in the Eastern District of New York and in cases in which the Office worked with other U.S. Attorney’s Offices and components of the Department of Justice in Fiscal Year 2023.  Of this amount, $273,839,971.81 was collected in criminal actions and $1,513,910,494.25 was collected in civil actions.

“I take great pride in the Eastern District’s substantial recoveries in Fiscal Year 2023, which is the result of our team’s strong commitment to justice and holding wrongdoers accountable for their crimes and misconduct,” stated United States Attorney Peace. “Providing restitution to victims of crime is also an important step in remedying the harm they have suffered and reaching some closure.”            

The U.S. Attorney’s Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

FY 2023 Collections Highlight

In August 2023, UBS AG and several of its U.S.-based affiliates agreed to pay $1.435 billion in penalties to settle a civil action filed in November 2018 that alleged misconduct related to UBS’ underwriting and issuance of residential mortgage-backed securities (RMBS) issued in 2006 and 2007.  UBS paid the United States $1,435,000,000 in civil penalties in exchange for dismissal of the complaint filed in the action.  The settlement resolved the last case brought by a Department of Justice Working Group dedicated to investigating the conduct of banks and other entities for their roles in creating and issuing RMBS leading up to the 2008 financial crisis. 
 

FY 2023 Forfeiture

Additionally, the U.S. Attorney’s Office for the Eastern District of New York, working with partner agencies and divisions, collected over $722,000,000 in asset forfeiture actions last year.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

The Justice Department announced today that it has signed an agreement with the State of New York Executive Chamber (Executive Chamber) to resolve the department’s claims that the Executive Chamber under former Governor Andrew Cuomo engaged in a pattern or practice of sexual harassment and retaliation in violation of Title VII of the Civil Rights Act of 1964. The agreement memorializes the reforms already carried out by current Governor Kathy Hochul as well as additional reforms aimed at preventing sexual harassment and retaliation in the Executive Chamber.

Title VII is a federal law that prohibits employment discrimination based on race, color, religion, sex and national origin. Title VII also forbids employers from retaliating against current and former employees for complaining about workplace discrimination or otherwise asserting their Title VII rights.

The department’s investigation, conducted jointly by the Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of New York, found that the Executive Chamber under former Governor Andrew M. Cuomo (1) subjected female employees to a sexually hostile work environment; (2) tolerated that environment and failed to correct the problem on an agency-wide basis and (3) retaliated against employees who spoke out about the harassment.

Former Governor Cuomo and many complicit senior staff left the Executive Chamber in 2021. Since the department’s investigation began in August 2021, the Executive Chamber has implemented changes to its policies and practices intended to prevent and address the alleged misconduct. The agreement announced today memorializes these efforts and calls for additional reforms, including:

• Expanding the Executive Chamber’s Human Resources Department;
• Creating new policies and procedures for the external reporting, investigation and resolution of complaints involving high-level Executive Chamber employees, including the Governor;
• Developing and implementing robust training and anti-retaliation programs and
• Creating mechanisms to assess the reforms’ effectiveness on a systemic basis.

“Executive Chamber employees deserve to work without fear of sexual harassment and harsh reprisal when they oppose that harassment,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The conduct in the Executive Chamber under the former governor, the state’s most powerful elected official, was especially egregious because of the stark power differential involved and the victims’ lack of avenues to report and redress harassment. With this settlement agreement, the Executive Chamber under Governor Hochul is undertaking additional actions that will address system failures of the past while helping prevent the recurrence of systemic sexual harassment and retaliation in the future.”

“We appreciate the Governor’s stated determination to make sure that sexual harassment does not recur at the highest level of New York State government,” said U.S. Attorney Breon Peace for the Eastern District of New York. “We share that goal and enter into this agreement to advance our common goal of creating clear, comprehensive and, most importantly, enduring policies preventing sexual harassment in the Executive Chamber.”

The enforcement of Title VII and other federal laws against employment discrimination is a top priority of the Justice Department. This agreement is part of the Civil Rights Division’s Employment Litigation Section’s Sexual Harassment in the Workplace Initiative, which seeks to eradicate sexual harassment in state and local government workplaces. It focuses on litigation, outreach and developing effective remedial measures to address and prevent sex discrimination and harassment.

More information about the work of the Civil Rights Division, the division’s Employment Litigation Section and civil rights enforcement at the U.S. Attorney’s Office for the Eastern District of New York is available at www.justice.gov/crt, www.justice.gov/crt/employment-litigation-section and www.justice.gov/usao-edny/civil-rights.

The Justice Department announced today that it has signed an agreement with the State of New York Executive Chamber (Executive Chamber) to resolve the department’s claims that the Executive Chamber under former Governor Andrew Cuomo engaged in a pattern or practice of sexual harassment and retaliation in violation of Title VII of the Civil Rights Act of 1964. The agreement memorializes the reforms already carried out by current Governor Kathy Hochul as well as additional reforms aimed at preventing sexual harassment and retaliation in the Executive Chamber.

Title VII is a federal law that prohibits employment discrimination based on race, color, religion, sex and national origin. Title VII also forbids employers from retaliating against current and former employees for complaining about workplace discrimination or otherwise asserting their Title VII rights.

The department’s investigation, conducted jointly by the Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of New York, found that the Executive Chamber under former Governor Andrew M. Cuomo (1) subjected female employees to a sexually hostile work environment; (2) tolerated that environment and failed to correct the problem on an agency-wide basis and (3) retaliated against employees who spoke out about the harassment.

Former Governor Cuomo and many complicit senior staff left the Executive Chamber in 2021. Since the department’s investigation began in August 2021, the Executive Chamber has implemented changes to its policies and practices intended to prevent and address the alleged misconduct. The agreement announced today memorializes these efforts and calls for additional reforms, including:

• Expanding the Executive Chamber’s Human Resources Department;
• Creating new policies and procedures for the external reporting, investigation and resolution of complaints involving high-level Executive Chamber employees, including the Governor;
• Developing and implementing robust training and anti-retaliation programs and
• Creating mechanisms to assess the reforms’ effectiveness on a systemic basis.

“Executive Chamber employees deserve to work without fear of sexual harassment and harsh reprisal when they oppose that harassment,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The conduct in the Executive Chamber under the former governor, the state’s most powerful elected official, was especially egregious because of the stark power differential involved and the victims’ lack of avenues to report and redress harassment. With this settlement agreement, the Executive Chamber under Governor Hochul is undertaking additional actions that will address system failures of the past while helping prevent the recurrence of systemic sexual harassment and retaliation in the future.”

“We appreciate the Governor’s stated determination to make sure that sexual harassment does not recur at the highest level of New York State government,” said U.S. Attorney Breon Peace for the Eastern District of New York. “We share that goal and enter into this agreement to advance our common goal of creating clear, comprehensive and, most importantly, enduring policies preventing sexual harassment in the Executive Chamber.”

The enforcement of Title VII and other federal laws against employment discrimination is a top priority of the Justice Department. This agreement is part of the Civil Rights Division’s Employment Litigation Section’s Sexual Harassment in the Workplace Initiative, which seeks to eradicate sexual harassment in state and local government workplaces. It focuses on litigation, outreach and developing effective remedial measures to address and prevent sex discrimination and harassment.

More information about the work of the Civil Rights Division, the division’s Employment Litigation Section and civil rights enforcement at the U.S. Attorney’s Office for the Eastern District of New York is available at www.justice.gov/crt, www.justice.gov/crt/employment-litigation-section and www.justice.gov/usao-edny/civil-rights.

Earlier today, in federal court in Brooklyn, former New York City Department of Correction (DOC) officer James Internicola pleaded guilty to federal program fraud, admitting that he fraudulently obtained a significant amount of salary and overtime pay by lying about the hours he worked.  The proceeding was held before United States District Judge Kiyo A. Matsumoto.  When sentenced, the defendant faces a maximum sentence of 10 years’ imprisonment.  Internicola resigned from the DOC after his arrest.

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

“The defendant defrauded the City of New York by falsely claiming to have worked thousands of hours and fraudulently pocketing more than $170,000, when he was actually at home, vacationing in Aruba or elsewhere,” stated United States Attorney Peace.  “The defendant’s greed cost taxpayer’s substantial money and threatens to undermine public confidence in our government institutions.  This Office and its law enforcement partners are committed to fighting corruption on Rikers Island.”

DOI Commissioner Strauber said, “This defendant, while a New York City Correction Officer, lied about the hours he worked, claiming to be on duty when, in fact, he was at home or on vacation, in order to obtain more than $170,000 of City funds by fraud.  The criminal conduct that he has acknowledged today does not reflect the dedication and integrity of the many City employees who show up every day to do their jobs and serve their fellow New Yorkers.  I thank our law enforcement partners in the U.S. Attorney’s Office for the Eastern District of New York and the New York Office of the FBI for their commitment to protect City resources and to ensure that employees who defraud the City will be held accountable.”

According to court documents and facts presented at the guilty plea proceeding, Internicola fraudulently obtained more than $171,000 in salary and overtime pay by lying about the hours he worked from at least July 2021 to January 2023.  During this time, Internicola claimed to work large amounts of overtime nearly every week.  In fact, based on license plate reader data, E-Z pass toll records and cell site location information, Internicola frequently showed up to work more than two hours late and left work several hours early.  In many instances, Internicola claimed to be at work when he actually never showed up to Rikers Island at all, including when he was at his home on Staten Island, visiting the Jersey Shore or vacationing in Aruba.  In total, Internicola claimed to have worked more than 2,250 hours more than he actually did in a period of approximately 18 months and he fraudulently received the equivalent of more than a year of his base salary.

The government’s case is being handled by the Office’s Public Integrity Section. The government’s case is being prosecuted by Assistant United States Attorneys Andrew D. Grubin and Philip Pilmar.

The Defendant:

JAMES INTERNICOLA
Age:  56
Staten Island, New York

E.D.N.Y. Docket No. 23-CR-531 (KAM)

Breon Peace, United States Attorney for the Eastern District of New York, announced today that New York Presbyterian Hospital (NYPH) has agreed to pay $801,000 to resolve claims that two radiology practices improperly billed Medicare, Medicaid and TRICARE for images used in image guided radiation therapy treatments (IGRT) provided to cancer patients.  The settlement agreement, which resolved claims under the Federal False Claims Act, was approved on January 19, 2024 by United States District Judge William F. Kuntz, II.

“The defendants provided substandard care to cancer patients by not properly or timely reviewing medical imaging and then billed taxpayer funded healthcare programs for these shoddy services,” stated United States Attorney Breon Peace. “My Office is committed to holding healthcare providers accountable for such conduct.”

Mr. Peace thanked the U.S. Department of Health and Human Services, Office of Inspector General, Federal Bureau of Investigation, Office of Personnel Management, Defense Healthcare Agency, and the New York State Office of Attorney General’s Medicaid Fraud Control Unit for their work on this case.

Radiation Therapist Associates, P.C. (RTA) and Leading Edge Radiation Oncology Services, PLLC (LEROS), which are no longer operating, provided outpatient radiation oncology services to several Brooklyn communities.  RTA was a physician practice located within Methodist Hospital and operated under a contract with a predecessor of NYPH.  LEROS was operated by an overlapping group of physicians and was a joint venture between NYPH’s predecessor and LEROS. 

IGRT is a type of cancer treatment that uses imaging technologies such as PET, MRI, and CT to deliver radiation more accurately and safely to cancer cells.  It uses periodically taken images to guide the precise delivery of radiation. 

The United States claimed that between 2012 and 2018, RTA and LEROS billed for images utilized in IGRT when such images were either not reviewed, or were not timely reviewed, and therefore were not reasonable and necessary.  Further, the investigation found that initial consultation sessions at RTA were in some instances billed at a higher coding level than appropriate. 

Under the terms of the agreement with the United States and the State of New York, NYPH will pay a total of $801,000, with $694,999.71 going to the United States and $106,000.29 to the State of New York.  These funds will go to the Medicare, Medicaid, and TRICARE programs.

The settlement includes the resolution of a civil action brought under the qui tam or whistleblower provisions of the False Claims Act.  Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendant.  The claims resolved by the settlement are allegations only and there has been no admission of or determination of liability.

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

E.D.N.Y. Docket No. 17-CV-6356

United States ex rel. RAD Claim, LLC v. Radiation Therapist Associates, P.C. et al.,

Earlier today, Garri Smith was sentenced to 48 months in prison by United States District Judge LaShann DeArcy Hall at the federal courthouse in Brooklyn, New York, for money laundering conspiracy in connection with his role in a multi-year scheme in which he and his co-conspirators stole millions of dollars from bank safety deposit boxes in seven foreign countries.  Smith pled guilty to the charge in June 2022.

Breon Peace, United States Attorney for the Eastern District of New York and Erin Keegan, Acting Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations, New York (HSI), New York and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the sentence. 

“Smith used deception and high-tech medical equipment to break into safety deposit boxes and steal millions of dollars, jewelry and even gold bars from customers around the world,” stated United States Attorney Breon Peace.  “This prosecution represents our continued commitment to combat theft and fraud, and put a stop to individuals who seek to use U.S. banks to launder their ill-gotten gains.”

Mr. Peace also expressed his appreciation for the assistance of the New York City Police Department, Customs and Border Protection (CBP), the European Union Agency for Law Enforcement Cooperation (Europol) and the governments of Azerbaijan, Latvia, Moldova, North Macedonia, Ukraine and Uzbekistan in the investigation.

“Garri Smith stole a fortune from banks around the world in a scheme more suited for a Hollywood production. He sought wealth and the finer things, but instead landed himself on the wrong side of the law,” said HSI New York Acting Special Agent in Charge Erin Keegan. “I want to thank FBI New York and our law enforcement partners here and abroad, who together have shown that even the craftiest of criminals will ultimately get caught.”

According to court filings and facts presented during the sentencing proceeding, Smith and other members of the conspiracy would pose as customers at the target banks in countries including Ukraine, Russia, North Macedonia, Moldova, Latvia, Uzbekistan and Azerbaijan, where they would rent safety deposit boxes, sometimes using fake identification documents.  After they gained access to rooms at the banks where these safety deposit boxes were located, they used specialized medical equipment to take photographs of the inside of the locks on other customers’ safety deposit boxes.  Using these photographs, the conspirators created duplicate keys to access the safety deposit boxes and used those keys to steal money and other valuables, including jewelry and gold bars, from the banks’ customers.  For his role in the thefts, Smith is accountable for a loss of $5.1 million.  They then laundered their ill-gotten gains into their United States-based bank accounts.

The government’s case is being prosecuted by Assistant United States Attorneys Devon Lash, Joy Lurinsky, Megan Larkin, and Brian Morris.

The Defendant:

GARRI SMITH
Age:  52
Brooklyn, New York

E.D.N.Y. Docket No. 21-CR-208 (LDH)

Earlier today, at the federal courthouse in Brooklyn, an indictment was unsealed charging Luis Rosario with being a felon in possession of ammunition relating to a December 3, 2023 shooting in the Red Hook section of Brooklyn.  Rosario was arrested this morning and will be arraigned this afternoon before United States Magistrate Judge Peggy Kuo. 

