Eastern District of New York

A complaint was filed in federal court in Brooklyn yesterday charging Jegara Igbara, also known as “Jay Mazini,” with wire fraud related to a scheme in which the defendant allegedly induced victims to send him Bitcoin by falsely claiming to have sent wire transfers of cash in exchange for the Bitcoin.  In reality, Igbara never sent the money, and stole at least $2.5 million worth of Bitcoin from victims. Igbara is currently being held on state charges in New Jersey and will make his initial appearance in the Eastern District of New York at a later date.

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 Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the charge. 

“As alleged, Igbara used his immense social media popularity to dupe his followers into selling him Bitcoin,” stated Acting United States Attorney Lesko.  “This Office will continue to work closely with its law enforcement partners to stop fraudsters like the defendant from perpetrating social media scams that prey on innocent victims.”

“As we allege, Igbara’s social media persona served as a backdrop for enticing victims to sell him their Bitcoin at attractive, but inflated, values. A behind-the-scenes look, however, revealed things aren’t always as they seem. There was nothing philanthropic about the Bitcoin transactions Igbara engaged in with his victims. A quick search of the Interwebs today will reveal an entirely different image of this multimillion-dollar scammer.” stated FBI Assistant Director-in-Charge Sweeney. “If anyone out there has information about this case, we urge you to file a complaint online at tips.fbi.gov.”    

“Buyer beware when making purchases of Bitcoin or any other cryptocurrency over social media,” stated IRS-CI Special Agent-in-Charge Larsen. “This defendant allegedly used his online popularity to defraud those seeking to exchange Bitcoin for cash above the market value. Always be on your guard and don’t fall prey to these cryptocurrency schemes.”

As set forth in the complaint, up until March 2021, Igbara, under the name “Jay Mazini,” maintained a popular Instagram account with nearly one million followers where he would post videos depicting himself handing out large amounts of cash to individuals as gifts.  Beginning in or around January 2021, Igbara began posting videos to his Instagram account offering to buy Bitcoin from other Instagram users at prices 3.5% to 5% over market value.  Igbara claimed that he was willing to pay above-market prices because the traditional Bitcoin exchanges were limiting how much Bitcoin he could purchase.  When victims agreed to transact in Bitcoin with Igbara, he sent them documents that included images of purported wire transfer confirmation pages that falsely confirmed Igbara had sent a wire transfer for the promised amounts.  In response, the victims supplied Igbara with the Bitcoin, but the promised wire transfers never arrived.  Bank records showed that, as to at least one victim, Igbara did not have funds in the account identified in the wire transfer receipt that were sufficient to cover the wire transfer he had promised to make. 

This investigation remains ongoing, and anyone who thinks they may have been a victim of this scheme is asked to file a complaint online with the FBI at tips.fbi.gov.

The charge in the indictment is an allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Igbara faces up to 20 years’ imprisonment.

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

The Defendant:

JEBERA IGBARA (also known as “Jay Mazini”)
Age:  25
Edgewater, New Jersey

E.D.N.Y. Docket No.: 20-MJ-356

Earlier today, at the federal courthouse in Brooklyn, Henning Schwarzkopf, a citizen of Germany and an attorney licensed to practice in Germany, pleaded guilty before United States Magistrate Judge Ramon E. Reyes, Jr., to money laundering by transferring funds that he believed to be the proceeds of a securities fraud scheme through the bank account of a Hong Kong shell company controlled by the defendant.  Schwarzkopf was arrested on a criminal complaint in October 2020.  When sentenced, Schwarzkopf faces up to 20 years in prison, as well as forfeiture and a fine of up to $250,000. 

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 guilty plea.

“Schwarzkopf brazenly plotted to launder over $1 million in funds that he believed had been stolen from investors trading in the securities markets,” stated Acting United States Attorney Lesko.  “This Office, together with our law enforcement partners, will vigorously prosecute and hold accountable corrupt lawyers like the defendant who abuse their specialized knowledge to commit crimes.”  Mr. Lesko thanked the Hamburg, Germany State Bureau of Criminal Investigation, the Hamburg, Germany Prosecution Service, and the Monaco Police Department Criminal Division for their assistance during the investigation. 

“Schwarzkopf  knew the money he was moving from the account of a Hong Kong-based shell company to bank accounts in New York was obtained through fraudulent means, but proceeded to engage in this money laundering scheme anyway in exchange for more than $50,000 in illegal kickbacks.  Today’s guilty plea signals an end to Schwarzkopf’s fraud, but our office will continue to pursue all criminals whose crimes affect the integrity of the financial markets,” stated FBI Assistant Director-in-Charge Sweeney.

According to court filings and facts presented at his guilty plea, an undercover agent (“Undercover Agent”) was introduced to Schwarzkopf in October 2019 as someone who would launder money for the Undercover Agent.  In subsequent encrypted communications and in two face-to-face meetings in Monaco and Germany, the Undercover Agent told Schwarzkopf that he was a stock promoter who operated pump-and-dump schemes in which he manipulated the price and trading volume of shares of publicly-traded companies.  Furthermore, the Undercover Agent explained that as part of those schemes, he paid illegal kickbacks to stockbrokers who purchased the shares.  The Undercover Agent advised Schwarzkopf that he wanted him to “create a fog” around those illegal kickbacks in order to disguise the source of the funds before they reached the brokers.  Schwarzkopf agreed to transfer the funds and to falsely characterize the payments as “invoices” or “loan agreements.”  Schwarzkopf retained a five percent fee from each transfer, even though he provided no services except to receive funds from the Undercover Agent in the bank account of a Hong Kong-based shell company that he controlled, and then forward those funds to bank accounts in New York.

Between December 29, 2019 and August 2020, Schwarzkopf sent 30 transfers totaling approximately $1,100,784 that he believed were the proceeds of securities fraud from the Hong Kong bank account of his shell company to bank accounts in the United States, earning approximately $57,936 in fees. 

The 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:

HENNING SCHWARZKOPF
Age:  69
Hamburg, Germany

E.D.N.Y. Docket No. 21-CR-117 (EK)

An indictment was returned in federal court in Brooklyn yesterday charging Gelpys Joel Peralta-Gutierrez with wire fraud conspiracy relating to a fraudulent application for a loan under the United States Small Business Administration (the “SBA”)’s Paycheck Protection Program (“PPP”), which Congress created as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.  Peralta-Gutierrez was previously arrested in February 2021 on a criminal complaint and 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), and Amaleka McCall-Brathwaite, Special Agent-in-Charge, Office of the Inspector General of the U.S. Small Business Administration, Eastern Region Office (SBA-OIG), announced the charges. 

“As alleged, Peralta-Gutierrez claimed falsely that he needed government loan benefits to pay his employees during the pandemic, but instead deliberately lined his own pockets with $1.7 million,” stated Acting United States Attorney Lesko.  “This Office will not hesitate to bring the full weight of the law against those who, for personal gain, take advantage of the COVID crisis and unlawfully divert funds from vitally important government relief programs.”

“Peralta, as alleged, took advantage of the Paycheck Protection Program, which was created to provide emergency financial assistance to businesses who need it during the pandemic. While claiming to have 62 employees on his payroll, he received $1.7 million worth of taxpayer-funded relief in support of his claims. According to other business relief applications he filed, however, he had only one employee. The FBI will continue to aggressively pursue those who are using the money from this economic relief program to pad their own pockets.  If you know of similar instances of fraud, please call us at 1-800-CALL-FBI,” stated FBI Assistant Director-in-Charge Sweeney.  

“Lying to gain access to economic stimulus funds will be met with justice,” stated SBA-OIG Special Agent-in-Charge McCall-Brathwaite.  “SBA-OIG will aggressively pursue evidence of fraud against SBA’s programs aimed at assisting the nation’s small businesses struggling with the pandemic challenges.  I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”

As set forth in court filings, in June 2020, Peralta-Gutierrez arranged for a PPP loan application to be submitted on behalf of his company, J Films HD Inc., claiming that he employed 62 employees with a total monthly payroll of nearly $700,000.  Based on these representations, Peralta-Gutierrez’s business was granted a loan in excess of $1.7 million.  The location that Peralta-Gutierrez submitted as his business address, however, was a New York City Housing Authority apartment at the Queensbridge Houses.  In applications Peralta-Gutierrez submitted for other business relief, he acknowledged that, in reality, his business had only one employee, and total revenues of approximately $50,000. 

The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted, he faces up to 20 years’ imprisonment.

The government’s case is being handled by the Office’s Business & Securities Fraud Section.  Assistant United States Attorney Lauren Howard Elbert is in charge of the prosecution. 

The Defendant:

GELPYS JOEL PERALTA-GUTIERREZ (also known as “Joel Peralta”)
Age:  31
Long Island City, New York

E.D.N.Y. Docket No. 21-CR-149 (DG)

 

A 10-count indictment was filed today in federal court in Brooklyn charging Jason Peltz with securities fraud, money laundering and tax evasion, among other offenses, including related conspiracy offenses.  The charged crimes arise out of a long-running insider trading scheme, in which Peltz executed securities transactions in the brokerage accounts of co-conspirators based on material nonpublic information (“MNPI”) from a variety of sources.  Peltz was previously arrested on a complaint in December 2020 and will be arraigned on the indictment 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), and Jonathan D. Larsen, Special Agent-in-Charge, IRS Criminal Investigation, New York (IRS-CI), announced the indictment.

“As alleged, Peltz used material nonpublic information about publicly traded companies to line his own pockets and then concealed his illegally earned income to avoid paying taxes,” stated Acting U.S. Attorney Lesko.  “This Office will spare no effort to identify and prosecute defendants who seek to profit from insider trading schemes that harm the investing public and undermine the integrity of our financial markets.”  Mr. Lesko thanked the Securities and Exchange Commission, New York Regional Office, for their assistance during the investigation. 

“As alleged, today’s indictment details a very deliberate attempt by Peltz to illegally profit from receiving and providing advanced knowledge of nonpublic information about publicly traded companies. When one has access to material, nonpublic information, they’re afforded significant knowledge that could give them a competitive edge in stock and options trading.  Exploiting this knowledge is illegal, and the FBI will continue to investigate and prosecute those who cheat the system in this way,” stated FBI Assistant Director-in-Charge Sweeney.”

“While most Americans dream of winning the lottery or finding a stock before it takes off, Peltz rigged the system for his personal gain, creating fortune for himself at the expense of others,” stated IRS-CI Special Agent-in-Charge Larsen.  “Peltz stands accused of a multitude of crimes that go far beyond his initial investments, extending to tax crimes and lying.  Thanks to our work with the Joint Chiefs of Global Tax Enforcement (J5), we were able to unravel the web of lies that Peltz wove to cover his greedy crimes and send a message to others involved in similar schemes.”

According to the indictment, between November 2015 and October 2020, Peltz and his co-conspirators engaged in a fraudulent scheme by which they obtained MNPI about publicly traded companies from a variety of sources, including a corporate insider and a reporter at a financial news organization (the “Reporter”).  Peltz and his co-conspirators allegedly used the MNPI to profitably trade in securities in advance of public disclosure through news articles.   For example, the brokerage accounts of members of the conspiracy made purchases of certain companies’ securities shortly before significant corporate events, such as announcements of potential mergers or acquisitions that sometimes resulted in near-immediate increases in the companies’ share prices.  The co-conspirators’ brokerage accounts sold the shares at a later date in close proximity to the relevant corporate events or announcements of the events.  To prevent scrutiny of their communications, Peltz and his co-conspirators often communicated via the use of smartphone applications with end-to-end encryption.  Peltz also used prepaid cellular telephones, known as “burner” phones, to prevent scrutiny of his communications.

In February 2016, Peltz obtained MNPI from an insider at Ferro Corporation (“Ferro”) about a potential takeover offer (the “Ferro Takeover Bid”).  Peltz used that MNPI to (1) profitably trade in Ferro in the brokerage accounts of two co-conspirators, (2) tip certain other co-conspirators, each of whom also profitably traded on MNPI about the Ferro Takeover Bid, and (3) tip the Reporter, who wrote an article making public the news of the Ferro Takeover Bid, which resulted in an increase in the price of Ferro’s stock.  Peltz and the Ferro insider each received significant financial benefits from other co-conspirators shortly after Peltz traded in those co-conspirators’ brokerage accounts.

Following his profitable insider trading in Ferro, Peltz continued to cultivate his relationship with the Reporter and obtained information about the Reporter’s upcoming news articles.  On multiple occasions thereafter, Peltz traded in the brokerage accounts of co-conspirators shortly before the publication of articles by the Reporter about publicly traded companies.  The articles were often followed by increases in the prices of the companies’ stock.

During the course of the conspiracy, Peltz received large payments from co-conspirators, as well as other benefits, as payment for his trading activity.  Peltz received these payments in corporate and nominee bank and credit card accounts, in order to conceal his income from the IRS.  Despite receiving such payments, in 2017 Peltz falsely swore under penalty of perjury to the IRS that he had been unemployed since December 2015 and had no income.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of securities fraud, Peltz faces up to 25 years’ imprisonment.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Kaitlin T. Farrell and Sarah M. Evans are in charge of the prosecution, with assistance from Assistant United States Attorney Brian Morris of the Office’s Asset Forfeiture Section.

The Defendant:

JASON PELTZ
Age: 38
Brooklyn, New York

E.D.N.Y. Docket No.  21-CR-154 (NGG)

Mark J. Lesko has begun serving as Acting United States Attorney for the Eastern District of New York, as per the Vacancies Reform Act.  Mr. Lesko was sworn in today by United States Chief Judge for the Eastern District of New York Margo K. Brodie.  Mr. Lesko has served as the First Assistant United States Attorney since March 2019.  In that role he has been second-in-command of the U.S. Attorney’s Office and a key decision-maker in both criminal prosecutions and civil litigation in the Office.  Mr. Lesko succeeds Seth D. DuCharme, who resigned on March 19, 2021.

“It is an absolute honor and privilege to serve as the Acting United States Attorney for the Eastern District of New York,” stated Acting U.S. Attorney Lesko.  “After having spent many years on the line prosecuting federal crimes, as well as significant time overseeing prosecutions and civil cases in a wide range of supervisory positions, I look forward to leading the Office and working with our law enforcement and agency partners to protect and serve the Eastern District’s more than eight million residents. I’m also particularly proud that I get to continue to work with the outstanding and dedicated women and men in the Office as they continue their tireless efforts to prosecute criminal cases and defend the interests of the United States, all in the unwavering pursuit of the fair administration of equal justice under the law.”

In October 2018, Mr. Lesko returned to the Office and assumed the position of Special Counsel to the United States Attorney before he was appointed to the position of First Assistant United States Attorney two years ago.  Mr. Lesko was a member of the prosecution team that won the trial conviction of Nxivm founder Keith Raniere on all counts of a superseding indictment charging him with racketeering and racketeering conspiracy; sex trafficking, attempted sex trafficking and sex trafficking conspiracy; forced labor conspiracy and wire fraud conspiracy. 

Mr. Lesko previously served in the Office from 2002 to 2009. He served as the Deputy Chief of the Long Island Criminal Division and as a Computer Hacking and Intellectual Property Coordinator. While in the Office, Mr. Lesko conducted complex and wide-ranging criminal investigations and handled numerous jury trials and appeals. His most notable cases include the prosecutions of the former CEO and CFO of Symbol Technologies; a titanium manufacturing company and its CEO for violations of the Resource Conservation Recovery Act for illegal storage of hazardous waste; two fraudulent financiers of a major motion picture; and a Colombo associate. His trial convictions include a Muttontown, New York couple who tortured two Indonesian domestic servants held in a condition of forced labor and servitude; gang members convicted of the racketeering murder of a man they mistakenly believed to be a member of the MS-13; and the leader of a robbery crew based in the Louis H. Pink Houses in East New York who was responsible for more than 50 armed robberies throughout New York City and Long Island.

Prior to joining the Office, he served as an Assistant United States Attorney for the District of Columbia from 1999 to 2002, where he was in the Homicide/Major Crimes Section and handled numerous jury trials and appellate arguments. He also worked as an associate at the law firms of Miller & Chevalier in Washington, D.C. and Kirkpatrick & Lockhart in Pittsburgh, Pennsylvania (now K&L Gates). He received his B.A. from Yale University in 1989 and his J.D. from the Georgetown University Law Center in 1994.

Mr. Lesko has also previously served as the Vice President for Economic Development, the Executive Dean of the Center for Entrepreneurship and an Adjunct Professor of Law at Hofstra University. Prior to Hofstra, Mr. Lesko served as the Executive Director of Accelerate Long Island, a regional collaboration between Brookhaven National Laboratory, Cold Spring Harbor Laboratory, Hofstra University, Northwell Health and Stony Brook University that oversaw a seed-stage investment program for biotech companies in New York City and on Long Island. Before Accelerate Long Island, Mr. Lesko was the three-time elected Supervisor of the Town of Brookhaven, New York State’s second-largest town with a population of 486,000 residents.

Earlier today, at the federal courthouse in Central Islip, Jonathan Mayzick, also known as “J-Reck,” a leader of the Nine Trey Gangster set of the Bloods street gang based in Hempstead, New York, was sentenced by United States District Judge Sandra J. Feuerstein to 10 years’ imprisonment for conspiring to murder rival gang members.  The charge arose out of the defendant’s participation in a year-long war with the rival Outlaws street gang in the “Heights” neighborhood of Hempstead.  Judge Feuerstein ordered the sentence imposed today to run consecutively to a 13 ½-year federal prison term that was imposed in 2018 after Mayzick pled guilty to distributing narcotics.  As a result, Mayzick will serve a total of 23 ½ years in prison. 

Seth D. DuCharme, 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. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.

“Mayzick was a leader of a murderous street gang that, in its thirst for revenge, engaged in a shooting rampage that terrorized the community and put the public at risk for over a year,” stated Acting U.S. Attorney DuCharme.  “Today’s lengthy sentence reflects the tireless efforts of this Office and its law enforcement partners to bring an end to senseless violence and loss of life and eradicate gangs like the Bloods.”  

Mr. DuCharme expressed his grateful appreciation to the FBI’s Long Island Gang Task Force, the NCPD’s Gang Investigations Squad and the Firearms Section of the Suffolk County Crime Laboratory for their outstanding investigative work on the case.

“Violent criminals engage in turf battles without any thought about the communities they endanger. Think again.  The agencies which compose the FBI Long Island Gang Task Force put our communities first, and we will work round-the-clock to remove and hold violent offenders accountable. Today’s sentence is the community’s message back that violent behavior comes with consequences, and offenders who break federal law should be prepared for a lengthy stay in federal prison,” stated FBI Assistant Director-in-Charge Sweeney.

“Today’s announcement of another gang member going to jail is a clear reminder that these types of illegal activity will never be tolerated in Nassau County, stated NCPD Commissioner Ryder.  “The arrest and sentencing comes after a lengthy and extensive investigation and I would like to thank the dedicated members of law enforcement for a job well done. We continue to work with our local, state and federal partners to keep our neighborhoods, communities and residents safe.”

Mr. DuCharme expressed his grateful appreciation to the FBI’s Long Island Gang Task Force, the NCPD’s Gang Investigations Squad and the Firearms Section of the Suffolk County Crime Laboratory for their outstanding investigative work on the case.

Between September 2013 and November 2014, Mayzick, along with members of the Nine Trey, engaged in multiple shootings in retaliation for the September 2013 murder of Dante Quinones, a Bloods associate, by Outlaws member Pedro Merchant.  Four individuals were shot by the Bloods: one was shot in the arm, another was shot in the chest and an associate of the Outlaws was shot in the testicles.  When gang members attempted to kill the leader of the Outlaws on the front porch of his home, a teenage girl was shot in the face.  In addition, the homes of several Outlaws members were sprayed with bullets. 

While the gang war was ongoing, Mayzick and his fellow Nine Trey members operated a crack cocaine trafficking business in the Hempstead area.  In January 2018, following his plea of guilty, Mayzick was sentenced by United States District Judge Denis R. Hurley to 162 months’ imprisonment for conspiring to distribute crack cocaine. 

The government’s investigation into the Bloods and Outlaws gang war has led to the arrest and conviction of nine members and associates of the Nine Trey Gangster Bloods and six members and associates of the Outlaws.  Mayzick is the final defendant to be sentenced.  The defendants previously sentenced include:

• Bloods member Billy McLen, who was sentenced to 15 years’ imprisonment following his guilty plea to attempted murder in-aid-of racketeering and discharging a firearm during a crime of violence;
• Bloods members Khalil Brown and Naree Barnes, who were each sentenced to 10 years’ imprisonment following their guilty pleas to discharging firearms during a crime of violence for shooting at a rival gang member on October 21, 2014. 
• Bloods member Jovan Ramirez, who was sentenced to 10 years’ imprisonment following his guilty plea to conspiracy to distribute and possess with intent to distribute cocaine base;
• Bloods member Philip Saunders, who was sentenced to 12 years’ imprisonment following his guilty plea to discharging a firearm during a crime of violence for his role in a May 9, 2014 assault of a rival gang member;
• Bloods associate Johnathan Winslow, who was sentenced to 13 years’ imprisonment following his guilty plea to conspiracy to distribute and possess with intent to distribute cocaine base;
• Bloods associate Rashon Campbell, who was sentenced to 5 years’ imprisonment following his guilty plea to conspiracy to distribute cocaine base;
• Outlaws member Alton Gore, who was sentenced to 15 years’ imprisonment following his guilty plea to assault in aid of racketeering and discharging a firearm in connection with a crime of violence;
• Outlaws member Pedro Merchant, who was sentenced to 20 years’ imprisonment for the September 11, 2013 firearm-related murder of Dante Quinones; and
• Outlaws associate Everett Brown, who was sentenced to 15 years’ imprisonment following his guilty plea to discharging a firearm during a crime of violence for his role in one of three shootings of rivals’ homes committed by the gang on August 19, 2014. 

The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Nicole Boeckmann and Michael Maffei are in charge of the prosecution.

The Defendant:

JONATHAN MAYZICK (also known as “J-Reck”)
Age:  32
Hempstead, New York

E.D.N.Y. Docket No. 16-CR-429 (S-2) (SJF

Earlier today, a criminal complaint was unsealed in federal court in Brooklyn charging Stuart Conklin, a former employee of the Long Island Rail Road (LIRR), with making a false entry in a railroad inspection report required to be maintained by the LIRR under United States Department of Transportation regulations.  Conklin surrendered to federal authorities earlier today, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; Daniel M. Helzner, Acting Special Agent-in-Charge, U.S. Department of Transportation Office of Inspector General, Northeastern Region (DOT-OIG); and Carolyn Pokorny, Inspector General for the Metropolitan Transportation Authority, announced the arrest.

“As alleged, Conklin’s false inspection report endangered passengers on a heavily used line of the Long Island Rail Road and potentially placed scores of riders in harm’s way,” stated Acting United States Attorney DuCharme. “Today’s arrest sends a strong message that this Office is committed to ensuring integrity in reports that are critical to the safe operation of the transport system.” 

“This investigation demonstrates our commitment to maintaining the safety and integrity of commuter rail systems in New York and around the country,” stated DOT-OIG Acting Special Agent-in-Charge Helzner. “Working with our law enforcement and prosecutorial partners, we will continue to hold accountable those individuals who are responsible for inspections and oversight when their neglectful actions compromise the safety of the traveling public.”

“It was an unconscionable betrayal to all New Yorkers for this signal inspector to allegedly claim a critical piece of Long Island Railroad infrastructure was safe when he didn’t even bother to look at it," stated MTA Inspector General Pokorny. “This is yet another example of why the MTA must stop relying on honor systems and implement systemic reforms to verify that claimed work was actually completed. By falsifying federally required documents, this individual put many riders at risk and it is a miracle no one was critically injured because of his actions.”

As alleged in the complaint, Conklin was employed by LIRR as a Signalman and his responsibilities included performing regular inspections of rail bonds.  Rail bonds are electronic jumpers around joints in the rails of a railroad track to ensure continuity of conductivity for signal currents.  Conklin completed an inspection report indicating that he had inspected a particular rail bond on April 26, 2019, and that the bond had passed inspection.  Video footage from a LIRR camera showed that Conklin in fact did not inspect the bond during his shift that day. 

On May 25, 2019, at approximately 3 a.m., a westbound LIRR train collided with the rear of an eastbound train that had pulled onto a sidetrack to permit the westbound train to pass.  A subsequent investigation by the LIRR determined that the rail bond Conklin had falsely indicated he had inspected on April 26, 2019, was broken and was the cause of the derailment.  Conklin submitted a handwritten letter of resignation six days after the derailment.

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

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

The Defendant:

STUART CONKLIN
Age: 63 
Magnolia, Texas

E.D.N.Y. Docket No. 21-MJ-329

A New York man was arrested today for his role in a conspiracy to commit health care fraud and to pay kickbacks and bribes to customers for expensive prescription orders in connection with more than $4 million in Medicare and Medicaid reimbursements.

