Eastern District of New York

A federal jury found a New York pharmacy owner guilty Wednesday of health care fraud and money laundering charges for his role in a scheme to defraud Medicare by billing for prescription medications that were not provided to patients.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York, Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations and Acting Special Agent in Charge Jonathan Larsen of Internal Revenue Service Criminal Investigation’s (IRS-CI) New York Field Office made the announcement.

After a four-day trial, Yuriy Barayev, 45, of Queens, New York, was found guilty of one count of health care fraud and seven counts of money laundering.  U.S. District Judge Edward R. Korman of the Eastern District of New York, who presided over the trial, will sentence Barayev at a later date. 

According to evidence presented at trial, from November 2013 to December 2015, Barayev engaged in a scheme to defraud Medicare by submitting claims for prescription medications that were not actually dispensed to patients.  Barayev billed Medicare for hundreds of medications that were never dispensed through his pharmacy, Woodhaven Rx, the evidence showed.  The evidence further showed that Barayev laundered the proceeds of his health care fraud scheme by transferring money to a shell company owned by his wife and then spending the money to benefit himself, his family and others close to him.

This case was investigated by HHS-OIG and IRS-CI.  Trial Attorneys Sarah Wilson Rocha and Debra Jaroslawicz and Assistant Chief A. Brendan Stewart of the Criminal Division’s Fraud Section are prosecuting the case. 

The Fraud Section leads the Medicare Fraud Strike Force.  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 nearly $19 billion.  In addition, the HHS 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.

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.

Aleksey Tsvetkov, a leader of a violent, Brooklyn-based Eastern European organized crime syndicate that operated primarily in the Sheepshead Bay, Brighton Beach and Coney Island neighborhoods, was sentenced today in federal court in Brooklyn to 198 months’ imprisonment and ordered to pay $1,145,339.90 in restitution following his conviction for racketeering – including predicate acts of illegal gambling, extortion, arson and marijuana distribution – and wire fraud and pistol-whipping.  Tsvetkov and co-defendant Leonid Gershman were convicted following a three-week jury trial in August 2018.  Today’s proceeding was held before United States District Judge Brian M. Cogan.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the sentence.

“Today’s sentence appropriately punishes Tsvetkov, whose crime syndicate inflicted violence on three Brooklyn communities, including an arson that destroyed an occupied building and endangered its residents and New York City firefighters,” stated United States Attorney Donoghue.  “This Office, together with our law enforcement partners, will continue to deploy all resources necessary to rid our neighborhoods of violent organized crime groups.”

“Last summer, Aleksey Tsvetkov and his co-defendant Leonid Gershman were convicted for a litany of violent crimes and racketeering that reached from Brooklyn to abroad,” stated DEA Special Agent-in-Charge Donovan.  “This sentence exemplifies law enforcement’s commitment to saving lives by arresting and prosecuting members of criminal organizations who place neighborhoods in peril through violence, drug trafficking and criminal threats.”  

“Organized criminal organizations like the one led by Tsvetkov negatively impact the standard of living for the citizens living in those areas where they operate, causing harm and fear in their neighborhoods,” stated IRS-CI Special Agent-in-Charge Larsen.  “IRS Criminal Investigation and our law enforcement partners will continue to be relentless in our resolve to dismantle organized criminal groups and bring the criminals who run them to justice.”

Between 2011 and May 2017, Tsvetkov and his co-conspirators, born in states of the former Soviet Union, including Russia, Ukraine and Moldova, operated as a racketeering syndicate.  The syndicate members were linked to high-level members of Russian organized crime, known as “thieves in law,” or “thieves,” who authorized syndicate members to use violence in the United States and abroad to protect their criminal activities. 

As established at trial, in 2016, Tsvetkov partnered in an illegal high-stakes poker game on Coney Island Avenue that generated substantial profits for the syndicate.  In the spring of 2016, Tsvetkov and other syndicate members enlisted two co-conspirators to set fire to a mixed-use a building on Voorhies Avenue that housed a rival poker game on the ground floor.  Two residents of the building, including a young boy, were trapped inside by the resulting fire, and had to be rescued by firefighters.  Both residents and firefighters suffered smoke inhalation, and one firefighter’s injuries required multiple surgeries.  The families living in the building were displaced due to fire damage.

The syndicate also preyed upon extortion victims.  For example, to find an extortion victim who owed the syndicate more than $40,000, a co-conspirator enlisted the help of “thieves” in Russia to track down the victim’s father in Moscow.  Subsequently, after locating the victim, a co-conspirator was recorded on a wiretap stating, the “Thieves have found him . . . in Israel,” and “they were at [his] place today.”  The co-conspirators regularly reported to Tsvetkov as debt payments were collected from the victim. 

In connection with a separate extortion, the government recovered Tsvetkov’s cell phone and found a video of Tsvetkov beating the extortion victim into near unconsciousness.  Tsvetkov kept the video as a souvenir.

In July 2012, Tsvetkov, Gershman and a co-conspirator beat a member of a rival criminal organization, known as the “Kafkaz Crew,” whom they suspected of stealing marijuana and thousands of dollars from the syndicate’s stash house on Ocean Avenue.  Tsvetkov grabbed a handgun from the co-conspirator and jammed it in the victim’s mouth, knocking out several of his teeth.  On December 3, 2019, Gershman was sentenced to 198 months’ imprisonment for racketeering.

Mr. Donoghue expressed his grateful appreciation to the members of DEA’s New York Organized Crime Drug Enforcement Strike Force, comprising agents and officers of the DEA;  New York City Police Department; New York State Police; Immigration and Customs Enforcement – Homeland Security Investigations; IRS-CI; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection; U.S. Secret Service; U.S. 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 for their roles in the investigation, and thanked the New York City Fire Department for its investigation of the arson and its heroic efforts in rescuing the residents who were trapped in the building during the fire.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Andrey Spektor and Sarah Evans are in charge of the prosecution.  

The Defendant:

ALEKSEY TSVETKOV (also known as “Pelmin,” “Pulya,” “Lesha” and “Lyosha”)
Age:  40
Brooklyn, New York

E.D.N.Y. Docket No. 16-CR-553 (S-4) (BMC)

Richard P. Donoghue, 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 Water Act (CWA) against the Village of Northport, New York (Northport) to address illegal and persistent discharges of pollutants and for failure to comply with the municipal separate storm sewer system (MS4) permit and EPA’s administrative orders that required Northport to prevent pollutants discharged from its sewer system from entering the waters of the United States.  The parties agreed to enter into a Consent Decree, which was also filed today with the court, and it requires Northport to conduct inspections and sampling of its outfalls, and to implement rehabilitation work to eliminate any illicit discharges.  The Consent Decree also requires Northport to pay civil penalties of $125,000.  The State of New York is a plaintiff in this matter and a party to the Consent Decree.  Following a 30-day public comment period, the United States will review any comments and, if appropriate, ask the court to enter the Consent Decree.

The lawsuit and Consent Decree were filed in the United States District Court for the Eastern District of New York, in Central Islip, New York.

“The United States brought this action to ensure that Northport meets its obligation to protect water quality by developing and enforcing a program to eliminate the discharge of unpermitted pollutants from its storm sewer system,” stated United States Attorney Donoghue. “Specifically, the resolution of this case is designed to prevent pollutants, such as raw sewage travelling through Northport’s storm sewers, from discharging into Northport Harbor and Northport Bay, which flow into the Long Island Sound. This Office is committed to vigorously enforcing the CWA against parties who discharge pollutants into the waters of the United States.”  

“When not properly managed, storm water often carries pollution and sediment into local waterways that can impair streams, lakes and beaches,” stated EPA Regional Administrator Lopez.  “Before Northport began to take steps several years ago to address these issues, storm water from Northport impaired local waterways and there were instances of beach closings due to contamination in Northport Harbor.  EPA takes these violations seriously, and the Village has come a long way to protect their valuable natural resources and improve the community’s quality of life.”

Northport owns and operates an MS4 permitted storm sewer system that comprises numerous catch basins in which storm water is collected and discharged through connecting pipe segments to 19 outfalls.  Northport’s outfalls discharge into Northport Harbor and Northport Bay and flow into the Long Island Sound.  As alleged in the complaint, following inspections by EPA in 2011, EPA determined that Northport’s storm sewer system discharged illicit contaminants, including raw sewage, into Northport Harbor.  To address these discharges, Northport and EPA entered into three administrative orders from 2012 through 2013 to bring Northport into compliance with the CWA and the MS4 permit.  The administrative orders required Northport to complete rehabilitation projects, inspection and sampling.  In addition, Northport’s MS4 permit required it to implement and enforce a program to detect and eliminate illicit discharge flowing into its storm sewer system.  The deadlines in EPA’s orders and the MS4 permit were not achieved, resulting in today’s lawsuit.  The Consent Decree will require Northport to comply with the CWA, preventing future illicit sewage discharges into waters of the United States.  

The civil negotiations and settlement were handled by the Office’s Civil Division.  Assistant United States Attorney Deborah B. Zwany is in charge of this matter, working with Phyllis Kaplan Feinmark and Kara Murphy, Regional Counsel’s Office, U.S. EPA Region 2, Douglas McKenna, Chief of the Water Compliance Branch, U.S. EPA Region 2, Justine Modigliani, P.E. Chief of the Clean Water Act Compliance Section, U.S. EPA Region 2 and Katherine Green, Physical Scientist, Clean Water Act Compliance Section, U.S. EPA Region 2.

Earlier today, at the federal courthouse in Central Islip, Alexis Laguerra, Raymond Soto, Jr. and Raymond Soto, Sr. were sentenced by United States District Judge Sandra J. Feuerstein to 30 months, 33 months and 18 months in prison, respectively, for bank larceny in connection with the theft of over $500,000 from an armored car on November 2, 2018 in Valley Stream, New York.  Laguerra was an employee of GardaWorld, the owner of the armored car.  The defendants were also ordered to pay forfeiture of $300,000, and restitution of $510,000 to GardaWorld.  The defendants pleaded guilty in April 2019.   

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentences.

As set forth during the prior guilty plea proceedings and in court filings, Laguerra used his insider’s knowledge of GardaWorld to plot and carry out the theft.  Laguerra was the assigned GardaWorld driver for the overnight shift and left the armored car unoccupied and unguarded outside a bank.  Soto Jr. entered the armored car, drove a short distance from the bank, and removed three bags of cash totaling $510,000 from the vehicle.  Soto Sr., driving a getaway car, picked up Soto Jr. and the cash and fled.  Law enforcement authorities later recovered $130,000 of the stolen money from Soto Sr.’s residence in Queens.

“This inside job has landed the defendants inside prison where they can contemplate what a foolhardy idea this crime was,” stated United States Attorney Donoghue.  “I commend the FBI and the Nassau County Police Department for quickly solving this crime and demonstrating, once again, that crime doesn’t pay.” 

“Today’s sentencing of defendants Laguerra, Soto Jr and Soto Sr. is a clear example of how numerous law enforcement agencies working together brought these three defendants to justice in an expeditious manner.  I would like to congratulate all of the investigators and their respective agencies for a job well done,” stated NCPD Commissioner Ryder.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Charles P. Kelly and Madeline O’Connor are in charge of the prosecution.

The Defendants:

ALEXIS LAGUERRA
Age:  32
Brooklyn, New York

RAYMOND SOTO, SR. (also known as “Razor”)
Age:  49
Richmond Hill, Queens

RAYMOND SOTO, JR. (also known as “Rambo”)
Age: 29
Richmond Hill, Queens

E.D.N.Y. Docket No. 18-CR-678 (SJF)

 

United States Attorney Richard P. Donoghue announced today that the Eastern District of New York collected over $1.1 billion in criminal and civil actions in fiscal year 2019.  Of this amount, $24,687,372 was collected in criminal actions, and $1,093,836,145 was collected in civil actions handled solely by the Eastern District.  Additionally, $1,012,187 resulted from cases handled in conjunction with other U.S. Attorney’s Offices and litigating divisions of the Department of Justice, including the forfeiture of $215,491,403 in assets tainted by crime. 

“The Eastern District’s recoveries in fiscal year 2019 are notable for having achieved economic justice on behalf of those who were harmed by individuals and corporate entities that put profits ahead of individuals and their well-being,” stated United States Attorney Donoghue.  “This Office is committed to vigorously pursuing civil and criminal penalties from wrongdoers.”

FY 2019 Collections Highlights

In October 2018, the Eastern District of New York recovered $480 million in civil penalties from Nomura Holding America Inc. and several of its affiliates to resolve claims that Nomura misled investors in connection with the marketing, sale and issuance of residential mortgage-backed securities between 2006 and 2007.

Also in October 2018, AmerisourceBergen Corporation, one of the nation’s largest wholesale drug companies, and its subsidiaries AmerisourceBergen Specialty Group, AmerisourceBergen Drug Corporation, Oncology Supply Company and Medical Initiatives, Inc. (collectively “ABC”), entered into a settlement agreement with the United States in which ABC agreed to pay $625 million to resolve civil liability under the False Claims Act.  The claims against ABC arose from its repackaging and distributing of pre-filled syringes that were not approved for sale or use by the U.S. Food and Drug Administration.  The drugs involved in the scheme were supportive drugs for cancer patients undergoing chemotherapy treatment.

Collections Overview

The U.S. Attorneys’ Offices, along with the Department of Justice litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victims, criminal fines and felony assessments are paid to the Department of Justice Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.  Forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund, and are used to restore funds to crime victims and for a variety of law enforcement purposes.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct, or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

 

 

Earlier today, in federal court in Brooklyn, Steven Bynum pleaded guilty before United States District Judge Ann M. Donnelly to firing a handgun into a group of people in furtherance of a drug distribution dispute, wounding a pregnant innocent bystander.  When sentenced, Bynum faces up to life in prison.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, John B. DeVito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division (ATF), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the guilty plea.

According to court filings and facts presented during court proceedings, in early 2017, Bynum and his co-conspirators stole drugs from another drug dealer (“John Doe”) and then distributed those drugs at the Kingsborough Houses in Crown Heights, Brooklyn.  In June 2017, “John Doe” retaliated by assaulting and pistol-whipping Bynum.  On September 10, 2017, Bynum drove to Dean Street in East New York, where he spotted “John Doe” standing with a group of people.  Bynum fired multiple shots at the group, but missed “John Doe” and instead hit a five-month pregnant bystander twice in the head.  The victim still suffers from partial paralysis and permanent cognitive damage from the bullet wounds.

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 is handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Francisco J. Navarro and Temidayo Aganga-Williams are in charge of the prosecution.

The Defendant:

STEVEN BYNUM (also known as “Nitty”)
Age:  38
Brooklyn, New York

E.D.N.Y. Docket No. 19-CR-0255 (AMD)

A superseding indictment and criminal complaint were unsealed today in federal court in Brooklyn charging 11 members of the 5-9 Brims, a violent set of the Bloods street gang, with crimes related to their participation in a criminal enterprise that made money through narcotics trafficking and financial scamming, and maintained its power through acts of violence, including murder.  The arraignments and initial appearances of six defendants arrested today are scheduled for this afternoon before United States Magistrate Judge Vera M. Scanlon. 

Richard P. Donoghue, 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), John B. DeVito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division (ATF), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the superseding indictment.

“The 5-9 Brims is a violent criminal organization that has terrorized residents of Brooklyn and Queens by committing brutal acts of violence in public places, trafficking narcotics on the streets and defrauding victims through financial schemes,” stated United States Attorney Donoghue.  “This Office is working closely with our federal and local partners to dismantle criminal street gangs and prosecute their members to the fullest extent of the law.”  Mr. Donoghue thanked Homeland Security Investigations, New York, and the New York City Department of Investigation for their work on the case.

“These violent street gangs simply want to make money with as little effort as possible, which is why they’re venturing into unique criminal territory for gangs such as credit card fraud while maintaining their tried and true drug trafficking and murder activity,” stated FBI Assistant Director-in-Charge Sweeney.  “The work our FBI New York Metro Safe Streets Task Force is doing is extremely important to the communities where these gangs are terrorizing people.  Those people don’t deserve to fear bullets flying by their homes while they sleep, or seeing people killed in the streets.  They deserve peaceful neighborhoods and safe places to live.”

“The members of the 5-9 Brims are alleged to have engaged in a host of illegal activity including acts of violence and murder,” stated ATF Special Agent-in-Charge DeVito.  “Thanks to great coordination and leveraging of resources with our local, state and federal partners these individuals will be brought to justice. I would like to thank the United States Attorney’s Office for their diligent work in prosecuting this case.

“Today’s takedown highlights our relentless work in stopping the violence carried out by large, established gangs and their ruthless offshoots. I commend our detectives, and federal partners, for their sustained focus on this case until all the major defendants could be arrested,” stated NYPD Commissioner Shea.

According to the indictment and other court filings, the 5-9 Brims is a set of the Bloods street gang that operates in Brooklyn, Queens, Manhattan, the Bronx and elsewhere.  Gang members have committed acts of violence, including murder, robbery and assault, and engaged in drug-trafficking and fraud.  Between January 2012 and December 2019, the defendants committed crimes to further the interests of the gang, including earning money for the gang’s members, and enhancing the gang’s position with respect to rival criminal organizations. 