Breon Peace, United States Attorney for the Eastern District of New York; Tommy Kalogiros, Assistant Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Division (ATF); and Edward A. Caban, Commissioner, New York City Police Department (NYPD) announced the arrest and indictment.

“As alleged, Rosario is a convicted felon who shot and injured a man in broad daylight on a Brooklyn sidewalk without regard for the victim or passersby who were in the line of fire,” said United States Attorney Peace.  “Today’s arrest and indictment demonstrates the important work that this Office and our law enforcement partners are doing to reduce gun violence in our communities.”

“With today’s indictment, the NYPD continues its tireless efforts to rid our communities of gun violence,” stated NYPD Commissioner Caban.  “I thank all of our law enforcement partners for their dedication to this critical aspect of our public safety mission.”

“The callous disregard for life will not be tolerated under any circumstance. This indictment demonstrates the commitment of law enforcement and prosecutors working together at all levels. ATF NY is laser-focused on targeting the most significant drivers of violent crime in our communities. I commend the work of ATF NY’s Joint Firearms Task Force,  NYPD’s Brooklyn South Violent Crime Squad, NYPD’s 76th Precinct, Drug Enforcement Administration, U.S. Marshals Service, the U.S. Secret Service And the United States Attorney’s Office for the Eastern District of New York . We are dedicated to protecting the public and holding trigger pullers accountable for their actions,” stated ATF Assistant Special Agent-in-Charge Kalogiros. 

As alleged in the indictment and other court filings, on December 3, 2023, Rosario fired multiple shots from close range at three men standing on the sidewalk outside of a supermarket and restaurant located across the street from a housing development in Red Hook.  Surveillance video footage shows Rosario pulling a gun from his jacket and opening fire while passersby were walking along the sidewalk.  Rosario shot one man in the leg, causing him to collapse.  As the wounded victim lay on the sidewalk, Rosario got into a car and drove it directly toward the victim, running over his foot.

Rosario has a prior felony conviction.  On June 20, 2016, he was convicted in Bronx County Supreme Court of knowingly making or possessing dangerous contraband in prison in the first degree.

The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Rosario faces up to 15 years in prison.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  As part of the program, U.S. Attorney’s Offices work in partnership with federal, state, local, and tribal law enforcement and their local communities to develop effective, locally based strategies to reduce violent crime.  The U.S. Attorney’s Office for the Eastern District of New York is currently partnering with the SCPD, the NYPD, the Federal Bureau of Investigation (FBI), ATF, the U.S. Department of Homeland Security, Homeland Security Investigations (DHS/HSI), and the Drug Enforcement Administration (DEA) in its PSN mission.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Andrew M. Roddin and James R. Simmons are in charge of the prosecution.

The Defendant:

LUIS ROSARIO
Age: 30
Cliffside Park, New Jersey

E.D.N.Y. Docket No. 24-CR-20 (RER)

Earlier today, a federal grand jury in Brooklyn returned a two-count indictment charging Isaiah Dukes, also known as “Lil Zay Osama,” with possession of a machinegun and possession of an unregistered firearm.  Dukes is presently in state custody in Illinois on unrelated charges and will be arraigned in federal court in Brooklyn at a later date.  

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

“As alleged, Dukes brought a machinegun into our District, and then dangerously left it in the back of a rideshare,” stated United States Attorney Peace.  “This Office, together with our law enforcement partners, will continue to work diligently to protect our communities from such dangerous weapons.”

“Machineguns have been highly regulated in the United States since the 1930s and have been banned since 1986.  Machineguns have no place on the streets of our communities.  They are weapons intended to kill and injure with maximum effect, with the shooter often firing uncontrollably and indiscriminately.  They pose a significant danger to both the public and law enforcement.  Today’s indictment serves as an important reminder that machinegun conversion devices, such as switches, violate federal law, and that possession will not be tolerated.  The men and women of ATF will continue to work with our partners to reduce the proliferation of these devices on our streets. Thanks to ATF NY’s Joint Firearms Task Force, ATF Chicago, NYPD & EDNY,” stated ATF Assistant Special Agent-in-Charge Kalogiros.

“Today’s indictment is a stark reminder that loaded, illegal firearms – sometimes modified to maximize their deadly potential, as alleged in this case – continue to be brought into and carried throughout New York City,” stated NYPD Commissioner Caban. “Let me be clear: This behavior will not be tolerated here, and the NYPD vows to keep our streets safe from guns and anyone who unlawfully possesses them. I commend and thank the rideshare driver who observed this weapon for doing what we always ask of all New Yorkers: He saw something and he said something, and he possibly saved lives in the process.”

As alleged in public filings, on September 29, 2022, Dukes carried a loaded Glock pistol affixed with a switch — a device that when attached to the back of a handgun like a Glock converts the firearm into a fully automatic weapon.  Law enforcement subsequently determined that the firearm can automatically fire more than one round with a single function of the trigger, rendering it a machinegun.  Dukes was arrested after leaving the firearm in a rideshare vehicle that brought him from a luxury hotel in Manhattan to a recording studio in Queens. 

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

Assistant United States Attorneys Gilbert M. Rein and Rebecca M. Schuman are in charge of the prosecution with assistance from Paralegal Specialist Rachel Friedman.

The Defendant:

ISAIAH DUKES
Age:  26
Calumet City, Illinois

E.D.N.Y. Docket No. 24-CR-28 (NRM)

Earlier today, in federal court in Brooklyn, Tyshawn Corbett, also known as “Reck,” was sentenced by United States District Judge Kiyo A. Matsumoto to 45 years in prison.  In September 2022, the defendant pleaded guilty to three firearm offenses involving murder or assault in-aid-of racketeering, each of which carried a mandatory consecutive term of 10 years. 

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, announced the sentence. 

“For years, Corbett inflicted violence on rivals and terrorized the East New York community with impunity, but with today’s sentence, he has been punished for his repeated, flagrant disrespect for the law,” stated United States Attorney Peace.  “My Office is deeply committed to combating gang violence and will continue to work tirelessly with federal and local law enforcement to dismantle these groups.” 

“Everyone who was subjected to the intimidation and brutality perpetrated by Mr. Corbett can breathe easier today with news of this meaningful prison sentence,” stated NYPD Commissioner Edward A. Caban. “The NYPD, in close partnership with our colleagues at the FBI and the office of the U.S. Attorney for the Eastern District, will continue to focus its resources on the relatively small number of criminals responsible for driving the violence in New York City. Neither we nor the people we serve will ever stand for our neighborhoods to be overrun by illegal drugs, guns, and associated gang violence, and I commend the investigators and prosecutors involved in this case for their steadfast commitment to our public safety mission.”

According to court filings and transcripts, Corbett was a long-time member of the East New York-based Elite Assassin Millas (E.A.M.), a set of the Bloods street gang that operated primarily in East New York.  The gang made money through fraud and drug dealing, particularly sales of crack cocaine and marijuana.  The gang’s members murdered or attempted to murder its rivals to maintain its power.  E.A.M. even referred to its East New York-based chapter as “Gun Town” for the level of violence its members and associates committed and perpetuated.  

Within the gang, Corbett developed a reputation as a “shooter” for being willing to shoot and kill other people.  In this case, Corbett pleaded guilty to committing three shootings.  In April 2015, Corbett shot and killed Michael Tenorio.  Then, between 2016 and 2018, Corbett engaged in extensive efforts to stalk and kill another individual (John Doe #1).  Corbett attempted to shoot and kill John Doe #1 in March 2016 but John Doe #1 survived the shooting.  When that murder attempt failed, Corbett and other members of E.A.M. stalked John Doe #1 to try to kill him again.  On June 28, 2018, Corbett located John Doe #1 and fired at him repeatedly at close range, striking him approximately six times.  John Doe #1 survived the shooting but was left paralyzed.  Evidence presented during the trial of a co-defendant showed that Corbett participated in at least four additional shootings over the years.

The government’s case has led to the convictions of six members and associates of E.A.M. in addition to Corbett, including E.A.M.’s leader, Quandel Smothers, who was convicted at trial and is scheduled to be sentenced in March 2024.

This case is being prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Jonathan Siegel, Genny Ngai and Matthew Galeotti are in charge of the prosecution. 

The Defendant:

TYSHAWN CORBETT (also known as “Reck”)
Age: 32
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-213 (KAM)

Earlier today, in federal court in Central Islip, Lorraine Pilitz was sentenced by United States District Judge Joanna Seybert to 33 months’ imprisonment for illegally structuring financial transactions, corruptly obstructing the Internal Revenue Service and filing false tax returns.  Pilitz was also ordered to pay $324,702.78 in restitution to the Internal Revenue Service and forfeited a commercial property in Lindenhurst, New York.  Pilitz was convicted of the charges in November 2022 after a two-week trial.

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 sentence.

“For years Pilitz thought she could get away with hiding substantial amounts of cash and income, impeding the Internal Revenue Service, and cheating her employees, until a jury found her guilty on all counts.  Today’s sentence sends a message to the defendant and others who place greed above following the law that this Office will vigorously prosecute those who commit tax fraud,” stated United States Attorney Peace. 

“Lorraine Pilitz lined her pockets with money owed to the government by hiding hundreds of thousands of dollars and grossly underreporting her income with an ‘off-the-books’ payroll. IRS-CI New York worked closely with the Eastern District of New York on this case, and Pilitz has since been convicted by a jury of her peers.  Today’s sentencing means she now faces the consequences of her self-serving criminal acts,” stated IRS-CI Special Agent-in-Charge Fattorusso.

As proven at trial, Pilitz owned and operated several automobile-related businesses on Long Island.  Financial institutions are required to file a Currency Transaction Report (CTR) with the IRS for each transaction in excess of $10,000.  Between 2011 and 2013, the defendant routinely structured cash deposits to avoid the required CTR filings – depositing cash amounts just under $10,000.  As a result of Pilitz’s scheme, hundreds of thousands of dollars were concealed from the IRS.  As part of the same scheme to conceal her income, Pilitz also diverted hundreds of thousands of dollars of business checks into her and her family’s personal bank accounts, maintained “off-the-books” payrolls, failed to file personal and corporate tax returns, and filed false tax returns that severely underreported her income.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Burton T. Ryan, Jr., Adam R. Toporovsky, Madeline O’Connor and Diane Leonardo are in charge of the prosecution with assistance from Paralegal Specialist Michael Compitello.

The Defendant:

LORRAINE PILITZ (also known as “Lorraine Christie” and “Lorraine Storms”)
Age:  65
Merrick, New York

E.D.N.Y. Docket 17-CR-53 (S-2) (JS)

Earlier today, Marcia Joseph pleaded guilty at the federal courthouse in Brooklyn, to wire fraud in connection with her embezzlement of approximately $2.3 million from her employer, a non-profit organization that provides employment and education services for those in need.  Joseph was arrested in October 2023.  Today’s proceeding was held before United States District Judge Eric N. Vitaliano. When sentenced, Joseph faces up to 20 years’ 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 Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI), announced the guilty plea.

“With her guilty plea today, the defendant admitted that she failed in her duty to serve a non-profit organization by stealing millions of dollars for personal expenses that were meant to be spent in its mission helping vulnerable members of the community,” stated United States Attorney Peace.  “When she is sentenced, the defendant will learn the penalty for her dishonesty and greed.”

“This defendant created a company for the sole purpose of siphoning $2.3 million from the City-funded nonprofit where she worked.  She took valuable funds meant for the educational and employment needs of economically disadvantaged New Yorkers for her personal profit. DOI thanks our federal partners, the U.S. Attorney’s Office for the Eastern District of New York and the FBI, for their commitment to protecting precious public funds that help those in need,” stated DOI Commissioner Strauber.

According to the complaint, court filings, and facts presented during the plea hearing, Joseph was the senior fiscal officer of Company-1, a 501(c)(3) non-profit organization located in Brooklyn, New York that provides comprehensive services to support employment opportunities for persons with emotional, developmental, and/or physical disabilities, and those who are economically disadvantaged.  Joseph set up a company called Prestige Business Services (“Prestige”), which purported to provide specialized services to other companies on behalf of Company-1.  In truth, Prestige performed no work, and was used by Joseph for the exclusive purpose of embezzling more than $2.3 million from Company-1 over a 16-year period.  Joseph used the money paid by Company-1 to Prestige to pay for numerous personal expenses, including approximately $235,000 in mortgage payments; $207,000 in credit card payments; $98,000 in car payments; $45,000 in Amazon expenses; and various other personal items, such as home remodeling, spa treatment, landscaping expenses, and luxury goods.  Joseph also withdrew nearly $100,000 in cash, disbursed approximately $16,000 to friends and family, and issued approximately $50,000 in Prestige checks to herself.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorney Eric Silverberg is in charge of the prosecution with assistance from Paralegal Specialists Elizabeth Reed and Melissa Bennett.

The Defendant:

MARCIA JOSEPH (also known as “Marcia James,” “Marcia Lewis,” and “Marcia Peters”)
Age:  57
Baldwin, New York

E.D.N.Y. Docket No. 24-CR-4 (ENV)

This morning, Horst Jicha, a German national, will be arraigned at the federal courthouse in Brooklyn on an indictment charging him with securities fraud and conspiracies to commit securities fraud, wire fraud, and money laundering for his role in a cryptocurrency scheme called USI Tech.  Jicha was arrested, and the charges against him were unsealed when he entered the United States on December 23, 2023 attempting to vacation in Miami, Florida. 

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 charges.

“As alleged, in the early days of crypto, the defendant deployed a multilevel marketing scheme to defraud U.S. investors excited about the crypto market,” stated United States Attorney Peace.  “Although the defendant did not return to the United States for half a decade, my Office and the FBI worked to ensure that when he did, he would be brought to justice.  Our Office is committed to prosecuting any criminal actor defrauding U.S. investors for their own gain, regardless of where in the world they may come from.”

“Too often honest investors fall victim to schemes surrounding emerging financial opportunities. Horst Jicha allegedly advertised a platform that made cryptocurrency investing simple and more accessible to investors, with guaranteed returns.  In reality the platform was  just a facade, and when questions arose, Jicha stole millions of his investors’ money and fled the country.  No matter how long it takes, the FBI will continue to bring to justice criminal financial fraudsters,” stated FBI Assistant Director-in-Charge Smith.

As alleged in the indictment, USI Tech was an online platform that began in Europe and purported to make cryptocurrency investments easy and accessible to the average retail investor.  In reality, it was a multilevel marketing scheme that relied on investors recruiting other investors below them to buy various purported cryptocurrency investments.  Jicha was one of USI Tech’s founders and its Chief Executive Officer.  In 2017, Jicha brought USI Tech to the United States and aggressively marketed it to U.S. retailers on social media and through in-person presentations in which he falsely guaranteed high returns on investments and made false claims about the legality of the platform’s investment offerings. 

