Eastern District of New York

Earlier today, in federal court in Central Islip, a seven-count indictment was unsealed charging Joshua Lampley-Reid, a member of the Makk Balla set of the Bloods street gang, with sex trafficking, coercion and enticement of a minor, sexual exploitation of a minor, transportation of child pornography and interstate prostitution. Lampley-Reid was arrested on Wednesday and will be arraigned this afternoon before United States Magistrate Judge James M. Wicks.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York; Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); Vincent F. DeMarco, United States Marshal for the Eastern District of New York; and Errol D. Toulon, Jr., Suffolk County Sheriff, announced the indictment.

“As alleged, through violence, coercion and manipulation, the defendant exploited and demeaned both underage and adult female victims by forcing them to engage in commercial sex acts and posting sexually explicit photographs of them on the internet,” stated Acting U.S. Attorney Lesko.  “This Office will use every tool in its law enforcement arsenal to combat the sexual exploitation of women, especially young girls, and ensure that predators like the defendant are prosecuted to the fullest extent of the law.”  Mr. Lesko expressed his appreciation to the Nassau County Police Department for their assistance during the investigation.

“Lampley-Reid lured young girls, some as young as 15, with romantic gestures.  Once he had them in his grip, it’s alleged that he enslaved these girls and used violence to force them to work as prostitutes for his insidious gain,” stated HSI Special Agent-in-Charge Fitzhugh.  “The deplorable actions of this one man will affect the lives of these young girls for years to come.  HSI works closely with its law enforcement partners in a victim-centered approach to rescue the victims and keep them safe.  Today, we are sending a unified message to anyone perpetrating crimes against children: no matter who you are, we will bring every resource available to hold you accountable for your crimes.”

“The U.S. Marshals Service has a long-standing and extremely successful history of cooperating with our federal, state and local law enforcement partners,” stated Marshal DeMarco.  “These law enforcement partnerships enable the Marshals Service to fulfill its mission to keep our communities safe.” 

“Sex trafficking is a particularly heinous crime that targets some of the most vulnerable in our communities.  Individuals who perpetrate this crime use drugs intimidation and ultimately violence to lure in their victims for financial gain while slowly destroying their lives,” stated Sheriff Toulon.  “I applaud this arrest and will continue to support and work closely with both our local and federal partners to help eliminate this scourge from our communities.”

As set forth in court filings, from December 2019 until his arrest yesterday, Lampley-Reid allegedly used violence and the threat of violence to compel the commission of commercial sex acts by numerous women for his financial benefit, including by minors as young as 15-years-old.  Lampley-Reid used social media and other internet applications to establish relationships with potential victims, groomed those victims by feigning a romantic interest in them, manipulated them into working for him as prostitutes, and then effectively enslaved them through acts of force and coercion.  Lampley-Reid demanded that the proceeds of prostitution “dates” be turned over to him, and any resistance from the victims was met with violence or threats.  Lampley-Reid trafficked victims on Long Island, including at motels in East Meadow, Freeport and Rockville Centre, as well as out of state, including locations in Florida, Maryland and North Carolina.  He also engaged in sexual intercourse with his victims, including minors, and provided them with illegal narcotics.  Lampley-Reid promoted and managed his prostitution business over the Internet, posting sexually exploitative photos of minor victims that he took or persuaded them to take of themselves in order to further his trafficking business.  

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of sex trafficking of a minor, the defendant faces a mandatory minimum sentence of 15 years’ imprisonment and a maximum of life in prison.  If convicted of producing child pornography, he faces a mandatory minimum sentence of 15 years in prison and a maximum of 30 years in prison.

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

The Defendant:

JOSHUA LAMPLEY-REID
Age:  26
West Hempstead, New York

E.D.N.Y. Docket No. 21-CR-319 (GRB)

A criminal complaint was unsealed today in federal court in Brooklyn charging Orlando Sanay, Keimi Nunez and his twin brother Keily Nunez, Michael Pimentel Veloz and Fanny Plasencia with wire fraud in connection with false statements they allegedly made to obtain loans pursuant to the Economic Injury Disaster Loan program (“EIDL”).  The defendants were arrested today and will make their initial appearances this afternoon before United States Magistrate Judge Roanne L. Mann. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the arrests and charge. 

“As alleged, the defendants brazenly lied and stole more than $1 million in taxpayer funds from a program designed to help small businesses and their employees who were struggling to stay afloat and make ends meet during the pandemic,” stated Acting United States Attorney Lesko.  “Our Office will continue to ensure that criminals who divert pandemic-related relief to line their own pockets are held accountable for their greed.”   

“It’s alleged that the five arrested today schemed to defraud the government by falsely obtaining over one million dollars in loans from the Economic Injury Disaster Loan program under the COVID Relief Act.  This is a team of fraudsters who didn’t just skim from a government agency, but stole much needed relief from the hands of those who depended on it most,” stated HSI Special Agent-in-Charge Fitzhugh.  “HSI New York worked closely with IRS--Criminal Investigations, the SBA’s Office of Inspector General and JetBlue Corporate Security to apprehend these individuals and ensure they face the consequences of their actions.”

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

As alleged in the complaint, between April 2020 and August 2020, the defendants applied for EIDL loans for eight separate entities.  In those applications, the defendants falsely represented the number of employees associated with the entities and misstated the gross revenues for the entities for the 12 months prior to the COVID-19 pandemic.  For example, Sanay submitted a loan application to the Small Business Association (“SBA”) in July 2020 claiming that he was the owner and chief executive officer of Sanay Venture Capital LLC (“SVC”).  In the application, Sanay falsely claimed that SVC had 26 employees, gross revenues of $839,000 and cost of goods sold of $560,000 for the relevant period.  Sanay and Keimy Nunez submitted the application from the IP address of their employer, JetBlue Airways, to the SBA’s online portal.  The SBA approved SVC’s application and on August 4, 2020 wired $139,400 to Sanay’s personal bank account.  In contrast to the claims made in the application, New York Department of Labor records showed that SVC has never reported having any employees.  Internal Revenue Service records further reveal that SVC has never filed a tax return since its formation in 2014.  There is no evidence to date that the EIDL funds provided to SVC were used for business purposes.  Keily Nunez is no longer employed by JetBlue.

Based on these false representations, the Small Business Administration approved more than $1 million in loans that were deposited into the defendants’ bank accounts. 

In addition to making false statements to obtain the loans, the defendants did not use the relief funding for ongoing business expenses as the EIDL program requires.  Instead, they withdrew hundreds of thousands of dollars in cash from bank accounts that had received EIDL loan funds. 

The charge in the complaint is an allegation, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants each face up to 20 years’ imprisonment.

The case is being handled by the Office’s Business and Securities Fraud Section.  Department of Justice Trial Attorney Patrick J. Campbell is in charge of the prosecution.   

The Defendants:

ORLANDO SANAY
Age: 39
Elizabeth, New Jersey

KEILY NUNEZ
Age: 41
Jamaica, New York

KEIMI NUNEZ
Age: 41
Woodhaven, New York

MICHAEL PIMENTEL VELOZ
Age: 40
Garfield, New Jersey

FANNY PLASENCIA
Age: 20
Jamaica, New York

E.D.N.Y. Docket No. 21-MJ-668

Earlier today, in federal court in Central Islip, Ronald Catalan, a former leader of the Brentwood Locos Salvatruchas (BLS) clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, was sentenced by United States Circuit Judge Joseph F. Bianco to 25 years’ imprisonment.  The sentencing follows Catalan’s guilty plea to racketeering charges, including predicate acts relating to a June 23, 2009 shooting in Brentwood and an October 21, 2015 shooting in Bay Shore that collectively left three victims wounded. Catalan also pleaded guilty to conspiracy to distribute cocaine and marijuana as predicate racketeering acts, as well as illegally using firearms in connection with crimes of violence.  Catalan, who was the leader of the BLS clique from 2015 until his federal arrest in July 2017, pleaded guilty in October 2018.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Stuart Cameron, Acting Commissioner, Suffolk County Police Department (SCPD), announced the sentence.

“Catalan will deservedly spend decades in prison for the violent and brutal acts he committed and directed others to carry out as a leader of the MS-13.  His ruthless and retaliatory attacks on his so-called ‘rivals’ to enhance his own status in the MS-13 demonstrate his complete and callous disregard for human life,” stated Acting United States Attorney Lesko.  “Working with our partners on the FBI’s Long Island Gang Task Force, this Office will continue its relentless pursuit of justice for the victims of the MS-13 and will not rest until the threat they present to the communities in our district is eliminated.”

“Thanks to the relentless efforts of the FBI’s Long Island Gang Task Force and Eastern District of New York, Catalan will be held accountable for his vicious crimes that nearly claimed three lives,” stated Acting SCPD Commissioner Cameron.  “The SCPD will continue to work with our law enforcement partners to put an end to gangs in our communities and their senseless violence while continuing to seek justice for MS-13 victims.”   

On June 23, 2009, Catalan and two other MS-13 members, all of whom were new members of the BLS clique, armed themselves with handguns and drove through Brentwood, hunting for rival gang members to attack and kill in order to increase their standing in the MS-13 gang.  They observed a group of males on Barleau Street whom they believed to be members of the Bloods street gang.  The MS-13 members got out of their car, approached the group and started firing.  John Doe #1 was struck in the armpit and back as he tried to run.  John Doe #1 underwent surgery and ultimately survived the attack.

In addition to shooting John Doe #1, Catalan admitted to participating in the October 21, 2015 attempted murders of two men that occurred on Bancroft Road in North Bay Shore.  Catalan and other MS-13 members decided to retaliate against suspected members of the rival Latin Kings gang for the assault of an MS-13 member earlier that day.  The MS-13 members, who were armed with two .38 caliber revolvers, drove around Brentwood and Bay Shore and observed a group of people they believed to be Latin Kings.  Catalan directed two newer MS-13 members to carry out the shooting and gave them the .38 caliber revolvers.  The MS-13 members fired multiple shots before running back to the car and fleeing the scene.  Two victims were struck by gunfire, but survived their wounds.  Catalan further admitted that, between January 2015 and February 2016, he and other members of the BLS clique conspired to distribute cocaine and marijuana to help finance the MS-13’s operations. 

Today’s sentencing is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent, transnational criminal organization.  The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America.  With numerous branches, or “cliques,” the MS-13 is the most violent street gang 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 60 murders in the Eastern District of New York, and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, SCPD, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation Office, Suffolk County Sheriff’s Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department and the New York State Department of Corrections and Community Supervision. 

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

The Defendant:

RONALD CATALAN (also known as “Stranger” and “Extrano”)
Age:  30 
Brentwood, New York

E.D.N.Y. Docket No. 16-CR-403 (S-6)(JFB)

Earlier today, in federal court in Brooklyn, Dennis Mancino, the former Chief Executive Officer of HD View 360, Inc., a publicly traded penny stock company that purported to distribute and install security surveillance systems, was sentenced by United States District Judge Kiyo A. Matsumoto to 15 months’ imprisonment for conspiracy to commit securities fraud.  Mancino’s conviction stemmed from his participation in a scheme to manipulate the price and trading volume of HD View’s stock, which traded under the ticker symbol HDVW.  Mancino was also ordered to pay more than $1.2 million in restitution and $257,000 in forfeiture.  Mancino pleaded guilty in September 2019.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, announced the sentencing.

“Today, Mancino has been held accountable for abusing the trust of more than 1,200 of his own investors in order to line his pockets,” stated Acting United States Attorney Lesko.  “As this case demonstrates, we remain committed to protecting the investing public and the integrity of the financial markets from fraudulent schemes such as those advanced by the defendant.”  Mr. Lesko expressed his thanks to the Federal Bureau of Investigation, New York Field Office, and the United States Securities and Exchange Commission, New York Regional Office and Washington, D.C. Office, for their invaluable efforts in the case. 

Between July 2017 and February 2018, Mancino conspired to increase HD View’s stock price by executing numerous fraudulent matched trades designed to create the false appearance that HD View’s stock price had risen as a result of genuine market demand.  Once HD View’s stock price increased, the conspirators sold the stock for profit and caused more than $1.2 million in losses to more than 1,200 HD View investors.  Mancino also agreed to pay kickbacks to stock brokers who would execute manipulative trades designed to increase the price and trading volume of HD View’s stock.

The case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys David Gopstein and Michael T. Keilty are in charge of the prosecution.

The Defendant:

DENNIS MANCINO
Age: 49
Residence: Miami, Florida

E.D.N.Y. Docket No. 18-CR-296 (KAM)

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and Walter Mugdan, Acting Regional Administrator of the United States Environmental Protection Agency, Region 2 (EPA), announced today the final resolution of the United States’ claims that the State of New York, the New York State Office of Parks, Recreation and Historic Preservation, and the Palisades Interstate Park Commission (collectively, “Defendants”) violated the Safe Drinking Water Act (the “SDWA”) with respect to 54 Large Capacity Cesspools (“the LCCs”) that discharged untreated sanitary waste into the ground at comfort stations located in parks across New York State.   The announcement follows Defendants’ compliance with the terms of an April 2017 Court-ordered Consent Judgment, which required closure of the LCCs and installation of systems at seven parks that reduce the levels of harmful nutrients—including nitrogen—that enter the local groundwater.

Based on Defendants’ compliance with the terms of the Consent Judgment, the parties submitted a stipulation and proposed order requesting that the Court terminate the Consent Judgment.

“Through its implementation of the terms of the Consent Judgment, New York State has complied with the Safe Drinking Water Act and prevented significant amounts of harmful nutrient pollution from entering our groundwater,” stated Acting United States Attorney Lesko.  “This Office will continue to vigorously enforce violations of the Safe Drinking Water Act to protect the public from water contamination.” 

“Large cesspools are now a thing of the past in New York State’s parks. These polluting sewage handling systems use centuries-old technology that can cause serious pollution of groundwater and drinking water,” stated EPA Acting Regional Administrator Mugdan. “The actions required in the court judgement, including Supplemental Environmental Projects called SEPs that used state-of-the-art technologies at parks across Long Island, dramatically reduced the amount of nitrogen getting into groundwater across New York. These technologies can now serve as best practices for others.”

Congress enacted the SDWA to protect the nation’s drinking water sources, and EPA regulates LCCs to prevent them from contaminating underground sources of drinking water.  Under the SDWA regulations, owners and operators of LCCs were required to close them by April 5, 2005.  LCCs are cesspools that receive untreated sanitary waste, including human excreta, and are capable of being used by 20 or more persons a day.   Such untreated waste is high in harmful nutrients, such as nitrogen, that can compromise ground and surface water quality.  Nutrient pollution of the ground and surface waters in and surrounding Suffolk County is a longstanding problem that threatens the area’s water quality and ecosystem.

Many of New York’s public water systems rely on underground sources of water for their supply.  Underground injection wells, including cesspools, pose a risk to the public because they can contaminate underground drinking water sources and the public water systems that use those sources.  Thirty-six of the LCCs were above the Nassau/Suffolk County Sole Source Aquifer, which supplies most of the drinking water for the population of Long Island.  Nine of the LCCs, previously located in Broome and Orange Counties, were above the Clinton Street-Ballpark and the Ramapo Sole Source Aquifers, which supply most of the drinking water for the populations of the Broome and Orange County areas. 

Pursuant to the Consent Judgment, which settled claims filed by the United States, Defendants closed the LCCs between 2017 and 2019.  The injunctive relief in the settlement had an approximate value of $8.8 million.  Defendants also implemented a series of Supplemental Environmental Projects (“SEPs”) at seven Long Island parks which significantly reduce the amount of harmful nutrients, including nitrogen, that enter the local groundwater.  These SEPs included urine separation systems, nitrogen-reducing technology, and green technology improvements to stormwater treatment systems.  Defendants spent over $3.5 million to implement these projects, which are ongoing.

To date, the SEPs have collectively removed approximately 1,500 pounds of nitrogen from septic system discharges, and they will continue to remove approximately 500 pounds of nitrogen per year.  These amounts represent a substantial portion of nitrogen present in the waste waters discharged from the park facilities.  For example, the treatment system at Connetquot State Park Preserve was found to remove 88% of the nitrogen from sanitary wastewater.  In addition, there is an educational area at Connetquot and Captree State Parks where park visitors can learn about the nitrogen pollution, including sources, effects and solutions and the nitrogen removal technology installed at each of the parks.  Visitors of Captree State Park can also learn about green technology, which manages and treats stormwater run-off, and removes 50% of the nitrogen from rain events.

The case is being handled by the Office’s Civil Division.  Assistant United States Attorney Matthew Silverman is in charge of the litigation, with assistance from Lauren Fischer, Assistant Regional Counsel, Water and General Law Branch, EPA Region 2, Nicole Kraft, Section Chief, Water Compliance Branch, EPA Region 2, and Lisa Kim Pelcyger, Environmental Engineer, Water Compliance Branch, EPA Region 2.

E.D.N.Y. Docket No. 16-CV-6989 (JMA)

Earlier today, in federal court in Brooklyn, Bryan Cho, also known as “Yong Hee Cho,” a Special Agent with Internal Revenue Service Criminal Investigation, pleaded guilty to wire fraud and aggravated identity theft in connection with a scheme to create false identification documents and passports using the stolen identity of the former subject of an IRS investigation.  The proceeding took place before United States District Judge Ann M. Donnelly.  When sentenced, Cho faces up to 22 years in prison and has agreed to forfeit $394,374.63. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and J. Russell George, Treasury Inspector General for Tax Administration (TIGTA), announced the guilty plea.

According to court filings and facts presented during the plea proceeding, Cho stole the identity of a former subject in one of his investigations and used it to create fake identification documents in the person’s name.  The false documents included purported identification cards and passports from the Republic of Marshall Island, Philippines and the Republic of Guinea Bissau.  Some of the documents, including identification cards from the Philippines and the Republic of Guinea Bissau, featured Cho’s picture.  One false identification document was used by Cho to register a corporation overseas in the name of the suspect.  Cho then lied during an official background investigation when he failed to disclose this conduct and denied having any aliases or foreign interests.   

“The defendant shamelessly violated his oath of office, and now he will pay the price for his criminal conduct,” stated Acting United States Attorney Lesko.  “While the vast majority of federal law enforcement agents honor the trust placed in them by the public, today’s plea serves as a reminder that this Office will prosecute corrupt agents who abuse their positions for their personal benefit.” 

“TIGTA aggressively investigates Internal Revenue Service employees who violate the public’s trust,” stated Treasury Inspector General for Tax Administration George.  “Our mission at TIGTA is to protect the integrity of our Nation’s system of tax administration, and we are committed to working with our law enforcement partners to ensure those who endeavor to corrupt Federal tax administration are prosecuted to the fullest extent of the law.”

Cho faces up to 20 years’ imprisonment on the wire fraud count and a mandatory consecutive sentence of two years’ imprisonment on the aggravated identity theft count.

The government’s case is being handled by the Office’s Public Integrity Section.   Assistant United States Attorneys Elizabeth Geddes and Turner Buford are in charge of the prosecution. 

The Defendant:

BRYAN CHO (also known as “Yong Hee Cho”)
Age: 49 
New York, New York

E.D.N.Y. Docket No. 21-CR-40 (AMD)

Earlier today, Aleksandr Zhukov, a Russian national, was convicted by a federal jury in Brooklyn of four counts of a superseding indictment charging him with wire fraud conspiracy, wire fraud, money laundering conspiracy, and money laundering.  The charges arose from Zhukov’s sophisticated scheme to defraud brands, ad platforms and others in the U.S. digital advertising industry out of more than $7 million.  The verdict followed a three-week trial before United States District Judge Eric R. Komitee.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the verdict.

“Today, after evaluating the evidence and wading through the complexities of digital advertising on the internet, the jury recognized the defendant for who he is — a fraudster who used computer code to steal millions from U.S. companies,”  stated Acting U.S. Attorney Lesko.  “Zhukov may have thought that he could get away with his fraud by carrying it out from halfway around the world, but this verdict sends a powerful message that U.S. law enforcement will bring such cybercriminals to justice, wherever they are.”

Mr. Lesko thanked the FBI’s Cyber Division and the NYPD for their extraordinary efforts in carrying out the multi-year investigation.