During the charged period, the 5-9 Brims were feuding with a rival faction of the 5-9 Brims, known as the “Real Ryte,” whose members also operated in Brooklyn.  The feud led to a series of violent confrontations and, as alleged, during this period several members of the 5-9 Brims conspired to murder members of Real Ryte.  Defendant Marvin Pippins, a 5-9 Brims member, allegedly shot and killed Sean Peart, a Real Ryte member, on December 19, 2015 in broad daylight while the victim was sitting in his car in Bedford Stuyvesant, Brooklyn. 

On August 15, 2018, members of the 5-9 Brims carried out a violent assault against a bartender at Angels night club in Flushing, Queens, who had not shown proper respect for another member of the gang.  Defendant Yonette Respass, who was serving a sentence in a federal prison at the time, commissioned her younger female members, referred to as “drops,” to “pop that bottle” on the bartenders, stating “I want hands put on them.  I don’t even want no talking.”  That night, Defendants Jeffrey Bush, Louis Love, Rodolfo Zambrano and three of Respass’s “drops” met at Angels where they lured one of their bartender targets across the bar, and, while holding her by the hair, beat her head and threw a bottle at her. Bush recorded the assault on his cell phone, and the video was sent to the gang member on behalf of whom Respass allegedly ordered the attack.

Throughout the period charged in the superseding indictment, members of the gang supplemented their illegal drug business by committing numerous financial frauds, including  possession and use of stolen identities, fraudulent checks and access devices such as credit cards and bank account information.

Defendants Jeffrey Bush, Tyshawn Atkins, Louis Love, Marvin Pippins, James Sease, Montel Shuemake and Rodolfo Zambrano are charged in the superseding indictment with racketeering conspiracy for agreeing to commit crimes on behalf of the gang, including drug trafficking, identification and access device fraud, as well as multiple acts involving murder.  Defendant Marvin Pippins is also charged with murder in-aid-of racketeering in a retaliatory act of gang-related violence for killing Sean Peart; Marvin Pippins, James Sease and Montel Shuemake are charged with conspiring to murder additional members of a rival faction of the gang.  Defendants Jeffrey Bush, Louis Love, Rondolfo Zambrano, India Lane and Yonette Respass are charged with conspiracy to commit assault in-aid-of racketeering.  A number of the defendants are variously charged with narcotics and firearms-related offenses.  Pippins is a fugitive.

Two additional 5-9 Brims members, Jose Battle and Brian Jackson, were arrested on a complaint charging them with financial fraud.

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

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Jennifer M. Sasso, Drew G. Rolle and Nicholas J. Moscow are in charge of the prosecution.

The Defendants:

JEFFREY BUSH (also known as “Chuck” and “Chuck Taylor”)
Age:  35
Brooklyn, New York

TYSHAWN ATKINS (also known as “Breeze”)
Age:  25
Brooklyn, New York

INDIA LANE (also known as “Gorgeous Gangsta”)
Age:  29
Brooklyn, New York

LOUIS LOVE (also known as “Scoobz” and “Scoobie”)
Age:  29
Brooklyn, New York

MARVIN PIPPINS (also known as “Mukk”)
Age:  29
Brooklyn, New York

JAMES SEASE (also known as “Chop Whop”)
Age:  32
Brooklyn, New York

MONTEL SHUEMAKE (also known as “Buzzo”)
Age:  29
Brooklyn, New York

RODOLFO ZAMBRANO (also known as “Latinn Dinero”)
Age:  26
Brooklyn, New York

JOSE BATTLE (also known as “Strizzy”)
Age:  25
Brooklyn, New York

BRIAN JACKSON (also known as “Grape” and “Maxx Millii”)
Age:  29
Brooklyn, New York

YONETTE RESPASS
Age:  28
Bronx, New York

E.D.N.Y. Docket No. 19-CR-378 (S-1)(DLI)

WASHINGTON – A superseding indictment was returned yesterday in federal court in Brooklyn, New York, charging Huawei Technologies Co., Ltd. (Huawei), the world’s largest telecommunications equipment manufacturer, and two U.S. subsidiaries with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO).

The 16-count superseding indictment also adds a charge of conspiracy to steal trade secrets stemming from the China-based company’s alleged long-running practice of using fraud and deception to misappropriate sophisticated technology from U.S. counterparts.

The indicted defendants include Huawei and four official and unofficial subsidiaries — Huawei Device Co., Ltd. (Huawei Device), Huawei Device USA Inc. (Huawei USA), Futurewei Technologies, Inc. (Futurewei) and Skycom Tech Co. Ltd. (Skycom) — as well as Huawei’s Chief Financial Officer (CFO) Wanzhou Meng (Meng).[1]  The new superseding indictment also contains the charges from the prior superseding indictment, which was unsealed in January 2019.

Richard P. Donoghue, United States Attorney for the Eastern District of New York; Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division; John C. Demers, Assistant Attorney General of the Justice Department’s National Security Division; and Christopher A. Wray, Director, Federal Bureau of Investigation (FBI), announced the charges.

Mr. Donoghue thanked the FBI, Homeland Security Investigations (HSI), U.S. Department of Commerce Office of Export Enforcement (OEE) and the Defense Criminal Investigative Service (DCIS) agents who are investigating this case for their tireless work and dedication.

As revealed by the government’s independent investigation and review of court filings, the new charges in this case relate to the alleged decades-long efforts by Huawei, and several of its subsidiaries, both in the U.S. and in the People’s Republic of China, to misappropriate intellectual property, including from six U.S. technology companies, in an effort to grow and operate Huawei’s business.  The misappropriated intellectual property included trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology and robot testing technology.  Huawei, Huawei USA and Futurewei agreed to reinvest the proceeds of this alleged racketeering activity in Huawei’s worldwide business, including in the United States.

The means and methods of the alleged misappropriation included entering into confidentiality agreements with the owners of the intellectual property and then violating the terms of the agreements by misappropriating the intellectual property for the defendants’ own commercial use, recruiting employees of other companies and directing them to misappropriate their former employers’ intellectual property, and using proxies such as professors working at research institutions to obtain and provide the technology to the defendants.  As part of the scheme, Huawei allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors.  The policy made clear that employees who provided valuable information were to be financially rewarded.

Huawei’s efforts to steal trade secrets and other sophisticated U.S. technology were successful.  Through the methods of deception described above, the defendants obtained nonpublic intellectual property relating to internet router source code, cellular antenna technology and robotics.  As a consequence of its campaign to steal this technology and intellectual property, Huawei was able to drastically cut its research and development costs and associated delays, giving the company a significant and unfair competitive advantage.  

When confronted with evidence of wrongdoing, the defendants allegedly made repeated misstatements to U.S. officials, including FBI agents and representatives from the U.S. House Permanent Select Committee on Intelligence, regarding their efforts to misappropriate trade secrets.  Similarly, the defendants engaged in obstructive conduct to minimize litigation risk and the potential for criminal investigations, including the very investigation that led to this prosecution.

The superseding indictment also includes new allegations about Huawei and its subsidiaries’ involvement in business and technology projects in countries subject to U.S., E.U. and/or U.N. sanctions, such as Iran and North Korea – as well as the company’s efforts to conceal the full scope of that involvement.  The defendants’ activities, which included arranging for shipment of Huawei goods and services to end users in sanctioned countries, were typically conducted through local affiliates in the sanctioned countries.  Reflecting the inherent sensitivity of conducting business in jurisdictions subject to sanctions, internal Huawei documents allegedly referred to such jurisdictions with code names.  For example, the code “A2” referred to Iran, and “A9” referred to North Korea. 

Huawei employees also allegedly lied about Huawei’s relationship to Skycom, falsely asserting it was not a subsidiary of Huawei.  The company further claimed that Huawei had only limited operations in Iran and that Huawei did not violate U.S. or other laws or regulations related to Iran.  In fact, the indictment alleges Skycom was Huawei’s unofficial subsidiary that, among other services, assisted the Government of Iran in performing domestic surveillance, including during the demonstrations in Tehran in 2009.

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

The government’s investigation is ongoing.  Individuals with knowledge of misconduct by Huawei, its subsidiaries, employees or agents should contact the FBI’s New York Field Office at 1-800-CALL-FBI.

The investigation is being jointly conducted by the FBI’s New York Field Office, HSI’s New York Field Office, OEE’s New York Field Office and DCIS’s Southwest and Northeast Field Offices.  Agents from the FBI, HSI and OEE offices in Dallas provided significant support and assistance.  The government’s case is being handled by the U.S. Attorney’s Office for the Eastern District of New York, the Justice Department Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and the Justice Department National Security Division’s Counterintelligence and Export Control Section (CES). 

Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler and Sarah Evans, MLARS Trial Attorneys Laura Billings and Christian Nauvel and CES Trial Attorneys Thea D. R. Kendler and David Lim are in charge of the prosecution, with assistance provided by Assistant U.S. Attorney Brendan G. King of the Civil Division of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorneys Margaret O’Malley and John Riesenberg of DOJ’s Office of International Affairs.  Additional Criminal Division and National Security Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Northern District of Texas, the Northern District of Illinois, the Eastern District of Texas, the Western District of Washington and the Northern District of California have provided valuable assistance with various aspects of this investigation.

The Defendants:

Huawei Technologies Co. Ltd.

Huawei Device Co., Ltd.

Huawei Device USA Inc.

Futurewei Technologies, Inc.

Skycom Tech Co. Ltd.

E.D.N.Y. Docket No. 18-CR-457 (AMD)

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[1] The superseding indictment charges other individuals who have not yet been apprehended and whose names will not be publicly released at this time.

Earlier today, in federal court in Brooklyn, Anton P. Bogdanov, a citizen of Russia, pleaded guilty before United States Magistrate Judge Vera M. Scanlon to wire fraud conspiracy and computer intrusion in connection with a scheme in which he and others used stolen personal information to file federal tax returns and fraudulently obtain more than $1.5 million in tax refunds from the Department of the Treasury.  When sentenced, Bogdanov faces up to 20 years in prison.

Richard P. Donoghue, 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 guilty plea.

“Cyber criminals operating from halfway around the world might think they are beyond the reach of U.S. law enforcement, but they are mistaken – just ask Anton P. Bogdanov.  This Office and our law enforcement partners will use all necessary resources to combat sophisticated computer hacking and identity theft,” stated United States Attorney Donoghue.  Mr. Donoghue expressed his grateful appreciation the New York County District Attorney’s Office for its assistance with the case.

“Combating cyber-attacks is one of IRS-CI’s top priorities especially when our taxpayers are victimized,” stated IRS-CI Special Agent-in-Charge Larsen.  “Mr. Bogdanov used sophisticated means to enrich himself, and we will always be at the ready to tackle these global fraud schemes.”  

According to court filings, between June 2014 and November 2016, Bogdanov and his co-conspirators misappropriated personally identifiable information (“PII”), such as Social Security numbers and dates of birth of identity theft victims by gaining unauthorized access to the computer systems of private tax preparation firms in the United States.  He and his co-conspirators then changed the tax return information so that the refunds were paid to prepaid debit cards that they controlled.  Bogdanov and his co-conspirators were able to gain access to these systems by exploiting a vulnerability in a remote access program used by the tax preparation firms’ employees to log in from home and while traveling.  Bogdanov also used misappropriated PII to obtain prior tax filings of victims from the IRS Transcript System website, and filed new tax returns, purportedly on behalf of the victims, so that refunds were paid to prepaid debit cards he and his co-conspirators controlled.  The debit cards were cashed out in the United States, and a percentage of the proceeds was wired to Bogdanov in Russia.    

Bogdanov was arrested in Thailand in November 2018 and extradited to the United States in March 2019.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Michael T. Keilty and Jonathan E. Algor are in charge of the prosecution.   

The Defendant:

ANTON P. BOGDANOV (also known as “Kusok”)
Age:  34
Russia

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

By:   James P. Kennedy, Jr., U.S. Attorney for the Western District of New York

        Geoffrey S. Berman, U.S. Attorney for the Southern District of New York

        Richard P. Donoghue, U.S. Attorney for the Eastern District of New York

        Grant C. Jaquith, U.S. Attorney for the Northern District of New York

While the New York State Green Light Law provides undocumented aliens the opportunity to obtain New York State Driver Licenses, a less heralded – though perhaps more impactful – provision of the statute prevents the New York State Department of Motor Vehicles (DMV) from sharing information with any agency that enforces immigration law. Unfortunately, this provision has a much broader adverse effect on law enforcement and public safety.

The United States Department of Homeland Security (DHS) is responsible for protecting us from terrorism, securing our borders while facilitating lawful travel and trade, and combating a host of crimes that threaten our safety and security. The Green Light Law impedes Homeland Security’s ability to conduct active criminal investigations involving citizens and non-citizens who are lawfully present in the United States, not just those who are undocumented. On a daily basis, Homeland Security agents and officers – including sworn law enforcement officers who work for Homeland Security Investigations (HSI), Customs and Border Protection, the U.S. Border Patrol and Enforcement and Removal

Operations (ERO) – use Department of Motor Vehicles information to assist them in stopping transnational criminal organizations, cybercrime, and offenses involving drug trafficking and money laundering; murder, sexual assault and other crimes of violence; racketeering and extortion; the illegal use and possession of firearms; economic espionage, telemarketing fraud and elder fraud; human trafficking; and child exploitation, as well as illegal immigration.

Like other federal, state, local, and tribal law enforcement officers, DHS agents seek New York State DMV information for a variety of purposes, including: (1) to obtain identification, address and vehicle registration information for individuals committing crimes; (2) to identify and apprehend dangerous defendants and fugitives wanted by state or federal authorities; (3) to conduct surveillance of individuals suspected or known to be engaged in the commission of crimes; (4) to establish the probable cause necessary to secure search and arrest warrants; (5) to identify crime victims and potential crime victims; (6) to identify the proceeds of crime to increase the amount of restitution recoverable for crime victims; (7) to make informed determinations regarding whether, when, where, and how to stop a vehicle, to minimize the risk to occupants, officers and others; and (8) to assist in determining whether to grant individuals presenting themselves at ports of entry admission into the United States.

The disturbing truth is that under the newly enacted statute, the Customs and Border Protection Officers working today at New York’s 13 ports of entry – which include both the busiest port on the entire northern border of the United States (the longest land border in the world), and the busiest international air passenger gateway into North America – are unable even to check the registration or the driver’s license status of individuals presenting themselves for admission into our country. Border Patrol Agents, who secure the border between the ports of entry, likewise can no longer check vehicle or driver’s license information. Forcing officers who serve as our nation’s frontline defense against dangerous criminals entering the country to make these important determinations in the dark dramatically diminishes the safety of all. Ensuring that HSI Agents and ERO officers must blindly interact with people who may be terrorists or other violent criminals, drug dealers, human traffickers, or child predators likewise poses a grave risk to the safety of the officer, the person and the public. In most instances, there simply is no time to pause the situation to obtain a court order or judicial warrant.

Prohibiting basic information sharing between New York State and federal law enforcement agencies means that more criminals will enter and roam freely in our state and nation; undermines the cooperative relationships between federal, state, local and tribal law enforcement; thwarts and curtails investigations into serious crimes; and jeopardizes the safety of all of the inhabitants of our great country. Our citizens, lawful permanent and temporary residents, visitors and undocumented immigrants deserve better, and so do those who serve and protect them. Restoring collaboration and information sharing furthers our effort to secure justice for all, preserve public safety, protect individual rights, and promote due process, bringing us ever closer to a sanctuary built on the rule of law and fairness for everyone.

By: Grant C. Jaquith, U.S. Attorney for the Northern District of New York

Geoffrey S. Berman, U.S. Attorney for the Southern District of New York

Richard P. Donoghue, U.S. Attorney for the Eastern District of New York

 James P. Kennedy, Jr., U.S. Attorney for the Western District of New York

While the New York State Green Light Law provides undocumented aliens the opportunity to obtain New York State Driver Licenses, a less heralded – though perhaps more impactful – provision of the statute prevents the New York State Department of Motor Vehicles (DMV) from sharing information with any agency that enforces immigration law. Unfortunately, this provision has a much broader adverse effect on law enforcement and public safety.

The United States Department of Homeland Security (DHS) is responsible for protecting us from terrorism, securing our borders while facilitating lawful travel and trade, and combating a host of crimes that threaten our safety and security. The Green Light Law impedes Homeland Security’s ability to conduct active criminal investigations involving citizens and non-citizens who are lawfully present in the United States, not just those who are undocumented. On a daily basis, Homeland Security agents and officers – including sworn law enforcement officers who work for Homeland Security Investigations (HSI), Customs and Border Protection, the U.S. Border Patrol, and Enforcement and Removal Operations (ERO) – use Department of Motor Vehicles information to assist them in stopping transnational criminal organizations, cybercrime, and offenses involving drug trafficking and money laundering; murder, sexual assault, and other crimes of violence; racketeering and extortion; the illegal use and possession of firearms; economic espionage, telemarketing fraud, and elder fraud; human trafficking; and child exploitation, as well as illegal immigration.

Like other federal, state, local, and tribal law enforcement officers, DHS agents seek New York State DMV information for a variety of purposes, including: (1) to obtain identification, address, and vehicle registration information for individuals committing crimes; (2) to identify and apprehend dangerous defendants and fugitives wanted by state or federal authorities; (3) to conduct surveillance of individuals suspected or known to be engaged in the commission of crimes; (4) to establish the probable cause necessary to secure search and arrest warrants; (5) to identify crime victims and potential crime victims; (6) to identify the proceeds of crime to increase the amount of restitution recoverable for crime victims; (7) to make informed determinations regarding whether, when, where, and how to stop a vehicle, to minimize the risk to occupants, officers, and others; and (8) to assist in determining whether to grant individuals presenting themselves at ports of entry admission into the United States.