In early 2018, after USI Tech faced regulatory scrutiny in the United States, it ceased all U.S. operations overnight, leaving investors with no ability to access their money and resulting in millions of dollars in losses.  Much of the missing money – Ether and Bitcoin valued at approximately $150 million as of the date of his arrest – was sent to cryptocurrency deposit addresses controlled by Jicha after USI Tech ceased operations.  Jicha had not returned to the United States for over five years, until the date of his arrest.  

If you believe that you have been a victim of this crime, please contact USITechFraud@fbi.gov. 

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

The government’s case is being prosecuted by the Office’s Business and Securities Fraud and General Crimes Sections.  Assistant United States Attorneys Kaitlin Farrell, Genny Ngai, and Daniel Marcus are in charge of the prosecution with assistance from Paralegal Specialist Liam McNett.

Defendant: HORST JICHA
Age:  64
Germany

E.D.N.Y. Docket No. 23-CR-342 (OEM)

A five-count indictment was unsealed earlier today variously charging six defendants with interstate transportation of stolen property, interstate transportation of stolen motor vehicle and conspiracy counts, in connection with a 20-month scheme to steal rental cars from Hertz Global Holdings (Hertz) and other car companies, and merchandise from the retail stores Lowe’s Companies, Inc. (Lowe’s) and The Home Depot, Inc. (Home Depot).  Defendants Christopher World, Lovell Ambrister and Hassen Lewis were arrested this morning, during which a gun with an extended magazine was found, and will be arraigned later today at the federal courthouse in Brooklyn before United States Magistrate Judge Marcia M. Henry.  Defendants Trent Dance and Von Vincent are detained on other charges in Valhalla, New York and Auburn, New York, respectively, and they will be arrested and arraigned at the federal courthouse in Brooklyn at a later date.  Defendant William Harvin is still at large.

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 charges.

“As alleged, the instruction manual for these defendants was simple: commit crimes at every stage, and repeat. They stole over $300,000 in cars to drive to stores, which they robbed of over $500,000 in merchandise – and replayed this scheme at least 130 times across the East Coast,” stated United States Attorney Peace.  “Let this serve as a warning: retail theft has real consequences.”

Mr. Peace thanked the New York State Police; the Connecticut Department of Public Safety; the New York City Police Department; the Freeport Police Department, Freeport, New York; the South Burlington Police Department, South Burlington, Vermont; the Vestal Police Department, Vestal, New York; and the Wappingers Falls Police Department, Wappingers Falls, New York, for their assistance with the investigation.

"These six defendants allegedly attempted to benefit by stealing from home improvement stores up and down the East Coast. Today they have found out what the FBI has proven repeatedly—crime doesn’t pay. The arrests serve as a warning to anyone who believes they can pull off and profit from robberies– the FBI will ensure your crime spree is brought to an end," stated FBI Assistant Director-in-Charge Smith. 

As alleged in the government’s court filings, from about April 2022 to December 2023, the defendants stole rental cars from Hertz and others along the East Coast, drove those cars from New York to various branch stores of Lowe’s and Home Depot along the East Coast, and stole home improvement merchandise, often Lutron lighting products, for resale in New York.  As a result of the scheme, the defendants together stole at least $516,000 in merchandise from 71 Lowe’s branches and 59 Home Depot branches in 13 states, spanning from South Carolina to Maine.  At least 21 of the stores were located in the Eastern District of New York.  Each of the defendants personally participated in dozens of the thefts, and many of the defendants face arrest warrants for their thefts in multiple states, including Pennsylvania, Virginia and South Carolina.  The defendants also stole at least $320,000 in rental cars in four states, including New York.

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  The defendants face a maximum of 10 years’ imprisonment for each of the interstate transportation counts and a maximum of 5 years’ imprisonment for the conspiracy count.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorney Victor Zapana is in charge of the prosecution, with assistance from Paralegal Specialist Eileen Rosado.

The Defendants:

CHRISTOPHER WORLD (also known as “Birdo”)
Age:  22
Brooklyn, New York

LOVELL AMBRISTER (also known as “Stali”)
Age:  22
Bronx, New York

TRENT DANCE (also known as “Tre Savv”)
Age:  21
Brooklyn, New York

WILLIAM HARVIN (also known as “Pook”)
Age:  24
Brooklyn, New York

HASSEN LEWIS (also known as “Fan Boy”)
Age:  22
Brooklyn, New York

VON VINCENT
Age:  22
Brooklyn, New York

E.D.N.Y. Docket No. 24-CR-7 (AMD)

BROOKLYN, NY – A complaint was unsealed today in federal court in Brooklyn charging Ilya Kahn, a citizen of the United States, Israel, and Russia, for his alleged involvement in a multi-million dollar scheme to secure and illegally export sensitive technology from the United States for the benefit of a Russian business whose clients include elements of the Russian military and the Federal Security Service (FSB), the main successor agency to the Soviet Union’s KGB.  The Russian business, Joint Stock Company Research and Development Center ELVEES (Elvees), was sanctioned by the U.S. government in 2022 because of its critical role in facilitating Russia’s military and its invasion of Ukraine.  The complaint charges Kahn with conspiracy to violate the Export Control Reform Act.  Kahn was arrested yesterday in Los Angeles, California, and will make his initial appearance today in the Central District of California.

Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General for the Justice Department’s National Security Division, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jonathan Carson, Special Agent-in-Charge, U.S. Department of Commerce, Office of Export Enforcement, Bureau of Industry and Security, New York Field Office, announced the arrest and charges. 

Mr. Peace extended his appreciation to the U.S. Attorney’s Office for the Central District of California and the FBI’s Los Angeles Field Office for their assistance in this case.

“As alleged, Kahn illegally sent specialized technology from the United States to a Russian semiconductor manufacturer with ties to multiple other sanctioned Russian entities, and did so by circumventing U.S. export laws and regulations,” stated United States Attorney Peace.  “Evading U.S export regulations to send goods to benefit the Russian military complex presents a danger to our national security and our allies and partners abroad.  We will continue to use all of our law enforcement and national security tools to hold these enablers, both individuals and corporations, accountable for flouting the rule of law.”  

“Mr. Kahn stands accused of repeatedly exporting sensitive technology to Russia before, during, and after Russia launched its unprovoked invasion of Ukraine,” stated Assistant Attorney General Olsen.  “Violations of U.S. sanctions and export control laws that aid Russia and other hostile powers endanger our nation’s security and will be met with the full force of the Justice Department.”

“Illegally exporting semiconductors and other sensitive technology to a foreign adversary is not a trivial offense but a serious violation of American national security.  Ilya Kahn’s alleged actions – utilizing a nefarious web of companies to export sensitive controlled technology to the Russian military and intelligence services – directly harmed the interests and security of the United States and our allies.  The FBI, as we work to protect the United States, will continue to ensure that anyone willing to evade sanctions to aid hostile nations faces the consequences in the criminal justice system,” stated FBI Assistant Director-in-Charge Smith.

“Sophisticated illegal schemes such as this that violate our nation’s export control laws in effort to facilitate Russia’s war will not be tolerated. The Office of Export Enforcement will leverage our unique authorities and continue to work with our law enforcement partners to disrupt and arrest the perpetrators of these illicit schemes,” stated Department of Commerce Special Agent-in-Charge Carson.

Kahn is the owner of Senesys Incorporated based in California, and Sensor Design Association with a contact address in Brooklyn, New York.  As alleged in the complaint and other public filings, Kahn operated these two businesses—ostensibly involved in “security software development” and the testing of silicon wafers for military, avionics, and space users—through which he engaged in a years-long conspiracy to acquire and export sensitive and sophisticated electronics from the United States to Elvees in Russia without securing the appropriate licenses.  For example, in 2019, Kahn sent multiple U.S.-origin microcontrollers to Elvees, and in 2022, Kahn sent U.S.-origin network interface controllers and a radio-frequency transmitter to Elvees by way of a Hong Kong-based shipping company.  Each of these items required an export license due to national security and anti-terrorism reasons, which Kahn did not obtain.

Kahn also arranged for Elvees to continue to receive semiconductors after Russia’s February 2022 invasion of Ukraine increased the difficulty of shipping semiconductors to Russia.  These semiconductors can be used for, among other things, communications systems, GPS receivers, and equipment for unmanned aerial vehicles, also known as drones.  After a company in Taiwan that manufactured Elvees-designed semiconductors refused to ship those semiconductors to Russia following the invasion of Ukraine, Kahn arranged for the semiconductors to be sent to the United States and then re-exported them to Russia often through a shipping company based at John F. Kennedy International Airport in Queens, New York.  Kahn also used Hong Kong and other locations around the world as transshipment points in order to evade U.S. export laws and regulations and conceal the Russian end users. 

Even after Elvees was sanctioned by the U.S. government for its role in developing electronics components for the Russian military, Kahn continued to work with Elvees.  In May 2022, Kahn emailed a Taiwan manufacturer design guidance for an Elvees-branded microchip.  Subsequently, Kahn shipped thousands of units of this microchip to a Hong Kong shipping company, and then to a company located in the mainland of the People’s Republic of China.  Kahn noted in communications with the Hong Kong shipping company that he received a “call from Russia” about the PRC business to which he was directing the goods. 

Kahn’s export activity for the benefit of Elvees dates to at least 2012, and he received more than $50 million from Elvees and related entities between 2012 and 2022.

The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted of the charge, Kahn faces up to 20 years in prison.

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

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:

ILYA KAHN
Age: 66
Israel, Brooklyn, NY; Los Angeles, California

E.D.N.Y. Docket No. 23-MJ-1133

Ilya Kahn, 66, a citizen of the United States, Israel and Russia, and resident of Brooklyn, New York, and Los Angeles, California, was arrested yesterday in Los Angeles for his alleged involvement in a years-long scheme to secure and unlawfully export sensitive technology from the United States for the benefit of a Russian business. The business was sanctioned by the U.S. government following Russia’s unprovoked invasion of Ukraine in February 2022 and whose clients include elements of the Russian military and the Federal Security Service (FSB), the main successor agency to the Soviet Union’s KGB.

According to court documents, Kahn is charged by criminal complaint with conspiracy to violate the Export Control Reform Act (ECRA). Kahn will make his initial appearance in the Central District of California.

“Mr. Kahn stands accused of repeatedly exporting sensitive technology to Russia before, during, and after Russia launched its unprovoked invasion of Ukraine,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Violations of U.S. sanctions and export control laws that aid Russia and other hostile powers endanger our nation’s security and will be met with the full force of the Justice Department.”

“This arrest reflects our continued aggressive enforcement of export control violations involving the Russian military and the Federal Security Service,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod of the Commerce Department’s Bureau of Industry and Security (BIS). “Stopping the flow of semiconductors and sensitive technologies to those aiding Russia’s unjust war in Ukraine is a critical priority for BIS and our Disruptive Technology Strike Force partners.” 

“As alleged, Kahn illegally sent specialized technology from the United States to a Russian semiconductor manufacturer with ties to multiple other sanctioned Russian entities and did so by circumventing U.S. export laws and regulations,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Evading U.S export regulations to send goods to benefit the Russian military complex presents a danger to our national security and our allies and partners abroad. We will continue to use all of our law enforcement and national security tools to hold these enablers, both individuals and corporations, accountable for flouting the rule of law.”  

“This arrest marks the end of Ilya Khan's alleged involvement in a years-long scheme to secure and export millions of dollars’ worth of sensitive technologies from the U.S. to Russia to be used by its military and intelligence services,” said Executive Assistant Director Larissa L. Knapp of the FBI's National Security Branch. “Any attempt to circumvent U.S. laws, sanctions, and regulations will not be tolerated, and thanks to a coordinated interagency effort, our national security and our partners' are stronger than ever.”

According to court documents, Kahn is the owner of Senesys Incorporated, which is based in California, and Sensor Design Association, which maintains a contact address in Brooklyn. As alleged in the complaint and other public filings, Kahn operated these two businesses – ostensibly involved in “security software development” and the testing of silicon wafers for military avionics and space users – through which he engaged in a years-long conspiracy to acquire and export sensitive and sophisticated electronics from the United States to a sanctioned Russian business without acquiring the appropriate licenses. The Russian business, Joint Stock Company Research and Development Center ELVEES (Elvees) was added to the Commerce’s Department’s Entity List in March 2022 and was sanctioned by the Treasury Department in September 2022 because of its critical role in facilitating Russia’s military and its invasion of Ukraine.

For example, according to the complaint, in 2019, Kahn exported multiple U.S.-origin microcontrollers to Elvees in Russia, and in 2022, he exported U.S.-origin network interface controllers and a radio-frequency transmitter to Elvees in Russia by way of a Hong Kong-based shipping company. Each of these items required an export license from the Commerce Department, which Kahn did not obtain, and were controlled for national security and anti-terrorism reasons.

As alleged, Kahn also arranged for Elvees to continue to receive semiconductors manufactured in Taiwan following Russia’s invasion of Ukraine in February 2022. Specifically, after the Taiwanese company that manufactured Elvees-designed semiconductors refused to ship those semiconductors to Russia, Kahn arranged for the semiconductors to be sent to the United States and then re-exported them to Russia, often through a shipping company based at John F. Kennedy International Airport in Queens, New York. Kahn also used Hong Kong and other locations around the world as transshipment points to evade U.S. export laws and regulations and to conceal the Russian end users. 

Even after Elvees was added the Entity List, Kahn continued to work with the company. In May 2022, Kahn emailed design guidance for an Elvees-branded microchip to a Taiwan manufacturer. Subsequently, Kahn shipped thousands of units of this microchip – through a New York-based shipper – to a Hong Kong shipping company, and then to a company located in mainland China. Kahn noted in communications with the Hong Kong shipping company that he received a “call from Russia” about the Chinese business to which he was directing the goods. 

If convicted, Kahn faces a maximum penalty of 20 years in prison for conspiracy to violate the ECRA.

The FBI and Department of Commerce’s BIS New York Field Office are investigating the case. The U.S. Attorney’s Office for the Central District of California provided significant assistance.

Assistant U.S. Attorneys Craig R. Heeren, Artie McConnell, and Matthew Skurnik for the Eastern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with assistance from Litigation Analysts Joseph Levin and Mary Clare McMahon.

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.