“Aleksandr Zhukov took an old-fashioned fraud into cyberspace to steal millions of dollars from unsuspecting victims. But his guilty verdict, and the meticulous work of the prosecutors from the United States Attorney’s Office in the Eastern District of New York, highlights the vigilance of our NYPD detectives and law enforcement partners in tracking wrongdoers into the digital frontier,” stated NYPD Commissioner Shea.

The internet is, in large part, freely available to users worldwide because it runs on digital advertising: website owners display advertisements on their sites and are compensated for doing so by intermediaries representing businesses seeking to advertise their goods and services to real human customers.  In general, digital advertising revenue is based on how many users click or view the ads on those websites.  As proven at trial, Zhukov used computer programming and infrastructure spread around the world to exploit the digital advertising industry through fraud.  He and his co-conspirators represented to others that they ran legitimate companies that delivered advertisements to real human internet users accessing real internet webpages.  In fact, Zhukov and his co-conspirators faked both the users and the webpages: they programmed computers they controlled to load advertisements on fabricated webpages, via an automated program, in order to fraudulently obtain digital advertising revenue.  The victims included The New York Times, The New York Post, Comcast, Nestle Purina, the Texas Scottish Rite Hospital for Children, and Time Warner Cable.

The evidence at trial established that between September 2014 and December 2016, Zhukov carried out his digital advertising fraud scheme through a purported advertising network called Media Methane.  Media Methane had business arrangements with other advertising networks whereby it received payments in return for placing advertising placeholders (“ad tags”) on websites.  Rather than place these ad tags on real publishers’ websites, however, Media Methane rented more than 2,000 computer servers housed in commercial datacenters in Dallas, Texas, and Amsterdam, the Netherlands, and used those datacenter servers to load ads on fabricated websites, “spoofing” more than 6,000 domains.  To create the illusion that real human internet users were viewing the advertisements loaded onto these fabricated websites, the defendants programmed the datacenter servers to simulate the internet activity of human internet users: browsing the internet through a fake browser, using a fake mouse to move around and scroll down a webpage, starting and stopping a video player midway, and falsely appearing to be signed into Facebook.  Zhukov leased more than 650,000 Internet Protocol (“IP”) addresses, assigned multiple IP addresses to each datacenter server, and then fraudulently registered those IP addresses in the names of U.S. companies like Comcast and Time Warner Cable to make it appear that the datacenter servers were residential computers belonging to American internet users who were subscribed to various residential internet service providers.  In discussing the scheme with a co-conspirator, Zhukov boasted about the money he would earn and referred to himself as the “king of fraud.”  As a result of this elaborate scheme, the defendant falsified billions of ad views and caused businesses to pay more than $7 million for ads that were never actually viewed by real human internet users.  Zhukov was arrested in Bulgaria in November 2018 and extradited to the United States in January 2019.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Saritha Komatireddy, Artie McConnell, and Alexander F. Mindlin are in charge of the prosecution. 

The Justice Department’s Office of International Affairs, the FBI’s Legal Attachés abroad and foreign authorities in multiple countries provided critical assistance in this case.  The Office extends its appreciation to the Supreme Cassation Prosecution Office of Bulgaria, the Regional Prosecution Office of Varna, the Cybercrime Department of the Bulgarian General Directorate for Combating Organized Crime, the Bulgarian Ministry of Interior Regional Directorate of Varna, and the FBI’s Legal Attaché Office for Bulgaria for their assistance in apprehending defendants in this case.

The Defendant:

ALEKSANDR ZHUKOV
Age:  41
Russian Federation

E.D.N.Y. Docket No. 18-CR-633

Earlier today, in federal court in Brooklyn, Harris Hussnain, the owner of a pharmacy in Queens, was sentenced by United States District Court Judge Rachel P. Kovner to 36 months in prison for his participation in a health care fraud conspiracy, distribution of Oxycodone and illegal financial transactions. Hussnain pleaded guilty to the charges in September 2020.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York; Scott Lampert, Special Agent-in- Charge, U.S. Department of Health and Human Services - Office of Inspector General, Office of Investigations, New York Regional Office (HHS-OIG); Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI); Frank Walsh, Acting Medicaid Inspector General, New York State Office of the Medicaid Inspector General (OMIG); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the sentence.

“Hussnain masqueraded as a health care professional when, in reality, he is a drug-dealing criminal who abused the trust of the Medicare and Medicaid systems, put New Moon Pharmacy’s customers in harm’s way and introduced thousands of Oxycodone pills into the community during an opioid epidemic,” stated Acting United States Attorney Lesko.  “With today’s sentence, the defendant has been held accountable for his flagrant falsehoods and fraud.” 

“Hussnain brazenly deceived the pharmacy’s customers and threatened their safety in exchange for profit,” stated HHS-OIG Special Agent-in-Charge Lampert. “After inappropriately and dangerously dispensing opioid pills and stealing from Medicare and Medicaid, Hussnain has been brought to justice. OIG continues to work with our law enforcement partners to pursue individuals who endanger beneficiaries and cheat the Federal health care programs on which they depend.”

“The defendant’s past transgressions speak for themselves.  What a shame that a pharmacy owner who had the means and the opportunity to serve his community, did quite the opposite all in the name of greed,” stated DEA Special Agent-in-Charge Donovan. “Together with our incredible law enforcement partners, DEA stands committed to protecting our healthcare system from fraud, all while keeping our communities safe. I commend and appreciate all of our partners, as well as our colleagues at the United States Attorney’s Office for their hard work on this investigation.”

“Hussnain has been appropriately punished for his shameful actions and behavior,” stated IRS CI Special Agent-in-Charge Larsen.  “His criminal activity not only negatively impacted the finances of our social safety net, but more importantly the lives of those who potentially suffer from addiction.”

“Today’s sentencing is proof positive of the effectiveness of the strong partnerships that exist among city, state, and federal program integrity agencies and law enforcement organizations in combatting those that have fueled the opioid crisis in our communities.  The message is abundantly clear to anyone who seeks to line their pockets by exploiting the Medicaid program, particularly at these challenging times: you will be caught and held accountable to the fullest extent of the law,” stated Acting Medicaid Inspector General Walsh.

Between July 2016 and December 2019, Hussnain falsely claimed to be the pharmacist at New Moon Pharmacy in South Richmond Hill.  Although Hussnain lawfully owned the business, he was not a licensed pharmacist and was not permitted to dispense prescription medications to patients. Hussnain operated the pharmacy on a daily basis, dispensing prescription medications for years with no medical oversight, including controlled substances and over 10,000 Oxycodone pills, billing Medicare and Medicaid for the medications dispensed.  Hussnain paid a co-conspirator, Nisha Diler, a licensed pharmacist, to hold herself out as the full-time pharmacist despite the fact that she visited the pharmacy only sporadically.  Hussnain filed, and caused Diler to file, falsified paperwork with government entities in New York State in order to cover up Diler’s absences from New Moon Pharmacy.  Between 2016 and 2019, Medicare and Medicaid reimbursed New Moon Pharmacy approximately $3 million for pharmaceutical claims.  Hussnain transferred significant amounts of the reimbursed funds to accounts in his and his family’s names.  In September 2020, Diler pleaded guilty to conspiring to defraud Medicare and Medicaid and subscribing a false tax return.

The case was brought as part of the Medicare Fraud Strike Force, under the supervision of the Department of Justice Criminal Division’s Fraud Section and the United States Attorney’s Office for the Eastern District of New York.  The case is being prosecuted by United States Department of Justice Trial Attorney Miriam L. Glaser Dauermann and Assistant U.S. Attorney Tanisha R. Payne of the Office’s Asset Forfeiture Unit.

The Defendant:

HARRIS HUSSNAIN
Age: 41
Queens, New York

E.D.N.Y. Docket No. 20-CR-280 (RPK)

Bank Julius Baer & Co. Ltd. (BJB or the Bank), a Swiss bank with international operations, has admitted today in federal court in Brooklyn that it conspired to launder over $36 million in bribes through the United States to soccer officials with the Fédération Internationale de Football Association (FIFA) and other soccer federations, in furtherance of a scheme in which sports marketing companies bribed soccer officials in exchange for broadcasting rights to soccer matches. The proceeding was held before U.S. District Judge Pamela K. Chen.

The Bank made these admissions and entered into a three-year deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the Bank with conspiring to commit money laundering. As part of this agreement, the Bank has agreed to pay more than $79 million in penalties (including a fine of $43,320,000 and forfeiture of $36,368,400) to resolve the investigation into its involvement in a money laundering conspiracy that fueled this international soccer bribery scheme. 

Jorge Luis Arzuaga, a former BJB relationship manager who worked in the Bank’s Montevideo, Uruguay, and Zurich, Switzerland, offices pleaded guilty in June 2017 for his role in this conspiracy and was sentenced in November 2020. That case was assigned to U.S. District Judge Pamela K. Chen of the Eastern District of New York, as is this case.

“Today’s resolution sends a strong message to all banks and other financial institutions that if they knowingly misuse our financial system to hide their clients’ criminal proceeds or to promote a corrupt scheme, they will be held to account,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “From the time of the first FIFA-related indictment, the department has promised to hold accountable the financial institutions involved in this global criminal scheme. We are delivering on that promise.”

“BJB and its employees facilitated bribes and its compliance department turned a blind eye to glaring red flags of money laundering,” said Acting U.S. Attorney Mark J. Lesko for the Eastern District of New York. “This office will hold accountable those corporations or individuals that use the American banking system for corrupt ends. As today’s resolution makes clear, financial institutions that become complicit in their clients’ efforts to launder illicit funds face significant penalties.”

“Bank Julius Baer pursued the profit it could make laundering corrupt funds derived from a criminal scheme run by powerful FIFA officials,” said Assistant Director-in-Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “Their behavior has earned them the equivalent of a red card, and the money the bank now owes the U.S. government is more than double what it admits to laundering. The FBI operates globally with our international partners, and our message to those who may be looking to profit from similar schemes – the penalties for this type of play are steep. Stay within the rules.”

“Bank Julius Baer aided corrupt FIFA officials in laundering over $36 million,” said Special Agent in Charge Ryan L. Korner of the IRS-Criminal Investigation. “Banking officials that are a conduit for criminal activity undermine their own profession and the health of our financial system. The Bank's admissions show that IRS-Criminal Investigation will relentlessly pursue corruption across borders, including financial institutions that facilitate or conceal criminal activity. This should put other banks on notice that aiding in corruption will cost you millions.”

According to admissions in the publicly-filed statement of facts, from approximately February 2013 to May 2015, BJB, through Arzuaga, conspired with sports marketing executives — including Alejandro Burzaco, the controlling executive of Torneos y Competencias S.A. (Torneos), a sports media and marketing company headquartered in Argentina — to launder through the United States at least $36 million in bribes to soccer officials in exchange for broadcasting rights to soccer matches. BJB conspired to execute these illegal transactions through accounts at the Bank to conceal the true nature of the payments and promote the fraud. Burzaco pleaded guilty to racketeering conspiracy and other offenses in November 2015 in connection with his involvement in paying bribes to soccer officials.

For example, Burzaco and co-conspirators agreed to pay approximately $30 million to the senior vice president of FIFA, who was also the president of the Asociación del Fútbol Argentina, for his support in the award of regional broadcasting rights to the 2018, 2022, 2026 and 2030 editions of the World Cup. As part of the conspiracy, BJB, through Arzuaga, transferred approximately $25 million of this money into a sub-account at the Bank and held it there for this senior FIFA official.

Torneos and its co-conspirators also agreed to pay tens of millions of dollars in bribes to several officials of the Confederación Sudamericana de Fútbol (CONMEBOL) — all of whom were also FIFA officials — for the rights to the Copa América tournament (including the 2015, 2019 and 2023 editions of the tournament and the 2016 Copa América Centenario, a commemorative centennial edition of the tournament played at stadiums across the United States). The officials who were to receive bribes included, among others, Eugenio Figueredo, a member of FIFA’s executive committee and former president of both CONMEBOL and the Asociación Uruguaya de Fútbol, the Uruguayan soccer federation; Marco Polo Del Nero, another member of FIFA’s executive committee and a former president of the Confederação Brasileira de Futebol (CBF), the Brazilian soccer federation; and José Maria Marin, a member of multiple FIFA standing committees and another former president of the CBF.

Burzaco and Torneos also paid bribes through BJB to numerous CONMEBOL officials in furtherance of a scheme to obtain the broadcasting rights to the Copa Libertadores tournament. In addition to the aforementioned soccer officials, bribes were also paid to, among others, Juan Ángel Napout, who served as a FIFA Vice President, a member of FIFA’s Executive Committee, and president of CONMEBOL and Romer Osuna, a member of the FIFA audit and compliance committee and former treasurer of CONMEBOL.

At the time of the conduct, BJB’s Anti-Money Laundering (AML) controls failed to detect or prevent money laundering transactions related to the bribery schemes. Had Arzuaga’s supervisors or compliance personnel meaningfully reviewed Arzuaga’s due diligence on Torneos and his responses to transaction alerts, they would have known there were multiple, significant red flags, including facially false contracts, payments to third parties at the direction of a FIFA official, and services purportedly rendered by shell corporations — all of which would have alerted the Bank to the bribery, money laundering or other illegal activity.  

According to BJB’s admissions, the Bank knew that Arzuaga’s clients’ accounts were associated with international soccer, which was generally understood to involve high corruption risks. Nevertheless, a BJB executive directed the opening of these accounts be fast tracked in the hope that these clients would provide lucrative business. 

As outlined in the deferred prosecution agreement, the department reached this resolution with BJB based on a number of factors, including BJB’s failure to voluntarily disclose the conduct to the department; the nature and seriousness of the conduct including that the Bank played an essential role in this scheme for over two years; and the bank’s prior criminal history. BJB did not receive any cooperation credit because it made misleading representations about relevant facts in the case, which had the effect of hindering the department’s investigation, and it did not come forward with all evidence pertaining to the involvement of senior management. However, the Bank received some credit for its significant effort to remediate its compliance program. Accordingly, the total criminal penalty reflects a five percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range.

The agreement announced today is part of an investigation led by the FBI’s New York Field Office and the IRS-Criminal Investigation’s Los Angeles Field Office.

Trial Attorney Christian J. Nauvel of the Bank Integrity Unit of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorneys Lauren Howard Elbert, Samuel P. Nitze and Brian D. Morris of the U.S. Attorney’s Office for the Eastern District of New York prosecuted the case. Former MLARS Trial Attorney Michael P. Grady of the U.S. Attorney’s Office for the District of Columbia, the Criminal Division’s Office of International Affairs, the Swiss Federal Office of Justice, and the Swiss Office of the Attorney General provided significant assistance in this matter.

MLARS’s 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.

BROOKLYN, NY – Bank Julius Baer & Co. Ltd. (“BJB” or “the Bank”), a Swiss bank with international operations, admitted today in federal court in Brooklyn that it conspired to launder over $36 million in bribes through the United States to soccer officials with the Fédération Internationale de Football Association (FIFA) and other soccer federations.  These bribes were in furtherance of a scheme in which sports marketing companies bribed soccer officials in exchange for broadcasting rights to soccer matches.  The proceeding was held before United States District Judge Pamela K. Chen.

The Bank has entered into a three-year deferred prosecution agreement with the government in connection with a criminal information filed today in the Eastern District of New York charging the Bank with conspiring to commit money laundering.  As part of this agreement, the Bank has agreed to pay more than $79 million in penalties (including a fine of $43,320,000 and forfeiture of $36,368,400) to resolve the investigation into its involvement in a money laundering conspiracy that fueled this international soccer bribery scheme. 

Jorge Luis Arzuaga, a former BJB relationship manager who worked in the Bank’s Montevideo, Uruguay and Zurich, Switzerland offices, pleaded guilty in June 2017 for his role in this conspiracy and was sentenced by Judge Chen to three years’ probation in November 2020.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS CI), announced the agreement.

“BJB and its employees facilitated bribes and its compliance department turned a blind eye to glaring red flags of money laundering,” stated Acting U.S. Attorney Lesko. “This Office will hold accountable those corporations or individuals that use the American banking system for corrupt ends. As today’s resolution makes clear, financial institutions that become complicit in their clients’ efforts to launder illicit funds face significant penalties.”

“Today’s resolution sends a strong message to all banks and other financial institutions that if they knowingly misuse our financial system to hide their clients’ criminal proceeds or to promote a corrupt scheme, they will be held to account,” stated Acting Assistant Attorney General McQuaid. “From the time of the first FIFA-related indictment, the Department has promised to hold accountable the financial institutions involved in this global criminal scheme. We are delivering on that promise.”

"Bank Julius Baer pursued the profit it could make laundering corrupt funds derived from a criminal scheme run by powerful FIFA officials,” stated FBI Assistant Director-in-Charge Sweeney.  “Their behavior has earned them the equivalent of a red card, and the money the bank now owes the U.S. government is more than double what it admits to laundering. The FBI operates globally with our international partners, and our message to those who may be looking to profit from similar schemes is simple – the penalties for this type of play are steep. Stay within the rules.”                 

“Bank Julius Baer aided corrupt FIFA officials in laundering over $36 million. Banking officials that are a conduit for criminal activity undermine their own profession and the health of our financial system,” stated IRS CI Special Agent-in-Charge Korner. “The Bank's admissions show that IRS Criminal Investigation will relentlessly pursue corruption across borders, including financial institutions that facilitate or conceal criminal activity. This should put other banks on notice that aiding in corruption will cost you millions.”  

According to admissions in the statement of facts, from approximately February 2013 to May 2015, BJB, through Arzuaga, conspired with sports marketing executives—including Alejandro Burzaco, the controlling executive of Torneos y Competencias, S.A. (Torneos), a sports media and marketing company headquartered in Argentina—and others, to launder through the United States at least $36,368,400 in bribes paid to soccer officials in exchange for broadcasting rights to soccer matches.  BJB conspired to execute these illegal transactions through accounts at the Bank to conceal the true nature of the payments and promote the fraud.  Burzaco pleaded guilty in November 2015 to racketeering conspiracy and other offenses in connection with his involvement in paying bribes to soccer officials.

For example, Burzaco and co-conspirators agreed to pay approximately $30 million to the senior vice president of FIFA, who was also the president of the Asociación del Fútbol Argentina, for his support in the award of regional broadcasting rights to the 2018, 2022, 2026 and 2030 editions of the World Cup.  As part of the money laundering conspiracy, BJB, through Arzuaga, transferred approximately $25 million of this money into a sub-account at the Bank and held it there for this senior FIFA official.

Torneos and its co-conspirators also agreed to pay tens of millions of dollars in bribes to several officials of the Confederación Sudamericana de Fútbol (CONMEBOL)—all of whom were also FIFA officials—for the rights to the Copa América tournament (including the 2015, 2019, and 2023 editions of the tournament,  and the 2016 Copa América Centenario, a commemorative centennial edition of the tournament played at stadiums across the United States).  The officials who were to receive bribes included, among others: Eugenio Figueredo, a member of FIFA’s executive committee and former president of both CONMEBOL and the Asociación Uruguaya de Fútbol, the Uruguayan soccer federation; Marco Polo Del Nero, another member of FIFA’s executive committee and a former president of the Confederação Brasileira de Futebol (“CBF”), the Brazilian soccer federation; and José Maria Marin, a member of multiple FIFA standing committees, and another former president of the CBF.

Burzaco and Torneos also paid bribes through BJB to numerous CONMEBOL officials in furtherance of a scheme to obtain the broadcasting rights to the Copa Libertadores tournament.  In addition to the aforementioned soccer officials, bribes were also paid to, among others: Juan Ángel Napout, who served as a FIFA Vice President, a member of FIFA’s Executive Committee, and president of CONMEBOL, and Romer Osuna, a member of the FIFA audit and compliance committee and former treasurer of CONMEBOL.

At the time of the conduct, BJB’s Anti-Money Laundering (“AML”) controls failed to detect or prevent money laundering transactions related to the soccer bribery schemes.  Had Arzuaga’s supervisors or compliance personnel meaningfully reviewed Arzuaga’s due diligence on Torneos and his responses to transaction alerts, they would have known there were multiple, significant red flags, including facially false contracts, payments to third parties at the direction of a FIFA official, and services purportedly rendered by shell corporations—all of which would have alerted the Bank to the bribery, money laundering, or other illegal activity. 