The disturbing truth is that under the newly enacted statute, the Customs and Border Protection Officers working today at New York’s 13 ports of entry – which include both the busiest port on the entire northern border of the United States (the longest land border in the world), and the busiest international air passenger gateway into North America – are unable even to check the registration or the driver’s license status of individuals presenting themselves for admission into our country. Border Patrol Agents, who secure the border between the ports of entry, likewise can no longer check vehicle or driver’s license information. Forcing officers who serve as our nation’s frontline defense against dangerous criminals entering the country to make these important determinations in the dark dramatically diminishes the safety of all. Ensuring that HSI Agents and ERO officers must blindly interact with people who may be terrorists or other violent criminals, drug dealers, human traffickers, or child predators likewise poses a grave risk to the safety of the officer, the person, and the public. In most instances, there simply is no time to pause the situation to obtain a court order, judicial warrant, or subpoena.

Prohibiting basic information sharing between New York State and federal law enforcement agencies means that more criminals will enter and roam freely in our state and nation; undermines the cooperative relationships between federal, state, local, and tribal law enforcement; thwarts and curtails investigations into serious crimes; and jeopardizes the safety of all of the inhabitants of our great country. Our citizens, lawful permanent and temporary residents, visitors, and undocumented immigrants deserve better, and so do those who serve and protect them. Restoring collaboration and information sharing furthers our effort to secure justice for all, preserve public safety, protect individual rights, and promote due process, bringing us ever closer to a sanctuary built on the rule of law and fairness for everyone.

 

 

 

A superseding indictment was unsealed today in federal court in Brooklyn charging Ismael Quintero Arellanes with participating in an international conspiracy to manufacture and distribute heroin, cocaine, methamphetamine and marijuana and unlawful use of firearms as part of the Rafael Caro Quintero drug trafficking organization, a faction of the Mexican organized crime syndicate known as the Sinaloa Cartel.  The superseding indictment was returned under seal by a grand jury in July 2018.  Quintero Arellanes was captured in Culiacan, Sinaloa, Mexico on January 29, 2020.  The United States intends to seek his extradition to face charges in the Eastern District of New York.

Richard P. Donoghue, 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 charges.

“As alleged in the superseding indictment, the defendant conspired with members of the Caro Quintero drug trafficking organization to flood the United States with large quantities of heroin, methamphetamine, cocaine and marijuana,” stated United States Attorney Donoghue.  “This Office, together with our partners on the New York Strike Force, will relentlessly pursue the leadership of violent drug cartels and their associates until they are brought to justice.” 

“This indictment and arrest are indicative that the walls are closing in on members of the  Sinaloa Cartel, like Ismael Quintero Arellanes and DEA’s arch nemesis Rafael Caro Quintero,” stated DEA Special Agent-in-Charge Donovan.  “Caro-Quintero remains at large, however we are working hand in hand with our international, local, state and federal law enforcement partners to disrupt the Sinaloa Cartel’s trafficking operations by seizing ton-quantities of heroin, fentanyl, marijuana, cocaine and methamphetamine, while focusing on those responsible, including Caro-Quintero.”

According to the superseding indictment, between January 1980 and June 2018, Caro Quintero led a drug trafficking organization responsible for importing into the United States and distributing massive amounts of illegal narcotics, and conspiring to murder persons who posed a threat to his narcotics enterprise.  The charged murder conspiracy includes Caro Quintero’s kidnapping and murder of DEA Special Agent Enrique “Kiki” Camarena in Guadalajara, Jalisco, Mexico in February 1985.

As an associate of the Caro Quintero drug trafficking organization, Quintero Arellanes is charged with participating in an international heroin, methamphetamine and cocaine distribution conspiracy from February 2015 through June 2018, and an international marijuana distribution conspiracy from January 1980 through June 2018, as well as using firearms in support of the drug trafficking organization.

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, U.S. 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 charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Quintero Arellanes faces a mandatory minimum sentence of 20 years’ imprisonment, and up to life imprisonment.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Gina M. Parlovecchio, Michael Robotti and Erin Reid are in charge of the prosecution.

The Defendant:

ISMAEL QUINTERO ARELLANES (also known as “Fierro”)
Age:  49
Mexico

E.D.N.Y. Docket No. 15-CR-208 (S-3)(FB)

Earlier today, in federal court in Central Islip, Terrill Latney, an associate of the Red Stone Gorilla “set” of the Bloods street gang based in Riverhead, pleaded guilty before United States Magistrate Judge A. Kathleen Tomlinson to racketeering, including conspiring to distribute narcotics and participating in the murder of Thomas Lacolla on November 17, 2015.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.

“As a result of the outstanding work by our prosecutors, the Federal Bureau of Investigation and the Suffolk County East End Drug Task Force, Latney has been held accountable for his role in a large-scale narcotics distribution operation and a senseless act of violence that took a man’s life,” stated United States Attorney Donoghue.  “We hope today’s guilty plea begins to bring a measure of closure to the victim’s family.”

As alleged in the indictment and other court filings, Latney participated in the distribution of large quantities of crack cocaine, cocaine and heroin in the Riverhead area for nearly a decade.  On November 17, 2015, Latney assisted members of the Bloods in their attempt to kill a rival gang member.  Specifically, Latney drove three Bloods members to a location in Riverhead where they fired at least 39 shots into a vehicle that they erroneously believed was occupied by the rival gang member.  In fact, the car was occupied by Lacolla, who was killed in the fusillade. 

When sentenced, Latney faces a maximum sentence of life imprisonment. 

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 the 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:  39
Mastic Beach, New York

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

A 12-count indictment was filed this afternoon in federal court in Brooklyn charging Orlando Lopez with travelling across a state line with intent to commit aggravated sexual abuse of a child, sexual exploitation of a child and possession of child pornography. 

Richard P. Donoghue, 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), Melinda Katz, Queens County District Attorney, and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges.

“As alleged, for years Lopez horribly victimized numerous young children, some of whom we are still endeavoring to identify,” stated United States Attorney Donoghue.  “In addition to his unthinkable abuse of these young children – many of them infants  –  Lopez compounded his atrocities by producing thousands of photos and videos of his crime and we pledge to prosecute him to the fullest extent.”  Mr. Donoghue expressed his grateful appreciation to the Queens County District Attorney’s Office for their assistance with the case.

“The conduct alleged here is horrendous.  Mr. Lopez allegedly used friendships with his victims' parents as a means to access children he wouldn't generally have contact with, which leads us to believe there are more victims out there.  Readers should be stunned into action by an investigation like this,” stated FBI Assistant Director-in-Charge Sweeney.  “We are asking anyone who has had any contact with Mr. Lopez at any point to call 1-800-CALL-FBI.  Please take a moment to make this call.  The ages and numbers of victims are another warning that we must do more as a society to protect our children.”

“The defendant charged in this Federal indictment is alleged to have violated numerous children for years – and additionally recorded and took still photos of these alleged vile acts,” stated Queens District Attorney Katz.  “When I was a member of the Assembly, I authored legislation to hold pedophiles accountable for sexually abusing children. Child predators will be held accountable and prosecuted as we work with our law enforcement partners to end the abuse of innocent children.”  

“This defendant is accused of preying on the most vulnerable members of our communities – our children. Together with the Unites States Attorney’s office, the FBI and Queens District Attorney’s office, our NYPD investigators worked relentlessly to bring justice for victims of sexual abuse and exploitation,” stated NYPD Commissioner Shea. 

According to the indictment and other court filings, for over a decade, Lopez repeatedly sexually abused more than a dozen children, many of whom lived near his Queens residence.  Between approximately May 2010 and June 2018, Lopez produced thousands of explicit photos and videos of one female child who was two years-old when the abuse began.  Law enforcement also recovered thousands of other photos and videos from Lopez’s residence depicting him engaging in sexual activity with children.  In July 2018, Lopez transported one seven-year-old girl across state lines with the intent to sexually abuse her.  In order to gain access to his victims, Lopez attempted to befriend their parents.    

The government’s investigation is ongoing.  Anyone with information about sexual exploitation by Lopez is asked to contact the FBI at 1-800-CALL-FBI.

If convicted, Lopez faces a mandatory minimum sentence of 30 years and up to life in prison for the transportation charge, and a minimum of 15 years and up to 30 years in prison on each of the child exploitation charges.

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

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

The government’s case is being prosecuted by Assistant United States Attorney Tanya Hajjar.

The Defendant:

ORLANDO LOPEZ
Age:  64
Jamaica, Queens

E.D.N.Y. Criminal Docket No. 20-52 (EK)

Earlier today, in federal court in Central Islip, Roberto Villanueva pleaded guilty before United States Magistrate Judge Anne Y. Shields to forced labor conspiracy and forced labor of employees at the Thatched Cottage, a former catering and wedding venue in Centerport, New York.  When sentenced, Villanueva faces up to 20 years in prison, as well as restitution and a fine of up to $250,000 on each count.

Richard P. Donoghue, United States Attorney for the Eastern District of New York; Peter C. Fitzhugh, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; Michael Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, New York (DOL-OIG); and Patricia A. Menges, Director, United States Citizenship and Immigration Services, New York Asylum Office (USCIS), announced the guilty plea.

Villanueva formerly worked as a recruiter and manager for the Thatched Cottage.  At today’s plea proceeding, Villanueva admitted that workers were brought from the Philippines to the United States on H-2B visas that expired shortly after their arrival.  Once their H-2B visas expired, Villanueva coached workers how to apply for student visas by fraudulently representing that they intended to attend school full-time and had sufficient resources to support themselves during school.  Villanueva admitted that at times he deposited funds in the workers’ bank accounts to give the appearance of ample resources, and then withdrew the funds once the student visas were approved.  When workers objected to performing certain jobs, working consecutive shifts or not being paid promptly, Villanueva threatened to report them to immigration authorities.  Villanueva admitted that his actions were in concert and agreement with Ralph Colamussi, the former owner of Thatched Cottage.  Colamussi pleaded guilty in September 2018 to forced labor of employees and is awaiting sentencing.

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, with the assistance of Assistant United States Attorney Madeline O’Connor from the Office’s Long Island Civil Division.

The Defendant:

ROBERTO VILLANUEVA
Age:  64
Huntington, New York

E.D.N.Y. Criminal Docket No. 17-0592 (DRH)

 

A federal jury in Central Islip returned a guilty verdict today against Tyrone L. Robinson on seven counts of Hobbs Act robbery conspiracy, seven counts of robbery and attempted robbery of drugs and drug proceeds, seven counts of unlawful use, brandishing and discharge of firearm, four counts of felon in possession of firearms and ammunition and one count of firearms-related murder.  The verdict followed a four-week trial before United States District Judge Sandra J. Feuerstein.  When sentenced, Robinson faces a mandatory minimum sentence of 64 years in prison, and a maximum of life imprisonment.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and John B. Devito, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division (ATF), announced the verdict.

The evidence at trial established that between August 2015 and May 2016, Robinson and his co-conspirators committed multiple armed home invasion robberies of drug dealers in Nassau and Suffolk counties.  The victims were pistol-whipped, often times zip tied, threatened with death and shot.  On March 25, 2016, Robinson committed an armed home invasion in Lake Grove and threatened to kill an eight-year-old girl if she did not find money for him.  The following night, when Robinson returned to the scene of the Lake Grove home invasion, he dropped his cell phone and it was recovered by police responding to a call from neighbors.  The cellphone was logged into Robinson’s online account which he had used to Google search for directions to his targeted locations and for news reports about the crimes he had committed.  For example, after a violent robbery attack in Hempstead, Robinson Google searched, “man beaten in Hempstead.”  During a home invasion robbery by Robinson on May 3, 2016 in Freeport, the victim Johnathan Isaac was fatally shot in the back.  Five days before the murder, Robinson purchased the floor plans for the location of the murder using his Gmail account and, shortly after Isaac’s murder and the shooting of another victim in Freeport, Robinson Google searched “two shot Freeport” for news reports about the crimes.

“Over the course of two years, Robinson violently preyed upon multiple victims with firearms and his fists, inflicting permanent injuries and death to satisfy his greed,” stated United States Attorney Donoghue.  “With today’s verdict, Robinson will now face serious punishment for terrorizing communities on Long Island.” 

“Today’s verdict signals an end to a reign of terror that included brazen acts of violence and reckless disregard for human life,” stated ATF Special Agent-in-Charge Devito. “Tyrone L. Robinson is an example of the type of violent individual that presents a clear and present danger to the law abiding people in the community.  ATF and our partners stand committed to identifying, arresting and prosecuting individuals like Robinson to ensure that our communities will not be further damaged by this violent scourge.  I would like to thank our ATF Long Island Field Office and the United States Attorney’s Office for the Eastern District of New York for their work on this case.”

Mr. Donoghue and Special Agent-in-Charge Devito expressed their grateful appreciation to the Nassau and Suffolk Police Departments and the New York State Department of Corrections and Community Supervision for their assistance with the investigation and prosecution.

This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  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 Allen Bode, Monica Castro and Anthony Bagnuola are in charge of the prosecution.

The Defendant:

TYRONE L. ROBINSON
Age:  34
Bay Shore, New York

E.D.N.Y. Criminal Docket No. 16-545 (S-4)(SJF)

Earlier today, in federal court in Brooklyn, Maurice Brown, a member of the “Bushwick Crew,” a drug-trafficking enterprise based in Brooklyn and Queens, pleaded guilty before United States District Judge Kiyo A. Matsumoto to participating in a racketeering conspiracy and murdering Gary Lopez and Rudy Superville on March 5, 2013 at an apartment in Brooklyn used by one of crew’s heroin distributors.  Brown is the last of seven defendants to plead guilty to charges in the third superseding indictment.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty pleas.

“As a result of the outstanding work by the Federal Bureau of Investigation, the New York City Police Department and our Office’s prosecutors, seven members of this gang have been brought to justice for the wanton violence they carried out in furtherance of their drug trafficking enterprise,” stated United States Attorney Donoghue.  “We hope this prosecution brings a measure of closure for the victims’ families.”

As detailed in the indictment and other court filings, the Bushwick Crew was a large-scale heroin trafficking organization with connections to Mexican drug cartels.  Various members of the crew armed themselves to escort drug traffickers, forcibly collected drug debts and committed murders and other acts of violence against anyone who interfered with the crew’s operations or offended its members. 

Previously, Luis Lopez and Peter Vasquez pleaded guilty to racketeering conspiracy for their roles in the murders of Gary Lopez and Superville; Tyquan Griem pleaded guilty to racketeering conspiracy and the murder of Kelvin Johnson at a nightclub in Queens; Jaquan Cooper pleaded guilty to brandishing a firearm during a robbery of a barbershop in Queens; Lance Goodwin pleaded guilty to causing the death of Donte Williams by discharging a firearm; and Norman Marrero pleaded guilty to brandishing a firearm during an extortion.  The previous guilty plea proceedings were held before United States District Judge Raymond J. Dearie.

When sentenced, each defendant faces a maximum sentence of life imprisonment. 

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 the 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 Organized Crime and Gangs Section.  Assistant United States Attorneys Lindsay K. Gerdes and Andrey Spektor are in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian D. Morris of the Office’s Asset Forfeiture Unit.

Defendant Who Pleaded Guilty Today:

MAURICE BROWN (also known as “Spaz”)
Age: 28
Brooklyn, New York

Defendants Who Have Previously Pleaded Guilty:

JAQUAN COOPER (also known as “J-Gunna”)
Age: 31
Brooklyn, New York

NORMAN MARRERO (also known as “Tito”)
Age: 36
Harrisburg, Pennsylvania

LANCE GOODWIN (also known as “Ty Mucka”)
Age: 30
Brooklyn, New York

TYQUAN GRIEM (also known as “Ty Goon”)
Age: 29
Brooklyn, New York

LUIS LOPEZ (also known as “Lou”)
Age: 37
Brooklyn, New York

PETER VASQUEZ (also known as “Pete”)
Age: 31
Brooklyn, New York

E.D.N.Y. Docket No. 17-CR-390 (S-3) (RJD)

Earlier today, in federal court in Brooklyn, Albert Veliu was sentenced by United States District Judge Kiyo A. Matsumoto to nine years’ imprisonment for his role in a money laundering scheme that resulted in the defendant’s purchase and sale of an anti-tank rocket launcher and AK-47s rifles in Kosovo.  Veliu pleaded guilty in February 2019. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York; Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA); Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI); Dermot F. Shea, Commissioner, New York City Police Department (NYPD); and Keith M. Corlett, Superintendent, New York State Police (NYSP), announced the sentence. 

 “The arrest, conviction and today’s sentencing of Veliu mark an important victory for law enforcement in disrupting an international money laundering and arms trafficking network ready, willing and able to provide a pipeline of lethal weaponry to purported drug cartels in Mexico,” stated United States Attorney Donoghue.  “Through our partnerships with law enforcement agencies around the world, we will continue to target and dismantle international criminal organizations.”   Mr. Donoghue thanked the DEA New York Division, DEA Special Operations Division, DEA Austria Country Office, DEA Croatia Country Office, Internal Revenue Service Criminal Investigation, the New York City Department of Investigation and the Kosovo Police Force for their outstanding cooperation and assistance.