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

আজ ব্রুকলিনের ফেডারেল কোর্টে পূর্বেকার একটি রায় বাতিল করে সৈয়দ রুবেল আহমেদ (Syed Rubel Ahmed), শাহাদ আলম (Shahed Alom), আবু চৌধুরী (Abu Chowdhury), আঞ্জু খান (Anzu Khan) এবং সুলতানা রাজিয়া (Sultana Razia)-এর বিরুদ্ধে অপহরণ এবং জন ডো-1 (John Doe-1)-কে অপরহণের ষড়যন্ত্র করার অভিযোগে; আবু চৌধুরী এবং ইফফাত লুবনার (Iffat Lubna) বিরুদ্ধে জন ডো-2 (John Doe-2)-কে অপরহণ করার জন্য ষড়যন্ত্র করার জন্য; এদের বিরুদ্ধে চার্জ পেশ করার বিষয়টি ঘোষণা করা হয়েছে।  আবু চৌধুরি ও তার স্ত্রী লুবনা এর বিরুদ্ধে এর আগে উল্লিখিত অভিযোগে জন ডো-2 অপহরণের অভিযোগ আনা হয়েছিল।  আসামী এবং ভুক্তভোগীগণ Queens একই জাতিগত সম্প্রদায়ের সদস্য।  আহমেদ, আলম, খান ও রাজিয়া-কে আজ গ্রেপ্তার করা হয়েছে এবং আজ বিকেলে ইউনাইটেড স্টেটস ম্যাজিস্ট্রেট জজ Joseph A. Marutollo এর সামনে হাজির করা হবে।  আবু চৌধুরি ও লুবনা-কে এর আগে গ্রেপ্তার করা হয়েছিল এবং পরবর্তী তারিখে তাদের বিরুদ্ধে অভিযোগ গঠন করা হবে। সপ্তম আসামী পলাতক রয়েছেন।

ব্রিয়ন পিস (Breon Peace), ইউনাইটেড স্টেটস অ্যাটর্নি ফর দ্য ইস্টার্ন ডিস্ট্রিক্ট অব নিউ ইয়র্ক, জেমস স্মিথ (James Smith), অ্যাসিস্ট্যান্ট ডিরেক্টর-ইন-চার্জ, ফেডারেল ব্যুরো অব ইনভেস্টিগেশন, নিউ ইয়র্ক ফিল্ড অফিস (FBI) এবং এডওয়ার্ড এ. ক্যাবান (Edward A. Caban), কমিশনার, নিউ ইয়র্ক সিটি পুলিশ ডিপার্টমেন্ট (NYPD), গ্রেফতার ও অভিযোগের বিষয়টি ঘোষণা করেছে। 

ইউনাইটেড স্টেটস অ্যাটর্নি পিস বলেন, “অভিযোগ অনুসারে, আসামীগণ নির্মমভাবে শারীরিক ও যৌন নির্যাতনের মতো ঘটনা ঘটিয়েছে”।  “আসামীগণ অপরাধকে আরো গুরুত্বর করতে ভুক্তভোগীদের সাথে তাদের শেয়ার করা জাতিগত পটভূমিকে কাজে লাগিয়েছে বলে অভিযোগ রয়েছে।  এই আসামীগণের কারণে ভুক্তভোগী হওয়া যেকোনো কাউকে ইউনাইটেড স্টেটস অ্যাটর্নি'স অফিসের https://www.justice.gov/usao-edny/report-crime ঠিকানায় গিয়ে যোগাযোগ করার জন্য আমি অনুরোধ জানাচ্ছি।”

মি. পিস তদন্তে সহায়তা করার জন্য জয়েন্ট রোবারি ভায়োলেন্ট ক্রাইমস টাস্ক ফোর্সকে ধন্যবাদ জানান যেটি FBI-এর এজেন্ট এবং NYPD-এর গোয়েন্দাদের সমন্বয়ে গঠিত।

“অপহরণের শিকার হওয়া ব্যক্তিদের উপর এই বিবাদীরা যে সহিংস শারীরিক এবং যৌন অত্যাচার করেছে, তা অত্যন্ত উদ্বেগজনক বিষয়। আমাদের সমাজে সহিংস অপরাধের কোনো জায়গা নেই এবং যারা এই ধরনের অপরাধ করবে, তারা আমাদের বিচারব্যবস্থার পরম শক্তির সম্মুখীন হবে -- সেটা যাতে ঘটে, FBI এবং FBI নিউ ইয়র্ক জয়েন্ট ভায়োলেন্ট ক্রাইম টাস্ক ফোর্স তা নিশ্চিত করবে,” FBI অ্যাসিস্ট্যান্ট ডিরেক্টর-ইন-চার্জ স্মিথ বলেন।

NYPD-এর কমিশনার কাবান (Caban) বলেন, “NYPD-এর পুরুষ ও মহিলারা এই সমস্ত অত্যন্ত গুরুতর অভিযোগের নিন্দা করে। আমরা ও আমাদের আইন বাস্তবায়নকারী পার্টনাররা সহিংসতা এবং অত্যাচার সংক্রান্ত সব অভিযোগকে অতি গুরুত্ব সহকারে বিবেচনা করে এবং New York City রাস্তা থেকে এই ধরনের অপরাধ নির্মূল করার ব্যাপারে প্রতিজ্ঞাবদ্ধ।” 

27 মার্চ 2023 তারিখে Jamiaca, Queens জন ডো-1 এর অপহরণ

অপহরণের অভিযোগ এবং আদালতের দাখিলার বিবরণ অনুযায়ী 27 মার্চ 2023 তারিখে প্রায় 14 ঘণ্টা ধরে আহমেদ, আলম, চৌধুরী, খান এবং রাজিয়া Jamiaca, Queens একটি পাবলিক স্ট্রিটের একজন ভুক্তভোগী (“John Doe-1”)-কে অপহরণ ও লাঞ্ছিত করেছিল।  181st Street এবং Hillside Avenue-এর আশেপাশে জন ডো-1 হাঁটাহাটি করার সময় চৌধুরী তাকে হোন্ডা মিনিভ্যানে (SUV) জোর করে তুলে নিয়ে যাওয়ার অভিযোগ করেছে।  চৌধুরী  মিনিভ্যানের ভিতরেই জন ডো-1 কে মারতে শুরু করেছিলেন।  অপহরণের সময়, চৌধুরী জন ডো-1 কে মিনিভ্যান থেকে বের হতে বাধ্য করেছিলেন এবং ভুক্তভোগীকে আবাসিক এলাকায় নগ্নাবস্থায় দাঁড় করিয়ে ছবি তুলছিলেন।  অপহরণের সময় আহমেদ, আলম, খান এবং রাজিয়া সেলুলার টেলিফোনের মাধ্যমে আবু চৌধুরী এর সাথে যোগাযোগ করে সারা রাত জুড়ে বিভিন্ন পয়েন্টে চৌধুরী এর সাথে সাক্ষাৎ করেছিলেন এবং জন ডো-1 কে আরো মারধর ও হত্যার হুমকিতে অংশ নিয়েছিলেন। জন ডো-1 অপহরণকারীদের নিকট পানি পানের জন্য আকুতি জানালে আসামীগণ তাকে চেতনানাশক জল মিশ্রিত দিয়েছিল।  পরবর্তীতে জন ডো-1 জ্ঞান হারিয়ে ফেলে এবং অপহরণের পরেরদিন স্থানীয় একটি হাসপাতালে তার জ্ঞান ফিরে পায়।

11 মে 2023 তারিখে Woodside, Queens জন ডো-2 এর অপহরণ

অপহরণের অভিযোগ এবং আদালতের দাখিলার বিবরণ অনুযায়ী 11 মে 2023 তারিখ থেকে শুরু হয়ে প্রায় তিন চৌধুরী এবং লুবনা জন ডো-1 কে অপহরণ ও লাঞ্ছিত করেছিল। জন ডো-2 Woodside, Queens 72 তম স্ট্রিট এবং Broadway-এর পাশের একটি রেস্তোরাঁর বাইরে লুবনা এর সাথে দেখা করার জন্য অপেক্ষা করছিলেন তখন চৌধুরী জন ডো-2 কে জোর করে একটি মিনিভ্যানে তুলে মারধর শুরু করেন।  অপহরণের সময়, চৌধুরী এবং লুবনা জন ডো-2 কে একটি হোটেলে নিয়ে গেলে সেখানে চৌধুরী জন ডো-2 কে যৌন হয়রানি করেন।  এছাড়াও চৌধুরী ভুক্তভোগীর নিরাপত্তার জন্য $20,000 দাবি করে জন ডো-2 এর বাবার কাছে মুক্তিপণের জন্য কল করেছিলেন। যেখানে অপহরণের ঘটনাটি ঘটেছে সেটি হলো একটি জাতিগত সম্প্রদায় সেখানে আসামীগণ ভুক্তভোগীকে সতর্ক করে বলেছিল যে তিনি যদি আইন প্রয়োগকারীকে সহযোগিতা করে তাহলে তারা সহজেই তাকে খুঁজে পেতে পারে।  অপহরণের তৃতীয় দিনে, চৌধুরী জন ডো-2 কে বেঁধে একটি পরিত্যক্ত বাড়িতে ফেলে রেখে যান। জন ডো-2 তার বাঁধন দাঁত দিয়ে কেটে, জানালা ভেঙে এবং পাশের বাসিন্দাদের 911 নম্বরে কল করতে বলে নিজেকে মুক্ত করতে সক্ষম হয়েছিল।

অভিযুক্তের অভিযোগগুলো হলো নিছক অভিযোগ এবং আসামীগণ হলো  দোষী প্রমাণিত না হওয়া পর্যন্ত তারা নির্দোষ বলে মনে করা হয়।  সবগুলোতে দোষী সাব্যস্ত হলে আসামিদের সর্বোচ্চ যাবজ্জীবন কারাদণ্ড হতে পারে।   

          সরকারের মামলাটি অফিস'স জেনারেল ক্রাইম সেকশন (Office’s General Crimes Section) কর্তৃক পরিচালিত হচ্ছে। অ্যাসিস্ট্যান্ট ইউনাইটেড স্টেটস অ্যাটর্নি স্টেফানি পাক (Stephanie Pak) এবং ভিনসেন্ট চিয়াপিনি (Vincent Chiappini) প্যারালিগাল বিশেষজ্ঞ ক্যাটরিনা বাতিস্তা (Katrina Batista)-এর সাথে যৌথভাবে প্রসিকিউশনের দায়িত্বে রয়েছেন।

পূর্বে অভিযুক্ত আসামীগণ:

আবু চৌধুরি (ABU CHOWDHURY)

বয়স: 34

জ্যামাইকা, কুইন্স (Jamaica, Queens)

ইফাত লুবনা (IFFAT LUBNA)

বয়স: 24

জ্যামাইকা, কুইন্স (Jamaica, Queens)

নতুনভাবে-অভিযুক্ত বিবাদীগণ:

সৈয়দ রুবেল আহমেদ (SYED RUBEL AHMED)

বয়স: 43

জ্যামাইকা, কুইন্স (Jamaica, Queens)

শাহেদ আলম (SHAHED ALOM)

বয়স: 29

জ্যামাইকা, কুইন্স (Jamaica, Queens)

আঞ্জু খান (ANZU KHAN)

বয়স: 28

জ্যামাইকা, কুইন্স (Jamaica, Queens)

সুলতানা রাজিয়া (SULTANA RAZIA)

বয়স: 38

উডসাইড কুইন্স (Woodside, Queens)

E.D.N.Y. Docket No. 23-CR-278 (S-1) (NRM)

Earlier today, in federal court in Brooklyn, a superseding indictment was unsealed charging Syed Rubel Ahmed, Shahed Alom, Abu Chowdhury, Anzu Khan and Sultana Razia with one count of kidnapping and one count of conspiracy to kidnap John Doe-1; Abu Chowdhury and Iffat Lubna with one count of conspiracy to kidnap John Doe-2.  Abu Chowdhury and his wife Lubna were previously charged with kidnapping John Doe-2 in the underlying indictment.  The defendants and the victims are members of the same ethnic community in Queens.  Ahmed, Alom, Khan and Razia were arrested today and are scheduled to be arraigned this afternoon before United States Magistrate Judge Joseph M. Marutollo.  Abu Chowdhury and Lubna were previously arrested and will be arraigned on the superseding indictment at a later date. A seventh defendant remains at large.

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 arrests and charges. 

“As alleged, the defendants carried out acts of brutal physical and sexual assault of the victims,” stated United States Attorney Peace.  “The defendants allegedly exploited their shared ethnic background with the victims in furtherance of the crimes.  I urge anyone who believes they were victims of these defendants to contact the United States Attorney’s Office at https://www.justice.gov/usao-edny/report-crime.”

Mr. Peace thanked the Joint Violent Crimes Task Force, which is comprised of agents from the FBI and detectives from the NYPD, for their assistance with the investigation.

“The violent physical and sexual assaults these defendants allegedly inflicted upon the victims they kidnapped were disturbing beyond measure. Violent crimes of any nature have no place in our society, and those who perpetrate such crimes will find themselves facing the full extent of our justice system--the FBI and the FBI New York Joint Violent Crimes Task Force is here to make sure of it,” stated FBI Assistant Director-in-Charge Smith.             

 “The men and women of the NYPD condemn these deeply disturbing allegations,” stated NYPD Commissioner Caban. “We and our law enforcement partners take extremely seriously all accusations of violence and abuse and remain dedicated to eradicating such criminal behavior from the streets of New York City.”

The March 27, 2023 Kidnapping of John Doe-1 in Jamaica, Queens

As alleged in the superseding indictment and detailed in court filings, over the course of approximately 13 hours on March 27, 2023, Ahmed, Alom, Chowdhury, Khan, Razia and a co-conspirator, abducted and assaulted a victim (“John Doe-1”) off a public street in Jamaica, Queens.  John Doe-1 had been walking in the vicinity of 181st Street and Hillside Avenue when Chowdhury allegedly forced him into a Honda SUV.  Inside the SUV, Chowdhury began beating John Doe-1 as the co-conspirator drove them around Queens.  During the kidnapping, Chowdhury forced John Doe-1 to exit the SUV and filmed the victim standing naked in a residential neighborhood.  Ahmed, Alom, Khan and Razia communicated with Abu Chowdhury via cellular telephone during the kidnapping, met Chowdhury at different points throughout the night, and took part in further beating and threats to kill John Doe-1.  When John Doe-1 begged for water from the kidnappers, the defendants gave him water laced with a sedative.  John Doe-1 later lost consciousness and woke up in a local hospital the day after he had been abducted.

The May 11, 2023 Kidnapping of John Doe-2 in Woodside, Queens

As alleged in the superseding indictment and detailed in court filings, over the course of approximately three days beginning on May 11, 2023, Chowdhury and Lubna abducted and assaulted John Doe-2.  John Doe-2 had been waiting to meet Lubna outside a restaurant in the vicinity of 72nd Street and Broadway in Woodside, Queens, when Chowdhury forced John Doe-2 into a minivan and began beating him.  During the kidnapping, Chowdhury, Lubna and a co-conspirator took John Doe-2 to a hotel, where Chowdhury sodomized John Doe-2.  Chowdhury also made a ransom call to John Doe-2’s father, demanding $20,000 for the victim’s safety.  The neighborhood where the abduction occurred is an ethnic community which the defendants exploited in warning the victim that they could easily find him if he cooperated with law enforcement.  On the third day of the kidnapping, Chowdhury tied up and blindfolded John Doe-2, leaving him at an abandoned house.  John Doe-2 was able to free himself by chewing through his restraints, breaking open a window and asking residents in the neighborhood to call 911.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of all counts, the defendants face a maximum of life imprisonment.   

