Eastern District of New York

Earlier today, in federal court in Central Islip, New York, Vincent J. Trimarco, Jr., an attorney licensed to practice in the state of New York since 1997, pleaded guilty to conspiracy to commit mail and wire fraud in connection with a scheme to defraud the beneficiary of an estate from her inheritance from a wrongful death suit.  Today’s plea took place before United States District Judge Joan M. Azrack.  When sentenced, Trimarco faces up to 20 years in prison, as well as forfeiture, restitution and a fine of up to $250,000 or twice the gross gain or loss as a result of his crime, whichever is greater.  As a part of his plea agreement with the government, Trimarco agreed to pay more than $1 million in restitution.

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

“Trimarco defrauded a young girl of her inheritance violating the law as well as the trust placed in him as an attorney,” stated Acting United States Attorney Seth DuCharme.  “Protecting the public from those who, for personal gain, abuse that trust and betray the oath they have sworn to uphold is a priority of this Office.”  Mr. DuCharme thanked the Federal Bureau of Investigation, New York Field Office, for its investigative work on the case.

As set forth in court filings and today’s proceeding, from April 2012 through August 2017, Trimarco and a co-conspirator executed a scheme to defraud a minor, who was the co-conspirator’s grandchild, of settlement proceeds stemming from a wrongful death action.  Using the settlement proceeds, Trimarco and the co-conspirator purchased luxury vehicles, including a Ferrari F430 Spider for $200,000 and a Jaguar XKR convertible for $57,000, as well as numerous properties in Suffolk County for over $600,000, and invested approximately $800,000 in the Emporium, a nightclub and music venue in Patchogue, New York, in which Trimarco was, at times, a part owner.  Despite orders from the Suffolk County Surrogate’s Court in April 2012, June 2012 and August 2012 restraining the disbursement of the settlement proceeds and ultimately directing the return of the settlement proceeds, Trimarco and his co-conspirator sold the assets obtained with the settlement funds but failed to return the proceeds to the rightful heir. 

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Catherine M. Mirabile and Michael J. Bushwack are in charge of the prosecution, with the assistance of Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division, which is responsible for the forfeiture of assets.

The Defendant:

VINCENT J. TRIMARCO, JR.
Age:  51
Smithtown, NY

E.D.N.Y. Docket No. 17-CR-583 (S-1) (JMA)

Geoffrey Girnun, a former Associate Professor and cancer researcher at Stony Brook University’s Department of Pathology of Medicine, was sentenced today by United States District Judge Denis R. Hurley via videoconference to one year and a day in prison for theft of government funds related to a grant he received to research the effect of certain molecules on cancer.  Girnun pleaded guilty in January 2020 and pursuant to his plea agreement agreed to forfeit $225,000 and resign from his position at Stony Brook University.  The Court also ordered restitution to be paid to the National Institutes of Health (NIH) and Stony Brook University in the amount of $225,000.  

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 Scott J. Lampert, Special Agent-in-Charge, Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced the sentence.

“The defendant’s theft of cancer research funds undermined the important mission of the National Institute of Health, Stony Brook University and his fellow researchers, who are dedicated to curing this deadly illness,” stated Acting United States Attorney DuCharme.  “In connection with today’s sentence, which provides punishment for his offense, the defendant also will be required to pay back every penny he diverted from the fight against cancer.”

“Stealing cancer research funds solely to line your own pockets is an outrageous crime. Today’s sentence demonstrates that society will not tolerate fraudsters like Dr. Girnun, who will pay for his greed-fueled scheme,” stated HHS-OIG Special Agent-in-Charge Lampert.  “We will continue to work with our law enforcement partners to investigate such fraud and bring perpetrators to justice.”

In approximately 2013 and 2017, respectively, Girnun formed two sham companies, Atlas Metabolomics, LLC (Atlas) and Empyrean Biosciences, LLC (Empyrean) that purportedly provided research items and equipment for the defendant’s cancer-related research projects.  From approximately December 2013 to approximately September 2019, Girnun submitted fraudulent electronic invoices to Stony Brook University for payment to the sham companies for equipment, goods and services that were never received or provided.  Stony Brook University then used NIH and the university’s grant and foundation funds to pay the sham companies over $200,000.  Girnun withdrew the fraudulently obtained grant funds from Atlas and Empyrean’s bank accounts and used the money for personal expenses, including payments toward the mortgage on his residence and tuition for his children.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Erin E. Argo is in charge of the prosecution.  Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division is handling forfeiture matters.

The Defendant:

GEOFFREY GIRNUN
Age: 49
Woodmere, New York

E.D.N.Y. Docket No. 19-CR-416 (DRH)

Earlier today, in federal court in Central Islip, Terrill Latney, an associate of the “Red Stone Gorilla” subset of the Bloods, a violent criminal enterprise based in Riverhead, New York, was sentenced by United States District Judge Joanna Seybert to 20 years’ imprisonment for racketeering, including the predicate acts of conspiring to distribute narcotics and participating in the murder of Thomas Lacolla while attempting to kill a rival of the gang.  Latney pled guilty in February 2020. 

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

“With today’s sentence, justice has been served for years of drug dealing, violence and murder, which wreaked havoc in Riverhead and the surrounding area,” stated Acting United States Attorney DuCharme.  “This outcome brings a measure of closure to the victims and stands for the principle that we remain ever-committed to dismantling violent street gangs on Long Island and restoring safety and the rule of law to every community.”  Mr. DuCharme expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, and the Suffolk County East End Drug Task Force.

As detailed in the government’s court filings and admitted at the guilty plea proceeding, Latney participated in the distribution of large quantities of crack cocaine, cocaine and heroin in and around Riverhead over the course of nearly a decade.  In addition, on November 17, 2015, Latney assisted members of the Bloods in their attempt to kill a rival gang member which resulted in the shooting death of that rival’s friend, Thomas Lacolla.  Latney drove three Bloods members to a location in Riverhead where they fired more than 39 shots into a vehicle they believed was occupied by their intended target, but instead shot Lacolla, instantly killing him. 

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

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

Defendant:

TERRILL LATNEY (also known as “Motis” and “Mo”)
Age: 40
Mastic Beach, New York

E.D.N.Y. Docket No. 18-CR-606 (S-2) (JS)

Earlier today, in federal court in Central Islip, Phillip A. Kenner was sentenced by United States Circuit Judge Joseph F. Bianco to 17 years’ imprisonment for stealing millions of dollars in funds raised from Long Island residents and professional athletes that were intended for investment in land developments in Hawaii and a start-up business in Arizona, among other purposes.  Kenner and co-defendant Tommy Constantine were convicted at trial in July 2015 of one count of conspiracy to commit wire fraud, four substantive counts of wire fraud, and one count of conspiracy to commit money laundering.  The amount of restitution will be determined by the Court at a later date.  Previously, the Court entered a forfeiture money judgment in the amount of approximately $17 million and ordered Kenner to forfeit all his right, title and interest in an oceanfront resort in Mexico, real property in Hawaii and a Falcon 10 jet airplane, among other assets.  Kenner has been in the custody of the Bureau of Prisons since his arrest in 2013.  Constantine is awaiting sentencing.

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 Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Services—Criminal Investigation (IRS), announced the sentence.

“Today’s substantial sentence provides just punishment for the defendant’s victimization of clients, as well as his attempts to shift blame and scapegoat others as his scheme unraveled,” stated Acting United States Attorney DuCharme.  “As Kenner has now learned, fraud may seem like easy money in the short run, but when justice catches up with you, the consequences can be significant.”  Mr. DuCharme expressed his grateful appreciation to the FBI and IRS, the agencies responsible for leading the government’s investigation.

“Time and again, Kenner and his co-conspirator stole money from multiple investors and dumped millions in ill-gotten gains into entities that benefitted them rather than their victims. Kenner has received a significant sentence today, and the 17 years behind bars should give him ample time to think about his crimes and the consequences of his actions,” stated FBI Assistant Director-in-Charge Sweeney.

“Greed knows no boundaries, and anyone may fall victim to its promise of major returns on investment,” stated IRS-CI Special Agent in Charge Larsen.  “IRS-CI special agents deal with perpetrators of fraud motivated by their desire for personal financial enrichment on a daily basis.  “This sentence is just for Mr. Kenner who deserves his time in the ‘penalty box.’”

Kenner began his career as a Boston-based financial advisor and developed a roster of clients, including former New York Islander Michael Peca, former New York Islander and New York Ranger Brian Berard, and Darryl Sydor and Bill Ranford – both two-time Stanley Cup champions – and other NHL players.

At trial, the government presented testimony from nearly 40 witnesses and introduced more than 1,000 exhibits, including audio recordings made by several victim investors and proved that the defendants siphoned millions of investor dollars into a labyrinth of holding companies, diverting those dollars from their approved uses into companies, real estate and other ventures – including Constantine’s car racing endeavor – that solely benefited the defendants.

The Hawaii Real Estate Investment Scheme

Beginning in 2003, Kenner convinced Peca, Berard and several others to invest $100,000 each for the development of land in Hawaii into luxury estates and to open personal lines of credit at a bank, collateralized by their personal stock, bond and savings accounts worth at least $10 million.  Kenner assured the investors that the lines of credit would be used only to pay for initial development costs associated with the Hawaii project, and would be fully replenished after Lehman Brothers Holdings, Inc. agreed to loan the project up to $105 million in August 2006.  In fact, Kenner borrowed nearly all of investors’ lines of credit to acquire his personal interest in unrelated real estate projects in Hawaii and Mexico and to cover his own and Constantine’s personal expenses. 

In an offshoot of the scheme, Constantine brokered a $3.5 million loan from an Arizona businessman ostensibly to close on a Hawaii parcel of land.  Constantine put up no money of his own, but walked away from the transaction – funded with assets diverted from Peca, Berard and others – with approximately $2 million. 

The Eufora LLC Scheme

In 2002, Constantine founded Eufora LLC, a prepaid debit card business.  Between February 2008 and May 2009, Eufora was operating in the red, and as Constantine testified in civil depositions, the company was nearly worthless.  Notwithstanding, Kenner persuaded clients to invest in Eufora.  While representing that he was investing his clients’ funds in Eufora, Kenner instead wired $725,000 of his clients’ funds to Constantine’s personal account.  Kenner also directed the wiring of an additional $700,000 of his clients’ funds to Eufora’s account, and promptly re-wired those funds to a co-conspirator’s personal account.  The diverted funds were used to cover the costs of Kenner’s and Constantine’s home mortgages, credit card bills and other debts. 

The Global Settlement Fund Scheme

In early 2009, Kenner’s clients who had opened lines of credit for the Hawaii venture received notices that their credit lines were in default.  For years, Kenner concealed that he had wiped out most of his clients’ funds by borrowing against one line of credit to pay monthly interest charges for other another account.  By late 2008, the concealment scheme collapsed.  Notwithstanding, Kenner and Constantine persuaded their clients to invest additional funds to a “Global Settlement Fund.”  The clients contributed  more than $2.9 million toward the fund, but the vast majority of the money was diverted to the defendants’ personal use, which included Constantine buying his personal home out of foreclosure, Kenner and Constantine paying legal bills related to Kenner’s personal investment in a tequila company in Mexico, defending Constantine in Florida litigation over his race car sponsorship activities, and an exploratory and unsuccessful effort by Constantine to buy Playboy Enterprises.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Saritha Komatireddy and J. Matthew Haggans are in charge of the prosecution.  Assistant United States Attorneys Diane Leonardo and Madeline O’Connor are handling the forfeiture of assets.

The Defendant:

PHILLIP A. KENNER
Age: 51
Scottsdale, Arizona

Defendant To Be Sentenced:

TOMMY CONSTANTINE
Age: 54
Scottsdale, Arizona

E.D.N.Y. Docket No. 13-CR-607 (JFB)

Williamsburg Physical Therapy, P.C. and Euro Physical Therapy, P.C. have agreed to pay the United States and the State of New York $4 million to resolve civil allegations that they falsely billed Medicare, Medicaid, the Federal Employees’ Compensation Act Program (FECA) and the Federal Employees’ Health Benefits Program (FEHBP) for physical therapy services from 2008 to 2018.  The settlement also resolves claims against the owners of the two physical therapy practices, Alex Klurfeld and Diana Klurfeld, and First Plus Services, Inc., a management company associated with the practices.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; Matthew Modafferi, Special Agent-in-Charge, United States Postal Service, Office of the Inspector General (USPIS-OIG); Michael Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, New York Regional Office (DOL-OIG); and Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General, Office of Personnel Management (OPM OIG), announced the settlement.  Mr. DuCharme thanked the Office of the Inspector General for Health and Human Services and Office of the New York State Attorney General for their assistance in the investigation.

Williamsburg Physical Therapy and Euro Physical Therapy are New York professional corporations owned and operated by Alex Klurfeld, a physical therapist, and Diana Klurfeld, his wife, that provide physical therapy to the public, including to Medicare, FECA, FEHBP, and Medicaid beneficiaries in the New York City.  Williamsburg Physical Therapy and Euro Physical Therapy have operated under those names and others at the following addresses:

* 240 South 3rd Street, Brooklyn

* 182 Havermayer Street, Brooklyn

* 705 Manhattan Avenue, Brooklyn

* 37-49 91st Street, Queens

* 452 Fort Washington Avenue, Manhattan

* 601 West 182nd Street, Manhattan

* 3224 Grand Concourse, Bronx

First Plus Service, Inc. is a New York corporation owned and operated by Diana Klurfeld that conducts administrative services for Williamsburg Physical Therapy and Euro Physical Therapy, including medical billing and payroll.

The settlement resolves allegations that the defendants submitted false claims to federal healthcare programs for physical therapy services provided or supervised by someone other than the licensed physical therapist identified on the claim, including unlicensed aides.  The settlement also resolves claims that the defendants wrongfully backdated services after treatment authorizations had expired.

“Physical therapy performed by persons who are neither licensed nor supervised by licensed therapists may jeopardize patient health.  The knowing submission of claims for payment for such services to federally-funded health programs also defrauds taxpayers.  This settlement reaffirms this Office’s commitment to rooting out health care fraud and practices that may cause harm to patients,” stated Acting U.S. Attorney DuCharme. 

“This settlement sends a clear message that the government is dedicated to protecting the rights of patients and ridding corruption from federal benefit programs.  The U.S. Postal Service Office of Inspector General would like to thank our law enforcement partners for their commitment and efforts in this investigation.  The USPS OIG will continue to vigorously investigate those who engage in activities to defraud federal benefit programs and the U.S. Postal Service,” stated USPIS-OIG Special Agent-in-Charge Modafferi.

“Ensuring the integrity of the Department’s Workers Compensation Programs is an important part of the mission of the Office of Inspector General. We will continue to work with our law enforcement partners to vigorously pursue those that engage in fraud involving programs administered by the U.S. Department of Labor,” stated DOL-OIG Special Agent-in-Charge Mikulka.

“The OPM OIG is committed to holding providers accountable for fraudulent claims,” stated OPM Deputy Inspector General Vint. “This settlement is a result of the hard work of our investigative staff and our partners at the Department of Justice.”

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.  Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery.  The claims resolved by the settlement are allegations only; there has been no determination of liability.

The United States’ case was handled by Assistant United States Attorney Lisa Kutlin of the Office’s Civil Division, with assistance from Affirmative Civil Enforcement Auditor Michael Gambrell.

E.D.N.Y. Docket No.: 16-CV-4819 (WFK)

 

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Peter D. Lopez, Regional Administrator of the U.S. Environmental Protection Agency (EPA), Region 2, announced today that the United States has filed a Consent Judgment resolving its claims against the County of Nassau (Nassau) for violating the Resource Conservation and Recovery Act (RCRA).  The settlement addresses Nassau’s failure to comply with federal underground storage tank (UST) regulations and with an EPA administrative order at 48 of Nassau’s facilities.  The Consent Judgment requires Nassau to install equipment to assure adequate leak detection across all county facilities.  The settlement also requires Nassau to pay a civil penalty of $427,500.

The lawsuit and Consent Judgment were filed in United States District Court for the Eastern District of New York, in Central Islip, New York.  Following a 30-day public comment period, the United States will review any comments and, if appropriate, request the District Court to enter and approve the Consent Judgment.

“The United States is pleased to announce this settlement with Nassau County that will help protect the health and safety of county residents and our groundwater, which may be jeopardized when underground storage tanks are not properly monitored,” stated Acting United States Attorney DuCharme. “The settlement enforces RCRA’s underground storage tank regulations at Nassau’s facilities, which are critical to mitigate the risk of spills and leaks.  This Office will vigorously enforce RCRA against parties who illegally operate underground storage tanks and compromise the safety of our community.”

 “Nassau County and EPA have worked out an agreement that will help ensure that underground storage tanks (USTs) will be properly monitored and regulated to protect human health and the environment,” said EPA Regional Administrator Lopez.  “The judicial settlement requires the county to take multiple steps including implementing a centralized monitoring system. This judicial action settles the County’s non-compliance with a prior administrative settlement. Nassau County has cooperated with EPA and is now taking action to protect the integrity of the aquifer that provides drinking water to the county’s residents.”

Congress enacted RCRA in 1976 to address problems associated with municipal and industrial waste.  One of RCRA’s primary goals is to protect the health and safety of the community and the environment from the potential hazards of waste disposal.  The UST program was created under RCRA to help achieve RCRA’s goals by regulating USTs that contain hazardous substances and petroleum products.  When USTs are properly operated and monitored, they are a safe and effective way to store petroleum products.  However, when tanks are not properly safeguarded, they can endanger the health of the public and the environment by leaking petroleum or hazardous substances into the groundwater, contaminating soil and potentially triggering fires or explosions.

Prior to the present lawsuit, the EPA filed an administrative complaint against Nassau alleging that the county repeatedly failed to comply with UST safety requirements at 33 facilities between 2008 and 2010.  The EPA and Nassau reached a settlement of these claims in a September 2012 administrative Consent Agreement and Final Order (CA/FO).   However, Nassau failed to complete the injunctive work requirements in the CA/FO, leading to this judicial action.  

Further, after entering into the CA/FO, from 2012 to 2017, Nassau continued to violate the UST regulations.  Specifically, it did not: (i) conduct pipe tightness testing at 12 facilities, (ii) upgrade or close a steel UST at one facility, (iii) add secondary containment (or permanently close) the hazardous substance USTs at two facilities, (iv) install release detection equipment for the USTs at 17 facilities, (v) install release detection equipment for the USTs at 11 emergency generator facilities, (vi) install overfill prevention equipment for the USTs at 12 facilities and (vii) permanently close a UST that had been temporarily closed.

The Consent Judgment requires Nassau to fully comply with RCRA’s UST regulations.  Specifically, the settlement requires Nassau to install and operate release detection equipment and overfill and spill prevention equipment, upgrade certain USTs and close certain USTs.  The settlement also requires Nassau to install and operate a centralized monitoring system, which will enable Nassau to centrally monitor its USTs so that it can promptly detect and respond to any leaks or spills across its facilities.

The case is being handled by Assistant U.S. Attorneys Diane C. Leonardo and Matthew Silverman of the U.S. Attorney’s Office for the Eastern District of New York, working with Bruce Aber and William Sawyer of the Office of Regional Counsel, U.S. EPA Region 2, Claudia Gutierrez, UST Compliance Team Leader, Paul Sacker, Senior Enforcement Officer and Leonard Voo, RCRA Compliance Branch Chief, of the Enforcement and Compliance Assurance Division, U.S. EPA Region 2.

 

WASHINGTON - The Department of Justice announced today that it has filed a lawsuit against Village Realty of Staten Island Ltd. and Denis Donovan, a sales and former rental agent at Village Realty, alleging discrimination against African Americans in violation of the Fair Housing Act when offering housing units for rent.  The lawsuit is based on the results of testing conducted by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices. 

The complaint, filed in the U.S. District Court for the Eastern District of New York, alleges that Donovan discriminated against prospective renters on the basis of race by treating African Americans who inquired about available rental units differently and less favorably than similarly-situated white persons.  Donovan allegedly told African-American testers about fewer rental units than white testers, offered white testers rental discounts and opportunities to inspect units that were not offered to African-American testers, primarily offered African-American testers units in more integrated neighborhoods while offering white testers units in both overwhelmingly white and more integrated neighborhoods and made more encouraging comments to white testers about available rental units.  The lawsuit alleges that Village Realty is legally responsible for Donovan’s alleged discrimination because Donovan worked as Village Realty’s rental agent. 

“The U.S. Attorney’s Office has been, and always will be, dedicated to protecting the rights established by the Fair Housing Act, which demands that individuals and families of all races, colors and nationalities are treated fairly when they want to buy or rent a home.  Today’s lawsuit reinforces this Office’s commitment to eliminating discrimination in housing,” stated Acting U.S. Attorney Seth D. DuCharme for the Eastern District of New York.

“Freedom for Americans means that people can live peacefully in our nation without regard to their race, ancestry, sex, and other protected traits.  The United States and its laws forbid segregation in which people are judged, divided, and harmed because of the color of their skin.  Race never should be a factor that determines where someone can live,” stated Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division.  “No one should have their housing choices limited, whether by explicit refusals to rent on the basis of race, or more subtle differences in the way home seekers are treated when they ask about available properties.  Whether obvious or less apparent, race discrimination in the rental housing market is intolerable.  The Department of Justice is committed to enforcement of the Fair Housing Act to ensure that people have equal access to rental housing, and equal treatment when seeking rental housing, regardless of race, including by uncovering hidden discrimination through our Fair Housing Testing Program.”

The lawsuit seeks monetary damages to compensate victims, civil penalties against the defendants to vindicate the public interest, and a court order barring future discrimination.

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

Individuals who believe they may have experienced discrimination at Village Realty, or believe they may have information relevant to this case should contact the Department of Justice toll-free at 1-800-896-7743, by email at fairhousing@usdoj.gov, or by submitting a report online.

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

 

Fifteen individuals, including two doctors, two licensed physical therapists, a licensed clinical social worker, a pharmacist and four pharmacy owners and operators, have been charged for their participation in schemes that fraudulently billed the Medicare and Medicaid programs for more than $15 million.  The charges filed in federal court in Brooklyn, New York are part of a nationwide health care fraud takedown led by the Medicare Fraud Strike Force, which resulted in criminal charges against more than 300 individuals for their alleged participation in health care fraud schemes involving approximately $6 billion in fraudulent claims.

The charges were announced by Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; Brian C. Rabbitt,  Acting Assistant Attorney General of the Justice Department’s Criminal Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Scott Lampert, Special Agent-in- Charge, U.S. Department of Health and Human Services - Office of Inspector General, Office of Investigations, New York Regional Office (HHS-OIG); Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), Acting Medicaid Inspector General Erin E. Ives of New York State Office of the Medicaid Inspector General (OMIG) and Dermot F. Shea, Commissioner New York City Police Department (NYPD).            