“This sentencing brings to light the multitude of offenses often linked with money laundering including extortion, arms and drug trafficking,” stated DEA Special Agent-in-Charge Donovan.  “The casualties of these crimes cross all borders and I applaud the law enforcement agencies involved in the arrest and prosecution of Albert Veliu for their collaboration and partnership.”

“Veliu’s illicit business spanned the globe.  By ‘cleaning’ drug money and buying and selling high powered weapons, he was able to create a dangerous and lucrative criminal enterprise,” stated HSI Special Agent-in-Charge Fitzhugh.  “HSI’s continued efforts with the DEA and other law enforcement partners allows for the arrest of those who threaten the safety and security of the public both domestically and abroad.”

“This case illustrates the great police work done by the Strike Force, putting another suspect behind bars,” stated NYSP Superintendent Corlett.  “The investigation spanned continents, involved rockets, high-powered firearms and a suspect who was prepared to provide deadly, dangerous weapons to criminals. With this sentencing, law enforcement has once again put an end to a violent enterprise, and made our streets safer.”

In October 2017, Veliu and his co-conspirators met with a DEA confidential source (CS), who represented himself to be a narcotics trafficker in need of laundering his illicit drug proceeds through a shell corporation.  Veliu agreed to assist the CS in exchange for a commission.  Veliu then orchestrated the money laundering scheme by, among other things, exchanging the cash for purportedly “clean” checks made out to the shell corporation.  The checks were supported by fraudulent paperwork, including bogus invoices and receipts.  Throughout the course of the investigation, the CS gave Veliu approximately $800,000 in purported drug proceeds to be laundered.  

Later in the investigation, Veliu informed another DEA confidential source (CS-2) that he had access to firearms in Kosovo and was willing to broker a sale.  Veliu and CS-2  agreed that Veliu would purchase and then sell weapons he believed were bound for drug cartels operating in Mexico.  After accepting payment for the weapons, Veliu traveled to Kosovo to deliver the firearms to an individual he believed to be a Kosovo-based associate of CS-2.  Therafter, on two separate occasions, Veliu and his co-conspirators provided individuals with 14 AK-47s and an M80 Zolja Anti-tank Rocket Launcher equipped with a 64mm rocket.  Subsequent search warrants executed by Kosovo police netted additional weapons, ammunition and over 60,000 euros.

The arrest in this case was the result of a long-term investigation by the DEA’s New York Organized Crime Drug Enforcement Strike Force, comprising agents and officers of the DEA, New York City Police Department, Homeland Security Investigations, New York State Police, U.S. Internal Revenue Service Criminal Investigation, U.S. Customs and Border Protection, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, U.S. 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 Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorney Michael T. Keilty is in charge of the prosecution.  

The Defendant:

ALBERT VELIU
Age:  37
Staten Island, New York

WASHINGTON – The United States filed two civil complaints today seeking temporary restraining orders in landmark cases against five companies and three individuals allegedly responsible for carrying many millions of fraudulent robocalls from foreign call centers to individuals in the United States, the Department of Justice announced.  The complaints allege that the companies were warned numerous times that they were carrying fraudulent robocalls—including government and business imposter calls—but they continued to facilitate the delivery of these calls.  The calls, most of which originated in India, led to substantial financial losses suffered by elderly and vulnerable victims in the United States.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Jeffrey A. Rosen, Deputy Attorney General, Jody H. Hunt, Assistant Attorney General of the Justice Department’s Civil Division, Gary Barksdale, Chief Postal Inspector, United States Postal Inspection Service (USPIS), and Gail S. Ennis, Inspector General, Social Security Administration (SSA), made the announcement.

The two cases announced today contain similar allegations.  The defendants in one case are Ecommerce National, LLC d/b/a TollFreeDeals.com, SIP Retail d/b/a sipretail.com, and their owner/operators Nicholas Palumbo and Natasha Palumbo of Scottsdale, Arizona.  The defendants in the other case include Global Voicecom, Inc., Global Telecommunication Services Inc., KAT Telecom, Inc., aka IP Dish, and their principal Jon Kahen, of Great Neck, New York.  In each case, the Department of Justice has sought an order immediately halting the defendants’ transmission of allegedly unlawful robocall traffic. A federal court has entered a temporary restraining order against the Global Voicecom defendants.

In the cases announced today, the United States alleges that the defendants operate voice over internet protocol (VoIP) carriers, which use a broadband internet connection rather than traditional phone lines to carry telephone calls.  Numerous foreign-based call centers and VoIP carriers are alleged to have used the defendants’ VoIP carrier services to pass fraudulent robocalls to victims in the United States.  The complaints specifically allege the defendants served as “gateway carriers,” making them the entry point for foreign-initiated calls into the U.S. telecommunications system and that the defendants carried many millions of robocalls.  For example, the complaint against the owners/operators of Ecommerce National d/b/a TollFreeDeals.com alleges that the defendants carried 720 million calls during a sample 23-day period, and that more than 425 million of those calls lasted less than one second because the calls did not connect or the recipients immediately hung up, indicating that they were robocalls.  The complaint further alleges that many of the 720 million calls were fraudulent and used “spoofed,” or faked, caller ID numbers. The calls facilitated by the defendants falsely threatened victims with a variety of catastrophic government actions, including termination of Social Security benefits, imminent arrest for alleged tax fraud and deportation for supposed failure to fill out immigration forms correctly.

“We are using all available tools and resources to stop foreign call center scammers—and for the first time their U.S.-based enablers—from conning elderly and vulnerable victims in New York and throughout the United States,” stated United States Attorney Donoghue.  “Protecting individuals from schemes that result in catastrophic losses to the victims is a priority of this Office and the Department of Justice.”

“Robocalls are an annoyance to many Americans, and those that are fraudulent and predatory are a serious problem, often causing devastating financial harm to the elderly and vulnerable members of our society,” stated Assistant Attorney General Hunt. “The Department of Justice will pursue to the fullest extent of the law individuals in the United States who knowingly facilitate imposter fraud calls, using both criminal and civil tools where appropriate.  And we look forward to working closely with law enforcement colleagues in India and elsewhere around the world to identify those behind these calls so that we can bring them to justice.” 

“Anyone who engages in deceptive practices like imposter fraud should know, regardless of where they are, they will not go undetected and will be held accountable,” stated USPS Chief Inspector Barksdale.  “We will continue to work alongside the Department of Justice and our other partners to prevent and deter ongoing harm.”

“Today’s events are the culmination of months of hard work, and a critical step in holding these and other companies accountable for being the link between overseas scammers and their victims,” said Gail S. Ennis, Inspector General for the Social Security Administration. “We will continue to pursue those who exploit the U.S. telephone system and allow scammers to deceive consumers using the good name of Social Security. I want to thank the Department of Justice’s Transnational Elder Fraud Strike Force and our law enforcement partners for their support throughout this investigation.”

The government is represented by Assistant U.S. Attorneys Bonni Perlin, Evan Lestelle and Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorneys Ann Entwistle and Bart Dunn of the Civil Division’s Consumer Protection Branch.  The SSA’s Office of Inspector General, the USPIS, the Office of Inspector General for Tax Administration and U.S. Immigration and Customs Enforcement’s Homeland Security Investigation’s El Dorado Task Force provided investigative support.  The Federal Trade Commission and the Federal Communications Commission provided pertinent data. 

The claims made in the complaints are allegations that, if the case were to proceed to trial, the government must prove to receive a determination of liability.

Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.  In particular, in March 2019, the Department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep.  The Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.  

More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative webpage.  For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch.  Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP.  The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.

The Department of Justice filed civil actions for temporary restraining orders today in two landmark cases against five companies and three individuals allegedly responsible for carrying hundreds of millions of fraudulent robocalls to American consumers, the Department of Justice announced.  The Department of Justice alleges that the companies were warned numerous times that they were carrying fraudulent robocalls — including government- and business-imposter calls — and yet continued to carry those calls and facilitate foreign-based fraud schemes targeting Americans.  The calls, most of which originated in India, led to massive financial losses to elderly and vulnerable victims across the nation. 

Assistant Attorney General Jody H. Hunt of the Justice Department’s Civil Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York, Inspector General Gail S. Ennis of the Social Security Administration (SSA) and Chief Postal Inspector Gary Barksdale, made the announcement.

The two cases announced today contain similar allegations.  The defendants in one case are Ecommerce National LLC d/b/a TollFreeDeals.com; SIP Retail d/b/a sipretail.com; and their owner/operators, Nicholas Palumbo, 38, and Natasha Palumbo, 33, of Scottsdale, Arizona.  The defendants in the other case include Global Voicecom Inc., Global Telecommunication Services Inc., KAT Telecom Inc., aka IP Dish, and their owner/operator, Jon Kahen, 45, of Great Neck, New York.  In each case, the Department of Justice sought an order immediately halting the defendants’ transmission of unlawful robocall traffic.  A federal court has entered a temporary restraining order against the Global Voicecom defendants.

“Robocalls are an annoyance to many Americans, and those that are fraudulent and predatory are a serious problem, often causing devastating financial harm to the elderly and vulnerable members of our society,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division.  “The Department of Justice will pursue to the fullest extent of the law individuals in the United States who knowingly facilitate imposter fraud calls, using both criminal and civil tools where appropriate.  And we look forward to working closely with law enforcement colleagues in India and elsewhere around the world to identify those behind these calls so that we can bring them to justice.” 

Americans have experienced a deluge of robocalls over the past several years.  Many of the robocalls originate abroad.  Recently, foreign fraudsters have used robocalls to impersonate government investigators and to provide Americans with alarming messages, such as: the recipient’s social security number or other personal information has been compromised or otherwise connected to criminal activity; the recipient faces imminent arrest; their assets are being frozen; their bank and credit accounts have suspect activity; their benefits are being stopped; they face imminent deportation; or combinations of these threats.  Each of these claims is a lie, designed to scare the call recipient into paying large sums of money.  Social Security imposters, IRS imposters, and tech-support schemes (in which callers impersonate legitimate technology companies) have proliferated in part because of the ease with which robocalls can reach millions of potential victims every hour.

In the cases announced today, the United States alleges that the defendants operated voice over internet protocol (VoIP) carriers, which use an internet connection rather than traditional copper phone lines to carry telephone calls.  Numerous foreign-based criminal organizations are alleged to have used the defendants’ VoIP carrier services to pass fraudulent government- and business-imposter fraud robocalls to American victims.  The complaints filed in the cases specifically allege that defendants served as “gateway carriers,” making them the entry point for foreign-initiated calls into the U.S. telecommunications system.  The defendants carried astronomical numbers of robocalls.  For example, the complaint against the owners/operators of Ecommerce National d/b/a TollFreeDeals.com alleges that the defendants carried 720 million calls during a sample 23-day period, and that more than 425 million of those calls lasted less than one second, indicating that they were robocalls.  The complaint further alleges that many of the 720 million calls were fraudulent and used spoofed (i.e., fake) caller ID numbers.  The calls facilitated by the defendants falsely threatened victims with a variety of catastrophic government actions, including termination of social security benefits, imminent arrest for alleged tax fraud and deportation for supposed failure to fill out immigration forms correctly.

According to allegations in both complaints, the defendants ignored repeated red flags and warnings about the fraudulent and unlawful nature of the calls they were carrying.

“We are using all available tools and resources to stop foreign call center scammers — and for the first time their U.S.-based enablers — from conning elderly and vulnerable victims in New York and throughout the United States,” said U.S. Attorney Richard Donoghue.  “Protecting individuals from schemes that result in catastrophic losses to the victims is a priority of this Office and the Department of Justice.”

“Today’s events are the culmination of months of hard work, and a critical step in holding these and other companies accountable for being the link between overseas scammers and their victims,” said SSA Inspector General Gail S. Ennis.  “We will continue to pursue those who exploit the U.S. telephone system and allow scammers to deceive consumers using the good name of Social Security.  I want to thank the Department of Justice’s Transnational Elder Fraud Strike Force and our law enforcement partners for their support throughout this investigation.”

“Anyone who engages in deceptive practices like imposter fraud should know, regardless of where they are, they will not go undetected and will be held accountable,” said Chief Inspector Gary Barksdale.  “We will continue to work alongside the Department of Justice and our other partners to prevent and deter ongoing harm.”

Trial Attorneys Ann Entwistle and Bart Dunn of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys Bonni Perlin, Evan Lestelle, and Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York represent the United States.  The SSA’s Office of Inspector General, the U.S. Postal Inspection Service, the Office of Inspector General for Tax Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations New York El Dorado Task Force, U.S. Secret Service, New York Police Department and U.S. Customs and Border Protection collectively provided investigative support.  The Federal Trade Commission and the Federal Communications Commission provided pertinent data.  

The claims made in the complaint are mere allegations that, if the case were to proceed to trial, the government must prove to receive a determination of liability.

Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.  In particular, in March 2019, the department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep.  The department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.  

More information about the department’s efforts to help American seniors is available at its Elder Justice Initiative webpage.  For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch.  Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP.  The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.

Joseph Zanco, a former Massapequa High School teacher, was sentenced today at the federal courthouse in Central Islip to five years’ imprisonment by United States Circuit Court Judge Joseph F. Bianco for transporting child pornography in interstate and foreign commerce.  As part of his sentence, Zanco must serve seven years of supervised release following his imprisonment during which time he must register as a sex offender and may not have unsupervised contact with minors.  Zanco pleaded guilty in April 2019.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the sentence.

In April 2018, Zanco began uploading hundreds of images of child pornography to the cloud-based Google Drive storage feature of his Google account.  After receiving notification from Google, law enforcement authorities obtained search warrants and recovered child pornography from his Google account.  Additional images and videos containing child pornography were recovered from Zanco’s cell phone and laptop computer. 

“As a licensed teacher, Zanco had a mandatory obligation to report crimes against children, and today he was punished for doing just the opposite: perpetuating their victimization by his transportation and possession of child pornography,” stated United States Attorney Donoghue.  “The protection of children will always be a priority of this Office.” 

“Zanco, a man who was entrusted to teach our youth, violated that trust by engaging in the transmission and possession of child pornography,” stated HSI Special Agent-in-Charge Fitzhugh.  “We expect our teachers to educate and care for our children and when one violates that position of trust by sharing these alarming depictions, HSI and our law enforcement partners will stop at nothing to put an end to the facilitation and creation of children being victimized.  One of HSI’s priorities will continue to be centered around child exploitation investigations to protect our most innocent – our children

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

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

The Defendant:

JOSEPH M. ZANCO
Age:  45
Massapequa, New York

E.D.N.Y. Docket No. 18-CR-412 (JFB)

A criminal complaint was unsealed yesterday in federal court in Brooklyn charging Tiffany Harris with committing three separate anti-Semitic attacks against Orthodox Jewish women while they were walking on public streets in Brooklyn, New York, during Hanukkah.  Harris will make her initial appearance at a later date.

Richard P. Donoghue, 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.

As set forth in the complaint, the first attack occurred on December 27, 2020, at approximately 12:40 a.m., at the corner of Eastern Parkway and Kingston Avenue in Crown Heights.  Harris approached a woman who was walking alone and, without warning, slapped her in the face with an open hand.  Five minutes later at the corner of President Street and Kingston Avenue, Harris approached a woman who was walking with a group of people – two of whom were visibly Orthodox Jewish – and slapped the victim in the back of her head with an open hand while stating, “F—k the Jews.”  Several minutes later at the same intersection, Harris approached a third victim who was walking alongside another visibly Orthodox Jewish woman, and slapped her in the face with an open hand.  Harris was arrested by NYPD officers near the scene of the assaults, and was positively identified by the three victims. 

“As alleged in the criminal complaint, the defendant attacked three women solely because they were Jewish, striking not only at the innocent victims, but also at our country’s founding principles of tolerance and respect for civil rights,” stated United States Attorney Donoghue.  “The use of violence, or the threats of violence, against anyone based on the victim’s religion will not be tolerated, and those who engage in such conduct will learn that under federal law there are serious consequences for hate crimes.”  Mr. Donoghue commended the NYPD officers who quickly responded and apprehended the defendant.

“Any offensive physical assault is a crime of violence, and it should be obvious that perpetrators need to be held accountable,” stated FBI Assistant Director-in-Charge Sweeney.  “When one’s actions are motivated by their hatred of another group and supported by anti-Semitic sentiments, however, it opens up the possibility of federal criminal charges, which are hard to walk away from. Tiffany Harris now faces up to 10 years in prison for her alleged actions. The lesson to others thinking of behaving as we allege Ms. Harris did—knock it off now or we are going to lock you up. The anti-Semitic attacks in this city and elsewhere have been outrageous, and the FBI will use the full extent of the laws at our disposal to protect the community.”

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 10 years in prison.

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

The Defendant:

TIFFANY HARRIS
Age:  30
Brooklyn, New York

E.D.N.Y. Docket No. 20-MJ-10

An indictment was filed yesterday in federal court in Brooklyn charging Ivan Reyes Arzate, a former Mexican Federal Police Officer and Commander of the Mexican Federal Police’s Sensitive Investigative Units (“SIU”), with three counts of cocaine trafficking conspiracy.  Reyes Arzatel allegedly received bribes in exchange for assisting El Seguimiento 39, a Mexican Cartel associated with the Sinaloa Cartel, the Beltran Leyva Organization and other Mexican cartels, ship cocaine from Mexico to the United States.  Earlier today, federal agents arrested Reyes Arzate in Brooklyn, and he was arraigned this morning before United States Magistrate Judge Cheryl L. Pollak.  Reyes Arzate was remanded pending trial.