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorneys Stephanie Pak and Vincent Chiappini are in charge of the prosecution with assistance from Paralegal Specialist Katrina Batista.

Defendants Previously Charged:

ABU CHOWDHURY
Age: 34
Jamaica, Queens

IFFAT LUBNA
Age: 24
Jamaica, Queens

Newly-Charged Defendants:

SYED RUBEL AHMED
Age: 43
Jamaica, Queens

SHAHED ALOM
Age: 29
Jamaica, Queens

ANZU KHAN
Age: 28
Jamaica, Queens

SULTANA RAZIA
Age: 38
Woodside, Queens

E.D.N.Y. Docket No. 23-CR-278 (S-1) (NRM)

Earlier today, in federal court in Brooklyn, former federal correction officer Quandelle Joseph, formerly employed by the United States Bureau of Prisons (BOP), pleaded guilty to receiving bribes in exchange for providing contraband to individuals detained at the Metropolitan Detention Center (MDC) in Brooklyn.  Today’s proceeding was held before United States District Judge Dora L. Irizarry.  When sentenced, Joseph faces up to 15 years in prison.  Joseph resigned from the BOP during the pendency of the case.

Breon Peace, United States Attorney for the Eastern District of New York, and Ryan T. Geach, Special Agent-in-Charge, Department of Justice, Office of the Inspector General, Northeast Region, announced the guilty plea.

According to court documents and facts presented at the guilty plea proceeding, Joseph became a correction officer at the MDC in May 2020.  During his employment, Joseph accepted tens of thousands of dollars from inmates in exchange for smuggling narcotics, cigarettes, and cell phones into the MDC.  In one instance, Joseph entered a unit he was not guarding during a lockdown, opened an inmate’s cell and provided him with contraband.  Several hours later, MDC staff smelled marijuana in that inmate’s cell and recovered a contraband cell phone during a search of the cell; Joseph was to be paid $12,000 from this inmate for bringing in contraband.  Joseph also accepted bribes to smuggle contraband into the MDC to another inmate, who then sold the contraband widely throughout his unit.  Joseph also warned the inmate about upcoming contraband searches at the MDC.  For example, on January 26, 2021, Joseph texted an inmate from whom he was taking bribes: “Tighten up search comin clean phones out call logs n text n try to stash it.”  The next day, Joseph texted the inmate: “keep your phones cleannnnnnnnnn erase texts and call logs every night.”    

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

The Defendant:

QUANDELLE JOSEPH
Age:  33
Brooklyn, New York

E.D.N.Y. Docket No. 23-CR-306 (DLI)

Earlier today, at the federal courthouse in Brooklyn, a five-count indictment was unsealed charging Ariana Charles with conspiring to illegally traffic 18 firearms to Brooklyn.  The defendant is charged under the gun trafficking provisions of the Bipartisan Safer Communities Act, which Congress and the President enacted in June 2022.  The Act is the first federal statute specifically designed to target gun trafficking.  Charles is also charged with three narcotics-related charges, including distribution of fentanyl and cocaine base, and a conspiracy to do the same. The defendant was arrested this morning and is scheduled to be arraigned this afternoon before United States Magistrate Judge Joseph A. Marutollo.

Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and Edward A. Caban, Commissioner, New York City Police Department (NYPD), announced the charges.

“As alleged, the defendant brazenly trafficked firearms and deadly drugs to the streets of Brooklyn, feeding the cycle of gun violence and drug abuse endangering our community,” stated United States Attorney Peace.  “This Office will not relent in its efforts to keep the community safe by investigating and prosecuting those who seek to profit from the proliferation of guns and fentanyl which have destroyed so many lives.”

“DEA and our law enforcement partners work to stop the invasion of guns, drugs and violence that invade our neighborhoods causing unimaginable casualties along the way,” stated DEA Special Agent-in-Charge Taremtino.  “This indictment reinforces our commitment to saving lives through comprehensive investigations at the behest of public safety and health.  I commend the DEA New York Division, New York City Police Department and the U.S. Attorney’s Office Eastern District of New York for their work throughout this investigation.” 

“Today’s indictment underscores the destructive threat that illegal guns and drugs continue to pose on the streets of New York City, as well as our unwavering commitment to delivering public safety and improving quality of life in every community,” stated NYPD Commissioner Caban.  “Together with our partners at the DEA and the office of the U.S. Attorney for the Eastern District of New York, NYPD investigators remain dedicated to this critical mission.”

According to the indictment and court documents, Charles personally conducted firearms sales to an undercover member of law enforcement (the UC) in and around New York City Housing Authority’s Breukelen Houses which is located in Canarsie, Brooklyn.  Transactions also took place outside apartment buildings and in shopping center parking lots in broad daylight.  Several guns were purchased in Virginia and Georgia and transported to New York. The UC told Charles and her co-conspirators that he was a drug dealer who needed guns and that he was going to resell some of the guns and drugs that were provided to him.  For example, messages between the UC and Charles show that the UC told Charles that he intended to “flip” the firearms Charles sold him so that he could resell them to others.  One firearm sold had a defaced serial number, making it hard for law enforcement to trace.  Charles also sold semi-automatic rifles.

In addition to firearm sales, Charles sold drugs, including crack cocaine and fentanyl.  The fentanyl allegedly sold by the defendant was disguised as Oxycodone pills.

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

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

The Defendants:

ARIANA CHARLES
Age:  28
Brooklyn, New York

E.D.N.Y. Docket No. 24-CR-8

An indictment was unsealed earlier today in federal court in Brooklyn charging Daniel Vernon, Yveler Marcellus, Felix Marcial and Tatiana Williams with conspiracy to commit mail and wire fraud, and conspiracy to commit money laundering.  Defendants Vernon and Marcial were arrested earlier today in the Eastern District of New York and their initial appearances were held this afternoon before United States Magistrate Judge Joseph A. Marutollo. 

Defendant Marcellus is scheduled to be arraigned on January 10, 2024 before Judge Marutollo.  Defendant Williams was arrested earlier this morning in Florida, and her initial appearance is scheduled for this afternoon in Miami before United States Magistrate Judge Lisette M. Reid.

Breon Peace, United States Attorney for the Eastern District of New York and Daniel B. Brubaker, New York Division Inspector-in-Charge, United States Postal Inspection Service, announced the arrests and charges.

“As alleged, while the defendants called unsuspecting individuals with promises of safeguarding their money and refinancing their mortgages, they lied and actually stole more than $7.5 million from over 50 victims,” stated United States Attorney Peace. “We will continue to aggressively prosecute those who commit financial fraud and work to recover and return victims’ stolen money. We urge the public to be extremely wary of sending money to people they don’t know, as they may be trying to swindle you.”

“Postal Inspectors will relentlessly pursue anyone who misuses the U.S. mail to commit fraud and take advantage of the American public. The defendants, through their fraudulent tech and mortgage refinancing schemes, allegedly victimized over 50 individuals and stole well over $7 Million.  Inspectors and our law enforcement partners at the U.S. Attorney’s Office, Eastern District of New York, work diligently to ensure these individuals are brought to justice and held accountable. Today’s arrests are proof of that fact. The U.S. Postal Inspection Service is continuously working to protect and educate consumers regarding various fraudulent schemes that in this case claimed millions of dollars from innocent victims,” said United States Postal Inspection Service Inspector-In-Charge Brubaker.

As alleged in the indictment, between January 2022 and May 2023, the defendants conducted fraudulent “tech” and “mortgage refinancing” schemes, through which they targeted victims by phone and convinced them to send cash, checks, or money orders to the defendants at various addresses in the Eastern District of New York. 

Through the tech scheme, the defendants and their co-conspirators falsely represented to individual victims that victim bank accounts were compromised, that individuals were attempting to access the victim’s computer to gain access to the victim’s funds, that individuals at the victim’s financial institution were involved in the scheme to steal the victim’s money and that the victim’s money would be kept safe if the victim sent the funds to the individual on the telephone.  Each victim was then directed to send a check, money order or cash to an address provided by the conspirators, under the guise that the victim’s funds would be kept safe with that person. 

Under the mortgage refinancing scheme, the defendants and their co-conspirators falsely represented to victims that the victims could refinance their mortgages at a beneficial interest rate by diverting their mortgage payments to an address provided by the defendants and their co-conspirators.  Each victim was then directed to send a check, money order or cash to an address provided by person on the phone, under the guise that the payment was being made toward the victim’s refinanced mortgage. 

After the victims sent their checks, cash, or money order to the address provided to them by the individual they spoke with over the phone, the defendants and their co-conspirators retrieved the mailings from the address it was sent to and deposited it in their own bank accounts.  In total, the defendants stole more than $7.5 million dollars from more than 50 victims.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants each face a maximum sentence of twenty years’ imprisonment on each of the two counts.  The government’s investigation is ongoing. 

The government’s case is being handled by the Office’s General Crimes Section.  The government’s case is being prosecuted by Assistant United States Attorney Elias Laris.

The Defendants:

DANIEL G. VERNON (also known as “Daquan Mitchell,” “Daniel George,” and “Cory Fortune”)
Age: 28
Ozone Park, New York

YVELER MARCELLUS
Age: 30
Brooklyn, New York

FELIX MARCIAL
Age: 31
Brooklyn, New York

TATIANA WILLIAMS
Age: 26
Miami, Florida

E.D.N.Y. Docket No. 24-CR-9 (CBA)

A 32-two-count superseding indictment was unsealed today in federal court in Central Islip charging three Bloods gang members, Dwayne Murray, Kendrick Seymore and Lavalle Wilson, with racketeering, racketeering conspiracy, attempted murder, various firearms charges and narcotics related offenses.  Additionally, Murray is charged with the June 2020 murder of Wayne Cherry in Baywood, New York, and Seymore is charged with the July 23, 2021 murders of Nyasia Knox, Diamond Schick and Richard Castano in Farmingville, New York.  The defendants are presently in custody and will be arraigned on the superseding indictment at a later date.      

Breon Peace, United States Attorney for the Eastern District of New York, Raymond A. Tierney, District Attorney, Suffolk County District Attorney’s Office (SCDAO), James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Tommy Kalogiros, Assistant Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Office (ATF), announced the superseding indictment.

“Today’s superseding indictment speaks loudly to this Office’s commitment to making our communities safer by holding ruthless gang members accountable for the murders, gun violence and narcotics trafficking they allegedly carried out on behalf of the Bloods,” stated United States Attorney Peace.  “I commend our prosecutors and law enforcement partners for their tireless work dismantling gangs operating on Long Island.” 

Mr. Peace also expressed his appreciation to the Suffolk County Police Department for their unwavering dedication to eradicating gang violence on Long Island. 

“My office is committed to eradicating violent gangs and bringing prosecutions on both the state and federal level where appropriate. Joint prosecutions in serious cases with our federal partners better protects Suffolk County residents. I thank United States Attorney Peace, the FBI, and the ATF,  for working together with my office and the Suffolk County Police Department to successfully collaborate on this significant prosecution,” stated Suffolk County District Attorney Tierney.

“These indictments demonstrate the collective commitment and investigative efforts between ATF NY and law enforcement partners, utilizing Crime Gun Intelligence to connect the dots between the many incidents of violence. Brazen acts of violence will never become acceptable to us. ATF NY is determined to root out the drivers of the deadly cycle of violence in our communities. We will continue to work tirelessly alongside our partners and appreciate the efforts of the ATF NY Long Island Field Office, FBI, Suffolk County Police Department and EDNY,” stated ATF Assistant Special Agent-in-Charge Kalogiros.

As alleged in the indictment, the defendants engaged in numerous acts of violence on the gang’s behalf, including robberies, home invasions, and vicious shootings and murders.  Specifically, according to the superseding indictment and statements made in court proceedings, on the evening of June 12, 2020, Murray fatally shot Cherry in the head in the backyard of a vacant home in Baywood.  His body was found two days later.

Additionally, on July 23, 2021, Seymore and an accomplice, both of whom were armed with guns, entered Richard Castano’s apartment in Farmingville to rob him.  During the course of the robbery, Seymore shot and killed Castano, as well Diamond Schick and Nyasia Knox, who were also in the apartment.  A one-year old child was in the apartment at the time of the triple murder, but was left physically unharmed. 

The defendants also used their membership in the Bloods street gang to distribute large quantities of narcotics in Suffolk County.  In order to protect their supply of narcotics, and secure their ability to distribute the narcotics, the defendants possessed multiple firearms.

If convicted, the defendants each face a maximum of life in prison.  Murray and Seymore face the possibility of the death penalty.

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

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

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Mark E. Misorek and Andrew P. Wenzel and Special Assistant United States Attorneys Donald N. Barclay and Dena C. Rizopoulos are in charge of the prosecution. 

The Defendants

DWAYNE MURRAY (also known as “Wayno”)
Age:  33
Coram, New York  

KENDRICK SEYMORE (also known as “KR”)
Age:  22
Coram, New York  

LAVALLE WILSON (also known as “Val,” Skip,” “Flip” and “Wes”)
Age:  30
Shirley, New York  

E.D.N.Y. Docket No. 22-CR-401 (JMA)

A superseding indictment was filed today in federal court in Brooklyn charging Amaury Guzmán, Ian Diez, Ruffi Fernández and Jonathan Rodríguez, members of the Trinitarios street gang, with a string of violent crimes including multiple shootings and armed carjackings between November 2022 and February 2023.  The defendants were previously arrested and will be arraigned on the superseding indictment at a later date.

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 charges.

“As alleged, the defendants repeatedly and violently terrorized the community with multiple shootings and armed carjackings,” stated United States Attorney Peace. “Members of our community should not have to live in fear of gun violence in their homes, on the streets, or in their cars.  My Office is dedicated to ensuring the safety of the community and bringing those who shoot and rob community members to justice.”

“Taking violent offenders off the street should send a message to Trinitarios members and their associates that violence and senseless murder will not be tolerated” said James Smith, Assistant Director in Charge of the FBI New York Field Office. “New Yorkers should have the opportunity to live, work, and play without fear, and we ask the community to join us in our stand against violence. You can make a difference. If you have information about crime in your community, call our tip line at 1-800-CALL-FBI (1-800-225-5324), or submit information online to tips.fbi.gov to help ensure a safe environment in all our neighborhoods,” stated FBI Assistant Director-in-Charge Smith.

The November 19, 2022 Shooting

As alleged in the indictment and other court filings, Guzmán, Fernández and others conspired to rob a marijuana dealer in Queens on November 19, 2022.  Guzmán approached the victim as he sat inside his parked car with a companion in the passenger seat.  Guzmán fired a shot into the victim’s car, wounding the passenger in the neck. The passenger survived but underwent extensive surgery to remove the bullet from his neck.  