According to BJB’s admissions, the Bank knew that Arzuaga’s clients’ accounts were associated with international soccer, which was generally understood to involve high corruption risks.  Nevertheless, a BJB executive directed the opening of these accounts be fast-tracked in the hope that these clients would provide lucrative business. 

As outlined in the agreement, the Department reached this resolution with BJB based on a number of factors, including BJB’s failure to voluntarily disclose the conduct to the Department; the nature and seriousness of the conduct, including that the bank played an essential role in this scheme for over two years; and the bank’s prior criminal history.  BJB did not receive any cooperation credit because it made misleading representations about relevant facts in the case, which had the effect of hindering the Department’s investigation, and it did not come forward with all evidence pertaining to the involvement of senior management.  However, the Bank received some credit for its significant efforts to remediate its compliance program.  Accordingly, the total criminal penalty reflects a five percent reduction off the bottom of the applicable U.S. sentencing guidelines fine range.   

The agreement announced today is part of an investigation led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI’s New York Field Office and the IRS-CI’s Los Angeles Field Office.  Assistant U.S. Attorneys Lauren Howard Elbert, Samuel P. Nitze and Brian D. Morris of the U.S. Attorney’s Office and Trial Attorney Christian J. Nauvel of the Bank Integrity Unit in the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) prosecuted the case.  Assistant United States Attorney Michael P. Grady of the U.S. Attorney’s Office for the District of Columbia (former MLARS attorney), the Criminal Division’s Office of International Affairs, the Swiss Federal Office of Justice, and the Swiss Office of the Attorney General provided significant assistance in this matter.

The Defendant: BANK JULIUS BAER & CO. LTD.
Zurich, Switzerland

E.D.N.Y. Docket No. 21-CR-273 (PKC)

Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Peter Weinzierl and Alexander Waldstein, both citizens of Austria, for their roles in a scheme to launder hundreds of millions of dollars through the U.S. financial system on behalf of Odebrecht S.A. (Odebrecht), a Brazil-based global construction conglomerate, in order to pay bribes around the world and defraud the Brazilian government. Weinzierl was arrested earlier today in the United Kingdom pursuant to a provisional arrest request from the United States.  Waldstein remains at large.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General, U.S. Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the indictment and arrest.

“As alleged, the defendants, high-ranking officials at an Austrian bank, brazenly assisted a large corporation in laundering millions of dollars through the United States financial system as part of a scheme to commit tax fraud on the Brazilian government,” stated Acting U.S. Attorney Lesko.  “This Office is committed to protecting the integrity of the U.S. financial system and will hold accountable those who seek to misuse it to defraud a foreign government.”  Mr. Lesko thanked the Department of Justice’s Criminal Division and the FBI for their work on the investigation.

As alleged in the indictment, Weinzierl served as chief executive officer and Waldstein served as an officer of an Austrian bank (the “Austrian Bank”), and both served as board members of an Antiguan bank (the “Antiguan Bank”).  In and about and between 2006 and 2016, Weinzierl and Waldstein conspired with Odebrecht and others to launder money in a scheme to defraud Brazil’s tax authority of more than $100 million in taxes and to create off-books slush funds used by Odebrecht to pay hundreds of millions of dollars in bribes for the benefit of public officials around the world. 

Specifically, Weinzierl, Waldstein, and their co-conspirators allegedly used fraudulent transactions and sham agreements to move more than $170 million from bank accounts in New York held in the name of Odebrecht, through the Austrian Bank, to offshore shell company bank accounts secretly owned and controlled by Odebrecht.  As part of the scheme, Odebrecht used the slush funds funneled to the offshore shell company bank accounts to pay bribes.  Odebrecht falsely recorded the hundreds of millions of dollars in international wire transfers sent to the Austrian Bank as legitimate business expenses and deducted the fraudulent payments from the overall profits that it reported in Brazil, thus reducing its tax liability and evading more than $100 million in taxes.  Shell company bank accounts that were involved in the scheme, and used to pay bribes to foreign officials, were held at the Antiguan Bank, which was controlled by Weinzierl, Waldstein, and their co-conspirators and used to promote the scheme.  Weinzierl and Waldstein also caused millions of dollars in criminal proceeds to be transferred from the Antiguan Bank to a brokerage account located in the United States to purchase U.S. Treasury securities and corporate stocks and bonds on U.S. exchanges.  In exchange for their roles in the scheme, Weinzierl and Waldstein demanded and collected substantial fees for the benefit of the Austrian Bank and the Antiguan Bank.

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

The FBI’s International Corruption squad in New York is investigating this case.  Assistant U.S. Attorney Julia Nestor of the U.S. Attorney’s Office for the Eastern District of New York, Trial Attorney Michael Culhane Harper of the Criminal Division’s Fraud Section and Trial Attorney Michael B. Redmann of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case.  The Justice Department’s Criminal Division and United Kingdom authorities provided significant assistance.

The Defendants:

PETER WEINZIERL
Age:  55
Austria

ALEXANDER WALDSTEIN
Age:  73
Austria

E.D.N.Y. Docket No. 20-CR-383 (RJD)

An Austrian man was arrested today in the United Kingdom on criminal charges related to his alleged participation in a conspiracy to launder hundreds of millions of dollars through the U.S. financial system as part of a scheme to pay bribes around the world and defraud the Brazilian government. 

The indictment unsealed today was previously returned by a federal grand jury in Brooklyn, New York, and charges Peter Weinzierl, 55, and Alexander Waldstein, 73, both of Austria, for their role in a massive money laundering scheme involving Odebrecht S.A. (Odebrecht), a Brazil-based global construction conglomerate. Weinzierl was arrested today in the United Kingdom pursuant to a provisional arrest request from the United States.  Waldstein remains at large.

Weinzierl served as chief executive officer and Waldstein as officer of an Austrian bank, and both served as board members of an Antiguan bank. According to the indictment, between approximately 2006 and 2016, Weinzierl and Waldstein conspired with Odebrecht and others to launder money in a scheme to defraud Brazil’s tax authority of more than $100 million in taxes and to create off-books slush funds used by Odebrecht to pay hundreds of millions of dollars in bribes for the benefit of public officials around the world. 

According to the indictment, Weinzierl, Waldstein, and their co-conspirators used fraudulent transactions and sham agreements to move more than $170 million from bank accounts in New York held in the name of Odebrecht, through the Austrian bank, to offshore shell company bank accounts secretly controlled by Odebrecht. As part of the scheme, Odebrecht used the slush funds funneled to the offshore shell company bank accounts to pay bribes. Odebrecht falsely recorded the hundreds of millions of dollars in international wire transfers sent to the Austrian bank as legitimate business expenses and deducted the fraudulent payments from the overall profits that it reported in Brazil, thus reducing its tax liability and evading more than $100 million in taxes. Shell company bank accounts involved in the scheme and used to pay bribes to foreign officials were held at the Antiguan bank that Weinzierl, Waldstein, and their co-conspirators controlled and used to promote the scheme. Weinzierl and Waldstein also caused millions of dollars in criminal proceeds to be transferred from the Antiguan bank to a brokerage account located in the United States to purchase U.S. Treasury securities and corporate stocks and bonds on U.S. exchanges. In exchange for their role in the scheme, Weinzierl and Waldstein collected substantial fees for the benefit of the Austrian and Antiguan banks.

On Dec. 21, 2016, Odebrecht pleaded guilty in federal court in Brooklyn to a criminal information charging it with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) for its involvement in the bribery and money laundering scheme.

Weinzierl and Waldstein are charged with one count of conspiracy to commit money laundering and two counts of international promotional money laundering. Weinzierl is also charged with one count of engaging in a transaction in criminally derived property. If convicted of all counts, Weinzierl and Waldstein would face a maximum penalty of 70 and 60 years in prison, respectively. A federal district court judge in Brooklyn will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Mark J. Lesko for the Eastern District of New York; and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.

The FBI’s International Corruption squad in New York is investigating this case. 

Trial Attorney Michael Culhane Harper of the Criminal Division’s Fraud Section, Trial Attorney Michael B. Redmann of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorney Julia Nestor of the U.S. Attorney’s Office for the Eastern District of New York are prosecuting the case. The Justice Department’s Office of International Affairs and UK authorities provided significant assistance.

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

The Kleptocracy Asset Recovery Initiative in the Criminal Division’s Money Laundering and Asset Recovery Section was formed to prosecute money launderers and forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered asset to benefit the people harmed by the corruption and abuse of office.  Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov.

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

A criminal complaint has been filed in federal court in Brooklyn charging Ali Alaheri with setting fire to a yeshiva and synagogue in Brooklyn on May 19, 2021.  Alaheri was arrested in Dobbs Ferry, New York, yesterday and will make his initial appearance this afternoon before United States Magistrate Judge Vera M. Scanlon. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York; John B. DeVito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); Dermot Shea, Commissioner, New York City Police Department (NYPD); and Daniel A. Nigro, Commissioner, New York City Fire Department (FDNY), announced the arrest and charge.

“As alleged in the complaint and detention letter, Alaheri deliberately set fire to the sacred home of a yeshiva and synagogue, and viciously attacked a man wearing traditional Hasidic garb, demonstrating a violent hatred that cannot be tolerated,” stated Acting U.S. Attorney Lesko.  “This Office strongly condemns these sorts of intentional acts of violence and we will go to every length possible to prosecute this type of conduct to the fullest extent possible.”  Mr. Lesko praised the special agents, detectives and fire marshals of the Strategic Explosive and Arson Response Task Force for their outstanding investigative work on the case.

“The defendant’s alleged actions endangered the lives of numerous individuals, from the congregants and students at the synagogue and yeshiva, to the first responders who arrived to extinguish the flames, to the neighboring members of the community,” stated ATF Special Agent-in-Charge DeVito.  “The members of ATF’s Arson and Explosives Task Force, in partnership with NYPD’s Hate Crime Unit, worked diligently to quickly identify the defendant and bring him to justice.   I thank them for their efforts, as well as those of the U.S. Attorney’s Office, in sending a clear message that crimes such as this will not be tolerated.”

“Ali Alaheri, as alleged in today’s federal complaint, set fire to a school and religious institution and threatened public safety for all. I commend our NYPD investigators, our government partners and the prosecutors in the United States Attorney’s Office for the Eastern District of New York for their work in bringing swift justice in this case,” stated NYPD Commissioner Shea.

“Arson is a callous and senseless crime that endangers the lives of innocent residents and our firefighters who bravely respond to protect life and property,” stated FDNY Commissioner Nigro. “I commend our Fire Marshals and their partners in law enforcement for their outstanding efforts to investigate this incident and apprehend the suspect.”

As set forth in the complaint and detention letter, in the pre-dawn hours of May 19, 2021, Alaheri was captured on surveillance video piling garbage bags against the side of a building on 36th Street in Brooklyn that housed a yeshiva (a Jewish school) and a synagogue.  Alaheri was recorded igniting the garbage bags.  Firefighters responded to a fire alarm at the location and extinguished the blaze.  Several hours later, Alaheri was again captured on surveillance video, this time repeatedly punching a man wearing traditional Hasidic garb.  There was no interaction between Alaheri and the victim prior to the assault.  When Alaheri was arrested on May 21, 2021, he appeared to be wearing the same clothing he was wearing in the video footage of the assault.

The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Alaheri faces a mandatory minimum sentence of five years’ imprisonment, and a maximum of 20 years’ imprisonment.

The government’s case is being handled by the Office’s Civil Rights Section.  Assistant United States Attorney Rachel A. Bennek is in charge of the prosecution. 

The Defendant:

ALI ALAHERI
Age:  29
Brooklyn, New York

E.D.N.Y. Docket No. 21-MJ-624

A complaint was unsealed today in federal court in Brooklyn charging Manuel Guzman Breton with eight counts of Hobbs Act robbery in connection with the robberies of eight grocery stores, laundromats, and other businesses during the month of April 2021.  An employee was injured during one of the robberies.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, John B. DeVito, Special Agent-in-Charge, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the arrest and charges. 

“As alleged, Guzman Breton embarked on a one-man crime spree to rob and terrorize hard-working store clerks and employees while armed with a knife or a boxcutter,” stated Acting U.S. Attorney Lesko.  “This Office and our partners at the ATF and the NYPD relentlessly pursued this serial armed robber and, by bringing him to justice, stopped him from inflicting further harm on businesses in our communities.”  Mr. Lesko expressed his appreciation to the NYPD detectives and ATF special agents assigned to the ATF/NYPD Robbery Task Force for their investigative work.

“ATF is committed to the investigation and prosecution of violent and dangerous offenders in order to make our communities safer,” stated ATF Special Agent-in-Charge DeVito.  “The defendant’s alleged violent crime spree has been stopped as a result of that commitment.  We thank the NYPD and the U.S. Attorney’s Office for their continued partnership and their dedication to the safety of New York City’s residents and businesses.”

As set forth in the complaint and as captured on video surveillance, between April 7, 2021 and April 27, 2021, Guzman Breton, wearing a hooded sweatshirt, committed a spree of robberies in which he entered each store, threatened employees with a knife or boxcutter, and stole thousands of dollars from his victims.  An employee of a laundromat suffered cuts on the hand trying to wrest a knife away from the defendant during one of the robberies.

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

The complaint charges Guzman Breton with the following robberies, all in Queens:

• Grocery store on Corona Avenue in Corona on April 7, 2021.
• Grocery store on 74th Street in Jackson Heights on April 10, 2021.
• Grocery store on Astoria Boulevard in East Elmhurst on April 12, 2021.
• Grocery store on Roosevelt Avenue in Woodside on April 16, 2021.
• Grocery store on Hampton Street in Elmhurst on April 19, 2021.
• Laundromat on 81st Street in Jackson Heights on April 25, 2021.
• Laundromat on Elmhurst Avenue in Elmhurst on April 26, 2021.
• Clothing store on 37th Avenue in Jackson Heights on April 27, 2021.

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorney Ellen H. Sise is in charge of the prosecution.

The Defendant:

MANUEL GUZMAN BRETON
Age:  31
Queens, New York

E.D.N.Y. Docket No. 21-MJ-603

Earlier today, in federal court in Brooklyn, Shimon Rosenfeld, an attorney licensed to practice in New York, pleaded guilty to defrauding investors of at least $6 million by falsely claiming he was using the money to invest in real estate opportunities.  The proceeding was held before United States District Judge Kiyo A. Matsumoto.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Patrick J. Freaney, Deputy Special Agent-in-Charge, United States Secret Service, New York Field Office (USSS), announced the guilty plea.

“The defendant, a licensed lawyer, swindled his investors by claiming he was ‘flipping’ properties, when in reality the only thing he flipped was their millions of dollars in investments into his own personal bank accounts,” stated Acting United States Attorney Lesko.  “It is particularly egregious that the defendant perpetrated this fraud scheme as a member of the bar who betrayed the trust of victims who believed his lies.” Mr. Lesko thanked the FBI for their outstanding investigative work on the case.

“The U.S. Secret Service, working in conjunction with our law enforcement partners, is dedicated to bringing those who commit financial crimes to justice,” stated USSS Deputy Special Agent-in-Charge Freaney.  “The defendant used his position as an attorney to defraud victims who believed they were investing in real estate, when in actuality the defendant was misappropriating the funds for his personal gain.  Due to the diligent investigative efforts of the Secret Service and FBI, the defendant has been brought to justice in the Eastern District of New York and will face the appropriate consequences for his actions.”

Between May 2014 and March 2018, Rosenfeld perpetrated a fraudulent scheme by soliciting and receiving approximately at least $6 million from various individuals (the “Victims”) based on fraudulent misrepresentations.  Specifically, Rosenfeld induced the Victims to invest their money with him based, in part, on representations that he would purchase real estate and sell it to a prospective buyer at a higher price, also referred to as “flipping” the property.  Rosenfeld told the Victims that he would split the profits from the real estate transactions with the Victims.  In reality, Rosenfeld misappropriated the victim investors’ money, directing the funds into bank accounts he controlled and using the money to trade securities out of his brokerage account. 

The government’s case is being handled by the Office’s Business & Securities Fraud Section.  Assistant United States Attorney Hiral D. Mehta is in charge of the prosecution, assisted by Special Agent Martin Sullivan of the Eastern District of New York. 

The Defendant:

SHIMON ROSENFELD
Age:  59
Brooklyn, New York

E.D.N.Y. Docket No. 21-CR-236 (KAM)

Earlier today, in federal court in Brooklyn, Anton P. Bogdanov, a citizen of Russia, was sentenced by United States Chief District Judge Margo K. Brodie to 60 months’ imprisonment for wire fraud conspiracy and computer intrusions in connection with a scheme in which he and others hacked into private tax preparation firms, stole personal information, used that information to file federal tax returns and fraudulently attempted to obtain more than $1.5 million in tax refunds from the Department of the Treasury.  The Court also ordered Bogdanov to pay $476,713 in forfeiture.  Bogdanov was arrested in Bangkok, Thailand in November 2018, extradited to the United States in March 2019 and pleaded guilty in January 2020.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jonathan D. Larsen, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the sentence.

“Bogdanov hacked into tax preparation firms and used illegally obtained private information from innocent victims to try to steal their federal income tax refunds for his own use,” stated Acting United States Attorney Lesko.  “Today’s sentence underscores the commitment of this Office to protecting the integrity of private tax return information and holding corrupt hackers like the defendant accountable for his crimes.” 

“Victims in this investigation may have thought justice would be elusive when they learned Bogdanov and his cohorts were in Russia.  Today's result should serve as a reminder that our reach is global, and we are laser-focused on stopping cyber criminals wherever they may try to hide,” stated FBI Assistant Director-in-Charge Sweeney.

“Bogdanov utilized sophisticated means to steal two valuable commodities, peoples personally identifiable information and funds belonging to the American Taxpayer, stated IRS-CI Special Agent-in-Charge Larsen.  “IRS-Criminal Investigation will continue to work side-by-side with our law enforcement partners to identify and prosecute international cyber criminals who infiltrate our tax system for personal gain.  Justice was served in today’s sentence and should serve as a warning that cyber-criminals cannot hide anonymously beyond our borders.”

Between June 2014 and November 2016, Bogdanov, who used the online moniker “Kusok,” and his co-conspirators misappropriated personally identifiable information (“PII”), such as Social Security numbers and the dates of birth of their victims, by gaining unauthorized access to the computer systems of private tax preparation firms in the United States.  Bogdanov and his co-conspirators then changed the tax return information so that the refunds were paid to prepaid debit cards that they controlled.  Bogdanov and his co-conspirators also used misappropriated PII to obtain prior tax filings of victims from the IRS Transcript System website, and filed new tax returns, purportedly on behalf of the victims, so that refunds were paid to prepaid debit cards under their control.  The debit cards were cashed out in the United States, and a percentage of the proceeds was wired to Bogdanov in Russia. 

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorney Jonathan E. Algor is in charge of the prosecution.   

The Justice Department’s Office of International Affairs, the FBI’s Legal Attaché abroad and foreign authorities provided critical assistance in this case.  The Office extends its appreciation to the Royal Thai Police, particularly the Crime Suppression Division, and the FBI’s Legal Attaché Bangkok for their assistance in apprehending the defendant.  The Office also extends its appreciation to the New York County District Attorney’s Office for their assistance in this case.

The Defendant:

ANTON P. BOGDANOV (also known as “Kusok”)
Age:  35
Russia

E.D.N.Y. Docket No. 19-CR-197 (MKB)

Earlier today, in federal court in Brooklyn, Francesco Ginestri, a former New York City Department of Buildings (DOB) Inspector, pleaded guilty to solicitation and receipt of a bribe in exchange for his agreement to ensure that DOB would not issue a fine in connection with a stop work order.  The proceeding was held before United States Magistrate Judge Sanket J. Bulsara. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.

“With today’s guilty plea, Ginestri admits to selling his position as a building inspector in exchange for cash and to violating the public trust to ensure the safety of city construction sites,” stated Acting United States Attorney Lesko.  “This Office will vigorously prosecute corrupt employees who put their official positions up for sale and endanger the safety of their communities.”  Mr. Lesko thanked the Federal Bureau of Investigation, New York Field Office, U.S. Department of Labor, Office of Inspector General, and the New York City Department of Investigation, for their investigative work on the case.