Richard P. Donoghue, United States Attorney for the Eastern District of New York; Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA); Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI); Dermot F. Shea, Commissioner, New York City Police Department (NYPD); and Keith M. Corlett, Superintendent, New York State Police (NYSP), announced the charges.

“By choosing to align himself with drug traffickers instead of the people of Mexico that he was sworn to protect, Reyes Arzate’s corruption ensured the safe passage of massive quantities of illegal narcotics into the United States,” stated United States Attorney Donoghue.  “This Office will continue working tirelessly with our law enforcement partners to make enablers of drug cartels answer for their crimes, whoever they are and wherever they operate.”  Mr. Donoghue expressed his grateful appreciation to the United States Attorney’s Offices for the Southern District of California and the Northern District of Illinois for their assistance on the case.

“Collective law enforcement efforts to cut off drug cartels’ supply chain into the United States has led to worldwide arrests, including Ivan Reyes Arzate,” stated DEA Special Agent-in-Charge Donovan. “I applaud our federal, state, local and international law enforcement partners for their diligent work on this significant investigation.”

“As a Commander in the Mexican Federal Police, Arzate allegedly offered protection of the cartel’s criminal activities in exchange for hundreds of thousands of dollars in bribes,” stated HSI Special Agent-in-Charge Fitzhugh.  “Arzate’s corruption as the highest-ranking officer in the MFP’s Sensitive Investigative Unit allowed violent cartels to continue the flow of drugs through the region without consequence, but it is clear today that no one is exempt from justice.”

"This case shows no one is exempt from the law, and those who choose a life of crime, no matter their rank or employment, will be brought to justice,” stated NYSP Superintendent Corlett.  “This suspect gave in to greed, putting people and communities at risk, when he should have been doing his job to protect them.  I commend the great work of the New York Strike Force in this case. We will continue to make it our priority to find and dismantle violent enterprises and partnerships to make our streets safer.”

According to the indictment and other court filings, Mexican SIU officers routinely work with U.S. law enforcement to combat narcotics trafficking, money laundering and other criminal activities. From 2003 to 2016, Reyes Arzate was a Mexican Federal Police Officer assigned to SIU.  In 2008, he was appointed SIU Commander, making him the its highest ranking officer and principal point of contact for information sharing between U.S. and Mexican law enforcement personnel assigned to the SIU.

From approximately September 2016 to November 2016, while serving as SIU commander, Reyes Arzate received hundreds of thousands of dollars in bribes from El Seguimiento 39 in exchange for providing protection for the cartel’s drug trafficking.  Specifically, in exchange for a $290,000 bribe, he disclosed to the cartel’s leadership sensitive information about a pending DEA investigation.  The bribe payments have been corroborated by intercepted communications obtained pursuant to judicially-authorized wiretaps. 

Earlier, in the mid-2000s, in exchange for cash bribes, Reyes Arzate allegedly provided sensitive law enforcement information to other Mexican drug cartels, including the Beltran Leyva Organization, which was then a faction of the Sinaloa Cartel led by Joaquin Guzman Loera, also known as “El Chapo.”  As a result, these criminal enterprises operated without significant interference from Mexican law enforcement, and imported multi-ton quantities of cocaine and other drugs into the United States.

If convicted of the drug conspiracy charge, Reyes Arzate faces a mandatory minimum sentence of 10 years’ imprisonment and a maximum of life imprisonment.

This 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 DEA 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, NYPD, NYSP, HSI, 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 charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. 

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

The Defendant:

IVAN REYES ARZATE
Age:  57
Mexico City, Mexico

E.D.N.Y. Docket No. 20-CR-30 (ERK)

Earlier today, in federal court in Central Islip, Stephanie Lee, a former broker who worked in conjunction with Plainview-based Elite Stock Research and Melville-based My Street Research and related companies (“My Street Research”), pleaded guilty to conspiracy to commit securities fraud, securities fraud, money laundering and money laundering conspiracy, wire fraud conspiracy and obstruction of an official proceeding in connection with the sale of the stock of two publicly traded companies, CES Synergies, Inc. (CESX), and National Waste Management Holdings, Inc. (NWMH).  The top count to which Lee pleaded guilty carries a maximum sentence of 20 years’ imprisonment.  The plea proceeding took place before United States District Judge Joanna Seybert.

Richard P. Donoghue, 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.  Mr. Donoghue expressed his appreciation to the United States Securities and Exchange Commission for its significant cooperation and assistance in the investigation.

As alleged in court papers, between August 2013 and July 2017, Lee and her co-defendants engaged in a scheme to defraud investors, many of them elderly, through the use of high-pressure call centers located at Elite and My Street Research.  Lee and her co-defendants artificially controlled the trading price and volume of publicly traded companies by, among other things, retaining Elite and My Street Research to use pressure tactics, material misrepresentations and omissions to induce victims from around the country to purchase stock.  Although the victims believed they were buying stock on the open market, Lee and her co-defendants secretly coordinated the trading so that the victims purchased shares at inflated prices that were owned and controlled by Lee and certain co-defendants.  Following her arrest, Lee gave false information to the FBI agents who interviewed her in connection with the alleged fraud.

Lee is among 16 defendants who were charged in July 2017 in connection with the $147 million illegal stock manipulation scheme, and she is the thirteenth defendant to plead guilty.  A fourteenth defendant, Michael Watts, was convicted after trial in October 2019.  Four defendants have been sentenced for their roles in the scheme:  Ronald Hardy was sentenced to 10 years’ imprisonment; Dennis Verderosa was sentenced to six years’ imprisonment; McArthur Jean was sentenced to four years’ imprisonment; and Emin Cohen was sentenced to two years’ imprisonment. 

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Whitman G.S. Knapp and Kaitlin T. Farrell are in charge of the prosecution.  Assistant United States Attorney Tanisha R. Payne of the Office’s Asset Forfeiture Section is handling the forfeiture matters. 

The Defendant:

STEPHANIE LEE
Age: 48
St. Petersburg, Florida

E.D.N.Y. Docket No. 17-CR-372 (S-3)(JS)

The Defendants Who Were Previously Convicted:

RONALD HARDY
Age:  44
Port Jefferson, New York

MCARTHUR JEAN, also known as “John McArthur”
Age:  37
Dix Hills, New York

ERIK MATZ
Age:  46
Mt. Sinai, New York

BRIAN HEEPKE, also known as “Brian Targis”
Age:  39
Farmingdale, New York

DENNIS VERDEROSA
Age:  79
Coram, New York

EMIN L. COHEN, also known as “Ian Grant”
Age:  36
Coram, New York

PAUL EWER
Age:  39
Massapequa, New York

ASHLEY ANTOS
Age:  28
Central Islip, New York

SERGIO RAMIREZ
Age:  46
East Meadow, New York

ROBERT GILBERT
Age:  53
Cold Spring Harbor, New York

ANTHONY VASSALLO
Age:  56
Farmingdale, New York

MICHAEL WATTS
Age:  63
Sugarland, Texas

E.D.N.Y. Docket No. 17-CR-372 (JS)

 

Earlier today, at the federal courthouse in Brooklyn, Luis Taveras pleaded guilty to attempt to commit obstruction of justice murder.  The plea proceeding took place before United States District Judge Roslynn R. Mauskopf.  When sentenced, Taveras faces up to 30 years in prison.

Richard P. Donoghue, 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, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), Keith M. Corlett, Superintendent, New York State Police (NYSP), and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the guilty plea.

 “The defendant’s crime was not only an attack on an individual victim, it was also an attack on our system of justice,” stated United States Attorney Donoghue.  “The message of this prosecution is clear – anyone who carries out such a crime, wherever committed, is not beyond the reach of U.S. law enforcement.”

“In his attempt to stop a man from providing information to the U.S. by leading a hitman right to him, Taveras now stands to serve time for his role in this conspiracy,” stated HSI Special Agent-in-Charge Fitzhugh  “HSI’s partnerships domestically and internationally directly enhances our ability to arrest and prosecute those who seek to obstruct justice to hide from the truth.”   

“In our investigations, it has become apparently clear that violence doesn’t travel far from drug trafficking,” stated DEA Special Agent-in-Charge Donovan.  “I commend the men and women responsible for investigating and prosecuting Luis Alfredo Taveras who allegedly would stop at nothing to protect his drug distribution network.”

“This plea is proof that we will aggressively seek to hold criminals accountable for their actions.  I commend the members of the task force for their efforts in this case, and their ongoing partnership to cut off the flow of illegal narcotics into our communities,” stated NYSP Superintendent Corlett.

“Our reach in this case stretched overseas, to bring to justice a criminal who put innocent people in danger in the name of illegal drug trafficking.  It highlights the success our combined federal and local efforts have in continuing to eradicate violence and keep narcotics out of New York City neighborhoods,” stated NYPD Commissioner Shea.

As detailed in the superseding indictment, other court filings and the defendant’s statements at his guilty plea proceeding, Taveras participated in the attempted murder of an individual he knew from prior narcotics transactions and believed to be cooperating with U.S. law enforcement.  On June 21, 2016, Tavares entered a restaurant in Cali, Colombia, and sat down at a table with the victim.  Shortly thereafter, Taveras stood up, walked to the back of the restaurant, and watched as a co-conspirator entered the restaurant and fired eight shots – wounding the victim in the shoulder and arm, and also wounding two family members of the victim, including a five-year-old child.  Taveras and his co-conspirator then fled.  The three victims survived their wounds.  The harrowing attack was captured on videotape in the restaurant.

At today’s guilty plea proceeding, Tavares admitted that he identified the intended target to his co-conspirator, and that he wanted to prevent that individual from providing information to U.S. law enforcement

On February 21, 2019, Taveras was arrested by federal law enforcement agents in Miami.   

Taveras’s arrest and guilty plea are the results of an ongoing investigation conducted by the Organized Crime Drug Enforcement Task Force (OCDETF), led by the United States Attorney’s Office for the Eastern District of New York and the DEA.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Soumya Dayananda and Erin Reid are in charge of the prosecution.

The Defendant:

LUIS TAVERAS
Age:  30
Miami, Florida

E.D.N.Y. Docket No. 19-CR-180 (S-2) (RMM)

 

A 12-count indictment was unsealed today in federal court in Brooklyn charging Daniel E. Russo, a pharmacist, with conspiracy to distribute and possess with intent to distribute oxycodone, distribution and possession of oxycodone, distribution of oxycodone by a pharmacist without legitimate prescription and filing false tax returns.  Russo was arrested this morning by federal agents and arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak.  The defendant was released on a $1.5 million bond.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration (DEA), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation (IRS-CI), announced the charges.

As set forth in the indictment and other court documents, Russo owns and operates Russo’s Pharmacy in Far Rockaway, Queens.  Between March 2011 and June 2014, Russo allegedly conspired with others, including medical professionals and employees of a physician, to fill fraudulent prescriptions for oxycodone and dispense thousands of oxycodone pills in return for hundreds of thousands of dollars in cash.  Russo then filed false corporate income tax returns for his pharmacy for the years 2013 through 2016, omitting the proceeds of his scheme, and false individual income tax returns for the years 2012 through 2016.  In total, Russo is charged with failing to report over $1 million in cash earnings, most of it generated from his oxycodone distribution scheme. 

More than a dozen physicians for whom Russo filled prescriptions have since been convicted of crimes related to the distribution of oxycodone.

“We can count the hundreds of thousands of dollars Russo allegedly pocketed from the charged scheme, but the resulting human misery in our communities is incalculable,” stated United States Attorney Donoghue.  “This Office will continue working with federal and local law enforcement partners to investigate and prosecute medical professionals who seek to profit from the opioid epidemic.” 

“It is a misconception that pharmacists can hide their role in illegal drug distribution by blindly following what doctors have prescribed for their patients,” stated DEA Special Agent-in-Charge Donovan.  “By law, pharmacists must practice due diligence, and take their corresponding responsibility seriously.  If diversion of prescriptions is suspected, and merely cast aside to make a quick dollar, the pharmacist is no better than a dealer on the street. Today’s arrest reemphasizes law enforcement’s commitment to identifying and arresting all of those responsible for furthering drug abuse and overdose deaths throughout our hometowns.”

“Income earned from the sale of prescription drugs is taxable regardless if those sales are legal or illegal,” stated IRS Special Agent-in-Charge Larsen.  “Mr. Russo allegedly failed to report the illegal income on his corporate tax returns in conjunction with concealing how the income was derived.”

If convicted of the drug charges, Russo faces up to 20 years’ imprisonment.  If convicted of the tax charges, he faces up to three years’ imprisonment for each count.

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

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, 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 New York City Department of Investigation. 

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 20 health care professionals; taken civil enforcement actions against a hospital, a pharmacy and pharmacy chain; removed prescription authority from numerous rogue doctors and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers.  The initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.

The government’s case is being prosecuted by Assistant United States Attorney Nomi D. Berenson and Trial Attorney Michael C. Vasiliadis of the Tax Division.

The Defendant:

DANIEL E. RUSSO
Age: 40
Cedarhurst, New York

E.D.N.Y. Docket No. 20-CR-23 (DLI)

 

Dr. Rajendra Bhayani, an otolaryngologist, has agreed to pay the United States $1,109,000 to resolve civil allegations that he and his practice – New York Otolaryngology & Aesthetic Surgery, P.C. in Brooklyn and Queens – paid kickbacks and submitted false claims to federal healthcare programs for services provided to residents in adult homes in violation of the False Claims Act.  

Richard P. Donoghue, 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 settlement.

“The disabled and elderly residents of adult homes are among the most vulnerable members of our society, and doctors who treat these residents as commodities by paying kickbacks so they can administer medically unnecessary services at taxpayer expense will be held accountable by this Office,” stated United States Attorney Donoghue.  Mr. Donoghue expressed his grateful appreciation to the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for their assistance with the case.

“Elderly citizens without the means to care for themselves should be given the best treatment possible by everyone involved in their care. Exposing them to unnecessary medical testing and services because they’re deemed an easy target is disgraceful behavior,” stated FBI Assistant Director-in-Charge Sweeney.  “Putting one’s self interests above the welfare of others isn’t the way to do business, and in this case it came with a hefty penalty.”

Adult homes are privately owned residential facilities licensed by the State of New York to provide long-term care and supervision to adults with disabilities or mental illnesses.  An investigation by the FBI revealed that from 2012 through 2016, Bhayani allegedly paid cash tips, excessive rent and other improper remuneration to medical management companies in adult homes in the Eastern District of New York to obtain exclusive access to bill for allergy testing and other medical services to residents in violation of the Anti-Kickback Statute.  Bhayani then obtained payment for these services from Medicare and the Federal Employees’ Health Benefits Program, although the services were actually performed by his nurse practitioner, and some of the services performed were medically unnecessary.

HHS-OIG has concurrently entered into an Integrity Agreement with Bhayani and New York Otolaryngology & Aesthetic Surgery, P.C.  Among other things, the Integrity Agreement requires compliance training that specifically addresses the Anti-Kickback Statute and a quarterly claims review to be conducted by an Independent Review Organization.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

The government’s case is being handled by Assistant United States Attorney Lisa Kutlin of the Office’s Civil Division.

 

 

 

For the last four days, Special Agents of the Federal Bureau of Investigation (FBI) and detectives of the New York City Police Department (NYPD) have sought to arrest Gerod Woodberry pursuant to a federal arrest warrant charging him with bank robbery.[1] That effort was necessary because, as set forth in the federal Complaint and related documents filed in court today, Woodberry was released after his January 8, 2020 state arrest following four bank robberies he allegedly committed between December 30, 2019 and January 8, 2020.  Earlier this afternoon, Woodberry surrendered.   

As alleged in court documents, Gerod Woodberry robbed or attempted to rob six New York City banks in 16 days. Those robberies and attempted robberies were committed on December 30, 2019, January 3, 2020, January 6, 2020, January 8, 2020, January 10, 2020 and January 14, 2020. This robbery spree is unprecedented and it is made all the more so by the fact that he was actually arrested and released in the midst of his crimes. The January 10, 2020 robbery in Brooklyn was committed less than four hours after his release on the January 8, 2020 arrest, a release required under recently-enacted bail reform legislation.    

No sound, rational and fair criminal justice system requires the pre-trial release of criminal defendants who demonstrate such determination to continuously commit serious crimes. Prior to the recently-enacted reforms, New York judges weighing pre-trial release could consider the flight risk, but not the dangerousness, posed by a charged defendant. The recent reforms have made a bad situation worse by entirely excluding classes of purportedly “non-violent” felonies – like the bank robberies here – from pre-trial confinement eligibility. Preventing judges from considering the danger a charged defendant poses to the public when making a pre-trial confinement decision defies common sense and endangers all New Yorkers.

The recently-enacted bail reforms have dramatically altered the New York criminal justice system and even more dramatic criminal justice proposals are under consideration in New York and across the country. While we must ensure that all criminal justice systems are open to scrutiny and reform, we must also guard against the outright dismantling of criminal justice systems masquerading as criminal justice reform.