According to an indictment returned by a federal grand jury in the Eastern District of New York, Robert John Sabet, 44, of Brooklyn, was the owner of Brooklyn Chemists in Gravesend, Brooklyn, and Lucky Care Pharmacy in Flushing, Queens. Since September 2016, Sabet allegedly conspired to bill Medicare and Medicaid for expensive prescription drugs that were not eligible for reimbursement because, among other reasons, they were not needed or not dispensed. Sabet also allegedly conspired to pay kickbacks and bribes to customers to convince them to fill prescriptions at his pharmacies, and to pay customers cash in exchange for the ability to bill Medicare and Medicaid for over-the-counter health care-related products on their behalf.  

In December 2020, Sabet allegedly wired nearly $100,000 from Lucky Care’s bank accounts to an automobile dealership to pay for a luxury car. Investigators conducted a search warrant at Sabet’s home at the time of his arrest and seized a 2020 Porsche Taycan worth over $250,000, as well as cash and luxury goods.

Sabet is charged with conspiracy to commit health care fraud, conspiracy to defraud the United States by paying kickbacks and bribes in connection with the provision of health care services, and unlawfully spending the proceeds of his fraud. The defendant is scheduled for his initial court appearance today before U.S. Magistrate Judge Ramon E. Reyes, Jr. of the U.S. District Court for the Eastern District of New York. If convicted, he faces a maximum penalty of 10 years in prison for conspiracy to commit health care fraud, five years in prison for conspiracy to pay kickbacks and bribes, and 10 years in prison for unlawful spending. 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 Seth D. DuCharme of the Eastern District of New York; Special Agent in Charge Scott J. Lampert of the Health and Human Services Office of Inspector General (HHS-OIG), New York Regional Office; Special Agent in Charge Jonathan D. Larsen of IRS-Criminal Investigation (IRS-CI), New York; and Acting Medicaid Inspector General Frank T. Walsh Jr. of the New York State Office of the Medicaid Inspector General (OMIG) made the announcement.

HHS-OIG, IRS-CI, and OMIG are investigating the case.

Trial Attorney Miriam L. Glaser Dauermann of the Justice Department’s Fraud Section is prosecuting the case.

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

BROOKLYN, NY  – An indictment was unsealed today in federal court in Brooklyn charging Robert John Sabet, the owner of Brooklyn Chemists in Gravesend, Brooklyn, and Lucky Care Pharmacy in Flushing, Queens, with conspiracy to commit health care fraud, conspiracy to defraud the United States by paying kickbacks and bribes in connection with the provision of health care services, and unlawfully spending the proceeds of his fraud. Sabet was arrested today and is scheduled to be arraigned this afternoon via videoconference before United States Magistrate Judge Ramon E. Reyes, Jr. 

Seth D. DuCharme, 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; Scott J. Lampert, Special Agent-in-Charge, Health and Human Services, Office of Inspector General, New York Regional Office (HHS-OIG); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI); and Frank T. Walsh, Jr., Acting Medicaid Inspector General, New York State Office of the Medicaid Inspector General (OMIG), announced the arrest and indictment..

“The defendant’s alleged participation in health care fraud, and his payment of kickbacks and bribes, corrupted the trusted relationship between pharmacies and patients, and potentially harmed the very people that the Medicare and Medicaid programs are intended to serve,” stated Acting U.S. Attorney DuCharme.

“Billing Medicare and Medicaid for medically unnecessary costs diverts taxpayer funds from their intended purpose of providing life-sustaining health care services to beneficiaries. Sabet’s alleged payment of bribes and kickbacks also threatens the integrity of federal health care programs. It is unacceptable when health care providers seek personal enrichment by defrauding the programs on which their patients rely, and along with our law enforcement partners, we will continue to hold these individuals accountable for their actions,” stated HHS-OIG Special Agent-in-Charge Lampert.

“Many Americans rely heavily on the social safety nets provided by Medicare and Medicaid when they are needed,” stated IRS Special Agent-in-Charge Larsen.  “Benefiting personally as alleged impacts all of us both today and tomorrow.”

“Particularly as we continue to recover from the COVID pandemic, individuals who commit Medicaid fraud prey on the most vulnerable New Yorkers, threaten the viability of programs that provide vital health care services, and steal taxpayer dollars. My office will continue to work closely with our partners in law enforcement to hold fully accountable those who seek to exploit the Medicaid program for personal gain,” stated OMIG Acting Inspector General Walsh.

As set forth in court filings, since September 2016, Sabet allegedly conspired to bill Medicare and Medicaid for expensive prescription drugs that were not eligible for reimbursement because they were not needed or not dispensed. Sabet also allegedly conspired to pay kickbacks and bribes to customers to convince them to fill prescriptions at his pharmacies, and to pay customers cash in exchange for the ability to bill Medicare and Medicaid for over-the-counter health care-related products on their behalf.  

In December 2020, Sabet allegedly wired nearly $100,000 from Lucky Care’s bank accounts to an automobile dealership to pay for a luxury car. Investigators conducted a search warrant at Sabet’s home at the time of his arrest and seized a 2020 Porsche Taycan worth over $250,000, as well as cash and luxury goods.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Sabet faces a maximum sentence of 10 years in prison for conspiracy to commit health care fraud; five years in prison for conspiracy to pay kickbacks and bribes and 10 years in prison for unlawful spending.

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

The Defendant:

ROBERT SABET
Age:  44
Brooklyn, New York

E.D.N.Y. Docket No.: 21-CR-140 (VMS)

A criminal complaint was unsealed today in federal court in Brooklyn charging Ryan Behar with attempted sexual exploitation of a child.  The charges relate to sexually explicit live streamed and recorded depictions that the defendant requested from a minor whom he targeted on Instagram.  Behar was arrested today and will make his initial appearance via videoconference this afternoon before United States Magistrate Judge Sanket J. Bulsara.

Seth D. DuCharme, 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 arrest and charge.

“As alleged, Behar misused social media in an effort to lure an underage teenager into having sexually explicit communications with him,” stated Acting United States Attorney DuCharme.  “This Office will continue to make every effort to protect minors and hold to account those who contribute to their victimization.”  Mr. DuCharme extended his grateful appreciation to the FBI Violent Crimes Against Children Squad for its investigative work, the New York City Police Department and the Richmond County District Attorney’s Office for their assistance on the case. 

“Predators are appallingly aggressive in targeting society’s youth.  If you think your child or teen is shielded from this type of predator, who can quietly target your child without ever having to physically enter your home, please think again.  Do you know who your children are interacting with online?  Have you asked?  Adults did not grow up with this type of threat. Technology has changed, and we need your help educating and protecting our children,” stated FBI Assistant Director-in-Charge Sweeney.  “We believe Mr. Behar had contact with many more victims, and we are urging those victims or their parents or guardians to call us at 1-800-CALL-FBI, or reach out for us online at tips.fbi.gov.”

As set forth in court filings, beginning on September 13, 2020, Behar, age 42, falsely claimed he was a teenage boy and engaged in a series of sexually explicit communications with the 16-year-old victim.  Using an Instagram account, Behar repeatedly messaged the victim requesting that the victim create pornographic videos, photographs and live visual depictions.  These communications occurred between September 2020 and October 2020.  During these communications, Behar also sent the victim sexually explicit images he represented to be of himself and directed her to perform sexual acts while participating in video calls.

The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted of attempted sexual exploitation of a child, Behar faces a mandatory minimum sentence of 15 years’ imprisonment and a maximum of 30 years in prison.

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

The government’s case is being handled by the Office’s General Crimes Section. Assistant United States Attorney Garen S. Marshall is in charge of the prosecution.

The Defendant:

RYAN BEHAR
Age:  42
Staten Island, New York

E.D.N.Y. Docket No. 21-MJ-293

Seth D. DuCharme is resigning as Acting United States Attorney for the Eastern District of New York effective March 19, 2021. Mr. DuCharme has served in the position as chief federal law enforcement officer for the district comprising Brooklyn, Queens and Staten Island in New York City, and Nassau and Suffolk Counties on Long Island, since July 10, 2020. Earlier today, Mr. DuCharme sent letters to President Biden and Acting United States Attorney General Monty Wilkinson informing them of his decision.

First Assistant U.S. Attorney Mark J. Lesko will become the Acting U.S. Attorney upon Mr. DuCharme’s departure.

Statement from Acting United States Attorney DuCharme:

“Earlier today, I announced that I am stepping down as Acting U.S. Attorney in the Eastern District of New York, effective March 19, 2021.  I have enjoyed a long and rewarding career in the Department, from Deputy U.S. Marshal to Principal Deputy Associate Attorney General of the United States, to my current position.  At each stage of my career, I was blessed to be faced with worthy challenges on behalf of the American people.  My time in EDNY and the Department gives me great confidence that the American people are well served by forward-leaning professionals, who put mission first, and assume risks every day on behalf of the people they are sworn to serve.  My guiding principles have been to serve others and to do my best to go where I am needed most.  After having had the opportunities to serve at so many levels, from junior AUSA, to close advisor to the Attorney General and Deputy Attorney General, and most recently as Acting U.S. Attorney, I am now thrilled to be spending more time with my family, and to transitioning thoughtfully and successfully into private practice, where I intend to serve clients zealously, capably and honorably. To all of those who offered me the chances to take risks, to test myself against the most skilled adversaries in the defense bar, to grow as a lawyer, and to serve the public, I am forever grateful.  Over the next two weeks, I will be increasingly shifting responsibility to my First Assistant U.S. Attorney, Mark Lesko – a proven professional who has served the District and the nation with distinction.  I have great confidence that the Office and the Department will function smoothly and effectively as we prepare for my departure.”

During his tenure as Acting U.S. Attorney, Mr. DuCharme’s notable achievements include the expansion of  the Office’s Rapid and Strategic Prosecution (RASP) Initiative to more effectively use crime data to identify, investigate, disrupt and prosecute violent armed criminals and organizations; and the creation of a Bank Integrity Task Force to investigate and charge corporate and individual actors who launder criminal proceeds using the U.S. banking system and to enforce anti-money laundering controls.

Prior to his designation as Acting United States Attorney, Mr. DuCharme served as the Principal Associate Deputy Attorney General at the Department of Justice in Washington, D.C. from December 2019 until July 2020.  From March 2019 to December 2019, Mr. DuCharme served as Counselor to Attorney General William P. Barr.  He worked with Attorney General Barr and Deputy Attorney General Jeffrey Rosen to supervise and coordinate the work of all of the Department’s components, including all 94 United States Attorney’s Offices.  In addition, he helped to coordinate national initiatives against fraud, opioid trafficking, transnational organized crime, international terrorism and other national security priorities. 

Prior to his work at Main Justice, Mr. DuCharme served as Chief of the Criminal Division in the U.S. Attorney’s Office for the Eastern District of New York, where he initiated and supervised numerous investigations and prosecutions across a wide range of subject areas, including corporate and securities fraud, terrorism, cybercrime, public corruption, international narcotics trafficking, civil rights violations, and violent and organized crime. 

Mr. DuCharme first joined the U.S. Attorney’s Office for the Eastern District of New York in March 2008 and has served in the General Crimes, Violent Crimes and Terrorism, and National Security and Cybercrime Sections.  He also has served as Chief and Deputy Chief of the Office’s National Security and Cybercrime Section, the Office’s National Security Cyber Specialist and the Office’s representative on the Anti-Terrorism Advisory Council.

BROOKLYN, NY – The United States Court for the Eastern District of New York  has permanently enjoined a New York company and its operators from manufacturing or distributing dietary supplements unless and until they comply with the law, the Department of Justice Civil Division’s Consumer Protection Branch and the United States Attorney’s Office for the Eastern District of New York announced today.

A complaint filed May 23, 2019, alleged that defendants Confidence USA Inc., of Port Washington, New York, the company’s president Helen Chian, and manager Jim Chao violated the Federal Food, Drug, and Cosmetic Act (FDCA) by distributing adulterated dietary supplements. The complaint alleged that inspections conducted by the U.S. Food and Drug Administration (FDA) in 2016, 2017, and 2018 showed that the defendants repeatedly failed to verify that their finished dietary supplements met product specifications for identity, purity, strength, composition, and contamination limits, and failed to verify the identity of each dietary ingredient used in the manufacture of the supplements. The United States filed the complaint in U.S. District Court for the Eastern District of New York at the request of the FDA.

            “The millions of Americans who take dietary supplements trust that they are unadulterated and meet product specifications under good manufacturing practice regulations,” said Acting U.S. Attorney Seth D. DuCharme. “The injunctive relief obtained by the United States in this case protects consumers by requiring defendants to follow the law and adhere to the regulations in manufacturing and distributing dietary supplements.”

“American consumers expect dietary supplements to contain the ingredients stated on the label, in the stated amounts,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The department will continue to work with the FDA to ensure that dietary supplement manufacturers follow the law.”

“Consumers deserve access to dietary supplements that are manufactured to assure their quality. If a dietary supplement company repeatedly fails to comply with basic good manufacturing practice requirements, the public cannot trust that their products are what they say they are,” said Judy McMeekin, Pharm.D., FDA’s Associate Commissioner for Regulatory Affairs. “The FDA will continue to protect American consumers by taking appropriate actions necessary when companies violate the law.”

According to the complaint, the defendants made and distributed more than 50 dietary supplements under brand names that include Confidence USA, American Best, USA Natural and The Herbal Store.

Dietary supplements not prepared, packed and held in conformance with current good manufacturing practices (cGMP) regulations are adulterated in violation of the FDCA. The FDA issued a warning letter to Confidence USA in 2011 regarding deficiencies with the company’s manufacturing practices, and U.S. Marshals previously seized certain Confidence USA products in connection with a 2012 complaint alleging the products were adulterated.

Assistant United States Attorney Robert Schumacher from the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Raquel Toledo of the Justice Department’s Consumer Protection Branch handled the case, with assistance from Associate Chief Counsel for Enforcement Jennifer Argabright of the FDA’s Office of General Counsel.

E.D.N.Y. Docket No: 19–CV–3073 (ERK)

Earlier today, in federal court in Brooklyn, a three-count indictment was unsealed charging Jacob Daskal with coercing a minor to engage in illicit sexual conduct, transportation of a minor with intent to engage in criminal sexual activity and travelling with intent to engage in illicit sexual conduct.  Daskal was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Peggy Kuo. 

Seth D. DuCharme, 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 arrest and charges. 

“As alleged, Daskal, who was almost 60 years old when these crimes were committed, exploited the vulnerability of a young teenager by grooming her for sex and enticing her into having sexual relations with him,” stated Acting United States Attorney DuCharme.  “Protecting underage minors from flagrant sexual abuse and predators like the defendant will always be a high priority of this Office and the Department of Justice.”  Mr. DuCharme expressed his grateful appreciation to the Kings County District Attorney’s Office and the New York City Police Department for their assistance with the case.

“A man who founded an organization aimed at creating a safer community should know the difference between right and wrong.  As we allege, Mr. Daskal’s position of influence may have helped him attempt to silence his victim, but it won’t stop the FBI from holding him accountable. Sexually exploiting a teenaged girl is a crime that carries severe consequences, and we hope Mr. Daskal’s arrest will demonstrate to other victims that they can come forward. We are asking anyone with information about this investigation or the identities of additional victims to call us at 212-384-1000,” stated FBI Assistant Director-in-Charge Sweeney. 

As set forth in court filings, between August and November 2017, Daskal, then age 59, allegedly engaged in a sexual relationship with a 15-year-old girl whom he took into his home in Brooklyn, where he groomed her for sex.  During the summer of 2017, Daskal is alleged to have engaged in sexual relations with the victim primarily at his residence and at his summer home in South Fallsburg, New York.   In October 2017, the victim moved to Chicago to attend a new school and live with another family.  While the victim was in Chicago, Daskal communicated with her via text message and over Skype video chat.  He requested that she pose nude for him during their video chats and send him nude photographs as well. On November 5, 2017, Daskal traveled by plane to Chicago to visit the victim and brought her to a hotel room he had booked.  There, he engaged in sexual intercourse and oral sex with the victim.

Throughout the abuse, Daskal was the founder and chief of the Borough Park Shomrim Society, a private anti-crime patrol group, a position in the community which led the victim to feel threatened when he told her not to tell anyone about their sexual relationship. 

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of the charges, Daskal faces a mandatory minimum of 10 years’ imprisonment and a maximum of life in prison.

The government’s case is being prosecuted by the office’s Civil Rights Section.  Assistant United States Attorneys Erin Reid and Jonathan Algor are in charge of the prosecution. 

The Defendant:

JACOB DASKAL
Age:  62
Brooklyn, New York

E.D.N.Y. Docket No. 21-110 (NGG)

 

Innovative Educational Programs, LLC (Innovative), an educational services provider, has agreed to pay the United States $1,185,000 to resolve civil allegations that it fraudulently billed the United States for tutoring services for underprivileged New York City students that it never actually provided. 

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Terry Harris, Special Agent-in-Charge, U.S. Department of Education, Office of Inspector General, Eastern Regional Office (DOE-OIG), announced the settlement. 

“This settlement should put providers of educational services on notice that this Office will aggressively protect federal programs meant to help disadvantaged students and will hold accountable those who exploit and manipulate such programs,” stated Acting United States Attorney DuCharme.

“The Office of Inspector General has a unique and special law enforcement mission – to protect public education funds for eligible students. Today’s settlement is a result of the hard work and effort of OIG special agents and staff,” stated DOE-OIG Special Agent-in-Charge Harris. “I'm proud of their efforts, as well as those of our law enforcement partners and the U.S. Attorney’s Office whose actions today corroborates the importance of maintaining the integrity of Federal education programs and the taxpayer funds that support them.” 

The settlement resolves allegations that, between 2009 and 2012, Innovative, a New Jersey limited liability corporation, fraudulently obtained federal funds for purportedly providing after-school tutoring services to underprivileged students attending underperforming New York City public schools.  The New York City Department of Education paid Innovative $72.80 per hour for each student that Innovative tutored.  This money consisted entirely of funds made available to New York State by the United States under the Elementary and Secondary Education Act of 1965, as amended by the No Child Left Behind Act of 2001.  As a condition for receiving payment for its tutoring services, Innovative was required to certify that its attendance records were true and accurate.  The government’s investigation revealed that Innovative billed the government for allegedly providing after-school tutoring services to students on days when the students were, in reality, absent from school. 

The allegations were brought to the government’s attention through the filing of a complaint pursuant to the qui tam provisions of the False Claims Act (the Act).  Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery.  The Act also permits the government to intervene in such actions, as the government has done in this case.

The claims resolved by the settlement are allegations only and there has been no finding of liability by a court.  Innovative has expressly denied these allegations and any liability under the Act.  

The United States’ case was handled by Assistant U.S. Attorney James R. Cho of the Office’s Civil Division, with assistance from Affirmative Civil Enforcement Paralegal Loan Nguyen. 

E.D.N.Y. Docket No. 12-CV-094 (FB)

A third superseding indictment was unsealed today in federal court in Brooklyn charging 11 members and associates of the violent New York City-based street gang known as the “Bully Gang” with racketeering for their role in multiple crimes, including attempted murder, armed robbery, narcotics trafficking, bribery, extortion and money laundering.  Charges against multiple co-conspirators were also unsealed, including a New York City Department of Correction (DOC) officer and a former DOC officer who are charged with participating in a drug trafficking conspiracy led by the founder and leader of the Bully Gang which trafficked drugs into DOC facilities.  Six defendants were arrested in the New York area today and will be arraigned via videoconference this afternoon before United States Magistrate Judge Vera M. Scanlon.  The remaining defendants will be arraigned at a later date.  

Seth D. DuCharme, 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, New York Field Division (ATF), Dermot F. Shea, Commissioner, New York City Police Department (NYPD), and Margaret Garnett, Commissioner, New York City Department of Investigation (DOI), announced the arrests and charges.

“For years, members and associates of the Bully Gang have committed brutal and wanton acts of violence while spreading the poison of dangerous and illicit drugs throughout communities and even correctional institutions,” stated Acting United States Attorney DuCharme.  “Thanks to the tireless efforts of our law enforcement partners, today’s charges mark significant progress towards permanently neutralizing the Bully Gang and dismantling its destructive drug-trafficking network.” 

“Today, a sophisticated criminal network, committing acts of violence, trafficking in firearms, and distributing dangerous narcotics across the east coast has been dismantled. Thanks to the unwavering efforts of the ATF/NYPD Joint Firearms Task Force, these Bully Gang members and their associates are off the streets and facing lengthy prison sentences, where they will no longer be a threat to public safety,” stated ATF Special Agent-in- Charge DeVito.

“This investigation deals a substantial blow to gang violence on our City streets and demonstrates the critical need to uphold integrity as a City employee and in all City operations. As charged, these current and former City Correction officers used the access and influence of their position to traffic dangerous drugs from the Bully Gang to inmates on Rikers Island in exchange for bribes, undermining the safety of the City's jails and that of their fellow officers. DOI is proud to partner with the U.S. Attorney for the Eastern District of New York, the ATF, and the NYPD on this important investigation and we will continue to work together to protect our City jails from contraband smuggling,” stated DOI Commissioner Garnett.

As set forth in the indictment and other court filings, the defendants used force and violence to promote their power, terrorize surrounding communities and enrich themselves and their members.  For example, in June 2018, Moeleek Harrell, the founder and leader of the Bully Gang, conspired with Derrick Ayers, another member, to murder a perceived “rival” of the gang, whom Harrell later shot at multiple times on a street in Brooklyn.  Harrell’s leadership of the gang continued even after his incarceration at Rikers Island, where he led a drug trafficking, bribery and money laundering scheme responsible for smuggling drugs into the jail through the use of conspirators and the payment of bribes to correctional officers. 

As alleged, the defendants also operated a years-long, sophisticated drug trafficking network responsible for trafficking large quantities of dangerous drugs like cocaine base (“crack”), heroin and fentanyl through New York to Maine, and elsewhere.  As alleged, the gang’s leaders sent Brooklyn-based drug dealers, including Bully Gang members and associates, from New York to Maine to operate “trap” houses where narcotics were stored and sold.  The organization’s drug proceeds were collected on a regular basis and laundered through financial transactions and the purchase of high-value assets, including jewelry and cars.  During the investigation, law enforcement seized more than $380,000 in cash, more than 15 firearms, six kilograms of cocaine, 600 grams of fentanyl, multiple luxury watches and four vehicles with concealed “trap” compartments installed.

In the summer of 2020, Bully Gang members Franklin Gillespie and Latrell Johnson committed a spree of gunpoint robberies, displaying firearms to victims on the street in lower Manhattan to overpower them.  In 2020 and 2021, Johnson also extorted a local business in Brooklyn, brandishing a firearm as part of the extortion scheme.

Between June 2019 and June 2020, Johnny Chiles, currently employed by DOC as an officer, and then-DOC officer Darius Murphy accepted payments from gang associates in exchange for delivering papers soaked in synthetic cannabinoids to inmates at Rikers Island. 

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 Organized Crime and Gangs Section and Public Integrity Section.  Assistant United States Attorneys Drew G. Rolle, Nicholas J. Moscow and Lindsey R. Oken and Special Assistant United States Attorney Virginia T. Nguyen, are in charge of the prosecution.