In late July 2020, Ginestri, who was employed as a New York City Department of Buildings Inspector, conducted a re-inspection of a construction site located in Queens that had received a stop work order for safety violations earlier in the month.  During the re-inspection, Ginestri learned that construction had continued despite the pendency of the stop work order.  Instead of seeking to impose a penalty on the company for violating the stop work order, Ginestri solicited a $1,200 cash bribe in exchange for his agreement to ensure that the DOB would not issue a $25,000 fine to the company.  Ginestri resigned from the DOB on February 10, 2021, the day he was arrested.

The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Tanya Hajjar and Alicia N. Washington are in charge of the prosecution. 

The Defendant:

FRANCESCO GINESTRI
Age:  37
Queens, New York

E.D.N.Y. Docket No. 21-263 (ERK)

A criminal complaint was unsealed today in federal court in Brooklyn charging Bryan Abraham, Carlos Vazquez, Angel Cabrera, Armani Miller, Johan Santos, Gianni Stewart, Andre Ruddock and Seth Golding with conspiracy to commit access device fraud in connection with a scheme to obtain millions of dollars in unemployment insurance benefits funded, in whole or in part, by COVID-19 pandemic assistance programs.  Six defendants were arrested this morning and will make their initial appearance this afternoon before United States Magistrate Judge Ramon E. Reyes. Miller and Santos remain at large.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York; Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS); Nikitas Splagounias, Acting Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, New York Region (DOL-OIG); and Roberta Reardon, Commissioner, New York State Department of Labor (NYS DOL), announced the arrests and charges.

“As alleged, the defendants not only fraudulently obtained $2 million in pandemic-related unemployment benefits using information from third-party victims, they audaciously displayed the proceeds of their fraud – large amounts of stolen cash – on social media,” stated Acting United States Attorney Lesko.  “This Office will not hesitate to bring the full weight of the law against defendants who would pocket public funds that are intended to alleviate the hardship of others.”  Mr. Lesko also expressed his grateful appreciation to the New York City Police Department for their assistance during the investigation.

“Unfortunately, as the government rolled out various CARES Act programs, fraudsters were ‘At the Ready’ to take full advantage of these programs through a variety of fraud schemes, ripping off the American public of millions in taxpayer dollars, and clogging the system for those who honestly are in need. These arrests are an example of the commitment of law enforcement to bring those to justice for scamming the system” stated USPIS Inspector-in-Charge Bartlett.

“An important mission of the Office of Inspector General is to investigate allegations relating to pandemic-related unemployment benefits. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated DOL-OIG Acting Special Agent-in-Charge Splagounias.

“There is never an excuse to knowingly commit fraud and steal from a system that was designed to help New Yorkers in a time of need,” stated NYS DOL Commissioner Reardon.  “However, it’s even more despicable when these thieves steal a lifeline from New Yorkers in the midst of a public health pandemic. We have no tolerance for criminals, and if you break the law, you will be held accountable. I commend our partners in the U.S. Attorney’s Office and all levels of law enforcement for their commitment to helping us fight Unemployment Insurance fraud.”

In response to the COVID-19 pandemic, Congress has enacted laws to establish programs and provide additional funding for unemployment insurance benefits for unemployed persons.  These include the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law on March 27, 2020, which created programs for pandemic unemployment assistance and federal pandemic unemployment compensation. 

As alleged in the complaint, between June 2020 and April 2021, the defendants submitted fraudulent claims to the New York State Department of Labor for unemployment insurance benefits.  They used the personal identifying information of third-party victims to fraudulently receive unemployment insurance benefits funded, in whole or in part, by COVID-19 pandemic assistance programs.  The defendants’ scheme allegedly resulted in approximately $2 million in unemployment benefits being distributed to the defendants and others.  Cabrera, Golding, Stewart and Vazquez posted photos of themselves on social media in which they were holding and fanning out large sums of cash.

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

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorney Tara McGrath is in charge of the prosecution with assistance from Assistant United States Attorney Brendan G. King of the Office’s Asset Forfeiture Section. 

The Defendants:

BRYAN ABRAHAM
Age:  18
Brooklyn, New York

CARLOS VASQUEZ
Age:  20 
Brooklyn, New York

ANGEL CABRERA
Age:  18
Brooklyn, New York

ARMANI MILLER
Age:  24
Brooklyn, New York

JOHAN SANTOS
Age:  19
Brooklyn, New York

GIANNI STEWART
Age:  19
Brooklyn, New York

ANDRE RUDDOCK
Age:  25
Brooklyn, New York

SETH GOLDING
Age:  18
Brooklyn, New York

E.D.N.Y. Docket No. 21-MJ-593

Earlier today, in federal court in Brooklyn, Kesler Dalmacy, a medical doctor, pleaded guilty to illegal distribution of controlled substances.  Dalmacy, who operated his medical practice out of an office in East Flatbush, prescribed narcotics to patients outside the course of his professional practice that lacked a legitimate medical purpose in exchange for cash payments.  The proceeding was held before United States District Judge Ann M. Donnelly. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), Dermot F. Shea, Commissioner, New York City Police Department (NYPD), and Kevin P. Bruen, Acting Superintendent, New York State Police (NYSP), announced the guilty plea.

“The defendant, a medical doctor who swore an oath to do no harm, spread the scourge of addiction in our communities by writing bogus prescriptions for personal profit,” stated Acting United States Attorney Lesko.  “This Office, in partnership with the DEA, HSI, NYPD and NYSP, will spare no effort in combatting the illegal distribution of addictive drugs, and in holding medical professionals like the defendant accountable to the fullest extent of the law.”  Mr. Lesko also thanked the U.S. Department of Health and Human Services (HHS) and the New York State Department of Health’s Bureau of Narcotic Enforcement for their assistance during the investigation.

 “Another day, another doctor disguised as a drug dealer. The defendant not only prescribed highly addictive controlled substances without a legitimate medical need, but also went out of his way to attempt to evade law enforcement. Today’s plea demonstrates that the defendant is taking responsibility for betraying the trust of his patients, his community, and his oath,” stated DEA Special Agent-in-Charge Donovan.  “I commend the New York Division, Organized Crime Drug Enforcement Strike Force, Tactical Diversion Squad, the U.S Attorney’s Office for the Eastern District of New York, and our many law enforcement partners for their dedication, hard-work, and attention to the investigation and prosecution of this defendant.”  

“The opioid epidemic our country continues to battle is exacerbated when unscrupulous individuals seek to profit from those struggling with addiction,” stated HSI Special Agent-in-Charge Fitzhugh.  “The defendant exploited the weaknesses of fellow human beings in order to line his own pockets. HSI and our law enforcement partners remain steadfast in our pursuit to safeguard the public and hold individuals like Dr. Dalmacy accountable.”

“The primary work of a medical practitioner is to help patients. The work of this doctor did nothing but harm his victims, with no regard for their health. By taking payment for prescriptions, Dr. Dalmacy put his patients and the community he served at risk. I thank our law enforcement partners involved in this investigation, and together we will work to keep drugs off our streets, prevent prescription drug abuse and senseless deaths,” stated NYSP Acting Superintendent Bruen.

As set forth in the criminal complaint and court filings, between January 2014 and February 2020, Dr. Dalmacy illegally prescribed to patients thousands of pills of highly addictive controlled substances, including Adderall and Vicodin, in exchange for cash payments.  Dr. Dalmacy wrote these prescriptions outside the course of his professional practice and without a legitimate medical purpose.  To conceal the unauthorized prescriptions from law enforcement and oversight agencies, Dr. Dalmacy postdated prescriptions and provided multiple prescriptions to the same individual under different or fictitious names. 

The arrest of Dr. Dalmacy is 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.

This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative.  In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the NYPD and the New York State Police, along with other key federal, state and local government partners, launched the Initiative to mount a comprehensive response to what the HHS Centers for Disease Control and Prevention called an epidemic increase in the abuse of so-called opioid analgesics.  To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 20 health care professionals; taken civil enforcement actions against a hospital, a pharmacy and pharmacy chain; removed prescription authority from numerous rogue doctors; and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers.  The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.

The government’s case is being prosecuted by Assistant United States Attorneys Julia Nestor and Dylan A. Stern.

The Defendant:

DR. KESLER DALMACY
Age:  70
Brooklyn, New York

E.D.N.Y. Docket No. 21-CR-258 (AMD)

Earlier today, in federal court in Central Islip, Mark Lisser pleaded guilty to securities fraud conspiracy for lying to customers about investments in shares of several companies prior to the initial public offering (IPO) of those companies.  The proceeding was held before United States Magistrate Judge A. Kathleen Tomlinson.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.

“With today’s guilty plea, the defendant admits to personally profiting from the false representations he made to his customers about the nature of their investments in valuable pre-IPO companies,” stated Acting U.S. Attorney Lesko.  “This Office and its law enforcement partners are committed to preventing dishonest advisors like the defendant from taking advantage of the investing public.”  Mr. Lesko thanked the Federal Bureau of Investigation, New York Field Office, and the United States Securities and Exchange Commission, New York Regional Office, for their assistance. 

Between October 2018 and January 2019, Lisser was a partner in Knightsbridge Private Partners LLC (Knightsbridge), which operated a series of websites and call centers used to solicit investments in purported pre-IPO shares of companies (the Pre-IPO Companies).  Employees of Knightsbridge, including Lisser, solicited these investments by falsely telling investors and potential investors that Knightsbridge owned the shares it was selling, that Knightsbridge was on the capitalization table of the pre-IPO Companies, and that Knightsbridge and its employees did not earn any commissions or fees until after the shares were issued to the public and the investors made money.  In reality, as Lisser knew, Knightsbridge did not directly own any pre-IPO shares in the Pre-IPO Companies, and was not on the capitalization table of any of the Pre-IPO Companies.  Lisser also knew that he and other Knightsbridge employees earned money, including commissions, from the investments at the time they were made.  As a result of this scheme, Lisser misappropriated more than $700,000 in investors’ funds to make payments to companies controlled by Knightsbridge employees, pay salaries and sales commissions, pay his personal credit card bill, and make payments on a mortgage.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Mathew S. Miller and David Gopstein are in charge of the prosecution. 

The Defendant:

MARK ALAN LISSER
Age:  40
Massapequa, New York

E.D.N.Y. Docket No. 21-CR-210 (JMA)

Roman Narvaez Ansazoy, the founder and principal leader of an international drug trafficking enterprise based in Colombia, pleaded guilty today in federal court in Brooklyn to leading a continuing criminal enterprise as charged in a superseding indictment.  When sentenced, Narvaez will face a mandatory minimum term of 20 years in prison and up to life in prison.  As part of the plea agreement, Narvaez also agreed to pay a $20 million forfeiture money judgment.  The proceeding was held before United States Magistrate Judge Robert M. Levy.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Dermot F. Shea, Commissioner, New York City Police Department (NYPD), and Kevin P. Bruen, Acting Superintendent, New York State Police (NYSP), announced the guilty plea.

“With today’s guilty plea, the defendant will face significant punishment for the incalculable harm caused by poisoning our country with huge quantities of cocaine produced by his drug trafficking organization, while amassing substantial illicit wealth for himself,” stated Acting U.S. Attorney Lesko.  “The United States is committed to cooperating with our international partners to dismantle illicit organizations like the Narvaez drug trafficking organization.”  Mr. Lesko extended his grateful appreciation to the DEA’s offices in Bogota, the United States Marshals Service, the United States Department of State, the Department of Justice’s Office of International Affairs, the Colombian National Police, and the Government of Colombia.

“Ansazoy was admittedly a multi-ton supplier of cocaine with ties to narco-terrorist organizations.  His arrest and plea are another victory for the Rule of Law and the victims of drug abuse, misuse, and overdoses.  I applaud our global, state, local, and federal partners whose work resulted in today’s announcement,” stated DEA Special Agent-in-Charge Donovan.

“I commend the dedicated teamwork of the New York Organized Crime Drug Enforcement Strike Force which was instrumental in the takedown of this dangerous drug trafficker and bringing him to justice. This partnership of federal, state and local law enforcement continues to prevent dangerous narcotics making their way into our communities and helping to remove the violent criminals who profit at the expense of our communities. We are committed to working together with our law enforcement partners to keep these harmful narcotics off our streets and our neighborhoods safe,” stated NYSP Acting Superintendent Bruen.

As set forth in the superseding indictment and court filings, the drug trafficking organization led by Narvaez was responsible for producing multi-ton quantities of cocaine, on a monthly basis, in jungle laboratories in the Cauca region of Colombia.  At its peak, the Narvaez drug trafficking organization was one of the top producers of cocaine in Colombia.  After producing the cocaine, members of the Narvaez drug trafficking organization transported the cocaine to Colombian ports on the Pacific Ocean so that it could be exported from Colombia by sea.  In transporting the cocaine from the jungle areas of Cauca to port cities, members and associates of the Narvaez drug trafficking organization paid money to paramilitary groups that controlled these areas in exchange for safe passage.  One of the paramilitary groups that the Narvaez drug trafficking organization paid was the Revolutionary Armed Forces of Colombia (“FARC”), a designated Foreign Terrorist Organization.  The vast majority of the cocaine that the Narvaez drug trafficking organization delivered was destined for the United States.

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

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

The Defendant:

ROMAN NARVAEZ ANSAZOY
Age: 46
Cauca, Colombia

E.D.N.Y. Docket No. 14-CR-048 (S-1) (BMC)

A nine-count indictment was unsealed today in federal court in Brooklyn charging Heather Busch, Robert Hassett, and Robert Smith with five counts of using interstate facilities to commit bribery and two counts of conspiracy to violate the Travel Act.  Smith is also charged with attempting to transport at least one kilogram of heroin and possessing a firearm during the commission of that crime.  During the relevant period, Smith, Busch, and Hassett were New York City Police Department (“NYPD”) police officers assigned to the 105th Precinct in Queens.  Smith retired from the NYPD in March 2020. 

The defendants were arrested this morning and will be arraigned this afternoon before United States Chief Magistrate Judge Cheryl L. Pollak.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr. Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, Commissioner, NYPD, announced the charges.

“As alleged, the defendants shamelessly violated their oaths of office and the public trust by trading their badges for cash payments,” stated Acting United States Attorney Lesko.  “This Office will vigorously pursue corrupt public servants like these defendants, who exploited their positions as police officers for personal gain.” Mr. Lesko expressed his grateful appreciation to Internal Revenue Service-Criminal Investigation for their assistance with the case.

“Behavior like the type alleged today is a disgrace.  It erodes public trust in law enforcement and tarnishes the reputations of the many thousands of officers who honorably serve our communities on a daily basis.  The FBI and NYPD stand together on this – Our shared oath is to uphold the law and protect the public.  Nobody is above the law, and we will not tolerate illegal behavior, especially among the ranks of sworn law enforcement officers,” stated FBI Assistant Director-in-Charge Sweeney.

“There is zero tolerance in the NYPD for corruption of any kind. Wherever it is alleged, our NYPD investigators, with our partners in the Federal Bureau of Investigation and the United States Attorney’s Office in the Eastern District of New York, work tirelessly to ensure it is punished to the fullest extent of the law,” stated NYPD Commissioner Shea.

The Tow Truck Scheme

Beginning in September 2016, NYPD Officers Smith and Hassett responded to automobile accidents by allegedly directing the damaged vehicles to a licensed tow trucking and automobile repair business (the “Business”) operated by an individual (the “Individual”), instead of using the NYPD’s Directed Accident Response Program (“DARP”), which requires NYPD officers to identify an appropriate licensed tow trucking business to respond to the scene of the automobile accident and remove the damaged vehicles from the scene.  To ensure that no particular business receives favored treatment, NYPD officers are required to utilize a computer system that randomly selects a licensed tow trucking business.  Smith and Hassett allegedly bypassed DARP and directed damaged vehicles directly to the Business in exchange for thousands of dollars in cash bribe payments.  Smith and Hassett continued to participate in the scheme until at least June 2017, when they temporarily suspended their participation.

In November 2019, Smith resumed his participation in the scheme and continued to steer vehicles damaged in automobile accidents to the Business in exchange for cash.  Beginning in January 2020, Smith discussed his plan to recruit Busch to participate in the scheme in advance of his retirement from the NYPD.  In March 2020, Busch, at Smith’s invitation, met with Smith and the Individual and Busch agreed to participate in the scheme.  Thereafter, Busch began steering vehicles damaged in automobile accidents to the Business in exchange for cash bribe payments, in lieu of utilizing DARP as required.

The Victim Database Scheme

Beginning in January 2020, Smith and Hassett obtained the names and identifying information of recent automobile accident victims from NYPD databases and provided that information to the Individual in exchange for cash. Smith and Hassett understood that the Individual would sell that information to physical therapy businesses and personal injury attorneys so that they could seek to solicit the automobile accident victims as customers.

On numerous occasions, Hassett accessed NYPD databases in violation of NYPD regulations for the purpose of obtaining the names and identifying information of victims of recent automobile accidents.  Hassett then arranged for that information to be delivered to the Individual, sometimes through Smith.  Upon receipt of that information, the Individual made payments in cash to Smith who, in turn, redistributed a portion of those payments to Hassett.  In total, between January 2020 and March 2020, Smith and Hassett sold the names and identifying information of more than 100 victims to the Individual, in exchange for more than $7,000 in cash.

The Armed Drug Trafficking Scheme

Beginning in January 2020, Smith sought opportunities from the Individual to transport illegal narcotics, in exchange for payment, upon his retirement from the NYPD.  In June 2020, Smith met with two individuals to discuss his interest in participating in a scheme to traffic drugs and told them he could carry a firearm and his retired NYPD identification while he was transporting the drugs.  In July 2020, Smith met with an individual in Brooklyn and accepted a bag containing what Smith understood to be a kilogram of heroin.  Smith then transported the bag to a location in Queens where he delivered it to another individual.  Smith received a payment of approximately $1,200 in cash for his participation in the scheme.

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Smith faces up to life imprisonment on the drug trafficking charge, up to 5 years’ imprisonment on each bribery count and a mandatory consecutive sentence of five years to life imprisonment on the firearm charge. Hassett and Busch face up to five years’ imprisonment on each bribery count, and the defendants each face up to five years’ imprisonment on the conspiracy to violate the Travel Act counts.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Ryan C. Harris and Nicholas J. Moscow are in charge of the prosecution.

The Defendants:

HEATHER BUSCH
Age:  34
Massapequa, New York

ROBERT HASSETT
Age:  36
Farmingville, New York

ROBERT SMITH
Age:  44
Plainview, New York

E.D.N.Y. Docket No. 21-CR-254 (RPK)

Earlier today in federal court in Brooklyn, Alonzo Shipp was sentenced to 10 years’ imprisonment by United States District Judge Rachel P. Kovner for being a felon in possession of a firearm that wounded an individual in Queens in 2018.  Shipp was convicted in November 2020 following a six-day jury trial.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, announced the sentence.

“Today’s sentence is intended to serve notice to repeat offenders that wielding a loaded weapon and deliberately shooting a victim with it may result in a federal prosecution and lengthy prison sentence,” stated Acting U.S. Attorney Lesko.  “This Office is committed to working with its law enforcement partners to reduce gun violence and make our communities safer.”  Mr. Lesko expressed his grateful appreciation to the Bureau of Alcohol, Tobacco, Firearms and Explosives and the New York City Police Department (NYPD) for their outstanding investigative work on the case.

The evidence at trial proved that on July 20, 2018, Shipp, also known as “Pump,” shot the victim in the abdomen on 147th Street in South Jamaica. The victim collapsed two blocks away and called 911. Shipp then stood over him, holding his gun as the victim begged for his life. While on the line with the 911 operator, the victim spoke directly to Shipp, stating: ‘I don't want to die, Pump. Please, I don't want to die, Pump.” Shipp’s gun jammed, and he fled the scene, tossing the gun in a dumpster. Later, a civilian found the gun and contacted the NYPD. Ballistics examiners determined that a shell casing found where the victim was shot was consistent with being fired from the gun found in the dumpster. A search of Shipp’s Facebook account also revealed a message in which he admitted to a friend that he was on the run because of the shooting. The victim survived.  Prior to possessing this firearm and shooting the victim, Shipp had been convicted of more than 20 offenses in Virginia, New Jersey and New York. 