I thank and commend the FBI and the NYPD for the exemplary work they do every day to keep the people of New York City safe.      

 

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

Earlier today, in federal court in Central Islip, Tramaine Brown was sentenced by United States District Judge Joanna Seybert to 10 years’ imprisonment for conspiring to distribute and possess with intent to distribute crack cocaine and powder cocaine.  Brown pleaded guilty in June 2019. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the sentence.

“The Riverhead area is safer with Tramaine Brown sent to prison for running an armed and dangerous drug trafficking operation that endangered residents, including Brown’s own family members,” stated United States Attorney Donoghue.  “We will continue to work tirelessly with our federal and local law enforcement partners to take drugs and drug traffickers off our streets.”  Mr. Donoghue also extended his grateful thanks to the Suffolk County East End Drug Task Force, which partnered with the FBI in the investigation. 

In January 2018, the FBI and the Suffolk County East End Drug Task Force began an investigation into narcotics trafficking and gang activity on the East End of Long Island, including the Riverhead area.  As part of that investigation, agents and officers purchased more than 300 grams of crack cocaine from Brown at his home in Jamesport, where he resided with his wife and his children.  During one purchase, Brown was captured on video “cooking” powder cocaine into crack in his kitchen, while a child was present.  A backpack containing fentanyl, an extremely dangerous opioid, was in close proximity to the child.  On November 14, 2018, a search warrant was executed at Brown’s residence, and large quantities of narcotics, cash and a .223 caliber assault rifle, a .308 caliber rifle and a .45 caliber pistol were seized.  In total, during the investigation of Brown’s drug trafficking operation, law enforcement recovered quantities of crack cocaine, powder cocaine, fentanyl, marijuana, narcotics packaging materials, a kilogram press, eight cellular telephones and over $10,000 in cash. 

This case was investigated as part of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise of federal, state and local law enforcement agencies.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

This case is also 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 the 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 Michael Maffei and Nicole Boeckmann are in charge of the prosecution.

The Defendant:

TRAMAINE BROWN
Age: 30
Jamesport, New York

E.D.N.Y. Docket No. 18-CR-604 (JS)

A criminal complaint was unsealed today in federal court in Brooklyn charging Gerod Woodberry with the robbery of a Chase Bank in downtown Brooklyn on January 10, 2020.  Woodberry was arrested today, and will make his initial appearance at the United States Courthouse for the Eastern District of New York on Sunday morning.

Richard P. Donoghue, 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.  United States Attorney Donoghue issued a statement today noting some of the facts of the case. 

As detailed in court filings, at approximately 5:35 p.m., Woodberry, wearing a baseball cap with a Chicago Bulls logo, entered a Chase Bank branch at 20 Flatbush Avenue and presented a hand-written note to a teller, stating in red ink, “THIS IS A ROBBERY BIG BILLS ONLY NO DYE PACKS.”  The teller handed Woodberry approximately $1,000 in U.S. currency, and the defendant fled the bank.  In a detention memorandum filed with the court today seeking a Permanent Order of Detention, prosecutors indicated that Woodberry robbed or attempted to rob six New York City banks in 16 days.  Those robberies and attempted robberies were committed on December 30, 2019, January 3, 2020, January 6, 2020, January 8, 2020, January 10, 2020 and January 14, 2020.  The memorandum further noted that Woodberry was arrested by the NYPD hours after the January 8, 2020 robbery, but that he was released on January 10, 2020 because the crime charged did not qualify for pre-trial detention under New York State law.  The memorandum also reported that the January 10, 2020 robbery in Brooklyn was committed less than four hours after his release on the January 8, 2020 arrest.

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

The government’s case is being prosecuted by Assistant United States Attorney Jack Dennehy, Senior Litigation Counsel and Director of the Rapid Approach to Strategic Prosecutions in the Office’s Criminal Division. 

The Defendant:

GEROD WOODBERRY
Age:  42
Walterboro, South Carolina

E.D.N.Y. Docket No. 20-MJ-52

 

Earlier today, in federal court in Brooklyn, Patrick McDonnell was sentenced by United States District Judge Nicholas G. Garaufis to 33 months’ imprisonment for wire fraud related to a scheme to defraud investors in virtual currency.  In addition, McDonnell was ordered to pay $224,352 in restitution.  McDonnell pleaded guilty in June 2019. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the sentence.

“Patrick McDonnell is headed to prison for deceiving investors, using an alias, false promises and false balance statements for one purpose only—so that he could steal their money,” stated United States Attorney Donoghue.  “This Office will continue to vigorously prosecute white-collar criminals who defraud the investing public.”  Mr. Donoghue expressed his grateful appreciation to the Commodity Futures Trading Commission for its assistance with the investigation.

“Mr. McDonnell used his knowledge of virtual currencies to scam investors. While he thought he could outsmart law enforcement, his arrest and today’s sentence shows, no matter where you are, what’s done in the dark will be brought to the light,” stated USPIS Inspector-in-Charge Bartlett.

Between approximately November 2014 and January 2018, McDonnell portrayed himself on social media as an experienced trader in virtual currency, promising investors he would provide trading advice and purchase and trade virtual currency on their behalf.  Beginning in approximately May 2016, McDonnell made similar representations and promises to investors through his Staten Island-based company, CabbageTech, Corp., also known as Coin Drop Markets.  However, neither McDonnell nor CabbageTech provided investment services.  Instead, McDonnell sent investors false financial statements showing that their investments had been profitable, and stole their money for his personal use.  In total, McDonnell defrauded at least 10 victims of at least $194,000 in U.S. currency, 4.41 Bitcoin, 206 Litecoin, 620 Ethereum Classic and 1,342,634 Verge currency, for a total loss of $224,350.32.  In addition to lying to investors about his company’s prowess, McDonnell also solicited customers using a false alias, “Jason Flack,” an individual that did not actually exist.

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

The Defendant:

PATRICK MCDONNELL (also known as “Jason Flack”)
Age:  47
Staten Island, New York

E.D.N.Y. Docket No. 19-CR-148 (NGG)

A criminal complaint was filed yesterday in federal court in Brooklyn charging Mimi Ould Baba, a citizen of Mali, with the murder of United States citizen Michael J. Riddering, and conspiring to provide and attempting to provide material support, including personnel, to al-Qaeda in the Islamic Maghreb (“AQIM”) and al-Murabitoun, designated foreign terrorist organizations.  The defendant is currently in custody in Mali. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York; John Demers, Assistant Attorney General for National Security, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges.

“The Eastern District of New York and our partners in U.S. law enforcement will continue to work tirelessly with foreign counterparts to identify, incapacitate and prosecute terrorists who target American citizens anywhere in the world,” stated United States Attorney Donoghue.  “Counter-terrorism remains our number one priority.”  Mr. Donoghue expressed his grateful appreciation to the governments of Burkina Faso, Cote D’Ivoire and Mali for their continued support and assistance throughout this investigation

“The charges allege that Mimi Ould Baba played a central role in the planning of two separate terrorist attacks directed at Westerners in Burkina Faso and Côte d’Ivoire in early 2016.  Those attacks resulted in the murder of American citizen Michael Riddering and 48 other innocent victims from numerous countries,” said Assistant Attorney General Demers.  “Baba is currently in Malian custody for his terrorism-related activities.  We fully support the Malian investigation and prosecution of Baba and will continue to work with the authorities there to pursue our shared goal of holding Baba accountable for his crimes.  At the same time, these charges reflect that the U.S. justice system remains a powerful tool to bring to bear against those who harm our citizens abroad.  We will continue to pursue justice for Mr. Riddering and for all American victims of terrorism.  Our memories are long and our commitment to justice is unending.” 

“There’s nothing we could ever do to take away the pain felt by the families of those Baba killed during his 2016 terrorist attack in Burkina Faso, but four years later, we take some comfort in the fact that he will be held accountable for his egregious crime. I can only hope that as time goes on, we will remember the victims’ names instead of the attacker's, especially our own American citizen Michael Riddering, who was killed that day,” stated FBI Assistant Director-in-Charge Sweeney.

“Among the 30 killed in the attack four years ago was an American, Michael Riddering. Michael was in charge of an orphanage and a women’s crisis center in Burkina Faso. This case is another reminder that when terrorists kill an American, even half a world away, the FBI Special Agents and New York City Police Detectives of the JTTF will work as long as it takes, and go as far as it takes to bring justice,” stated NYPD Commissioner Shea.

As alleged in the complaint, Baba and the operations chief of al-Murabitoun planned and executed the January 15, 2016 terrorist attack at the Café Cappuccino and Hotel Splendid in Ouagadougou, Burkina Faso.  The attack resulted in the deaths of 30 individuals, including Riddering.  Prior to the attack, Baba surveilled attack locations in Ouagadougou, arranged the transport of AK-47 machine guns and hand grenades to be used in the attack, and transported the three suicide attack operatives to the Café Cappuccino.  Riddering, a patron at the Café Cappuccino, was shot multiple times by the attackers and died at the scene.  Following the attack, AQIM issued a public statement claiming responsibility for the attacks on behalf of AQIM and al-Murabitoun. 

Baba also allegedly participated in the planning and execution of the March 13, 2016 resort attack in Grand Bassam, Cote d’Ivoire.  Following the attacks in Ouagadougou, Baba once again met with the operations chief of al-Murabitoun to plan an additional attack against western targets in Cote d’Ivoire.  Thereafter, Baba identified an individual to further plan and execute the operation, and assisted in identifying three suicide operatives.  Baba also procured the vehicle used to transport the weapons for the attack.  On March 13, 2016, three individuals armed with AK-47s and grenades attacked resort patrons along the beach of Grand Bassam, Cote d’Ivoire, killing 19 individuals and wounding many others.  Subsequently, AQIM issued a public statement claiming responsibility for the attack. 

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

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Margaret E. Lee and Michael T. Keilty are in charge of the prosecution, with assistance provided by Trial Attorney Stephanie Sweeten of the Counterterrorism Section of the National Security Division of the Department of Justice.  The Criminal Division’s Office of International Affairs of the Justice Department also assisted in the investigation.

The Defendant:

Mimi Ould Baba
Age:  32
Mali

E.D.N.Y. Docket No. 20-MJ-56

 

A criminal complaint was filed yesterday in federal court in Brooklyn, New York, charging Mimi Ould Baba, 32, a citizen of Mali, with the murder of U.S. citizen Michael J. Riddering and conspiring to provide material support, including personnel (including himself), services, and property to two designated foreign terrorist organizations, al-Qaeda in the Islamic Maghreb (AQIM) and al-Murabitoun.  The defendant is currently in custody in Mali pending investigation and prosecution by Malian authorities. 

“The charges filed allege that Mimi Ould Baba played a central role in the planning of two separate terrorist attacks directed at Westerners in Burkina Faso and Côte d’Ivoire in early 2016.  Those attacks resulted in the murder of American citizen Michael Riddering and 48 other innocent victims from numerous countries,” said Assistant Attorney General for National Security John C. Demers.  “Baba is currently in Malian custody for his terrorism-related activities.  We fully support the Malian investigation and prosecution of Baba and will continue to work with the authorities there to pursue our shared goal of holding Baba accountable for his crimes.  At the same time, these charges reflect that the U.S. justice system remains a powerful tool to bring to bear against those who harm our citizens abroad.  We will continue to pursue justice for Mr. Riddering and for all American victims of terrorism.  Our memories are long and our commitment to justice is unending.”  

“The Eastern District of New York and our partners in U.S. law enforcement will continue to work tirelessly with foreign counterparts to identify, incapacitate and prosecute terrorists who target American citizens anywhere in the world,” said United States Attorney Richard P. Donoghue for the Eastern District of New York.  “Counter-terrorism remains our number one priority.”  Mr. Donoghue expressed his grateful appreciation to the governments of Burkina Faso, Cote D’Ivoire and Mali for their continued support and assistance throughout this investigation.

“There’s nothing we could ever do to take away the pain felt by the families of those Baba killed during his 2016 terrorist attack in Burkina Faso, but four years later, we take some comfort in the fact that he will be held accountable for his egregious crime. I can only hope that as time goes on, we will remember the victims’ names instead of the attacker's, especially our own American citizen Michael Riddering, who was killed that day,” said FBI Assistant Director-in-Charge William F. Sweeney.

“Among the 30 killed in the attack four years ago was an American, Michael Riddering. Michael was in charge of an orphanage and a women’s crisis center in Burkina Faso. This case is another reminder that when terrorists kill an American, even half a world away, the FBI Special Agents and New York City Police Detectives of the JTTF will work as long as it takes, and go as far as it takes to bring justice,”   said NYPD Commissioner Dermot F. Shea.

As alleged in the complaint, Baba, along with the operations chief of al-Murabitoun and others, planned the Jan. 15, 2016, terrorist attack at the Café Cappuccino and Hotel Splendid in Ouagadougou, Burkina Faso.  Baba assisted in the planning and preparation for the attack by conducting surveillance of potential targets frequented by Westerners, facilitating the transportation and storage of AK-47 assault rifles and hand grenades to be used in the attack, conducting a walk-through of the attack with the three suicide operatives, and driving the armed operatives to the attack site on the day of the attack.  Thirty people were killed in the terrorist attack, including American Michael J. Riddering and numerous victims from other Western countries and Burkina Faso.   Riddering, a patron at the Café Cappuccino, was shot multiple times by the attackers and died at the scene.   Following the attack, AQIM issued a public statement claiming responsibility for the attacks on behalf of AQIM and al-Murabitoun. 

Baba also participated in the planning and preparation for the March 13, 2016, resort attack in Grand Bassam, Cote d’Ivoire.  Following the attack in Ouagadougou, Baba met with the operations chief of al-Murabitoun to plan another attack against Westerners, this one in Cote d’Ivoire.   Thereafter, Baba identified an individual to assist with the preparations for the attack and in identifying three suicide operatives to conduct the attack.  Baba also procured the vehicle that was used to transport the weapons that were used in the attack.  On March 13, 2016, three suicide operatives armed with AK-47s and grenades attacked resort patrons along the beach of Grand Bassam, Cote d’Ivoire, killing 19 people from a number of countries and wounding many others.  Following the attack, AQIM issued a public statement claiming responsibility for the attack. 

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

The government’s case is being handled by the Office’s National Security and Cybercrime Section. Assistant United States Attorneys Margaret E. Lee and Michael T. Keilty are in charge of the prosecution, with assistance provided by Trial Attorney Katie Sweeten of the Counterterrorism Section of the National Security Division of the Department of Justice.  The Criminal Division’s Office of International Affairs of the Justice Department assisted in the investigation.   

A former member of the Barbados Parliament, who also served as the Minister of Industry of Barbados, was found guilty today by a federal jury for his role in a scheme to launder bribes paid to him by executives of the Insurance Corporation of Barbados Limited (ICBL). 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.

Following a one-week trial and two hours of jury deliberations, Donville Inniss, 54, a U.S. legal permanent resident who resided in Tampa, Florida, and Barbados, was found guilty of two counts of money laundering and one count of conspiracy to commit money laundering.   Sentencing has not yet been scheduled.

According to the evidence presented at trial, in 2015 and 2016, Inniss took part in a scheme to launder into the United States approximately $36,000 in bribes that he received from high-level executives of ICBL.  At the time, Inniss was a member of the Parliament of Barbados and the Minister of Industry, International Business, Commerce, and Small Business Development of Barbados.  The trial evidence demonstrated that, in exchange for the bribes, Inniss leveraged his position as the Minister of Industry to enable ICBL to obtain two insurance contracts from the Barbados government to insure over $100 million worth of government property.  To conceal the bribes, Inniss arranged to receive them through a U.S. bank account in the name of his friend’s dental company, which had an address in Elmont, New York.  The trial evidence further showed that Inniss used a personal email account to communicate with an executive from ICBL in connection with the bribe payments and the laundering of the money through the dental company in New York.

The FBI’s International Corruption Squad in New York City investigated the case.  In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption.  Trial Attorney Gerald M. Moody Jr. of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David Gopstein and Sylvia Shweder of the Eastern District of New York prosecuted the case.  The Criminal Division’s Office of International Affairs also provided assistance in this matter.  The Department appreciates the cooperation provided by its law enforcement colleagues in Barbados during this investigation.

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

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.

Donville Inniss, a former member of the Barbados Parliament and Minister of Industry, International Business, Commerce and Small Business Development of Barbados, was convicted today by a jury in federal court in Brooklyn of money laundering conspiracy and two counts of money laundering relating to bribe payments the defendant received from Insurance Corporation of Barbados Limited (ICBL) to secure government contracts for ICBL.  The verdict followed a one-week trial before United States District Judge Kiyo A. Matsumoto.  When sentenced, Inniss faces up to 20 years’ imprisonment.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the verdict.

The evidence at trial established that between August 2015 and April 2016, Inniss accepted approximately $36,000 in bribes from high-level executives of ICBL and laundered that money through banks on Long Island.  In exchange for the bribes, Inniss leveraged his position as the Minister of Industry to enable ICBL to obtain government contracts.  Inniss concealed the bribes by arranging to receive them through a friend’s dental company and a bank located in Elmont, New York.  ICBL executives transferred the funds to the dental company using an invoice falsely claiming that the payments were for consulting services. 

During the time of the charged conspiracy, Inniss was a legal permanent resident of the United States residing in Tampa, Florida and Barbados. 