 The results of the nationwide takedown were announced today Acting Assistant Attorney General Rabbitt; Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division; Deputy Inspector General Gary Cantrell of HHS-OIG; and Assistant Administrator Tim McDermott of the DEA.

“The defendants, many of them healthcare professionals, abused their positions by engaging in fraud in order to steal precious benefit funds that were meant to help the most vulnerable among us,” stated Acting United States Attorney DuCharme.  “The U.S. Attorney’s Office for the Eastern District of New York is working arm-in-arm with our federal and local law enforcement partners to protect our community and our taxpayer-funded programs from the potential harm posed by corrupt healthcare professionals and those who aid them.”

“This nationwide enforcement operation is historic in both its size and scope, alleging billions of dollars in healthcare fraud across the country,” stated Acting Assistant Attorney General Rabbitt.  “These cases hold accountable those medical professionals and others who have exploited health care benefit programs and patients for personal gain.  The cooperative law enforcement actions announced today send a clear deterrent message and should leave no doubt about the department’s ongoing commitment to ensuring the safety of patients and the integrity of health care benefit programs, even amid a national health emergency.”

“As alleged today, the defendants took advantage of programs established for the benefit of those less fortunate, illegally profiting by ripping off the rest of the law abiding public,” stated FBI Assistant Director-in-Charge Sweeney.  “This is not a victimless crime - health care fraud is a theft against all of us who contribute hard earned income and taxes into the system.  While today’s charges are a victory for the public at large, and those who play by the rules, they also highlight a constant glaring problem.  It is easy to illegally profit in the health care field, and the FBI’s New York office will continue to investigate and hold accountable those who break federal law while lining their own pockets.”

“Medical professionals who scheme to enrich themselves through health care fraud – such as Dr. Kalepu’s participation in a telefraud durable medical equipment scam -- undermine taxpayer-funded programs and drive up health care costs for everyone,” stated HHS-OIG Special Agent-in-Charge Lampert. “This takedown shows our commitment to collaborate with our law enforcement partners and effectively investigate such corrosive fraud schemes.”

“It is our duty to weed out those health care professionals who manipulate their position for profit,” stated DEA Special Agent-in-Charge Donovan.   “DEA, and our law enforcement partners, are committed to safeguarding the integrity of our healthcare system and keeping Americans safe.   I applaud all of our partners for their significant work in these investigations.” 

“IRS-CI is proud to lend our financial expertise in this effort to uncover a wide web of criminal behavior that impacts our financial system and public trust,” stated IRS-CI Special Agent-in-Charge Larsen.  “Both Diler and Hussnain are guilty of conspiring to participate in this broad scheme to steal from the United States taxpayers through both Medicare and Tax Fraud.” 

“These arrests serve notice to those who attempt to exploit the Medicaid program for personal gain,” stated Acting Medicaid Inspector General Ives. “My office will continue to work closely with our law enforcement partners to root out fraud and hold wrongdoers fully accountable.”

“This sweeping set of federal charges highlights law enforcement’s combined efforts to protect innocent citizens and ensure integrity across our vital health systems,” stated NYPD Commissioner Shea. “I commend our NYPD investigators, and all of our partners, for their important work in these cases.”

Schemes charged in the Eastern District of New York, detailed in three indictments, five complaints and three criminal information, include the following:

United States v. Dalmacio Francisco and Michael Othman:  The complaint charges Dr. Delmacio Francisco and Michael Othman with oxycodone distribution.  The complaint alleges that Dr. Francisco, who operated two medical offices in Queens, provided large-quantity oxycodone scripts to “patients” – individuals he never actually evaluated – who were recruited by Othman in exchange for cash.  Dr. Francisco also prescribed oxycodone in the names of two individuals who were incarcerated when the prescriptions were issued.  During a search of Francisco’s home, DEA agents found $150,000 in bundled cash in a hidden lock box.  Both defendants made their initial appearance by video before United States Magistrate Judge Steven M. Gold on May 20, 2020.  The case is being prosecuted by Assistant United States Attorneys James McDonald and Elizabeth Macchiaverna of the U.S. Attorney’s Office for the Eastern District of New York.

United States v. Anand Kalepu:  The information charges Anand Kalepu, a medical doctor, with conspiracy to commit health care fraud.  The charges stem from Dr. Kalepu’s work with a telemedicine company through which he allegedly caused the submission of false and fraudulent claims for durable medical equipment (“DME”) to Medicare.  Between 2018 and 2019 the amount billed to Medicare for Dr. Kalepu’s DME prescriptions was in excess of $1.3 million.  Dr. Kalepu pleaded guilty to the information before United States District Judge Ann M. Donnelly at the federal courthouse in Brooklyn, and the guilty plea was unsealed on September 30, 2020.  The case is being prosecuted by Trial Attorney Miriam Glaser Dauermann of the Criminal Division’s Fraud Section.

United States v. Mahmoud Elsanaa and Olga Popovych:  The indictment charges Mahmoud Elsanaa, a licensed physical therapist and clinic owner, and Olga Popovych, the office manager of several physical therapy clinics controlled by Elsanaa, with one count of conspiracy to commit health care fraud (Elsanaa only) and one count of conspiracy to falsify medical records (Elsanaa and Popovych).  The charges stem from the defendants’ alleged role in the operation of physical therapy clinics that billed Medicare and Medicaid for services that were unnecessary, procured by kickbacks, provided by unlicensed practitioners, or otherwise not provided as billed.  Elsanaa and Popovych were arrested and arraigned before United States Magistrate Judge Lois Bloom on September 17, 2020.  The case is being prosecuted by Trial Attorney Miriam Glaser Dauermann of the Criminal Division’s Fraud Section.

United States v. Mazen Abdel Magid:  The complaint charges Mazen Abdel Magid, a licensed physical therapist and clinic owner and a business partner of Mahmoud Elsanaa, with one count of submitting false claims to Medicare.  The charges stem from Abdel Magid’s alleged submission of claims to Medicare for physical therapy services purportedly provided at his physical therapy clinic when, in fact, he was overseas and could not have provided the services.  Abdel Magid was arrested and made an initial appearance before United States Magistrate Judge Lois Bloom on September 17, 2020.  The case is being prosecuted by Trial Attorney Miriam Glaser Dauermann of the Criminal Division’s Fraud Section.

United States v. Vladimir Geykhman:  The indictment charges Vladimir Geykhman with one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.  The charges stem from the defendant’s alleged role in falsifying physical evaluation records in support of claims submitted through no-fault automobile insurance policies and laundering the proceeds therefrom.  Between March 2019 and August 2019, Geykhman was paid by New York State automobile insurance providers a total of approximately $1 million for claims that were based upon falsified patient records.  Geykhman was arrested and arraigned before United States Magistrate Judge Lois Bloom on September 17, 2020.  The case is being prosecuted by Miriam Glaser Dauermann of the Criminal Division’s Fraud Section.

United States v. Xuan Di Huang:  The complaint charges Xuan Di Huang, also known as “Wendy Huang,” an owner and operator of Zhiqing Social Adult Day Care in Flushing, Queens, with aiding and abetting and a substantive violation of the Anti-Kickback Statute.  The charges stem from a scheme in which Huang allegedly paid and offered to pay kickbacks to Medicaid beneficiaries for their attendance at Zhiqing Social Adult Day Care.  Between August 2019 and March 2020, Huang, through Zhiqing Social Adult Day Care, billed approximately $3.2 million dollars to long term managed care plans for Medicaid beneficiaries.  Huang was arrested and arraigned on August 27, 2020 before United States Magistrate Judge Lois Bloom.  The case is being prosecuted by Assistant United States Attorney Elizabeth Macchiaverna of the U.S. Attorney’s Office for the Eastern District of New York. 

United States v. Nisha Diler:  The information charges Nisha Diler, a licensed pharmacist, with conspiracy to commit health care fraud and subscribing a false tax return.  The charges stem from Diler’s role in a scheme to hold herself out as the supervising pharmacist at New Moon Pharmacy, when in fact she did not work at the pharmacy. Diler was paid kickbacks by Hussnain for her role in the scheme, which she then under-reported on her taxes.  Between 2016 and 2019, Medicare and Medicaid reimbursed the pharmacy approximately $3 million for pharmaceutical claims submitted through New Moon Pharmacy.  Diler pleaded guilty to the information before United States District Judge Rachel Kovner at the federal courthouse in Brooklyn on September 16, 2020.  The case is being prosecuted by Trial Attorney Miriam Glaser Dauermann of the Criminal Division’s Fraud Section.

United States v. Harris Hussnain:  The information charges Harris Hussnain with conspiracy to commit health care fraud, narcotics distribution and unlawful financial transactions.  The charges stem from Hussnain’s ownership of a Queens pharmacy, New Moon Pharmacy, and dispensing of prescription medications, including large amounts of Oxycodone, when the pharmacy did not employ a full-time licensed pharmacist.  Instead, Hussnain paid a co-conspirator, Nisha Diler, a licensed pharmacist, to hold herself out as the full-time pharmacist despite the fact that she visited the pharmacy only sporadically.  Between 2016 and 2019 Medicare and Medicaid reimbursed New Moon Pharmacy approximately $3 million for pharmaceutical claims.  Hussnain pleaded guilty to the information before United States District Judge Rachel Kovner at the federal courthouse in Brooklyn on September 29, 2020.  The case is being prosecuted by Trial Attorney Miriam Glaser Dauermann of the Criminal Division’s Fraud Section.

United States v. Aleah Mohammed, Aripha Mohammed and Shejer El Maliki:  A criminal complaint charges Aleah Mohammed, Aripha Mohammed and Shejer El Maliki, the owners and operators of the pharmacy Village Stardrugs Inc. in Queens, New York, with conspiracy to commit health care fraud.  Additionally, Aleah Mohammed was charged with health care fraud and aggravated identity theft, and Aripha Mohammed and Shejer El Maliki were each charged with money laundering.  The charges stem from their alleged roles in a scheme to submit claims through the pharmacy for medications that were not in fact prescribed as claimed, including claims for purportedly dispensing medications when the pharmacy was no longer licensed by the State of New York.  From March 2019 to March 2020, Medicare Part D plans reimbursed the pharmacy approximately $1.5 million for pharmaceutical claims, $1.4 million of which was reimbursed when the pharmacy was no longer licensed.  Aleah Mohammed, Aripha Mohammed and Shejer El Maliki were arrested and arraigned before United States Magistrate Judge Roanne L. Mann on September 23, 2020.  The case is being prosecuted by Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section.

United States v. Gorgi Naumovski:  The indictment charges Naumovski, the owner and operator of a durable medical equipment company Life Source Medical, Inc., in Greensboro, North Carolina, with one count of conspiracy to commit health care fraud.  The charge stems from Naumovski’s alleged role in a scheme in which claims were submitted to Medicare for durable medical equipment, including orthotic braces, where the defendant and his co-conspirators paid bribes and kickbacks by purchasing doctors’ orders for the equipment, including equipment that was not medically necessary.  Between April 2016 and December 2018, Life Source Medical billed Medicare approximately $4.1 million for claims for orthotics-related equipment and was paid approximately $1.8 million on those claims.  Naumovski was arrested and arraigned before United States Magistrate Judge Reona J. Daly by video in Benton, Illinois on September 29, 2020.  The case is being prosecuted by Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section.   

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

The Defendants:

NISHA DILER
Age:  40
Hicksville, NY

E.D.N.Y. Docket No.: 20-CR-279 (RPK)

HARRIS HUSSNAIN
Age:  40
Queens, NY

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

VLADIMIR GEYKHMAN
Age:   43
BROOKLYN, NY

E.D.N.Y. Docket No.: 20-CR-371 (AMD)

MAHMOUD ELSANAA
Age:  36
Wayne, NJ

POPOVYCH, OLGA
Age:  37
Brooklyn, NY

E.D.N.Y. Docket No.: 20-CR-373 (LDH)

MAGID, MAZEN ABDEL
Age:  37
Brooklyn, NY

E.D.N.Y. Docket No.: 20-MJ- 812

DR. ANAND KALEPU
Age:  70
Cleveland, OH

E.D.N.Y. Docket No. 19-CR-602

DR. DALMACIO FRANCISCO
Age:  75
Queens, NY

MICHAEL OTHMAN
Age:  48
Queens, NY

E.D.N.Y. Docket No.: 20-MJ-380

XUAN DI HUANG
Age:  59
Queens, NY

E.D.N.Y. Docket No. 20-MJ-733

GORGI NAUMOVSKI
Age:  52
DuQuoin, IL.

E.D.N.Y. Docket No.: 20-CR-384 (WFK)

ALEAH MOHAMMED (also known as “Abby”)
Age:  35
Queens, NY

ARIPHA MOHAMMED
Age:  33
Queens, NY

SHEJER EL MALIKI (also known as “Shaggy”)
Age:  33
Queens, NY

E.D.N.Y. Docket No. 20-MJ-851

Clare Bronfman, a high-ranking member of Nxivm’s Executive Board, was sentenced by United States District Judge Nicholas G. Garaufis today in federal court in Brooklyn to 81 months’ imprisonment for conspiracy to conceal and harbor aliens for financial gain and fraudulent use of personal identification information.  Bronfman pleaded guilty in April 2019 and pursuant to her plea agreement forfeited $6 million.  The Court also imposed a fine of $500,000 and restitution to be paid to victim “Jane Doe 12” in the amount of $96,605.

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

“Defendant Bronfman twisted our immigration system to serve a reprehensible agenda, and engaged in flagrant fraud to the detriment of her victims and in the service of a corrupt endeavor,” stated Acting United States Attorney DuCharme.  “With today’s sentence, she has been held accountable for her crimes.” 

Mr. DuCharme extended his appreciation to the Department of Homeland Security, Homeland Security Investigations, the New York State Police and the United States Attorney’s Office for the Northern District of New York for their assistance during the investigation and prosecution.

“Today, Clare Bronfman is the first of many to be sentenced for the crimes she committed in furtherance of Nxivm’s objectives. While her fate in no way removes the trauma Nxivm’s victims will likely continue to suffer, it does highlight the government’s efforts to bring to justice all of those involved in a series of illegal acts carried out for the benefit of this organization. She recently wrote to the judge telling him that Nxivm and Keith Raniere had changed her life for the better. She will now have more than six years behind bars to contemplate that sentiment, and decide once and for all if it’s as easy to accept as she once believed it to be,” stated FBI Assistant Director-in-Charge Sweeney.

“IRS-CI specializes in financial investigations where following the money much of the time is a result of greed,” stated IRS-CI Special Agent-in-Charge Larsen. “Defendant Bronfman is now paying the price for her behavior that reached a depraved level beyond just financial greed.”

Between October 2015 and January 2018, Bronfman recruited individuals into Nxivm-affiliated organizations and then sought to obtain visas or other immigration status for them based on false or fraudulent representations.  Bronfman recruited one woman from Mexico (“Jane Doe 12”) to work for a fitness-related Nxivm-affiliated company.  Bronfman then submitted documents purporting to hire Jane Doe 12 as a management consultant with a salary of $3,600 per month in order to secure a work visa for her, but Bronfman paid Jane Doe 12 only approximately $4,000 over the course of more than a year for her work.  In response to Jane Doe 12’s pleas to be paid a living wage, Bronfman told Jane Doe 12 she would have to “earn” her visa by doing additional uncompensated work. 

After the death of one of Raniere’s partners, Bronfman participated in a scheme to assist Raniere in fraudulently using the partner’s credit card information to keep money and assets out of Raniere’s name to evade paying income tax and his creditors or their judgments against him.

Five of Bronfman’s co-defendants were previously convicted on various charges and are awaiting sentencing.  On June 19, 2019, Keith Raniere was convicted after a jury trial of racketeering and racketeering conspiracy, sex trafficking, attempted sex trafficking and sex trafficking conspiracy, forced labor conspiracy and wire fraud conspiracy.  On March 12, 2019, Nancy Salzman, Nxivm’s president and co-founder, pleaded guilty to racketeering conspiracy.  On March 25, 2019, Lauren Salzman, a first-line “master” in DOS, a secret society within Nxivm with levels of women “slaves” headed by “masters,” pleaded guilty to racketeering and racketeering conspiracy.  On April 8, 2019, Allison Mack, another first-line “master” in DOS, pleaded guilty to racketeering and racketeering conspiracy.  On April 19, 2019, Kathy Russell, a bookkeeper for Nxivm, pleaded guilty to visa fraud. 

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Tanya Hajjar and Mark J. Lesko are in charge of the prosecution.  Assistant United States Attorney Karin Orenstein of the Office’s Civil Division is handling forfeiture matters.

The Defendant:

CLARE BRONFMAN
Age:  41
Clifton Park, New York

E.D.N.Y. Docket No. 18-CR-204 (S-2) (NGG)

The Department of Justice announced today that it has filed a lawsuit against Village Realty of Staten Island Ltd. and Denis Donovan, a sales and former rental agent at Village Realty, alleging discrimination against African Americans in violation of the Fair Housing Act when offering housing units for rent. The lawsuit is based on the results of testing conducted by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices. 

The complaint, filed in the U.S. District Court for the Eastern District of New York, alleges that Donovan discriminated against prospective renters on the basis of race by treating African Americans who inquired about available rental units differently and less favorably than similarly-situated white persons. According to the complaint, Donovan told African-American testers about fewer rental units than white testers, offered white testers rental discounts and opportunities to inspect units that were not offered to African-American testers, generally offered African-American testers units only in racially mixed  neighborhoods while offering white testers units in both overwhelmingly white and racially mixed neighborhoods, and made more encouraging comments to white testers about available rental units. The lawsuit alleges that Village Realty is legally responsible for Donovan’s alleged discrimination because Donovan worked as Village Realty’s rental agent. 

“Freedom for Americans means that people can live peacefully in our nation without regard to their race, ancestry, sex, and other protected traits,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The United States and its laws forbid segregation in which people are judged, divided, and harmed because of the color of their skin. Race never should be a factor that determines where someone can live. No one should have their housing choices limited, whether by explicit refusals to rent on the basis of race, or more subtle differences in the way home seekers are treated when they ask about available properties. Whether obvious or less apparent, race discrimination in the rental housing market is intolerable. The Department of Justice is committed to enforcement of the Fair Housing Act to ensure that people have equal access to rental housing, and equal treatment when seeking rental housing, regardless of race, including by uncovering hidden discrimination through our Fair Housing Testing Program.”

“The U.S. Attorney’s Office has been, and always will be, dedicated to protecting the rights established by the Fair Housing Act, which demands that individuals and families of all races, colors and nationalities are treated fairly when they want to buy or rent a home,” said Acting U.S. Attorney Seth D. DuCharme. “Today’s lawsuit reinforces this Office’s commitment to eliminating discrimination in housing.”

The lawsuit seeks monetary damages to compensate victims, civil penalties against the defendants to vindicate the public interest, and a court order barring future discrimination.

Individuals who believe they may have experienced discrimination at Village Realty or believe they may have information relevant to this case should contact the Department of Justice toll-free at 1-800-896-7743, by email at fairhousing@usdoj.gov, or by submitting a report online.

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

Earlier today, in federal court in Brooklyn, Joshua Turney, formerly a registered broker at Global Arena Capital Corp. (“Global”), a now defunct brokerage firm located in New York City, pleaded guilty before United States District Judge Eric N. Vitaliano to conspiracy to commit securities fraud for engaging in unauthorized trading in his customers’ accounts.  When sentenced, Turney faces up to five years in prison, as well as restitution, criminal forfeiture and a fine.

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.

“With today’s guilty plea, Turney has been held accountable for abusing the trust of his customers and for engaging in unauthorized trades to unjustly enrich himself,” stated Acting United States Attorney DuCharme.  “This Office will continue to work vigilantly alongside our law enforcement partners to protect the integrity of financial markets.” Mr. DuCharme expressed his grateful appreciation to the Securities and Exchange Commission, New York Regional Office (SEC), for its significant cooperation and assistance during the investigation.  

“The scheme Turney and his co-conspirators are accused of today is fairly straightforward. As alleged, they pushed through more than $100 million in customer trades, most of which were unauthorized, for the sole purpose of generating commission for themselves.  In Turney’s case, reaping the benefits of his proceeds, however, won’t be quite as simple now that he’s been charged with a federal crime,” stated FBI Assistant Director-in-Charge Sweeney.

According to court filings and facts presented at the plea hearing, between April 2015 and June 2015, shortly before Global ceased operations, Turney and his co-conspirators engaged in a scheme to defraud Global customers by purchasing and selling securities without the customers’ prior authorization or knowledge.  Approximately 4,500 trades were executed in approximately 360 customer accounts during this time period, most of which were unauthorized.  The principal value of these transactions was approximately $106 million, and the trades generated over $2.44 million in commissions and fees for Global. 

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

The Defendant:

JOSHUA TURNEY
Age:  41
San Diego, California

E.D.N.Y. Docket No.-20 CR-359 (ENV)

CENTRAL ISLIP, NY – An agreement was filed today in federal court in Central Islip resolving the criminal case against Amardeep Singh, who was charged in April 2020 with violating the Defense Production Act of 1950 by hoarding personal protective equipment (PPE) amid the COVID-19 pandemic and price-gouging customers of his retail store.  Under the terms of his Deferred Prosecution Agreement with the Government, Singh will donate PPE valued at more than $450,000 to hospitals, health care providers, first responders and other essential workers involved with addressing the needs of those affected by the pandemic and working to prevent the spread of COVID-19.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Craig Carpenito, head of the Department of Justice’s nationwide COVID-19 Hoarding and Price Gouging Task Force, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the disposition.

“The defendant has accepted responsibility for taking advantage of a public health emergency for personal profit,” stated Acting United States Attorney DuCharme.  “Today’s deferred prosecution agreement is a victory for heroic healthcare workers and first-responders who will benefit from the personal protective equipment relinquished by the defendant in their continuing battle against the COVID-19 virus.”

“This defendant’s attempt to charge unnecessarily high prices for badly needed and vitally important protective gear was an early example of how some people will try to unscrupulously profit from a national health care emergency,” stated head of the Department of Justice’s nationwide COVID-19 Hoarding and Price Gouging Task Force Carpenito. “Today’s agreement thwarts that attempt, and resolves the matter by getting this personal protective equipment to the people who need it.”

“Mr. Singh took advantage of being the ‘only game in town’ with PPE during the height of the coronavirus pandemic, by jacking up the prices on life-saving equipment needed by first responders, medical personnel and the general public. Singh held himself out as a local hero but we now know this was totally untrue,” stated USPIS Inspector-in-Charge Bartlett.