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

The government’s case is being prosecuted by Assistant United States Attorneys Philip Pilmar and Michael W. Gibaldi.

The Defendant:

ALONZO SHIPP (also known as “Pump”)
Age: 33
Richmond, Virginia

E.D.N.Y. Docket No. 19-CR-029 (RPK)

BROOKLYN, NY— In honor of National Police Week, Acting United States Attorney Mark J. Lesko recognizes the service and sacrifice of federal, state, local, and Tribal law enforcement. This year, the week is observed Sunday, May 9, 2021, through Saturday, May 15, 2021.

“This week is a time to honor our law enforcement officers who have made the ultimate sacrifice in service to our nation,” stated Attorney General Merrick B. Garland. “I am constantly inspired by the extraordinary courage and dedication with which members of law enforcement act each day, putting their lives on the line to make our communities safer. To members of law enforcement and your families: we know that not a single day, nor a single week, is enough to recognize your service and sacrifice. On behalf of the entire Department of Justice, you have our unwavering support and eternal gratitude.”

“The United States Attorney’s Office for the Eastern District of New York is deeply grateful to the brave men and women of law enforcement who risk their lives every tour of duty to keep us safe, especially during the challenges posed over the past year by the pandemic,” stated Acting United States Attorney Lesko.  “This week, and always, we will remember those who have sacrificed so much, including NYPD Highway Police Officer Anastasios Tsakos, who was killed by an alleged drunk driver on the Long Island Expressway this month, and Suffolk County Police Officer Christopher Racioppo, who was stabbed and nearly bled to death while heroically grappling with an alleged drunk driver in Patchogue in April.  Please remember them and their families who have also suffered.”

In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices.  Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty.  

Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty and commitment to keeping our communities safe. This year the COVID-19 pandemic has highlighted law enforcement officers’ courage and unwavering devotion to the communities that they have sworn to serve.

During the Roll Call of Heroes, a ceremony coordinated by the Fraternal Order of Police (FOP), more than 300 officers will be honored.  Based on data submitted to and analyzed by the National Law Enforcement Officer Memorial Fund (NLEOMF), of the law enforcement officers who died nationwide in the line of duty in 2020, nearly 60 percent succumbed to COVID-19.  In the past year in the Eastern District of New York, NYPD Police Officer Anastasios Tsakos and New York State Trooper Joseph Gallagher died in the line of duty. At least 55 members of the NYPD, one member of the Sands Point Police Department and two members of the Suffolk County Police Department have died from the Coronavirus during the pandemic.   

Additionally, according to statistics reported by the Federal Bureau of Investigation (FBI) through the Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 46 law enforcement officers died as a result of felonious acts and 47 died in accidents in 2020.  LEOKA statistics can be found on FBI’s Crime Data Explorer website. 

The names of the 394 fallen officers who have been added in 2020 to the wall at the National Law Enforcement Officer Memorial will be read on Thursday, May 13, 2021, during a Virtual Candlelight Vigil, which will be livestreamed to the public at 8:00 p.m. EDT. The Police Week in-person public events, originally scheduled for May, have been rescheduled due to ongoing COVID-19 concerns to October 13-17, 2021. An in-person Candlelight Vigil event is scheduled for October 14, 2021.

Those who wish to view the Virtual Candlelight Vigil on May 13, 2021, can watch on the NLEOMF YouTube channel found at https://www.youtube.com/user/TheNLEOMF. The FOP’s Roll Call of Heroes can be viewed at www.fop.net. To view the schedule of virtual Police Week events in May, please view NLEOMF’s Police Week Flyer.   

To learn more about National Police Week in-person events scheduled for October, please visit www.policeweek.org.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, announced today a settlement with Maimonides Medical Center (Maimonides) in Brooklyn to resolve a lawsuit filed on behalf of Lieutenant Colonel Louis Rego, a U.S. Army Reservist and former Maimonides pharmacist.  Maimonides is the largest hospital in Brooklyn and is an affiliate of Northwell Health, New York State’s largest health care provider and private employer. According to the United States’ complaint, Maimonides violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by terminating Lieutenant Colonel Rego’s employment in the Pharmacy Department after he was called up to active military duty status.  USERRA prohibits discrimination in employment based on an individual’s prior service in the uniformed services; current service in the uniformed services; or intent to join the uniformed services.  Under the terms of the settlement, Maimonides will pay Lieutenant Colonel Rego $195,000 to compensate him for lost wages and other damages. The settlement also requires Maimonides to provide annual training to hospital officials and human resources staff on the rights of service members under USERRA.

“Lieutenant Colonel Rego’s honorable service to his country cost him his job as a pharmacist, even though USERRA flatly prohibits employers from discriminating against employees on account of their military service,” stated Acting U.S. Attorney Lesko. “This Office is firmly committed to enforcing USERRA’s requirements and to holding employers like Maimonides accountable for their failure to comply.”

Rego was ordered to full-time active duty with the U.S. Army Reserves on July 17, 2017, when he was deployed for a tour of duty with U.S. Army Medical Materiel Agency at Fort Detrick in Maryland.  Rego took a leave of absence from Maimonides in order to perform his military service.  Rego returned to work at MMC on October 2, 2017.  Just seven weeks later, on November 21, 2017, Rego was informed by a supervisor that his position was being eliminated and that he was being terminated as part of a reduction in force designed to save money at the hospital.  Rego was the only employee terminated of the more than 100 employees in the Pharmacy Department.  After Rego was fired, Maimonides promoted and gave pay raises to two mid-level managers in order to cover some of Rego’s duties, used non-managers to perform other duties and paid those non-managers overtime. Maimonides also hired new Pharmacy Department employees immediately before and after it fired Rego and had posted an opening for his job on a job search website one week before he was dismissed. 

The claims resolved by the settlement are allegations only; there has been no determination of liability and Maimonides denies that it has violated USERRA.

The case is being handled by Assistant U.S. Attorney Sean P. Greene-Delgado of the Office’s Civil Division. 

The protection of servicemembers’ rights is a priority for the U.S. Attorney’s Office.    Individuals who believe they may have experienced discrimination, harassment or retaliation on account of their military service should contact the United States Attorney’s Office by emailing usanye-civilrights@usdoj.gov or the Department of Justice Civil Rights Division by e-mailing servicemembers@usdoj.gov.  Additional information about USERRA can be found on the Justice Department’s websites at https://www.justice.gov/crt/employment-litigation-section and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.

E.D.N.Y. Docket No.: 21-CV-2448

Earlier today, in federal court in Brooklyn, Jeremy Trapp pleaded guilty before United States Magistrate Judge Cheryl L. Pollak to one count of destruction of a vehicle for his cutting a brake line of a New York City Police Department (“NYPD”) van during a time of anti-law enforcement protests in the summer of 2020, and one count of wire fraud in connection with the Economic Injury Disaster Loan (“EIDL”) program. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the guilty pleas.

“With his admissions of guilt today, Trapp will face the consequences of his flagrantly lawless and fraudulent conduct, first, in endangering the lives of police officers by sabotaging one of their vehicles, and second, by lining his pockets with stolen government funds intended to provide relief during the COVID-19 pandemic.” stated Acting United States Attorney Lesko.  “This Office and its law enforcement partners will bring to justice any individual who deliberately jeopardizes the safety of the police and steals funds from government programs intended to help deserving recipients.” 

As set forth in court filings and today’s proceeding, on July 17, 2020, Trapp crawled under a marked NYPD van parked near Fourth Avenue and 42nd Street in Sunset Park and partially severed a line that is part of the NYPD Van’s anti-lock braking system, which is similar in appearance to, and in the same location as, the NYPD vehicle’s main brake line.  A malfunctioning anti-lock braking system adversely impacts a driver’s ability to stop and maintain control of a vehicle in an emergency.

In addition, in June 2020, Trapp submitted a fraudulent EIDL loan and grant application.  The EIDL program provides qualifying small businesses with low-interest loans.  The Coronavirus Aid, Relief and Economic Security (CARES) Act expanded EIDL to provide economic support to help offset the temporary loss of revenue experienced by businesses due to the COVID-19 pandemic.  In the application, Trapp claimed that he was the sole proprietor of a car wash business located at his home address in Brooklyn, which, in reality, is a multi-unit residential building.  Trapp further represented that he employed 10 individuals and that his gross revenue for the 12 months prior to the COVID-19 pandemic was $150,000.  Based on Trapp’s false representations, the Small Business Administration approved a $42,500 loan and $10,000 grant to Trapp, and these funds were deposited into Trapp’s bank account.  

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Francisco J. Navarro and Sara K. Winik are in charge of the prosecution. 

The Defendant:

JEREMY TRAPP
Age: 24
Brooklyn, New York

E.D.N.Y. Docket Nos. 20-CR-308 and 20-CR-454

Earlier today, in federal court in Brooklyn, Abed Ahmad and his brother Alaa Ahmad, pleaded guilty before United States District Judge Eric N. Vitaliano to bank fraud conspiracy and conspiracy to commit aggravated identity theft relating to a scheme to defraud JPMorgan Chase & Co. and its customers.  Abed Ahmad also pleaded guilty to conspiracy to commit money laundering and one count of aggravated identity theft. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), John Grasso, Special Agent-in-Charge, Social Security Administration Office of Inspector General, New York Field Office (SSA-OIG), and Cyrus Vance, District Attorney, New York County District Attorney’s Office, announced the guilty pleas.

“The defendants abused their positions of trust at JP Morgan Chase in furtherance of a sordid scheme to steal the identities of elderly and deceased customers in order to misappropriate millions in funds from their accounts,” stated Acting United States Attorney Lesko.  “This Office and its law enforcement partners will spare no effort in holding the defendants to account for their brazen fraud.”  Mr. Lesko expressed his grateful appreciation to the New York City Police Department’s Intelligence Bureau, U.S. Department of Veterans Affairs Office of Inspector General, and the Social Security Administration Office of Inspector General, for their work on the case.

“Out of sheer greed, the defendants abused their positions to steal from arguably the most vulnerable of banking customers,” stated IRS-CI Special Agent-in-Charge Larsen.   “Their admissions today will hopefully provide some measure of closure to all of those impacted by their crimes and put them on a path to full restoration.”  

“This $7 million fraud scheme was perpetrated by bank employees that misused their access to sensitive information to victimize the bank and its customers. Today’s guilty pleas highlight that HSI and our law enforcement partners will continue to use every available resource to bring those who prey on innocent victims to justice,” stated HSI Special Agent-in-Charge Fitzhugh.

“These guilty pleas are the result of a true collaborative effort between Federal and local agencies to identify this massive fraud and hold accountable those who abused their authority for personal gain. These individuals stole these funds not only from private citizens and financial institutions, but also from the Social Security Administration,” stated SSA-OIG Special Agent-in-Charge Grasso. “I want to recognize our law enforcement partners, the Manhattan District Attorney’s Office, and the United States Attorney’s Office, for their efforts leading to today’s announcement.”

“These guilty pleas put high-tech cyber thieves on notice: the Manhattan D.A.’s Office has built the expertise, resources, and seamlessly collaborative partnerships to find you, hold you accountable, and secure justice for your victims,” stated District Attorney Vance.  “I thank Acting U.S. Attorney Lesko and my Office’s Cybercrime and Identity Theft Bureau for their exceptional collaboration as we continue working together to protect our residents and markets from increasingly sophisticated, large-scale frauds. I also commend my Office’s Forensic Accounting and Financial Investigations Bureau; the NYPD’s Financial Crimes Task Force, Cybercrime and Identity Theft Task Force, and Intelligence Bureau; and our federal partners at IRS and HSI for this expert, joint investigation, as well as the Veterans Affairs OIG and Social Security Administration OIG for their important work.”

As set forth in court filings and today’s proceedings, between approximately 2012 and 2017, Abed and Alaa Ahmad, both of whom worked at branches of JPMorgan Chase & Co. in Queens, used their positions at the bank to target high-dollar value customer accounts of elderly or deceased individuals that had been dormant for a period of time. After identifying these accounts, Abed and Alaa Ahmad passed the account information, as well as the personal identifying information of the account holders, to another co-conspirator, Moustafa Ayoub.  Ayoub used the account information to transfer nearly $7 million of victim funds from the JPMorgan Chase accounts to other financial accounts controlled by Ayoub. 

Ayoub previously pleaded guilty in January 2021 before Judge Vitaliano to conspiracy to commit bank fraud, conspiracy to commit money laundering, conspiracy to commit aggravated identity theft and aggravated identity theft.  He is awaiting sentencing.

The government’s case is being handled by the Office’s National Security and Cybercrime Section, with the assistance of the New York County District Attorney’s Office.  Assistant United States Attorneys Josh Hafetz, Jonathan E. Algor and Special Assistant U.S. Attorney Beth F. Potashnick are in charge of the prosecution.

The Defendants:

ABED AHMAD
Age:  37
Boca Raton, Florida

E.D.N.Y. Docket No. 21-CR-095 (ENV)

ALAA AHMAD
Age: 34
Boca Raton, Florida

E.D.N.Y. Docket No. 21-CR-228 (ENV)

MOUSTAFA AYOUB
Age: 50
Queens, New York    

E.D.N.Y Docket No. 20-142 (ENV)

Earlier today, following a one-week trial before United States District Judge Pamela K. Chen, a federal jury in Brooklyn convicted Brendan Hunt, also known as “X-Ray Ultra,” of threatening to assault and murder members of the United States Congress to impede, interfere and intimidate with those members and to retaliate against them on account of their performance of their official duties. When sentenced on June 22, 2021, Hunt faces up to 10 years in prison.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the verdict.

“With today’s verdict, the defendant is now a convicted felon, not for his repugnant, racist rants, but because he threatened to attack and kill members of Congress to prevent them from carrying out their constitutional duties, and that is a federal crime,” stated Acting United States Attorney Lesko. “This Office will not tolerate threats of violence against public officials who are entrusted with upholding the Constitution.”

Mr. Lesko and Mr. Sweeney praised the outstanding work of the FBI’s New York Joint Terrorism Task Force on the case.

On January 8, 2021, two days after the violent assault on the U.S. Capitol in Washington, D.C., Hunt posted a video called “KILL YOUR SENATORS” that included the summary “Slaughter them all,” to BitChute, an Internet-based video sharing site.  In the video, Hunt made additional threats, exhorting his viewers to violence and telling them that “[w]e need to go back to the U.S. Capitol when all of the Senators and a lot of the Representatives are back there, and this time we have to show up with our guns.  And we need to slaughter these m-----f-----s.”  Hunt also advocated for the violent overthrow of the federal government, claiming that “our government at this point is basically a handful of traitors . . . so what you need to do is take up arms, get to D.C., probably the inauguration . . . so called inauguration of this m-----f-----g communist Joe Biden . . . [T]hat’s probably the best time to do this, get your guns, show up to D.C., and literally just spray these m-----f-----s . . . put some bullets in their f------g heads.”  Hunt stated, “If anybody has a gun, give me it, I’ll go there myself and shoot them and kill them . . . [W]e have to take out these Senators and then replace them with actual patriots.  This is a [Zionist Occupied Government].” 

The evidence at trial also showed that, between December 6, 2020 and January 8, 2021, Hunt made a series of posts on various social media websites in which he targeted Members of Congress, including Speaker of the House of Representatives Nancy Pelosi, Senate Majority Leader Charles Schumer, and Representative Alexandria Ocasio-Cortez.  On December 6, 2020, Hunt posted two messages on his Facebook account, the first calling Speaker Pelosi, Senator Schumer, and Congresswoman Ocasio-Cortez “high-value target[s].”  Hunt stated: “They really need to be put down. These commies will see death before they see us surrender.”  A second message called on former President Donald Trump to hold a public execution of Pelosi, Schumer, and Ocasio-Cortez.  “If you don't do it, the citizenry will. We’re not voting in another rigged election. Start up the firing squads, mow down these commies, and lets take America back,” Hunt stated. 

The evidence included the defendant’s social media and video accounts, as well as videos, text messages, emails, and documents downloaded from the defendant’s electronic devices espousing white supremacist and anti-Semitic views, including Adolf Hitler’s “Mein Kampf” and accused mass murderer Dylan Roof’s manifesto.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys David K. Kessler, Ian C. Richardson and Francisco J. Navarro are in charge of the prosecution.

The Defendant:

BRENDAN HUNT (also known as “X-Ray Ultra”)
Age: 37
Ridgewood, Queens

E.D.N.Y. Docket No. 21-CR-086 (PKC)

A former Minister of Industry and elected member of Parliament of Barbados was sentenced today to two years in prison for his role in a scheme to launder bribe payments from a Barbadian insurance company through bank accounts in New York.

Donville Inniss, 55, a U.S. lawful permanent resident who resided in Tampa, Florida, and Barbados, was convicted by a federal jury of two counts of money laundering and one count of conspiracy to commit money laundering on Jan. 16, 2020. According to the evidence presented at trial, in 2015 and 2016, Inniss took part in a scheme to launder into the United States approximately $36,000 in bribes that he had received from high-level executives of the Insurance Corporation of Barbados Limited (ICBL). In exchange for the bribes, Inniss leveraged his position as the Minister of Industry to enable ICBL to obtain two insurance contracts from the Barbados government to insure over $100 million worth of government property. To conceal the bribes, Inniss arranged to receive them through a U.S. bank account in the name of his friend’s dental company, which had an address in Elmont, New York. 

“Donville Inniss engaged in a bribery and money laundering scheme to line his own pockets at the expense of the people of Barbados,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “International corruption undermines trust in governments, threatens our national security, and prevents the free market from functioning fairly for law-abiding people and companies.  Today’s sentence sends a strong message that the Department is committed to prosecuting corrupt officials like Inniss who seek to use the U.S. financial system to hide their bribe payments.”

“In accepting bribes and laundering the payments through banks on Long Island, Inniss not only abused the public trust that was placed in him by the people of Barbados, he also stained the U.S. banking system with the proceeds of his corrupt scheme,” said Acting U.S. Attorney Mark J. Lesko of the Eastern District of New York. “The defendant’s sentence today reflects the seriousness of his crimes.” 

In addition to the prison sentence, the court also ordered Inniss to pay $36,536.73 in forfeiture. 

The FBI investigated the case.

Assistant Chief Gerald M. Moody Jr. of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Sylvia Shweder and David Gopstein for the Eastern District of New York prosecuted the case. Assistant U.S. Attorney Claire Kedeshian is handling the forfeiture aspects of the case.

The Justice Department’s Office of International Affairs also provided assistance in this matter. The department appreciates the cooperation provided by its law enforcement colleagues in Barbados during this investigation.

The Fraud Section is responsible for investigating and prosecuting all Foreign Corrupt Practices Act (FCPA) matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Donville Inniss, a former member of Parliament in Barbados, was sentenced today in federal court in Brooklyn by United States District Court Judge Kiyo A. Matsumoto to 24 months in prison for laundering bribe payments from a Barbados-based insurance company through banks on Long Island.  The Court also ordered Inniss to pay $36,536.73 in forfeiture.  Inniss was convicted in January 2020, following a one-week trial.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.

“In accepting bribes and laundering the payments through banks on Long Island, Inniss not only abused the public trust that was placed in him by the people of Barbados, he also stained the U.S. banking system with the proceeds of his corrupt scheme,” stated Acting U.S. Attorney Lesko.  “The defendant’s sentence today reflects the seriousness of his crimes.” 

“Donville Inniss engaged in a bribery and money laundering scheme to line his own pockets at the expense of the people of Barbados,” stated Acting Assistant Attorney General McQuaid. “International corruption undermines trust in governments, threatens our national security, and prevents the free market from functioning fairly for law-abiding people and companies.  Today’s sentence sends a strong message that the Department is committed to prosecuting corrupt officials like Inniss who seek to use the U.S. financial system to hide their bribe payments.”