“As a government official, Inniss was responsible for improving the economic development and quality of life for Barbados and its people.  But as proven at trial, he corruptly abused his position and the U.S. financial system to enrich himself,” stated United States Attorney Donoghue.  “With today’s verdict, the defendant will face the consequences.”  Mr. Donoghue thanked the FBI’s New York Office for its outstanding investigative work on the case.

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

The Defendant:

DONVILLE INNIS
Age:  54
Barbados

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

WASHINGTON – The Department of Justice announced today that ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers.   

The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE.  Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.

The settlement resolves allegations that ResMed:  (a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea; (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines; (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME suppliers acquired from third-party financial institutions for the purchase of ResMed equipment; and (d) provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”

“When companies give free equipment to doctors for the sole purpose of generating business and increasing their bottom lines, federal health insurance programs should not foot the bills.  This case rights that alleged wrong by ResMed,” stated United States Attorney for the Eastern District of New York Richard P. Donoghue.  “We will continue to work with our law enforcement partners to hold accountable companies that put profits before patients.”

“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on illegal payments from equipment manufacturers.”

The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims Act.  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.  The whistleblowers will collectively receive a roughly $6.2 million share of the settlement. 

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

The settlement was the result of a coordinated effort by the Civil Division of the United States Department of Justice; the U.S. Attorney’s Offices for the Eastern District of New York, the District of South Carolina, the Southern District of California and the Northern District of Iowa; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; the Defense Health Agency Office of General Counsel; the Federal Bureau of Investigation; and the National Association of Medicaid Fraud Control Units.  

The lawsuits resolved by this settlement are captioned United States, et al., ex rel. Ameer v. ResMed, Inc., et al., Case No. 2:15-CV-04842-MBS (D.S.C.); United States, et al., ex rel. Baker v. ResMed, Inc., et al., Case No. 3:16-CV-00987-MBS (D.S.C.); United States, et al., ex rel. Ross v. ResMed, Inc., Case No. 16-CV-1988-W (JLB) (S.D. Cal.); United States ex rel. Meyer v. ResMed, Inc., et al., Case No. 17-CV-12-MWB (N.D. Iowa); and United States, et al., ex rel. Ottavio, et al. v. ResMed, Inc., Case No. CV 17-5734 (E.D.N.Y.).  The claims resolved by the settlement are allegations only, and there has been no determination of liability. 

Three criminal complaints were unsealed today in federal court in Brooklyn, New York, charging 21 defendants with conspiring to bribe correction officers employed by the New York City Department of Corrections (“DOC”) as part of narcotics smuggling conspiracies.  Three defendants remain at large.  The initial appearances for 12 of the defendants are scheduled for this afternoon before United States Magistrate Judge Ramon E.  Reyes, Jr. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Margaret M. Garnett, Commissioner, New York City Department of Investigation (DOI), announced the charges. 

“The corruption of correction officers presents a security risk to the entire jail population, and a potential danger to the residents of our communities,” stated United States Attorney Donoghue.  “We will continue to aggressively investigate and prosecute those who place their personal enrichment over the public duties they have sworn to perform.”  Mr. Donoghue thanked Homeland Security Investigations, New York, and the New York City Police Department for their assistance in the investigations.

“The correction officers charged today allegedly accepted bribes to sneak contraband onto Rikers Island—propagating behavior that has the potential to harm other officers and prisoners alike. The smuggling of contraband into our jails is a common Hollywood storyline, but while there’s an element a fiction in many a screenplay, there’s nothing fake about this real-life threat to our correctional facilities. Along with our partners at the DOI, we are dedicated to confronting this issue head-on,” stated FBI Assistant Director-in-Charge Sweeney.

"Contraband smuggling enterprises have long plagued City jail facilities.  The arrests today are another example of a pattern in which inmates and outside conspirators identify correction officers vulnerable to corruption, and use them to carry drugs and other illegal substances into the jails,” stated DOI Commissioner Garnett.  “These schemes threaten the safety of fellow officers and other inmates, and undermine order and discipline in the City’s jails.  DOI will continue to prioritize safety and integrity in the jails, and continue to relentlessly pursue those who threaten it.  DOI thanks its partners at the Office of the U.S. Attorney for the Eastern District of New York and the FBI for their partnership in the pursuit of these individuals charged today in our shared effort to root out criminal activity in the City's correction system."

Since early 2019, the FBI and DOI have been investigating contraband rings involving the payment and receipt of bribes by DOC officers in exchange for transporting marijuana, the narcotic Suboxone and K2 (a synthetic cannabinoid) and an unauthorized smart phone into the George R. Vierno Center and the Otis Bantum Correctional Center on Rikers Island.

As set forth in the complaints, the defendants conspired to smuggle the contraband into Rikers Island facilities with the assistance of New York City Correction Officers Darrington James, Patrick Legerme, Aldrin Livingston, Michael Murray, Angel Rodriguez and Christopher Walker.  Defendants James Albert, Clarence Brooks, Kyle Charles, John Mohammed and Christopher Rivas, who were incarcerated for unrelated offenses, arranged for marijuana and other contraband to be packaged and secretly delivered to those correction officers by defendants Celena Burgess, Veronica Jagdeo, Jorcetta King, Aboudou Krigger, Jonathan Medina, Styles Shephard and Tony West.  The defendant correction officers allegedly received thousands of dollars in bribes to smuggle the drugs past DOC security, for distribution inside the Rikers Island facilities. 

As a part of their investigations, law enforcement officers reviewed financial records related to online money transfer tools, such as CashApp, conducted surveillance and reviewed recorded telephone calls made by defendants who used coded language in their conversations.  For example, on February 19, 2019, an inmate at the Vierno facility called a co-conspirator to discuss supplying the inmate and Albert with marijuana: “I’m trying to get, um four ‘Oakland Raider jerseys’ [code for marijuana].  “…’Got Pink Panties’ [code for correction officer] on the line right now, you heard?  Gangsta. You just gotta make it to the ‘Jungle’ [code for Brooklyn] to drop it off to them and, more or less, we lit from there.”  In recorded telephone calls between Rivas and a co-conspirator in October 2019, Rivas requested a ‘joint’ [code for a cellular telephone] with a Facetime application.  In a subsequent telephone conversation, Rivas asked West whether the joint is a Size 5 or Size 6 [code for iPhone 5 or iPhone 6], and West replied that it was a Size 6, referring to an iPhone 6 that was delivered to the Vierno facility the previous night. 

On October 25, 2019, a DOC Special Search Team seized an iPhone 6 and an iPhone charger from Rivas’s laundry bag and 12 clear plastic bags containing marijuana from his person.

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

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Nathan Reilly, Margaret Gandy, Drew Rolle, Alicia Washington and Virginia Nguyen are in charge of the prosecution.

The Defendants:

JAMES ALBERT
Age: 43
Comstock, New York

CLARENCE BROOKS
Age: 39
Bronx, New York

CELENA BURGESS
Age: 43
New York, New York

KYLE CHARLES
Age: 32
Brooklyn, New York

VERONICA JAGDEO
Age: 24
Freeport, New York

DARRINGTON JAMES
Age: 30
Queens, New York

JORCETTA KING
Age: 33
Bronx, New York

ABOUDOU KRIGGER
Age: 25
Bronx, New York

PATRICK LEGERME
Age: 29
Queens, New York

ALDRIN LIVINGSTON
Age: 31
Queens, New York

JONATHAN MEDINA
Age: 29
Queens, New York

JOHN MOHAMMED
Age: 27
Rome, New York

MICHAEL MURRAY
Age: 28
Brooklyn, New York

CHRISTOPHER RIVAS
Age: 32
New York, New York

ANGEL RODRIGUEZ
Age: 23
Bellport, New York

STYLES SHEPHARD
Age: 24
New York, New York

CHRISTOPHER WALKER
Age: 28
Brooklyn, New York

TONY WEST
Age: 24
Brooklyn, New York

E.D.N.Y. Docket Nos.: 20-MJ-25; 20-MJ-26; and 20-MJ-31.

Earlier today, in federal court in Central Islip, Geoffrey Girnun, a former Associate Professor in the Department of Pathology and Director of Cancer Metabolomics at the Renaissance School of Medicine at Stony Brook University (SBU), pleaded guilty to theft of  government funds from cancer-related research grants issued by the National Institutes of Health (NIH).  The plea proceeding was held before United States District Judge Denis R. Hurley.  Girnun resigned his position at SBU in December 2019.  When sentenced, Girnun faces up to 10 years in prison, as well as restitution, forfeiture and a fine to be determined.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the guilty plea.

“With today’s guilty plea, Girnun has been held accountable for his unconscionable scheme to embezzle for his personal use hundreds of thousands of dollars in government funds that were intended to help find a cure for cancer,” stated United States Attorney Donoghue.  Mr. Donoghue thanked the Federal Bureau of Investigation, New York Field Office, and the Department of Health and Human Services, Office of Inspector General, for their investigative work on the case. 

Between December 2013 and December 2017, Girnun stole approximately $78,000 in NIH funds that were earmarked for cancer research.  He then used those funds to pay for personal expenses, including payments on his home mortgage.  At his guilty plea proceeding today, Girnun agreed to pay restitution in the amount of $225,000, which includes the NIH funds and approximately $147,000 from SBU’s foundation and state-sponsored grants.

Girnun has a doctorate degree in cancer biology and while employed at SBU, served as a principal investigator for various research projects.

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

The Defendant:

GEOFFREY GIRNUN         
Age:  49
Woodmere, New York

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

Earlier today, in federal court in Brooklyn, Jeffrey Auerbach, a former registered representative for various broker-dealers, pled guilty to conspiracy to commit securities fraud for his role in a scheme to take kickbacks from the former Chief Executive Officer (CEO) of NXT-ID, a publicly listed company on NASDAQ, in exchange for promoting NXT-ID stock to investors and potential investors.  Today’s plea proceeding took place before United States District Judge Pamela K. Chen.  When sentenced, Auerbach faces up to five years in prison, as well as forfeiture and a fine of up to $250,000.

Richard P. Donoghue, 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. 

“Auerbach exploited his position as a former registered representative for broker-dealers to enrich himself to the detriment of investors,” stated United States Attorney Donoghue.  “We will continue to investigate and prosecute stock promoters, brokers and others in the securities industry who exploit the trust of investors and distort the public markets.”  Mr. Donoghue expressed his appreciation to the United States Securities and Exchange Commission for its significant cooperation and assistance.

According to court filings and facts presented during the plea proceeding, between July 2014 and September 2015, Auerbach conspired with others to defraud investors and potential investors in NXT-ID, a company that purported to provide a comprehensive platform of technology products and services that enable the Internet of Things (“IoT”).  As part of this scheme, Auerbach allegedly accepted secret payments from the CEO of NXT-ID in exchange for promoting NXT-ID stock to investors, and making payments to a broker to purchase shares of NXT-ID stock in the accounts of the broker’s clients.  

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

The Defendant:

Jeffrey Auerbach
Age:  49
New York, New York

E.D.N.Y. Docket No. 19-CR-607 (PKC)

A criminal complaint was unsealed today in federal court in Brooklyn charging Nancy Jean and Carissa Scott with a scheme to defraud concert investors by falsely claiming to act as booking agents for well-known entertainers, including Justin Timberlake and Bruno Mars.  The defendants were arrested yesterday at John F. Kennedy International Airport in Queens, New York, and their initial appearance is scheduled for this afternoon before United States Magistrate Judge Sanket J. Bulsara. 

Richard P. Donoghue, 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. 

As alleged in the complaint, in September 2019, Jean and Scott were contacted by an investor who was organizing a concert at the Alamodome in San Antonio, Texas, to benefit the Sandy Hook Promise Foundation.  The defendants falsely represented that they could book top-tier musical acts to perform at the concert, and provided the investor with a contract for a total fee of $500,000 that purported to commit Timberlake to perform.  One of the investors then wired a $100,000 deposit to the defendants.  Subsequently, when Timberlake’s social media account failed to mention or promote the event, the investor requested confirmation that Timberlake was booked.  In response, the investor received a telephone call from an unidentified individual who falsely claimed to be Timberlake’s manager.  The unidentified individual stated that Timberlake would perform at the concert, but that the fee would have to be raised to between $800,000 and $1 million.  In November 2019, the defendants sent the investor an agreement stating that Mars would perform at the concert as an alternative to Timberlake for a fee of $600,000.  The investor agreed that Mars could be the headliner, but did not send an additional deposit to the defendants. 

Within a month of receiving the original $100,000 deposit, approximately half of the money was used by the defendants for personal expenses or withdrawn as cash. 

“As alleged, the defendants viewed a fundraiser for a charity formed to protect children from gun violence as an opportunity to commit fraud and line their own pockets,” stated United States Attorney Donoghue.  “Simple stealing is bad enough, this is worse.” 

 “Nancy Jean and Carissa Scott may have been able to realize a quick profit as a result of their alleged fraudulent booking scheme, but not long after their illegal activity took off, they landed in New York to face federal criminal charges.  It’s discouraging to think these defendants were willing to defraud an investor supporting a charity foundation.  Fortunately, the FBI doesn’t entertain such activity,” stated FBI Assistant Director-in-Charge Sweeney. 

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

The government’s case is being prosecuted by the Office’s Business & Securities Fraud Section.  Assistant United States Attorney Lauren Howard Elbert is in charge of the prosecution, and Assistant United States Attorney Brian Morris of the Office’s Civil Division is handling matters relating to forfeiture.

The Defendants:

NANCY JEAN
Age: 51
Riverdale, Georgia

CARISSA SCOTT
Age: 41
Fayette, Mississippi

E.D.N.Y. Docket No. 20-MJ-16

Earlier today, at the federal courthouse in Brooklyn, New York, Asia Siddiqui was sentenced to 15 years’ imprisonment by United States District Judge Sterling Johnson Jr. for her role in planning to build a bomb for use in a terrorist attack in the United States.  Siddiqui and her co-defendant, Noelle Velentzas, pleaded guilty on August 23, 2019 to a charge of teaching or distributing information pertaining to the making and use of an explosive, destructive device, and weapon of mass destruction in furtherance of a planned federal crime of violence.  Velentzas is awaiting sentencing.

Richard P. Donoghue, United States Attorney for the Eastern District of New York; John C. Demers, Assistant Attorney General for National Security; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the sentence.

“Lives were saved when the defendants’ plot to detonate a bomb in a terrorist attack was thwarted by the tireless efforts of law enforcement,” stated United States Attorney Donoghue.  “This is precisely the reason why countering terrorism remains the highest priority of the Department of Justice, and working with the FBI, the NYPD and our Joint Terrorism Task Force partners, we will continue to do everything possible to stay steps ahead of aspiring terrorists and their evil plans to harm Americans.”

“With the sentence imposed by the court, Siddiqui has been held accountable for her crimes.  Inspired by radical Islam, Siddiqui and her co-defendant researched and taught each other how to construct bombs to be used on American soil against law enforcement and military targets,” stated Assistant Attorney General Demers.  “They were thwarted by the excellent work of the agents, analysts and prosecutors who are responsible for this investigation and prosecution.  For this, we are grateful.”

“Asia Siddiqui and co-defendant Noelle Velentzas were more than prepared to kill Americans and fellow New Yorkers. Thanks to the dedicated work of the FBI’s JTTF in New York and our many law enforcement partners, they never succeeded. Today, Siddiqui’s fate has been sealed as we await one final sentencing that will decisively bring this case to a close,” stated FBI Assistant Director-in-Charge Sweeney.

“Today’s sentencing is a strong and timely reminder that the NYPD and its partners in law enforcement will never stop pursuing those who, if undetected, would plan and execute acts of terrorism in the United States,” stated NYPD Commissioner Shea. “I want to thank the members of the Department of Justice, the FBI and the NYPD for their work each and every day and on this investigation.”

Between approximately 2013 and 2015, Siddiqui and Velentzas planned to build a bomb for use in a terrorist attack in the United States.  They taught each other chemistry and electrical skills directly related to creating explosives and building detonating devices; conducted research on how to make plastic explosives and build a car bomb; shopped for materials for use in an explosive device; and discussed explosive devices used in past terrorist incidents, including  the Boston Marathon bombing, Oklahoma City bombing and 1993 World Trade Center attack.  They then researched potential targets for an attack, focusing on law enforcement and military-related targets. 

Siddiqui’s long-term interest in violent terrorist-related activities was demonstrated in her written submissions to a radical jihadist magazine edited by Samir Khan – a prominent figure and member of the designated foreign terrorist organization al-Qaeda in the Arabian Peninsula.  In a poem titled “Take Me to the Lands Where the Eyes Are Cooled,” Siddiqui wrote that she “taste[s] the Truth through fists and slit throats,” and that there is “[n]o excuse to sit back and wait – for the skies rain martyrdom.” 

At the time of the defendants’ arrests, law enforcement agents searched their  residences and seized tools of the trade for terrorists, including propane gas tanks, soldering tools, car bomb instructions, machetes, knives and jihadist literature. 

The government’s case is being handled by the Office’s National Security & Cybercrime Section.  Assistant United States Attorneys Craig R. Heeren, Jennifer M. Sasso, Michael T. Keilty, Josh Hafetz and Jonathan E. Algor are in charge of the prosecution, with assistance provided by Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section.