New Defendants:

KASSIN APPLING (also known as “Killa” and “Kassim”)
Age: 34
Brooklyn, New York

JOHNNY CHILES
Age: 36
Brooklyn, New York

RONALD DAVIS (also known as “Ronno”)
Age: 29
Brooklyn, New York

BRITTANY DUNCAN
Age: 26
Bayonne, New Jersey

NEHEMIE ERIL (also known as “Poca”)
Age: 24
Orange, New Jersey

LARON ESTRADA (also known as “Yetta”)
Age: 27
Brooklyn, New York

ROBERT HOLT (also known as “Ricky” and “Ghost”)
Age: 33
Brooklyn, New York

DARIUS MURPHY
Age:  24
Brooklyn, New York

TERRELL RATLIFF (also known as “Rello”)
Age: 29
Brooklyn, New York

JAMEL SMITH
Age: 23
Bronx, New York

Defendants Previously Indicted:

JESSICA ALMEIDA
Age: 33
Detroit, Maine

DERRICK AYERS (also known as “Dee” and “Mel”)
Age: 34
Rahway, New Jersey

TYRONE BANKS (also known as “Ty Hitta”)
Age: 23
Brooklyn, New York

JANET BLOOD
Age: 47
Troy, Maine

DAYVON BOSTICK-SAMUELS (also known as “Daytoe”)
Age:  22
Brooklyn, New York

BERMON CLARKE (also known as “G” and “Blue”)
Age: 28
Rahway, New Jersey

MIKE GUSTAVO CONNOR (also known as “Gus”)
Age:  21
Brooklyn, New York

RASHAAD CRAIG (also known as “Skeeno”)
Age:  25
Brooklyn, New York

QUINTEN DELVALLE (also known as “Q”)
Age:  24
Brooklyn, New York

ELIZABETH DUECASTER
Age: 35
Searsport, Maine

CHRISTINA ESTEVEZ
Age: 31
Queens, New York

ERICA FAGGIOLE
Age: 44
Maine

ANTONIO FULTON (also known as “Tone”)
Age: 23
Brooklyn, New York

FRANKLIN GILLESPIE (also known as “Spazz” and “Frankie Gino”)
Age: 30
Newark, New Jersey

ROMEO GONZALES
Age:  22
Brooklyn, New York

NIA GOVAN (also known as “Cam” and “V”)
Age: 29
Boston, Massachusetts

KEON GRANT (also known as “Keys”)
Age: 34
Brooklyn, New York

MOELEEK HARRELL (also known as “Moe Money”)
Age: 31
Brooklyn, New York

PAUL HARRIS (also known as “Baldhead”)
Age: 31
Brooklyn, New York

NADINE HEATH
Age:  54
Troy, Maine

AMANDA HUARD
Age: 38
Raymond, Maine

LATRELL JOHNSON (also known as “Barlie Buckz”)
Age: 27
Brooklyn, New York

ANTHONY KENNEDY (also known as “Biggie”)
Age: 34
Queens, New York

TYQUAWN LANE (also known as “Bicks” and “Tah Tah”)
Age: 27
Brooklyn, New York

JOANNE LYDEM
Age:  49
Garland, Maine

JESSICA PELKEY
Age: 26
Presque Isle, Maine

CHRISHAWN PENN (also known as “Prince”)
Age: 26
Brooklyn, New York

MICHAEL PEREZ (also known as “White Mike”)
Age: 29
Brooklyn, New York

JOELLE POCHE (also known as “Rico”)
Age: 21
Brooklyn, New York

MICHAEL REID (also known as “Half”)
Age:  39
Brooklyn, New York

ISAIAH TERRY SANDIFORD
Age: 21
Brooklyn, New York

CHINASA STRACHAN
Age:  33
Brooklyn, New York

NICOLETTE TOMPKINS
Age: 22
Westfield, Maine

AMANDA WALTON (also known as “A”)
Age: 32
Portland, Maine

DANIELLE WHITE
Age:  47
Swanville, Maine

E.D.N.Y. Docket No. 20-CR-239 (S-3) (BMC)

 

A Serbian man was charged in an indictment today for his alleged participation in a coordinated cryptocurrency scheme in which he solicited U.S. investors using two fraudulent online investment platforms. 

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division, Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York, Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office, and Special Agent in Charge Ryan L. Korner of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement.

Kristijan Krstic, 45, was charged in an indictment filed today in the Eastern District of New York with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit money laundering.

According to the indictment, Krstic was the founder of two digital-asset investment platforms, “Start Options” and “B2G,” and also served as the chief financial officer of Start Options. As alleged, between approximately 2017 and 2018, Krstic and others fraudulently induced U.S.-based investors to purchase securities in the form of investment contracts in Start Options and B2G. In order to perpetuate the fraud, Krstic allegedly used the alias “Felix Logan” and created the Twitter handle “@felixlogan_cfo” to communicate with investors in Start Options and B2G.    

The indictment alleges that Start Options purported to be an online investment platform that provided cryptocurrency mining and digital-asset trading services, including trading in cryptocurrencies, commodities, stocks, and indices. Start Options also allegedly claimed that it was “the largest Bitcoin exchange in euro volume and liquidity” and that it was “consistently rated the best and most secure Bitcoin exchange by independent news media.” The indictment further alleges that B2G purported to be an “ecosystem” that would allow users to trade B2G tokens, as well as digital and fiat currencies, “on a secure, comprehensive platform.”

As alleged, Krstic and others represented that once investors opened a B2G account, a deposit of B2G “open[ed] a door to all the curtains inside Aladdin’s cave. Dollars buy B2G; B2G tokens can be exchanged back into dollars, or for Euros, or for other national fiat currencies. B2G holdings can be traded for original bitcoin or other altcoins.”

According to the indictment, however, both Start Options and B2G were fraudulent. In truth, the money sent by investors in Start Options and B2G allegedly was never invested and instead was laundered internationally to a Phillippines-based financial account and digital-currency wallet, and diverted to a U.S.-based promoter of the fraud. Subsequently, as alleged, the promoter transferred to Krstic approximately $7 million in investor funds from B2G and Start Options, and Krstic thereafter stopped responding to all communications and absconded with those investors’ funds. A press release issued by Start Options claimed that the company had been sold to Russian venture capitalists.

The former Director of North American Operations for Start Options and B2G, John DeMarr, 55, of Santa Ana, California, was previously charged for his role in the scheme.

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

This case was investigated by the FBI and IRS-CI. Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Kaitlin Farrell, Hiral Mehta, and David Pitluck of the Eastern District of New York are prosecuting the case, with assistance on forfeiture matters from Assistant U.S. Attorney Laura Mantell. 

The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.

An indictment was unsealed today in federal court in Brooklyn charging Larby Amirouche with conspiracy to commit bank and wire fraud, bank fraud, making false statements to banks and conspiracy to commit money laundering.  These charges are brought in connection with a series of internet marketing schemes that utilized internet e-commerce websites to defraud consumers and financial institutions.  Amirouche was arrested today and will make his initial appearance this afternoon in federal court in Chicago, Illinois.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS-CI), announced the arrest and the charges. 

“Amirouche was the alleged ringleader of an elaborate internet marketing scheme designed to fleece unwitting consumers and financial institutions,” stated Acting United States Attorney DuCharme.  “This Office is committed to protecting consumers from fraudulent marketing practices and ensuring integrity in the e-commerce marketplace.”

“Amirouche allegedly victimized unsuspecting consumers by creating a web of lies in layering financial transactions to ultimately defraud these victims for his own personal gain,” stated IRS Special Agent-in-Charge Larsen. “IRS-Criminal Investigation stands at the ready to follow the money and unravel these fraudulent schemes to protect the integrity of our financial system.”  

As detailed in the indictment and other court documents, Amirouche was the managing member of Angry Elephant Marketing LLC and Purple Whale Management LLC.  Between January 2012 and April 2016, Amirouche allegedly orchestrated a series of internet marketing schemes that utilized internet e-commerce websites that purported to sell various types of dietary supplements, hair care products, skin care products, testosterone and web-based business tutorials.  Amirouche and his co-conspirators earned illegal profits by (1) charging consumer credit cards for products that were ordered, but never delivered to the consumer; (2) charging consumer credit cards for products that were not purchased by the consumers and (3) repeatedly charging consumers for products that they had ordered from Amirouche’s websites.

Amirouche and his co-conspirators set up dozens of shell companies fronted by nominees they recruited to distance themselves from the fraudulent schemes and maximize the ill-gotten profits.  The profits were funneled to a bank account that was in the name of a nominee, but was actually controlled by Amirouche.  From that account, Amirouche sent over $1.3 million to bank accounts in the names of other companies he controlled.

Amirouche and his co-conspirators also fraudulently established bank and merchant accounts for the shell companies so they could process credit card transactions and collect and transfer the proceeds of their crimes. 

In addition, Amirouche and his co-conspirators concealed material information from the financial institutions that supported the merchant card accounts.  The misrepresentations were designed to prevent the financial institutions from discovering the frauds, which would have led to the financial institutions shutting off the accounts for the websites and stopping payment of funds to Amirouche.

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

The government’s case is being handled by the Office’s Business & Securities Fraud Section.  Assistant United States Attorneys David Pitluck and Michael Keilty are in charge of the prosecution. 

The Defendant:

LARBY AMIROUCHE
Age:  31
Chicago, Illinois

E.D.N.Y. Docket No. 21-CR-64 (RPK)

 

BROOKLYN, NY – Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Krstijan Krstic with conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering for his alleged participation in a cryptocurrency scheme in which he solicited U.S. investors using two fraudulent online investment platforms.   

Seth D. DuCharme, 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, Kristi K. Johnson, Assistant Director-in-Charge, Federal Bureau of Investigation, Los Angeles Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, Los Angeles Field Office (IRS-CI), announced the indictment.

“As alleged, Krstic convinced U.S. investors to pour millions of dollars into fraudulent cryptocurrency schemes through misrepresentations and false statements, and then ran off with their money,” stated Acting U.S. Attorney DuCharme. “This Office is committed to vigorously prosecuting those who cheat investors."  Mr. DuCharme expressed his grateful appreciation to the U.S. Securities and Exchange Commission, New York Regional Office, for its assistance with the case.

“Mr. Krstic and others devised fraudulent platforms which purported to offer sophisticated options appealing to bitcoin investors, then fabricated positive reports about the company in an attempt to add legitimacy to the scheme,” stated FBI Assistant Director-in-Charge Johnson. “Cryptocurrency scams are on the rise. The charges against Mr. Krstic should send a message that the FBI and our partners take securities fraud very seriously and will hold accountable individuals who steal from American investors.”

“Today’s indictment of Kristijan Krstic highlights just how seriously IRS Criminal Investigation and the federal law enforcement community are taking criminal activity related to cryptocurrency and online fraud schemes,” stated Special Agent-in-Charge Korner. “Under the cloak of an international online digital currency exchange, $7 million in investor funds from B2G and Start Options were allegedly funneled from unwitting investors directly to Krstic’s pocket. Whether online or on the streets, financial crime never pays, and IRS Criminal Investigation will continue to work tirelessly to ensure those who are involved are brought to justice.

As alleged in the indictment, Krstic was the founder of two digital-asset investment platforms, “Start Options” and “B2G,” and also served as the chief financial officer of Start Options.  Between approximately 2017 and 2018, Krstic and others fraudulently induced U.S.-based investors to purchase securities in the form of investment contracts in Start Options and B2G.  To perpetuate the fraud, Krstic used the alias “Felix Logan” and created the Twitter handle “@felixlogan_cfo” to communicate with investors in Start Options and B2G. 

Start Options purported to be an online investment platform that provided cryptocurrency mining and digital-asset trading services, including trading in cryptocurrencies, commodities, stocks and indices.  Start Options also claimed that it was “the largest Bitcoin exchange in euro volume and liquidity” and that it was “consistently rated the best and most secure Bitcoin exchange by independent news media.”  B2G purported to be an “ecosystem” that would allow users to trade B2G tokens, as well as digital and fiat currencies, “on a secure, comprehensive platform.”  Krstic and others represented that once investors opened a B2G account, a deposit of B2G “open[ed] a door to all the curtains inside Aladdin’s cave. Dollars buy B2G; B2G tokens can be exchanged back into dollars, or for Euros, or for other national fiat currencies. B2G holdings can be traded for original bitcoin or other altcoins.”

In reality, the money sent by investors in Start Options and B2G was never invested as promised, and instead was funneled to a Philippines-based financial account and digital-currency wallet, and to a U.S.-based promoter of the fraud.  Subsequently, the U.S.-based promoter transferred approximately $7 million in investor funds from B2G and Start Options to Krstic, and Krstic thereafter stopped responding to all communications and absconded with those investors’ funds.  A press release issued by Start Options falsely claimed that the company had been sold to Russian venture capitalists.

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

This case was investigated by the FBI and IRS-CI.  The prosecution is being handled by the Business & Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section.  Assistant U.S. Attorneys Kaitlin T. Farrell, Hiral D. Mehta and David C. Pitluck of the Eastern District of New York, assisted by a Special Agent of the Eastern District of New York’s Business & Securities Fraud Section and Trial Attorney Kevin Lowell of the Criminal Division are prosecuting the case.  Assistant U.S. Attorney Laura D. Mantell of the Eastern District of New York’s Civil Division is handling forfeiture matters.  

The Defendant:

KRISTIJAN KRSTIC
Age:  45
Serbia

E.D.N.Y. Docket No.: 21-CR-

A criminal complaint was unsealed today in federal court in Brooklyn charging Bruce Schoengood, the chief executive officer of Medifirst Solutions, Inc. (MFST"), a publicly-traded company, with securities fraud in connection with a scheme that yielded hundreds of thousands of dollars in profits for Schoengood and others, while defrauding MFST investors.  Schoengood was arrested earlier today and made his initial appearance this afternoon via videoconference before United States Magistrate Judge Robert M. Levy.  The defendant was released on a $500,000 bond.

Seth D. DuCharme, 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 charge.

“CEOs of publicly-traded companies cannot enrich themselves at the expense of investors by illegally manipulating the stock of their companies,” stated Acting United States Attorney DuCharme.  “This Office is committed to upholding the integrity of financial markets and to prosecuting, to the fullest extent of the law, company executives who abuse investors' trust.”  Mr. DuCharme expressed his grateful appreciation to the U.S. Securities and Exchange Commission for its assistance with the case. 

“As alleged, Schoengood stood to illegally profit from the exploitation of his victims, whom he defrauded through manipulative practices carried out in relation to the purchase and sale of stock for Medifirst Solutions, Inc. These illegal business practices, while all too common, tend to catch the eye of federal investigators. The FBI is committed to bringing to justice all those who attempt to defeat the integrity of the financial markets in this way,” stated FBI Assistant Director-in-Charge Sweeney.

According to the complaint, between May 2016 and January 2019, Schoengood, together with others, engaged in a scheme to defraud MFST investors by manipulating the volume of MFST stock and concealing the sale of that stock by others.  Specifically, Schoengood entered into sham consulting agreements with a co-conspirator (Co-Conspirator 1) so that Co-Conspirator 1 would appear to be working for MFST.  Schoengood then transferred MFST stock to Co-Conspirator 1 and made false statements in public filings and related filings to enable the shares to be deposited and sold by Co-Conspirator 1, so that Co-Conspirator 1 and an investment relations firm could participate in the undisclosed promotion of MFST stock.  Schoengood also issued stock to co-conspirators so that they could sell their shares into the artificially created volume by Co-Conspirator 1 and the investment relations firm, then “kickback” portions of the proceeds to Schoengood.

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

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

The Defendant:

BRUCE SCHOENGOOD
Age:  62
Manalapan, New Jersey

E.D.N.Y. Docket No. 20-MJ-206

Hugo Hernandez-Velazquez, also known as “Norberto Hernandez Velasquez” and “La Gallina,” will be arraigned via videoconference this afternoon before United States Magistrate Judge Vera M. Scanlon at the federal courthouse in Brooklyn on a 12-count indictment. Along with his siblings Arcelia Hernandez-Velazquez, also known as “La Gordis,” and Ernesto Hernandez-Velazquez, also known as “Chapas,” Hugo Hernandez-Velazquez is charged with racketeering and racketeering conspiracy involving predicate acts of sex trafficking by force, fraud and coercion, interstate prostitution, alien smuggling, money laundering and related offenses.  Hugo Hernandez-Velazquez was arrested on a provisional arrest warrant in August 2020 and extradited on Wednesday, February 17, 2021, from Mexico to the United States.  His co-defendants were previously arrested in New York in November 2019 and are currently awaiting trial.

Seth D. DuCharme, 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 charges.

“For nearly two decades, the defendants lured young women into a brutal life of forced prostitution through false promises of a better life,” stated Acting United States Attorney DuCharme. “This Office will leave no stone unturned in its efforts to end the illegal exploitation of young women and in holding the defendants to account for their crimes and the lasting harm they have inflicted on their victims.”

Mr. DuCharme thanked the Department of Justice’s Office of International Affairs for their assistance, the New York City Police Department for its longstanding partnership in the Office’s coordinated anti-trafficking program, and the State Department.  Mr. DuCharme also thanked the many victim service providers and advocates for their dedicated efforts to restore and improve the lives of survivors of trafficking.  In particular, Mr. DuCharme thanked the organizations and individuals who provided services and advocacy to the victims in this case.

“Words can’t describe the type of person who preys on and victimizes women by forcing them into prostitution while using violence to maintain control over them.  Hugo Hernandez-Velazquez and his organization did just that, treating women as mere commodities meant to be bought and sold rather than as human beings deserving of respect,” stated HSI Special Agent-in-Charge Fitzhugh.  “As human trafficking operates in darkness, HSI works tirelessly to rescue victims out of the shadows as we investigate and hold accountable those who exploit and victimize others for their own financial advantage.”

As set forth in the indictment, since at least 2001, the Hernandez-Velazquez Trafficking Organization, a family organization based in Mexico, has used force, fraud and coercion to cause young women in Mexico to engage in prostitution in the United States.  Members of the organization lured victims into romantic relationships through false promises of love and support.  Victims were taken to the homes of members of the organization in Tenancingo, Mexico, where they were often not allowed to leave the home and not allowed to contact their families.  The victims were pressured to travel to the United States with promises of a better life with their trafficker.  After the young women were smuggled into the United States, members of the organization transported them to various states, including  Alabama, Connecticut, Florida, Georgia, Louisiana, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee and Virginia, to engage in prostitution.  In addition, the organization maintained a base of operations in Queens, New York.  Members of the organization used violence, including physical beatings and forced abortions, and threatened violence to the victims’ families to force the victims to continue prostituting.  The prostitution proceeds were sent to members of the organization in Mexico through wire transfers and cash shipments. 

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

The government’s case is being prosecuted by the Office’s Civil Rights Section.  Assistant United States Attorneys Margaret Lee and Erin Reid are in charge of the prosecution. 

The Defendants:

ARCELIA HERNANDEZ-VELAZQUEZ
Age:  47
Queens, New York

ERNESTO HERNANDEZ-VELAZQUEZ
Age:  40
Queens, New York

HUGO HERNANDEZ-VELAZQUEZ
Age:  45
Mexico

E.D.N.Y. Docket No. 19-CR-306(S-1)(WFK)

A Coram, New York, car wash owner pleaded guilty today to tax evasion, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Seth D. DuCharme for the Eastern District of New York.

According to court documents and statements made in court, Nicholas Pascullo, 56, operated a car wash and detailing business called H2O Car Wash & Exotic Detailing LLC (H2O), based in Lindenhurst, New York. From 2012 to 2017, Pascullo attempted to evade income and employment taxes owed by him and H2O for calendar years 2012 through 2016. As part of the scheme, Pascullo filed false partnership and individual income tax returns with the IRS that underreported the gross receipts earned by H2O and the flow-through income received by Pascullo and his partners.

Pascullo also concealed assets and sources of income by manipulating H2O’s books and records, including its point-of-sale system, by failing to file certain reports with the IRS, and by making unreported cash payments to H2O’s employees and to himself. In 2012 and 2013, Pascullo willfully filed false quarterly employment tax returns (Forms 941) that underreported H2O’s payroll tax liabilities for these years, including the extent of its cash payroll. In total, Pascullo caused a combined tax loss to the IRS of approximately $315,000.

Sentencing will be held before U.S. District Judge Denis R. Hurley. At sentencing, Pascullo faces a statutory maximum sentence of five years. Pascullo also faces a period of supervised release, restitution, and monetary penalties.

Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney DuCharme commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Eric Powers of the Tax Division, who are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.

Earlier today, in federal court in Brooklyn, George Kalergios, the owner of several companies that operated in the New York City area, including Zeus Waste Management Inc. (“Zeus Waste Management”), a carting business in Queens, pleaded guilty via videoconference before United States District Judge Pamela K. Chen to bribery and conspiracy to commit bribery in connection with a scheme to secure waste management contracts from a local college.  When sentenced, Kalergios faces up to 15 years’ imprisonment.  In addition, Kalergios agreed to pay forfeiture in the amount of $110,955.

Seth D. DuCharme, 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 guilty plea.   

“The defendant’s bribery scheme deprived a local college of the honest services of its contractors and employees,” stated Acting United States Attorney DuCharme.  “Today’s guilty plea demonstrates that those who engage in criminal corruption to enrich themselves at the expense of institutions in our communities will be held accountable.”  Mr. DuCharme expressed his grateful appreciation to the United States Attorney’s Office for the District of Massachusetts, and the FBI, Boston Field Office, for their assistance on the case.   

“Instead of providing the best possible services to his clients with no strings attached, Kalergios participated in a quid-pro-quo arrangement that served to advance his selfish interests. Corrupt behavior has no place in the business of honest services, and today’s guilty plea highlights that basic truth,” stated FBI Assistant Director-in-Charge Sweeney.

As set forth in public filings, in June 2018, Kalergios agreed to bribe the facilities director of a college located in New York City (“College”) to grant Zeus Waste Management the exclusive right to remove non-hazardous waste from the College’s campus.  Specifically, Kalergios agreed to pay the facilities director 10 percent of any payments that the College made to Zeus Waste Management under any contracts directed to the company.  In July 2018, the facilities director awarded a three-year contract to Zeus Waste Management that gave it the exclusive right to remove non-hazardous waste from the College’s campus.  Between July 2018 and March 2019, pursuant to their agreement, Kalergios made multiple cash payments to the facilities director totaling approximately $11,095. 

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

The Defendant:

GEORGE KALERGIOS
Age: 57 
Queens, N.Y.

E.D.N.Y. Docket No. 21-CR-34 (PKC)

A criminal complaint was filed today in federal court in Brooklyn charging New York City Department of Buildings (DOB) Inspector Francesco Ginestri with 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.  Ginestri was arrested this morning and made his initial appearance via videoconference this afternoon before United States Magistrate Lois Bloom. The defendant was released on a $150,000 bond.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the arrest and charge.

“As alleged, Ginestri, a buildings inspector who was entrusted with protecting public safety at city construction sites, instead exploited his position to line his pockets with a cash bribe,” stated Acting United States Attorney DuCharme.  “This Office will vigorously prosecute those who would betray their public trust for personal gain.”

Mr. DuCharme 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 exemplary work on the case.

According to the complaint, on July 31, 2020, Ginestri re-inspected a construction site in Flushing, New York, after a stop work order was issued for safety violations earlier in the month.  After learning that construction had continued during the pendency of the stop work order, Ginestri solicited a $1,200 cash bribe from an employee of the construction company in exchange for the defendant’s agreement to ensure that DOB would not issue a $25,000 fine to the company.  In August 2020, an employee of the construction company met Ginestri at a bakery and provided him with the $1,200 bribe payment.  The meeting was recorded under the supervision of federal law enforcement agents.

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

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:  36
Queens, New York

E.D.N.Y. Docket No. 21-MJ-169

A criminal complaint was unsealed today in federal court in Central Islip charging Apostolos Pitsironis, a former registered investment advisor and broker, with defrauding his former clients of more than $400,000 that he used to pay his personal debts and expenses, including casino gambling debts and credit card bills.  Pitsironis was arrested earlier today in Dix Hills, New York, and will make his initial appearance via videoconference this afternoon before United States Magistrate Judge Steven I. Locke.

Seth D. DuCharme, 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 arrest and charge.

“As alleged, the defendant stole hundreds of thousands of dollars from investors to pay his personal debts, violating the trust they had placed in him to manage their money safely and honestly,” stated Acting United States Attorney DuCharme.  “This Office is committed to protecting the investing public from corrupt financial advisors like the defendant who put greed before their clients’ best interests.”   

“Pitsironis, as alleged, transferred more than $400,000 from the investment account of a couple who trusted him to manage their portfolio directly into bank accounts he controlled. He later used this money to pay his family’s personal expenses, all the while deceiving both his victims and the financial services firm for whom he worked. Financial advisors have a significant responsibility to appropriately manage the life savings of those who put their faith in them. Anyone who falls short on this front by engaging in illegal practices should, and will, be held accountable to the fullest extent of the law,” stated FBI Assistant Director-in-Charge Sweeney.    

In approximately 2009, Pitsironis, who worked in the Melville office of a financial services firm (“Financial Services Firm”), began managing the investments of Victim-1 and Victim-2, a married couple who lived on Long Island (the “Victims”).  Between May 2, 2019 and June 11, 2019, Pitsironis initiated 22 transfers totaling approximately $411,000 from one of the Victims’ investment accounts at the Financial Services Firm to a bank account in the defendant’s own name at another financial institution.  Pitsironis falsely told the Financial Services Firm that Victim-2 owned the bank account receiving the funds and that Victim-2 had authorized the transfer of funds to that account.  Pitsironis then transferred the stolen funds to other bank accounts that he controlled and used the stolen money to pay for his family’s personal expenses, including casino gambling debts, credit card bills and the lease for a luxury car. 

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

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

The Defendant:

APOSTOLOS PITSIRONIS
Age:  52
Dix Hills, New York

E.D.N.Y. Docket No. 21-MJ-162

An indictment was unsealed today in federal court in Brooklyn charging three individuals affiliated with GPB Capital Holdings, LLC (“GPB”) with securities fraud, wire fraud and conspiracy.  Defendants David Gentile, the founder, owner and Chief Executive Officer (“CEO”) of GPB; Jeffry Schneider, the owner and CEO of Ascendant Capital LLC (“Ascendant”); and Jeffrey Lash, a former managing partner of GPB, are charged with engaging in a scheme to defraud investors by misrepresenting the source of funds used to make monthly distribution payments to them and the amount of revenue generated by two of GPB’s investment funds, GPB Holdings, LP and GPB Automotive Portfolio, LP. The defendants were arrested today, and Gentile will appear this afternoon in federal court in Boston, Massachusetts, Schneider will appear in federal court in Austin, Texas, and Lash in federal court in Fort Myers, Florida.

Seth D. DuCharme, 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 charges. 