Between August 2015 and April 2016, Inniss accepted approximately $36,000 in bribes from high-level executives of Insurance Corporation of Barbados Limited (ICBL) and laundered that money through banks on Long Island.  In exchange for the bribes, Inniss leveraged his position as the Minister of Industry, International Business, Commerce and Small Business Development of Barbados to enable ICBL to obtain two contracts from the Barbados government to insure over $100 million worth of government property.  Inniss concealed the bribes by arranging to receive them through a Long Island bank account in the name of a friend’s dental company in Elmont, New York.  ICBL executives transferred the funds to the dental company using an invoice falsely claiming that the payments were for consulting services.  During the time of the charged conspiracy, Inniss was a legal permanent resident of the United States residing in Tampa, Florida and Barbados.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Sylvia Shweder and David Gopstein, and Assistant Chief Gerald M. Moody, Jr., of the Department of Justice Criminal Division’s Fraud Section are in charge of the prosecution.  Assistant United States Attorney Claire Kedeshian of the Office’s Asset Forfeiture Unit is handling forfeiture matters.

The Defendant:

DONVILLE INNISS
Age:  55
Tampa, Florida and Barbados

E.D.N.Y. Docket No. 18-134 (S-2) (KAM)

A New York man pleaded guilty to attempting to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front, both designated by the U.S. Department of State as foreign terrorist organizations.

According to court documents, Elvis Redzepagic, 30, of Commack, New York, began communicating in early 2015 with an individual he believed to be both the commander of a battalion in Syria and a member of ISIS or the al-Nusrah Front, and made attempts to join that individual’s battalion to engage in violent jihad. In July 2015, Redzepagic traveled to Turkey and made multiple unsuccessful attempts to cross the border into Syria. Unable to enter Syria from Turkey, Redzepagic traveled to Jordan in August 2016, but was stopped and deported by Jordanian authorities. 

“Redzepagic has admitted to travelling overseas to try to join and provide material support to ISIS and the al-Nusrah Front, two foreign terrorist organizations that were engaged in fighting in Syria,” said Assistant Attorney General John C. Demers for the Justice Department’s National Security Division.  “The threat from these terrorist organizations has not ended, and we will continue to work to stem the flow of fighters and bring to justice those who provide material support to these groups.”

“Redzepagic, a Long Island resident, admitted that he attempted to travel to Syria on several occasions to wage jihad on behalf of ISIS and other organizations dedicated to violence and mass destruction,” said Acting U.S. Attorney Mark Lesko for the Eastern District of New York. “This Office is committed to preventing the spread of terrorism by stopping individuals like the defendant in their tracks and prosecuting them before they are able to harm the United States and its allies.” Acting U.S. Attorney Lesko praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies. 

In Facebook messages from October 2015, Redzepagic explained that “jihad” is when “you fight for the sake of God” and “die for the sake of Allah.”  Redzepagic stated that he traveled to Turkey to “perform Jihad and join Jabhat Al-Nusra.” He predicted, “there will come a time where people will only know to say Allahu Akbar.”  In subsequent interviews with law enforcement, Redzepagic admitted that at the time he attempted to enter Syria, he was prepared to strap a bomb to himself.  

Redzepagic pleaded guilty to attempting to provide material support to a designated foreign terrorist organization. If convicted, he faces up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI’s New York Field Office is investigating the case.

Trial Attorney Stephanie Sweeten of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorneys Saritha Komatireddy and Artie McConnell are prosecuting the case.

Earlier today, in federal court in Central Islip, Elvis Redzepagic pleaded guilty to attempting to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front, both having been designated by the U.S. Secretary of State as foreign terrorist organizations.  When sentenced, Redzepagic faces up to 20 years in prison.  The guilty plea was entered before United States Magistrate Judge A. Kathleen Tomlinson.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, John C. Demers, Assistant Attorney General for National Security, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.

“Redzepagic, a Long Island resident, admitted that he attempted to travel to Syria on several occasions to wage jihad on behalf of ISIS and other organizations dedicated to violence and mass destruction,” stated Acting United States Attorney Lesko.  “This Office is committed to preventing the spread of terrorism by stopping individuals like the defendant in their tracks and prosecuting them before they are able to harm the United States and its allies.”  Mr. Lesko praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies. 

Mr. Lesko also thanked the Justice Department’s Office of International Affairs, the FBI Legal Attaché Office for Serbia, and the Government of Montenegro Ministry of Justice, Prosecutor’s Office, and Special Police Unit for their assistance in this case.  

“Redzepagic has admitted to travelling overseas to try to join and provide material support to ISIS and the al-Nusrah Front, two foreign terrorist organizations that were engaged in fighting in Syria,” stated Assistant Attorney General Demers.  “The threat from these terrorist organizations has not ended, and we will continue to work to stem the flow of fighters and bring to justice those who provide material support to these groups.”

In early 2015, Redzepagic began communicating with an individual he believed to be both the commander of a battalion in Syria and a member of ISIS or the al-Nusrah Front, and made attempts to join that individual’s battalion to engage in violent jihad.  In July 2015, Redzepagic traveled to Turkey and made multiple unsuccessful attempts to cross the border into Syria.  Unable to enter Syria from Turkey, Redzepagic traveled to Jordan in August 2016, but was stopped and deported by Jordanian authorities. 

In Facebook messages from October 2015, Redzepagic explained that “jihad” is when “you fight for the sake of God” and “die for the sake of Allah.”  Redzepagic stated that he traveled to Turkey to “perform Jihad and join Jabhat Al-Nusra.”  He predicted, “there will come a time where people will only know to say Allahu Akbar.”  In subsequent interviews with law enforcement, Redzepagic admitted that at the time he attempted to enter Syria, he was prepared to strap a bomb to himself.  

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Saritha Komatireddy and Artie McConnell are in charge of the prosecution, with assistance provided by Trial Attorney Stephanie Sweeten of the National Security Division’s Counterterrorism Section.

The Defendant:

ELVIS REDZEPAGIC
Age: 30
Commack, New York

E.D.N.Y. Docket No. 17-CR-228 (DRH)

BROOKLYN, NY – Earlier today, in federal court in Brooklyn, Aleah Mohammed pleaded guilty before United States District Judge Eric N. Vitaliano to mail fraud, health care fraud, and conspiracy to commit health care fraud stemming from multiple schemes to defraud health care programs, including obtaining more than $6.5 million from Medicare Part D Plans and Medicaid drug plans.  When sentenced, the defendant faces up to 40 years’ imprisonment.  As part of her plea agreement, Mohammed has agreed to forfeit $5.1 million and pay over $6.5 million in restitution.

Mark. J. Lesko, Acting United States Attorney for the Eastern District of New York; Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); announced the guilty plea.

“With today’s guilty plea, Mohammed is held accountable for stealing millions of dollars from the taxpayer-funded Medicare and Medicaid programs to line her own pockets,” stated Acting U.S. Attorney Lesko.  “This Office and our law enforcement partners are committed to safeguarding these vital health care programs and recovering ill-gotten proceeds from corrupt healthcare operators.”

“In attempting to finance a lavish lifestyle, Mohammed stole millions of dollars intended to provide medical and health services to the elder population, individuals with disabilities, and other HHS beneficiaries,” stated HHS-OIG Special Agent-in-Charge Lampert. “HHS-OIG, in collaboration with our law enforcement partners, is boldly committed to investigating illegal acts that target Federal health care programs and bringing the fraudsters to justice.”

According to court filings, Mohammed, 36, of Queens, New York, was an owner and operator of Superdrugs Inc., Superdrugs I Inc., Superdrugs II Inc., S&A Superdrugs II Inc. and Village Stardrugs Inc.  From approximately May 2015 to January 2018 and December 2018 to March 2020, Mohammed submitted fraudulent claims to Medicare and Medicaid, for reimbursement for  prescription drugs that were not dispensed, prescribed as claimed, or medically necessary, or that were purportedly dispensed during a time when Village Stardrugs was no longer registered with the State of New York.  The fraudulent claims included claims for prescription drugs for the treatment of the human immunodeficiency virus (HIV).  Mohammed used the proceeds of the scheme, among other things, to purchase luxury items such a Porsche and jewelry.

The FBI and HHS-OIG are investigating the case, which was brought as part of the Medicare Fraud Strike Force under the supervision by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section.  Trial Attorney Andrew Estes of the Fraud Section is in charge of the prosecution.

The Defendant:

ALEAH MOHAMMED
Age:  36
Queens, New York

E.D.N.Y Docket Nos: 18-CR-509 and 20-CR-581 (ENV)

A New York woman pleaded guilty today to perpetrating schemes to defraud health care programs, including obtaining more than $6.5 million from Medicare Part D Plans and Medicaid drug plans.

According to court documents, Aleah Mohammed, 36, of Queens, was an owner and operator of five pharmacies:  Superdrugs Inc., Superdrugs I Inc., Superdrugs II Inc., S&A Superdrugs II Inc. and Village Stardrugs Inc. Between 2018 and 2020, the defendant engaged in schemes that defrauded health care programs, including Medicare and Medicaid, through claims for prescription drugs that were not dispensed, not prescribed as claimed, not medically necessary, or that were purportedly dispensed during a time when the pharmacy was no longer registered with the State of New York. The fraudulent claims included, among others, claims for prescription drugs for the treatment of the human immunodeficiency virus (HIV). Mohammed admitted to using the proceeds of the scheme, among other things, to purchase luxury items such a Porsche and jewelry. 

Mohammed pleaded guilty to mail fraud, health care fraud, and conspiracy to commit health care fraud. She is scheduled to be sentenced at a later date and faces a maximum penalty of 40 years in prison. Mohammed is required to pay $6.5 million in restitution to Medicare and Medicaid, and, as part of her plea agreement, agreed to a $5.1 million forfeiture money judgment. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Mark J. Lesko of the Eastern District of New York; Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office; and Special Agent in Charge Scott J. Lampert of the Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

The FBI and HHS-OIG are investigating the case.

Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section is prosecuting the case.

An indictment was unsealed earlier today in federal court in Brooklyn charging Val Cooper, Alex Levin and Garri Smith with money laundering conspiracy and conspiracy to violate the Travel Act in connection with their roles in a scheme to steal over $30 million in cash and other valuables from safe deposit boxes located at banks abroad, primarily in Eastern Europe.  The defendants were arrested this morning and will be arraigned this afternoon before United States Magistrate Judge Robert M. Levy.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Office (HSI); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the arrests and charges.  

“The defendants and their co-conspirators were allegedly part of a sophisticated network of criminals that used high-tech camera equipment to steal millions in cash and other valuables from victims who had tried to protect their property by using safe deposit boxes in foreign countries, and they then laundered the proceeds of their scheme through the United States financial system,” stated Acting United States Attorney Lesko.  “This Office will hold accountable anyone who uses our financial system to commit fraud and theft here or abroad.”  Mr. Lesko expressed his grateful appreciation to the European Union Agency for Law Enforcement Cooperation (Europol), and the governments of Azerbaijan, Latvia, Moldova, North Macedonia, Ukraine and Uzbekistan for their assistance in the investigation.

“The crimes we allege in this indictment read like something straight out of Hollywood fiction,” stated FBI Assistant Director-in-Charge Sweeney.  “The thieves used sophisticated tools to thwart security systems at foreign banks and tried to cover their tracks by laundering money through U.S. banks.  However, thanks to the outstanding work of our FBI Eurasian Organized Crime Task Force and our international partners, these criminals now face real federal charges and the possibility of real time in federal prison.”

“Using state of the art technology, these modern-day bank robbers allegedly exploited small, unsophisticated banks to gain access to safety deposit boxes and looted $30 million in other people’s cash and valuables.  Cooper, Levin and Smith then used bank accounts located in the United States, to launder the proceeds of their illegal activities,” stated HSI Special Agent-in-Charge Fitzhugh.  “HSI is proud to work along-side our domestic and international law enforcement partners, including the United States Attorney’s Office, EDNY, and will utilize our unique and broad authorities to bring to justice those who engage in criminal activity for their own financial gain.  These defendants must now face our system of justice and answer to the allegations contained in the indictment.”

As set forth in the indictment and court filings, between March 2015 and October 2019, the defendants and their co-conspirators allegedly stole over $30 million in cash and other valuables from safe deposit boxes at banks in multiple foreign countries, including the Ukraine, Russia, North Macedonia, Moldova, Latvia, Uzbekistan and Azerbaijan.  The co-conspirators targeted foreign banks that appeared to lack security features, including video surveillance cameras in certain areas.  After a bank was selected, they rented safe deposit boxes at the location by posing as customers.  The co-conspirators entered the safe deposit box rooms of the targeted banks and used sophisticated camera equipment, including borescopes that are typically used in medical procedures, to photograph the insides of locks of safe deposit boxes belonging to other individuals.  Another co-conspirator used these photographs to create duplicate keys, and then other co-conspirators used the duplicate keys to open the victim safe deposit boxes in order to steal the contents, including currency, gold bars, jewelry and other property. 

Cooper, the leader of the network, directed others, received stolen property and used his bank accounts in the United States to launder proceeds from the scheme.  Levin used his bank accounts in the United States to purchase camera equipment used in some of the thefts and also to launder the proceeds.  Smith committed some of the safe deposit box thefts himself, flying from the United States to foreign countries to steal property from victim safe deposit boxes at the targeted banks.

Earlier today, agents executed a search warrant at, among other places, Cooper’s residence.  There, agents discovered, among other things, safe deposit box keys with no numbering on them, cash, jewelry and high-end handbags. Agents also searched a storage unit in Brooklyn controlled by Cooper and found a borescope and a safe deposit box lock.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of money laundering conspiracy, the defendants face up to 20 years’ imprisonment.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation.  OCDETF identifies, disrupts and dismantles the highest-level money launderers 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 Organized Crime and Gangs Section.  Assistant United States Attorneys Keith D. Edelman, Andrey Spektor and Joy Lurinsky are in charge of the prosecution, assisted by Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Unit. 

The Defendants:

VAL COOPER (also known as “Val Konon” and “Valeriy Kononenko”)
Age: 56
Brooklyn, New York

ALEX LEVIN
Age: 52
Brooklyn, New York

GARRI SMITH (also known as “Igor Berk” and “Igor Berkovich”)
Age: 49
Brooklyn, New York

E.D.N.Y. Docket No. 21-CR-208 (LDH)

A criminal complaint was filed today in federal court in Brooklyn charging Lionel Virgile with attempted arson by allegedly using an improvised incendiary device commonly known as a “Molotov Cocktail” to damage and destroy a New York City Police Department (NYPD) vehicle while police officers were inside the vehicle.  Virgile was arrested on Saturday and made his initial appearance this afternoon before United States Magistrate Judge Robert M. Levy.  The defendant was ordered detained pending trial.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Dermot F. Shea, Commissioner, NYPD, announced the arrest and charges.

“As alleged, the defendant deliberately sought to severely injure an NYPD police officer by throwing bleach at his eyes and to ignite an NYPD vehicle with officers inside by hurling a lit Molotov cocktail at it," stated Acting United States Attorney Lesko.  “This Office simply will not tolerate the intentional infliction of physical harm on NYPD officers while they are working to protect our communities.” Mr. Lesko thanked the Kings County District Attorney’s Office for their assistance with the investigation.

“Virgile’s alleged attack on members of the NYPD is yet another reminder of the danger law enforcement officers face on a daily basis—and today’s charges should serve as a reminder to all that this type of behavior will be met with a swift response.  As Virgile has now learned, the federal charge he faces carries the potential for a lengthy federal prison sentence.  The NYPD’s quick response in neutralizing this threat to the public is a testament to its professionalism and dedication to keeping our city safe,” stated FBI Assistant Director-in-Charge Sweeney. 

“Attacks on uniformed police officers, as alleged in this federal complaint, are not only crimes against our sworn public servants but are unacceptable assaults on the fabric of society. I commend our NYPD officers and our partners in the FBI and the United States Attorney’s Office in the Eastern District of New York for working closely to ensure that Lionel Virgile, the accused assailant in this case, faces justice,” stated NYPD Commissioner Shea.

According to the complaint, in the morning of April 17, 2021, NYPD officers in a marked vehicle observed Virgile drive his Lincoln Town Car through a steady red traffic light at the intersection of Clarendon Road and East 45th Street in East Flatbush.  When the officers approached Virgile’s car, he opened the driver side door and threw a cup containing a chemical substance in one of the NYPD officer’s eyes that was later determined to be bleach.  The officer sustained chemical burns on his face and has since been discharged from the hospital.  Virgile fled in the Lincoln Town car and was pursued by officers in another NYPD vehicle.  Approximately 10 minutes later, Virgile pulled over, exited his Lincoln Town Car and threw a lit Molotov cocktail at the NYPD vehicle pursuing him.  The Molotov cocktail struck the windshield of the NYPD vehicle and shattered on the sidewalk.  The Molotov cocktail consisted of a glass beverage bottle containing gasoline and a cloth wick.  The defendant subsequently crashed into a parked car on Snyder Avenue and was apprehended by the NYPD.  Five additional Molotov cocktails and a red jerry can were found in Virgile’s Lincoln Town Car.       

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

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Sara K. Winik and Joy Lurinsky are in charge of the prosecution.

The Defendant:

LIONEL VIRGILE
Age:  44
Brooklyn, New York

E.D.N.Y. Docket No. 21-MJ-483

Today, in federal court in Brooklyn, United States District Judge Eric N. Vitaliano entered a Default Judgment and Partial Decree of Forfeiture authorizing the seizure and forfeiture of five pieces of real property located in and around Guadalajara, Mexico.  These properties, described in the civil forfeiture complaint filed on October 11, 2019, were purchased by Rafael Caro Quintero (“RCQ”) with drug proceeds generated by the Caro Quintero drug trafficking organization, a faction of the Mexican organized crime syndicate known as the Sinaloa Cartel. The United States will seek to enforce this Order through diplomatic channels. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the District Court’s Forfeiture Order.

“Today’s order is another step forward in our relentless pursuit of justice for the victims of Caro Quintero’s brutal drug trafficking organization and especially for DEA Special Agent Enrique Camarena, who was tragically murdered at the hands of Caro Quintero’s crime syndicate,” stated Acting United States Attorney Lesko.  “In forfeiting these drug-tainted properties, we join with the Mexican government and our law enforcement partners at the DEA to commemorate Special Agent Camarena’s life and remember his ultimate sacrifice.” Mr. Lesko extended his grateful appreciation to the DEA New York Division Organized Crime and Drug Enforcement Strike Force, as well as the DEA Raleigh Resident Office and DEA Mexico City Country Office for their assistance with the case.  

“Rafael Caro Quintero is one of the world’s most wanted criminals for years of drug trafficking and his role in killing one of our own, DEA Special Agent Enrique Kiki Camarena,” stated DEA Special Agent-in-Charge Donovan. “The unprecedented seizures and forfeitures announced today exemplify our resolve and perseverance in bringing RCQ to justice to face the consequences of his alleged crimes.  As we continue to safeguard the American public from drug trafficking and the dangers associated, we will never forget Special Agent Camarena’s courage and sacrifice.”

According to the forfeiture complaint, between January 1980 and March 2015, the Caro Quintero drug trafficking organization was involved in the transportation of multi-ton quantities of marijuana, multi-kilogram quantities of methamphetamine and multi-kilogram quantities of cocaine from Mexico to the United States.  As part of its investigation, law enforcement learned that Caro Quintero used proceeds from the sale of illegal narcotics to purchase real estate in and around his home area of Guadalajara.  Caro Quintero allegedly placed the properties in the names of family members to conceal his ownership of the properties and use of illegal proceeds to purchase them, and to prevent Mexican authorities from seizing them.

Caro Quintero is a fugitive from several indictments in the United States and is on the FBI’s list of “Ten Most Wanted” criminals.  In April 2018, an indictment was unsealed in federal court in Brooklyn charging Caro Quintero with leading a continuing criminal enterprise and other crimes, including his participation in the 1985 kidnapping, torture and murder of DEA Special Agent Enrique “Kiki” Camarena.  A $20 million reward provided by the United States Department of State is being offered for information leading to his capture.  

The government’s forfeiture case is being prosecuted by Assistant United States Attorneys Brendan G. King and Patricia E. Notopoulos.

E.D.N.Y. Docket No. 19-CV-5748 (ENV)

A Brazilian national who previously served as a chief executive officer (CEO) of Braskem S.A. (Braskem), a publicly traded Brazilian petrochemical company, pleaded guilty today to conspiring to divert hundreds of millions of dollars from Braskem into a secret slush fund and to pay bribes to government officials, political parties, and others in Brazil to obtain and retain business.