On March 18, 2020, in response to the COVID-19 pandemic, President Donald Trump issued Executive Order 13909 invoking the Act making it illegal to acquire medical supplies and devices designated by the Secretary of Health and Human Services as scarce in order to hoard them or sell them for excessive prices.

On April 14, 2020, Postal Inspectors executed a search warrant at Singh’s retail store and a consensual search of the warehouse and seized 23 pallets containing more than 100,000 face masks, 10,000 surgical gowns, nearly 2,500 full-body isolation suits and more than 500,000 pairs of disposable gloves. 

On April 24, 2020, Singh became the first person in the nation charged with violating the Act after accumulating merchandise, some of which had been officially designated as scarce, at his retail store in Plainview, and at a warehouse in Brentwood, including 40 shipments of disposable face masks weighing more than 1.6 tons, 14 shipments of disposable surgical gowns weighing more than 2.2 tons, six shipments of hand sanitizer weighing more than 1.8 tons and seven shipments of digital thermometers weighing approximately 253 pounds.  Singh then sold those items to the public at inflated prices. 

Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by Craig Carpenito, United States Attorney for District of New Jersey, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs.  The Secretary of Health and Human Services has issued a Notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices.

Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: disaster@leo.gov.

The government’s case is being prosecuted by the Office’s Long Island Criminal Division, with assistance from the Department of Justice’s Hoarding and Price-Gouging Task Force.  Assistant United States Attorney Anthony Bagnuola is in charge of the prosecution.

The Defendant:

AMARDEEP SINGH (also known as “Bobby Singh” and “Bobby Sidana”)
Age:  45
Woodbury, New York

E.D.N.Y. Docket No. 20-MJ-326

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Pete D. Lopez, Regional Administrator of the United States Environmental Protection Agency, Region 2 (EPA), announced today that the United States filed suit under the Clean Air Act (CAA) against the Town of Brookhaven (the Town) to address its longstanding failure to properly monitor and control noxious landfill gas emissions.  The parties agreed to enter into a Consent Judgment, also filed today with the court, which requires the Town to perform injunctive relief that will bring its landfill into compliance with the CAA.  Under the agreement, the Town will install and operate systems that reduce and monitor landfill gases, including sulfur dioxide, hydrogen sulfide and methane.  The settlement also requires the Town to pay a civil penalty of $249,166.

The lawsuit and Consent Judgment were filed in the United States District Court for the Eastern District of New York, in Central Islip, New York.  Following a 30-day public comment period, the United States will review any comments and, if appropriate, ask the court to enter the Consent Judgment.

“The United States brought this action to ensure that the Town of Brookhaven meets its obligation to protect air quality by properly operating systems that reduce potentially harmful landfill gas emissions.  The resolution in this case protects air quality by preventing excess emissions of sulfur dioxide, hydrogen sulfide and methane.  This Office will vigorously and faithfully enforce the rule of law to protect our community and our precious natural environment,” stated Acting United States Attorney DuCharme. 

“The Town of Brookhaven, EPA and the Department of Justice have worked out an agreement that will ensure that hydrogen sulfide and other landfill gas emissions emanating from the Brookhaven landfill are properly monitored, detected, and controlled,” stated EPA Regional Administrator Lopez.  “Putting these safeguards in place is essential to protecting human health and the environment.  We look forward to our continued engagement on this issue.”

The CAA was passed by Congress in 1970 to protect public health and the environment through the regulation of air emissions from both stationary and mobile sources.  The law requires the EPA to establish national ambient air quality standards (NAAQS) and imposes limitations on air pollutant emissions.  State and local governments are required to adopt federally enforceable plans to meet these standards.

The Town of Brookhaven, the largest town in Suffolk County, owns and operates the Brookhaven Landfill and the Brookhaven Landfill Gas Recovery Facility.  The landfill accepts municipal waste from the Town as well as other municipalities throughout Long Island.  Waste is deposited at the Landfill into various Cells, which are equipped with gas collection and control systems (GCCS).  Gas generated from Cells 5 and 6 contain high levels of hydrogen sulfide, which is combusted by an enclosed flare and oxidized into sulfur dioxide.  The Town also operates a system called the SulfaTreat System, to reduce hydrogen sulfide concentration in the gas upstream of the flare, thereby reducing the sulfur dioxide emissions from the flare.

Since 2005, the Town’s facilities have violated the CAA and its implementing regulations related to landfill air pollutant emissions, as well as the Town’s Title V operating permit for its landfill.  For example, the Town failed to: maintain proper temperatures in the landfill (which poses a risk for underground fires); properly monitor surface methane emissions; and continuously operate the SulfaTreat system, which reduces sulfur dioxide emissions from its flare.  Some of these violations contributed to excessive sulfur dioxide in the ambient air surrounding the facility.  In addition to its foul odor, sulfur dioxide can pose a danger to human, animal and plant health.

The settlement requires the Town to perform injunctive relief to bring its landfill facilities back into compliance with CAA.  As such, the Town must maintain and operate the facilities and associated air pollution control equipment in a manner consistent with sound practices for minimizing emissions.  Compliance with the CAA will require the Town to: properly operate the GCCS system, continuously operate the SulfaTreat system to reduce hydrogen sulfide concentrations from the landfill gas which will result in lower levels of sulfur dioxide emissions, install and operate a continuous hydrogen sulfide monitoring system, design and install a new taller flare to better disperse emissions, conduct monthly methane surface monitoring, and survey and correct any areas of high temperature in the landfill.  The Town has also agreed to install 350 solar panels, expected to generate 129 kilowatts of electricity, as a means to further reduce the Town’s air emissions profile.

The civil negotiations and settlement were handled by Assistant U.S. Attorneys Diane C. Leonardo and Matthew Silverman, working with Liliana Villatora and Damaris Urdaz, Regional Counsel’s Office, U.S. EPA Region 2, and Gaetano LaVigna, Chief, Stationary Source Compliance Section, Air Compliance Branch, U.S. EPA Region 2.

Earlier today, in federal court in Brooklyn, Sargeant Marine Inc., an asphalt company incorporated and formerly headquartered in Boca Raton, Florida, pleaded guilty and agreed to pay $16.6 million to resolve foreign bribery charges stemming from conduct by the company and its employees and agents in Brazil, Venezuela and Ecuador.  In each one of the countries, the company paid bribes to government officials to obtain contracts to purchase or sell asphalt to the countries’ state-owned companies in violation of the Foreign Corrupt Practices Act (FCPA).   Today’s proceedings took place by video before the United States District Judge Eric N. Vitaliano.  Previously, a corporate executive for Sargeant Marine, Daniel Sargeant; two Sargeant Marine traders who were active in Brazil, Venezuela and Ecuador, Roberto Finocchi and Jose Tomas Meneses; an agent and a consultant who acted as bribe intermediaries in Brazil and Venezuela, Luiz Eduardo Andrade and David Diaz; and a former Venezuelan government official, Hector Nunez Troyano, who received some of the bribes, pled guilty.  In addition, on September 10, 2020, a criminal complaint was unsealed in federal court in Brooklyn charging another former Venezuelan official with conspiracy to commit money laundering, in part for his alleged role in the Sargeant Marine Venezuela scheme.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Brian C. Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Calvin A. Shivers, Assistant Director, Federal Bureau of Investigtion, Criminal Investigative Division (FBI), announced the guilty pleas and resolution.

“Today’s resolution is the result of a multi-year, multi-national, collaborative effort to root out corruption perpetrated by an American company in three countries,” stated Acting U.S. Attorney DuCharme.  “We will continue to investigate and prosecute any company that corrupts foreign government officials in order to gain a competitive edge, as well as any of their executives and employees who participate in those efforts.”

“With today’s guilty plea, Sargeant Marine has admitted to engaging in a long-running pattern of paying bribes to corrupt officials in three South American countries to obtain lucrative business,” stated Acting Assistant Attorney General Rabbitt.  “Today’s resolution, together with charges the department has brought against individuals involved in Sargeant Marine’s illegal schemes, demonstrates the department’s continuing commitment to holding companies and their executives responsible for international corruption.” 

“The FBI is dedicated to rooting corruption out of our market, keeping the United States fair for vendors and consumers alike," stated FBI Assistant Director Shivers.  “Sargeant Marine, Inc. attempted to get ahead of competitors by paying bribes to foreign officials in violation of the Foreign Corrupt Practices Act.  As today's guilty pleas demonstrate, the FBI will relentlessly investigate those attempting to cheat the market, and we will bring them to justice.”

According to the Statement of Facts stipulated to by Sargeant Marine in connection with its guilty plea and other court documents, between approximately 2010 and 2018, Sargeant Marine, through its employees and agents, conspired to pay bribes to foreign officials in Brazil, Venezuela and Ecuador to secure lucrative contracts.  As a result of these bribes, Sargeant Marine and its affiliated companies earned profits of over $38 million.  

In Brazil, Sargeant Marine and its related companies bribed officials at the state-owned oil company, Petróleo Brasileiro S.A. - Petrobras (Petrobras), to obtain contracts to sell asphalt to Petrobras.  From approximately 2010 to 2015, Sargeant Marine and its affiliates, through its employees and agents, concealed bribe payments to Brazilian government officials by creating fake consulting contracts and fake invoices by using cash payments and by wiring millions of dollars from the United States to offshore bank accounts held in the name of shell companies of bribe middlemen.  As a result of the Brazilian bribery scheme, Sargeant Marine and its affiliated companies earned profits of approximately $26.5 million.

The conduct in Brazil began when a Sargeant Marine senior executive officer traveled to Brazil in January 2010 in an effort to identify an agent with connections to a government official who could help the company obtain business from Petrobras.  Eventually, the company began paying bribes to a “lobbyist” who was known to receive payments for his connections to Petrobras officials.  At a dinner arranged by the Sargeant Marine intermediary with a Petrobras official and a Brazilian politician, the intermediary promised bribes in return for securing contracts between Petrobras and Sargeant Marine.  After a company affiliated with Sargeant Marine completed shipments of asphalt to Petrobras in August 2010, the affiliate’s executive emailed Daniel Sargeant stating, “Wow guess last Brazil trip with crooks paid off.  Should go again before contract next year gets hot and heavy.”

Between approximately 2012 and 2018, Sargeant Marine engaged in similar conduct in Venezuela, this time to purchase asphalt from the state-controlled oil company, Petroleos de Venezuela S.A. (PDVSA).  Sargeant Marine and its affiliates—which had been blacklisted by PDVSA—used a Swiss company that would resell the asphalt to Sargeant Marine at a small premium.  As it did in Brazil, Sargeant Marine concealed the bribes by creating fake consulting contracts and fake invoices and by making payments to offshore bank accounts held by a bribe middleman.  The bribe middleman then paid bribes to a PDVSA official. Sargeant Marine’s bribe payments also gave it access to non-public information from PDVSA officials to give Sargeant Marine a corrupt edge on its competition.  As a result of the Venezuela bribery scheme, Sargeant Marine earned about $8.2 million in profits.

Sargeant Marine paid bribes to an official working for Empresa Publica de Hidrocarburos del Ecuador (Petroecuador), a state-owned oil company of Ecuador that needed asphalt to supply the country.  Sargeant Marine and its affiliates used the same tactics as in Brazil and Venezuela to conceal bribe payments, made through an intermediary to a Petroecuador official, which were made to secure a contract with Petroecuador.  As a result of this scheme, Sargeant Marine earned profits of approximately $3.2 million.   

In September 2017, Andrade pleaded guilty to conspiring to violate the FCPA.  In November 2017, Finocchi pleaded guilty to conspiracy to defraud the United States.  In March 2018, Diaz pleaded guilty to two counts of conspiring to violate the FCPA.  In August 2018, Meneses pleaded guilty to conspiring to violate the FCPA.  In March 2019, Troyano pleaded guilty to money laundering conspiracy.  In December 2019, Daniel Sargeant pleaded guilty to conspiracy to violate the FCPA and conspiracy to commit money laundering.  The defendants are awaiting sentencing.

The investigation is being conducted by FBI's International Corruption squad in Miami. The government’s case is being handled by the Office’s Business and Securities Fraud Section and the Criminal Division’s Fraud Section.  Assistant United States Attorneys Whitman Knapp, Mark E. Bini and Andrey Spektor of the Eastern District of New York and Fraud Section Trial Attorney Derek J. Ettinger are prosecuting the case.

The government of Brazil provided significant assistance in this matter, as did the Criminal Division’s Office of International Affairs.

The Defendant:

SARGEANT MARINE, INC.

E.D.N.Y. Docket No.: 20-CR-363 (ENV)

DANIEL SARGEANT
Age: 53
Florida, United States

E.D.N.Y. Docket No.: 19-CR-319 (ENV)

ROBERTO FINOCCHI
Age: 58
Country of Origin: Venezuela

E.D.N.Y. Docket No.: 17-CR-600 (ENV)

JOSE TOMAS MENESES
Age: 65
Country of Origin: Venezuela

E.D.N.Y. Docket No.: 18-CR-358 (ENV)

LUIZ EDUARDO ANDRADE
Age: 61
Country of Origin: Brazil

E.D.N.Y. Docket No. 17-CR-497 (ENV)

DAVID DIAZ
Age: 56
Country of Origin: Venezuela

E.D.N.Y. Docket No.: 18-CR-140 (ENV)

Hector Nunez Troyano
Age: 43
Country of Origin: Venezuela

E.D.N.Y. Docket No. 19-CR-135 (ENV)

 

Sargeant Marine Inc., an asphalt company formerly based in Boca Raton, Florida, pleaded guilty today to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a criminal fine of $16.6 million to resolve charges stemming from a scheme to pay bribes to foreign officials in three South American countries. 

According to its admissions, between 2010 and 2018, the company paid millions of dollars in bribes to foreign officials in Brazil, Venezuela, and Ecuador to obtain contracts to purchase or sell asphalt to the countries’ state-owned and state-controlled oil companies, in violation of the FCPA. 

“With today’s guilty plea, Sargeant Marine has admitted to engaging in a long-running pattern of paying bribes to corrupt officials in three South American countries to obtain lucrative business,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “Today’s resolution, together with charges the department has brought against individuals involved in Sargeant Marine’s illegal schemes, demonstrates the department’s continuing commitment to holding companies and their executives responsible for international corruption.” 

“Today’s resolution is the result of a multi-year, multi-national, collaborative effort to root out corruption perpetrated by an American company in three countries,” said Acting U.S. Attorney Seth DuCharme of the Eastern District of New York.  “We will continue to investigate and prosecute any company that corrupts foreign government officials in order to gain a competitive edge, as well as any of their executives and employees who participate in those efforts.”

“The FBI is dedicated to rooting corruption out of our market, keeping the United States fair for vendors and consumers alike,” said Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division. “Sargeant Marine Inc. attempted to get ahead of competitors by paying bribes to foreign officials in violation of the Foreign Corrupt Practices Act.  As today's guilty pleas demonstrate, the FBI will relentlessly investigate those attempting to cheat the market, and we will bring them to justice.”

According to the company’s admissions, Sargeant Marine Inc. and its affiliated companies (Sargeant Marine) engaged in an eight-year scheme to bribe foreign officials in Brazil, Venezuela, and Ecuador.  In Brazil, Sargeant Marine admitted to bribing a Minister in the Brazilian government, a high-ranking member of the Brazilian Congress, and senior executives at Petróleo Brasileiro S.A.-Petrobras to obtain valuable contracts to sell asphalt.  To execute the scheme and conceal the bribe payments, Sargeant Marine entered into fake consulting agreements with bribe intermediaries.  After receiving fake invoices, it then sent international wires from Sargeant Marine bank accounts to offshore bank accounts held in the names of shell companies controlled by the bribe intermediaries.  The bribe intermediaries used a portion of the commissions to pay bribes to Brazilian government officials on Sargeant Marine’s behalf, either by wire to the officials’ offshore shell companies, or in cash in Brazil.

Sargeant Marine also admitted that between approximately 2012 and 2018, it bribed four Petróleos de Venezuela, S.A. (PDVSA) officials in Venezuela in exchange for inside information, and for their assistance in steering contracts to purchase asphalt from PDVSA to a Sargeant Marine nominee.  The Sargeant Marine co-conspirators used code names to hide the identities of some of the PDVSA officials receiving the bribes, referring to them simply as “Oiltrader,” “Tony,” and “Tony 2” in emails and texts.  The inside information was called “Chocolates.”  Similar to Brazil, Sargeant Marine covered up the bribes by entering into fake consulting agreements with a bribe intermediary and wiring commission payments into U.S. and offshore bank accounts he controlled.  The bribe intermediary then paid the PDVSA officials on behalf of Sargeant Marine.  

Sargeant Marine also admitted that it bribed an official at Ecuador’s state-owned oil company EP Petroecuador (Petroecuador) to secure a 2014 contract to supply asphalt.  The company used the same tactics as in Brazil and Venezuela to conceal the bribe payments.  In particular, it engaged a bribe intermediary with close ties to a decisionmaker at Petroecuador and then paid commissions to the bribe intermediary pursuant to a sham consulting agreement.  The intermediary used the commission payments to pay the bribes to the Petroecuador official on Sargeant Marine’s behalf.

The department recently unsealed charges against, and the guilty pleas of, five of the individuals who played a major role in the bribery scheme, including Daniel Sargeant, a senior executive of the company; Jose Tomas Meneses, a Sargeant Marine trader; Luiz Eduardo Andrade and David Diaz, consultants who acted as bribe intermediaries in Brazil and Venezuela, respectively; and Hector Nuñez Troyano, a former PDVSA official who received bribes in connection with the Venezuela contracts.  A sixth individual, Roberto Finocchi, also a Sargeant Marine trader, pleaded guilty in November 2017 for his role in the Brazil scheme. 

On Sept. 10, 2020, a criminal complaint was unsealed in federal court in Brooklyn charging another former PDVSA official with conspiracy to commit money laundering, in part, for his alleged role in the Sargeant Marine Venezuela scheme.

The investigation is being conducted by the FBI’s International Corruption Unit.  The government’s case is being handled by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  Fraud Section Trial Attorney Derek J. Ettinger and Assistant U.S. Attorneys Whitman Knapp, Mark E. Bini, and Andrey Spektor are prosecuting the case. 

The Justice Department’s Office of International Affairs provided substantial assistance.  The Ministerio Publico Federal in Brazil provided significant cooperation. 

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

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

A federal grand jury in the Eastern District of New York returned an indictment today against a trader at the U.S. subsidiary of a multinational oil distributor and trading company (Trading Company), for his alleged participation in a five-year international bribery and money laundering scheme involving corrupt payments to Ecuadorian officials. 

Acting Attorney General Brian C. Rabbitt, Acting U.S. Attorney Seth D. DuCharme for the Eastern District of New York, and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.

The two-count indictment charges Javier Aguilar, 46, a citizen of Mexico and resident of the United States, with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and conspiracy to commit money laundering. 

As alleged in court documents, including the criminal complaint that was unsealed today, between approximately 2015 and July 2020, Aguilar and others participated in a conspiracy to pay and conceal bribes to then-Ecuadorian officials, including at Empresa Publica de Hidrocarburos del Ecuador (Petroecuador) in order to obtain and retain business for Trading Company, in particular, a $300 million contract to purchase fuel oil that was awarded to a state-owned entity for the benefit of Trading Company.   

To promote the bribery scheme and conceal its proceeds, Aguilar and his co-conspirators allegedly agreed to use sham consulting agreements between bribe paying intermediaries and offshore shell companies, into whose accounts Trading Company paid funds while knowing that they would be used to pay bribes to the Ecuadorian government officials. 

According to the allegations, during the scheme, Aguilar and his co-conspirators caused the payment of approximately $870,000 in bribes that they had promised to then-Ecuadorian officials on behalf of Trading Company.

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

The investigation is being conducted by FBI's International Corruption squad in Miami.  The government’s case is being handled by the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS) and the U.S. Attorney’s Office for the Eastern District of New York.  Fraud Section Trial Attorneys Derek J. Ettinger, Jonathan P. Robell, and Clayton P. Solomon, MLARS Trial Attorneys Ann Brickley and Adam Schwartz, and Assistant U.S. Attorneys Mark E. Bini and Andrey Spektor are prosecuting the case.  The Department of Justice’s Office of International Affairs provided assistance in the investigation.

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

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

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

An indictment was unsealed today in federal court in Brooklyn charging Javier Aguilar with conspiring to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and money laundering conspiracy for his involvement in a scheme to pay approximately $870,000 in bribes to Ecuadorian government officials in exchange their assistance to help Aguilar’s employer secure a $300 million contract for fuel oil from Ecuador’s state-owned oil company.  Aguilar was previously arrested in Houston, Texas, and will be arraigned in the Eastern District of New York at a later date. 

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Brian C. Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and George L. Piro, Special Agent-in-Charge, Federal Bureau of Investigation, Miami Field Office (FBI), announced the charges.

As alleged in the indictment and other court documents, Aguilar worked as a manager and oil trader in Houston for a United States subsidiary of a European energy trading company (the “Trading Company”).  Beginning in mid-2015 and continuing into 2020, Aguilar and others allegedly caused approximately $870,000 in bribes to be paid to Ecuadorian government officials for their assistance in obtaining and retaining business for the Trading Company.  Specifically, the Trading Company paid two intermediaries $1.4 million for their efforts to secretly bribe the government officials using bank accounts located in the United States and offshore, and $870,000 of those funds were used to pay the bribes to the Ecuadorian officials.  In exchange for the bribes, the Trading Company secured contracts to purchase approximately $300 million in fuel oil from Petroecuador.  To conceal the proceeds of the bribery scheme, Aguilar caused fake and fraudulent consulting agreements to be executed with so-called consultants located in the United States who were actually bribe intermediaries. 

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

The government’s investigation is being conducted by the FBI’s International Corruption Unit, Miami Field Office.  The is case is being handled by the Office’s Business and Securities Fraud Section, the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and the Fraud Section.  Assistant United States Attorneys Mark E. Bini and Andrey Spektor, MLARS Trial Attorneys Ann Brickley and Adam Schwartz, and Fraud Section Trial Attorney Derek Ettinger are prosecuting the case.

The Defendant:

JAVIER AGUILAR
Age:  46
Houston, Texas

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

 

A criminal complaint was unsealed earlier today in federal court in Brooklyn charging Yinghang Yang with securities fraud for his role in an insider trading scheme.  Yang and a co-conspirator allegedly executed a series of securities transactions based on nonpublic information stolen from Yang’s employer, which resulted in profits of more than $900,000.  Yang was arrested this afternoon and is scheduled to make his initial appearance tomorrow via videoconference before United States Magistrate Judge Roanne L. Mann.