“As alleged, by paying investors from an undisclosed and improper source such as investor capital, the defendants repeatedly misled investors about the health and performance of their investments,” stated Acting United States Attorney DuCharme.  “This Office is committed to ensuring honesty and integrity in the management of investment funds.”

Mr. DuCharme expressed his grateful appreciation to the Securities and Exchange Commission, New York Regional Office, for their significant cooperation and assistance during the investigation, and thanked the Business Integrity Commission and the New York City Police Department and for their support during the investigation.

“As alleged, the defendants misrepresented the holdings of GPB Capital through deceptive marketing practices, luring investors with promises of monthly distributions that would be covered by funds from the investments and not drawn from underlying invested capital. As we allege today, however, this was all a lie. In truth, a significant portion of GPB’s distributions were paid directly from investor funds. Investment fraud schemes are not only problematic for the victims they claim, but for the overall investing public who loses faith in a free-market system every time they hear of crimes like this. Along with our partners, we’re committed to exposing these frauds whenever and wherever we find them—and holding the fraudsters accountable,” stated FBI Assistant Director-in-Charge Sweeney.  

As detailed in the indictment and other court documents, GPB, founded by Gentile in or around 2013, was a New York-based investment advisor registered with the SEC.  GPB served as the general partner of several investment funds, including GPB Holdings, LP (“Holdings I”), GPB Holdings II, LP (“Holdings II”), GPB Automotive Portfolio, LP (“Automotive Portfolio”), GPB Waste Management, LP (“Waste Management”) and GPB Cold Storage, LP (“Cold Storage”) (collectively, the “GPB Funds”).  The business of GPB Capital was to manage the GPB Funds, which raised and invested capital in a portfolio of private equity investments.  Gentile and Schneider worked closely together on the founding, development, operation and marketing of the GPB Funds.  From 2013 through early 2018, Lash was responsible for overseeing the GPB Funds’ investments in car dealerships, which made up a sizable percentage of GPB’s portfolio companies. 

Between August 2015 and December 2018, the defendants, together with others, allegedly engaged in a scheme to defraud investors and prospective investors in the GPB Funds through material misrepresentations and omissions.                 

Specifically, Gentile and Schneider, both individually and through employees at Ascendant, represented to investors in Holdings I, Holdings II and Automotive Portfolio that the GPB funds would make a monthly distribution payment to investors that would be fully covered by funds from operations, meaning that the companies purchased by the funds would be sufficiently profitable for the monthly payments to be made from the companies’ cash flow, without drawing from capital raised by investors. 

In reality, despite the defendants’ representations, investor capital was used to pay for a significant portion of the distributions made to investors in each of these funds.  Gentile and Schneider were aware that the GPB Funds were underperforming, and authorized repeated distribution payments that used investor funds to cover income shortfalls, to the obvious detriment of investors. 

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

The government’s case is being handled by the Office’s Business & Securities Fraud Section.  Assistant United States Attorneys Lauren Howard Elbert, Artie McConnell and Garen Marshall are in charge of the prosecution. 

The Defendants:

DAVID GENTILE
Age:  54
Manhasset, New York

JEFFREY LASH
Age:  51
Naples, Florida

JEFFRY SCHNEIDER
Age:  52
Austin, Texas

E.D.N.Y. Docket No. 21-CR-54 (DG)

A California man was charged in a complaint unsealed today for his alleged participation in a coordinated cryptocurrency and securities fraud scheme that used purported digital currency platforms and foreign-based financial accounts. 

John DeMarr, 55, of Santa Ana, was charged in a complaint filed in the Eastern District of New York with one count of conspiracy to commit securities fraud. DeMarr made his initial appearance this afternoon before U.S. Magistrate Judge John D. Early of the Central District of California. Judge Early referred the case to the Eastern District of New York for further proceedings.

“The indictment alleges an elaborate scheme in which the defendant conspired to lure unsuspecting investors with fraudulent promises of large returns in the cryptocurrency market, only to divert millions of dollars for his own personal use,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “While the technologies and methods are constantly changing, the Criminal Division’s commitment to aggressively pursuing fraud in all its forms remains unchanged.”

“As alleged, DeMarr made misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency schemes, all to facilitate his extravagant lifestyle,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “We will continue to root out and prosecute those who would cheat investors to line their own pockets.”

“Mr. DeMarr created an elaborate cryptocurrency scheme, complete with high profile endorsements and incredibly large returns that proved to be a mirage costing investors millions,” said Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “Mr. DeMarr is now in custody and no longer spending his victims' money, nor hiding from justice by faking his own disappearance.”                                                                                        

“In today’s hi-tech financial world there are increasingly more opportunities for fraudsters to take advantage of people and their bank accounts,” said Special Agent in Charge Ryan Korner of the IRS-Criminal Investigation (IRS-CI) Los Angeles Field Office. “John DeMarr’s Bitcoin operation is one such example of a cryptocurrency investment scheme that did not payoff for his investors. Claiming to be part of a cryptocurrency ‘ecosystem,’ DeMarr created nothing more than an elaborate fraud scheme where he stole his investors’ money to fund his own personal lifestyle, resulting in losses totaling over $11 million. Financial crimes never pay, as one way or another the person behind the computer will be caught and will be held accountable.”

As alleged in the complaint, between 2017 and 2018, DeMarr conspired with others to defraud  numerous victims of $11.4 million by inducing them to invest in their companies, “Start Options” and “B2G,” based on materially false and misleading representations. Start Options purported to be an online investment platform that provided cryptocurrency mining, trading, and digital asset trading services. B2G was purportedly an “ecosystem” that would allow users to trade B2G tokens, provide digital wallet staking, and trade digital and fiat currencies “on a secure, comprehensive platform.”

According to the allegations, however, both Start Options and B2G were fraudulent. In approximately December 2017, DeMarr and others began offering securities in the form of investment contracts to U.S. and international investors through the Start Options website. Investments were accepted in Bitcoin, U.S. dollars, or Euros. To participate, investors had to deposit their funds for a specified contract period, after which they could purportedly withdraw their money at a significant profit. 

Among other things, DeMarr and others falsely claimed that investor funds would be invested in digital asset mining and trading platforms that would earn them massive profits. In truth, however, the money was never invested and was instead diverted to accounts controlled by DeMarr and others and used for various personal expenditures, including the purchase of a Porsche, jewelry, and renovations to DeMarr’s home in California. 

Similarly, according to the complaint, Start Options also purported to feature celebrity endorsements to promote its securities offerings. For example, a professional athlete purportedly endorsed Start Options when, as alleged in the indictment, the athlete had no involvement with Start Options and his name and likeness were used without his consent. Based on this and other fraudulent promotional materials, investors sent millions of dollars worth of Bitcoin, Ethereum, and fiat currency to financial accounts, including cryptowallets, controlled by DeMarr and others in the U.S. and abroad. 

As alleged, in or about late January 2018, rather than permitting Start Options investors to withdraw money from their accounts after the requisite time period, DeMarr and others required investors to roll over their accounts into an unregistered “initial coin offering,” or ICO, of B2G, the second of the two fraudulent companies in which DeMarr was involved. Among other fraudulent misrepresentations, DeMarr and others falsely told investors that the ICO would raise capital for the company to build an “ecosystem” that would allow users to trade B2G tokens, provide digital wallet staking, and trading. In truth, investors never actually received any digital tokens and funds from the offering were not used to develop the B2G platform.

According to the complaint, DeMarr and others also paid various promoters, including an actor famous for martial arts films made in the 1980s and 1990s, to serve as a promoter and celebrity spokesperson, falsely claiming that B2G could generate an “8000%” return for investors within one year, and that he was a participant in the ICO. DeMarr and others also created false press releases and whitepapers about B2G, fabricated B2G account statements, and refused to allow investors to withdraw their money. 

As alleged in the complaint, DeMarr staged his own disappearance to avoid facing disgruntled B2G investors. DeMarr instructed others to release statements asserting that DeMarr had been assaulted and went missing in Montenegro, and telling B2G investors to stop attempting to contact DeMarr or his family regarding their inability to have the money they invested in B2G returned. In truth, however, DeMarr did not disappear in Montenegro and instead was believed to be residing in California.

The charge in the complaint is based on allegations, and the defendant is presumed innocent unless and until proven guilty. 

This case was investigated by the FBI and IRS-CI. Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Kaitlin Farrell, Hiral Mehta, and David Pitluck of the Eastern District of New York are prosecuting the case, with assistance on forfeiture matters from Assistant U.S. Attorney Laura Mantell. 

The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.

BROOKLYN, NY – Earlier today, in federal court in Brooklyn, a complaint was unsealed charging John DeMarr with conspiracy to commit securities fraud for his alleged participation in a cryptocurrency and securities fraud scheme.  DeMarr was arrested this morning in Santa Ana, California, and will make his initial appearance this afternoon in U.S. District Court for the Central District of California.

Seth D. DuCharme, 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, Kristi Koons Johnson, Assistant Director-in-Charge, Federal Bureau of Investigation, Los Angeles Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, Los Angeles Field Office (IRS-CI), announced the arrest and charge.

“As alleged, DeMarr made misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency schemes, all to facilitate his extravagant lifestyle,” stated Acting U.S. Attorney DuCharme. “We will continue to root out and prosecute those who would cheat investors to line their own pockets.”  Mr. DuCharme expressed his grateful appreciation to the U.S. Securities and Exchange Commission, New York Regional Office, for its assistance with the case.

“The complaint alleges an elaborate scheme in which the defendant conspired to lure unsuspecting investors with fraudulent promises of large returns in the cryptocurrency market, only to divert millions of dollars for his own personal use,” stated Acting Assistant Attorney General McQuaid. “While the technologies and methods are constantly changing, the Criminal Division’s commitment to aggressively pursuing fraud in all its forms remains unchanged.”

"Mr. DeMarr created an elaborate cryptocurrency scheme, complete with high profile endorsements and incredibly large returns that proved to be a mirage, costing investors millions," stated FBI Assistant Director-in-Charge Johnson. "Mr. DeMarr is now in custody and no longer spending his victims' money, nor hiding from justice by faking his own disappearance.”

“In today’s hi-tech financial world there are increasingly more opportunities for fraudsters to take advantage of people and their bank accounts,” stated IRS-CI Special Agent-in-Charge Korner. “John Demarr’s Bitcoin operation is one such example of a cryptocurrency investment scheme that did not payoff for his investors. Claiming to be part of a cryptocurrency ‘ecosystem,’ Demarr created nothing more than an elaborate fraud scheme where he stole his investors’ money to fund his own personal lifestyle, resulting in losses totaling over $11 million. Financial crimes never pay, as one way or another the person behind the computer will be caught and will be held accountable.”

As alleged in the complaint, DeMarr, a promoter of several digital asset-related companies, conspired with others to defraud victims by inducing them to invest in two of his companies, “Start Options” and “B2G,” that purported to be online investment platforms providing digital asset trading services.  Investments were accepted in Bitcoin, U.S. dollars or Euros for a specified contract period based on DeMarr’s false and misleading representations of significant profits, which he bolstered with bogus celebrity endorsements, false press releases and fabricated account statements.  Instead of investing the funds in “Start Options” and” B2G,” DeMarr diverted the funds into other accounts he controlled and spent the money on a lavish lifestyle he maintained, which included the purchase of expensive jewelry, a Porsche and the remodeling of his California home.

Start Options also purported to feature celebrity endorsements to promote its securities offerings. For example, a professional athlete purportedly endorsed Start Options when, in fact, the athlete had no involvement with Start Options and his name and likeness were used without his consent. Based on this and other fraudulent promotional materials, investors sent millions of dollars’ worth of Bitcoin, Ethereum, and fiat currency to financial accounts, including cryptowallets, controlled by DeMarr and others in the U.S. and abroad. 

According to the complaint, DeMarr and others paid various promoters, including an actor famous for appearing in martial arts films of the 1980s and 1990s, to serve as a promoter and celebrity spokesperson, falsely claiming that B2G could generate a massive return for investors within one year, and that he was a participant in the ICO.

In May 2018 to avoid facing disgruntled B2G investors, DeMarr attempted to feign his disappearance by directing others to release statements claiming that he had been assaulted to avoid facing disgruntled B2G investors. DeMarr directed others to release statements claiming that DeMarr had been assaulted and was missing in Montenegro, and instructing B2G investors to stop attempting to contact DeMarr or his family regarding their inability to have the money they invested in B2G returned. Since his alleged disappearance, DeMarr has been residing in California.

The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.

This case was investigated by the FBI and IRS-CI.  Assistant U.S. Attorneys Kaitlin T. Farrell, Hiral D. Mehta, and David C. Pitluck of the Eastern District of New York, assisted by EDNY Criminal Investigator Martin Sullivan, with Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section are prosecuting the case, Assistant U.S. Attorney Laura D. Mantell of the Eastern District’s Civil Division is handling forfeiture matters.  

The Defendant:

JOHN DEMARR
Age:  55
Santa Ana, California

E.D.N.Y. Docket No.: 21-MJ-128

 

A criminal complaint was filed today in federal court in Central Islip charging Carmine Simpson with the sexual exploitation of children.  The charges relate to sexually explicit images and videos of children that the defendant requested and received from minors who he targeted on Twitter.  Simpson was arrested today and will make his initial appearance via videoconference this afternoon before United States Magistrate Judge A. Kathleen Tomlinson.

Seth D. DuCharme, 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 arrest and charge.

“Instead of protecting the community as a sworn police officer, the defendant has preyed upon and sexually exploited the most vulnerable members,” stated Acting United States Attorney DuCharme.  “The protection of innocent children is a priority for the Department of Justice and this Office will continue to make every effort to ensure that those who contribute to the victimization of children will be brought to justice.”  Mr. DuCharme extended his grateful appreciation to the FBI Violent Crimes Against Children Squad for its investigative work and the New York City Police Department (NYPD) for its assistance on the case. 

“As a law enforcement officer, Mr. Simpson swore an oath to protect the public he served.  We allege he chose instead to manipulate some of our society's most vulnerable citizens when he repeatedly enticed children to create sexually explicit videos and photos,” stated FBI Assistant Director-in-Charge Sweeney.  “Much of this activity occurs through popular social media sites, so I'd ask parents and guardians to take some time to talk with your children about their online activities.  You are the first line of defense in protecting our youth from predators. A moment of your time can save a lifetime of trauma. If you believe someone is trying to entice or sexually exploit your child, please report it to us by calling 1-800-CALL-FBI or going to tips.fbi.gov."

According to court filings, Simpson, a police officer with the NYPD, allegedly targeted vulnerable children on Twitter for the purpose of having them create sexually exploitative photos and videos of themselves for the defendant.  Simpson often represented to his victims that he was 17 years-old, and he sent them pictures of himself where he applied a filter to alter his own appearance so that he appeared younger.  Simpson communicated with at least 46 children who appear to have been between the ages of 13 and 17.  On Twitter alone, Simpson obtained at least 18 photographic images and 33 videos containing sexually exploitative material from children

If convicted of sexual exploitation of a child, Simpson faces a mandatory minimum of 15 years’ imprisonment.  The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.

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

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

The Defendant:

CARMINE SIMPSON
Age:  26
Holbrook, New York

E.D.N.Y. Docket No. 21-MJ-119

BROOKLYN, NY – A criminal complaint was unsealed today in federal court in Brooklyn charging Douglass Mackey, also known as “Ricky Vaughn,” with conspiring with others in advance of the 2016 United States Presidential Election to use various social media platforms to disseminate misinformation designed to deprive individuals of their constitutional right to vote. Mackey was arrested this morning in West Palm Beach, Florida and will make his initial appearance via videoconference today before United States Magistrate Judge Bruce Reinhart at the federal courthouse in West Palm Beach. 

Seth D. DuCharme, 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 arrest and charges.

“There is no place in public discourse for lies and misinformation to defraud citizens of their right to vote.” stated Acting United States Attorney DuCharme.  “With Mackey’s arrest, we serve notice that those who would subvert the democratic process in this manner cannot rely on the cloak of Internet anonymity to evade responsibility for their crimes.  They will be investigated, caught and prosecuted to the full extent of the law.”

“According to the allegations in the indictment, the defendant exploited a social media platform to infringe one the of most basic and sacred rights guaranteed by the Constitution: the right to vote,” stated Acting Assistant Attorney General McQuaid. “This indictment underscores the department’s commitment to investigating and prosecuting those who would undermine citizens’ voting rights.”

“Protecting every American citizen’s right to cast a legitimate vote is a key to the success of our republic.  What Mackey allegedly did to interfere with this process—by soliciting voters to cast their ballots via text—amounted to nothing short of vote theft.  It is illegal behavior and contributes to the erosion of the public’s trust in our electoral processes.  He may have been a powerful social media influencer at the time, but a quick Internet search of his name today will reveal an entirely different story,” stated FBI Assistant Director-in-Charge Sweeney.

In 2016, Mackey established an audience on Twitter with approximately 58,000 followers.  A February 2016 analysis by the MIT Media Lab ranked Mackey as the 107th most important influencer of the then-upcoming Election, ranking it above outlets and individuals, among others, such as NBC News (#114), Stephen Colbert (#119) and Newt Gingrich (#141).

As alleged in the complaint, between September 2016 and November 2016, in the lead up to the November 8, 2016, United States Presidential Election, Mackey conspired with others to use social media platforms, including Twitter, to disseminate fraudulent messages designed to encourage supporters of one of the presidential candidates (the “Candidate”) to “vote” via text message or social media and thus to fail to cast their ballots in a legally valid manner.

For example, on November 1, 2016, Mackey tweeted an image that featured an African American woman standing in front of an “African Americans for [the Candidate]” sign.  The image included the following text: “Avoid the Line.  Vote from Home.  Text ‘[Candidate’s first name]’ to 59925[.]  Vote for [the Candidate] and be a part of history.”  The fine print at the bottom of the image stated: “Must be 18 or older to vote.  One vote per person.  Must be a legal citizen of the United States.  Voting by text not available in Guam, Puerto Rico, Alaska or Hawaii.  Paid for by [Candidate] for President 2016.”  The tweet included the typed hashtags “#Go [Candidate]” and another slogan frequently used by the Candidate.  On or about and before Election Day 2016, at least 4,900 unique telephone numbers texted “[Candidate’s first name]” or some derivative to the 59925 text number, which was used in multiple deceptive campaign images tweeted by the defendant and his co-conspirators.

If convicted of the charge, conspiracy against rights, Mackey faces up to 10 years in prison.  The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Erik Paulsen and Nathan Reilly are in charge of the prosecution, with Trial Attorney James Mann from the Department of Justice’s Public Integrity Section. 

The Defendant:

DOUGLASS MACKEY
Age:  31
West Palm Beach, Florida

 

A Florida man was arrested this morning on charges of conspiring with others in advance of the 2016 U.S. Presidential Election to use various social media platforms to disseminate misinformation designed to deprive individuals of their constitutional right to vote.

Douglass Mackey, aka Ricky Vaughn, 31, of West Palm Beach, was charged by criminal complaint in the Eastern District of New York. He was taken into custody this morning in West Palm Beach and made his initial appearance before U.S. Magistrate Judge Bruce E. Reinhart of the Southern District of Florida.

“According to the allegations in the complaint, the defendant exploited a social media platform to infringe one the of most basic and sacred rights guaranteed by the Constitution: the right to vote,” said Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division. “This complaint underscores the department’s commitment to investigating and prosecuting those who would undermine citizens’ voting rights.”

“There is no place in public discourse for lies and misinformation to defraud citizens of their right to vote,” said Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York. “With Mackey’s arrest, we serve notice that those who would subvert the democratic process in this manner cannot rely on the cloak of Internet anonymity to evade responsibility for their crimes. They will be investigated, caught and prosecuted to the full extent of the law.”

“Protecting every American citizen’s right to cast a legitimate vote is a key to the success of our republic,” said William F. Sweeney Jr., Assistant Director in Charge of the FBI’s New York Field Office. “What Mackey allegedly did to interfere with this process – by soliciting voters to cast their ballots via text – amounted to nothing short of vote theft. It is illegal behavior and contributes to the erosion of the public’s trust in our electoral processes. He may have been a powerful social media influencer at the time, but a quick Internet search of his name today will reveal an entirely different story.”

The complaint alleges that in 2016, Mackey established an audience on Twitter with approximately 58,000 followers. A February 2016 analysis by the MIT Media Lab ranked Mackey as the 107th most important influencer of the then-upcoming Election, ranking his account above outlets and individuals such as NBC News (#114), Stephen Colbert (#119) and Newt Gingrich (#141).

As alleged in the complaint, between September 2016 and November 2016, in the lead up to the Nov. 8, 2016, U.S. Presidential Election, Mackey conspired with others to use social media platforms, including Twitter, to disseminate fraudulent messages designed to encourage supporters of one of the presidential candidates (the “Candidate”) to “vote” via text message or social media, a legally invalid method of voting.

For example, on Nov. 1, 2016, Mackey allegedly tweeted an image that featured an African American woman standing in front of an “African Americans for [the Candidate]” sign.  The image included the following text: “Avoid the Line. Vote from Home. Text ‘[Candidate’s first name]’ to 59925[.] Vote for [the Candidate] and be a part of history.”  The fine print at the bottom of the image stated: “Must be 18 or older to vote. One vote per person. Must be a legal citizen of the United States. Voting by text not available in Guam, Puerto Rico, Alaska or Hawaii. Paid for by [Candidate] for President 2016.”

The tweet included the typed hashtags “#Go [Candidate]” and another slogan frequently used by the Candidate. On or about and before Election Day 2016, at least 4,900 unique telephone numbers texted “[Candidate’s first name]” or some derivative to the 59925 text number, which was used in multiple deceptive campaign images tweeted by the defendant and his co-conspirators.

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

Assistant U.S. Attorneys Erik Paulsen and Nathan Reilly of the Eastern District of New York, and Trial Attorney James Mann of the Criminal Division’s Public Integrity Section are prosecuting the case.

A criminal complaint was unsealed today in federal court in Brooklyn charging Shimon Rosenfeld, an attorney admitted to practice law in the State of New York since 1987, with defrauding multiple investors of at least $4 million by falsely claiming he was investing their funds in real estate opportunities.  Rosenfeld was arrested this morning and made his initial appearance this afternoon via videoconference before United States Chief Magistrate Judge Cheryl. L. Pollak.  The defendant was released on a $200,000 bond.

Seth D. DuCharme, 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 charge.

“Through this alleged scheme, Rosenfeld abused his position as an attorney and betrayed his victims’ trust for his own selfish gain,” stated Acting United States Attorney DuCharme.  “Those who commit fraud, including lawyers, must be brought to justice, and this Office will continue to work tenaciously to ensure integrity in the practice of law.”

“As alleged, Rosenfeld solicited investments based on his stated intent to purchase various real estate and 'flip' it for substantial profit.  In reality, he didn't buy any properties, so there were none to sell.  Rather, Rosenfeld used the money he received to make his own financial trades and investments. Today, we’ve flipped the script on him and held him accountable for his fraudulent actions,” stated FBI Assistant Director-in-Charge Sweeney.

“The U.S. Secret Service remains dedicated to investigating those who commit financial fraud and would like to recognize the efforts of our law enforcement partners in helping bring them to justice,” stated USSS Deputy Special Agent-in-Charge Freaney. “This investigation exemplifies the success that law enforcement can achieve when working in a collaborative manner. In this instance, the defendant allegedly perpetrated a scheme to defraud and misappropriated funds from numerous victims for his own personal gain.”   

According to the complaint, between May 2014 and March 2018, Rosenfeld allegedly perpetrated a fraudulent scheme by soliciting and receiving approximately at least $4 million from various individuals (collectively, the “Victims”) based on fraudulent misrepresentations.  Specifically, Rosenfeld induced the Victims to invest their money with the defendant 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 further told the Victims that he would split the profits from the real estate transactions with the Victims.  In reality, Rosenfeld misappropriated the investors’ money by directing the funds into bank accounts he controlled and using the money to trade securities out of his brokerage account. Rosenfeld falsely told the Victims that there were problems with the real estate transactions, such as title or appraisal issues, to explain why no properties had been purchased. 

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

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.

The Defendant:

SHIMON ROSENFELD
Age:  59
Brooklyn, New York

E.D.N.Y. Docket No. 21-MJ-96

A 10-count indictment was unsealed today in federal court in Brooklyn charging Bryan Cho, also known as “Yong Hee Cho,” with possession of a fake foreign passport; aggravated identity theft; making false statements during a background check and wire fraud in connection with the purchase of an Upper East Side co-op apartment.  Cho was arrested this morning and is scheduled to be arraigned via videoconference this afternoon before United States Chief Magistrate Judge Cheryl L. Pollak.

Seth D. DuCharme, 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, the Treasury Inspector General for Tax Administration (TIGTA), announced the charges.

“As alleged, the defendant repeatedly betrayed the trust placed in him as a federal law enforcement officer to further his own schemes by misusing information to which he had access by virtue of his official assignments,” stated Acting United States Attorney DuCharme.  “Today’s charges show that no one is above the law, and that this Office remains committed to rooting out corruption wherever it lurks.” 