The November 20, 2022 Murder

The following day, on November 20, 2022, shortly after midnight, Guzmán and others stole a white Mercedes Benz sedan from the driveway of a residence in Carteret, New Jersey and drove it to Queens.  Later that evening using the stolen Mercedes, Guzmán and Rodríguez approached the driver of a parked BMW sports coupe.  Rodriguez approached the driver at gunpoint and fired in his direction as the victim attempted to flee.  The victim was shot once in the back, quickly lost control of his car and then flipped over onto a sidewalk.  The victim was shot once in the back and died from the gunshot wound moments later.

The November 22, 2022 Armed Carjacking

Two days later, on November 22, 2022, Guzmán, Rodríguez and others once again used the stolen Mercedes to approach a victim who had recently parked his BMW X5 on a residential block in Queens.  The crew attacked the victim at gunpoint and stole the keys to his BMW X5.  They then fled in the stolen Mercedes and in the victim’s BMW X5 only to crash into each other minutes later.  Rodríguez was arrested near the scene of the collision, but Guzmán managed to escape.  A 9mm ghost gun was recovered from the wrecked Mercedes which, based on ballistic analysis, was the same gun used in the fatal and non-fatal shootings days earlier based on ballistic analysis.

The December 12, 2022 Shooting

Several weeks later, on December 12, 2022, Guzmán, Fernández and Diez approached the driver of a Range Rover in Queens intending to carjack him.  Diez menaced the driver with a hard object.  As the victim attempted to flee, Fernández fired a gun towards the Range Rover causing a bullet to lodge in the center console of the victim’s car. 

The February 1, 2023 Armed Carjacking

On February 1, 2023, Guzmán and others attacked a victim at gunpoint on a residential block in Queens and struck him in the head with their guns while stealing the keys to his Ford Mustang.  They fled in the victim’s Mustang and in a stolen Dodge Charger that they used to carry out the carjacking.  Lacerations to the victim’s head required hospitalization. 

If convicted, Guzmán and Rodriguez are facing up to a life sentence, Fernandez is facing up to 20 years, and Diez is facing up to 15 years. The charges in the indictment are allegations, and the defendants are presumed innocent until proven guilty.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Andy Palacio and Gabriel Park are in charge of the prosecution with assistance from Paralegal Specialists Stephanie Heyward and Theodore Rader. 

The Defendants:

AMAURY GUZMÁN
Age:  24
Brooklyn, NY

IAN DIEZ (also known as “Gallina”)
Age:  19
Brooklyn, NY
 

RUFFI FERNÁNDEZ (also known as “Mojatoto”)
Age:  26
Staten Island, NY

JONATHAN RODRÍGUEZ
Age:  22
Queens, NY

E.D.N.Y. Docket No. 23-CR-107 (MKB)

Earlier today, in federal court in Brooklyn, Aylo Holdings S.A.R.L. (formerly MindGeek S.A.R.L.) (Aylo), parent company to Pornhub.com, was arraigned on a charge of engaging in unlawful monetary transactions involving sex trafficking proceeds, after entering into a deferred prosecution agreement (DPA) with the United States Attorney’s Office for the Eastern District of New York to resolve the charge. The proceeding was held before United States Chief Magistrate Judge Lois Bloom.  The DPA provides for the appointment of a monitor (Monitor) for three years and for payments to be made to the United States and to individuals adversely affected by the underlying sex trafficking.

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 deferred prosecution agreement.

Mr. Peace also thanked the Victim/Witness Unit of the U.S. Attorney’s Office for the Southern District of California, and the FBI’s San Diego Field Office for their valuable assistance in this case.

“This deferred prosecution agreement holds the parent company of Pornhub.com accountable for its role in hosting videos and accepting payments from criminal actors who coerced young women into engaging in sexual acts on videos that were posted without their consent,” stated United States Attorney Peace.  “This Office is committed to ensuring internet safety and protecting people from online sexual exploitation.  It is our hope that this resolution, which includes certain agreed payments to the women whose images were posted on the company’s platforms and an independent monitorship brings some measure of closure to those negatively affected.  This resolution will not only provide oversight over one of the largest online content distributors in the world and ensure the company’s lawful behavior, but it will also develop industry-wide standards for safety and compliance.”   

“Motivated by profit, Aylo Holdings knowingly enriched itself by turning a blind eye to the concerns of victims who communicated to the company that they were deceived and coerced into participating in illicit sexual activity” stated FBI Assistant Director-in-Charge Smith.  “Make no mistake, any entity that engages in sexual exploitation will be held to account for the mental anguish and terror imposed on victims. I hope today’s proceedings bring a sense of justice to the victims in this case as they move forward in their lives.”   

Unlawful Receipt of Sex Trafficking Proceeds

Aylo operates free and paid adult websites that allow third parties to post and distribute adult videos, including on its websites Pornhub.com and PornhubPremium.com.  As part of its business, Aylo contracted and/or partnered with adult entertainment companies who were given personalized channels on Aylo’s websites, which Aylo promoted and from which Aylo profited. 

Beginning in 2009, Aylo hosted pornographic videos created by GirlsDoPorn (GDP) founder Michael Pratt and his co-conspirators (collectively referred to as the “GDP Operators”) on Aylo’s websites, including Pornhub.com.  The GDP Operators owned and operated a pornographic production company and online pornography websites called GDP and “GirlsDoToys” (GDT).   In 2019, a federal grand jury in the Southern District of California returned an indictment against the GDP Operators, for, among other charges, sex trafficking offenses, for deceiving and coercing young women to appear in sex videos which were then posted online without the women’s consent.  See United States v. Pratt, et. al. 19-CR-4488.  Since then, several of the GDP Operators have been convicted in connection with that criminal prosecution.  

According to Aylo’s admissions and/or court documents filed today, between 2017 and 2019, Aylo received money that Aylo knew or should have known was derived from the GDP Operators’ sex trafficking operations.  For example, in September 2017, Aylo learned that many of the women appearing in the GDP and GDT videos had filed a civil lawsuit in California against the GDP Operators alleging that the complainants had been tricked and coerced into filming the adult videos and that the videos were posted on Pornhub.com without their consent.  Between 2016 and 2019, Aylo also received several content removal requests from complainants seeking to remove GDP videos from its websites.  The complainants told Aylo that they had been lied to and defrauded into making these videos and that the videos were posted on Pornhub.com without their consent.  Although Aylo sought, and received, information from the GDP Operators that purported to establish that the complainants had given consent for their videos to be posted online, Aylo did not independently verify consent and did not remove all the videos that were requested to be taken down.  Moreover, in August 2019, Aylo learned that a GDP videographer had testified during the civil trial that he falsely told women that their sex videos would not appear online so that they would agree to appear in the videos, and that such videos were posted on Pornhub.com.  Despite the above, Aylo continued to host the GDP and GDT channels on its websites and accept money from its partnership with the GDP Operators.

On or about October 14, 2019, Aylo finally removed the official GDP channel from its platforms.  However, the company did not take steps to identify for removal all unofficial GDP content from its website at that time.  Aylo also did not remove the official GDT channel from its platforms until December 2020 even though the company knew that the individuals operating GDT were the same as those who operated GDP and that many of the individuals featured in the GDP videos were also featured in the GDT videos. 

The Deferred Prosecution Agreement

Under the terms of the deferred prosecution agreement, Aylo has agreed to pay $1,844,952.83 to the United States.  Aylo has also agreed to provide monetary payments to victims of the GDP Operators who have not otherwise already received compensation, and whose images were posted on Aylo’s platforms. 

Aylo has agreed to be subject to an independent Monitor for a period of three years.  The Monitor will be tasked with assessing the company’s compliance with the terms of the DPA.  The Monitor will also evaluate the strength and thoroughness of Aylo’s due diligence protocols for its content partners and content programs; the robustness of the company’s content screening and monitoring processes; the adequateness of the staffing and resources dedicated by Aylo to address, mitigate and remediate takedown requests or allegations of the presence of illegal content on the company’s platforms; and the adequacy of the company’s disclosures to relevant law enforcement authorities regarding the presence of illegal content on the company’s platforms.  Aylo has agreed to cooperate fully with the Monitor, and to adopt and implement recommendations made by the Monitor, subject to the terms of the DPA.  

The Office reached this resolution with Aylo based on several factors, including the nature and seriousness of the offense; the fact Aylo did not voluntarily self-disclose its criminal conduct to the Office but thereafter cooperated with the Office’s investigation; its removal of GDP and GDT content from its platforms; the nature of remedial measures Aylo has instituted across its platforms since 2020; and Aylo’s commitment to remediating and improving its compliance program and internal controls, including its agreement to a three-year monitorship.  In reaching this resolution, the Office also considered the wide-ranging impact the monitorship will have on Aylo and, possibly more broadly, other adult website operators and internet safety generally. 

In the event Aylo breaches the terms of the DPA, the company has agreed to be prosecuted for engaging in an unlawful monetary transaction, in violation of Title 18, United States Code, Section 1957.

The investigation was conducted by the FBI’s New York Field Office.  The government’s case is being handled by the Office’s Business and Securities Fraud Section in coordination with the Office’s Bank Integrity Task Force, which is charged with investigating and charging 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.  Assistant United States Attorneys Hiral Mehta, Gillian Kassner, Genny Ngai and Tara McGrath are in charge of the prosecution.

The Defendant:

AYLO HOLDINGS S.A.R.L.

E.D.N.Y. Docket No. 23-CR-463 (BMC)

Today in federal court in Brooklyn, Leo Oliver pleaded guilty to being a felon in possession of ammunition in connection with a non-fatal shooting of a man in East New York, Brooklyn.  Today’s proceeding was held before United States District Judge Dora L. Irizarry.  When sentenced, Oliver faces up to 10 years in prison.

Breon Peace, United States Attorney for the Eastern District of New York, Erin Keegan, Acting Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations, New York (HSI), and Edward A. Caban, Commissioner, New York City Police Department (NYPD) announced the guilty plea.

“With today’s plea, the community can begin to heal from the callous violence the defendant brazenly inflicted in public places,” stated United States Attorney Peace.  “My Office is deeply committed to holding repeat offenders who engage in gun violence, like the defendant, fully accountable for their actions.”

“For years, Leo Oliver caused immense harm to the Brooklyn community through his reckless acts of violence and justice has finally caught up with him. I commend the efforts of HSI New York's Violent Gang Task Force for successfully identifying Oliver, a repeat offender whose rap sheet boasted seven prior felonies, as the perpetrator in multiple shootings in East New York over a two-year period,” said HSI New York Acting Special Agent in Charge Erin Keegan. “I would like to thank the NYPD and the Eastern District of New York for their collaborative efforts to reduce gun-related violence, and their commitment toward the safety of our great city.”

“While crime never rests, neither does the commitment of the men and women of the NYPD,” stated NYPD Commissioner Caban. “I commend our investigators for their dedication to this important case. And, in the ongoing effort to end the horrors of gun violence, we and our partners at HSI and the office of the U.S. Attorney for the Eastern District of New York will remain tireless in identifying, investigating, and holding fully accountable anyone responsible for driving crime and disorder in our city.”

According to court filings, the indictment, and facts presented during the plea proceeding, Oliver committed two shootings in East New York, Brooklyn in 2020 and 2021. 

On the evening of July 8, 2020, the defendant shot his first victim (Victim-1) at a bodega.  Victim-1 was working behind the counter when, after a dispute, Oliver brandished a black firearm from his pocket, and shot Victim-1 in the chest and hand, before fleeing in an SUV.  A .380 shell casing was recovered from the scene.  Victim-1 was hospitalized but survived. 

Oliver committed a second shooting on September 25, 2021 following an argument with Victim-2 on the sidewalk on Van Siclen Avenue in Brooklyn.  As Victim-2 and Oliver were in a verbal dispute, Oliver shot Victim-2 in his torso, before fleeing on foot.  Victim-2 was hospitalized but survived.  Two .380 shell casing were recovered at the scene. 

As described in court filings, after the shootings the defendant took steps to destroy evidence and conceal his crimes.  He deleted firearms evidence from his cell phone, and threw the firearm used in the 2020 shooting into a river.

The defendant has at least ten other prior convictions, including at least seven felony convictions.

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

The Defendant:

LEO OLIVER (also known as “Gam”)
Age:  43
Mechanicsburg, Pennsylvania

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

Breon Peace, United States Attorney for the Eastern District of New York, Brian M. Boynton, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Division, and Michael C. Rogers, MS, Acting Associate Commissioner, of the U.S. Food and Drug Administration (FDA)’s Regulatory Affairs announced today that two New York companies, a Delaware company, and the companies’ owner have been enjoined from distributing and manufacturing adulterated and misbranded dietary supplements in violation of the Federal Food, Drug, and Cosmetic Act (FDCA).

“Consumers trust that dietary supplements they purchase are unadulterated. My Office is working diligently with our partners at the Justice Department’s Consumer Protection Branch and the FDA to ensure that these products are what they purport to be and safe.  When they are not, we will take all appropriate action to protect consumers.” stated United States Attorney Peace.

“Dietary supplement manufacturers and distributors have an important responsibility to ensure product quality and safety,” stated Principal Deputy Assistant Attorney General Boynton. “The Justice Department will continue to work closely with the FDA and take action against manufacturers and distributors who fail to abide by laws designed to protect public health.”

“It is imperative that dietary supplement manufacturers comply with the FDA’s regulatory requirements to help ensure product safety and protect consumers,” said Acting Associate Commissioner Michael C. Rogers, MS, for FDA’s Regulatory Affairs. “When evidence of non-compliance is identified, the agency holds dietary supplement manufacturers responsible. The FDA is dedicated to exercising its full authority under the law to take action against adulterated dietary supplements, as part of our ongoing commitment to protect the health of U.S. consumers.”

A civil complaint filed on October 18, 2023 at the request of the U.S. Food and Drug Administration (FDA), alleged that Total Body Nutrition LLC, TBN Labs LLC, and Loud Muscle Science, LLC (collectively, “TBN companies”), and the companies’ owner, Mohammed Islam, violated the FDCA at the companies’ facility in Hauppauge, Long Island, and their previous facility in Edgewood, New York, by manufacturing and distributing adulterated and misbranded dietary supplements. The complaint alleges that Islam and the TBN companies violated the FDCA by manufacturing dietary supplements without establishing product specifications for the finished batches and without testing or examining the finished batches to verify that they met product specifications, and by using dietary ingredients in their dietary supplements without first testing or examining the ingredients to verify their identity. The complaint also alleged that FDA inspected the TBN companies’ current and previous facilities four times, in 2017, 2018, 2021, and 2023, and found violations of the FDCA at each inspection. According to the complaint, FDA also issued Islam and the TBN companies warning letters in 2016, 2017, and 2019.

Islam and the TBN companies agreed to settle the suit and be bound by a consent decree of permanent injunction. The negotiated consent decree entered by the court enjoins Islam and the TBN companies from violating the FDCA, and requires, among other things, that Islam and the TBN companies comply with the dietary supplement current good manufacturing practice regulations and the dietary supplement labeling provisions of the FDCA and its implementing regulations. Further, Islam and the TBN companies must destroy all of their adulterated dietary supplements. 