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 and arrest.   

“Yang abused the trust placed in him by his employer and allegedly broke the law by trading on, and profiting from, nonpublic information that he stole from his employer,” stated Acting United States Attorney DuCharme.  “As today’s arrest demonstrates, we are committed to protecting the integrity of our financial markets from dishonest profiteers.”  Mr. DuCharme thanked the Securities and Exchange Commission, New York Regional Office (SEC), for their significant cooperation and assistance during the investigation.

“It’s a plain and simple fact—those who base trading decisions on proprietary information they shouldn’t have access to are not only engaging in unfair business practices, they’re breaking the law. As we allege, Yinghang Yang did just that. His arrest today once again highlights the FBI’s ongoing efforts to uphold the integrity of our financial markets,” stated FBI Assistant Director-in-Charge Sweeney.

According to the complaint, since September 2018, Yang has been employed by a publicly traded company (“the Company”) that specializes in financial information and analytics.  The Company publishes several market indices, including American stock market indices based on the market capitalizations of groups of companies with shares listed on the New York Stock Exchange (NYSE) or the NASDAQ Stock Market (NASDAQ).  Yang’s job at the Company includes managing American stock market indices with more than $60 billion in asset value tracking. 

Between April 2019 and October 2019, Yang and a co-conspirator allegedly executed securities transactions in the co-conspirator’s brokerage account based, in whole or in part, on nonpublic information obtained by Yang through his employment at the Company, about issuers that were to be added or subtracted from market indexes published by the Company.  For example, on October 2, 2019, beginning at 2:47 p.m., the co-conspirator’s brokerage account entered orders to buy call options of Cleveland Cliffs (CLF), a publicly traded mining company.  The same day, at 5:15 p.m., the Company announced the addition of CLF to one of its indices effective prior to the open of trading on October 8, 2019.  The co-conspirator’s brokerage account subsequently sold the CLF call options on October 3, 2019, realizing a gain of approximately $155,029.  This sequence was followed in 13 additional transactions in the co-conspirator’s brokerage account during the charged conspiracy.

In total, the securities transactions engaged in by the co-conspirator’s brokerage account during the relevant time period generated more than $900,000 in profits, some of which were transferred to three different bank accounts held by Yang.  Funds from those accounts were then used by Yang for personal expenses, including credit card payments, repayment of student loans and trading activity in Yang’s own brokerage account. 

The charge in the complaint is an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Yang 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 Attorneys Alixandra Smith and Lindsay K. Gerdes are in charge of the prosecution, with assistance from Assistant United States Attorney Brian Morris of the Office’s Asset Forfeiture Section.

The Defendant:

YINGHANG YANG (also known as “James Yang”)
Age:  27
Flushing, Queens

E.D.N.Y. Docket No. 20-MJ-820

 

UPDATE

The charges described in the press release below were dismissed by the Court on January 19, 2023.  See No. 20-CR-442 (EK), ECF No. 140.

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BROOKLYN, NY – A criminal complaint was unsealed today in federal court in Brooklyn charging Baimadajie Angwang, a New York City Police Department officer and United States Army reservist, with acting as an illegal agent of the People’s Republic of China (PRC) as well as committing wire fraud, making false statements and obstructing an official proceeding.  Angwang was arrested today and will make his initial appearance this afternoon before United States Magistrate Judge Roanne L. Mann.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; John C. Demers, Assistant Attorney General for National Security; Alan E. Kohler, Jr., Assistant Director of the Federal Bureau of Investigation (FBI) Counterintelligence Division; 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 charges.

“The defendant allegedly violated his sworn oath to serve the New York City community and defend the Constitution against all enemies by reporting to PRC government officials about the activities of Chinese citizens in the New York area and developing intelligence sources within the Tibetan community in the United States,” stated Acting United States Attorney DuCharme.   “This Office, together with our law enforcement partners, remains vigilant in rooting out any attempts at foreign influence though criminal activity taken on behalf of a foreign power in whatever form they may take.”

“State and local officials should be aware that they are not immune to the threat of Chinese espionage,” said Assistant Attorney General for National Security John C. Demers.  “According to the allegations, the Chinese government recruited and directed a U.S. citizen and member of our nation’s largest law enforcement department to further its intelligence gathering and repression of Chinese abroad.  Our police departments provide for our public safety and are often the first line of defense against the national security threats our country faces.  We will continue to work with our state and local partners to protect our nation’s great police departments.”

“The defendant allegedly violated the trust of his community and the New York City Police Department on behalf of a foreign power, the People’s Republic of China.  This type of conduct simply cannot be tolerated,” stated FBI Assistant Director Kohler.  “This case serves as yet another reminder that China represents the biggest counterintelligence threat to the United States and that the FBI and our partners will be aggressive in investigating and stopping such activities within our nation.”

“This is the definition of an insider threat - as alleged, Mr. Angwang operated on behalf of a foreign government; lied to gain his clearance, and used his position as an NYPD police officer to aid the Chinese government's subversive and illegal attempts to recruit intelligence sources,” stated FBI Assistant Director-in-Charge Sweeney.  “The FBI is committed to stopping hostile foreign governments from infiltrating our institutions, and we will we not tolerate the behavior of those who willingly violate their oath to the United States, and covertly work against their fellow citizens. We want to thank the NYPD for its extraordinary partnership on this investigation.”

“As alleged in this federal complaint, Baimadajie Angwang violated every oath he took in this country. One to the United States, another to the U.S. Army, and a third to this Police Department,” stated NYPD Commissioner Shea.  “From the earliest stages of this investigation, the NYPD’s Intelligence and Internal Affairs bureaus worked closely with the FBI’s Counterintelligence Division to make sure this individual would be brought to justice.”

According to the publicly filed complaint and the government’s detention memorandum, Angwang, an ethnic Tibetan native of the PRC and naturalized U.S. citizen, is assigned to the NYPD’s community affairs unit where he serves as a liaison to the community served by the 111th Precinct. 

Since at least 2014, Angwang allegedly acted at the direction and control of officials at the PRC Consulate in New York City.  Specifically, Angwang reported on the activities of Chinese citizens in the New York area, spotted and assessed potential intelligence sources within the Tibetan community in New York and elsewhere, and provided PRC officials with access to senior NYPD officials through invitations to official events.  One of the PRC Consular officials at whose direction Angwang acted worked for the China Association for Preservation and Development of Tibetan Culture, a division of the PRC’s United Front Work Department.  This Department is responsible for, among other things, neutralizing potential opponents of the PRC and co-opting ethnic Chinese individuals living outside the PRC.

Angwang is also charged with committing wire fraud, making material false statements and obstructing an official proceeding.  As part of his employment with the U.S. Army Reserve, Angwang maintained a “SECRET”-level security clearance.  According to court documents, in 2019, Angwang completed and electronically submitted an SF-86C form for a background investigation.  On the form, Angwang lied by denying that he had contacts with a foreign government or its consulate and by denying that he had close and continuing contacts with foreign nationals, including his family members who live in the PRC, some of whom are affiliated with the People’s Liberation Army.   

The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Angwang faces a maximum sentence of 55 years’ imprisonment.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorney Michael T. Keilty is in charge of the prosecution, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

The Defendant:

BAIMADAJIE ANGWANG
Age:  33
Williston Park, New York

E.D.N.Y. Docket No. 20-MJ-837

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Baimadajie Angwang, 33, a New York City Police Department officer and United States Army reservist, with acting as an illegal agent of the People’s Republic of China (PRC) as well as committing wire fraud, making false statements and obstructing an official proceeding.  Angwang was arrested earlier today in Williston Park, New York, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Peggy Kuo at the United States Courthouse in Brooklyn, New York.

“State and local officials should be aware that they are not immune to the threat of Chinese espionage,” said Assistant Attorney General for National Security John C. Demers.  “According to the allegations, the Chinese government recruited and directed a U.S. citizen and member of our nation’s largest law enforcement department to further its intelligence gathering and repression of Chinese abroad.  Our police departments provide for our public safety and are often the first line of defense against the national security threats our country faces.  We will continue to work with our state and local partners to protect our nation’s great police departments.”

“The defendant is charged with violating his sworn oath as a New York City police officer to protect and serve the citizens of New York by instead reporting to PRC government officials about the activities of Chinese citizens in the New York area and developing intelligence sources within the Tibetan community in the United States,” stated Acting United States Attorney Seth D. DuCharme.  “Today’s arrest shows that no one – especially one sworn to uphold the law – is immune from prosecution for illegal acts on behalf of foreign governments.”

“The defendant allegedly violated the trust of his community and the New York City Police Department on behalf of a foreign power, the People’s Republic of China.  This type of conduct simply cannot be tolerated,” said Alan E. Kohler, Jr., Assistant Director of the FBI’s Counterintelligence Division.  “This case serves as yet another reminder that China represents the biggest counterintelligence threat to the United States and that the FBI and our partners will be aggressive in investigating and stopping such activities within our nation.”

“This is the definition of an insider threat - as alleged, Angwang operated on behalf of a foreign government; lied to gain his clearance, and used his position as an NYPD police officer to aid the Chinese government's subversive and illegal attempts to recruit intelligence sources,” stated FBI Assistant Director-in-Charge of the New York Field Office William F. Sweeney.  “The FBI is committed to stopping hostile foreign governments from infiltrating our institutions, and we will we not tolerate the behavior of those who willingly violate their oath to the United States, and covertly work against their fellow citizens. We want to thank the NYPD for its extraordinary partnership on this investigation.”

“As alleged in this federal complaint, Baimadajie Angwang violated every oath he took in this country. One to the United States, another to the U.S. Army, and a third to this Police Department,” stated NYPD Commissioner Dermot F. Shea.  “From the earliest stages of this investigation, the NYPD’s Intelligence and Internal Affairs bureaus worked closely with the FBI’s Counterintelligence Division to make sure this individual would be brought to justice.”

According to the publicly filed complaint and detention memorandum, Angwang, an ethnic Tibetan native of the PRC and naturalized U.S. citizen who resides in Williston Park, New York, is assigned to NYPD’s community affairs unit where, among other things, he serves as a liaison to the community served by the 111th Precinct. 

Since at least 2014, Angwang acted at the direction and control of officials at the PRC Consulate in New York City.  Specifically, Angwang reported on the activities of Chinese citizens in the New York area, spotted and assessed potential intelligence sources within the Tibetan community in New York and elsewhere, and provided PRC officials with access to senior NYPD officials through invitations to official events.  One of the PRC Consular officials at whose direction Angwang acted worked for the “China Association for Preservation and Development of Tibetan Culture,” a division of the PRC’s United Front Work Department.  This Department is responsible for, among other things, neutralizing potential opponents of the PRC and co-opting ethnic Chinese individuals living outside the PRC.

According to court documents, Angwang was explicit about his motivations, telling his PRC official handler that was wanted to get promoted within the NYPD so that he could assist the PRC and bring “glory to China.”  In addition, Angwang told his handler that the handler’s superiors in Beijing “should be happy . . . because you have stretched your reach into the police.”

In addition to acting as an illegal agent of the PRC, Angwang is also charged with committing wire fraud, making material false statements and obstructing an official proceeding.  As part of his employment with the U.S. Army Reserve, Angwang maintained a “SECRET”-level security clearance.  According to court documents, in 2019, Angwang completed and electronically submitted an SF-86C form for a background investigation.  On the form, Angwang lied by denying that he had contacts with a foreign government or its consulate and by denying that he had close and continuing contacts with foreign nationals, including his family members who live in the PRC, some of whom were affiliated with the People’s Liberation Army.   

The charges in the complaint are merely allegations and the defendant is presumed innocent unless and until proven guilty.  If convicted, Angwang faces a maximum sentence of 55 years’ imprisonment.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant U.S. Attorney Michael T. Keilty is in charge of the prosecution, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

Earlier today, at the federal courthouse in Brooklyn, Howard Mora and Alan Buxbaum pleaded guilty before United States District Judge Kiyo A. Matsumoto to conspiracy to commit wire fraud by using counterfeit United States Department of Agriculture stamps to sell misbranded lower quality beef at inflated prices to consumers.  When sentenced, each defendant faces up to 20 years in prison and criminal forfeiture of $250,000.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Bethanne M. Dinkins, Special Agent-in-Charge, United States Department of Agriculture, Office of Inspector General (USDA-OIG), announced the guilty pleas.

“Mora and Buxbaum rang up hundreds of thousands of dollars in fraudulent profits by charging customers more than the defendants’ products were worth, and now they will pay a price for their avarice,” stated Acting United States Attorney DuCharme. 

Between September 2011 and October 2014, the defendants were co-owners of A. Stein Meat Products, Inc., a wholesale meat processing and distribution business located in Brooklyn.  During this period, the defendants purchased beef products that had been graded “Choice” quality by graders at the USDA Agricultural Marketing Service and directed their employees to carve off the “Choice” markings and re-stamp them as “Prime,” using counterfeit stamps.  The meat was then sold at inflated prices to customers in the New York City metropolitan area.

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

The Defendants:

HOWARD MORA
Age: 68
Westbury, NY

ALAN BUXBAUM
Age: 66
Monroe, NJ

E.D.N.Y. Docket No. 19-CR-425 (KAM)

Earlier today, in federal court in Brooklyn, John Comito, Chief Executive Officer of AutoExec Computer Systems, Inc., pleaded guilty before United States Magistrate Judge Roanne L. Mann to wire fraud in connection with his theft of hundreds of thousands of dollars that was earmarked for the installation of internet access at 26 Catholic Elementary, Middle and High Schools in New York City.  When sentenced, Comito faces up to 20 years in prison.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), and David L. Hunt, Inspector General of the Federal Communications Commission (FCC-OIG), announced the guilty plea.

“With today’s guilty plea, Comito will now be held to account for defrauding the E-rate federal program and schools in order to enrich himself at the expense of the deserving children the program was designed to serve,” stated Acting United States Attorney DuCharme.  “This Office will remain vigilant in ensuring that taxpayer funds are not misappropriated but are used for their intended purpose and recipients.”

“Crimes like these make you shake your head in disbelief. This was no Robin Hood story, but a story of greed and total disregard for those in need of a quality and accessible education. Now with Mr. Comito’s guilty plea, he can spend his time paying for his theft of funds from the E-rate program and those who would have benefited from the needed telecommunication services the program provided,” stated USPIS Inspector-in-Charge Bartlett.

“The E-Rate Program was designed to assist the children in our nation’s neediest schools and we are committed to pursuing investigations into those who would corrupt this program for personal gain,” stated FCC-IG Hunt.  “The result in this case demonstrates the outstanding working relationship between the FCC Office of Inspector General and the U.S. Attorney’s Office of the Eastern District of New York. We remain committed to supporting the investigation and prosecution of individuals who defraud this program.  We would particularly like to thank the U.S. Postal Inspection Service, New York Division for their assistance in this matter.”

As set forth in the indictment and other court documents, the Federal Communications Commission program known as E‑rate distributes funds to schools and libraries, mostly serving economically disadvantaged children so that those institutions can acquire needed telecommunication services, internet access and related equipment.  In order to obtain those funds, schools and libraries certify that they are purchasing equipment and services from a private vendor.  The private vendor must, in turn, certify that it is providing the services and equipment as ordered, and is otherwise in compliance with the requirements of the program.  If approved, the E-rate program defrays the cost to the schools and libraries by up to 90%. 

From at least 2013 and into 2017, various Catholic elementary, middle and high schools located in the Diocese of Brooklyn contracted with AutoExec, through its CEO Comito, to provide them with telecommunications services and equipment.  Comito agreed to provide specific services and equipment to the schools but AutoExec did not complete the projects as promised.  At least eight schools received no items or services whatsoever.  The remaining schools received partial, substandard, older or otherwise non-approved equipment and services.  Nevertheless, Comito submitted false certifications to the FCC indicating that AutoExec had completed the work as promised in order to obtain E-Rate funds.  From approximately February 2013 through September 2017, AutoExec received approximately $426,000 in E-rate funds, and additional funds from the schools, for these projects.  By not doing the work, but keeping the money for personal expenses, Comito enriched himself at the expense of the underprivileged children the E-rate program was designed to serve.

Assistant United States Attorneys Francisco J. Navarro and Philip Pilmar are in charge of the prosecution. 

The Defendant:

JOHN COMITO
Age: 69
Staten Island, New York

E.D.N.Y. Docket No. 19-CR-593 (RRM)

An indictment was unsealed today in federal court in Central Islip charging Gregory Settino with theft of medical products and making a false statement to a federal agent.  Settino was arrested today and arraigned this afternoon via teleconference before United States Magistrate Judge Arlene R. Lindsay. Settino was released on a $250,000 bond.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Jeffrey Ebersole, Special Agent-in-Charge, Food and Drug Administration, Office of Criminal Investigations, New York Field Office (FDA-OCI), announced the arrest and charges.

“As alleged, Settino abused his supervisory position at a pharmaceuticals company to steal large quantities of equine drugs in order to enrich himself and without regard for how his sale of the medical products could potentially endanger the health of horses,” stated Acting United States Attorney DuCharme.  “The defendant then allegedly compounded his criminal conduct by lying to an FDA Special Agent to minimize the scope of his thefts.  Thanks to the combined efforts of the U.S. Attorney’s Office and the FDA, this illicit pipeline of stolen drugs to vets and horse trainers has been shut down.”

“The safety and effectiveness of veterinary drugs play a key role in maintaining the health of animals.  When these drugs leave the legitimate supply chain, they can lose their effectiveness or become unsafe,” stated FDA-OCI Special Agent-in-Charge Ebersole.  “We will continue to investigate and bring to justice those who endanger the health of animals.”

As set forth in court filings, Settino was the production supervisor of manufacturing at Luitpold Pharmaceuticals, Inc. in Shirley, New York.  In January 2019, Luitpold was renamed American Regent.  One of the products manufactured at Luitpold and American Regent was Adequan, an injectable equine drug administered to horses with degenerative joint disease and sold throughout the United States.  Between 2012 and January 2020, Settino allegedly stole thousands of bottles of Adequan from Luitpold and American Regent valued at over $1 million, and sold those drugs to horse trainers and veterinarians at New York racetracks, including Belmont Park, for more than $600,000.  Settino’s conduct endangered the health of horses because the drugs were not maintained, stored or transported in accordance with proper procedures for ensuring the safety, effectiveness and efficacy of the drugs.  At times, Settino transported the drugs in shoeboxes stored in his car.  At all times, the drugs were handled in violation of the FDA regulated supply chain.

On January 23, 2020, Settino was interviewed by an FDA Special Agent and allegedly falsely stated that he had stolen fewer than 100 bottles of Adequan from Luitpold and American Regent.  

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Settino faces up to 25 years in prison.

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

The Defendant:

GREGORY SETTINO
Age: 58
Bethpage, New York

E.D.N.Y. Docket No. 20-CR-340 (JS)

 

WASHINGTON – Earlier today, in federal court in Brooklyn, Aleksandr Pikus was sentenced by United States District Judge Ann M. Donnelly to 13 years’ imprisonment for his role in a massive healthcare kickback and money laundering conspiracy.  Pikus was also ordered by the Court to pay restitution in the amount of $23 million to Medicare, $16 million to Medicaid, $433,297 to the Internal Revenue Service and forfeit $2,614,233.79.  Pikus was convicted by a federal jury in November 2019 of one count of conspiracy to commit money laundering, two counts of money laundering, one count of conspiracy to pay and receive health care kickbacks and one count of conspiracy to defraud the United States by obstructing the IRS. 

Seth D. DuCharme, acting United States Attorney for the Eastern District of New York, Brian C. Rabbitt, Acting Assistant Attorney General of the Justice Department’s Criminal Division, Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General, New York Region (HHS-OIG), and Jonathan D. Larsen, Acting Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the sentence.

“The defendant’s key role in an elaborate scheme to steal and conceal tens of millions of dollars from the Medicare and Medicaid programs, was staggering in scope and deserving of the significant punishment he received today,” stated Acting U.S. Attorney DuCharme.  “This Office takes very seriously its obligation to protect government funds that provide vital medical coverage counted upon by individuals and families who qualify because of their low income, disability or advanced years.”

“For nearly a decade, Aleksandr Pikus stole millions of dollars from the federal Medicare and Medicaid programs in a major healthcare kickback, money laundering and tax fraud scheme,” stated Acting Assistant Attorney General Rabbitt.  “This significant sentence holds Pikus accountable for his leadership role in this scheme and reflects the Department’s commitment to protecting our valuable federal healthcare programs and their beneficiaries from this kind of fraud.”

“Pikus was the kingpin running a massive money laundering and kickback health care fraud syndicate,” stated HHS-OIG Special Agent-in-Charge Lampert.  “Now, like others who plot to steal from government health programs, he is paying a heavy price for his crimes.  Along with our law enforcement partners, we will continue to root out individuals who steal vital taxpayer-provided health funds.”

“The defendant’s greed and desire for money drove him to perpetrate crimes against our healthcare system and prey upon the vulnerable in our society,” stated IRS-CI Special Agent-in-Charge Larsen. “Justice has been served and IRS-CI will continue to work alongside our counterparts to uncover these schemes to hold these criminals accountable for their actions.”

The evidence at trial established that over the course of nearly a decade, Pikus and his co-conspirators perpetrated a scheme through a series of medical clinics in Brooklyn and Queens that employed doctors, physical and occupational therapists and other medical professionals who were enrolled in the Medicare and Medicaid programs.  In return for illegal kickbacks, Pikus referred beneficiaries to these health care providers, who submitted claims to the Medicare and Medicaid programs. Pikus and his co-conspirators then laundered a substantial portion of the proceeds of these claims through companies he controlled, including by cashing checks at several New York City check-cashing businesses.  Pikus then failed to report that cash income to the IRS.  Instead, Pikus used the cash to enrich himself and others and to pay kickbacks to patient recruiters, who, in turn, paid beneficiaries to receive treatment at the medical clinics.  The evidence further established that Pikus and his co-conspirators used sham shell companies and fake invoices to conceal their illegal activities.

Pikus used violent threats to protect his scheme.  For example, he threatened a co-conspirator who was thinking about leaving the scheme by saying: “[Y]ou know, you[’re] already with us so the only way out is feet first through the door,” meaning “like in a body bag.”  When a therapist left the Pikus Clinics, the defendant told a co-conspirator “I’m hearing that he might be trying to take patients from our clinics to that other clinic. . . tell him he better stop unless he likes his legs to be broken.”

More than 25 other individuals have pleaded guilty to or been convicted of participating in the scheme, including physicians, physical and occupational therapists, ambulette drivers and the owners of several of the shell companies used to launder the stolen money.