“The public places a great deal of trust in those who carry a shield, but when sworn federal officers use this as a free pass instead of a badge of honor, things go awry. As alleged, that’s what happened in this case when Cho used, to his benefit, proprietary information belonging to an individual he once investigated as part of his official duties. Today’s charges are a reminder that no one is beyond the reach of our corruption laws,” stated FBI Assistant Director-in-Charge Sweeney.

“The Treasury Inspector General for Tax Administration aggressively investigates Internal Revenue Service employees who violate the public’s trust,” stated Treasury Inspector General George.  “Our mission at TIGTA is to protect the integrity of our Nation’s system of tax administration.  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.  I would like to thank the U.S. Department of Justice and the Federal Bureau of Investigation for their support in this effort.”

As set forth in the indictment, Cho has been employed as a Special Agent with Internal Revenue Service Criminal Investigation since 2008.  During the course of his employment, Cho worked on an investigation through which he obtained identifying information for an individual described in the indictment as “John Doe.”  The investigation was eventually closed, but Cho retained items he obtained during the investigation and used John Doe’s identifying information to create false identification documents and open a corporate entity overseas in John Doe’s name.  The fraudulent documents included purported identification cards for the Philippines and the Republic of Marshall Islands in the name of John Doe, but bearing photos of the defendant, and a purported passport in the name of John Doe for the Republic of Guinea-Bissau. 

Cho later made false statements during a background investigation, including denying that he possessed any foreign identification documents.  Cho also denied any contacts with foreign officials even though law enforcement from the Republic of South Korea had communications with him regarding allegations that South Korean government personnel had paid bribes to the defendant in exchange for information about ongoing U.S. criminal investigations.  Cho also submitted multiple false documents in connection with the purchase of a co-op apartment on the Upper East Side of Manhattan, including forged tax returns and bank statements that inflated his income and assets to secure the co-op board’s approval for the purchase, and funneled hundreds of thousands of dollars from a foreign bank account associated with an entity the defendant created using John Doe’s identity to fund the purchase.     

If convicted of the top count, wire fraud, Cho faces up to 20 years’ imprisonment.  The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.

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, N.Y.

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

Earlier today, in federal court in Brooklyn, Joseph Miner pleaded guilty via videoconference before United States District Judge William F. Kuntz, II, to possessing a firearm with obliterated serial numbers.  When sentenced, Miner faces a maximum of five years’ imprisonment.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.

“With today’s guilty plea, Miner has been held accountable and faces a prison sentence for possessing an illegal firearm with obliterated serial numbers that he purchased from an undercover agent,” stated Acting United States Attorney DuCharme. “This Office, together with our federal and local partners, is working tirelessly to prevent illegal firearms from endangering our community.” Mr. DuCharme expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, for its outstanding work on the case.

As set forth in public filings, law enforcement began investigating Miner’s interest in illegally purchasing firearms in late 2019 when he posted on social media accounts his desire to obtain assault weapons and other firearms for a racial civil war or racial holy war.  Miner expressed support on social media for racially and ethnically motivated violence, including celebrating the August 2017 white supremacist rally in Charlottesville, Virginia, and the December 2019 machete attack at a synagogue in Monsey, New York.  Although the defendant at times disavowed interest in conducting an attack himself, on multiple occasions he posted social media messages in which he displayed suicidal ideations and fantasized about “martyring” himself and “go[ing] out in a blaze of glory” in a mass-shooting attack. 

In April 2020, Miner initiated contact with an undercover law enforcement agent who was posing as a firearms dealer.  Miner requested firearms from the undercover agent knowing that the serial numbers were removed from the guns that the undercover agent was offering for sale. On May 12, 2020, Miner met the undercover agent at a Queens hotel and purchased a Glock 19 9mm semi-automatic handgun with an obliterated serial number.

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

The Defendant:

JOSEPH MINER
Age:  30
Bayside, Queens

E.D.N.Y. Docket No. 21-CR-554 (WFK)

CENTRAL ISLIP, NY – The Department of Justice and the United States Attorney Office for the Eastern District of New York, together with the Federal Trade Commission (FTC), today announced three settlements resolving alleged violations of the Better Online Ticket Sales (BOTS) Act.  These are the first enforcement actions that the Department and the FTC have brought under the BOTS Act. 

Enacted in 2016, the BOTS Act aims to prevent ticket brokers from buying large numbers of event tickets and reselling them to interested customers at inflated prices.  The BOTS Act prohibits a person from circumventing access controls or measures used by online ticket sellers (such as Ticketmaster) to enforce ticket-purchasing limits.  It also prevents the resale of tickets obtained by knowingly circumventing access controls.

As alleged in the three complaints filed by the United States in the Eastern District of New York, the defendants—Just In Time Tickets, Inc. and its owner Evan Kohanian; Concert Specials, Inc. and its owner Steven Ebrani; and Cartisim Corp. and its owner Simon Ebrani—committed violations of the BOTS Act to purchase from Ticketmaster thousands of tickets they then resold for millions of dollars in revenues, often at significant markups.  The defendants allegedly circumvented Ticketmaster’s restrictions on users holding multiple accounts by creating accounts in the names of family members, friends, and fictitious individuals and using hundreds of credit cards.  They also allegedly used ticket bots to fool tests designed to prevent nonhuman visitors.  In addition, the complaints assert that the defendants used programs to conceal the IP addresses of the computers they used to make purchases. 

“Those who violate the BOTS Act cheat fans by forcing them to pay inflated prices to attend concerts, theater performances and sporting events,” stated Acting U.S. Attorney Seth D. DuCharme.  “This Office will spare no effort in prohibiting deceptive practices that harm consumers.”

“These defendants are alleged to have cheated the system to the detriment of consumers,” stated Acting Assistant Attorney General Brian Boynton of the Department of Justice’s Civil Division.  “Today’s filing serves notice that the Department of Justice will enforce the Better Online Ticket Sales Act in appropriate cases.  We are pleased to work with our partners at the Federal Trade Commission on this and other matters important to consumers.”

The three stipulated orders entered by the court assess civil penalties of $11.2 million against Just In Time Tickets, Inc. and Kohanian, $16 million against Concert Specials, Inc. and Steven Ebrani, and $4.4 million against Cartisim Corp. and Simon Ebrani.  The orders further provide for the suspension of the remainder of such civil penalties if the defendants pay $1,642,658.96, $1,565,527.41, and $499,147.12, respectively, and satisfy certain additional terms.  The stipulated orders also contain terms to prohibit the defendants from using ticket bots or other computer programs to defeat access controls, from concealing the IP addresses of computers they use to make ticket purchases and from purchasing tickets from any credit or debit account in the name of anyone other than the defendants or their corporate officers and employees.  Under the terms, the defendants must also maintain records and provide compliance reports to the government.

The claims resolved by the settlements in these cases are allegations only, and there has not been any final determination of liability or wrongdoing.

This matter was handled by Assistant United States Attorneys Bonni J. Perlin and Kevin Yim of the Eastern District of New York, with Trial Attorney Benjamin A. Cornfeld of the Civil Division’s Consumer Protection Branch.  Christine M. Todaro and Frances L. Kern represented the FTC.

E.D.N.Y. Civil Docket Nos: 21-CV-212 (GRB); 21-CV-214 (DRH); 21-CV-215 (GRB

The College of Staten Island (“CSI”), a college within the City University of New York (“CUNY”), has agreed to repay $98,237.86 in federal assistance awarded by the United States to perform research with the United States National Oceanic and Atmospheric Administration (“NOAA”), to resolve a federal investigation concerning alleged fabricated research results. 

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Duane E. Townsend, Special Agent-in-Charge, U.S. Department of Commerce, Office of the Inspector General, announced the resolution.    

“Maintaining the highest levels of integrity and accuracy must be the bedrock of scientific research.  This resolution demonstrates how research institutions should respond upon learning of alleged misconduct or fraud in connection with federally funded projects,” stated Acting U.S. Attorney DuCharme.  “When a federal award recipient fully cooperates with the government’s investigation, our Office will work with them to arrive at a fair and just resolution.”

“This investigation demonstrates the government's resolve to protect the integrity of federally funded research and ensure taxpayer money is not wasted on dishonesty.  We greatly appreciate the efforts of the U.S. Attorney's Office and the cooperation of the college in resolving this matter,” stated U.S. Department of Commerce Special Agent-in-Charge Townsend. 

NOAA is a component of the United States Department of Commerce.  In 2015, the Research Foundation of CUNY, on behalf of CSI, applied for and was awarded federal assistance pursuant to a cooperative agreement with NOAA to conduct a component of a research project to study the role of ocean eddies on the productivity of certain fish stock.  The principal investigator for CSI was a professor who is no longer employed by the school.  The work was required to be performed between September 2015 and August 2017.  As a condition for receiving the funds, CSI certified, in part, that it was capable of managing the research project and ensuring that the required work was done. 

In 2018, NOAA notified CSI that the principal investigator had not conducted the work required under the cooperative agreement and allegedly had fabricated research results submitted to NOAA.  CSI then conducted an internal investigation and concluded, in part, that the principal investigator had committed research misconduct.  After receiving CSI’s findings, the United States Attorney’s Office, with the support of the U.S. Department of Commerce, Office of the Inspector General, independently investigated NOAA’s allegations regarding the fabrication of research results.  CSI cooperated fully throughout the investigation, providing documents and responding to government inquiries.  The United States concluded that CSI failed to ensure proper management and completion of the research required under the cooperative agreement, and negotiated the resolution. 

In addition to repayment of the $98,237.86 that CSI received under the cooperative agreement, CSI has agreed to modify its current policies and procedures concerning the supervision of federal funded research projects to ensure that the work required under federal awards is completed and to safeguard against research misconduct and fraud.

The government’s case is being handled by Assistant United States Attorney Bonni J. Perlin.

Earlier today, at the federal courthouse in Brooklyn, Kysheeq Randolph was sentenced to 33 months’ imprisonment by United States District Judge Sterling Johnson, Jr., for making threatening hand gestures at a government witness who was testifying in a federal criminal trial.  Randolph pleaded guilty in February 2020 to a superseding criminal information charging him with witness retaliation.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York announced the sentence.

“It is a solemn duty of law enforcement to protect witnesses who testify at trial and attempts to brazenly intimidate or terrorize them will never be tolerated.” stated Acting United States Attorney DuCharme.  “Today the defendant learned that such flagrant disregard for the rule of law will be punished with incarceration.”  Mr. DuCharme thanked the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division, and the United States Marshals Service, Eastern District of New York, for their work in the case.

In October 2019, Devone Jefferys, a relative of the defendant, was on trial at the federal courthouse in Brooklyn for his role in a home invasion armed robbery.  During the trial, while a witness who had participated in the robbery was testifying, Randolph was seated in the public gallery of the courtroom in the witness’s line of sight.  Randolph began making gestures with his hand to mimic the shape of a gun and pointed it to his head and then to his chin in an upward movement to threaten the witness.

The government’s case is being prosecuted by Assistant United States Attorney Genny Ngai.   

The Defendant:

KYSHEEQ RANDOLPH
Age:  24
Brooklyn, New York

E.D.N.Y. Docket No. 19-CR-545 (SJ)

A criminal complaint was filed today in federal court in Brooklyn charging Brendan Hunt, also known as “X-Ray Ultra,” with threatening to murder United States officials.  Hunt was arrested this morning in Queens and made his initial appearance this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr., who ordered the defendant detained pending trial.

Seth D. DuCharme, 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 arrest and charge.

“Our democracy depends on the legislators who shoulder the responsibility of government.  By allegedly threatening to murder and intimidate elected officials, Hunt is striking at the core of our government,” stated Acting United States Attorney DuCharme.  “This Office will aggressively disrupt such conduct and prosecute offenders like the defendant to the fullest extent of the law.”

“Before the assault on the Capitol building, and again after, Hunt’s alleged online commentary directly called for the assassination of members of Congress.  This is not a hard message to understand –threats of violence against our public officials won’t be tolerated.  Mr. Hunt was arrested this morning by the FBI’s New York Joint Terrorism Task Force. To others from this area who still don’t get it – if you are considering a similar path to ‘take up arms’ like Mr. Hunt did, that road leads nowhere except a reservation at our building downtown,” stated FBI Assistant Director-in-Charge Sweeney.

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

As alleged in the complaint, on January 8, 2021, two days after the riot in the U.S. Capitol in Washington, D.C., Hunt posted a video to an Internet-based video sharing site in which he exhorted his viewers to violence, urging 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------.”  The video was one in a series of statements by Hunt posted on social media since at least December 6, 2020, in which he called for violence and “public execution” against members of Congress.

The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Hunt faces a maximum sentence of 10 years in prison.

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-MJ-57

BROOKLYN, NY – A criminal complaint was unsealed today in federal court in Brooklyn charging Kaveh Lotfolah Afrasiabi, also known as “Lotfolah Kaveh Afrasiabi,” with acting and conspiring to act as an unregistered agent of the Government of the Islamic Republic of Iran, in violation of the Foreign Agents Registration Act (FARA).  Afrasiabi was arrested yesterday at his home in Watertown, Massachusetts, and will make his initial appearance this morning in federal court in Boston, Massachusetts, before United States Magistrate Judge Jennifer C. Boal.

Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York; John C. Demers, Assistant Attorney General for National Security; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Joseph Bonavolonta, Special Agent-in-Charge, FBI, Boston Field Office announced the arrest and charges.

“Afrasiabi allegedly sought to influence the American public and American policymakers for the benefit of his employer, the Iranian government, by disguising propaganda as objective policy analysis and expertise,” stated Acting U.S. Attorney DuCharme.  “This Office is committed to the robust enforcement of the Foreign Agents Registration Act, which provides the American people the tools they need to evaluate opinions and arguments in the marketplace of ideas by requiring foreign agents to declare their paymasters.  Those, like the defendant, who conceal the full extent of their work for a foreign government when the law requires disclosure will face consequences for their actions.”

“For over a decade, Kaveh Afrasiabi pitched himself to Congress, journalists, and the American public as a neutral and objective expert on Iran," stated Assistant Attorney General Demers.  “However, all the while, Afrasiabi was actually a secret employee of the Government of Iran and the Permanent Mission of the Islamic Republic of Iran to the United Nations (IMUN) who was being paid to spread their propaganda.  In doing so, he intentionally avoided registering with Department of Justice as the Foreign Agents Registration Act required.  He likewise evaded his obligation to disclose who was sponsoring his views.  We now begin to hold him responsible for those deeds.”

“Anyone working to advance the agenda of a foreign government within the United States is required by law to register as an agent of that country,” stated FBI Assistant Director-in-Charge Sweeney. “Mr. Afrasiabi never disclosed to a Congressman, journalists or others who hold roles of influence in our country that he was being paid by the Iranian government to paint an untruthfully positive picture of the nation. Our laws are designed to create transparency in foreign relations, and they are not arbitrary or malleable. As today's action demonstrates, we will fully enforce them to protect our national security.”

“Our arrest of Kaveh Afrasiabi makes it clear that the United States is not going to allow undeclared agents of Iran to operate in our country unchecked. For more than a decade, Mr. Afrasiabi was allegedly paid, directed, and controlled by the Government of Iran to lobby U.S. government officials, including a Congressman; and to create and disseminate information favorable to the Iranian government,” stated FBI Special Agent-in-Charge Bonavolonta. “The FBI will continue to do everything it can to uncover these hidden efforts and hold accountable those who work for our adversaries to the detriment of our national security.”  

According to the complaint, Afrasiabi is a citizen of the Islamic Republic of Iran and a lawful permanent resident of the United States.   Afrasiabi holds a PhD, and frequently publishes books and articles, and appears on English-language television programs discussing foreign relations matters, particularly Iran’s relations with the United States.  Afrasiabi has identified or portrayed himself as a political scientist, a former political science professor or as an expert on foreign affairs.

Since at least 2007 to the present, Afrasiabi has also been secretly employed by the Iranian government and paid by Iranian diplomats assigned to the Permanent Mission of the Islamic Republic of Iran to the United Nations in New York City (IMUN).  Afrasiabi has been paid approximately $265,000 in checks drawn on the IMUN’s official bank accounts since 2007 and has received health insurance through the IMUN’s employee health benefit plans since at least 2011. 

In the course of his employment by the Iranian government, Afrasiabi has lobbied a U.S. Congressman and the U.S. Department of State to advocate for policies favorable to Iran, counseled Iranian diplomats concerning U.S. foreign policy, made television appearances to advocate for the Iranian government’s views on world events, and authored articles and opinion pieces espousing the Iranian government’s position on various matters of foreign policy.  Afrasiabi has long known that FARA requires agents of foreign principals to register with the U.S. Department of Justice and has discussed information obtained from FARA disclosures with others.  Nevertheless, Afrasiabi did not register as an agent of the Government of Iran.

For example, in January 2020, Afrasiabi emailed Iran’s Foreign Minister and Permanent Representative to the United Nations with advice for “retaliation” for the U.S. military airstrike that killed Major General Qasem Soleimani, the head of the Quds Force, the external operations arm of the Iranian government’s Islamic Revolutionary Guard Corps, proposing that the Iranian government “end all inspections and end all information on Iran’s nuclear activities pending a [United Nations Security Council] condemnation of [the United States’] illegal crime.”  Afrasiabi claimed that such a move would, among other things, “strike fear in the heart of [the] enemy.”

Afrasiabi has admitted in his own communications that his extensive body of published works and television appearances, in which he has consistently advocated perspectives and policy positions favored by the Iranian government, has been attributable to the funding he receives from the Iranian government.  For example, in a July 28, 2020 email to Iran’s Foreign Minister, Afrasiabi included “links for many of [his] works, including books, hundreds of articles in international newspapers and academic journals,” telling Iran’s Foreign Minister “Without support none of this would have been possible! This has been a very productive relationship spanning decades that ought not to be interrupted.”

The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of both charged offenses, Afrasiabi faces a maximum sentence of 10 years in prison.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Ian C. Richardson and Michael T. Keilty are in charge of the prosecution, with assistance from Trial Attorney David C. Recker of the National Security Division’s Counterintelligence and Export Control Section.

The Defendant:

KAVEH LOTFOLAH AFRASIABI (also known as “Lotfolah Kaveh Afrasiabi”)
Age: 63
Watertown, Massachusetts

E.D.N.Y. Docket No. 21-MJ-50

 

A criminal complaint was unsealed today in federal court in Brooklyn charging Kaveh Lotfolah Afrasiabi, also known as Lotfolah Kaveh Afrasiabi, with acting and conspiring to act as an unregistered agent of the Government of the Islamic Republic of Iran, in violation of the Foreign Agents Registration Act (FARA).  Afrasiabi was arrested yesterday at his home in Watertown, Massachusetts, and will make his initial appearance this morning in federal court in Boston, Massachusetts, before U.S. Magistrate Judge Jennifer C. Boal.

John C. Demers, Assistant Attorney General for National Security; Seth D. DuCharme, Acting U.S. 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 Joseph Bonavolonta, Special Agent in Charge, FBI, Boston Field Office, announced the arrest and charges.

“For over a decade, Kaveh Afrasiabi pitched himself to Congress, journalists, and the American public as a neutral and objective expert on Iran,” said John C. Demers, Assistant Attorney General for National Security.  “However, all the while, Afrasiabi was actually a secret employee of the Government of Iran and the Permanent Mission of the Islamic Republic of Iran to the United Nations (IMUN) who was being paid to spread their propaganda.  In doing so, he intentionally avoided registering with the Department of Justice as the Foreign Agents Registration Act required.  He likewise evaded his obligation to disclose who was sponsoring his views.  We now begin to hold him responsible for those deeds.”

“Afrasiabi allegedly sought to influence the American public and American policymakers for the benefit of his employer, the Iranian government, by disguising propaganda as objective policy analysis and expertise,” said Acting U.S. Attorney DuCharme.  “This Office is committed to the robust enforcement of the Foreign Agents Registration Act, which provides the American people the tools they need to evaluate opinions and arguments in the marketplace of ideas by requiring foreign agents to declare their paymasters.  Those, like the defendant, who conceal the full extent of their work for a foreign government when the law requires disclosure will face consequences for their actions.”

“Anyone working to advance the agenda of a foreign government within the United States is required by law to register as an agent of that country,” said FBI Assistant Director in Charge Sweeney.  “Mr. Afrasiabi never disclosed to a congressman, journalists or others who hold roles of influence in our country that he was being paid by the Iranian government to paint an untruthfully positive picture of the nation.  Our laws are designed to create transparency in foreign relations, and they are not arbitrary or malleable.  As today's action demonstrates, we will fully enforce them to protect our national security.”

“Our arrest of Kaveh Afrasiabi makes it clear that the United States is not going to allow undeclared agents of Iran to operate in our country unchecked.  For more than a decade, Mr. Afrasiabi was allegedly paid, directed, and controlled by the Government of Iran to lobby U.S. government officials, including a congressman; and to create and disseminate information favorable to the Iranian government,” said FBI Special Agent in Charge Bonavolonta.  “The FBI will continue to do everything it can to uncover these hidden efforts and hold accountable those who work for our adversaries to the detriment of our national security.”  

According to the complaint, Afrasiabi is a citizen of the Islamic Republic of Iran and a lawful permanent resident of the United States.  Afrasiabi holds a PhD, and frequently publishes books and articles, and appears on English-language television programs discussing foreign relations matters, particularly Iran’s relations with the United States.  Afrasiabi has identified or portrayed himself as a political scientist, a former political science professor or as an expert on foreign affairs.

Since at least 2007 to the present, Afrasiabi has also been secretly employed by the Iranian government and paid by Iranian diplomats assigned to the Permanent Mission of the IMUN.  Afrasiabi has been paid approximately $265,000 in checks drawn on the IMUN’s official bank accounts since 2007, and has received health insurance through the IMUN’s employee health benefit plans since at least 2011. 

In the course of his employment by the Iranian government, Afrasiabi has lobbied a U.S. congressman and the U.S. Department of State to advocate for policies favorable to Iran, counseled Iranian diplomats concerning U.S. foreign policy, made television appearances to advocate for the Iranian government’s views on world events, and authored articles and opinion pieces espousing the Iranian government’s position on various matters of foreign policy.  Afrasiabi has long known that FARA requires agents of foreign principals to register with the U.S. Department of Justice and has discussed information obtained from FARA disclosures with others.  Nevertheless, Afrasiabi did not register as an agent of the Government of Iran.

For example, in January 2020, Afrasiabi emailed Iran’s Foreign Minister and Permanent Representative to the United Nations with advice for “retaliation” for the U.S. military airstrike that killed Major General Qasem Soleimani, the head of the Quds Force, the external operations arm of the Iranian government’s Islamic Revolutionary Guard Corps, proposing that the Iranian government “end all inspections and end all information on Iran’s nuclear activities pending a [United Nations Security Council] condemnation of [the United States’] illegal crime.”  Afrasiabi claimed that such a move would, among other things, “strike fear in the heart of [the] enemy.”

Afrasiabi has admitted in his own communications that his extensive body of published works and television appearances, in which he has consistently advocated perspectives and policy positions favored by the Iranian government, has been attributable to the funding he receives from the Iranian government.  For example, in a July 28, 2020, email to Iran’s Foreign Minister, Afrasiabi included “links for many of [his] works, including books, hundreds of articles in international newspapers and academic journals,” telling Iran’s Foreign Minister, “Without support none of this would have been possible! This has been a very productive relationship spanning decades that ought not to be interrupted.”

The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of both charged offenses, Afrasiabi faces a maximum sentence of 10 years in prison.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant U.S. Attorneys Ian C. Richardson and Michael T. Keilty are in charge of the prosecution, with assistance from Trial Attorney David C. Recker of the National Security Division’s Counterintelligence and Export Control Section.

Este día, en Central Islip, Nueva York, se presentó una acusación contra 14 de los líderes de mayor rango de la MS-13 en el mundo, conocidos como la Ranfla Nacional, la cual funcionaba como la Junta Directiva de la Organización y dirigió la violencia y la actividad delictiva de la MS-13 en todo el mundo durante casi dos décadas.

Concretamente, según el acta presentada, se les acusa de conspiración para prestar y ocultar apoyo material a terroristas, conspiración para cometer actos de terrorismo que trascienden las fronteras nacionales, conspiración para financiar el terrorismo y conspiración de narcoterrorismo en relación con la dirección de los acusados de la organización delictiva transnacional durante las últimas dos décadas en El Salvador, Estados Unidos, México y otros lugares.