Assistant United States Attorney Michael Blume of the Eastern District of New York and Trial Attorney Kimberly R. Stephens of the Justice Department’s Consumer Protection Branch are handling the case with assistance from Associate Chief Counsel Roselle Oberstein of the FDA’s Office of the Chief Counsel.

In March 2022, Mr. Peace announced the creation of a Consumer Protection Team in the Office’s Civil Division.  The Consumer Protection Team has focused on protecting the health, safety, economic security, and dignity of individuals in the Eastern District of New York and nationwide, including our most vulnerable residents.

The claims resolved by the consent decree announced today are allegations only, and there has been no determination of liability.

E.D.N.Y. Docket No.: 23-CV-9073

Stephen Burton, a citizen of the United Kingdom, will be arraigned in federal court in Brooklyn this morning before United States Magistrate Judge Taryn A. Merkl on an indictment charging him with wire fraud conspiracy, wire fraud and money laundering conspiracy in connection with a scheme perpetrated through Bordeaux Cellars, a company that he operated. Burton was extradited yesterday to the Eastern District of New York from Morocco where he was arrested in 2022 after entering the country using a false Zimbabwean passport.  Burton’s co-defendant, James Wellesley, remains in extradition proceedings in the United Kingdom. 

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 extradition and arraignment. 

“With the successful extradition of Burton to the Eastern District of New York, he will now taste justice for the fine wines scheme alleged in the indictment,” stated United States Attorney Peace.  “This prosecution sends a message to all perpetrators of global fraud that you can run from law enforcement, but not forever.” 

Mr. Peace thanked Moroccan authorities for their assistance.  The Justice Department’s Office of International Affairs also provided significant assistance in securing the arrest and extradition from Morocco of the defendant.

The indictment alleges that from at least June 2017 and continuing through February 2019, the investors posed as executives at a company called Bordeaux Cellars.  The defendants solicited investors, including residents of the Eastern District of New York, at, among other places, investor conferences held in the United States and overseas.  The defendants claimed to investors that Bordeaux Cellars brokered loans between investors and high-net-worth wine collectors that would be fully collateralized by high-value collections of wine.  The defendants promised that investors would receive regular interest payments from the borrowers, and that Bordeaux Cellars would keep custody of the wine securing the loans while the loans were outstanding.  As alleged, these representations were lies, the “high-net-worth wine collectors” did not actually exist and Bordeaux Cellars did not maintain custody of the wine purportedly securing the loans.  Instead, the defendants used incoming loan proceeds to make fraudulent interest payments to investors and for their own personal expenses. 

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

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Lauren Elbert and Benjamin Weintraub are in charge of the prosecution.   

The Defendants:

STEPHEN BURTON
Age: 58
United Kingdom

JAMES WELLESLEY
Age: 56
United Kingdom

E.D.N.Y. Docket No. 22-CR-79 (PKC)

Earlier today, Ivars Auzins, a Latvian national, pleaded guilty at the federal courthouse in Brooklyn to conspiring to commit securities fraud in connection with defrauding investors in a series of digital-asset exit scams.  Today’s proceeding took place before United States Magistrate Judge Taryn A. Merkl.  When sentenced, Auzins faces up to five years in prison.  As part of his sentence, Auzins has also agreed to pay $497,006 in forfeiture.  Auzins was extradited to the United States from Latvia in August 2022.

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 guilty plea.

The term “digital asset” refers to an asset that is issued and transferred using distributed ledger or blockchain technology.  According to court filings and facts presented during the plea proceeding, Auzins and his co-conspirators fraudulently marketed multiple digital-asset offerings to investors worldwide by misrepresenting their products and services, the profits investors would earn and the qualifications of the individuals making the offerings.  Auzins and his co-conspirators intentionally failed to deliver on these promises, diverting millions of dollars’ worth of proceeds for their personal benefit while continuing to represent that the benefits would be forthcoming.  

The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney John O. Enright is in charge of the prosecution with assistance from Paralegal Jordi Martinez. The Justice Department’s Office of International Affairs worked with law enforcement partners in Latvia to secure the arrest and extradition of Auzins to the United States.

The Defendant:

IVARS AUZINS
Age:  31
Riga, Latvia

E.D.N.Y. Docket No. 21-CR-357 (ERK)

A four-count indictment was unsealed today in federal court in Brooklyn charging Christopher Terranova, a New York City police officer, with attempting to exploit children and coercion and enticement of a minor.  In at least one instance, Terranova is alleged to have used his position as a police officer to gain access to a victim who had previously been the victim of a crime.  Terranova was arrested this morning and will be arraigned later today before United States Magistrate Judge Marcia M. Henry.

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 arrest and charges.

“The defendant allegedly preyed upon vulnerable youth in the same community he was sworn to protect,” stated United States Attorney Peace.  “Protecting minors from those who violate their position of trust will always be a priority of this Office.  I urge parents and caregivers to have conversations with their children about the dangers of communicating online with strangers and individuals who seek to exploit them.” 

Mr. Peace expressed his appreciation to the New York City Police Department's Internal Affairs Bureau and the Richmond County District Attorney’s Office for its significant cooperation and assistance during the investigation. 

“The FBI takes crimes against children seriously—even more so when it involves someone who took an oath to serve and protect, and whom the public holds to a higher standard,” stated FBI Assistant Director-in-Charge Smith.  “The damage done by Terranova’s alleged depravity will likely outlast any punishment he ultimately receives. The FBI is dedicated to doing the work to restore public faith in law enforcement when individuals attempt to use the badge to hide their illegal behavior. We thank the U.S. Attorney’s Office for the Eastern District of New York and our law enforcement partners for their efforts in this case.”

As set forth in the indictment and other court documents, Terranova is charged with using social media to engage in sexually explicit conversations with underage boys and attempting to entice those victims into taking sexually explicit photographs of themselves and sharing them with the defendant.  Terranova used popular social media applications, such as Snapchat, to message with underage boys whom he encountered socially or through his job as a police officer.  After establishing a relationship with the boys, Terranova solicited them for nude photographs.  On at least one occasion, in the guise of giving a boy a ride home from a party, Terranova brought the boy to a secluded location where he directed the victim to engage in sex acts with him.

Between March 2023 and May 2023, the defendant targeted a 15-year-old boy (John Doe 3) who was the victim of a robbery.  After viewing John Doe 3’s personal information in an NYPD database, Terranova messaged the victim’s personal phone under the pretense of checking on him after the robbery.  The defendant wrote, “it’s Chris Terranova the cop you met at the 121 [Precinct] that day with mom, i just wanted to reach out to see if you were doing ok after the incident, I hate seeing these things happen to good Guys like yourself.”  Terranova then connected with John Doe 3 via social media and attempted to engage him in conversation about sexual activity and pornography.  After sending John Doe 3 a sexually explicit photograph of himself, Terranova messaged the victim: “See it’s nothing[.] Your turn[.]”      

Anyone with relevant information is asked to contact the FBI at tips.fbi.gov or 212-384-1000.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Terranova faces a mandatory minimum sentence of 15 years’ imprisonment and a maximum sentence of life imprisonment.

The government’s case is being handled by the Office’s Civil Rights Section.  Assistant United States Attorneys Lauren Howard Elbert and Rachel A. Bennek are in charge of the prosecution. 

The Defendants:

Christopher Terranova
Age: 33
Staten Island, New York

E.D.N.Y. Docket No. 21-CR-516 (KAM)

Earlier today, a federal jury in Brooklyn convicted Kristy Mak and Andre Prince of conspiracy to commit wire fraud, the sole count of a superseding indictment, in connection with their participation in a fraudulent moving company scheme. The verdict followed a one-week trial before United States Second Circuit Judge Denny Chin sitting by designation.  When sentenced, the defendants each face up to 20 years in prison and forfeiture in the amount to be determined by the Court.

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

“The jury found that these defendants conspired in a despicable scheme to steal from their victims when they were most vulnerable and at the mercy of crooked movers holding their worldly possessions hostage.  No person who contracts for moving services should be exploited in this manner,” stated United States Attorney Peace.  “Make no mistake, this was not a disagreement over billing, rather the jury found the defendants were part of a cunning and deliberate scheme to defraud customers and were held accountable.”

Mr. Peace expressed his thanks to the Special Agents of the Federal Bureau of Investigation, New York Field Office, and the United States Department of Transportation, Office of the Inspector General for their outstanding investigative work on the case.

As proven at trial, between at least January 2017 and August 2020, the defendants worked for a number of moving companies controlled by Yakov Moroz, which operated under various names including Great Moving USA, Green Movers, New City Moves, Cross Country Moving and Storage, and Movers Consulting. Mak was a customer service representative for the company and supervised Prince who was a member of the sales team.  The defendants lured customers to these movers by posting fake reviews online and by having sales associates offer low-cost transportation of their household goods. After a contract was signed and, in some cases, after the customer’s belongings loaded on the truck, the movers would spring new expenses on them. If the customer tried contacting the sales associate about the surprise fees, that person was unreachable, and the customers were faced with the drivers threatening to hold their goods hostage unless they paid additional fees which were sometimes double or triple the original estimated cost. In a Slack message conversation with an uncharged co-conspirator about revising orders to squeeze more money from customers, Mak stated they will “f*ck [customers] onsite.” In another Slack conversation, Prince reacted to two memes sent to him from another sales person depicting their scheme to cut off contact with the customer on the day of the move, stating: “[rolling on the floor laughing emoji] that is so accurate”].

Moroz, the president of Great Movers Inc. and its successor company, New City Movers, absconded earlier this year while on pre-trial release and is currently a fugitive. As a result of the fraudulent scheme, the defendants, together with others, wrongfully obtained more than $3 million from over 800 victims.

The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorneys Arun Bodapati and Elias Laris are in charge of the prosecution with the assistance of Paralegal Specialist Stephanie Heyward.

The Defendants:

KRISTY MAK
Age:  34
Plantation, Florida

ANDRE PRINCE (also known as “Allen Parks” and “Aaron”)
Age:  45
Taramac, Florida

E.D.N.Y. Docket No. 20-CR-342 (DC)

Today, a federal jury in Brooklyn convicted Anthony Romanello, also known as “Rom,” of extortionate collection of credit and conspiracy to commit the same in connection with a gambling debt, and convicted Joseph Celso of conspiracy to commit extortionate collection of credit.  The verdict followed a one-week trial before United States District Judge Eric R. Komitee.  When sentenced, Romanello faces up to 40 years in prison and Celso faces up to 20 years in prison.

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 verdict. 

“Today’s verdict upholds the rule of law and demonstrates the defendants’ violent and brazen conduct will not be tolerated,” stated United States Attorney Peace.  “I commend the jury for holding the defendants accountable for their crimes.”

As proven at trial, from March 2017 to June 2017, Romanello, Celso, and co-defendant Luan Bexheti conspired to use extortionate means to collect an unpaid gambling debt owed by John Doe #2 and a family member.  Romanello and Celso used threats and violence in repeated attempts to collect the debt from John Doe #1, a relative of John Doe #2.  Romanello confronted John Doe #1 three separate times to demand money in satisfaction of the debt.  On the third time, Romanello and Celso went to John Doe #1’s restaurant in Manhattan to again demand the money.  After John Doe #1 stated that he would only pay a portion of the amount Romanello was demanding, Romanello punched John Doe #1 in the face.  John Doe #1 reported the assault to the New York City Police Department.  The next day, Celso warned John Doe #2, John Doe #1’s brother, that if John Doe #1 did not drop the criminal charge against Romanello, the situation would escalate and “things would get ugly.”  After John Doe #2 told John Doe #1 about the warning, John Doe #1 withdrew his complaint with the NYPD. 

Luan Bexheti pleaded guilty in October 2023 to extortionate collection of credit conspiracy in connection with the same debt and is awaiting sentencing.

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

The Defendants:

ANTHONY ROMANELLO
Age:  86
Franklin Square, New York

JOSEPH CELSO
Age: 50
Queens, New York

Additional Defendant Who Previously Pleaded Guilty:

LUAN BEXHETI
Age:  51
Queens, New York

E.D.N.Y. Docket No. 22-CR-194 (EK)

Today, Alexander Valencia Garcia will be arraigned before United States Magistrate Judge Marcia M. Henry at the federal courthouse in Brooklyn on an indictment charging him with two counts of international cocaine distribution.  On November 7, 2023, the defendant, a Colombian citizen, was arrested in Florida on an arrest warrant issued from the Eastern District of New York.  On the same day, his co-defendants—Cesar Valencia Garcia, Diego Beltran Alvarez, Oscar Valencia Florez, and Jhonatan Samboni Ruiz—were all arrested in Colombia, and their extradition is pending. 

Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino, III, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Edward A. Caban, Commissioner, New York City Police Department (NYPD), and Dominick L. Chiumento, Acting Superintendent, New York State Police (NYSP), announced the arrests and arraignment.

“As alleged, these five co-defendants were members of an international drug trafficking organization that produced and exported hundreds of kilos of cocaine from Colombia to the United States,” stated United States Attorney Peace.  “We will not relent in our efforts to bring to justice those who are responsible for trafficking dangerous drugs into our communities whether here or in a foreign country.” 

Mr. Peace extended his appreciation to the DEA’s office in Bogota, Colombia, the United States Marshals Service, the United States Department of State, the Department of Justice’s Office of International Affairs, Narcotic and Dangerous Drug Section’s Judicial Attaché’s Office in Colombia, the Colombian National Police, and the Government of Colombia.

“Alexander Valencia Garcia has been brought to justice for his alleged role in a multi-million dollar cocaine trafficking conspiracy spanning from Colombia to New York.  DEA and our law enforcement partners do not rest and continue to pursue those responsible for bringing illegal drugs into the United States.  I commend the DEA New York Drug Enforcement Task Force and the United States Attorney’s Office Eastern District of New York for their tireless efforts in this investigation,” stated DEA Special Agent-in-Charge Tarentino.

“Our job is to identify, investigate, and arrest anyone responsible for distributing illegal drugs throughout New York City, wherever they are based,” stated NYPD Commissioner Caban. “I thank and commend the dedicated NYPD investigators who partner every day with our federal task force colleagues for extending their efforts beyond our borders to stop this poison from reaching our streets.”

NYSP Chiumento said, “The coordination and investigative persistence of all partners responsible for this indictment, sends a strong message that we will not tolerate dangerous drugs coming into our country or state. We will continue to work vigilantly to put dangerous individuals like Mr. Garcia behind bars. I want to thank our members and law enforcement partners for their tenacious dedication to tracking illegal drugs and intercepting them at their source before they infiltrate our communities."          