This case was investigated by the HHS-OIG and IRS-CI, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the United States Attorney’s Office for the Eastern District of New York.  Assistant Chief A. Brendan Stewart and Trial Attorneys Sarah Wilson Rocha and Andrew Estes of the Fraud Section are prosecuting the case with Assistant U.S. Attorney Claire S. Kedeshian of the Eastern District of New York’s Civil Division, which is handling forfeiture matters.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for approximately $19 billion.  In addition, the U.S. Department of Health and Human Services Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Defendant:

ALEKSANDR PIKUS
Age:  45
Brooklyn, New York

E.D.N.Y. Docket No.: 16-CR-329 (AMD)

Update: This sentencing was vacated. The defendant was resentenced on April 17, 2024, to nine years in prison and ordered to pay $39 million in restitution.

A Brooklyn man was sentenced to 156 months in prison today for his role in a vast multimillion-dollar health care kickback and money laundering conspiracy, the Department of Justice announced today.  

Aleksandr Pikus, 45, of Brooklyn, New York, was sentenced by U.S. District Judge Ann M. Donnelly of the Eastern District of New York.  Judge Donnelly also ordered Pikus to pay $39.4 million in restitution and to forfeit $2,614,233.  On Nov. 15, 2019, after a two-week trial, Pikus was convicted by a jury of one count of conspiracy to commit money laundering, two counts of money laundering, one count of conspiracy to pay and receive health care kickbacks and one count of conspiracy to defraud the United States by obstructing the IRS. 

“For nearly a decade, Aleksandr Pikus stole millions of dollars from the federal Medicare and Medicaid programs in a major healthcare kickback, money laundering and tax fraud scheme,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “This significant sentence holds Pikus accountable for his leadership role in this scheme and reflects the Department’s commitment to protecting our valuable federal healthcare programs and their beneficiaries from this kind of fraud.”

“The defendant’s key role in an elaborate scheme to steal and conceal tens of millions of dollars from the Medicare and Medicaid programs, was staggering in scope and deserving of the significant punishment he received today,” stated Acting U.S. Attorney DuCharme.  “This office takes very seriously its obligation to protect government funds that provide vital medical coverage counted upon by individuals and families who qualify because of their low income, disability or advanced years.”

“Pikus was the kingpin running a massive money laundering and kickback health care fraud syndicate,” said Scott J. Lampert, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “Now, like others who plot to steal from government health programs, he is paying a heavy price for his crimes.  Along with our law enforcement partners, we will continue to root out individuals who steal vital taxpayer-provided health funds.” 

“The defendant’s greed and desire for money drove him to perpetrate crimes against our healthcare system and prey upon the vulnerable in our society.,” stated IRS-CI Special Agent in Charge Larsen. “Justice has been served and IRS-CI will continue to work alongside our counterparts to uncover these schemes to hold these criminals accountable for their actions.”

According to evidence presented at trial, Pikus and his co-conspirators perpetrated a scheme through a series of medical clinics in Brooklyn and Queens over the course of nearly a decade, which clinics employed doctors, physical and occupational therapists, and other medical professionals who were enrolled in the Medicare and Medicaid programs.  In return for illegal kickbacks, Pikus referred beneficiaries to these health care providers, who submitted claims to the Medicare and Medicaid programs. 

Pikus and his co-conspirators then laundered a substantial portion of the proceeds of these claims through companies he controlled, including by cashing checks at several New York City check-cashing businesses.  Pikus then failed to report that cash income to the IRS.  Instead, Pikus used the cash to enrich himself and others and to pay kickbacks to patient recruiters, who, in turn, paid beneficiaries to receive treatment at the medical clinics.  The evidence further established that Pikus and his co-conspirators used sham shell companies and fake invoices to conceal their illegal activities.

More than 25 other individuals have pleaded guilty to or been convicted of participating in the scheme, including physicians, physical and occupational therapists, ambulette drivers, and the owners of several of the shell companies used to launder the stolen money.

This case was investigated by the HHS-OIG and IRS-CI, and 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.  Assistant Chief A. Brendan Stewart and Trial Attorneys Sarah Wilson Rocha and Andrew Estes of the Fraud Section are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for approximately $19 billion.  In addition, the U.S. Department of Health and Human Services Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Stanley Elianor, a member of the Folk Nation Street gang, was arrested today in connection with an indictment returned on August 27, 2020 charging him with being a felon in possession of a firearm and ammunition while having previously been convicted of a crime punishable by a term of imprisonment exceeding one year.  Elianor will be arraigned this afternoon via teleconference by United States Magistrate Judge Ramon E. Reyes, Jr.

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 indictment.

“Repeat offenders who possess firearms present an extreme danger to the community as this case tragically demonstrates with the senseless killing of Carey Gabay,” stated Acting United States Attorney DuCharme.  “This Office and our law enforcement partners are doing everything in our power to take guns out of the hands of violent felons as a measure to prevent the senseless loss of life.”  Mr. DuCharme expressed his grateful appreciation to the Kings County District Attorney’s Office for its assistance with the investigation.

“No one should have to fear standing in a crowd at a street festival, thinking their life could be taken by a gang member's stray bullet.  This brand of mayhem is often the work of convicted felons shooting guns they’re not legally allowed to possess.  We are methodically going down the list of these repeat offenders, and, as today's action demonstrates, we are committed to keeping them from terrorizing our besieged neighborhoods.  But we can't do it alone.  We are stronger together, and we need help from the communities these felons are targeting.  If you know something about any recent shooting, call us at 212-384-5000.  Help us protect our city from the criminals who seem determined to destroy it,” stated FBI Assistant Director-in-Charge Sweeney.

“This kind of gun violence erodes the fabric of city life and I commend the U.S. Attorney’s office for the Eastern District of New York for bringing these significant federal charges and ensuring, along with our NYPD detectives and law enforcement partners, that a measure of justice will be served,” stated NYPD Commissioner Shea.

As set forth in the indictment and detention memorandum, in the pre-dawn hours of September 7, 2015, Elianor was attending the J’ouvert cultural festival with other Folk Nation gang members and members of the Hood Starz, a group that was allied with Folk Nation, when they engaged in a shootout with members of the rival Crips street gang outside the Ebbets Field Houses in Crown Heights.  Carey Gabay, an aide to New York Governor Andrew Cuomo, was struck in the head by a stray bullet and died on September 15, 2015.  During the gun battle, Elianor allegedly possessed a .45 caliber Masterpiece Arms handgun which was recovered by the NYPD.  The firearm has a large capacity magazine and was loaded with 27 rounds of ammunition.  Prior to possessing this firearm, Elianor had been convicted of two counts of attempted criminal possession of a weapon in New York state court in October 2009.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Elianor faces up to 10 years in prison.

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

The Defendant:

STANLEY ELIANOR
Age:  29
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-332 (MKB)

WASHINGTON – The U.S. District Court for the Eastern District of New York has permanently barred two individuals and two companies that transmitted massive volumes of fraudulent robocalls from operating as intermediate voice-over-internet-protocol (VoIP) carriers conveying telephone calls into the U.S. telephone system, the Department of Justice announced today.  The consent decree entered yesterday by United States District Judge Eric R. Komitee resolves a civil complaint brought by the United States Attorney’s Office for the Eastern District of New York and the Department’s Consumer Protection Branch.

As alleged in a civil complaint filed earlier this year, in United States v. Nicholas Palumbo, et al., spouses Nicholas and Natasha Palumbo of Scottsdale, Arizona, and their companies, Ecommerce National LLC d/b/a TollFreeDeals.com and SIP Retail d/b/a sipretail.com, received millions of internet based calls every day from other entities, often located abroad.  The defendants transmitted those calls first to other carriers within the United States, and ultimately to the phones of individuals, knowing that the calls were fraudulent government and business-imposter robocalls. 

Many of the robocalls were made by individuals impersonating government investigators conveying false and alarming messages, such as the victim recipient’s social security number or other personal information had been compromised or otherwise connected to criminal activity, the recipient faced imminent arrest, the recipient’s assets were being frozen, the recipient’s bank and credit accounts had suspect activity, the recipient’s benefits were being stopped, and the recipient faced imminent deportation – each designed to frighten the recipient into paying large sums of money.  Often the numbers that appeared as the originating or caller-ID numbers were “spoofed” to make it appear that they originated from legitimate government or business offices in the United States when in fact they were made by overseas scammers, often located in India.  The defendants also sold to foreign call centers toll-free and other U.S. numbers that were left in fraudulent robocall messages on victims’ phones to deceive them into believing that the calls were legitimate and originated in the United States. These calls led to significant financial losses to victims throughout the United States and the Eastern District of New York, many of whom were elderly and vulnerable.

“The consent decree is a milestone in protecting the public, especially elderly and other vulnerable persons, from predatory robocall schemes that can cause catastrophic losses to victims in this district and throughout the country,” stated Acting United States Attorney Seth D. DuCharme.

“The Department is committed to protecting vulnerable Americans, particularly America’s seniors, from those who seek to steal their hard earned savings,” stated Acting Assistant Attorney General Ethan Davis of the Department of Justice’s Civil Division.  “The Department will prosecute both those who place fraudulent robocalls, and those who knowingly facilitate such calls for profit.  The Department recognizes the exceptional work of the Social Security Administration and Postal Inspection Service in investigating this case.”

“The Court's decision sends a clear message to gateway carriers who knowingly do business with scammers targeting Americans from overseas,” stated Gail S. Ennis, Inspector General for the Social Security Administration.  “We will continue to pursue those who facilitate these scam calls by allowing them into the U.S. telephone network.  I want to thank the Department of Justice for its support throughout this investigation and its commitment to protecting Americans from this insidious form of fraud and theft.”

Under the terms of the consent decree entered yesterday, the defendants agreed to be permanently barred from using the U.S. telephone system to deliver prerecorded messages through automatic means, carrying VoIP calls destined for phones in the United States, and providing any U.S. phone numbers to other individuals or entities.  In addition, the defendants are permanently barred from serving as employees, agents or consultants to any person or entity engaged in these activities. 

This case was handled by Assistant U.S. Attorneys Bonni Perlin and Dara Olds of the United States Attorney’s Office for the Eastern District of New York and Trial Attorneys Ann F. Entwistle and Charles B. Dunn of the Civil Division’s Consumer Protection Branch, in coordination with the Social Security Administration Office of the Inspector General and the U.S. Postal Inspection Service.  Investigative support was also provided by the U.S. Treasury Inspector General for Tax Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigation’s El Dorado Task Force and U.S. Secret Service.  The Federal Trade Commission and the Federal Communications Commission also provided pertinent data.  

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.   

 

An indictment was returned today in federal court in Brooklyn charging Dzenan Camovic with robbery and firearms offenses for his June 3, 2020 knife and firearm attack on multiple New York City Police Department (NYPD) police officers in Brooklyn.  As set forth in the court filings, the defendant, a Bosnian national in the United States illegally, was motivated to attack the officers because of his interest in and support for violent Islamist extremism.  The defendant is currently in state custody and will be arraigned at a later date. 

The indictment charges Camovic with Hobbs Act robbery, using and discharging a firearm during that robbery, theft of a firearm that moved in interstate commerce and unlawful possession of a firearm as an illegal alien. 

William P. Barr, Attorney General; Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; Christopher A. Wray, Director, Federal Bureau of Investigation (FBI); William F. Sweeney, Jr., Assistant Director-in-Charge, FBI, New York Field Office, and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges.

“Dzenan Camovic, an illegal alien and Bosnian national, is alleged to have used the cover of chaos during recent civil unrest in New York City to launch a premeditated and cowardly attack from behind against two New York City Police officers, brutally slashing one with a knife, stealing his weapon and opening fire, and injuring several responding officers,” stated Attorney General Barr.  “We know that Camovic repeatedly yelled, ‘Allahu Akbar’ during his attack.  We know that he possessed a significant volume of materials that demonstrates his interest in and support for violent Islamist extremism, including materials related to the Islamic State of Iraq and al-Sham (ISIS).  But the defendant’s access to the dark web and his use of encrypted communication platforms has created evidentiary roadblocks to fully learning his plans and who he discussed them with.  This is the second violent Islamist extremist attack on our land in the last nine months where the attacker used encrypted technology that can help cover his tracks and mask his communications.   If not for the heroism and bravery of the responding NYPD officers who returned fire and took the assailant down early in the attack, untold additional officers and innocents could have been killed or injured.

“As we have alleged in the indictment and set forth in related filings, just before midnight on June 3, 2020, the defendant launched a surprise attack on police officers standing post on the streets of Brooklyn, nearly ending their lives.  After stabbing a police officer in the neck, the defendant ripped a 9mm service pistol away from an officer and shot at the officers while perversely invoking religion,” stated Acting U.S. Attorney DuCharme.  “Despite engaging in technical tradecraft that covered some of his tracks, this defendant cannot escape the reach of the investigators and prosecutors who are committed to making sure that he faces justice for his extremely serious crimes.”  Mr. DuCharme expressed his grateful appreciation to the New York Joint Terrorism Task Force as well as the Kings County District Attorney’s Office for their outstanding work.

“Two New York City police officers, who swore an oath to protect and serve, were heinously ambushed in the line of duty at the hands of Dzenan Camovic as alleged in today’s indictment,” stated FBI Director Wray. “As fellow Americans were exercising their rights to demonstrate, these brave law enforcement officers were brutally attacked to further a violent agenda associated with ISIS and al-Qaeda in the Arabian Peninsula. This case demonstrates that the FBI remains steadfast in our fight to protect the U.S. from extremists who wish to harm our citizens and fellow law enforcement officers.”

“Several days into protests that erupted in New York City and throughout the country, we allege Dzenan Camovic, motivated by ISIS-inspired ideology, ambushed three NYPD officers on the streets of Brooklyn and caused serious injury to those officers.  As he commenced his attack, the NYPD officers were doing what the citizens of our city ask them to do every day - to stand watch and protect their fellow New Yorkers. Mr. Camovic's alleged behavior has no place in our community. His assault on the officers was an attack against the entire New York City community.  Our society has never tolerated this type of behavior, and today's federal charges will ensure Mr. Camovic isn't a threat to society again,” stated FBI Assistant Director-in-Charge Sweeney. 

“Dzenan Camovic, as outlined in the indictment, was a consumer of terrorist propaganda and calls for violence by groups like al-Qaida and ISIS. His premeditated ambush of two New York City police officers can never be accepted. As the investigation continues into his motives, these significant federal charges reinforce the notion that an attack against police officers is an attack against society,” stated NYPD Commissioner Shea.   

On the evening of June 3, 2020, in the midst of a public health emergency and while New York City was under a nightly curfew order, the defendant allegedly carried out his attack on NYPD police officers who were assigned to an anti-looting post near the intersection of Flatbush and Church Avenues in Brooklyn, New York.  At approximately 11:30 p.m., Camovic walked past two uniformed police officers on foot patrol and appeared to crouch for several minutes watching them.  Security footage shows that Camovic then moved around the block in an apparent effort to approach the two police officers from behind. 

At approximately 11:50 p.m., Camovic rounded the corner from Flatbush Avenue onto Church Avenue and stabbed one of the officers (“Officer 1”) in the neck with a knife.  After stabbing the first officer (“Officer 1”), Camovic chased the second officer (“Officer 2”), lunging at him and attempting to stab him.  Camovic then ran back to Officer 1, attacked him, forcibly took control of Officer 1’s firearm and fired multiple shots at Officer 2 and other officers who had responded to the scene.  Responding officers ultimately shot Camovic and took him into custody.  Several officers were wounded during Camovic’s attack and robbery, including Officer 2 who was shot in the hand.

During his attack on the police officers, Camovic repeatedly shouted “Allahu Akbar,” a common Arabic phrase meaning “God is the greatest,” that has been used by perpetrators of violent jihadist terror attacks during the commission of violent attacks.  The government’s investigation has revealed that, prior to the attack, Camovic possessed a significant volume of radical jihadist propaganda. 

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

If convicted, Camovic faces a maximum sentence of life in prison. 

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

The Defendant:

DZENAN CAMOVIC
Age:  20
Brooklyn, New York

E.D.N.Y. Docket No.  20-CR-326 (RPK)

An indictment was unsealed today in federal court in Brooklyn charging Dzenan Camovic with robbery and firearms offenses for his June 3, 2020, knife and firearm attack on multiple New York City Police Department (NYPD) police officers in Brooklyn.  As set forth in the court filings, the defendant, a Bosnian national in the United States illegally, was motivated to attack the officers because of his interest in and support for violent Islamist extremism.  The defendant is currently in state custody and is scheduled to be arraigned at a later date.    

The indictment charges Camovic with Hobbs Act robbery, using and discharging a firearm during that robbery, theft of a firearm that moved in interstate commerce and unlawful possession of a firearm as an illegal alien. 

William P. Barr, Attorney General; Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York, Christopher A. Wray, Director, Federal Bureau of Investigation (FBI); William F. Sweeney, Jr., Assistant Director-in-Charge, FBI, New York Field Office, and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges.

“Dzenan Camovic, an illegal alien and Bosnian national, is alleged to have used the cover of chaos during recent civil unrest in New York City to launch a premeditated and cowardly ambush against two New York City Police officers, brutally slashing one with a knife, stealing his weapon and opening fire, and injuring several responding officers,” said William P. Barr, U.S. Attorney General.  “We know that Camovic repeatedly yelled, ‘Allahu Akbar’ during his attack.  We know that he possessed a significant volume of materials that demonstrates his interest in and support for violent Islamist extremism, including materials related to the Islamic State of Iraq and al-Sham (ISIS).  But the defendant’s access to the dark web and his use of encrypted communication platforms have created evidentiary roadblocks to fully learning his plans and potential co-conspirators.  This is the second violent Islamist extremist attack on our land in the last nine months where the attacker used encrypted technology that can help cover his tracks and mask his communications.   If not for the heroism and bravery of the responding NYPD officers who returned fire and took the assailant down early in the attack, untold additional officers and innocents could have been killed or injured.”

 “As we have alleged in the indictment and set forth in related filings, just before midnight on June 3, 2020, the defendant launched a surprise attack on police officers standing post on the streets of Brooklyn, nearly ending their lives.  After stabbing a police officer in the neck, the defendant ripped a 9mm service pistol away from an officer and shot at the officers while perversely invoking religion,” stated Acting U.S. Attorney DuCharme.  “Despite engaging in technical tradecraft that covered some of his tracks, this defendant cannot escape the reach of the investigators and prosecutors who are committed to making sure that he faces justice for his extremely serious crimes.”  Mr. DuCharme expressed his grateful appreciation to the New York Joint Terrorism Task Force as well as the Kings County District Attorney’s Office for their outstanding work.

“Two New York City police officers, who swore an oath to protect and serve, were heinously ambushed in the line of duty at the hands of Dzenan Camovic as alleged in today’s indictment,” stated FBI Director Wray.  “As fellow Americans were exercising their rights to demonstrate, these brave law enforcement officers were brutally attacked to further a violent agenda associated with ISIS and al-Qaeda in the Arabian Peninsula.  This case demonstrates that the FBI remains steadfast in our fight to protect the U.S. from extremists who wish to harm our citizens and fellow law enforcement officers.”

“Several days into protests that erupted in New York City and throughout the country, we allege Dzenan Camovic, motivated by ISIS-inspired ideology, ambushed three NYPD officers on the streets of Brooklyn and caused serious injury to those officers.  As he commenced his attack, the NYPD officers were doing what the citizens of our city ask them to do every day - to stand watch and protect their fellow New Yorkers.  Mr. Camovic's alleged behavior has no place in our community. His assault on the officers was an attack against the entire New York City community.  Our society has never tolerated this type of behavior, and today's federal charges will ensure Mr. Camovic isn't a threat to society again,” stated FBI Assistant Director-in-Charge Sweeney. 

“Dzenan Camovic, as outlined in the indictment, was a consumer of terrorist propaganda and calls for violence by groups like al-Qaida and ISIS.  His premeditated ambush of two New York City police officers can never be accepted.  As the investigation continues into his motives, these significant federal charges reinforce the notion that an attack against police officers is an attack against society,” stated NYPD Commissioner Shea.   

On the evening of June 3, 2020, in the midst of a public health emergency and while New York City was under a nightly curfew order, the defendant allegedly carried out his attack on NYPD police officers who were assigned to an anti-looting post near the intersection of Flatbush and Church Avenues in Brooklyn, New York.  At approximately 11:30 p.m., Camovic walked past two uniformed police officers on foot patrol and appeared to crouch for several minutes watching them.  Security footage shows that Camovic then moved around the block in an apparent effort to approach the two police officers from behind. 

At approximately 11:50 p.m., Camovic rounded the corner from Flatbush Avenue onto Church Avenue and stabbed one of the officers (Officer 1) in the neck with a knife.  After stabbing the first officer (Officer 1), Camovic chased the second officer (Officer 2), lunging at him and attempting to stab him.  Camovic then ran back to Officer 1, attacked him, forcibly took control of Officer 1’s firearm and fired multiple shots at Officer 2 and other officers who had responded to the scene.  Responding officers ultimately shot Camovic and took him into custody.  Several officers were wounded during Camovic’s attack and robbery, including Officer 2 who was shot in the hand.

During his attack on the police officers, Camovic repeatedly shouted “Allahu Akbar,” a common Arabic phrase meaning “God is the greatest,” that has been used by perpetrators of violent jihadist terror attacks during the commission of violent attacks.  The government’s investigation has revealed that, prior to the attack, Camovic possessed a significant volume of radical jihadist propaganda. 

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

If convicted, Camovic faces a maximum sentence of life in prison. 

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant U.S. Attorneys Craig R. Heeren, Artie McConnell and Josh Hafetz are in charge of the prosecution.

Ghanshyam Bhambhani, a former Queens cardiologist, will pay a total of $2 million to settle civil claims that he paid kickbacks to other physicians for referrals of patients insured by Medicare, Medicaid and the Federal Employees’ Health Benefits Program.  Under the terms of the settlement, Bhambhani will pay the United States $1,370,294.50.  In addition, he will pay the State of New York $629,705.50.

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 Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General for the Office of Personnel Management (OPM-OIG), announced the settlement.  

An investigation by the Office, the FBI and OPM-OIG revealed that, from 2010 through 2017, Bhambhani paid other doctors compensation disguised as rent for patient referrals in violation of the Anti-Kickback Statute and the False Claims Act.  The investigation also revealed that Bhambhani falsified records to justify cardiac procedures.  Bhambhani admitted engaging in this conduct and has agreed to cooperate with the Government.