El acusado Borromeo Enrique Henríquez, alias “Diablito de Hollywood,” es ampliamente reconocido como el miembro más poderoso de la Ranfla Nacional. Tres de los acusados, Fredy Iván Jandres-Parada, alias “Lucky de Park View” y “Lacky de Park View;” César Humberto López-Larios, alias “El Greñas de Stoners” y “Oso de Stoners” y Hugo Armando Quinteros-Mineros, alias “Flaco de Francis,” siguen en libertad y deben ser considerados como armados y peligrosos. Se exhorta a los ciudadanos que tengan información sobre su paradero que se pongan en contacto con la línea telefónica gratuita de información MS-13 del Buró Federal de Investigaciones (FBI), 1-866-STP-MS13 (1-866-787-6713), o con el Servicio de Investigaciones de Seguridad Nacional (HSI) del Servicio de Inmigración y Aduanas de los Estados Unidos, en el (866) 347-2423, o en https://www.ice.gov/webform/ice-tip-form. Juntos, el FBI y HSI han ofrecido $20,000 en recompensa por información que lleve al arresto y condena de cada uno de los tres fugitivos. Henríquez y otros 10 acusados están en custodia en El Salvador. Estados Unidos, en conjunto con el Gobierno de El Salvador, estudiarán las opciones para su extradición a los Estados Unidos.

El fiscal general en funciones, Jeffrey A. Rosen; el fiscal en funciones del Distrito Este de Nueva York (EDNY), Seth D. DuCharme; el director de la Fuerza de Tarea Conjunta Vulcano (JTFV), John J. Durham; el director del FBI, Christopher A. Wray, y el director ejecutivo asociado de HSI, Derek Benner, anunciaron la acusación.

El fiscal general en funciones Rosen dijo, “La acusación anunciada hoy es la más amplia y de mayor alcance que se ha hecho en la historia de los EE.UU. contra la MS-13 y su estructura de mando y control. Cuando el fiscal general Barr anunció la creación de la JTFV en agosto de 2019, previó un enfoque transversal que combinaría herramientas procesales ya probadas con estrategias innovadoras diseñadas específicamente para eliminar la capacidad de los líderes de la MS-13 de operar la banda y dirigir su actividad terrorista. Esta acusación refleja un importante paso hacia el logro de ese objetivo. Al trabajar codo a codo con nuestros socios de la aplicación de la ley de EE. UU. y con nuestros socios en El Salvador, hemos acusado a los líderes de más alto rango de la MS-13 de operar una organización criminal transnacional que utiliza el terror para imponer su voluntad en los barrios, negocios y sobre civiles inocentes en Estados Unidos y América Central.”

“La MS-13 es responsable de una ola de muerte y violencia que ha aterrorizado a las comunidades, dejando a los barrios de Long Island y a todo el Distrito Este de Nueva York inundados de sangre,” dijo el fiscal en funciones del Distrito Este de Nueva York (EDNY), Seth D. DuCharme. “Incluso desde la cárcel, la Ranfla Nacional continuó dirigiendo las operaciones globales de la MS-13, reclutando nuevos miembros en la MS-13, incluyendo niños, y orquestando asesinatos y caos en todo el mundo. La innovadora acusación de hoy busca demoler la MS-13 apuntando a su estructura de mando y control y haciendo responsable a la Junta Directiva de la MS-13 por sus acciones terroristas.”

“El FBI está comprometido a combatir todas las formas de terrorismo que amenazan al pueblo estadounidense así como a nuestros socios internacionales,” dijo el director del FBI, Christopher Wray. “En colaboración con nuestros socios federales, estatales, locales e internacionales, tomamos medidas agresivas para atacar y perseguir algunos de los más altos niveles de liderazgo de la MS-13. Esta operación es una clara señal para otros que participan en este tipo de actividad delictiva transnacional: el FBI trabajará incansablemente para llevarlos ante la justicia dondequiera que tengan su base.”

“Por más de una década, HSI se ha mantenido firme en nuestra resolución de desmantelar las pandillas transnacionales como la MS-13,” dijo el director ejecutivo asociado de HSI, Derek Benner. “Como una de las organizaciones criminales más violentas y peligrosas, la MS-13 y la Ranfla Nacional fueron directamente responsables de una violencia y actividad criminal impensables en comunidades a lo largo de los Estados Unidos y Centroamérica. Como resultado de la ardua labor y los considerables recursos dedicados a la Fuerza de Tarea Conjunta Vulcano por nuestros socios en la aplicación de la ley, tanto nacionales como internacionales, esta acusación tendrá un efecto negativo duradero en las futuras actividades ilícitas mundiales de esta organización delictiva transnacional.”

Como se alega en la acusación, la Ranfla Nacional comprende el más alto nivel de liderazgo del MS-13.  Aproximadamente en 2002, los acusados y otros dirigentes del MS-13 comenzaron a establecer una estructura de mando y control altamente organizada y jerárquica como medio para llevar a cabo sus decisiones y hacer cumplir sus órdenes, incluso mientras estaban en prisión.  Dirigieron actos de violencia y asesinato en El Salvador, Estados Unidos y otros lugares; establecieron campamentos de entrenamiento de tipo militar para sus miembros y obtuvieron armas militares como rifles, pistolas, granadas, artefactos explosivos improvisados (IED) y lanzacohetes. Como líderes de la MS-13, los acusados controlaban franjas de territorio y participaban en actividades de relaciones públicas en nombre de la organización delictiva transnacional. Además, los acusados utilizaban la gran cantidad de miembros de la MS-13 en los Estados Unidos para participar en actividades delictivas, como el tráfico de drogas y la extorsión para recaudar fondos en apoyo de las actividades terroristas de la MS-13 en El Salvador y en otros lugares, y dirigían a sus miembros en los Estados Unidos a cometer actos de violencia, incluidos asesinatos, para promover sus objetivos. 

Como se alega también en la acusación, un tema central de las normas aplicadas por la Ranfla Nacional era el requisito de lealtad a la MS-13, o al “barrio.”  El requisito de lealtad era fundamental en todos los aspectos de la vida de los miembros del MS-13.  Los miembros que desobedecían las reglas, mostraban deslealtad a la banda o a sus líderes, cooperaban con las fuerzas del orden o faltaban al respeto a otros miembros eran sometidos a severos castigos, incluso la muerte. Las normas establecidas por la Ranfla Nacional permitieron que la banda prosperara en algunas partes de los Estados Unidos, incluso dentro del EDNY, donde, bajo el mando de los acusados, la MS-13 ha cometido numerosos actos de violencia, entre ellos asesinatos, intentos de asesinato, asaltos, secuestros, tráfico de drogas, extorsión de personas y empresas, obstrucción de la justicia y envío de las cuotas y el producto de la actividad delictiva por transferencia electrónica a los líderes de la MS-13 en El Salvador. 

Como se expone más adelante en el acta de acusación, la Ranfla Nacional ha ejercido su poder sobre el Gobierno de El Salvador cometiendo actos de violencia e intimidación contra funcionarios del gobierno, los organismos de represión y la población de El Salvador en general.  Al hacerlo, el Ranfla Nacional ha ordenado el asesinato de funcionarios de los organismos de represión y del Gobierno de El Salvador, así como la “luz verde”, o el asesinato, de un agente especial del FBI destacado en El Salvador que investigaba la MS-13 y sus miembros. Además, al controlar el nivel de violencia del MS-13, la Ranfla Nacional ejerció influencia sobre el Gobierno de El Salvador. Por ejemplo, como se alega en el acta de acusación, desde aproximadamente 2012 hasta aproximadamente 2015, la Ranfla Nacional entró en una “tregua” con el entonces Gobierno de El Salvador.  Como parte de ese acuerdo, la Ranfla Nacional ordenó a la MS-13 que redujera los homicidios en El Salvador a cambio de mejores condiciones carcelarias, prestaciones y pagos en efectivo. En 2015, cuando este acuerdo se derrumbó, la Ranfla Nacional culpó a los Estados Unidos, creyendo que el gobierno de los Estados Unidos presionó al gobierno de El Salvador para que pusiera fin a la “tregua” como condición para recibir fondos de cooperación. A partir de entonces, a principios de 2016, la Ranfla Nacional comenzó a planificar una importante campaña de violencia coordinada en El Salvador en represalia por las medidas más severas impuestas a sus miembros tras el fin de la “tregua.”  Como se alega en la acusación, los acusados ordenaron a todas las clicas de El Salvador que crearan una unidad especializada de miembros de la MS-13 para atacar a los agentes de policía, los militares y los funcionarios gubernamentales de El Salvador. Estos miembros se sometieron a entrenamiento militar en los campamentos de entrenamiento militar de la MS-13 en El Salvador.  Los acusados también ordenaron a todas las clicas, incluidas las de los Estados Unidos y el EDNY, que proporcionarán los beneficios de sus actividades delictivas relacionadas con la MS-13 para que se utilizaran en la compra de armas para los ataques previstos contra la policía en El Salvador. En total, los acusados recaudaron más de $600,000 para este fondo que se utilizó para comprar armas, incluyendo ametralladoras M-16 y M-60, granadas, IED y lanzacohetes.  Además, los acusados ordenaron un aumento de la violencia, incluyendo asesinatos, en el EDNY y en otras partes de los Estados Unidos, que vieron un dramático aumento de la violencia con las MS-13 en 2016 y 2017. 

Por último, como se alega en la acusación, la Ranfla Nacional dirigió la expansión de las actividades de la MS-13 en todo el mundo, sobre todo en México, donde se envió a varios dirigentes de alto rango para que organizaran operaciones. En México, los líderes de la MS-13 establecieron conexiones para obtener narcóticos y armas de fuego, hicieron negocios con los cárteles mexicanos de la droga, como los Zetas, el Cártel del Golfo, el Cártel de Jalisco Nueva Generación (CJNG) y el Cártel de Sinaloa, y se dedicaron a la trata y el contrabando de personas.

En agosto de 2019, el fiscal general William P. Barr creó la JTFV para llevar a cabo las recomendaciones del Subcomité MS-13 formado en el marco del Grupo de Trabajo del fiscal general sobre la Delincuencia Organizada Transnacional. El Grupo de Tarea del fiscal general fue el resultado de la Orden Ejecutiva del presidente Donald J. Trump, de febrero de 2017, en la que se ordenaba a los Departamentos de Justicia, Estado y Seguridad Nacional y a la Oficina del Director de Inteligencia Nacional que coordinaran un enfoque de todo el gobierno para desmantelar las organizaciones delictivas transnacionales, como la MS-13, y aumentar la seguridad del pueblo estadounidense.

Desde su creación, la JTFV ha aplicado con éxito un enfoque de todo el gobierno para combatir la MS-13, que incluye el aumento de la coordinación y la colaboración con asociados extranjeros en la aplicación de la ley, entre ellos El Salvador, México, Honduras y Guatemala; la designación de programas, camarillas y líderes de la MS-13 prioritarios, que tienen el mayor impacto en los Estados Unidos, para enjuiciamientos selectivos; y la coordinación de acusaciones importantes de la MS-13 en las oficinas de los fiscales de los Estados Unidos en todo el país, incluido el primer uso de cargos de seguridad nacional contra los líderes de la MS-13.

La JTFV ha estado compuesta por miembros de la División de Seguridad Nacional y de la División Penal del Departamento de Justicia, así como de la División de los Estados Unidos Fiscalías de todo el país, incluyendo el EDNY; el Distrito de Nueva Jersey; el Distrito Norte de Ohio; el Distrito de Utah; el Distrito Este de Virginia; el Distrito de Massachusetts; el Distrito Este de Texas; el Distrito Sur de Nueva York; el Distrito de Alaska; el Distrito Sur de Florida; el Distrito Sur de California; el Distrito de Nevada, y el Distrito de Columbia. Además, todos los organismos de aplicación de la ley del Departamento de Justicia participan en el esfuerzo, incluidos el FBI, la Administración de Lucha contra las Drogas de los Estados Unidos, la Oficina de Alcohol, Tabaco, Armas de Fuego y Explosivos, el Servicio de Alguaciles de los Estados Unidos y la Oficina de Prisiones de los Estados Unidos.  Además, HSI también desempeña un papel fundamental en el JTFV.

El fiscal general, en funciones, Jeffrey A. Rosen, expresó su sincero agradecimiento al fiscal general de El Salvador, Raúl Melara, por la asistencia de su oficina, así como a los investigadores de la Policía Nacional Civil de El Salvador, unidad del Centro Transnacional Antipandillas, por su inestimable cooperación. Además, numerosos componentes del Departamento de Justicia contribuyeron a esta acusación, entre ellos: la Sección de Lucha contra el Terrorismo de la División de Seguridad Nacional; la Oficina de Asuntos Internacionales del Departamento de Justicia; la Oficina de Desarrollo, Asistencia y Capacitación del Ministerio Público en el Extranjero de la División Penal; la Sección de Lucha contra la Delincuencia Organizada y las Pandillas; y la Oficina Ejecutiva de los Grupos de Tareas para la Lucha contra la Delincuencia Organizada contra las Drogas. Por último, en consonancia con la Orden Ejecutiva del presidente Trump y el enfoque de todo el gobierno del fiscal general, el Departamento de Estado ha prestado un apoyo fundamental a la misión de la JTFV.

Los cargos anunciados hoy son acusaciones y los acusados se presumen inocentes a menos y hasta que se demuestre su culpabilidad más allá de toda duda razonable en un tribunal de justicia.  Si son declarados culpables, los acusados se enfrentan a una sentencia máxima de cadena perpetua.

El caso del gobierno está siendo procesado por los fiscales adjuntos James Donnelly, Matthew Shepherd y Stewart Young de JTFV, y los fiscales adjuntos Paul G. Scotti, Justina L. Geraci y Megan E. Farrell de la División Criminal de Long Island del EDNY.

Para saber más sobre los esfuerzos del Departamento de Justicia en la lucha contra la MS-13 de 2016 a 2020, véase el informe en: /media/1120601/dl?inline.

Una copia de la acusación y los carteles de buscados en español haciendo clic en: acusación, Fredy Ivan Jandres-Parada póster buscado en español, Cesar Humberto Lopez-Larios póster buscado en español, y Hugo Armando Quinteros-Mineros Wanted póster buscado en español.

Los Acusados:

BORROMEO ENRIQUE HENRIQUEZ (“Diablito de Hollywood”)

Edad: 42 años

ELMER CANALES-RIVERA (“Crook de Hollywood”)

Edad: 44 años

EFRAIN CORTEZ (“Tigre de Park View” y “Viejo Tigre de Park View”)

Edad: 51 años

RICARDO ALBERTO DIAZ (“Rata de Sotavento” y “Ratón de Sotavento”)

Edad: 47 años

EDUARDO ERAZO-NOLASCO (“Colocho de Western” y “Mustage de Western”)

Edad: 48 años

EDSON SACHARY EUFEMIA (“Speedy de Park View”)

Edad: 46 años

JOSE FERNANDEZ FLORES-CUBAS (“Cola de Western”)

Edad: 46 años

FREDY IVAN JANDRES-PARADA (“Lucky de Park View” y “Lacky de Park View”)

Edad: 45 años

LEONEL ALEXANDER LEONARDO (“El Necio de San Cocos”)

Edad: 40 años

CESAR HUMBERTO LOPEZ-LARIOS (“El Greñas de Stoners” y “Oso de Stoners”)

Edad: 42 años

JOSE LUIS MENDOZA-FIGUEROA (“Pavas de 7-11” y “Viejo Pavas de 7-11”)

Edad: 56 años

HUGO ARMANDO QUINTEROS-MINEROS (“Flaco de Francis”)

Edad: 48 años

SAUL ANTONIO TURCIOS (“Trece de Teclas”)

Edad: 42 años

ARISTIDES DIONISIO UMANZOR (“Sirra de Teclas”)

Edad: 42 años

Earlier today, and throughout the past week in federal court in Brooklyn, 11 members and associates of the Gambino organized crime family of La Cosa Nostra pleaded guilty to multiple crimes, including racketeering conspiracy, fraud, obstruction of justice and related offenses for criminal activities throughout the New York metropolitan area committed as part of the illicit activities of the Gambino family.  One additional defendant pleaded guilty to filing a false tax return.  The proceedings were held before United States Magistrate Judge Roanne L. Mann.

Today, Andrew Campos, a captain in the Gambino organized crime family, and Vincent Fiore, a Gambino family soldier, pleaded guilty to racketeering conspiracy, variously admitting their participation in predicate acts of wire fraud, money laundering and obstruction of justice offenses. 

Previously, Richard Martino, a Gambino family soldier, and Frank Tarul, a Gambino crime family associate, pleaded guilty to conspiracy to obstruction justice;  Mark Kocaj, Benito DiZenzo and Carlos Cobos, Sr., Gambino family associates, pleaded guilty to wire fraud conspiracy;  James Ciaccia and George Campos, Gambino family soldiers, and Renato Barca, Jr. and Michael Tarul, Gambino family associates, pleaded guilty to making false statements in connection with their fraudulently obtaining safety cards from the Occupational Safety and Health Administration (“OSHA”).  John Simonlacaj, a former managing director of a construction company, pleaded guilty to submitting a false tax return. 

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the guilty pleas.

“With these guilty pleas, a dozen members and associates of the Gambino crime family are held accountable for committing a litany of crimes in the construction industry that enriched the Mafia at the expense of the American taxpayer, construction companies harmed by their pernicious presence and the U.S. government,” stated Acting United States Attorney DuCharme.  “The defendants will now have to pay the consequences for their corrupt activities.”  Mr. DuCharme expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, the Internal Revenue Service- Criminal Investigation, the New York City Police Department and the Department of Labor for their exemplary work on the case.  Mr. DuCharme also thanked the Queens County District Attorney’s Office, the United States Probation Departments for the Eastern and Southern Districts of New York and the Waterfront Commission of New York Harbor for their assistance during the investigation.

According to court filings and facts presented during the guilty plea proceedings, Andrew Campos and members of his crew carried out fraudulent schemes to infiltrate the construction industry and earn millions of dollars in criminal proceeds, in part through their operation of a carpentry company, CWC Contracting Corp. (“CWC”).  Campos, Fiore and Cobos, among others, defrauded the U.S. government by paying CWC employees millions of dollars in cash without making the required payroll tax withholdings and payments.  Further, Campos, Fiore and others laundered money, causing checks to be made from CWC, purportedly for work performed in connection with CWC construction projects where, in fact, no services were performed.  The proceeds of these scheme were used to, among other things, construct Andrew Campos’s residence.  Further, when Fiore became aware of the government’s investigation, he tried to obstruct it by asking another person to lie about his and Campos’s misconduct.

Between June 2018 and June 2019, CWC paid hundreds of thousands of dollars in bribes and kickbacks to employees of a real estate development company (described in the indictment as “Construction Company #1”), including John Simonlacaj, the company’s former Managing Director of Development.  CWC paid the bribes in the form of hundreds of thousands of dollars’ worth of free labor and materials used for renovations on Simonlacaj’s residence, which Simonlacaj failed to report as taxable income and which Kocaj had fraudulently paid for by billing them to a CWC project for Construction Company #1.  Kocaj was recorded stating the work “should have been pro bono” because Construction Company #1 “do[es] 50 million a year in business.”  DiZenzo and Fiore performed tens of thousands of dollars of work at a gym for the benefit of an employee of another real estate development company (described in the indictment as “Construction Company #2”), which they agreed would be fraudulently paid for by billing the work to an unrelated project for Construction Company #2. 

In addition to these schemes, Martino was convicted in the Eastern District of New York in 2005 for his role in a scheme to defraud users of adult entertainment services.  Martino was ordered by the Court to pay $9.1 million in forfeiture.  After his release from prison, Martino, together with Frank Tarul and others, concealed Martino’s substantial income in order to avoid him paying the more than $300,000 forfeiture balance owed by falsely reporting that Martino had limited assets and worked for Tarul’s flooring company.  In reality, Martino operated companies that earned millions of dollars.

Finally, Barca, George Campos, Ciaccia and Michael Tarul, along with others, fraudulently procured safety cards from the United States Department of Labor indicating the completion of certain OSHA training courses when, in fact, the courses were not completed.

When sentenced, Andrew Campos, Cobos, DiZenzo, Fiore, Kocaj, Martino and Frank Tarul each face up to 20 years in prison.  Barca, George Campos, Ciaccia and Michael Tarul each face up to 5 years in prison.  Simonlacaj faces up to 3 years in prison

The government’s case is being handled by the Office’s Organized Crime & Gangs Section.  Assistant United States Attorneys Keith D. Edelman and Kayla C. Bensing are in charge of the prosecution, assisted by EDNY Special Agent Erik Nesbitt.  Assistant United States Attorney Claire S. Kedeshian of the Office’s Civil Division is handling forfeiture matters. 

The Defendants:

RENATO BARCA, JR. (also known as “Ronny”)
Age: 33
Bronx, New York

ANDREW CAMPOS
Age: 51
Scarsdale, New York

GEORGE CAMPOS
Age: 73
Peekskill, New York

JAMES CIACCIA
Age: 52
Bronx, New York

CARLOS COBOS, SR.
Age: 57
Brentwood, New York

BENITO DIZENZO (also known as “Benny”)
Age: 54
New Rochelle, New York

VINCENT FIORE
Age: 58
Briarcliff, New York

MARK KOCAJ (also known as “Chippy”)
Age: 50
Tuckahoe, New York

RICHARD MARTINO
Age: 61
Rye, New York

JOHN SIMONLACAJ (also known as “John Si” and “Smiley”)
Age: 51
Scarsdale, New York

FRANK TARUL (also known as “Bones”)
Age: 46
Bronx, New York

MICHAEL TARUL (also known as “Perkins”)
Age: 44
Bronx, New York

E.D.N.Y. Docket No. 19-CR-575 (FB)

Earlier today, an indictment was unsealed in Central Islip, New York charging 14 of the world’s highest-ranking MS-13 leaders who are known today as the Ranfla Nacional, which operated as the Organization’s Board of Directors, and directed MS-13’s violence and criminal activity around the world for almost two decades.

Specifically, the indictment charges the defendants with conspiracy to provide and conceal material support to terrorists, conspiracy to commit acts of terrorism transcending national boundaries, conspiracy to finance terrorism and narco-terrorism conspiracy in connection with the defendants’ leadership of the transnational criminal organization over the past two decades from El Salvador, the United States, Mexico and elsewhere.

Defendant Borromeo Enrique Henriquez, aka “Diablito de Hollywood,” is widely recognized as the most powerful member of the Ranfla Nacional.  Three of the indicted defendants, Fredy Ivan Jandres-Parada, aka “Lucky de Park View” and “Lacky de Park View,” Cesar Humberto Lopez-Larios, aka “El Grenas de Stoners” and “Oso de Stoners,” and Hugo Armando Quinteros-Mineros, aka “Flaco de Francis,” remain at large and should be considered armed and dangerous.  Members of the public with information concerning their whereabouts are strongly encouraged to contact the Federal Bureau of Investigation’s (FBI) toll-free MS-13 tip line, 1-866-STP-MS13 (1-866-787-6713), or U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) at (866) 347-2423 or https://www.ice.gov/webform/ice-tip-form.  Together, FBI and HSI have offered $20,000 in rewards for information leading to the arrest and conviction of each of the three fugitives.  Henriquez and 10 other defendants are in custody in El Salvador.  The United States will explore options for their extradition to the United States with the Government of El Salvador.

Acting Attorney General Jeffrey A. Rosen, Acting U.S. Attorney Seth D. DuCharme for the Eastern District of New York (EDNY), Director of Joint Task Force Vulcan (JTFV) John J. Durham, FBI Director Christopher A. Wray, and Executive Associate Director Derek Benner of HSI, announced the unsealing of the indictment.

Acting Attorney General Rosen said, “The indictment announced today is the highest-reaching and most sweeping indictment targeting MS-13 and its command and control structure in U.S. history.  When Attorney General Barr announced the creation of JTFV in August 2019, he envisioned a whole-of-government approach that would combine proven prosecution tools from the past with innovative strategies designed specifically to eliminate MS-13 leadership’s ability to operate the gang and direct its terrorist activity.  This indictment reflects an important step toward achieving that goal.  By working side-by-side with our U.S. law enforcement partners and with our partners in El Salvador, we have charged MS-13’s highest-ranking leaders with operating a transnational criminal organization that utilizes terror to impose their will on neighborhoods, businesses and innocent civilians across the United States and Central America.”

“MS-13 is responsible for a wave of death and violence that has terrorized communities, leaving neighborhoods on Long Island and throughout the Eastern District of New York awash in bloodshed,” said Acting U.S. Attorney Seth D. DuCharme.  “Even when incarcerated, the Ranfla Nacional continued to direct MS-13’s global operations, recruit new members, including children, into MS-13, and orchestrate murder and mayhem around the world.  Today’s ground-breaking indictment seeks to demolish MS-13 by targeting its command and control structure and holding MS-13’s Board of Directors accountable for their terroristic actions.”

“The FBI is committed to combatting all forms of terrorism that threaten the American people as well as our international partners,” said FBI Director Christopher Wray. “In collaboration with our federal, state, local and international partners, we took aggressive steps to target and pursue some of the highest levels of leadership of MS-13. This operation is a clear signal to others who engage in this type of transnational criminal activity: the FBI will work tirelessly to bring them to justice wherever they are based.” 

“For over a decade, HSI has remained steadfast in our resolve to dismantle transnational gangs like MS-13,” said HSI Executive Associate Director Benner.  “As one of the most violent and dangerous criminal enterprises, MS-13 and Ranfla Nacional were directly responsible for unthinkable violence and criminal activity in communities across the United States and throughout Central America.  As a result of the hard work and substantial resources dedicated to Joint Task Force Vulcan by our domestic and international law enforcement partners, this indictment will have a lasting disruptive effect on the future global illicit activities of this transnational criminal organization.”