According to the indictment, court filings, and statements made in Court, the defendant and his co-defendants were members of a sophisticated drug trafficking organization that operated in southwestern Colombia.  The organization produced and transported thousands of kilograms of cocaine to locations along the coast of Colombia so that the cocaine could eventually be exported and smuggled into the United States.  Valencia Garcia specifically helped oversee production in labs as well as transportation of finished cocaine.  As part of the investigation, law enforcement authorities seized over 500 kilograms of cocaine attributable to the defendant’s drug trafficking enterprise. 

The arrests of Alexander Valencia Garcia and his co-defendants are the result 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 DEA.  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 charges in the indictment allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to life in prison.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorney Andrew D. Wang is in charge of the prosecution. 

The Defendants:

ALEXANDER VALENCIA GARCIA
Age: 57
Colombia

CESAR VALENCIA GARCIA
Age: 55
Colombia

DIEGO BELTRAN ALVAREZ
Age: 32
Colombia

OSCAR VALENCIA FLOREZ
Age: 24
Colombia

JHONATAN SAMBONI RUIZ
Age: 34
Colombia

E.D.N.Y. Docket No. 22-CR-513 (PKC)

An indictment was unsealed earlier today in federal court in Brooklyn charging Alexander Figliolia, Jr., and Kenneth Sutherland, the owners of Liberty Water & Sewer (Liberty Water), a Brooklyn-based plumbing company which they operate as a partnership, with tax evasion and conspiracy to defraud the United States.  Figliolia, Jr., and Sutherland were arrested earlier today, and their initial appearances are scheduled for this afternoon before United States Magistrate Judge James R. Cho. 

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), James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI), announced the arrests and charges.

“Business owners like everyone else have an obligation to pay their fair share of taxes,” stated United States Attorney Peace.  “As alleged, the defendants made millions of dollars repairing water and sewer lines for New York City residents, but instead of dutifully paying the taxes they owed, they improperly classified more than $10 million of personal expenses as business expenses. Their greed drained the government’s coffers of nearly $4 million in tax revenue.” 

“Figliolia and Sutherland were living the lavish life while allegedly failing to report more than ten million dollars in income.  The yachts, jewelry and family trips were all paid for with money owed to the federal government.  Today’s indictment is a message to all those who choose to evade taxes, one day your extravagant lifestyle on the taxpayer dime will come to an end, and you will be prosecuted for your actions,” stated IRS-CI Special Agent-in-Charge Thomas Fattorusso.

“The defendants, as charged, evaded taxes on millions of dollars of income from the business they conducted in New York City, by misclassifying lavish personal expenses as business expenses to reduce their tax burden. I thank our federal law enforcement partners for their commitment to hold corrupt contractors in this City accountable,” stated DOI Commissioner Strauber.

"The alleged greed and abuse of trust here are unconscionable. Pocketing funds to support an extravagant lifestyle is an afront to hardworking taxpayers who depended on these men to do honest work," said James Smith, Assistant Director in Charge of the FBI New York Field Office. “The FBI is committed to working with our law enforcement partners to investigate allegations of significant financial crime and holding the people behind them accountable for their actions.”

As alleged in the indictment and other court filings, between January 2017 and June 2020, the defendants evaded personal income taxes by issuing checks and wiring money from Liberty Water’s bank account to pay for personal expenses.  The defendants classified these payments of their personal expenses as business expenses of Liberty Water, thereby reducing Liberty Water’s profits and reducing the defendants’ personal income tax burdens.  For example, Figliolia, Jr., and Sutherland classified more than $1.75 million of personal credit card expenses, including home renovations, a family trip to Disney World, jewelry, clothing and veterinary expenses, as business expenses.  As another example, Figliolia, Jr., and Sutherland obtained loans of more than $2.8 million on personal life insurance policies, and repaid the loans using Liberty Water funds, allowing them to siphon that money out of the business without paying taxes.  As still another example, Figliolia, Jr., issued more than $4 million in checks from Liberty Water’s bank account to a law firm for the payment of personal expenses, including the purchase of multiple properties and a yacht, but classified them as business expenses of Liberty Water. 

In total, Figliolia, Jr., and Sutherland intentionally diverted approximately $10,225,213 from Liberty Water between tax years 2017 and 2019, resulting in the evasion of approximately $3,933,046 in federal taxes.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants each face a maximum sentence of five years’ imprisonment on each count.

The government’s case is being handled by the Office’s Public Integrity Section. The government’s case is being prosecuted by Assistant United States Attorneys Philip Pilmar and Dana Rehnquist.

The Defendants:

ALEXANDER FIGLIOLIA, JR.
Age:  50
Staten Island, NY

KENNETH SUTHERLAND
Age:  62
Staten Island, NY

E.D.N.Y. Docket No. 23-CR-498

Jose Saez, Jr., a pastor at a church located in Brentwood, will be arraigned this afternoon at the federal courthouse in Central Islip on an indictment charging him with sexual exploitation of children, coercion and enticement of children, distribution of child pornography, and possession of child pornography.  Saez was arrested on a complaint on September 28, 2023 and has been detained pending trial.  Today’s arraignment will be held before United States Magistrate Judge James M. Wicks.   

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 indictment. 

 “As alleged, despite the trust and respect placed in him by his community and his congregation, the defendant verbally abused children online and attempted to persuade minors to produce sexually explicit photographs and videos of themselves and send them to him via the internet,” stated United States Attorney Peace.  “Protecting children from predators and those who sexually exploit them will always be a priority of this Office.” 

Mr. Peace thanked the Suffolk County Police Department for their assistance with the case.

“When you go to church you expect to be safe and protected...but that's not what members of Pastor Jose Saez's congregation got. He allegedly possessed child pornography and sexually abused multiple children. This is unfathomable to the families and caused lasting harm to the children. The men and women of the FBI's Long Island Child Exploitation Task Force work tirelessly to protect our children but bad people are still out there. If anyone has any information on Saez or think they know someone who may be a victim, please call law enforcement,” stated FBI Assistant Director-in-Charge Smith.

As set forth in court filings, while employed as a pastor at a church located in Brentwood, New York, Saez allegedly used an encrypted messaging service to engage in sexually explicit conversations with minors and with a law enforcement officer acting in an undercover capacity (the UC).  In August of 2023, Saez had online conversations with the UC.  During those conversations, the defendant stated that he had sexually abused an infant, that his “sweet spot” for molesting children was children between the ages of 11 and 15, and that he was able to find his younger victims at “church.” Pursuant to a court-authorized search, FBI agents recovered numerous images and videos of child pornography from the defendant. 

Anyone with information about sexual exploitation by the defendant is asked to contact the FBI at tips.fbi.gov or 212-384-1000.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Saez faces a mandatory minimum sentence of 15 years in prison and up to 30 years in prison.

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

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

The Defendant:

JOSE SAEZ, JR.
Age:  28
Brentwood, New York

E.D.N.Y. Docket No.: 23-CR-480 (JMA)

Anatoly Legkodymov, a Russian national also known as “Anatolii Legkodymov,” “Gandalf” and “Tolik,” pleaded guilty today in federal court in Brooklyn to operating a money transmitting business that transported and transmitted illicit funds.  The charges stem from Legkodymov’s majority ownership of Bitzlato Ltd., a cryptocurrency exchange that served as a primary conduit for dark market purchasers and sellers, as well as a safe haven for ransomware criminals.  As part of his plea agreement, Legkodymov agreed to dissolve Bitzlato and to release any claim over approximately $23 million in seized assets of Bitzlato. The proceeding was held before United States District Judge Eric N. Vitaliano.

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

“Legkodymov’s guilty plea today confirms that he was well aware that Bitzlato, his cryptocurrency exchange, was being used like an open turnstile by criminals eager to take advantage of his lax controls over illicit money transactions,” stated United States Attorney Peace.  “The defendant may have thought he was operating from a safe haven overseas for his ‘No Questions Asked’ clearinghouse, but this prosecution and conviction demonstrate otherwise.”

“As alleged, Bitzlato advertised a safe haven for fraudsters, thieves, and other criminals to launder illicit proceeds—but their business model didn’t account for federal law enforcement,” said Deputy Attorney General Lisa O. Monaco. “We are dismantling and disrupting the cryptocrime ecosystem using all tools available—including criminal prosecution.  In January, the Department and our partners took down Bitzlato’s infrastructure and seized its cryptocurrency.  Today’s conviction of Bitzlato’s founder is the latest product of our efforts.”

“Legkodymov operated a cryptocurrency exchange that was open for business to money launderers and other criminals,” stated Acting Assistant Attorney General Argentieri.  “He profited from catering to criminals, and now he must pay the price.  Transacting in cryptocurrency does not put you beyond the reach of the law. Legkdoymov’s plea demonstrates the consequences for those who would offer a safe haven for criminals and their ill-gotten gains.”

As alleged in public filings, Legkodymov is a senior executive and the majority shareholder of Bitzlato Ltd. (Bitzlato), a Hong Kong-registered cryptocurrency exchange that operated globally.  Bitzlato marketed itself as requiring minimal identification from its users, specifying that “neither selfies nor passports [are] required.”   On occasions when Bitzlato did direct users to submit identifying information, it repeatedly allowed them to openly provide information belonging to “straw man” registrants.

As a result of these deficient know-your-customer (KYC) procedures, Bitzlato became a haven for criminal proceeds and funds intended for use in criminal activity.  Bitzlato’s largest counterparty in cryptocurrency transactions was Hydra Market, an online marketplace for narcotics, stolen financial information, fraudulent identification documents, and money laundering services that was the largest and longest running darknet market in the world.  Hydra Market users exchanged more than 700 million dollars’ worth of cryptocurrency with Bitzlato, either directly or through intermediaries, until Hydra Market was shut down because of seizures made by U.S. and German law enforcement in April 2022. Bitzlato also received millions of dollars’ worth of ransomware proceeds.  The defendant was repeatedly advised that cryptocurrency routed through Bitzlato represented the proceeds of crime and/or was intended for use in illicit transactions.

The investigation was jointly prosecuted by the United States Attorney’s Office for the Eastern District of New York and the National Cryptocurrency Enforcement Team (NCET), which was established to combat the growing illicit use of cryptocurrencies and digital assets.  Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers.  The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the Department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets. 

The Justice Department’s Office of International Affairs and the FBI’s Legal Attaché in France provided critical assistance in the case, with support from the department’s Cyber Operations International Liaison. The department also thanks the Cyber Division of the Paris Prosecution Office and to France’s Gendarmerie Nationale Cyberspace Command (Cyber Crime Investigation Unit/ C3N).

The government’s case is being prosecuted by CCIPS/NCET Trial Attorney and EDNY Assistant U.S. Attorney Alexander Mindlin, CCIPS/NCET Trial Attorney Sarah Wolfe, and EDNY Assistant U.S. Attorney Artie McConnell are prosecuting the case, with substantial assistance from former NCET Trial Attorneys Scott Meisler and Matthew Blackwood.

The Defendant:

ANATOLY LEGKODYMOV (also known as “Gandalf” and “Tolik”)
Age:  41
Shenzhen, People’s Republic of China

E.D.N.Y. Docket No. 23-CR-496 (ENV)

The founder and majority owner of Bitzlato Ltd. (Bitzlato), a cryptocurrency exchange that served as a primary conduit for dark market purchasers and sellers, as well as a safe haven for illicit transactions by ransomware criminals, pleaded guilty today to operating a money transmitting business that transmitted illicit funds.

In connection with his plea agreement, Anatoly Legkodymov, aka Anatolii Legkodymov, Gandalf, and Tolik, 41, who is a Russian national and resided in Shenzen, People’s Republic of China, agreed to dissolve Bitzlato and to release any claim over approximately $23 million in seized assets of Bitzlato.

“As alleged, Bitzlato advertised a safe haven for fraudsters, thieves, and other criminals to launder illicit proceeds — but their business model didn’t account for federal law enforcement,” said Deputy Attorney General Lisa O. Monaco. “We are dismantling and disrupting the cryptocrime ecosystem using all tools available — including criminal prosecution. In January, the Department and our partners took down Bitzlato’s infrastructure and seized its cryptocurrency. Today’s conviction of Bitzlato’s founder is the latest product of our efforts.”

“Legkodymov operated a cryptocurrency exchange that was open for business to money launderers and other criminals,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “He profited from catering to criminals, and now he must pay the price. Transacting in cryptocurrency does not put you beyond the reach of the law. Legkdoymov’s plea demonstrates the consequences for those who would offer a safe haven for criminals and their ill-gotten gains.”

According to court documents, Bitzlato, a Hong Kong-registered cryptocurrency exchange that operated globally, marketed itself as requiring minimal identification from its users, specifying that “neither selfies nor passports [are] required.” On occasions when Bitzlato did direct users to submit identifying information, it repeatedly allowed them to openly provide information belonging to “straw man” registrants. As a result of these deficient know-your-customer (KYC) procedures, Bitzlato allegedly became a haven for criminal proceeds and funds intended for use in criminal activity.

“Legkodymov’s guilty plea today confirms that he was well aware that Bitzlato, his cryptocurrency exchange, was being used like an open turnstile by criminals eager to take advantage of his lax controls over illicit money transactions,” said U.S. Attorney Breon Peace for the Eastern District of New York. “The defendant may have thought he was operating from a safe haven overseas for his ‘No Questions Asked’ clearinghouse, but this prosecution and conviction demonstrate otherwise.”

Bitzlato’s largest counterparty in cryptocurrency transactions was Hydra Market, an online marketplace for narcotics, stolen financial information, fraudulent identification documents, and money laundering services that was the largest and longest-running darknet market in the world.  Hydra Market users exchanged more than $700 million worth of cryptocurrency with Bitzlato, either directly or through intermediaries, until Hydra Market was shut down because of seizures made by U.S. and German law enforcement in April 2022. Bitzlato also received millions of dollars’ worth of ransomware proceeds. Legkodymov was repeatedly advised that cryptocurrency routed through Bitzlato represented the proceeds of crime and/or was intended for use in illicit transactions.

Legkodymov faces a maximum penalty of five years in prison. A sentencing date has not yet been set. A federal judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI is investigating the case.

The investigation was jointly prosecuted by the U.S. Attorney’s Office for the Eastern District of New York (EDNY) and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and National Cryptocurrency Enforcement Team (NCET), which was established to combat the growing illicit use of cryptocurrencies and digital assets. NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the Department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets. 

CCIPS/NCET Trial Attorney and EDNY Assistant U.S. Attorney Alexander Mindlin, CCIPS/NCET Trial Attorney Sarah Wolfe, and EDNY Assistant U.S. Attorney Artie McConnell are prosecuting the case, with substantial assistance from former NCET Trial Attorneys Scott Meisler and Matthew Blackwood.

The Justice Department’s Office of International Affairs and the FBI’s Legal Attaché in France provided critical assistance in the case, with support from the Department’s Cyber Operations International Liaison. The Department also thanks the Cyber Division of the Paris Prosecution Office and France’s Gendarmerie Nationale Cyberspace Command (Cyber Crime Investigation Unit / C3N).