“Paying kickbacks for patient referrals erodes the integrity of our healthcare system and costs taxpayers precious dollars.  Doctors must put patients first, not treat them like commodities unscrupulously paid for with government funds,” stated Acting United States Attorney DuCharme.  Mr. DuCharme expressed his grateful appreciation to the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), and the New York State Attorney General for their assistance with the case.

“The OPM-OIG has zero tolerance for fraud against the Federal Employees Health Benefits Program (FEHBP).  Submitting false claims for services that are not medically necessary and creating false documentation to justify procedure undermines the FEHBP, wastes taxpayer dollars, and increases the cost of medical care for us all,” stated OPM-OIG Deputy Inspector General Vint. “This settlement is a result of the hard work of our investigative staff and our partners at the U.S. Attorney’s Office, EDNY, FBI, HHS OIG, and the New York State Attorney General’s office.”

The agreement resolves a lawsuit originally brought by a whistleblower under the qui tam, or whistleblower, provisions of the False Claims Act, captioned United States ex rel. FNU LNU LLC v. New York Cardiology P.C., et al., Civil No. 14-4581 (EDNY).  The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery. 

In 2018, Bhambhani surrendered his medical license after pleading guilty in the Eastern District of New York to one count of conspiracy to pay healthcare kickbacks.  He was sentenced to 34 months in prison, three years’ supervised release and ordered to pay $217,364.83 in criminal restitution and $1,080,000 in criminal forfeiture.

The government’s case was handled by Assistant U.S. Attorney Lisa Kutlin of the Office’s Civil Division, with assistance from Affirmative Civil Enforcement Auditor Michael Gambrell.

 

Metropolitan Jewish Health System Hospice and Palliative Care (“MJHS Hospice”), a New York nonprofit hospice provider, has agreed to pay the United States $4,850,000 to resolve civil allegations that it billed Medicare and Medicaid for services rendered to hospice patients at heightened levels of care for which the patients did not qualify, in violation of the False Claims Act, and has agreed to pay the State of New York $375,000.  

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the settlement.  Mr. DuCharme thanked the Office of the Inspector General of the U.S. Department of Health and Human Services and the New York State Attorney General for their assistance in the investigation.

The settlement resolves allegations that MJHS Hospice knowingly billed Medicare and Medicaid for unnecessary levels of hospice care to patients.  Medicare’s and Medicaid’s hospice benefits are available for patients who elect palliative treatment (medical care focused on the patient’s relief from pain and stress) for a terminal illness. 

Under the Medicare and Medicaid programs, a hospice provider may seek payment for several levels of care, including heightened levels known as “CHC” (continuous home care services) and “GIP” (general inpatient services).  To receive reimbursement for CHC, a hospice provider must show that a patient is experiencing acute medical symptoms.  For a hospice provider to obtain reimbursement for GIP, a patient must need pain control, or acute or chronic symptom management, which must be managed in a hospital.  After an extensive investigation, the United States determined that from 2011-2015, MJHS falsely claimed that some of its patients required CHC and, in 2012, falsely claimed that some patients required GIP.

“It is vital that the terminally ill have appropriate access to hospice care, including levels of care that are available under Medicare and Medicaid.  This Office recognizes the importance of preserving limited federal health care funds for this purpose, and to holding health care providers accountable when they seek reimbursement for care that is not reasonable and necessary,” stated Acting United States Attorney DuCharme.

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.  Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery.  The claims resolved by the settlement are allegations only and there has been no finding of liability by a court.

The United States’ case was handled by Assistant U.S. Attorney Lisa D. Kutlin of the Office’s Civil Division, with assistance from Affirmative Civil Enforcement Auditor Michael Gambrell.

E.D.N.Y. Docket No. 14-CV-4201 (FB)

 

An indictment was unsealed earlier today in federal court in Brooklyn charging attorney Jason Kurland, Christopher Chierchio, Francis Smookler, a former securities broker, and Frangesco Russo with wire fraud, wire fraud conspiracy, money laundering and money laundering conspiracy in connection with a scheme to defraud Kurland’s clients that resulted in $107 million in losses.  In addition, Kurland was charged with honest services fraud for his role in the scheme, and Russo and Smookler are charged with extortionate extension and collection of credit for threatening to kill an individual and his family for failure to repay a usurious loan. 

The defendants were arrested today and will be arraigned this afternoon via teleconference before United States Magistrate Judge Lois Bloom.

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 arrests and charges.

“Defendant Kurland allegedly violated the law and his oath as a lawyer when he allowed co-conspirators to pillage his clients’ bank accounts for their own enrichment,” stated Acting United States Attorney DuCharme.  “In addition, Russo and Smookler allegedly threatened to torture an individual’s wife and children. The defendants callously thought they could line their pockets with lottery winnings without consequence, but today their luck ran out.” 

“Lottery winners can't believe their luck when they win millions of dollars, and the men we arrested this morning allegedly used that euphoric feeling to their advantage,” stated FBI Assistant Director-in-Charge Sweeney.  “The FBI New York discovered how these victims were persuaded to put large chunks of their cash into investments that benefited the defendants. Rather than try their luck at the lottery, these men resorted to defrauding the victims to get rich, but their gamble didn't pay off.”

The Scheme to Defraud the Lottery Victims

As set forth in court filings, Kurland is a self-dubbed “Lottery Lawyer” purporting to represent dozens of lottery winners throughout the country with total winnings of approximately $3 billion.  One of the winners won the $1.5 billion Mega Millions lottery, another won the $245 million Powerball jackpot, and the third won the $150 million jackpot (together, the “Lottery Victims”).  The Lottery Victims each paid Kurland and his law firm hundreds of thousands of dollars, in part so that he could advise them on how to safely invest their money.  After gaining their trust with primarily traditional investments, Kurland steered his clients to invest in various entities and business deals controlled and directed by Russo, Smookler and Chierchio, and received kickbacks in return – which Kurland failed to disclose to his clients.  The defendants then used the money from the Lottery Victims’ investments to keep their scheme going and to enrich themselves.  A portion of these funds was funneled back to the Lottery Victims and falsely presented to them as “interest payments” on their investments, other funds went to Kurland as kickbacks, and millions of dollars were stolen to support the defendants’ lavish lifestyles – private jets, expensive vacations and luxury vehicles including two yachts.  The funds that the defendants actually invested in various entities and deals were, in large part, eventually lost. 

In intercepted calls cited in court documents, the defendants can be heard discussing their scheme, attempting to cover their tracks and expressing concern about what might happen to them if they were caught by law enforcement.                  

The Scheme to Extort Altieri

Russo’s and Smookler invested some of the Lottery Victims’ money with Gregory Altieri, a jewelry merchant, and then extended him a $250,000 “street loan.”  Conversations recorded during the government’s investigation revealed that Russo and Smookler expected to be repaid over $400,000 for the $250,000 loan, and the threats Russo and Smookler made to Altieri in their attempt to collect it.  Russo informed Altieri that he had a “few tactical shotguns . . . with lasers,” and Smookler told Altieri that if he did not fully repay the loan, “it’s just going to be unbelievable.”  Russo compared himself to the mob-affiliated character in “Uncut Gems,” a movie that ends with the indebted diamond dealer shot dead.  On another call, Russo told Altieri, “They’re gonna pop your head off in front of your f------ kids.  This guy has no clue what he’s getting into.”  Smookler told Altieri, “You watch my man, you f-----d me, now watch what I am gonna do to you, I’m coming brother.  Full f-----g steam ahead.” 

Russo and Smookler also threatened to harm Altieri’s family if Altieri did not repay the loan.  Smookler told Altieri that, “[W]e are gonna find your wife today.  That’s happening.”  Russo informed Altieri that the people coming for him are “going to make you watch as they rip your son’s teeth out of his mouth, watch, they’re going to do worse things to your wife.” 

The government has taken steps to recover funds stolen in connection with the charged scheme to defraud the Lottery Victims, including executing warrants to seize 13 bank accounts associated with the defendants’ scheme, and placing liens on three properties that Smookler and Russo allegedly purchased and/or renovated with stolen funds.   

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 Business & Securities Fraud Section.  Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution, assisted by Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Unit and by a Special Agent of the Office’s Business & Securities Fraud Section.

The Defendants:

CHRISTOPHER CHIERCHIO
Age:  52
Staten Island, NY

JASON KURLAND
Age:  46
Dix Hills, NY

FRANGESCO RUSSO
Age:  38
Roslyn, NY

FRANCIS SMOOKLER
Age:  45
Oyster Bay, NY    

E.D.N.Y. Docket No. 20-CR-306 (NGG)

A 10-count indictment was unsealed today in the Eastern District of New York charging Ronald Washington and Karl Jordan, Jr., with the October 30, 2002 murder of Jason Mizell, also known as “Jam Master Jay,” a member of the famed hip hop group Run-DMC.  Each defendant is charged with murder while engaged in narcotics trafficking and firearm-related murder for the fatal shooting of Mizell inside the victim’s recording studio in Hollis, Queens.  Jordan is charged with several additional narcotics distribution counts.  Jordan was arrested yesterday and will be arraigned this afternoon via videoconference by United States Magistrate Judge Lois Bloom.  Washington is in federal custody and will be arraigned at a later date.     

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Dermot F. Shea, Commissioner, New York City Police Department (NYPD), Daryl McCormick, Acting Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and William F. Sweeney Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrests and indictment. 

“The defendants allegedly carried out the cold-blooded murder of Jason Mizell, a brazen act that has finally caught up with them thanks to the dedicated detectives, agents and prosecutors who never gave up on this case,” stated Acting United States Attorney DuCharme.  “The charges announced today begin to provide a measure of justice to the family and friends of the victim, and make clear that the rule of law will be upheld, whether that takes days, months or decades.”

“The gunshots that rang out in a recording studio in Queens nearly 18 years ago, taking this pioneering rap artist’s life, have been answered. Today’s indictment shows that no amount of time passed can erase the commitment of our NYPD detectives, federal law enforcement partners and prosecutors in the US Attorney’s Office for the Eastern District, to the pursuit of justice,” stated NYPD Commissioner Shea.

“The ATF New York Field Division never believed this case was unsolvable,” stated ATF Acting Special Agent-in-Charge McCormick.  “Working tirelessly alongside the NYPD Cold Case Squad, we were determined to bring justice for the Mizell family and see these killers held accountable. For nearly eighteen years, one of these alleged perpetrators walked freely, thinking he’d gotten away with murder. But today, thanks to the unwavering efforts of the investigators and prosecutors, two individuals will answer for their crimes.”

As alleged in court filings, on October 30, 2002, Mizell was present at his recording studio, 24/7 Studio, located on Merrick Boulevard in Jamaica, Queens.  At approximately 7:30 p.m., Washington and Jordan, armed with firearms, entered the studio.  Washington pointed his firearm at an individual located inside the studio and demanded that the person lie on the floor.  Jordan approached Mizell, pointed his firearm at him, and fired two shots at close range, striking the victim once in the head, killing him.  The second shot struck another individual in the leg. 

The investigation revealed that the motive for the killing resulted from Mizell’s previous acquisition of approximately 10 kilograms of cocaine from a narcotics supplier in the Midwest.  The cocaine was allegedly intended to be distributed in Maryland by Washington, Jordan and other co-conspirators.  Mizell had recently informed Washington that the defendant would not be involved in distributing the narcotics in Maryland, which precipitated the murder conspiracy. 

In addition to the murder, Jordan is also charged with one count of conspiracy to distribute cocaine and seven counts of cocaine distribution. 

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, each defendant faces a minimum of 20 years’ imprisonment and a maximum term of life imprisonment, or the death penalty. 

Assistant United States Attorneys Artie McConnell and Mark E. Misorek are in charge of the prosecution.    

The Defendants:

KARL JORDAN, JR. (also known as “Little D” and “Noid”)
Age: 36
Hollis, Queens

RONALD WASHINGTON (also known as “Tinard”)
Age: 56
Hollis, Queens

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

José Jonathan Guevara-Castro, also known as “Suspechoso” (“Guevara-Castro”), an alleged member of the violent transnational criminal organization La Mara Salvatrucha, also known as the “MS-13,” and a fugitive from justice, was arrested on August 13, 2020 in Acajutla, Sonsonate, El Salvador. 

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York; John J. Durham, Director, Joint Task Force Vulcan (JTFV); and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest.

“Guevara’s arrest more than 2,000 miles away from Long Island where he allegedly participated in the brutal murder of a young man more than four years ago, is a testament to the commitment of this Office and our law enforcement partners to bringing members of the MS-13 gang to justice for their crimes,” stated Acting United States Attorney DuCharme.  “There is no place to hide, here or abroad, and neither distance nor the passage of time will offer any safe harbor to criminals from our mission to eradicate violent gangs from the Eastern District of New York.”

Mr. DuCharme expressed his grateful appreciation to the investigators and analysts of El Salvador’s Policía Nacional Civil (PNC) Centro Antipandillas Transnacional (CAT) unit, who are assigned to the Transnational Anti-Gang (TAG) Unit, a task force of Salvadoran police officers receiving financial and technical assistance from the FBI and State Department Bureau of International Narcotics and Law Enforcement, for their outstanding assistance and collaboration in locating and apprehending this fugitive.  Additionally, Mr. DuCharme expressed sincere thanks to the FBI’s Long Island Gang Task Force, the Drug Enforcement Administration (DEA), the Nassau County Police Department (NCPD), and the Nassau County District Attorney’s Office (NCDAO), as well as to the members of the FBI Baltimore Field Office/Annapolis Resident Agency, the International Criminal Police Organization (INTERPOL), and the Justice Department’s Office of International Affairs (OIA), for their partnership in this case. 

Guevara-Castro is charged in a 24-count indictment, along with seven other MS-13 members, with racketeering offenses, murder and narcotics trafficking.  In particular, Guevara-Castro is charged with participating in the murder of 20-year-old Kerin Pineda, who was believed to be a member of the 18th Street gang, one of MS-13’s principal rivals.  Pineda’s murder was committed as a joint venture between two different subgroups, or “cliques,” of the MS-13 operating on Long Island: the Hollywood Locos Salvatruchas (“Hollywood”) clique, of which Guevara-Castro was an alleged member; and the Sailors Locos Salvatruchas Westside (“Sailors”) clique.  On May 21, 2016, MS-13 members, armed with machetes, lured Pineda to a secluded wooded area near the Merrick-Freeport border, where he was surrounded and violently attacked.  Pineda’s machete-mutilated corpse was then buried in a hole that had been dug the day before.  Pineda’s corpse was recovered more than one year later.     

The charges in the indictment are allegations, and the defendant and his co-defendants are presumed innocent unless and until proven guilty.  If convicted, Guevara-Castro faces up to life in prison. 

This indictment is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent transnational criminal organization.  The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America.  With numerous branches, or “cliques,” the MS-13 is the largest and most violent street gang on Long Island.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 60 murders in the Eastern District of New York, and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, the NCPD, the Suffolk County Police Department, the Nassau County Sheriff’s Department, the Suffolk County Sheriff’s Department, the Suffolk County Probation Office, the New York State Police, the Hempstead Police Department, the Rockville Centre Police Department, and the New York State Department of Corrections and Community Supervision.

This investigation was carried out in partnership with Joint Task Force Vulcan (JTFV).  In August 2019, Attorney General Barr created JTFV to carry out the recommendations of the MS-13 subcommittee formed under the Attorney General’s Transnational Organized Crime Task Force, which was the result of President 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 restore safety for the American people.  The principal purpose of JTFV is to coordinate and lead the efforts of the Justice Department and U.S. law enforcement agencies against MS-13 in order to dismantle the group.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Paul G. Scotti, Justina L. Geraci and Megan E. Farrell are in charge of the prosecution, with assistance from Assistant District Attorney Jared Rosenblatt of the Nassau County District Attorney’s Office.

The Defendant:

JOSE JONATHAN GUEVARA-CASTRO (also known as “Suspechoso”)
Age:  25
Acajutla, Sonsonate, El Salvador; formerly of Roosevelt, New York, and Annapolis, Maryland

E.D.N.Y. Docket No. 20-CR-251 (JFB)

A criminal complaint was unsealed today in federal court in Brooklyn charging Sam Resto with setting on fire a marked New York City Police Department (NYPD) van.  Resto was arrested yesterday and will make his initial appearance this afternoon before United States Magistrate Judge Peggy Kuo. 

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, NYPD Commissioner, announced the arrest and charges.

“As alleged, Resto, wearing a mask and gloves and carrying a backpack containing the tools of his destructive trade, intentionally set fire to an NYPD van parked on a city street lined with residential buildings and vehicles,” stated Acting United States Attorney DuCharme. “This Office will vigorously prosecute criminals whose actions endanger the community, police officers and first responders.”   

“When Resto set an NYPD van ablaze last month, as we allege today, his actions not only destroyed essential public safety equipment paid for by the people of New York City, he placed the personal safety of those living in the neighborhood and their private property into harm’s way.  Deliberate criminal activity like the type alleged today puts both first responders and private citizens at risk, it is an affront to everything this city is supposed to be about.  Today’s federal charges are the community’s message back to Mr. Resto and others who may choose to engage in this type of criminal behavior – we will not tolerate crimes of this magnitude and the consequences will be significant,” stated FBI Assistant Director-in-Charge Sweeney. 

“Today’s criminal complaint not only seeks justice for the alleged torching of an NYPD van parked in a busy Manhattan neighborhood but answers for a crime that put innocent New Yorkers in considerable danger. I thank our NYPD detectives, the US Attorney for the Eastern District of New York, and all of our law enforcement partners for their tireless work in ensuring our common mission of protecting life and public safety,” stated NYPD Commissioner Shea.

According to the complaint, in the early morning hours of July 29, 2020, Resto was captured on video setting ablaze an unoccupied NYPD van parked on West 83rd Street near Columbus Avenue in Manhattan.  On the video, Resto approached the van, smashed the window with a blunt object, poured gasoline into the interior and set the vehicle on fire before fleeing east towards Central Park.  The NYPD subsequently recovered a backpack in the park belonging to Resto containing, among other things, clothing similar to items Resto was seen wearing earlier that morning, a Guy Fawkes mask, a red jerry can that smelled of gasoline, a hammer and lighters. 

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

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Francisco J. Navarro, Michael T. Keilty and Sara K. Winik are in charge of the prosecution.

The Defendant:

SAM RESTO
Age:  29
Queens, New York

E.D.N.Y. Docket No. 20-MJ-665

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Peter D. Lopez, Regional Administrator of the United States Environmental Protection Agency, Region 2 (EPA), announced today that the United States filed suit under the Clean Air Act (CAA) against the Village of Rockville Centre (“the Village”) to address its failure to comply with federally-enforceable emissions limits for particulate matter (PM) and nitrogen oxide (NOx).  The Village operates a 33 megawatt municipal power plant (the “Power Plant”) that provides electric power to its residents, in part, using diesel engines.  The Village operates the Power Plant primarily during the summer to meet high electricity demands. 

The parties also agreed to enter into a Consent Judgment that requires the Village to retire high-emission engines, and to institute operational practices and technologies to reduce further the PM and NOx emissions of the Power Plant.  The settlement also requires the Village to pay a civil penalty of $110,000 and perform other injunctive relief that will bring its Power Plant into compliance with the CAA.

The lawsuit and Consent Judgment were filed in the United States District Court for the Eastern District of New York, in Central Islip, New York.  Following a 30-day public comment period, the United States will review any comments and, if appropriate, request the District Court to enter and approve the Consent Judgment.

“The United States brought this action to ensure that the Village of Rockville Centre meets its obligation to protect our air quality by instituting stronger emission control practices at its power plant,” stated Acting United States Attorney DuCharme.  “The settlement enforces specific and appropriate emission limits that are critical to mitigating human exposure to particulate matter, which is potentially harmful to our health.  This Office will vigorously enforce the Clean Air Act against parties who illegally emit air pollutants and compromise the safety of our community.”

“Emission limits on particulate matter and nitrogen oxides exist to help reduce conditions that lead to the formation of dangerous soot and smog. Studies show that in excess, both of these pollutants are linked to a range of respiratory ailments and premature death,” stated EPA Regional Administrator Lopez. “EPA is committed to resolve violations of the Clean Air Act. By fully implementing the actions in the agreement, the Village can protect people that live, work and visit this community.”

The CAA was passed by Congress in 1970 to protect public health and the environment through the regulation of air emissions from both stationary and mobile sources.  The law requires the EPA to establish national ambient air quality standards and imposes limits on air pollutant emissions.

Since at least 2009, the Power Plant has exceeded PM and NOx limits under the CAA.  As a result of the United States’ enforcement efforts preceding this settlement, the Power Plant’s exceedances of PM ceased in December 2018, by which time the Village had instituted effective operational controls to reduce its PM emissions.  However, the Village continues to violate the NOx limits, and the Consent Judgment requires the Village to comply with the NOx limits by December 31, 2021.

As part of the settlement, the Village has permanently retired its three most polluting engines.  Further, the Village will reclassify certain engines to limit their use, which will produce significant emissions reductions.  The Village will also increase its capacity to import electricity, thereby reducing the load on its Power Plant and associated air emissions.  Finally, the Consent Judgment requires the Village to install and operate a continuous emissions monitoring system on all non-emergency engines and implement periodic engine tune ups.  These requirements will protect local air quality while enforcing the Village’s compliance with PM and NOx limits.

The negotiations and settlement were handled by Assistant U.S. Attorneys James R. Cho and Matthew Silverman and paralegal Loan Nguyen of the U.S. Attorney’s Office for the Eastern District of New York, working with Liliana Villatora, Denise Leong, Amanda Prentice and Sara Froikin of the Regional Counsel’s Office, U.S. EPA Region 2, Gaetano LaVigna, Chief, Stationary Source Compliance Section, Air Compliance Branch, U.S. EPA Region 2 and Richard Kan, also with the Air Compliance Branch.

Ten individuals were separately charged by complaint or indictment during the past week in the Eastern District of New York with being a felon in possession of a firearm. 

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

“The one tried and true way to reduce the rapid spike in gun violence we’ve experienced in Brooklyn this summer is to take the guns out of the hands of repeat offenders and take those offenders off of our streets,” stated Acting U.S. Attorney DuCharme.  “This is another example of the great results we’ve achieved with our Project Safe Neighborhoods program and I commend the outstanding work by this Office’s prosecutors, members of the New York City Police Department (NYPD), the FBI-NYPD New York Metro Safe Streets Task Force and the New York State Department of Parole for sending a clear message to convicted criminals that carrying a gun also carries serious federal consequences.”

As alleged, the following defendants, having previously been convicted in a court of a crime punishable by a term of imprisonment exceeding one year, intentionally possessed a firearm:

DASHAWN ANDREWS

On August 6, 2020 Andrews was indicted for possessing a Taurus, model PT-22, .22LR caliber pistol and ammunition on Livonia Avenue near Pennsylvania Avenue in Brooklyn.