Courtesy of the FBI

As alleged in the indictment, the Ranfla Nacional comprises the highest level of leadership of MS-13.  In approximately 2002, the defendants and other MS-13 leaders began establishing a highly organized, hierarchical command and control structure as a means to effectuate their decisions and enforce their orders, even while in prison.  They directed acts of violence and murder in El Salvador, the United States, and elsewhere, established military-style training camps for its members and obtained military weapons such as rifles, handguns, grenades, improvised explosive devices (IED) and rocket launchers.  As leaders of MS-13, the defendants controlled swaths of territory and engaged in public relations efforts on behalf of the transnational criminal organization.  Further, the defendants used MS-13’s large membership in the United States to engage in criminal activities, such as drug trafficking and extortion to raise money to support MS-13’s terrorist activities in El Salvador and elsewhere, and directed members in the United States to commit acts of violence, including murders, to further its goals. 

As further alleged in the indictment, a central theme of the rules implemented by the Ranfla Nacional was the requirement of loyalty to MS-13, or to the “barrio.”  The requirement for loyalty was central to all aspects of life for MS-13 members.  Members who disobeyed the rules, showed disloyalty to the gang or to its leaders, cooperated with law enforcement, or disrespected other members were subject to severe punishment, including death.  The rules put in place by the Ranfla Nacional allowed the gang to flourish in parts of the United States, including within the EDNY where, under the defendants’ command, MS-13 has committed numerous acts of violence—including murders, attempted murders, assaults, kidnappings, drug trafficking, extortion of individuals and businesses, obstructed justice and sent dues and the proceeds of criminal activity by wire transfer to MS-13 leaders in El Salvador. 

As further outlined in the indictment, the Ranfla Nacional has exercised its power over the Government of El Salvador by committing acts of violence and intimidation over government officials, law enforcement and the population of El Salvador at large.  In doing so the Ranfla Nacional has ordered the killing of law enforcement and government officials in El Salvador as well as ordering a “green light,” or killing, of a FBI Special Agent detailed to El Salvador investigating MS-13 and its members.  Moreover, by controlling the level of MS-13’s violence, the Ranfla Nacional exercised leverage with the Government of El Salvador.  For example, as alleged in the indictment, from approximately 2012 until approximately 2015, the Ranfla Nacional entered into a “truce” with the then-Government of El Salvador.  As part of this agreement, the Ranfla Nacional directed MS-13 to reduce homicides in El Salvador in exchange for improved prison conditions, benefits and cash payments.  In 2015, when this agreement collapsed, the Ranfla Nacional blamed the United States, believing that the U.S. government pressured the government of El Salvador to end the “truce” as a condition of receiving funds from the United States.  Thereafter, in early 2016, the Ranfla Nacional began planning for a major campaign of coordinated violence in El Salvador in retaliation for the harsher measures imposed on its members after the end of the “truce.”  As alleged in the indictment, the defendants ordered all cliques in El Salvador to create a specialized unit of MS-13 members to target police officers, military members, and government officials in El Salvador.  These members underwent military training at MS-13 military training camps in El Salvador.  The defendants also ordered all cliques, including those in the United States and in the EDNY, to provide profits from their MS-13-related criminal activity to be used to purchase weapons for the planned attacks on police in El Salvador.  In total, the defendants collected over $600,000 U.S. dollars for this fund which was used to purchase weapons, including M-16s and M-60 machine guns, grenades, IEDs, and rocket launchers.  Furthermore, the defendants ordered increased violence, including murders, in the EDNY and other parts of the United States, which saw a dramatic increase in MS-13 violence in 2016 and 2017. 

Finally, as alleged in the indictment, the Ranfla Nacional directed the expansion of MS-13 activities around the world, most significantly into Mexico, where several high-ranking leaders were sent to organize operations there.  In Mexico, MS-13 leaders made connections to obtain narcotics and firearms, conducted business with Mexican drug cartels such as the Zetas, Gulf Cartel, Cártel de Jalisco Nueva Generación (CJNG) and Sinaloa Cartel, and engaged in human trafficking and smuggling.

In August 2019, Attorney General William P. Barr created JTFV to carry out the recommendations of the MS-13 Subcommittee formed under the Attorney General’s Transnational Organized Crime Task Force (TOC Task Force).  The Attorney General’s TOC Task Force resulted from President Donald J. Trump’s February 2017 Executive Order directing the Departments of Justice, State, and Homeland Security, and the Office of the Director of National Intelligence to coordinate a whole-of-government approach to dismantle transnational criminal organizations, such as MS-13, and increase the safety of the American people.

Since its creation, JTFV has successfully implemented a whole-of-government approach to combatting MS-13, including increasing coordination and collaboration with foreign law enforcement partners, including El Salvador, Mexico, Honduras and Guatemala; designating priority MS-13 programs, cliques and leaders, who have the most impact on the United States, for targeted prosecutions; and coordinating significant MS-13 indictments in U.S. Attorney’s Offices across the country, including the first use of national security charges against MS-13 leaders.

JTFV has been comprised of members from the Department of Justice’s National Security Division and the Criminal Division, as well as U.S. Attorney’s Offices across the country, including the EDNY; the District of New Jersey; the Northern District of Ohio; the District of Utah; the Eastern District of Virginia; the District of Massachusetts; the Eastern District of Texas; the Southern District of New York; the District of Alaska; the Southern District of Florida; the Southern District of California; the District of Nevada; and the District of Columbia.  In addition, all Department of Justice law enforcement agencies are involved in the effort, including the FBI; the U.S. Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; and the U.S. Bureau of Prisons.  In addition, HSI also plays a critical role in JTFV.

Acting Attorney General Rosen expressed his sincere thanks to Attorney General Raul Melara of El Salvador for the assistance of his office, as well as investigators from El Salvador’s Policía Nacional Civil, Centro Antipandilla Transnacional unit for their invaluable cooperation.  Additionally, numerous Department of Justice components contributed to this indictment, including: the National Security Division’s Counterterrorism Section; the Justice Department’s Office of International Affairs; the Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training; and Organized Crime and Gang Section; and the Organized Crime Drug Enforcement Task Forces Executive Office.  Finally, consistent with President Trump’s Executive Order and the Attorney General’s whole of government approach, the Department of State has provided critical support for JTFV’s mission.

The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.  If convicted, the defendants face a maximum sentence of life in prison.

The government’s case is being prosecuted by Assistant U.S. Attorneys James Donnelly, Matthew Shepherd, and Stewart Young from JTFV, and Assistant U.S. Attorneys Paul G. Scotti, Justina L. Geraci, and Megan E. Farrell from the EDNY’s Long Island Criminal Division.

To learn more about the Justice Department’s efforts in combating MS-13 from 2016 to 2020, see report at https://www.justice.gov/ag/page/file/1329776/download.

A copy of the indictment and wanted posters in English and Spanish can be downloaded by clicking on: indictment, Fredy Ivan Jandres-Parada Wanted poster in English and Spanish, Cesar Humberto Lopez-Larios Wanted poster in English and Spanish, and Hugo Armando Quinteros-Mineros Wanted poster in English and Spanish.

The Defendants:

BORROMEO ENRIQUE HENRIQUEZ (“Diablito de Hollywood”)
Age:  42

ELMER CANALES-RIVERA (“Crook de Hollywood”)
Age:  44

EFRAIN CORTEZ (“Tigre de Park View” and “Viejo Tigre de Park View”)
Age:  51

RICARDO ALBERTO DIAZ (“Rata de Leewards” and “Mousey de Leewards”)
Age:  47

EDUARDO ERAZO-NOLASCO (“Colocho de Western” and “Mustage de Western”)
Age:  48

EDSON SACHARY EUFEMIA (“Speedy de Park View”)
Age:  46

JOSE FERNANDEZ FLORES-CUBAS (“Cola de Western”)
Age:  46

FREDY IVAN JANDRES-PARADA (“Lucky de Park View” and “Lacky de Park View”)
Age:  45

LEONEL ALEXANDER LEONARDO (“El Necio de San Cocos”)
Age:  40

CESAR HUMBERTO LOPEZ-LARIOS (“El Grenas de Stoners” and “Oso de Stoners”)
Age:   42

JOSE LUIS MENDOZA-FIGUEROA (“Pavas de 7-11” and “Viejo Pavas de 7-11”)
Age:  56

HUGO ARMANDO QUINTEROS-MINEROS (“Flaco de Francis”)
Age:  48

SAUL ANTONIO TURCIOS (“Trece de Teclas”)
Age:  42

ARISTIDES DIONISIO UMANZOR (“Sirra de Teclas”)
Age:  42

CENTRAL ISLIP, NY - Earlier today, an indictment was unsealed in Central Islip, New York charging 14 of the world’s highest-ranking MS-13 leaders who are known today as the Ranfla Nacional, which operated as the Organization’s Board of Directors, and directed MS-13’s violence and criminal activity around the world for almost two decades.

Specifically, the indictment charges the defendants with conspiracy to provide and conceal material support to terrorists, conspiracy to commit acts of terrorism transcending national boundaries, conspiracy to finance terrorism and narco-terrorism conspiracy in connection with the defendants’ leadership of the transnational criminal organization over the past two decades from El Salvador, the United States, Mexico and elsewhere.

Defendant Borromeo Enrique Henriquez, aka “Diablito de Hollywood,” is widely recognized as the most powerful member of the Ranfla Nacional.  Three of the indicted defendants, Fredy Ivan Jandres-Parada, aka “Lucky de Park View” and “Lacky de Park View,” Cesar Humberto Lopez-Larios, aka “El Grenas de Stoners” and “Oso de Stoners,” and Hugo Armando Quinteros-Mineros, aka “Flaco de Francis,” remain at large and should be considered armed and dangerous.  Members of the public with information concerning their whereabouts are strongly encouraged to contact the Federal Bureau of Investigation’s (FBI) toll-free MS-13 tip line, 1-866-STP-MS13 (1-866-787-6713), or U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) at (866) 347-2423 or https://www.ice.gov/webform/ice-tip-form.  Together, FBI and HSI have offered $20,000 in rewards for information leading to the arrest and conviction of each of the three fugitives.  Henriquez and 10 other defendants are in custody in El Salvador.  The United States will explore options for their extradition to the U.S. with the government of El Salvador.

Jeffrey A. Rosen, Acting Attorney General; Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York (EDNY); John J. Durham, Director of Joint Task Force Vulcan (JTFV); Christopher A. Wray, Director, FBI; and Derek Benner, Executive Associate Director, HSI, announced the unsealing of the indictment.

“The indictment announced today is the highest-reaching and most sweeping indictment targeting MS-13 and its command and control structure in U.S. history.  When Attorney General Barr announced the creation of JTFV in August 2019, he envisioned a whole-of-government approach that would combine proven prosecution tools from the past with innovative strategies designed specifically to eliminate MS-13 leadership’s ability to operate the gang and direct its terrorist activity.  This indictment reflects an important step toward achieving that goal.  By working side-by-side with our U.S. law enforcement partners and with our partners in El Salvador, we have charged MS-13’s highest-ranking leaders with operating a transnational criminal organization that utilizes terror to impose their will on neighborhoods, businesses and innocent civilians across the United States and Central America,” stated Acting Attorney General Rosen.  

“MS-13 is responsible for a wave of death and violence that has terrorized communities, leaving neighborhoods on Long Island and throughout the Eastern District of New York awash in bloodshed,” said Acting U.S. Attorney DuCharme.  “Even when incarcerated, the Ranfla Nacional continued to direct MS-13’s global operations, recruit new members, including children, into MS-13, and orchestrate murder and mayhem around the world.  Today’s ground-breaking indictment seeks to demolish MS-13 by targeting its command and control structure and holding MS-13’s Board of Directors accountable for their terroristic actions.”

“The FBI is committed to combatting all forms of terrorism that threaten the American people as well as our international partners,” stated FBI Director Wray. “In collaboration with our federal, state, local and international partners, we took aggressive steps to target and pursue some of the highest levels of leadership of MS-13. This operation is a clear signal to others who engage in this type of transnational criminal activity: the FBI will work tirelessly to bring them to justice wherever they are based.”

“For over a decade, HSI has remained steadfast in our resolve to dismantle transnational gangs like MS-13, stated HSI Executive Associate Director Benner.  “As one of the most violent and dangerous criminal enterprises, MS-13 and La Ranfla Nacional were directly responsible for unthinkable violence and criminal activity in communities across the United States and throughout Central America.  As a result of the hard work and substantial resources dedicated to Joint Task Force Vulcan by our domestic and international law enforcement partners, this indictment will have a lasting disruptive effect on the future global illicit activities of this transnational criminal organization.”

As alleged in the indictment, the Ranfla Nacional comprises the highest level of leadership of MS-13.  In approximately 2002, the defendants and other MS-13 leaders began establishing a highly-organized, hierarchical command and control structure as a means to effectuate their decisions and enforce their orders, even while in prison.  They directed acts of violence and murder in El Salvador, the United States, and elsewhere, established military-style training camps for its members and obtained military weapons such as rifles, handguns, grenades, improvised explosive devices (IED) and rocket launchers.  As leaders of MS-13, the defendants controlled swaths of territory and engaged in public relations efforts on behalf of the transnational criminal organization.  Further, the defendants used MS-13’s large membership in the United States to engage in criminal activities, such as drug trafficking and extortion to raise money to support MS-13’s terrorist activities in El Salvador and elsewhere, and directed members in the United States to commit acts of violence, including murders, to further its goals. 

As further alleged in the indictment, a central theme of the rules implemented by the Ranfla Nacional was the requirement of loyalty to MS-13, or to the “barrio.”  The requirement for loyalty was central to all aspects of life for MS-13 members.  Members who disobeyed the rules, showed disloyalty to the gang or to its leaders, cooperated with law enforcement, or disrespected other members were subject to severe punishment, including death.  The rules put in place by the Ranfla Nacional allowed the gang to flourish in parts of the United States, including within the EDNY where, under the defendants’ command, MS-13 has committed numerous acts of violence—including murders, attempted murders, assaults, kidnappings, drug trafficking, extortion of individuals and businesses, obstructed justice and sent dues and the proceeds of criminal activity by wire transfer to MS-13 leaders in El Salvador. 

As further outlined in the indictment, the Ranfla Nacional has exercised its power over the Government of El Salvador by committing acts of violence and intimidation over government officials, law enforcement and the population of El Salvador at large.  In doing so the Ranfla Nacional has ordered the killing of law enforcement and government officials in El Salvador as well as ordering a “green light,” or killing, of a FBI Special Agent detailed to El Salvador investigating MS-13 and its members.  Moreover, by controlling the level of MS-13’s violence, the Ranfla Nacional exercised leverage with the Government of El Salvador.  For example, as alleged in the indictment, from approximately 2012 until approximately 2015, the Ranfla Nacional entered into a “truce” with the then-Government of El Salvador.  As part of this agreement, the Ranfla Nacional directed MS-13 to reduce homicides in El Salvador in exchange for improved prison conditions, benefits and cash payments.  In 2015, when this agreement collapsed, the Ranfla Nacional blamed the United States, believing that the U.S. government pressured the government of El Salvador to end the “truce” as a condition of receiving funds from the United States.  Thereafter, in early 2016, the Ranfla Nacional began planning for a major campaign of coordinated violence in El Salvador in retaliation for the harsher measures imposed on its members after the end of the “truce.”  As alleged in the indictment, the defendants ordered all cliques in El Salvador to create a specialized unit of MS-13 members to target police officers, military members, and government officials in El Salvador.  These members underwent military training at MS-13 military training camps in El Salvador.  The defendants also ordered all cliques, including those in the United States and in the EDNY, to provide profits from their MS-13-related criminal activity to be used to purchase weapons for the planned attacks on police in El Salvador.  In total, the defendants collected over $600,000 U.S. dollars for this fund which was used to purchase weapons, including M-16s and M-60 machine guns, grenades, IEDs, and rocket launchers.  Furthermore, the defendants ordered increased violence, including murders, in the EDNY and other parts of the United States, which saw a dramatic increase in MS-13 violence in 2016 and 2017. 

Finally, as alleged in the indictment, the Ranfla Nacional directed the expansion of MS-13 activities around the world, most significantly into Mexico, where several high-ranking leaders were sent to organize operations there.  In Mexico, MS-13 leaders made connections to obtain narcotics and firearms, conducted business with Mexican drug cartels such as the Zetas, Gulf Cartel, Cártel de Jalisco Nueva Generación (CJNG) and Sinaloa Cartel, and engaged in human trafficking and smuggling.

In August 2019, Attorney General William P. Barr created JTFV to carry out the recommendations of the MS-13 Subcommittee formed under the Attorney General’s Transnational Organized Crime Task Force (TOC Task Force).  The Attorney General’s TOC Task Force resulted from President Donald J. Trump’s February 2017 Executive Order directing the Departments of Justice, State, and Homeland Security, and the Office of the Director of National Intelligence to coordinate a whole-of-government approach to dismantle transnational criminal organizations, such as MS-13, and increase the safety of the American people.

Since its creation, JTFV has successfully implemented a whole-of-government approach to combatting MS-13, including increasing coordination and collaboration with foreign law enforcement partners, including El Salvador, Mexico, Honduras and Guatemala; designating priority MS-13 programs, cliques and leaders, who have the most impact on the United States, for targeted prosecutions; and coordinating significant MS-13 indictments in U.S. Attorney’s Offices across the country, including the first use of national security charges against MS-13 leaders.

JTFV has been comprised of members from the Department of Justice’s National Security Division and the Criminal Division, as well as U.S. Attorney’s Offices across the country, including the EDNY; the District of New Jersey; the Northern District of Ohio; the District of Utah; the Eastern District of Virginia; the District of Massachusetts; the Eastern District of Texas; the Southern District of New York; the District of Alaska; the Southern District of Florida; the Southern District of California; the District of Nevada; and the District of Columbia.  In addition, all Department of Justice law enforcement agencies are involved in the effort, including the FBI; the U.S. Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; and the U.S. Bureau of Prisons.  In addition, HSI also plays a critical role in JTFV.

Acting Attorney General Rosen expressed his sincere thanks to Attorney General Raul Melara of El Salvador for the assistance of his office, as well as investigators from El Salvador’s Policía Nacional Civil, Centro Antipandilla Transnacional unit for their invaluable cooperation.  Additionally, numerous Department of Justice components contributed to this indictment, including: the National Security Division’s Counterterrorism Section; the Justice Department’s Office of International Affairs; the Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training; and Organized Crime and Gang Section; and the Organized Crime Drug Enforcement Task Forces Executive Office.  Finally, consistent with President Trump’s Executive Order and the Attorney General’s whole of government approach, the Department of State has provided critical support for JTFV’s mission.

The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.  If convicted, the defendants face a maximum sentence of life in prison.

The government’s case is being prosecuted by Assistant U.S. Attorneys James Donnelly, Matthew Shepherd and Stewart Young from JTFV, and Assistant U.S. Attorneys Paul G. Scotti, Justina L. Geraci and Megan E. Farrell from the EDNY’s Long Island Criminal Division.

To learn more about the Justice Department’s efforts in combating MS-13 from 2016 to 2020, see report at /media/1120601/dl?inline.

The Defendants:

BORROMEO ENRIQUE HENRIQUEZ (“Diablito de Hollywood”)
Age:  42

ELMER CANALES-RIVERA (“Crook de Hollywood”)
Age:  44

EFRAIN CORTEZ (“Tigre de Park View” and “Viejo Tigre de Park View”)
Age:  51

RICARDO ALBERTO DIAZ (“Rata de Leewards” and “Mousey de Leewards”)
Age:  47

EDUARDO ERAZO-NOLASCO (“Colocho de Western” and “Mustage de Western”)
Age:  48

EDSON SACHARY EUFEMIA (“Speedy de Park View”)
Age:  46

JOSE FERNANDEZ FLORES-CUBAS (“Cola de Western”)
Age:  46

FREDY IVAN JANDRES-PARADA (“Lucky de Park View” and “Lacky de Park View”)
Age:  45

LEONEL ALEXANDER LEONARDO (“El Necio de San Cocos”)
Age:  40

CESAR HUMBERTO LOPEZ-LARIOS (“El Grenas de Stoners” and “Oso de Stoners”)
Age:   42

JOSE LUIS MENDOZA-FIGUEROA (“Pavas de 7-11” and “Viejo Pavas de 7-11”)
Age:  56

HUGO ARMANDO QUINTEROS-MINEROS (“Flaco de Francis”)
Age:  48

SAUL ANTONIO TURCIOS (“Trece de Teclas”)
Age:  42

ARISTIDES DIONISIO UMANZOR (“Sirra de Teclas”)
Age:  42

E.D.N.Y. Docket No.: 20-CR-577 (JFB)

Earlier today, at the federal courthouse in Brooklyn, Azizjon Rakhmatov, a citizen of Uzbekistan and a resident of New Haven, Connecticut, was sentenced to 12 ½ years’ imprisonment by United States District Judge William F. Kuntz, II, for conspiring to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (ISIS).  In August 2019, Rakhmatov pleaded guilty to the charge.  The U.S. government intends to seek the defendant’s removal to Uzbekistan upon completion of his sentence of imprisonment.  

Seth D. DuCharme, 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, New York City Police Department (NYPD), announced the sentence.

“Today’s sentence demonstrates that there are significant consequences for those who support terrorism.” stated Acting United States Attorney DuCharme.  “The investigation and prosecution of Rakhmatov and his co-conspirators are the result of this Office’s unwavering commitment, along with our outstanding partners on the New York Joint Terrorist Task Force, to detect, disrupt and neutralize any individual or group that is under the mistaken impression that violence is a legitimate means to effect political change, here or abroad.  Once again, we have rooted out ISIS’s supporters, methods and means, and prevented ISIS from carrying out its abhorrent extremist agenda.”

According to court filings, in 2014, Rakhmatov’s co-defendants Abdurasul Juraboev and Akhror Saidakhmetov planned to travel to Syria to fight on behalf of ISIS.  Rakhmatov and co-defendant Abror Habibov discussed providing their own money to cover Saidakhmetov’s travel expenses and to purchase a firearm for Saidakhmetov once he arrived in Syria.  Rakhmatov also agreed to collect money from others to fund Saidakhmetov’s travel.  On the day before Saidakhmetov’s scheduled departure, Rakhmatov transferred $400 into co-defendant Akmal Zakirov’s personal bank account to facilitate Saidakhmetov’s travel to and expenses in Syria.  Co-conspirator Dilkhayot Kasimov also agreed to fund Saidakhmetov’s travel and brought the group’s money to Saidakhmetov at John F. Kennedy International Airport.   

Juraboev, Saidakahmetov, Habibov and Zakirov have previously pleaded guilty, and Kasimov was convicted at trial in September 2019.  Juraboev and Saidakahmetov each were sentenced to 15 years’ imprisonment.  Kasimov, Habibov and Zakirov are awaiting sentencing.

The government’s case is being handled by the Office’s National Security & Cybercrime Section.  Assistant United States Attorneys Douglas M. Pravda, David K. Kessler, and J. Matthew Haggans are in charge of the prosecution, with assistance provided by Trial Attorney Steven Ward of the National Security Division’s Counterterrorism Section.

The Defendant:

AZIZJON RAKHMATOV
Age:  33
New Haven, Connecticut

E.D.N.Y. Docket No. 15-CR-95 (S-3)

 

A Nevada woman was arrested today for her alleged role in a multi-year scheme to commit visa fraud and money laundering, and to illegally bring Chinese nationals into the United States for financial gain.

Haiyan Liao, 43, of Las Vegas, is charged in an indictment obtained in the Eastern District of New York and unsealed today in the U.S. District Court for the District of Nevada. She is charged with conspiracy to commit visa fraud and to unlawfully bring aliens into the U.S. for financial gain, bringing aliens into the U.S. for financial gain, and money laundering conspiracy.

“The United States benefits from the rich diversity of culture and experience which results from lawful immigration into our country,” said David P. Burns, Acting Assistant Attorney General of the Justice Department’s Criminal Division. “This defendant, however, is charged with submitting false applications for visitor visas to the U.S. Consulate in Guangzhou and engaging in money laundering as part of a multi-year alien smuggling business that brought Chinese nationals into the United States illegally. This indictment underscores that those who seek to thwart our system of legal immigration to line their own pockets will be prosecuted.”

“As alleged in the indictment, Liao aided and abetted aliens who paid thousands of dollars for her fraudulent immigration services,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “The defendant provided fake documents and coached her accomplices regarding how to lie during visa interviews and customs checks. Our office and our law enforcement agency partners remain vigilant and committed to protecting the integrity of the immigration process and our border security and preventing criminals from seeking profit in the subversion of the rule of law.”