According to court documents, between approximately 2002 and 2014, Jose Carlos Grubisich, 64, a citizen of Brazil — who served as the CEO and a member of the board of directors of Braskem as well as in various capacities for Braskem’s parent company, Odebrecht S.A. (Odebrecht) — engaged in a scheme to bribe Brazilian government officials in violation of the Foreign Corrupt Practices Act (FCPA). As part of the scheme, Grubisich and his co-conspirators diverted approximately $250 million from Braskem into a secret slush fund, which Grubisich and others had generated through fraudulent contracts and offshore shell companies secretly controlled by Braskem.

Grubisich admitted that while CEO of Braskem, he agreed to pay bribes to Brazilian government officials to ensure Braskem’s retention of a contract for a significant petrochemical project from Petroleo Brasileiro S.A. (Petrobras), Brazil’s state-owned and state-controlled oil company. Grubisich also admitted that, as Braskem’s CEO, he falsified Braskem’s books and records by falsely recording the payments to Braskem’s offshore shell companies as payments for legitimate services. Grubisich also signed false Sarbanes-Oxley certifications submitted to the U.S. Securities and Exchange Commission (SEC) that, among other things, attested that Braskem’s annual reports fairly and accurately represented Braskem’s financial condition, and that Grubisich, as Braskem’s principal officer, had disclosed all fraudulent conduct by Braskem’s management and other employees with control over Braskem’s financial reporting.

“As CEO of a publicly traded company, Grubisich and other senior executives at Braskem engaged in a large-scale, sophisticated international bribery and fraud scheme and then lied to U.S. shareholders and authorities to conceal their criminal conduct,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “Today’s guilty plea demonstrates the Department’s commitment to holding individuals accountable for corrupt and fraudulent conduct, including those at the highest corporate echelons.”

“Grubisich abused his position of trust as CEO of Braskem to both facilitate and conceal the payment of millions of dollars in bribes so that Braskem could increase its profits and its senior executives — including Grubisich himself — could personally benefit,” said Acting U.S. Attorney Mark J. Lesko of the Eastern District of New York. “This office is committed to the prosecution of corrupt gatekeepers, including officers and directors of public companies, who, like Grubisich, use the United States’ financial system to commit crimes.”

Grubisich pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the books and records provision of the FCPA and to fail to accurately certify Braskem’s financial reports. Grubisich has also agreed to pay approximately $2.2 million in forfeiture. He is scheduled to be sentenced on Aug. 5, and faces a maximum penalty of 10 years in prison. Any sentence will be determined after considering the U.S. Sentencing Guidelines and other statutory factors.

In December 2016, Braskem and Odebrecht each pleaded guilty in the Eastern District of New York to separate one-count criminal informations charging them with conspiracy to violate the anti-bribery provisions of the FCPA. Braskem settled with the SEC in related proceedings on the same day.

The FBI’s International Corruption squad in New York is investigating the case. The Justice Department’s Office of International Affairs also provided substantial assistance. The department also expresses its appreciation for the assistance provided by the SEC’s Division of Enforcement, Ministério Público Federal and the Departamento de Polícia Federal in Brazil, the Office of the Attorney General in Switzerland, the Swiss Federal Office of Justice, and the governments of Portugal, Andorra, United Kingdom, and Panama.

Assistant Chief Lorinda Laryea and Trial Attorney Leila Babaeva of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Julia Nestor and Alixandra Smith of the Eastern District of New York are prosecuting the case, with Assistant U.S. Attorney Laura Mantell of the Eastern District’s Civil Division handling forfeiture matters.

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

BROOKLYN, NY – Earlier today, in federal court in Brooklyn, Jose Carlos Grubisich, the former chief executive officer of Braskem S.A. (Braskem), a publicly traded Brazilian petrochemical company, pleaded guilty before United States District Judge Raymond J. Dearie to (1) conspiring to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and (2) conspiring to violate the books and records provisions of the FCPA in failing to accurately certify Braskem’s financial reports.  Grubisich and his co-conspirators engaged in a massive bribery scheme involving Braskem and its parent company Odebrecht S.A. (Odebrecht), in which hundreds of millions of dollars were diverted from Braskem to a secret slush fund that was used, in part, to pay bribes to government officials, political parties and others in Brazil to obtain and retain business for Braskem.  Under the plea agreement, Grubisich has agreed to pay approximately $2.2 million in forfeiture.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.

“Grubisich abused his position of trust as CEO of Braskem to both facilitate and conceal the payment of millions of dollars in bribes so that Braskem could increase its profits and its senior executives — including Grubisich himself — could personally benefit,” stated Acting United States Attorney Lesko.  “This Office is committed to the prosecution of corrupt gatekeepers, including officers and directors of public companies, who, like Grubisich, use the United States’ financial system to commit crimes.”

“As CEO of a publicly traded company, Grubisich and other senior executives at Braskem engaged in a large-scale, sophisticated international bribery and fraud scheme and then lied to U.S. shareholders and authorities to conceal their criminal conduct,” stated Acting Assistant Attorney General McQuaid. “Today’s guilty plea demonstrates the Department’s commitment to holding individuals accountable for corrupt and fraudulent conduct, including those at the highest corporate echelons.”

As set forth in court filings and at today’s proceedings, between approximately 2002 and 2014, Grubisich, a citizen of Brazil, who served as the CEO and a member of the Board of Directors of Braskem as well as in various capacities for Odebrecht— engaged in a scheme to bribe Brazilian government officials in violation of the FCPA.  As part of the scheme, Grubisich and his co-conspirators diverted approximately $250 million from Braskem into a secret slush fund which Grubisich and others had set up through fraudulent contracts and offshore shell companies that were secretly controlled by Braskem.  At the time of the conspiracy, Braskem’s American Depositary Receipts were publicly traded on the New York Stock Exchange.   

Grubisich admitted that, while CEO of Braskem, he agreed to pay bribes to Brazilian government officials to ensure Braskem’s retention of a contract for a significant petrochemical project from Petroleo Brasileiro S.A.–Petrobras, Brazil’s state-owned and state-controlled oil company.  Grubisich further admitted that while CEO of Braskem, he agreed to falsify Braskem’s books and records by causing Braskem to falsely record the payments to offshore shell companies controlled by Braskem as payments for legitimate services.  Grubisich signed false Sarbanes-Oxley certifications submitted to the United States Securities and Exchange Commission (SEC) that, among other things, attested that Braskem’s annual reports fairly and accurately represented Braskem’s financial condition, and that Grubisich, as Braskem’s principal officer, had disclosed all fraudulent conduct by Braskem’s management and other employees with control over Braskem’s financial reporting.

In December 2016, Braskem and Odebrecht pleaded guilty in the Eastern District of New York to one-count criminal informations charging each with conspiracy to violate the anti-bribery provisions of the FCPA.  Braskem settled with the SEC in related proceedings on the same day.

The government’s case is being prosecuted by Assistant U.S. Attorneys Julia Nestor and Alixandra Smith of the Office’s Business and Securities Fraud Section, and Assistant Chief Lorinda Laryea and Trial Attorney Leila Babaeva of the Criminal Division’s Fraud Section.  Assistant U.S. Attorney Laura Mantell of the Office’s Civil Division is handling forfeiture matters.  The FBI’s International Corruption squad in New York is investigating the case. 

The Criminal Division’s Office of International Affairs provided substantial assistance, as did the SEC’s Division of Enforcement, Ministério Público Federal and the Departamento de Polícia Federal in Brazil, the Office of the Attorney General in Switzerland, and the governments of Portugal, Andorra, United Kingdom, and Panama.

The Defendant

JOSE CARLOS GRUBISICH
Age:  64
Sao Paulo, Brazil

E.D.N.Y. Docket No. 19-CR-102 (RJD)

BROOKLYN, NY - An indictment was unsealed today in federal court in Brooklyn charging Gyanendra Asre and Hanan Ofer with Bank Secrecy Act (BSA) offenses and operating an unlicensed money transmitting business.  Asre is charged with two counts of failure to maintain an anti-money laundering program, five counts of failure to file Suspicious Activity Reports and one count of operation of an unlicensed money transmitting business.  Ofer is charged with one count of operation of an unlicensed money transmitting business.  The defendants were arrested today and are scheduled to be arraigned this afternoon before United States Magistrate Judge Vera M. Scanlon.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the arrests and charges.

“The defendants allegedly operated an illegal money transmitting business and took advantage of smaller financial institutions to engage in risky financial transactions, without the oversight and compliance with anti-money laundering controls they had promised,” stated Acting United States Attorney Lesko. “This Office will vigorously prosecute those who deliberately avoid reporting requirements and put the integrity of U.S. financial institutions at risk.”

“As alleged, Asre and Ofer used a small, unsophisticated financial institution to process high-risk, high-dollar international transactions without the anti-money laundering procedures required by law,” stated Acting Assistant Attorney General McQuaid. “Today's announcement demonstrates the Department's commitment to hold accountable individuals who knowingly expose the U.S. financial system and U.S. financial institutions to the risk of laundering criminal proceeds.”

"The Bank Secrecy Act was established to protect our financial system and maintain the integrity of our banking system.  As alleged, Ofer and Asre blatantly disregarded our laws and placed their own enrichment above all else,” stated HSI Special Agent-in-Charge Fitzhugh.  “The defendants took advantage of a small, unsophisticated financial institution and pumped billions of dollars of high-risk transactions through it, any one of which could have left the bank in ruin.  HSI New York’s El Dorado Task Force continues to protect the nation’s financial systems and working with its partners, will see to it that those seeking to exploit our laws for their own financial gain are brought to justice.”

As alleged in the indictment, from 2014 to 2016, Asre and Ofer devised a scheme to bring lucrative and high-risk international financial business lines such as international currency trading to small, unsophisticated financial institutions.  Asre and Ofer were trained in anti-money laundering compliance and procedures, and represented to the financial institutions that, because of their experience and training, they 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 and Ofer’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 and Ofer to conduct high-risk transactions through the NYSEFCU.  Asre and Ofer 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.  Contrary to their 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.

Asre and Ofer also owned and operated DDH Group, LLC, a money transmitting business and money services business that conducted some of these high-risk transactions without licensing or registering that entity as required by law.

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

The government’s case is being handled by the Office’s 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 Trial Attorneys Margaret Moeser and Leigh Kessler 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 Defendants:

GYANDERA ASRE
Age: 53
Greenwich, Connecticut

HANAN OFER
Age: 67
New York, New York

E.D.N.Y. Docket No. 21-CR-174 (DG)

An indictment was unsealed today in the Eastern District of New York charging two defendants with failing to maintain anti-money laundering controls, failing to file suspicious activity reports, and operating an unlicensed money transmitting business.

As alleged in the indictment, from 2014 to 2016, Gyanendra Asre, 53, of Greenwich, Connecticut, and Hanan Ofer, 67, of New York, New York, devised and executed a scheme to bring lucrative and high-risk international financial business to small, unsophisticated financial institutions. Asre and Ofer were trained in anti-money laundering compliance and procedures, and represented to the financial institutions that, because of their experience and training, they understood the risks associated with the high-risk business and would conduct appropriate anti-money laundering oversight as required by the Bank Secrecy Act. 

Based on Asre and Ofer’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 and Ofer to conduct high-risk transactions through the NYSEFCU. Asre and Ofer then caused the transfer of more than $1 billion in high-risk transactions, including hundreds of millions of dollars originating from foreign jurisdictions, through the NYSEFCU and other entities. Contrary to their 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 a billion dollars in high-risk transactions during Asre’s tenure, without ever filing a single Suspicious Activity Report, as required by law.

Asre and Ofer owned and operated DDH Group LLC, a money transmitting business and money services business that conducted some of these high-risk transactions, without it being licensed or registered as required by law.

“As alleged, Asre and Ofer used a small, unsophisticated financial institution to process high-risk, high-dollar international transactions without the anti-money laundering procedures required by law,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “Today's announcement demonstrates the department's commitment to hold accountable individuals who knowingly expose the U.S. financial system and U.S. financial institutions to the risk of laundering criminal proceeds.”

“The defendants allegedly operated an illegal money transmitting business and took advantage of smaller financial institutions to engage in risky financial transactions, without the oversight and compliance with anti-money laundering controls they had promised,” said Acting U.S. Attorney Mark J. Lesko for the Eastern District of New York. “This office will vigorously prosecute those who deliberately avoid reporting requirements and put the integrity of U.S. financial institutions at risk.”

“The Bank Secrecy Act was established to protect our financial system and maintain the integrity of our banking system,” said Special Agent in Charge Peter C. Fitzhugh of Homeland Security Investigations (HSI) New York. “As alleged, Ofer and Asre blatantly disregarded our laws and placed their own enrichment above all else. The defendants took advantage of a small, unsophisticated financial institution and pumped billions of dollars of high-risk transactions through it, any one of which could have left the bank in ruin. HSI New York’s El Dorado Task Force continues to protect the nation’s financial systems and working with its partners, will see to it that those seeking to exploit our laws for their own financial gain are brought to justice.”

Asre is charged with two counts of failure to maintain an anti-money laundering program, five counts of failure to file Suspicious Activity Reports, and one count of operation of an unlicensed money transmitting business. Ofer is charged with one count of operation of an unlicensed money transmitting business. The defendants are scheduled to be arraigned on the indictment this afternoon.

HSI is investigating the case. 

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

MLARS’s 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.

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

A five-count indictment was filed today in federal court in Brooklyn charging Richard Dale Sterritt, Jr., Michael Greer, Robert Magness, Mark Ross and Robyn Straza with conspiracy to commit securities fraud, wire fraud and money laundering, among other offenses.  The charged crimes arise out of a series of securities fraud schemes, including an offering fraud targeted at investors and potential investors in an oil and gas company in Texas and the attempted manipulation of the publicly traded stock of a cannabis company.  The defendants were arrested today.  Sterritt, Greer and Straza will make their initial appearance in federal court in Dallas, Texas; Magness and Ross will make their initial appearance in Brooklyn.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrests and indictment.

“Through a web of related schemes, Sterritt and his co-defendants allegedly stole millions of dollars from investors, attempted to manipulate a publicly-traded stock and laundered the proceeds of their crimes through the purchase of luxury items like a Bentley,” stated Acting U.S. Attorney Lesko.  “This Office will identify and vigorously prosecute those who take advantage of investors to enrich themselves at the expense of the integrity of our financial markets.”  Mr. Lesko thanked the U.S. Securities and Exchange Commission, New York Regional Office, for its assistance during the investigation. 

“Investor confidence is essential to keeping our financial markets afloat. Actions like the ones Sterritt, Greer, Magness, Ross, and Straza are charged with today chip away at the faith investors place in the process and have the potential to create far-reaching consequences. Our office is committed to tackling these types of financial crimes and bringing their perpetrators to justice,” stated FBI Assistant Director-in-Charge Sweeney.

According to the indictment, between March 2018 and January 2021, Sterritt, Greer, Magness and Ross engaged in a series of related fraudulent schemes.  The schemes included an offering fraud in the securities of Zona Energy (the “Zona Energy Offering Fraud”) and a scheme to manipulate the price and trading volume of publicly traded shares of stock in OrgHarvest, Inc., which traded under the stock ticker “ORGH” (the “ORGH Market Manipulation,” and, together with the Zona Energy Offering Fraud, the “Fraudulent Schemes”).  In addition, all of the defendants, including Straza, laundered the proceeds of the Fraudulent Schemes by facilitating financial transactions to conceal and promote the Fraudulent Schemes. 

As part of the Zona Energy Offering Fraud, the defendants misappropriated more than $10 million of investor funds through the sale of shares in Zona Energy, an oil and gas exploration production company based in the Permian basin of West Texas.  Sterritt elicited investors in Zona Energy using the alias “Richard Richman.”  Sterritt and his co-conspirators made material misrepresentations about Zona Energy’s business, management and the use of proceeds from the share offering.  Of the more than $16 million raised from Zona Energy investors in the offering, Sterritt and his co-conspirators, including Ross, Straza and Greer, misappropriated more than $10 million, including to purchase luxury items, pay personal expenses or funnel funds into other businesses Sterritt controlled, including a cannabis company.

With regard to the ORGH Market Manipulation scheme, Sterritt, Magness and Ross engaged in matched trading to artificially prop up the price of ORGH shares as a part of a scheme to raise revenue and hide the misappropriation from and true financial condition of Zona Energy.  They coordinated those ORGH trades with an undercover law enforcement agent (the “Undercover Agent”) posing as a corrupt stock promoter, who they believed controlled a team of corrupt brokers who would buy the artificially inflated ORGH stock in their customers’ accounts.  Sterritt, who secretly controlled the majority of ORGH shares through trusts in the name of his girlfriends, family members and co-conspirators, agreed with the Undercover Agent to place matched trades at specific prices, volumes and times to inflate the price of ORGH stock

To facilitate the misappropriation of funds from Zona Energy, Sterritt, Greer, Ross and Straza laundered investor money from the sale of Zona Energy shares between bank accounts controlled by Sterritt, Greer and Straza.  In some cases, investor funds were wired between bank accounts for multiple different entities in the name of Greer and/or Straza, or their entities, before those funds were used to pay personal expenses; to purchase luxury goods, including plastic surgery; or provided in cash to Sterritt’s family, friends, girlfriends and to co-conspirators.   

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of securities fraud or money laundering, they face up to 20 years’ imprisonment.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys David C. Pitluck and Michael P. Robotti are in charge of the prosecution, with assistance on forfeiture matters from Assistant United States Attorney Laura D. Mantell of the Office’s Asset Forfeiture Section.

The Defendants:

RICHARD DALE STERRITT, JR., (also known as “Richard Richman”)
Age: 64
Garland, Texas

MICHAEL GREER
Age: 45
Dallas, Texas

ROBERT MAGNESS
Age: 51
New York, New York

MARK ROSS
Age: 53
Parkland, Florida

ROBYN STRAZA
Age: 58
Dallas, Texas

E.D.N.Y. Docket No.  21-CR-193 (KAM)

Earlier today, in federal court in Brooklyn, Michael Hlady pled guilty before United States Chief District Court Judge Margo K. Brodie to conspiring to extort a startup company for millions of dollars in the cryptocurrency Ether (ETH).  When sentenced, Hlady faces up to 20 years in prison, as well as a fine. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.

“Hlady and his co-conspirator used strong-arm tactics to shake down a startup company of cryptocurrency and will now face punishment just like anyone else who extorts a business,” stated Acting United States Attorney Lesko.  “This Office and its law enforcement partners are committed to protecting businesses from extortion in whatever manner it is perpetrated.”  Mr. Lesko thanked the Federal Bureau of Investigation, New York Field Office, for their outstanding work on the case.

As set forth in court filings and at today’s proceeding, the victim company (“Company”) was a startup mobile-based business that issued cryptocurrency tokens such as Ether as loyalty rewards for generating user traffic to its clients’ products.  To raise capital, the Company planned to conduct an Initial Coin Offering (“ICO”) in November 2017. In connection with the ICO, Hlady told the Company’s executives that he had been a part of the Irish Republican Army, the National Security Agency, the Central Intelligence Agency and the Federal Bureau of Investigation; that he had been shot at and had killed people; and that he had “taken down” a head of state.  In March 2018, Hlady and his co-conspirator Steven Nerayoff issued threats to Company executives that included destruction of the Company if it did not agree to demands for additional funds and Company tokens.  On March 28, 2018, Hlady sent a text message to a Company executive stating, in part, “I promise I will destroy your community” if the Company did not comply with the demands.  As a result of this threat, the Company transferred 10,000 ETH to Nerayoff.

Nerayoff has entered a plea of not guilty to extortion charges and is awaiting trial.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Mark E. Bini and Andrey Spektor are in charge of the prosecution. 

The Defendant:

MICHAEL HLADY (also known as “Michael Peters”)
Age:  48
East Greenwich, Rhode Island

E.D.N.Y. Docket No. 20-CR-8 (MKB)

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, today announced that former Assistant U.S. Attorney (AUSA) James R. Cho has been appointed to serve as a United States Magistrate Judge. He will sit in federal court in Brooklyn. Mr. Cho was sworn in today by United States Chief District Court Judge Margo K. Brodie.