PAOLO ALFARO BARBER

On August 6, 2020, in front of 2501 Newkirk Avenue in Brooklyn, NYPD Officers observed an L-shaped bulge in a bag hanging from Alfaro Barber’s neck.  When the bag was searched, officers found a Taurus .38 caliber revolver loaded with six rounds of .38 caliber ammunition. 

TERRENCE BROWN

On August 6, 2020, Brown was indicted for possessing a Taurus PT 111, 9mm pistol found in his apartment at 419 Blake Ave. in Brooklyn during a search by New York State Parole Officers and NYPD Officers.

JAHQUEL GIDDEON

On August 6, 2020, Giddeon was indicted for possessing a loaded Ruger 380 semi-automatic pistol found under a mattress during a search of his apartment on Rockaway Parkway by New York State Parole Officers.

MACYE MCCALL

On August 6, 2020, McCall was indicted for possessing a Taurus, Model 85, .38 Special caliber revolver.  NYPD Officers discovered the gun after they pulled over a Range Rover in which McCall was a passenger for driving the wrong way down a one way street off  Sutter Avenue in Brooklyn.

TONY MCQUEEN

On August 6, 2020, McQueen was arrested for possessing a Smith & Wesson Model M&P 9C caliber 9mm pistol loaded with 13 rounds of ammunition in a vehicle where he was found intoxicated and passed out behind the wheel at the intersection of Atlantic Avenue and Boyland Street in Brooklyn.

AVERY MILLINGTON

On August 6, 2020, Millington was indicted for possession of Charter Arms Undercover .38 Special Pistol loaded with five rounds of .38 caliber ammunition after he was observed driving a Hyundai the wrong way on Bristol Street near Newport Avenue in Brooklyn.

KEENEN NURSE

On August 4, 2020, Nurse was arrested on a complaint charging him with possessing a loaded Jimenez Arms .380 caliber semi-automatic pistol hidden under the stairwell in a residential building on Eastern Parkway in Brooklyn.  Nurse’s DNA was found on the firearm.

MARVIN PICKETT

On August 6, 2020, Pickett was arrested on an indictment charging him with possessing a Taurus .380 caliber pistol while allegedly driving drunk and crashing into a Citibike stand at Nassau and Navy Streets in downtown Brooklyn on March 28, 2020.

AARON SWABY

On August 6, 2020, Swaby was indicted for possessing a Smith & Wesson, Model SD40VE, .40 caliber semi-automatic pistol inside a vehicle stopped by NYPD Officers for a traffic infraction on Surf Avenue in Brooklyn.

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

The charges in the complaints and indictments are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants face up to 10 years’ imprisonment.

The government’s cases are being handled by the Office’s Criminal Division, General Crimes Section and Organized Crime and Gangs Section.

The Defendants:

DASHAWN ANDREWS
Age:  29
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-285 (ILG)

PAOLO ALFARO BARBER
Age:  29
Brooklyn, New York

E.D.N.Y. Docket No. 20-MJ-642

TERRENCE BROWN
Age:  24
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-295 (WFK)

JAHQUEL GIDDEON
Age:  20
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-289 (MKB)

MACYE MCCALL (also known as “Gunplay”)
Age:  27
Bronx, New York

E.D.N.Y. Docket No. 20-CR-290 (ARR)

TONY MCQUEEN
Age:  32
Brooklyn, New York

E.D.N.Y. Docket No. 20-MJ-643

AVERY MILLINGTON
Age:  25
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-288 (LDH)

KEENEN NURSE
Age:  29
Brooklyn, New York

E.D.N.Y.  Docket No. 20-MJ-602

MARVIN PICKETT
Age:  38
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-255 (BMC)

AARON SWABY
Age:  27
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-287 (WFK)

Three separate criminal complaints were unsealed yesterday in federal court in Brooklyn charging defendants Richard Arline, Jr., Donnell Russell and Michael Williams, respectively, with crimes relating to their efforts to harass, intimidate, threaten or corruptly influence individuals named as alleged victims in the racketeering case against Robert Sylvester Kelly, also known as “R. Kelly,” currently pending in the Eastern District of New York (the Kelly case). 

Arline, Jr. is charged with attempting to corruptly persuade the testimony of an alleged victim in the Kelly case, identified in the complaint as “Jane Doe,” and engaging in misleading conduct towards the victim, with intent to influence, delay and prevent her testimony in the Kelly case, as well as corruptly offering something of value to the victim, with the intent to influence her testimony as a witness upon a trial, hearing and other proceeding.  Arline, Jr. was arrested earlier today in Dolton, Illinois, and his initial appearance took place yesterday afternoon before United States Magistrate Judge Young B. Kim at the federal courthouse in Chicago, Illinois.

A second criminal complaint charges Russell with using the mail, the internet and cellular telephones to attempt to cause emotional distress to another individual identified in the complaint as “Jane Doe,” an alleged victim in the Kelly case, as well as Jane Doe’s mother, with the intent to harass and intimidate Jane Doe and her mother.  Russell’s initial appearance will take place before a United States Magistrate Judge in the Eastern District of New York at a date to be determined in the near future.

A third criminal complaint charges Williams with using and attempting to use intimidation and threats against an alleged victim in the Kelly case, with intent to influence, delay and prevent her testimony in the Kelly case.  The complaint also charges Williams with maliciously damaging and destroying a vehicle by means of fire and an explosive.  Williams was arrested yesterday in Pompano Beach, Florida, and his initial appearance is scheduled for this morning at the federal courthouse in Fort Lauderdale, Florida. 

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations (HSI), New York Field Office, and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges.  

“The defendants are separately charged with engaging in multiple crimes that were intended to undermine and subvert the integrity of the criminal justice system and victimize the women who have come forward with serious allegations of criminal conduct against the defendant R. Kelly,” stated Acting United States Attorney DuCharme.  “Efforts to illegally influence pending federal cases, whether through threats of violence, intimidation, damage to property, or payments to buy a potential witness’s silence, will not be tolerated.” 

Mr. DuCharme expressed his grateful appreciation to the HSI Field Offices in Chicago, Illinois, Fort Lauderdale, Florida, Long Beach, California, and Tampa, Florida; the Bureau of Alcohol, Tobacco, Firearms and Explosives Field Offices in Savannah, Georgia, and Tampa, Florida; the Florida Bureau of Fire, Arson & Explosives Investigations; the Broward County Sheriff’s Office, Florida, the Lowndes County Sheriff’s Office, Florida, the Polk County Sheriff’s Office, Florida and the Valdosta Police Department, Georgia, for their assistance in these cases.

“These crimes shock the conscience.  The men charged today allegedly have shown that there is no line they will not cross to help Kelly avoid the consequences of his alleged crimes—even if it means re-victimizing his accusers.  These acts not only fly in the face of human decency, they insult the very rule of law.  HSI will continue to bring the full force of our investigative powers to pursue those seeking to attack witnesses and pervert the cause of justice.  To the victims of these and other crimes: we stand with you.  We will meet your bravery with our resolve to keep you safe to tell your story,” stated HSI Special Agent-in-Charge Fitzhugh.

“The bribery, intimidation and violence alleged in these complaints reflects a nationwide pattern of criminality that further victimized civilian witnesses in a federal case. Such behavior can never be accepted and I commend the NYPD investigators, federal agents and prosecutors from the U.S. Attorney’s Office for the Eastern District of New York in bringing these charges,” stated NYPD Commissioner Shea.

The Arline, Jr. Complaint

As alleged, between January 9, 2020 and June 2020, Arline, Jr., a self-proclaimed longtime friend of Kelly, attempted to illegally influence the cooperation and testimony of an alleged victim in the Kelly case.  After learning of Arline Jr.’s plan, the victim contacted law enforcement, and under the supervision of law enforcement authorities, continued to communicate with him.  During a series of consensually recorded telephone calls, as well as in calls and texts captured pursuant to a judicially authorized wiretap, Arline, Jr. discussed a scheme in which the victim would receive compensation, including a proposed payment of $500,000, to keep her from cooperating with the government.  During one of the recorded telephone calls, Arline, Jr. claimed that he had communicated with Kelly while Kelly was incarcerated via a three-way call with another individual. 

The intercepted communications also include Arline, Jr. discussing plans to pay the victim “to be quiet,” explaining that “if I had a way to talk to Rob [Kelly], being next to him, and telling him what’s going on, without nobody listening to, no feds, nobody, he gonna pay her . . . off to be quiet” because “[s]he got too much.  She got too much.” 

The Russell Complaint

As alleged, between November 2018 and February 2020, Russell, a self-described manager, advisor and friend of Kelly, used the mail, telephones and the internet to harass and intimidate Jane Doe, an alleged victim in the Kelly case, and her mother after Jane Doe filed a civil lawsuit against R. Kelly.  Specifically, Russell threatened to reveal sexually explicit photographs of Jane Doe and to publicly reveal her sexual history if she did not withdraw her lawsuit against Kelly and “cease her participation and association with the organizers” of a “negative campaign” against Kelly.  In November 2018, Russell caused a letter with attachments purportedly written by Kelly to be mailed to Jane Doe’s Brooklyn-based lawyer at the time.  The attachments included cropped nude photographs of Jane Doe with the following text: “the next two pictures have been cropped for the sake of not exposing her extremities to the world, yet!!!”  In December 2018, Russell, using his alias “Colon Dunn,” sent a series of text messages to Jane Doe and her mother, which contained the same photographs of Jane Doe, and stating “Just a sample.  We will seek criminal charges.  You’ve been warned,” as well as “Publishing soon” and “[T]his is Colon.”   

On January 3, 2019, Russell allegedly sent additional text messages to Jane Doe and her mother, stating, “Pull the plug or you will be exposed.”  On January 6, 2019, Russell, using the Colon Dunn alias, created a Facebook Page named “Surviving Lies,” a play on the title of Lifetime’s “Surviving R Kelly” documentary, and posted screen shots of text messages between Kelly and Jane Doe, which contained the same sexually explicit photographs of Jane Doe.  In late January 2020, Russell appeared on two live interviews with “vloggers” discussing Kelly’s legal troubles, which were streamed live on the internet via YouTube.  Russell again displayed the same sexually explicit photographs of Jane Doe and broadcast them publicly over the internet.  

The Williams Complaint

As alleged, on or about June 11, 2020, Williams, a relative of an individual who once served as a publicist for Kelly, set fire to an SUV parked outside a residence in Florida where an alleged victim in the Kelly case and others were staying.  The vehicle, leased by the victim’s father, was heavily damaged.  Fire investigators also detected an accelerant along the outside perimeter of the residence.  Cell site records, surveillance footage, toll records and photographs, and Williams’ internet searches for the victim’s address, revealed that Williams had driven from Georgia to the Florida residence.  Williams also performed internet queries about the detonation properties of fertilizer and diesel fuel, witness intimidation and witness tampering, and countries that do not have extradition with the United States.

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

The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorneys Elizabeth A. Geddes, Nadia I. Shihata and Maria Cruz Melendez are in charge of the prosecution. 

The Defendants:

RICHARD ARLINE, JR.
Age:  31
Dolton, IL

DONNELL RUSSELL, also known as “Don Russell” and “Colon Dunn”
Age:  45
Chicago, IL

MICHAEL WILLIAMS
Age: 37
Valdosta, GA

E.D.N.Y. Docket Nos: 20-MJ-239; 20-MJ-629; 20-MJ-630

Earlier today, at the federal courthouse in Central Islip, Arkadiy Khaimov pleaded guilty before United States Magistrate Judge A. Kathleen Tomlinson to conspiring to commit mail and wire fraud by defrauding a pharmaceutical manufacturer of approximately $6.9 million by submitting fraudulent claims under the manufacturer’s Co-pay Coupon Program.  As part of the plea, Khaimov agreed to forfeit approximately $489,000 as proceeds involved in the fraudulent scheme.  When sentenced, Khaimov faces up to 20 years in prison.

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

“With today’s guilty plea, Khaimov is held accountable for bilking a program designed to reduce the cost of prescription medicines so that he could line his own pockets with millions of dollars,” stated Acting United States Attorney DuCharme.  “The defendant will now face the consequences of his fraudulent scheme.”  Mr. DuCharme expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, United States Postal Inspection Service and Internal Revenue Service-Criminal Investigation for their exemplary work on the case.

The pharmaceutical manufacturer, referred to in the indictment as “John Doe Company 1,” established the Co-pay Program to reimburse pharmacies for dispensing a prescription medication.  Between approximately February 2017 and July 2018, Khaimov and his co-conspirators submitted claims for approximately $6.9 million in reimbursements under the Co-pay Program for the medications that pharmacies operated by the defendant and his co-conspirators never actually dispensed.  In some cases, Khaimov and his co-conspirators fraudulently used the credentials of a Nassau County-based physician to submit the false claims.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Bradley T. King, Madeline O’Connor and Department of Justice Trial Attorney Andrew Estes are in charge of the prosecution.

The Defendant:

ARKADIY KHAIMOV (also known as “Alex”)
Age:  37
Forest Hills, Queens

E.D.N.Y. Docket No. 20-CR-267 (SJF)

A two-count indictment was unsealed today in federal court in Brooklyn charging Davon Brown and Christian Williams, members of the violent street gang Folk Nation Gangster Disciples, with being felons in possession of a firearm in connection with their involvement in a March 14, 2020 shooting that wounded a man.  The defendants were arrested this morning and will make their initial appearance this afternoon via videoconference before United States Magistrate Judge Peggy Kuo.

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 charges and arrests.

“Preventing gun violence by repeat offenders is a priority of this Office, and we are addressing it aggressively in close coordination with our federal and local law enforcement partners,” stated Acting United States Attorney DuCharme.  “As alleged, a minor dispute escalated to a shooting, underscoring the need to eradicate violent gangs that jeopardize the safety of our communities.”

“It's the random violence alleged here that keeps escalating, and enveloping an entire community of innocent people who are being terrorized by the actions of repeat offenders. We are working hourly with our law enforcement partners to address the recent spate of violence, and doing everything we can to make sure their return to crime is a short-lived exercise in futility,” stated FBI Assistant Director-in-Charge Sweeney. 

“The gun violence alleged in this indictment tears at the fabric of life in our city. I applaud the NYPD’s vigorous efforts, along with our federal partners, to stop this kind of violence and work closely with the communities we are sworn to serve,” stated NYPD Commissioner Shea. 

As detailed in the government’s detention letter filed earlier today, Brown and  Williams were involved in the shooting of a victim who was disrespectful toward their gang.  On March 20, 2020, an individual with the victim threw a drink at a woman inside the Gold Room Restaurant and Lounge in Prospect Lefferts Gardens, splashing a person standing with Brown.  An argument ensued, and the victim, a Crips gang member, flashed a gang sign known as “dropping the rake” — a gesture intended to be insulting to the Folk Nation.  The argument continued outside the bar where Brown allegedly displayed a gun and fired a shot into the air.  Brown then handed the gun to Williams who walked behind the victim and shot him in the buttocks at close-range.  Williams fled and discarded the gun a half block away.  The gun was recovered by law enforcement, and DNA from both defendants was found on the weapon.

Brown, who was on federal supervised release at the time of the charged offense, has prior convictions for criminal possession of a loaded firearm, robbery and racketeering conspiracy, among other crimes.  Williams, who was on New York state parole at the time of the charged offense, has prior convictions for, among other crimes, conspiracy and criminal possession of a loaded firearm in connection with an earlier shooting of a Folk Nation gang rival.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, both defendants face a maximum sentence of 10 years in prison.  If convicted of violating his supervised release, Brown faces an additional sentence of up to two years in prison.

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

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorney Jonathan Siegel is in charge of the prosecution.

The Defendants:

DAVON BROWN (also known as “Chico Dinero”)
Age:  26
Brooklyn, New York

CHRISTIAN WILLIAMS (also known as “Zonee Flocks”)
Age:  25
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-293 (WFK)

 

A criminal complaint was unsealed today in federal court in Brooklyn charging Yakov Moroz, the president of Great Movers Inc. and its successor company New City Movers, and company employee Tal Ohana with wire fraud and wire fraud conspiracy by misrepresenting estimated charges for moving services and then requiring customers to pay additional fees that far exceeded the original estimate in order to recover their belongings.  Moroz and Ohana were arrested earlier today and will make their initial appearance this afternoon before United States Magistrate Judge Steven M. Gold.

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 Douglas Shoemaker, Special Agent-in-Charge, United States Department of Transportation, Office of the Inspector General (DOT-OIG), announced the charges.

According to the complaint, Moroz and Ohana, through Great Movers Inc., which operated through the website https://greatmovingusa.com and other affiliated moving companies,  defrauded dozens of customers by misrepresenting the estimated charges for moving services and then (i) requiring customers to pay additional fees, often more than 10 percent of the original estimate, (ii) requiring payment before delivery of goods, or (iii) refusing to return and threatening to sell and auction the customers’ belongings if the fees were not paid.  These practices violate federal regulations for companies engaged in the transportation of household goods in interstate commerce.  Many customers ultimately paid the inflated and additional fees to ensure delivery of their property.  

“As alleged, Moroz and Ohana victimized their customers by holding their belongings hostage until the inflated fees were paid,” stated Acting United States Attorney DuCharme.  “This Office will hold accountable anyone who seeks to target the vulnerable in an effort to profit from predatory schemes.”  Mr. DuCharme thanked the Better Business Bureau for its assistance with the investigation.

“Imagine moving every item you own from one place to another, trusting the moving company loading up the truck to not rip you off. The subjects in this scheme allegedly used that vulnerability in a cruel way, knowing victims would pay almost anything to get their prized possessions back,” stated FBI Assistant Director-in-Charge Sweeney.  “The FBI New York Joint Major Theft Task Force will investigate these fraudsters, and we want other potential victims to report it to us so we can stop these criminals before they move on to someone else.”

“Today’s arrests and actions taken stemming from a criminal investigation conducted by the U.S. Department of Transportation Office of Inspector General (DOT-OIG) and FBI shows our commitment to rooting out fraudulent household goods movers who take advantage of unsuspecting customers,” stated DOT-OIG Special Agent-in-Charge Shoemaker. “Working with our law enforcement and prosecutorial partners, as well as the Federal Motor Carrier Safety Administration, we will continue our vigorous efforts to ensure that commercial household goods movers adhere to Federal laws and regulations designed to protect the public.”

The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants face up to 30 years’ imprisonment.

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

The Defendants:

YAKOV MOROZ
Age:  39
Brooklyn, New York

TAL OHANA
Age:  37
Queens, New York

E.D.N.Y. Docket No. 20-MJ-604

Earlier today, Vito Difalco, also known as “Victor” and “The Mask,” an inducted member of the Colombo organized crime family, was sentenced by United States District Judge William F. Kuntz, II, to 37 months’ imprisonment for racketeering.  

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

“With today’s sentence, the defendant has been held accountable for his participation in a violent criminal enterprise that used fear as fuel,” stated Acting United States Attorney DuCharme.  “Investigating and disrupting the activities of organized crime will always remain a priority of this Office and our law enforcement partners.”  Mr. DuCharme thanked the Federal Bureau of Investigation, New York Field Office, and the New York City Police Department, for their outstanding investigative work.

Difalco and co-defendant Joseph Maratea operated a loansharking business, extending loans at exorbitant interest rates and under the threat physical violence or harm if interest payments were not made on a timely basis. Specifically, they charged $15 in weekly interest payments on every $500 extended, which amounted to 3% weekly interest payments or 156% annual interest. To ensure both that they could locate their debtors and that their debtors understood that Difalco and Maratea knew where they resided, they required debtors to provide copies of their driver’s licenses and their contact information. Defendant Difalco also earned illegal proceeds through his gambling business, which included illegal sports-betting and video gambling machines, Difalco used a legitimate business – a bar called Tryst which he operated – to facilitate his criminal activity and limit detection by law enforcement. Specifically, he used the bar to attract new loansharking customers and used his employees to collect loansharking payments. He also used the bar to operate and promote his illegal gambling businesses.

On April 19, 2018, Difalco and Matera had the following conversation about a debtor’s missed payments:

DIFALCO: Alright stretch out, ‘cause we are going to take a ride in a little while.

MARATEA: Alright.

DIFALCO: I’ll be here, then we’ll take a ride up there.

MARATEA: Where by [John Doe #8]?

DIFALCO: Yeah, we’ll go by [John Doe #8].

MARATEA: Did you call him?

DIFALCO: I called him, he didn’t pick up. I figure I’ll ring the bell and flood

the house.

Maratea pleaded guilty to racketeering and was sentenced in April 2020 to time served and two years’ probation with the first four months to be served under home incarceration

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Elizabeth A. Geddes and Mathew S. Miller are in charge of the prosecution.

The Defendant:

VITO DIFALCO (also known as “Victor” and “The Mask”)
Age:  65
Brooklyn, New York

E.D.N.Y. Docket No. 18-CR-337 (WFK)

A criminal complaint was unsealed today in federal court in Brooklyn charging Jeremy Trapp with sabotaging a New York City Police Department (“NYPD”) van by cutting one of the vehicle’s brake lines.  Trapp was arrested earlier today at his home in Brooklyn, and was ordered detained pending trial by United States Magistrate Judge Steven M. Gold this afternoon. 

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, NYPD, announced the arrest and charges.

"Trapp’s alleged actions had potentially life-threatening consequences for NYPD officers and members of the public, who could have been injured by the vehicle’s brake failure,” stated Acting United States Attorney DuCharme.  “This Office will ensure that anyone who targets police officers or acts with the intent to undermine public safety efforts will face justice.”

“Mr. Trapp’s alleged behavior is illegal, and for the information of others who may have been planning similar criminal activity, we’d like to remind them that the FBI investigates and charges this type of behavior as a federal crime,” stated FBI Assistant Director-in-Charge Sweeney.  “Citizens of this city, many of whom are not currently collecting paychecks, paid for the equipment allegedly damaged by Mr. Trapp.  They expect it to be available to protect and serve our community when needed.  Behavior like the type alleged here diverts resources, destroys property, risk lives, and detracts from the important message thousands of peaceful citizens have rightfully highlighted.”

“The defendant who believed he was cutting the brake lines to a vehicle that could be carrying up to nine police officers clearly intended to create a situation that could result in serious injuries or death for officers or civilians. No one should confuse this conduct with lawful protest. We appreciate the work of the NYPD Intelligence Bureau, the FBI agents and the prosecutors from the US Attorney for the Eastern District of New York in bringing these charges,” stated NYPD Commissioner Shea.