“The Diplomatic Security Service (DSS) is firmly committed to protecting the integrity of all U.S. visas and travel documents,” said Jeffrey A. Thomas, Deputy Assistant Director for the Office of Investigations. “This case is the result of a strong partnership among federal law enforcement agencies and DSS’ global network of special agents working together to stop visa and passport crimes, and to stop criminals from earning illegal income by exploiting U.S. visas, passports, and foreign nationals.”

According to the indictment, Liao, with others, fraudulently obtained visitor visas by submitting applications containing false statements to the U.S. Consulate in Guangzhou, China as part of a scheme to assist aliens from China to enter the U.S. For the aliens whose applications were approved, Liao would facilitate the aliens’ travel to the U.S., including accompanying them on commercial flights to Queens and Brooklyn, New York. The aliens and their families paid thousands of dollars in exchange for the visitor visas and travel to the U.S. Liao’s co-defendant in the indictment, Ned Michael Moriearty, was recently deceased.

This case is being investigated by the DSS, Criminal Fraud Investigations Unit Branch.

The case is being prosecuted by Trial Attorneys Rami S. Badawy of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Nomi Berenson of the Eastern District of New York. 

The charges contained in the indictment are merely allegations and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A criminal complaint was filed today in federal court in Broolyn charging Eduard Florea with being a felon in possession of ammunition.  Florea was arrested yesterday at his home in Queens, New York, and made his initial appearance this afternoon before United States Magistrate Judge Sanket J. Bulsara who ordered the defendant detained pending trial.

Seth D. DuCharme, 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 arrest and charge.

“This Office will dutifully and responsibly enforce our nation’s gun and ammunition laws and will act swiftly and decisively where an individual who violates such laws threatens our institutions with acts of violence,” stated Acting United States Attorney DuCharme.  “Respectful of our citizens’ rights and our obligation to protect their safety and their liberties, we will ensure the orderly functioning of our country’s democratic institutions and the safety of those we are sworn to protect through our diligent investigations and, where appropriate, federal prosecution.”  Mr. DuCharme expressed his grateful appreciation to the United States Attorney’s Office for the Southern District of New York for their assistance on the case.

“As alleged, Florea, a previously convicted felon, made various social media posts about his plan to travel to Washington D.C. to engage in acts of violence. We saved him a trip and paid him a visit instead. Yesterday evening members of the FBI’s Joint Terrorism Task Force, to include our partners at the New York City Police Department, placed him under arrest for illegally possessing ammunition. For those of you out there with similar intentions, heed this warning—knock it off, or expect to see us at your door,” stated FBI Assistant Director-in-Charge Sweeney.    

According to the complaint and statements made in court, Florea operated a social media account on Parler using the name “LoneWolfWar.” Florea who was previously convicted of a New York state firearms-related felony, posted threatening statements online about killing a United States Senator-elect and about intending to travel to Washington D.C. as part of a group armed with firearms ready to engage in violence.  For example, on January 6, 2021, Florea posted “dead men can’t pass [expletive] laws” in response to a post about a United States Senator-elect.  Additionally, Florea posted on social media:

• “Let’s go . . . I will be reaching out to patriots in my area so we can come up with a game plan . . . Here in New York we are target rich[] . . . . Dead men can’t pass [expletive] law. . . . I will fight so help me god.”
• “The time for peace and civility is over . . . ./3 cars full of armed patriots are enroute from NY / 3 cars of armed patriots heading into DC from NY / Guns cleaned loaded . . . got a bunch of guys all armed and ready to deploy . . . we are just waiting for the word.”
• “Its time to unleash some violence.”

n January 12, 2021, FBI Special Agents and Task Force Officers with the New York Joint Terrorism Task Force executed a search warrant at Florea’s home in Middle Village, Queens.  Law enforcement recovered over 1,000 rounds of ammunition.

The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Florea faces up to 10 years’ imprisonment.

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

The Defendant:

EDUARD FLOREA
Age: 40
Middle Village, New York

E.D.N.Y. Docket No. 21-MJ-35

BROOKLYN, NY – Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Haiyan Liao in connection with a scheme to commit visa fraud, money laundering and illegally bring Chinese nationals into the United States for financial gain.  Liao was arrested this morning in Las Vegas, Nevada and will make her initial appearance tomorrow in United States District Court, District of Nevada before U.S. Magistrate Judge Elayna Youchah.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, David P. Burns, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Jeffrey A. Thomas, Deputy Assistant Director of Investigations, U.S. Department of State’s Diplomatic Security Service, announced the arrest and charges.

“As alleged in the indictment, Liao aided and abetted aliens who paid thousands of dollars for her fraudulent immigration services,” stated Acting United States Attorney DuCharme.  “The defendant provided fake documents and coached her accomplices regarding how to lie during visa interviews and customs checks.  Our Office and our law enforcement agency partners remain vigilant and committed to protecting the integrity of the immigration process and our border security and preventing criminals from seeking profit in the subversion of the rule of law.”

The United States benefits from the rich diversity of culture and experience which results from lawful immigration into our country,” stated Acting Assistant Attorney General Burns.  “This defendant, however, is charged with submitting false applications for visitor visas to the U.S. Consulate in Guangzhou and engaging in money laundering as part of a multi-year alien smuggling business that brought Chinese nationals into the United States illegally. This indictment underscores that those who seek to thwart our system of legal immigration to line their own pockets will be prosecuted.”

“The Diplomatic Security Service (DSS) is firmly committed to protecting the integrity of all U.S. visas and travel documents,” stated DSS Deputy Assistant Director Thomas. “This case is the result of a strong partnership among federal law enforcement agencies and DSS’ global network of special agents working together to stop visa and passport crimes, and to stop criminals from earning illegal income by exploiting U.S. visas, passports, and foreign nationals.”

According to the indictment, between January 2014 and December 2015, Liao conspired with others in a scheme to fraudulently obtain visitor visas for aliens from China by submitting applications containing false statements to the U.S. Consulate in Guangzhou, China.  In addition, Liao and her co-conspirators obtained fraudulent documents for aliens to present to the Department of State Bureau of Consular Affairs, including fake birth certificates, marriage certificates, national identity cards, property deeds and employment verification purportedly to show they had strong ties to China and were likely to return to their homeland.  Liao and her co-conspirators allegedly met with alien applicants and instructed them to falsely answer questions during their visa interviews.  For the aliens whose applications were approved, Liao and her co-conspirators facilitated their travel to the United States by purchasing airline tickets, accompanying them on commercial flights and instructing them how to clear customs after they arrived in the United States.  The aliens and their families paid the defendant thousands of dollars to obtain the fraudulent visas.  Liao and her co-conspirators allegedly wired proceeds of the scheme from China to the United States.  Liao’s co-defendant in the indictment, Ned Michael Moriearty, was recently deceased.

The charges contained in the indictment are allegations and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Liao faces up to 20 years’ imprisonment. 

This case is being investigated by the Diplomatic Security Service, Criminal Fraud Investigations Unit.

The case is being prosecuted by Assistant U.S. Attorney Nomi Berenson of the Eastern District of New York and Trial Attorney Rami S. Badawy of the Criminal Division’s Human Rights and Special Prosecutions Section. 

The Defendant:

HAIYAN LIAO
Age:  43
Las Vegas Nevada

E.D.N.Y. Docket No.: 20-CR-500 (SJ)

Earlier today, in federal court in Brooklyn, Peter Tuccio pleaded guilty before United States Magistrate Judge Steven L. Tiscione to using fire to commit the felony crime of extortion.  When sentenced, Tuccio faces a mandatory sentence of 10 years’ imprisonment, as well as forfeiture, restitution and a fine of up to $250,000.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the guilty plea.

“With today’s guilty plea, Tuccio has been convicted of an offense arising from his efforts to extort a local businessman by brazenly chasing him through the streets and then setting his car ablaze,” stated Acting United States Attorney DuCharme. “This Office, together with our partners at the FBI, will continue to vigorously investigate and prosecute members and associates of organized crime to eradicate the danger they pose to our community.”  Mr. DuCharme thanked the Federal Bureau of Investigation, New York Field Office, the New York City Police Department and the New York City Fire Department’s Bureau of Fire Investigation for their outstanding work on the case.

In 2015, a businessman who had been extorted by a captain in the Gambino Organized Crime Family (referred to in court filings as “Co-Conspirator 1”) for many years, began avoiding Co-Conspirator 1 in an effort to stop making the $400 annual payment.  On December 3, 2015, Tuccio, co-defendants Jonathan Gurino and Gino Gabrielli, who were charged in a separate indictment, observed the businessman leave a smoke shop in Howard Beach, New York and drive away in his 2014 Mercedes Benz.  The three men then followed the businessman at a high rate of speed through the streets of Queens and confronted him outside a pizzeria, where Tuccio mentioned Co-Conspirator 1 and commented on the businessman’s car.  Tuccio and his co-defendants schemed to set the businessman’s car on fire, sending a message that he had to continue making the extortion payments to Co-Conspirator 1.  Later that night, the businessman heard a loud noise and saw that his car was on fire outside of his residence.  The businessman’s security video system recorded Gabrielli pouring a substance on the car, the car erupting in flames, and Gabrielli running away with his pant leg on fire.  Shortly thereafter, Gabrielli and Tuccio were caught on surveillance video entering Jamaica Hospital. After the arson, the businessman paid more than $5,000 to Co-Conspirator 1. 

In August 2016, Gabrielli pleaded guilty to the arson.  In June 2020, Gurino pleaded guilty to extortionate collection of credit and extortion.  They are awaiting sentencing.

The government’s case is being handled by the Office’s Organized Crime & Gangs Section.  Assistant United States Attorneys Nadia E. Moore and Nicholas Moscow are in charge of the prosecution.

The Defendant:

PETER TUCCIO
Age:  27
Queens, New York

E.D.N.Y. Docket No. 18-CR-610 (S-1) (LDH)

Deutsche Bank Aktiengesellschaft (Deutsche Bank or the Company) has agreed to pay more than $130 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and a separate investigation into a commodities fraud scheme.

The resolution includes criminal penalties of $85,186,206, criminal disgorgement of $681,480, victim compensation payments of $1,223,738, and $43,329,622 to be paid to the U.S. Securities & Exchange Commission in a coordinated resolution.

Deutsche Bank is a multi-national financial services company headquartered in Frankfurt, Germany. The charges arise out of a scheme to conceal corrupt payments and bribes made to third-party intermediaries by falsely recording them on Deutsche Bank’s books and records, as well as related internal accounting control violations, and a separate scheme to engage in fraudulent and manipulative commodities trading practices involving publicly-traded precious metals futures contracts. 

Deutsche Bank entered into a three-year deferred prosecution agreement (DPA) with the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS) and with the U.S. Attorney’s Office for the Eastern District of New York. The criminal information was filed today in the Eastern District of New York charging Deutsche Bank with one count of conspiracy to violate the books and records and internal accounting controls provisions of the FCPA and one count of conspiracy to commit wire fraud affecting a financial institution in relation to the commodities conduct.

“Deutsche Bank engaged in a seven-year course of conduct, during which it failed to implement a system of internal accounting controls regarding the use of company funds and falsified its books and records to conceal corrupt and improper payments,” said Acting Deputy Assistant Attorney General Robert Zink of the Justice Department’s Criminal Division. “Separately, Deutsche Bank traders on three continents sought to manipulate our public financial markets through fraud for five years. This resolution exemplifies the department’s commitment to help ensure that publicly traded companies devise and implement appropriate and proper systems of internal accounting controls and maintain accurate and truthful corporate documentation. It also stands as an example of the department’s efforts to police the public U.S. markets so that all may continue to trust, and rely upon, the integrity of our public financial systems.”

“Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects,” stated Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York. “This office will continue to hold responsible financial institutions that operate in the United States and engage in practices to facilitate criminal activity in order to increase their bottom line.”

“The U.S. Postal Inspection Service takes pride in investigating complex fraud and corruption cases that impact American investors,” said Inspector in Charge Delany De Léon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group. “This type of deceptive activity can cause immeasurable economic losses to competitive markets around the world. The combined efforts of our partners at the FBI and Department of Justice helped to bring today’s significant action which illustrates our efforts to protect the United States and the international marketplace.”

The FCPA Case

According to admissions and court documents, between 2009 and 2016, Deutsche Bank, acting through its employees and agents, including managing directors and high-level regional executives, knowingly and willfully conspired to maintain false books, records, and accounts to conceal, among other things, payments to a business development consultant (BDC) who was acting as a proxy for a foreign official and payments to a BDC that were actually bribes paid to a decisionmaker for a client in order to obtain lucrative business for the bank. In some instances, Deutsche Bank made payments to BDCs that were not supported by invoices or evidence of any services provided. In other cases, Deutsche Bank employees created or helped BDC’s create false justifications for payments.      

In relation to a Saudi BDC, Deutsche Bank admitted that its employees conspired to contract with a company owned by the wife of a client decisionmaker to facilitate bribe payments of over $1 million to the decisionmaker. Deutsche Bank approved the BDC relationship despite Deutsche Bank employees knowing about the relationship between the Saudi BDC and the decisionmaker, and approved the corrupt payments despite Deutsche Bank employees openly discussing the need to pay the Saudi BDC in order to incentivize her husband to continue to do business with Deutsche Bank. In requesting approval of one payment, Deutsche Bank employees cautioned that the “client and [the Saudi BDC] are intimately linked and . . . any cessation of payment to the [the Saudi BDC] will certainly prompt a significant outflow of [business]” from the client.

Deutsche Bank also contracted with an Abu Dhabi BDC to obtain a lucrative transaction, despite Deutsche Bank employees knowing that the Abu Dhabi BDC lacked qualifications as a BDC, other than his family relationship with the client decisionmaker, and that the Abu Dhabi BDC was in fact acting as proxy for the client decisionmaker. Deutsche Bank paid the Abu Dhabi BDC over $3 million without invoices.

By agreeing to misrepresent the purpose of payments to BDCs and falsely characterizing payments to others as payments to BDCs, Deutsche Bank employees conspired to falsify Deutsche Bank’s books, records, and accounts, in violation of the FCPA. Additionally, Deutsche Bank employees knowingly and willfully conspired to fail to implement internal accounting controls in violation of the FCPA by, among other things, failing to conduct meaningful due diligence regarding BDCs, making payments to certain BDCs who were not under contract with Deutsche Bank at the time, and making payments to certain BDCs without invoices or adequate documentation of the services purportedly performed.

Deutsche Bank will pay a total criminal penalty of $79,561,206 in relation to the FCPA scheme. In a related matter with the U.S. Securities & Exchange Commission, Deutsche Bank will also pay $43,329,622 in disgorgement and prejudgment interest.

The Commodities Fraud Case

According to admissions and court documents, between 2008 and 2013, Deutsche Bank precious metals traders engaged in a scheme to defraud other traders on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. On numerous occasions, traders on Deutsche Bank’s precious metals desk in New York, Singapore, and London placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts.

On Sept. 25, 2020, a Chicago federal jury found two former Deutsche Bank precious metals traders, James Vorley, 42, of the United Kingdom, and Cedric Chanu, 40, of France and the United Arab Emirates, guilty of wire fraud affecting a financial institution for their respective roles in the commodities scheme. A third former Deutsche Bank trader, David Liew, 35, of Singapore, pleaded guilty on June 1, 2017, to conspiracy to commit wire fraud affecting a financial institution and spoofing. A fourth former Deutsche Bank trader, Edward Bases, 58, of New Canaan, Connecticut, was charged in a third superseding indictment on Nov. 12, 2020, and awaits trial on fraud and conspiracy charges. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Deutsche Bank has agreed to pay a total criminal amount of $7,530,218 in relation to the commodities scheme. This amount includes criminal disgorgement of $681,480, victim compensation payments of $1,223,738, and a criminal penalty of $5,625,000, which will be fully credited against Deutsche Bank’s payment of a civil monetary penalty of $30 million to the U.S. Commodity Futures Trading Commission in January 2018 in connection with substantially the same commodities conduct.

The department reached this resolution with Deutsche Bank based on a number of factors, including the Company’s failure to voluntarily disclose the conduct to the department and the nature and seriousness of the offense, which included corrupt payments, willful violations of the FCPA accounting provisions, and commodities trading violations in three countries. Deutsche Bank received full credit for its cooperation with the department’s investigations and for its significant remediation. Penalties associated with both the FCPA and wire fraud conspiracies reflect a discount of 25 percent off the middle of the otherwise-applicable U.S. Sentencing Guidelines fine range, to account for Deutsche Bank’s 2015 resolution in connection with its manipulation of the London Interbank Offered Rate.  

The FCPA investigation is being conducted by the U.S. Postal Inspection Service, and is being prosecuted by the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section, and the U.S. Attorney’s Office for the Eastern District of New York. Trial Attorneys Katherine Nielsen, Elizabeth S. Boison and Nikhila Raj, and Assistant U.S. Attorneys Alixandra Smith and Whitman Knapp. The Justice Department’s Office of International Affairs provided assistance in this case.

The commodities case is being investigated by the FBI’s New York Field Office, and is being prosecuted by the Fraud Section. Deputy Chief Brian R. Young, Assistant Chief Avi Perry, and Trial Attorney Leslie S. Garthwaite of the Fraud Section are prosecuting the case.

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/foreign-corrupt-practices-act.

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.

Individuals who believe that they may be a victim in the commodities case should visit the Fraud Section’s Victim Witness website for more information.

BROOKLYN, NY – Deutsche Bank Aktiengesellschaft (Deutsche Bank or the Company) has agreed to pay more than $130 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and a separate investigation into a commodities fraud scheme.

The resolution includes criminal penalties of $85,186,206, criminal disgorgement of $681,480, victim compensation payments of $1,223,738, and $43,329,622 to be paid to the U.S. Securities & Exchange Commission in a coordinated resolution.

Deutsche Bank is a multi-national financial services company headquartered in Frankfurt, Germany. The charges arise out of a scheme to conceal corrupt payments and bribes made to third-party intermediaries by falsely recording them on Deutsche Bank’s books and records, as well as related internal accounting control violations, and a separate scheme to engage in fraudulent and manipulative commodities trading practices involving publicly-traded precious metals futures contracts. 

Earlier today, in federal court in Brooklyn, Deutsche Bank entered into a three-year deferred prosecution agreement (DPA) with United States Attorney’s Office for the Eastern District of New York and the Department of Justice Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS). The criminal information was filed in U.S. District Court for the Eastern District of New York charging Deutsche Bank with one count of conspiracy to violate the books and records and internal accounting controls provisions of the FCPA and one count of conspiracy to commit wire fraud affecting a financial institution in relation to the commodities conduct.  The case is assigned to U.S. District Judge Rachel P. Kovner.

Seth DuCharme, Acting United States Attorney for the Eastern District of New York, Robert Zink, Acting Deputy Assistant Attorney General of the Justice Department’s Criminal Division, and Delany De Léon-Colón, Inspector-in-Charge, United States Postal Inspection Service (USPIS), made the announcement.

"Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects,” stated Acting United States Attorney DuCharme.  “This Office will continue to hold responsible financial institutions that operate in the United States and engage in practices to facilitate criminal activity in order to increase their bottom line.”

“Deutsche Bank engaged in a seven-year course of conduct, during which it failed to implement a system of internal accounting controls regarding the use of company funds and falsified its books and records to conceal corrupt and improper payments,” stated Acting Deputy Assistant Attorney General Zink.  “Separately, Deutsche Bank traders on three continents sought to manipulate our public financial markets through fraud for five years. This resolution exemplifies the department’s commitment to help ensure that publicly traded companies devise and implement appropriate and proper systems of internal accounting controls and maintain accurate and truthful corporate documentation. It also stands as an example of the department’s efforts to police the public U.S. markets so that all may continue to trust, and rely upon, the integrity of our public financial systems.”

“The U.S. Postal Inspection Service takes pride in investigating complex fraud and corruption cases that impact American investors,” stated USPIS Inspector-in-Charge De Léon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group.  “This type of deceptive activity can cause immeasurable economic losses to competitive markets around the world. The combined efforts of our partners at the FBI and Department of Justice helped to bring today’s significant action which illustrates our efforts to protect the United States and the international marketplace.”

The FCPA Case

According to admissions and court documents, between 2009 and 2016, Deutsche Bank, acting through its employees and agents, including managing directors and high-level regional executives, knowingly and willfully conspired to maintain false books, records, and accounts to conceal, among other things, payments to a business development consultant (BDC) who was acting as a proxy for a foreign official and payments to a BDC that were actually bribes paid to a decisionmaker for a client in order to obtain lucrative business for the bank. In some instances, Deutsche Bank made payments to BDCs that were not supported by invoices or evidence of any services provided. In other cases, Deutsche Bank employees created or helped BDC’s create false justifications for payments.      

In relation to a Saudi BDC, Deutsche Bank admitted that its employees conspired to contract with a company owned by the wife of a client decision maker to facilitate bribe payments of over $1 million to the decision maker. Deutsche Bank approved the BDC relationship despite Deutsche Bank employees knowing about the relationship between the Saudi BDC and the decision maker, and approved the corrupt payments despite Deutsche Bank employees openly discussing the need to pay the Saudi BDC in order to incentivize her husband to continue to do business with Deutsche Bank.  In requesting approval of one payment, Deutsche Bank employees cautioned that the “client and [the Saudi BDC] are intimately linked and . . . any cessation of payment to the [the Saudi BDC] will certainly prompt a significant outflow of [business]” from the client.

Deutsche Bank also contracted with an Abu Dhabi BDC to obtain a lucrative transaction, despite Deutsche Bank employees knowing that the Abu Dhabi BDC lacked qualifications as a BDC, other than his family relationship with the client decision maker, and that the Abu Dhabi BDC was in fact acting as proxy for the client decision maker. Deutsche Bank paid the Abu Dhabi BDC over $3 million without invoices.

By agreeing to misrepresent the purpose of payments to BDCs and falsely characterizing payments to others as payments to BDCs, Deutsche Bank employees conspired to falsify Deutsche Bank’s books, records, and accounts, in violation of the FCPA. Additionally, Deutsche Bank employees knowingly and willfully conspired to fail to implement internal accounting controls in violation of the FCPA by, among other things, failing to conduct meaningful due diligence regarding BDCs, making payments to certain BDCs who were not under contract with Deutsche Bank at the time, and making payments to certain BDCs without invoices or adequate documentation of the services purportedly performed.

Deutsche Bank will pay a total criminal penalty of $79,561,206 in relation to the FCPA scheme. In a related matter with the U.S. Securities & Exchange Commission, Deutsche Bank will also pay $43,329,622 in disgorgement and prejudgment interest.

The Commodities Fraud Case

According to admissions and court documents, between 2008 and 2013, Deutsche Bank precious metals traders engaged in a scheme to defraud other traders on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. On numerous occasions, traders on Deutsche Bank’s precious metals desk in New York, Singapore, and London placed orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for precious metals futures contracts.

On Sept. 25, 2020, a Chicago federal jury found two former Deutsche Bank precious metals traders, James Vorley, of the United Kingdom, and Cedric Chanu, of France and the United Arab Emirates, guilty of wire fraud affecting a financial institution for their respective roles in the commodities scheme. A third former Deutsche Bank trader, David Liew, of Singapore, pleaded guilty on June 1, 2017, to conspiracy to commit wire fraud affecting a financial institution and spoofing. A fourth former Deutsche Bank trader, Edward Bases, of Connecticut, was charged in a third superseding indictment on Nov. 12, 2020, and awaits trial on fraud and conspiracy charges. An indictment is an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Deutsche Bank has agreed to pay a total criminal amount of $7,530,218 in relation to the commodities scheme. This amount includes criminal disgorgement of $681,480, victim compensation payments of $1,223,738, and a criminal penalty of $5,625,000, which will be fully credited against Deutsche Bank’s payment of a civil monetary penalty of $30 million to the U.S. Commodity Futures Trading Commission in January 2018 in connection with substantially the same commodities conduct.

The department reached this resolution with Deutsche Bank based on a number of factors, including the Company’s failure to voluntarily disclose the conduct to the department and the nature and seriousness of the offense, which included corrupt payments, willful violations of the FCPA accounting provisions, and commodities trading violations in three countries. Deutsche Bank received full credit for its cooperation with the department’s investigations and for its significant remediation. Penalties associated with both the FCPA and wire fraud conspiracies reflect a discount of 25 percent off the middle of the otherwise-applicable U.S. Sentencing Guidelines fine range, to account for Deutsche Bank’s 2015 resolution in connection with its manipulation of the London Interbank Offered Rate.  

The FCPA investigation is being conducted by the U.S. Postal Inspection Service and is being prosecuted by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section.  Assistant U.S. Attorneys Alixandra Smith and Whitman Knapp of the Eastern District of New York and Trial Attorneys Katherine Nielsen, Elizabeth S. Boison and Nikhila Raj are prosecuting the case.  The Justice Department’s Office of International Affairs provided assistance in this case.

 

The commodities case is being investigated by the FBI’s New York Field Office and is being handled by the Fraud Section.  Deputy Chief Brian R. Young, Assistant Chief Avi Perry, and Trial Attorney Leslie S. Garthwaite of the Fraud Section are prosecuting the case.

E.D.N.Y. Docket No. 20-CR-584 (RPK)