“I am proud that James Cho has been selected to serve as a Magistrate Judge for the Eastern District of New York.  James was an excellent AUSA who handled some of our Office’s most difficult and complex cases.  I am confident that as a federal judge, James will continue to serve the people of our district with integrity and a keen sense of fairness.” 

Mr. Cho served in the Office’s Civil Division for more than 12 years and, most recently, served as the Office’s Chief of Immigration Litigation and Chief of Bankruptcy Litigation.  Mr. Cho is a seasoned trial lawyer who litigated numerous complex affirmative and defensive matters.

Mr. Cho also previously served as the Civil Division’s training coordinator, where he was responsible for AUSA training, and on the Office’s hiring and diversity and inclusion committees.

As an AUSA, Mr. Cho represented the United States and its agencies and employees in some of the Office’s most challenging cases.  He brought affirmative civil enforcement lawsuits on behalf of the United States resulting in significant recoveries arising from fraud against the government or environmental violations.  He defended lawsuits challenging government actions, and employment, constitutional and tort claims against the federal government and its employees.  Mr. Cho also argued routinely before the Second Circuit Court of Appeals.

Mr. Cho previously taught a course in government civil litigation as an adjunct professor at Brooklyn Law School and New York University Law School.  Mr. Cho also previously served as president of the Korean American Lawyers Association of Greater New York and the Asian American Bar Association of New York.

Before joining the Office, Mr. Cho worked in private practice.  He graduated from the University of Minnesota Law School cum laude, and from the University of Michigan with high honors.

Mr. Cho will be the first Korean American to serve on the EDNY bench.

BROOKLYN  – Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and Pamela S. Karlan, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Rights Division, announced today a settlement with Village Realty of Staten Island Ltd. and Denis Donovan, a sales and former rental agent at Village Realty, to resolve a lawsuit filed last year alleging discrimination against African Americans in violation of the Fair Housing Act.

The settlement resolves claims that Donovan discriminated against prospective renters on the basis of race by treating African Americans who inquired about available rental units less favorably than similarly-situated white persons, and that Village Realty is legally responsible for Donovan’s alleged discrimination because he was acting as Village Realty’s agent. The lawsuit was based on the results of testing conducted by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.  According to the complaint, Donovan allegedly told African-American testers about fewer rental units than white testers, offered white testers rental discounts and opportunities to inspect units that were not offered to African-American testers, generally offered African-American testers units only in racially mixed neighborhoods while offering white testers units in both overwhelmingly white and racially mixed neighborhoods, and made more encouraging comments to white testers about available rental units.   

“Today's settlement underscores the importance of making housing equally available to all residents of this district, regardless of race," stated Acting U.S. Attorney Lesko.  “This Office is committed to ending racial discrimination and to achieving fairness and equality in housing.”

“For 30 years – since its establishment in 1991 – the Fair Housing Testing Program has played a critical role in helping the Department of Justice root out discrimination that might otherwise go undetected,” said Principal Deputy Assistant Attorney General Karlan. “Today’s settlement reflects the Department’s continued commitment to uncover and eliminate discrimination in all forms and to ensure equal access to housing regardless of race.”

Under the consent decree, the defendants will establish a settlement fund of $15,000 to compensate victims of Donovan’s alleged discriminatory practices and pay a civil penalty of $2,500 to the United States. The agreement prohibits the defendants from engaging in further acts of discrimination and requires them to implement nondiscriminatory standards and procedures, undergo fair housing training, and provide periodic reports to the department.

This case is being handled by Eastern District of New York Assistant U.S. Attorney Rachel G. Balaban, along with Trial Attorney Katherine A. Raimondo of the Civil Rights Division’s Housing and Civil Enforcement Section.

Individuals who believe they may have experienced discrimination at Village Realty should contact the Justice Department toll-free at 1-800-896-7743 or by email at fairhousing@usdoj.gov. Individuals may be entitled to relief from the settlement fund if they (1) are African American; (2) visited or called Village Realty to inquire about units available for rent prior to March 31, 2019; and (3) were denied the opportunity to rent a unit or provided untrue or incomplete information about available rental units.

The Civil Rights Division enforces the federal Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the department’s fair housing enforcement can be found at www.justice.gov/fairhousing.

Two criminal complaints were unsealed today in federal court in Brooklyn  charging Charles McFadgen and Willie Garcon with access device fraud for using credit and debit cards that belonged to decedents whose bodies were in the care and custody of the New York City Office of Chief Medical Examiner (“OCME”).  McFadgen and Garcon were arrested this morning and are scheduled to make their initial appearances this afternoon before United States Magistrate Judge Roanne L. Mann.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Margaret Garnett, Commissioner, New York City Department of Investigation (DOI), announced the arrests and charges.

“As alleged, the defendants, as mortuary technicians employed by New York City’s OCME, had a solemn duty to care for the bodies of the deceased and treat their personal effects with the utmost respect.  Instead, the defendants brazenly pilfered the belongings of the deceased, stole their property and enriched themselves by making unauthorized purchases worth several thousand dollars,” stated Acting United States Attorney Lesko.  “These arrests serve as a warning to corrupt city employees that they will be prosecuted and held accountable for their   criminal acts and breach of public trust.” 

“Government employees, regardless of their position, are supposed to serve their fellow citizens, not steal from them. The alleged behavior of these two former medical examiner office employees stripped families of the dignity they expected to be afforded to their deceased family members, and it broke federal law. Today’s charges serve as a reminder that there are consequences for illegal behavior,” stated FBI Assistant Director-in-Charge Sweeney.

“As representatives of the City's Office of Chief Medical Examiner, these defendants should have provided compassion, dignity, and respect for the deceased New Yorkers they were serving. Instead, they exploited the access of their positions and breached the trust the City placed in them by stealing from the dead, according to the charges. DOI thanks the NYPD, FBI and the U.S. Attorney’s Office for the Eastern District of New York for working together to expose the corruption and bring accountability to this charged conduct.  Individuals who have experienced similar issues with theft from deceased loved ones are encouraged to make a report to DOI's Office of Inspector General for OCME at (212) 825-5904,” stated DOI Commissioner Garnett.

Garcon Complaint:

Garcon was employed at the OCME between May 2018 and July 2020 as a forensic mortuary technician. His duties included transporting the bodies of decedents from the location of death to the OCME.  Garcon was simultaneously employed by the Burlington County Medical Examiner’s Office from February 2020 to May 21, 2020.  In May 2020, Garcon was arrested by state authorities in New Jersey and found in possession of property that belonged to four decedents who died in New York City and whose bodies had been placed in the OCME’s custody.  According to the OCME’s records, Garcon was assigned to transport the bodies of three of those decedents and was working as an autopsy technician at the OCME in New York when the body of the fourth decedent arrived there.  A subsequent investigation revealed that Garcon made nearly $6,500 in unauthorized purchases, including airline travel from Newark to Fort Lauderdale, Florida, using credit and debit cards that belonged to the four decedents.

McFadgen Complaint:

McFadgen was employed at the OCME as a mortuary technician between October 2003 and July 2016 when he retired.  McFadgen admitted to investigators that both during and after his employment at the OCME, he used debit and credit cards that he knew had been stolen.  McFadgen made more than $13,500 in unauthorized purchases using debit and credit cards stolen from five decedents whose bodies were in the OCME’s custody. 

The charges in the complaints are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, each defendant faces a maximum of 10 years’ imprisonment.

The government’s case is being handled by the Office’s Public Integrity Section.  Special Assistant United States Attorney Virginia Nguyen is in charge of the prosecution.

The Defendants:

CHARLES MCFADGEN
Age:  66
Bronx, New York

E.D.N.Y. Docket No. 21-MJ-378

WILLIE GARCON
Age:  50
Brooklyn, New York

E.D.N.Y. Docket No. 21-MJ-379

Earlier today, in federal court in Brooklyn, Tae Hung Kang, also known as “Kevin Kang,” pleaded guilty before United States Magistrate Judge Peggy Kuo to conspiring to commit securities fraud in connection with a scheme involving foreign exchange trading that targeted members of the Korean-American community.  When sentenced, Kang faces up to five years in prison, as well as forfeiture and a fine.  Kang has also agreed to pay restitution in the amount of $835,058.32. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.

“With today's plea, Kang is held accountable for his fraud and for betraying the trust of the Korean-American community who, believing in Kang's integrity, invested hundreds of thousands of dollars in his company's stock," stated Acting U.S. Attorney Lesko.  "This Office is committed to safeguarding the investing public and protecting investors whose hard-earned money has been fraudulently misappropriated.”  Mr. Lesko thanked the Federal Bureau of Investigation, New York Field Office, for their investigative work on the case, and the United States Commodities and Futures Trading Commission for their assistance during the investigation.        

As set forth in court filings and today’s proceeding, Kang defrauded investors located in the Eastern District of New York and elsewhere in connection with foreign exchange trading which refers to trading one currency for another in an effort to profit from fluctuating exchange rates.  Kang enticed investors to invest their money into stock issued by his company, Safety Capital Management, Inc. (“Safety Capital”), which did business as FOREXNPOWER.  The investors were told their investments would be pooled by Kang and others to conduct foreign exchange trading, or to expand the FOREXNPOWER business.  Kang falsely promised investors outsized returns at minimal risk.  Ultimately, nearly all of the money that was invested in Safety Capital stock was misappropriated by Kang and his co-conspirators.  Kang used some of the money stolen from clients to pay for advertisements targeting additional investors and promoting FOREXNPOWER’s outsized trading returns based on a algorithmic trading method that did not actually exist.  Kang’s co-defendant John Won is awaiting trial.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Julia Nestor, Lauren Howard Elbert, Mathew S. Miller and Trial Attorney Gerald M. Moody, Jr., of the Criminal Division’s Fraud Section, are in charge of the prosecution.

The Defendant:

TAE HUNG KANG (also known as “Kevin Kang”)
Age:  57
Bayside, New York

E.D.N.Y. Docket No. 18-CR-184 (RJD)

Earlier today, in federal court in Brooklyn, Adolfo LaCola was sentenced by United States Chief District Court Judge Margo K. Brodie to 48 months in prison for his participation in a narcotics distribution conspiracy and money laundering. LaCola pleaded guilty to the charges in September 2020.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York; Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation (IRS-CI); Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD),  announced the sentence.

“The defendant aspired to be a one-stop-shop for cocaine trafficking and money laundering, but thanks to the outstanding work of our law enforcement partners, LaCola’s next stop will be federal prison,” stated Acting U.S. Attorney Lesko.  “This Office will vigorously pursue narcotics traffickers who peddle drugs that endanger our communities.”

“LaCola’s criminal enterprise landed him in jail,” stated DEA Special Agent-in-Charge Donovan.  “The DEA and our law enforcement partners investigate traffickers and money launderers alike who enable drug addiction in our communities.  I applaud the partnership and hard work of the U.S. Attorney’s Office Eastern District of New York and the Internal Revenue Service Criminal Investigation throughout this investigation.” 

“The elaborate criminal network established by LaCola led to the appropriate sentence handed down today stated IRS-CI Special Agent-in-Charge Larsen.  “This investigation highlights the excellent work done through our partnership at the DEA Strike Force to tackle these drug and money laundering organizations.”

“LaCola operated with a complete disregard for law enforcement as he ran a large-scale cocaine distribution scheme and offered to ‘clean’ hundreds of thousands of dollars for who he thought was just another criminal looking to make a buck,” stated HSI Special Agent-in-Charge Fitzhugh. “LaCola’s brazen pride and cavalier attitude yielded the evidence needed to arrest and charge this self-purported, high level, international narcotics trafficker/money launderer. Once again, we demonstrate our collective investigative acumen showing that the work of HSI New York with the DEA Strike Force and NYPD is unyielding, and we will persist to make sure deadly drugs do not reach our communities.”

“Today’s sentencing demonstrates the investigative efforts of New York City law enforcement and our dedication to stop the threat that narcotics trafficking poses to public safety. I commend and thank the NYPD investigators involved in this investigation in addition to our colleagues at the U.S. Attorney, Eastern District, Internal Revenue Service Criminal Investigation, and Homeland Security Investigations for building such a strong conspiracy case,” stated NYPD Commissioner Shea. 

LaCola’s arrest arose out of a long-term investigation by the DEA and IRS-CI of local narcotics trafficking and distribution in New York City.  Between April 2018 and December 2018, LaCola conspired with others to import kilograms of cocaine from Mexico into the United States.  Unbeknownst to LaCola, one of the individuals with whom he was negotiating a multi-kilogram deal was cooperating with the DEA.  In his meetings with this individual, LaCola offered his services as a large-scale cocaine distributor in Staten Island and as a money launderer for narcotics traffickers.  The defendant arranged for the individual to try a 100-gram sample of his cocaine, after which he attempted to negotiate a deal for regular shipments of multi-kilogram loads of cocaine.  LaCola informed the individual that the sample he provided came from a 10-kilogram shipment he had received and that he could regularly provide the individual with 10 to 15 kilograms of cocaine from his sources of supply in Mexico. 

LaCola also offered his services as a money launderer for narcotics traffickers.  He offered to use a co-conspirator’s businesses to launder up to $300,000 a-month for another individual who turned out to also be cooperating with the DEA.  The defendant facilitated the laundering of $100,000 of purported heroin trafficking proceeds.  This money, in reality, came from the DEA informant.

The case was the result of an investigation by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.  The New York OCDETF Strike Force is housed at the DEA’s New York Division and includes agents and officers of the DEA; the NYPD; the New York State Police; HSI; IRS-CI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection; U.S. Secret Service; the U.S. Marshals Service; New York National Guard; the Clarkstown Police Department; U.S. Coast Guard; Port Washington Police Department; and New York State Department of Corrections and Community Supervision.

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

The Defendant:

ADOLFO LACOLA
Age:  54
Staten Island, New York

E.D.N.Y. Docket No. 19-CR-187 (MKB)

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York announced today that the Office will double the size of its Civil Rights Section in the Criminal Division to provide additional resources to evaluate and, where appropriate, prosecute hate crimes.  The Civil Rights Section will continue to be responsible for spearheading the Office’s prosecution of three types of offenses: (1) traditional civil rights crimes by individuals who operate under the color of law; (2) hate crimes; and (3) sex trafficking.

“The spiking number of hate crimes directed at Asian Americans in this District and throughout the country runs contrary to deeply-held American values of fairness, respect and equal treatment for all without regard to ethnic origin.  The additional resources allocated to the Civil Rights Section reflect the commitment of this Office and its federal, state and local law enforcement partners to upholding these important and enduring values, which categorically reject hate, intolerance and the violence they spawn,” stated Acting U.S. Attorney Lesko.  “We strongly encourage members of all communities to report hate-based crimes as we continue to work with our law enforcement partners to investigate and prosecute these crimes to the fullest extent of the law.”

Mr. Lesko thanked the District Attorneys of Brooklyn, Queens, Staten Island and Long Island for their cooperation and coordination, and the Federal Bureau of Investigation, New York Field Office (FBI), Homeland Security Investigations; the New York City Police Department; and the Nassau and Suffolk County Police Departments for their continued partnership. 

“Investigating hate crimes remains the highest priority of the FBI's civil rights program, and the public should know that we will continue to work hand in hand with all of our law enforcement partners to investigate any and all allegations of hate crimes. We can't investigate what we don't know, however, so I would urge anyone who has been the victim of a hate crime, or anyone who has witnessed a hate crime, to report this information to the FBI by calling 1-800-CALL-FBI or submitting a tip online at tips.fbi.gov. Victims should know that information may be reported anonymously and in their native language. Help us fight hate in our communities together,” stated FBI Assistant Director-in-Charge William F. Sweeney, Jr.

“Homeland Security Investigations (HSI) is proud to join together with the FBI and the United States Attorney’s Office, EDNY, in combatting the rising trend of Hate Crimes that we are seeing throughout our region.  Every person should be free to live and worship as they wish without fear for repercussions or their safety,” stated HSI New York Special Agent-in-Charge Peter C. Fitzhugh.  “Working with our partners, HSI will hold those who victimize others based on their nationality, race, religion or otherwise, responsible for their actions.”

A superseding indictment was returned yesterday in federal court in Brooklyn charging Oscar Flores-Mejia, an associate of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, with murder in-aid-of racketeering and conspiracy to commit murder in-aid-of racketeering in connection with the April 23, 2018 murder of 17-year-old Andy Peralta in Queens, New York.  Flores-Mejia was arrested on a criminal complaint in February 2021 and ordered detained pending trial.  The defendant will be arraigned at a later date. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the superseding indictment.

“After allegedly helping to torture and murder the teenage victim, the defendant leaned over his lifeless body and displayed the MS-13 hand sign, openly revealing his presence at the scene and linking MS-13 to this horrific crime,” stated Acting U.S. Attorney Lesko. “This Office and its federal, state and local law enforcement partners will not rest until the senseless brutality and violence of MS-13 has been eliminated and those responsible for the victim’s cruel and cold-blooded murder in Kissena Park have been held to account.” Mr. Lesko expressed his appreciation to the Queens County District Attorney’s Office and the New York City Department of Investigation for their assistance in the investigation.

“No one deserves to die simply to boost the standing of a gang member. Today’s indictment should serve as the FBI’s continuing sign to other gang members who commit violence in our neighborhoods. We work around the clock, and our connections are global. Behavior like the kind we allege today leads to a federal prison cell. Your stay will be a long one,” stated FBI Assistant Director-in-Charge Sweeney.

“The heinous details of the Flores-Mejia case and his alleged involvement in the ruthless murder of a teen in 2018 is on par with MS-13’s core values of extreme violence and control,” stated HSI Special Agent-in-Charge Fitzhugh. “Transnational criminal street gangs like MS-13 serve only to terrorize our communities and prey upon our most vulnerable youth who are often left with little choice, join the gang or face the consequence. This unfair choice ends one of two ways, jail or death.  In facing this threat, HSI continues to work with its federal and local law enforcement partners to arrest and prosecute those who commit senseless violence while simultaneously working with our communities to offer a better option, a chance for a future.”

“The federal indictment announced today answers for an unspeakably violent crime and sends a message that gangs like La Mara Salvatrucha can never be tolerated. I commend our NYPD detectives, our law enforcement partners and the United States Attorney’s Office for the Eastern District of New York for bringing this important case,” stated NYPD Commissioner Shea.

According to court filings, on the evening of April 23, 2018, Peralta was lured to Kissena Park where he was ambushed in a wooded area by Flores-Mejia and two others. Peralta was believed to be a member of the 18th Street gang.  Peralta had a tattoo of a crown on his chest which the defendant mistakenly believed to be a symbol of a rival gang.  Peralta was repeatedly slashed, stabbed, beaten and strangled.  A photograph taken of Peralta’s body depicts Flores-Mejia leaning over the victim and displaying an MS-13 hand sign. 

The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Flores-Mejia faces a mandatory sentence of life imprisonment.

Today’s charges are the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13.  The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 45 murders in the district and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by our law enforcement partners.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Nadia E. Moore and Phil Selden and Special Assistant United States Attorney Kirk Sendlein are in charge of the prosecution.

The Defendant Charged in the Superseding Indictment:

OSCAR FLORES-MEJIA (also known as “Chamuco”)
Age:  21
Elmhurst, New York

Defendants Previously Indicted:

JUAN AMAYA-RAMIREZ (also known as “Cadaver”)
Age:  23
Fresh Meadows, New York

RAMIRO GUTIERREZ (also known as “Cara de Malo”)
Age:  28
Flushing, New York

VICTOR LOPEZ (also known as “Curioso”)
Age:  22
Flushing, New York

TITO MARTINEZ-ALVARENGA (also known as “Imprudente”)
Age:  21
Flushing, New York

JAIRO MARTINEZ-GARCIA (also known as “Colmillo”)
Age:  22
Flushing, New York

EMERSON MARTINEZ-LARA (also known as “Fugitivo”)
Age:  21
College Point, New York

DOUGLAS MELGAR-SURIANO (also known as “Clemencia”)
Age:  24
Flushing, New York

VICTOR RAMIREZ (also known as “Frijolito”)
Age:  21
Elmhurst, New York

ISMAEL SANTOS-NOVOA (also known as “Profe” and “Travieso”)
Age:  32
Flushing, New York

E.D.N.Y. Docket Nos. 20-CR-228 (SJ)