As set forth in the complaint, on July 13, 2020, Trapp participated in a demonstration outside the Brooklyn Criminal Court building in downtown Brooklyn that was objecting to the arrests of individuals who had earlier confronted pro-law enforcement demonstrators in Bay Ridge, Brooklyn. As the demonstration was winding down, Trapp spoke with an individual who was a confidential source for the NYPD (the “CS”) and he stated that he wanted to harm police officers and their supporters. Trapp also stated that he wanted to cut the brake lines on police cars. On July 17, 2020, after Trapp and the CS communicated via telephone calls and text messages, the CS drove to Trapp’s home and picked him up in the CS’s vehicle, where Trapp showed the CS his backpack, which contained, among other things, a scissor-like tool.  At approximately 4:00 p.m. on July 17, 2020, Trapp and the CS approached a marked NYPD van parked near Fourth Avenue and 42nd Street in Sunset Park. Trapp crawled under the van and reached for something near one of the vehicle’s wheel wells while the CS stood nearby acting as a purported “lookout.” Trapp then crawled out from under the van and left the area with the CS.  Both the CS and NYPD officers conducting surveillance recorded this incident on video.  An inspection of the NYPD van revealed that a line for a wheel speed sensor had been partially severed. An NYPD automobile mechanic informed the FBI that the partially severed line is part of the NYPD Van’s anti-lock braking system, which is similar in appearance to, and in the same location as, the NYPD vehicle’s main brake line.  A malfunctioning anti-lock braking system would adversely impact a driver’s ability to stop and maintain control of the van in an emergency.

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

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

The Defendant:

JEREMY TRAPP
Age:  24
Brooklyn, New York

E.D.N.Y. Docket No.: 20-MJ-626

 

Seth D. DuCharme,  Acting United States Attorney for the Eastern District of New York, this week marked the 30th anniversary of the passage of the Americans with Disabilities Act of 1990 (ADA).  Since President George H.W. Bush signed the Act into law on July 26, 1990, the ADA has transformed society—by replacing exclusion with access, segregation with integration, and limitations with self-determination.

The ADA prohibits discrimination on the basis of disability in employment, activities and facilities of state and local governments and places of public accommodation, including all hotels, restaurants, retail stores, theaters, health care facilities, convention centers, parks and places of recreation. Its promise is to work to eliminate disability discrimination across the range of services, programs and activities that most Americans take for granted, but were largely inaccessible to individuals with disabilities prior to the law’s enactment.  The ADA seeks to allow individuals with disabilities to live more independently. 

The ADA empowers the U.S. Attorney’s Office to investigate, litigate and resolve complaints of discrimination and to conduct compliance reviews to ensure covered entities comply with the Act’s requirements. 

“On this anniversary of the enactment of the ADA, we are reminded of the harm caused by discrimination on the basis of disability,” stated Acting United States Attorney DuCharme.  “The ADA recognizes that we all benefit when persons with disabilities have the same opportunities and access to services and facilities as people without disabilities.  This Office, which serves the people of Brooklyn, Queens, Staten Island, and Nassau and Suffolk Counties, remains committed to protecting the rights of the disabled and taking legal action when necessary to right wrongs.”

Since the passage of the ADA in 1990, this Office has fulfilled the mission of the ADA in a wide range of enforcement actions, including:

• Protecting the Rights of New York City Firefighters with Disabilities.  In response to a complaint by an FDNY captain whose lungs were damaged while serving as a 9/11 first responder, the United States Attorney’s Office successfully obtained a court-ordered Stipulation of Settlement compelling the FDNY to develop and implement a policy providing reasonable accommodation to firefighters with disabilities who are otherwise able to perform work within the department.
   
• Ensuring Accessibility at Citi Field and Barclays Center.  Pursuant to its authority to conduct compliance reviews under the ADA, the Office worked to ensure that individuals with mobility impairments are able to access Citi Field, home of the New York Mets, and the Brooklyn Nets’ Barclays Center.
   
• Protecting the Rights of Individuals with Serious Mental Illness.  The Office has obtained an ongoing Consent Decree with the State of New York to transition into the community individuals with mental illness who reside in adult homes – substandard privately owned facilities licensed by the State.  Almost 1,000 former adult home residents covered by the Decree now live successfully in community placements.
   
• Protecting the Rights of Individuals Who Are Deaf and Hard of Hearing in the New York City Homeless Family System Programs.  The Office entered into a Consent Decree and Judgment with the City of New York homeless family shelter system to ensure that it provides sign language interpretation and other auxiliary aids and services to clients who are deaf or hard of hearing. 
   
• Obtaining relief for individuals with disabilities who were subject to discrimination
   
• Compelling a regional shoe store chain to educate its managers regarding the rights of individuals with disabilities after a store manager in Bay Ridge, Brooklyn forced a customer in a wheelchair to leave the store because her wheels were “dirtying the carpets.”  The Settlement Agreement also required the chain to pay the individual $10,000 for emotional injury.
   
• Obtaining damages on behalf of an HIV+ patient whose surgeon refused to operate on him.
   
• Obtaining relief for a child with diabetes who was turned away from a children’s summer camp. 
   

For more information about the 30th Anniversary of the ADA, please visit www.ada.gov. To file a complaint with the U.S. Attorney’s Office, contact the U.S. Attorney’s Office at USANYE-CivilRights@usa.doj.gov or visit the Civil Rights Division’s portal at https://civilrights.justice.gov/report/

For more information about the ADA, call the Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).

 

 

An 11-count indictment was unsealed earlier today in federal court in Brooklyn charging Donal O’Sullivan, his sister Helen O’Sullivan and Padraig Naughton with wire fraud, mail fraud, embezzlement from employee benefit funds, submission of false remittance reports to union benefit funds and conspiracy to commit those crimes.  The indictment relates to the defendants’ conduct at Navillus Tile, Inc. d/b/a Navillus Contracting (“Navillus”), one of the largest construction firms in New York City.  Donal O’Sullivan is the founder, owner and President of Navillus.  Helen O’Sullivan is the Treasurer of Navillus and Padraig Naughton is the company’s Financial Controller.  The defendants were arrested this morning and arraigned this afternoon before United States Magistrate Judge Robert M. Levy.  Donal O’Sullivan was released on a $500,000 bond; Helen O’Sullivan and Naughton were each released on $250,000 bonds.

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); Thomas Licetti, Acting Regional Director, U.S. Department of Labor, Employee Benefits Security Administration (DOL-EBSA); Michael C. Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, New York Region (DOL-OIG); Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); and Michael Farbiarz, Acting Inspector General, Port Authority of New York and New Jersey, Office of the Inspector General (PANYNJ-OIG), announced the arrests and indictment.

Navillus is a signatory to multiple collective bargaining agreements with labor organizations – including the Bricklayers and Allied Craft Workers Local No. 1, the New York City District Council of Carpenters, the Cement Masons Union, the Pointers, Cleaners and Caulkers, and the International Brotherhood of Teamsters Local 282 – that required the company to employ union workers on its projects and to make contributions to various union benefits  including pension, annuity and welfare funds on their behalf.  To ensure that the benefits funds received the contributions that it had agreed to pay, Navillus was required to periodically file remittance reports with the benefits funds that detailed the number of hours worked by each worker.

As alleged in the indictment, the defendants engaged in a payroll scheme from approximately 2011 to 2017 to avoid making those contributions by using a consulting firm to pay certain Navillus workers for work done on Navillus construction jobs.  However, neither Navillus nor the consulting firm made contributions to the benefits funds on behalf of those workers.  To disguise the scheme, the defendants directed the consulting firm to issue fraudulent invoices to conceal the fact that funds paid by Navillus to the consulting firm were, in fact, for wages paid to Navillus workers.  As a result, the defendants caused Navillus to avoid making over $1 million in required contributions to union benefits funds.            

“As alleged, these senior construction company executives were the architects of a payroll scheme designed to evade obligatory contributions to union benefits funds that their workers depend upon,” stated Acting United States Attorney DuCharme.  “This Office, together with its federal and local law enforcement partners, will continue to investigate and hold accountable employers whose corrupt actions jeopardize their employees’ economic well-being.”  Mr. DuCharme expressed his grateful appreciation to the New York City Police Department for its assistance with the case.

“As alleged, the defendants deprived union workers of benefits to which they were entitled, falsifying records and creatively circumventing their fiscal responsibilities,” stated FBI Assistant Director-in-Charge Sweeney. “This type of crime depletes the benefits union employees have a right to access. Today’s arrests highlight this illegal scheme and reassert our dedication to rooting out crimes of this nature.”

“Embezzling and underfunding employee benefits funds cheat workers, retirees, and their families of the benefits to which they are entitled and are against the law. The U.S. Department of Labor’s Employee Benefits Security Administration will continue to work with our law enforcement partners to investigate and take action to counter illegal activity that threatens employees’ hard-earned benefits,” stated DOL-EBSA Acting Regional Director Thomas Licetti.

“An important mission of the Office of Inspector General is to investigate allegations of fraud relating to labor unions and their affiliated employee benefit plans. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated DOL-OIG Special Agent-in-Charge Mikulka.

“The alleged scheme perpetrated by the president of Navillus Contracting cheated union benefits funds of more than a million dollars,” stated HSI Special Agent-in-Charge Fitzhugh.  “HSI’s collaboration with federal, state and local partners allows for comprehensive investigations and arresting those fraudsters who look to fill their pockets at the expense of others.”

“The Port Authority Office of Inspector General initiated this investigation, and the message today’s indictment sends is crystal clear: the Port Authority has zero tolerance for fraud by its business partners, and we will work aggressively to ensure that individuals who engage in fraudulent conduct — including contractors’ senior executives, where appropriate — are held personally accountable under the criminal law,” stated PANYNJ Acting Inspector General Farbiarz. 

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 Public Integrity Section.  Assistant United States Attorneys Martin Coffey and Turner Buford are in charge of the prosecution. 

The Defendants:

DONAL O’SULLIVAN
Age:  59
Queens, New York

HELEN O’SULLIVAN
Age:  60
Queens, New York

PADRAIG NAUGHTON
Age: 48
New York, New York

E.D.N.Y. Docket No. 20-CR-272 (WFK)

A superseding indictment was returned today in federal court in Central Islip, New York, charging Genaro Garcia Luna, the former Secretary of Public Security in Mexico from 2006 to 2012, with engaging in a continuing criminal enterprise.  Luis Cardenas Palomino and Ramon Pequeno Garcia, former high-ranking Mexican law enforcement officials who worked under Garcia Luna, are each charged with three counts of cocaine trafficking conspiracy.  In exchange for multimillion-dollar bribes, the defendants allegedly permitted the Sinaloa Cartel to operate with impunity in Mexico.  Garcia Luna was arrested on December 9, 2019 by federal agents in Dallas, Texas, and he is presently pending trial in the Eastern District of New York to face these charges.  Cardenas Palomino and Pequeno Garcia are presently fugitives.

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

 "As alleged, for nearly two decades Garica Luna betrayed those he was sworn to protect by accepting bribes from members of the Sinaloa Cartel to facilitate their crimes and empower their criminal enterprise,” stated Acting United States Attorney DuCharme.  “Through today’s superseding indictment, Garcia Luna and his co-conspirators will face justice for offenses involving the importation and the distribution of massive quantities of dangerous drugs into the United States.”  Mr. DuCharme thanked the Drug Enforcement Administration (DEA) offices in New York and Houston for their work on the case.

As set forth in the superseding indictment and other court filings, from 2001 to 2012, while occupying high-ranking law enforcement positions in the Mexican government, Garcia Luna received millions of dollars in bribes from the Sinaloa Cartel in exchange for providing protection for its drug trafficking activities.  From 2001 to 2005, Garcia Luna led Mexico’s Federal Investigation Agency, and from 2006 to 2012, he served as Mexico’s Secretary of Public Security, controlling Mexico’s Federal Police Force.  Cardenas Palomino and Pequeno Garcia also were high-level Mexican law enforcement officials who worked under Garcia Luna during this time.  They each received millions of dollars in bribes from the Sinaloa Cartel.  

In exchange for the payment of bribes, between January 2001 and the present, the defendants abused their public positions by allowing the Sinaloa Cartel to obtain safe passage for its drug shipments, and by providing sensitive law enforcement information about investigations into the Cartel, and information about rival drug cartels, thereby facilitating the importation of multi‑ton quantities of cocaine and other drugs into the United States.  For example, between 2002 and 2007, Garcia Luna allegedly aided at least six cocaine shipments totaling more than 50,000 kilos of cocaine.  Additionally, the defendants placed other corrupt officials in positions of power in certain areas of Mexico controlled by the Sinaloa Cartel.  On at least two occasions, the Cartel personally delivered bribe payments to Garcia Luna in briefcases containing millions of dollars. 

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

If convicted of the continuing criminal enterprise charge, Garcia Luna faces a mandatory minimum sentence of 20 years’ imprisonment and a maximum of life imprisonment.  If convicted of a drug conspiracy charge, Cardenas Palomino and Pequeno Garcia each face a mandatory minimum sentence of 10 years’ imprisonment and a maximum of life imprisonment.

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

The government’s case is being prosecuted by the Eastern District’s International Narcotics and Money Laundering Section and Public Integrity Section.  Assistant United States Attorneys Michael P. Robotti, Ryan Harris and Erin Reid are in charge of the prosecution.

The Defendants:

GENARO GARCIA LUNA
Age:  51
Florida

LUIS CARDENAS PALOMINO
Age:  51
Mexico

RAMON PEQUENO GARCIA
Age:  53
Mexico

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

A criminal complaint was unsealed today in federal court in Brooklyn charging Eric Adjei with the robbery of a Chase Bank in Brooklyn on July 21, 2020.  Adjei was arrested today and was ordered detained pending trial by United States Magistrate Judge Robert M. Levy.

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

“As alleged, the defendant threatened a bank teller in the course of a robbery here in Brooklyn,” stated Acting United States Attorney DuCharme.  “Our Office remains committed to protecting our financial institutions and the employees and customers who rely on them to safeguard their money, and anyone who robs a bank in this district will face justice.”  Mr. DuCharme thanked the Federal Bureau of Investigation, New York Field Office, and the New York City Police Department for the diligent work that led to the apprehension of the defendant.

According to court filings, on July 21, 2020, at approximately 5:40 p.m., Adjei entered the Chase Bank at 401 Flatbush Avenue.  Adjei approached the teller window and stated, “I have a gun in my bag, give me $3,000.”  Adjei was wearing a surgical mask, a blue cloth over a green cap, and a distinctive black and white horizontally striped shirt.  NYPD officers located Adjei after recovering surveillance video of him in a subway station, with his surgical mask pulled down. 

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

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorney Matthew R. Galeotti is in charge of the prosecution.

The Defendant:

ERIC ADJEI
Age:  47
New York, New York

E.D.N.Y. Docket No. 20-MJ-578

Earlier today, in federal court in Central Islip, Tameshwar Ammar, a former medical doctor in Roslyn, New York, pleaded guilty via teleconference to conspiring to illegally distribute oxycodone.  Ammar was indicted in November 2019.  On June 22, 2020, he relinquished his license to practice medicine.  Today’s plea was entered before United States District Judge Denis R. Hurley.  As part of his plea, Ammar agreed to forfeit approximately $245,700 as proceeds involved in the oxycodone offense.  When sentenced, Ammar faces up to 20 years in prison.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the guilty plea.

As set forth in the indictment and other court filings, between 2013 and 2019, Ammar illegally prescribed thousands of highly addictive oxycodone pills to two individuals identified in the indictment as John Doe 1 and John Doe 2.  According to a review of Ammar’s medical files for the two individuals, Ammar wrote the prescriptions without any diagnostic proof that either had a legitimate medical necessity.  Ammar prescribed oxycodone pills to John Doe 1, knowing that he intended to sell the pills to others.  In addition, after learning that John Doe 2 had been admitted to a psychiatric facility in March 2018, Ammar continued to prescribe John Doe 2 with oxycodone as well as methadone.  In July 2019, John Doe 2 died of a drug overdose caused by oxycodone, methadone and ketamine.  After his arrest on November 7, 2019, Ammar was ordered by the Court to surrender his DEA registration. 

“Today’s guilty plea establishes that the defendant, who was a doctor, essentially acted as a drug dealer, spreading injury and addiction without regard for the consequences,” stated Acting United States Attorney DuCharme.  “This Office and our partners at the DEA are working tirelessly to combat the opioid epidemic on Long Island and elsewhere, including by prosecuting medical professionals who betray their oath to do no harm.”  Mr. DuCharme also thanked the U.S. Department of Health and Human Services, Office of Inspector General, New York Region, for their assistance during the investigation.

“Dr. Ammar’s plea shows us that his motivation was greed, not the welfare and health of his patients.  Instead of healing, he chose a dangerous path of causing addiction, overdose, and overwhelming suffering to many. I commend the DEA Long Island Tactical Diversion Squad, the U.S. Attorney’s Office for the Eastern District of New York and our law enforcement partners for pursuing the investigation and prosecution with diligence and determination,” stated DEA Special Agent-in-Charge Donovan. 

The government’s investigation was led by the DEA’s Long Island Tactical Diversion Squad, comprising agents and officers of the DEA, Nassau County Police Department (NCPD), Suffolk County Police Department, Port Washington Police Department and Rockville Centre Police Department.  The DEA Tactical Diversion Squad also worked in conjunction with officers and agents of the U.S. Department of Health & Human Services Office of the Inspector General and the Hempstead Police Department. 

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

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

The Defendant:

TAMESHWAR AMMAR
Age:  52
Amityville, New York

E.D.N.Y. Docket No. 19-CR-516 (DRH)

Earlier today, at the federal courthouse in Central Islip, an indictment was filed charging Arkadiy Khaimov with conspiring to commit mail and wire fraud by defrauding a pharmaceutical manufacturer of approximately $6.9 million by submitting fraudulent claims under the manufacturer’s Co-pay Coupon Program.  Khaimov will be arraigned at a later date.

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), Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service (USPIS), Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, announced the indictment.

As alleged in the indictment, the pharmaceutical manufacturer, referred to in the indictment as “John Doe Company 1,” established the Co-pay Program to reimburse pharmacies for dispensing a prescription medication.  Between approximately February 2017 and July 2018, Khaimov and his co-conspirators submitted claims for approximately $6.9 million in reimbursements under the Co-pay Program for the medications that pharmacies operated by the defendant and his co-conspirators never actually dispensed.  In most cases, the pharmacies that the defendant and his co-conspirators operated sought reimbursements for highly unusual 18 or 21-day supplies of the medication, as compared to the 28-day supply that is commonly used in legitimate medical treatment.  This enabled the defendant and his co-conspirators to submit approximately two reimbursement claims in the same month.  In some cases Khaimov and his co-conspirators fraudulently used the credentials of a Nassau County-based physician to submit the false claims.

“Khaimov allegedly stole millions of dollars from a program that was established to assist patients in need of high-cost medication,” stated Acting United States Attorney DuCharme.  “Due to the hard work of our investigators and prosecutors, he will now be held accountable.” 

“Taking advantage of a program established to help pharmacies defray the cost of dispensing vital prescription medicine to those who need it most, Khaimov and his co-conspirators allegedly sought to profit from fraudulent claims totaling more than $6 million. It’s utterly discouraging to see people capitalize on any initiative designed to contribute to the greater good, but when the crime is healthcare related, and manufacturers stand to lose millions, nobody wins in the long run. Today’s charges signal an end to this particular instance of fraud, but rest assured, along with our partners, we will continue to seek out and pursue criminal charges wherever else this activity exists,” stated FBI Assistant Director-in-Charge Sweeney.

“Rebate fraud is not a new crime, it’s been investigated by Postal Inspectors for decades. What makes this case different is the size and scope of the scheme. The investigation of fraud crimes involving the U.S. Mail will always be a top priority for the Postal Inspection Service. Today’s arrest reflects a commitment by law enforcement to bring those to justice who participate in schemes to defraud” stated USPIS Inspector-in-Charge Bartlett.

“Fraud schemes that prey on funds intended for the use of those in need in our society, such as the one Mr. Khaimov has perpetrated here, are egregious and a serious concern for law enforcement and the tax-paying public in general”, stated IRS-CI Special Agent-in-Charge Larsen, “In a case like this, IRS-Criminal Investigation takes pride in working shoulder to shoulder with our law enforcement partners to see that the offenders are punished to the fullest extent of the law.” 

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

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Bradley T. King, Madeline O’Connor and Department of Justice Trial Attorney Andrew Estes are in charge of the prosecution.

The Defendant:

ARKADIY KHAIMOV, also known as “Alex”
Age:  37
Forest Hills, Queens

E.D.N.Y. Docket No. 20-CR-267 (JS)

The Department of Justice and the U.S. Attorney’s Office for the Eastern District of New York today filed a civil complaint and proposed settlement agreement to resolve claims that Bank of America, N.A. (Bank) engaged in a pattern or practice of discrimination on the basis of disability, in violation of the Fair Housing Act.  The settlement agreement is subject to approval by the federal district court.

The department alleges in its complaint that for several years beginning in January 2010, the Bank maintained a policy of denying mortgage and home equity loans to adults with disabilities who were under legal guardianships or conservatorships. The Bank changed this policy in 2016 for mortgage loans and in 2017 for home equity loans.

“No one in this free country should be denied access to the American dream merely because of a disability. The unalienable right to pursue happiness extends to all people, including those with disabilities, and purchasing a home is one way many people exercise this right,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Fair Housing Act prohibits banks from denying mortgage loans and other housing-related credit to people because of their disabilities, and this department will hold accountable those lenders who engage in such illegal conduct. Today’s settlement provides compensation to victims of unlawful discrimination and requires Bank of America to apply non-discriminatory policies in deciding which applicants will receive loans.”

“This settlement ensures that Bank of America will no longer discriminate against people with disabilities when issuing mortgage and home equity loans, and compensates the victims for their losses,” said Seth D. DuCharme, Acting U.S. Attorney for the Eastern District of New York. “Our Office is committed to standing up for the rights of individuals with disabilities and taking action when necessary to vindicate those rights.”

The Bank has ended its practice of denying mortgage and home equity loans to adults with disabilities under guardianships or conservatorships. The terms of the settlement require the Bank to pay $4,000 per loan to eligible loan applicants who were affected by the Bank’s prior discriminatory policies, and we anticipate that the payments will total approximately $300,000. The settlement also requires the Bank to maintain the new, non-discriminatory loan underwriting policies and train its employees on the new policies. In addition, the Bank must monitor its loan processing and underwriting activities to ensure compliance with the Fair Housing Act.  

The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Additional information about the Section’s fair lending enforcement can be found at www.justice.gov/fairhousing. Lending discrimination can be reported to the Civil Rights Division at https://civilrights.justice.gov.