The Defendant:

ASIA SIDDIQUI
Age:  35
Queens, New York

E.D.N.Y. Docket No. 15-CR-213 (SJ)

Earlier today, at the federal courthouse in Brooklyn, New York, Asia Siddiqui was sentenced to 15 years’ imprisonment by United States District Judge Sterling Johnson Jr. for her role in planning to build a bomb for use in a terrorist attack in the United States. Siddiqui and her co-defendant, Noelle Velentzas, pleaded guilty on Aug. 23, 2019, to a charge of teaching or distributing information pertaining to the making and use of an explosive, destructive device, or weapon of mass destruction in furtherance of a planned federal crime of violence.  Velentzas is awaiting sentencing.

“With the sentence imposed by the court, Siddiqui has been held accountable for her crimes.  Inspired by radical Islam, Siddiqui and her co-defendant researched and taught each other how to construct bombs to be used on American soil against law enforcement and military targets,” said Assistant Attorney General for National Security John C. Demers. “They were thwarted by the excellent work of the agents, analysts and prosecutors who are responsible for this investigation and prosecution.  For this, we are grateful.”

“Lives were saved when the defendants’ plot to detonate a bomb in a terrorist attack was thwarted by the tireless efforts of law enforcement,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York.  “This is precisely the reason why countering terrorism remains the highest priority of the Department of Justice, and working with the FBI, the NYPD and our Joint Terrorism Task Force partners, we will continue to do everything possible to stay steps ahead of aspiring terrorists and their evil plans to harm Americans.”

“Asia Siddiqui and co-defendant Noelle Velentzas were more than prepared to kill Americans and fellow New Yorkers. Thanks to the dedicated work of the FBI’s JTTF in New York and our many law enforcement partners, they never succeeded. Today, Siddiqui’s fate has been sealed as we await one final sentencing that will decisively bring this case to a close,” said FBI Assistant Director-in-Charge William F. Sweeney.

“Today’s sentencing is a strong and timely reminder that the NYPD and its partners in law enforcement will never stop pursuing those who, if undetected, would plan and execute acts of terrorism in the United States,” said NYPD Commissioner Dermot F. Shea. “I want to thank the members of the Department of Justice, the FBI and the NYPD for their work each and every day and on this investigation.”

Between approximately 2013 and 2015, Siddiqui and Velentzas planned to build a bomb for use in a terrorist attack in the United States. In furtherance of their plan, the defendants taught each other chemistry and electrical skills related to creating explosives and building detonating devices, conducted research on how to make plastic explosives and how to build a car bomb, and shopped for and acquired materials to be used in an explosive device. They discussed similar devices used in past terrorist incidents like the Boston Marathon bombing, Oklahoma City bombing, and 1993 World Trade Center attack and researched potential targets of an attack, focusing on law enforcement and military-related targets. 

Siddiqui’s interest in violent terrorist-related activities was reflected in her written submissions to a radical jihadist magazine edited by Samir Khan — a now- deceased prominent figure and member of the designated foreign terrorist organization al-Qaeda in the Arabian Peninsula (AQAP).  In a poem called “Take Me to the Lands Where the Eyes Are Cooled,” Siddiqui wrote that she “taste[s] the Truth through fists and slit throats” and that there is “[n]o excuse to sit back and wait – for the skies rain martyrdom.” 

When the defendants were arrested, law enforcement officers seized propane gas tanks, soldering tools, car bomb instructions, jihadist literature, machetes and several knives from their residences. 

The government’s case is being handled by the Office’s National Security & Cybercrime Section.  Assistant United States Attorneys Craig R. Heeren, Jennifer M. Sasso, Michael T. Keilty, Josh Hafetz and Jonathan E. Algor are in charge of the prosecution, with assistance provided by Trial Attorney Jennifer Burke of the National Security Division’s Counterterrorism Section.

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.  

Earlier today, in federal court in Central Islip, Steven Pagartanis was sentenced by United States District Judge Joan M. Azrack to 170 months’ imprisonment and ordered to pay more than $6.5 million in restitution.  Pagartanis, a former registered investment advisor based on Long Island, pleaded guilty in December 2018 to conspiracy to commit mail and wire fraud for orchestrating a securities fraud scheme over the course of 18 years.  

Richard P. Donoghue, 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.

“Today’s sentence is a well-deserved reckoning for Pagartanis, who preyed on elderly investors, many of whom trusted him with their life savings, for nearly two decades,” stated United States Attorney Donoghue.  “Protecting investors, especially those that are vulnerable, from white-collar criminals is a priority of this Office and the Department of Justice.”  Mr. Donoghue thanked the Securities and Exchange Commission, New York Regional Office, and the Financial Industry Regulatory Authority for their cooperation and assistance during the investigation.

“Steven Pagartanis deceived investors from New York to California with the selfish goal of enriching himself at the expense of innocent elderly victims,” stated IRS-CI Special Agent-in-Charge Larsen.  “We at IRS-CI welcome the opportunity to lend our financial expertise to uncover such callous criminality and protect the innocent from being swindled out of their life savings.”

From January 2000 to March 2018, Pagartanis, then an affiliate of a registered broker-dealer, solicited victims, almost all of whom were elderly women, to invest in two publicly traded companies, promising an eight percent return.  At Pagartanis’s direction, the victims wrote checks payable to an entity he secretly controlled.  Pagartanis then laundered the victims’ investments through a series of bank accounts, and used the money to pay personal expenses, purchase luxury items, fund failed business ventures including his wife’s pet store and make the guaranteed “interest” or “dividend” payments to other victims.  The defendant’s victims invested over $13 million and sustained losses of over $9 million.  Many lost substantial amounts of their life savings, including funds set aside to help ill family members, pay college expenses and maintain their homes.

Assistant United States Attorney Artie McConnell is in charge of the prosecution.

The Defendant:

STEVEN PAGARTANIS
Age:  60
East Setauket, New York

E.D.N.Y. Docket No. 18-CR-374 (JMA)

A New York tax return preparer was sentenced to 36 months in prison today for wire fraud, aggravated identity theft, and assisting in the preparation and filing of false returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to court documents and statements made in court, Oyeniyi Jaiyesimi was the owner of Pace Financial Services, a tax preparation business located in Springfield Gardens, New York. From 2014 through 2016, Jaiyesimi used stolen identities to file fraudulent tax returns with the Internal Revenue Service (IRS) in order to obtain refunds to which he was not entitled. Jaiyesimi also filed false tax returns on behalf of his clients that claimed fraudulent dependent exemptions in order to obtain larger refunds for them. 

In addition to the prison term, U.S. District Judge Edward R. Korman ordered Jaiyesimi to serve two years of supervised release and to pay approximately $58,000 in restitution to the United States.

Principal Deputy Assistant Attorney General Zuckerman commended the special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Mark McDonald and Eric Powers of the Tax Division, who are prosecuting the case.

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 brothers Gladimir Thomas and Ronald Thomas, members of the Brooklyn-based “Insane Crip Gangsters,” a subset of the Crips street gang, with sex trafficking, sex trafficking conspiracy and promoting prostitution.  The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Steven L. Tiscione.

Richard P. Donoghue, 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.

“As alleged, over a period of years the defendants forced a woman to prostitute herself, while they enriched themselves at her expense,” stated United States Attorney Donoghue.  “This Office will continue to work with the FBI and our local law enforcement partners to put an end to the criminal acts of those who seek to profit from sexual slavery.”  

As alleged in the indictment and court filings, from 2014 through 2018, the defendants used violence and threats of violence to force their victim into prostitution.  As part of their coercion, they plied her with drugs and deprived her of food and sleep, and demonstrated their control over their victim by tattooing their names on her body.  The defendants then brazenly promoted their criminal acts on the internet and social media. 

If convicted of sex trafficking, both defendants face a mandatory minimum term of 15 years’ imprisonment, and a maximum of life in prison.

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

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

The Defendants:

GLADIMIR THOMAS (also known as “Sleep,” “Sleep Boss” and “Daddy”)
Age: 31
Brooklyn, New York

RONALD THOMAS (also known as “Roco,” “Roco Da Boss” and “Daddy”)
Age: 27
Brooklyn, New York

E.D.N.Y. Docket No. 20-CR-0001 (RRM)

Defendant Joanna De Alba, a U.S. citizen, will be arraigned this afternoon in federal court in Brooklyn on an indictment charging her with conspiring to distribute and possess with intent to distribute heroin and methamphetamine, and distribution of heroin and methamphetamine via the “dark web.”  De Alba was detained on October 24, 2019 at the U.S.-Mexico border while attempting to enter the United States.  The arraignment will be held before United States Magistrate Judge Steven L. Tiscione.

Richard P. Donoghue, 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 charges.

“As alleged, De Alba dispensed heroin and methamphetamine from the shadowy corners of the internet, believing that it provided anonymity to her and her customers,” stated United States Attorney Donoghue.  “But thanks to the outstanding work by this Office’s prosecutors and DEA special agents, a bright light has been shined on her activities, and she will now be held to account for her charged criminal acts.”

“Anonymity is what drug dealers rely on in the dark web, but this case proves it’s a false security.  Law enforcement is committed to tracking down drug traffickers’ distribution networks everywhere,” stated DEA Special Agent-in-Charge Donovan.

The internet contains online marketplaces for narcotics and other contraband on the “dark web,” a part of the internet located beyond the reach of traditional internet browsers and accessible only through networks designed to conceal user identities.  As alleged, the “Wall Street Market” was a global dark web marketplace that required its users to trade in digital currencies, primarily Bitcoin. 

Between June 2018 and May 2019, De Alba allegedly advertised and sold illegal narcotics on the Wall Street Market, using the moniker “RaptureReloaded.”  Customers were directed to pay her in Bitcoin, and contact her through encrypted email and messaging services.  De Alba offered customers free shipping to addresses in the United States, and “stealth” delivery options ranging from “Basic Stealth” and “Better Stealth,” to “Super Stealth 360.”  These options featured measures to conceal the external and internal packaging of illegal narcotics to evade detection by law enforcement, and to inform buyers if law enforcement had intercepted, tampered with, or was monitoring the shipment.

On January 3, 2019, an undercover DEA agent accessed the RaptureReloaded listing on the Wall Street Market and purchased 30 grams of heroin for a total of $1,810.  Later that day, the undercover agent purchased 10 grams of methamphetamine from the RaptureReloaded listing for a total of $160.  As requested, the undercover agent paid for the drugs with Bitcoin.  On January 14, 2019, the undercover agent retrieved a package shipped by RaptureReloaded via the U.S. postal service to a mailbox in Queens, New York.  The package contained a small plastic container containing approximately 30 grams of a substance that tested positive for heroin, and a clear plastic bag containing approximately 10 grams of a substance that tested positive for methamphetamine.  Between August 2018 and January 2019, law enforcement agents intercepted five packages containing methamphetamine pills and fentanyl that were shipped from the Netherlands and Canada and addressed to De Alba’s deceased husband at an apartment in southern California.  Allegedly, since her husband’s death in March 2018, De Alba used his identity and credit cards to fund her narcotics business on the Wall Street Market.

If convicted of all counts, De Alba faces a mandatory minimum term of five years’ imprisonment and a maximum sentence of up to 100 years in prison.

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

The government’s case is being prosecuted by Assistant United States Attorneys Saritha Komatireddy and Francisco J. Navarro.

The Defendant:

JOANNA DE ALBA (also known as “RaptureReloaded”)
Age: 39
Tijuana, Mexico

E.D.N.Y. Docket No. 19-CR-563 (DLI)

 

The U.S. District Court for the Eastern District of New York permanently enjoined ABH Nature’s Products, Inc., ABH Pharma, Inc., StockNutra.com, Inc. (together, "ABH"), each of Edgewood, New York, and their owner, Mohammed Jahirul Islam ("Islam") of Flushing, New York from distributing adulterated and misbranded dietary supplements in violation of the Federal Food, Drug, and Cosmetic Act, the Department of Justice announced today.

The injunction requires ABH and Islam to destroy, within 15 days, dietary supplements that are in their possession, custody, or control.  The injunction also orders ABH and Islam to implement several consumer safety measures before resuming the manufacturing or distributing of dietary supplements.  Those measures include hiring an independent expert to inspect ABH’s facility and certify that the facility has corrected all deficiencies and implemented current good manufacturing practices.  It also mandates that the defendants engage a labeling expert to review their product labeling and certify that claims on their products comply with the law.

"Today’s injunction reflects the Department of Justice’s commitment to protect consumers from adulterated and misbranded dietary supplements," said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  "The Department of Justice will work with the FDA to ensure that dietary supplements are manufactured according to food safety laws and accurately describe their ingredients."

"As demonstrated by today’s consent decree, this office and the FDA will work tirelessly to protect consumers who take dietary supplements, ensuring that manufacturers comply with good manufacturing practices and do not distribute unapproved and misbranded drugs in violation of the Food, Drug, and Cosmetic Act," said U.S. Attorney for the Eastern District of New York Richard P. Donoghue. 

"Manufacturers of products labeled as dietary supplements have an obligation to evaluate the safety and labeling to ensure their products are manufactured correctly to meet all federal requirements and are not misleading to consumers," said Melinda K. Plaisier, FDA Associate Commissioner for Regulatory Affairs. "Americans expect and deserve products that meet appropriate standards, and the FDA remains committed to taking action against companies and owners who place the health of American consumers at risk."

The injunction stems from a complaint the Department filed on Nov. 21, 2019, at the request of the U.S. Food and Drug Administration (FDA).  According to the complaint, ABH and Islam manufactured, prepared, labeled, packed, held, and distributed dietary supplements under conditions that failed to comply with current good manufacturing practice regulations.  In particular, the complaint alleged that the FDA had observed several critical deviations from current good manufacturing practice regulations during its inspections of ABH’s manufacturing facility, including failures to verify that certain dietary supplements met the product’s specifications for identity, purity, strength, and composition; to implement a production system that ensured the quality of the supplements; to include necessary information in its production records; and to properly review and investigate a consumer complaint. 

In addition, the complaint alleged that ABH and Islam further violated the Federal Food, Drug, and Cosmetic Act by distributing unapproved and misbranded "new drugs" into interstate commerce.  For instance, as alleged in the complaint, ABH made claims on product labeling that such products could be used to treat such medical conditions as cancer, heart disease, HIV and AIDS, even though the FDA had not approved those products for such purported uses, nor were there any published adequate and well-controlled investigations showing that such products are generally recognized as safe and effective for any use.

The defendants agreed to resolve the complaint and be bound by a consent decree of permanent injunction.  The court adopted the agreement and entered the injunction.      

The government is represented by Trial Attorney Joshua Fowkes of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Evan Lestelle of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of William Thanhauser of the FDA’s Office of Chief Counsel.

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.

BROOKLYN, NY – The United States District Court for the Eastern District of New York has entered a consent decree barring three corporations, ABH Nature’s Products, Inc., ABH Pharma, Inc., and StockNutra.com, Inc. (together, “ABH”), each of Edgewood, New York, and their owner, Mohammed Jahirul Islam (“Islam”), from distributing adulterated and misbranded dietary supplements and unapproved and misbranded drugs, and requiring them to take remedial action.

The consent decree approved by United States District Judge LaShann DeArcy Hall requires ABH and Islam to destroy, within 15 days, all dietary supplements and drugs in their possession, custody or control.  The injunction also requires ABH and Islam to implement consumer safety measures before resuming the manufacturing or distributing of dietary supplements.  This includes hiring an independent expert to perform a comprehensive inspection of ABH’s facility, and requiring the expert to certify that defendants are complying with current good manufacturing practices.

The consent decree resolves a suit filed on November 21, 2019, at the request of the U.S. Food and Drug Administration (FDA).  According to the complaint, ABH and Islam manufactured, prepared, labeled, packed, held and/or distributed dietary supplements under conditions that failed to comply with current good manufacturing practice regulations.

“As demonstrated by the consent decree, this Office and the FDA will work tirelessly to protect consumers who take dietary supplements, ensuring that manufacturers comply with good manufacturing practices and do not distribute unapproved and misbranded drugs in violation of the Food, Drug, and Cosmetic Act,” stated U.S. Attorney for the Eastern District of New York Richard P. Donoghue. 

“Today’s injunction reflects the Department of Justice’s commitment to protect consumers from adulterated and misbranded dietary supplements,” stated Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “The Department of Justice will work with the FDA to ensure that dietary supplements are manufactured according to food safety laws and accurately describe their ingredients.”

“Manufacturers of products labeled as dietary supplements have an obligation to evaluate the safety and labeling to ensure their products are manufactured correctly to meet all federal requirements and are not misleading to consumers,” said Melinda K. Plaisier, FDA Associate Commissioner for Regulatory Affairs. “Americans expect and deserve products that meet appropriate standards, and the FDA remains committed to taking action against companies and owners who place the health of American consumers at risk.”

According to the complaint, the FDA documented numerous significant deviations from current good manufacturing practice regulations during at least six inspections of ABH’s facilities conducted over the past several years, including failures to: conduct at least one appropriate test to verify the identity of a dietary ingredient; verify that finished batches of dietary supplements meet product specifications for identity, purity, strength and composition; include required information in batch production records; and properly review and investigate a consumer complaint.

In addition, the complaint alleged that ABH and Islam further violated the federal Food, Drug, and Cosmetic Act by distributing unapproved and misbranded “new drugs” into interstate commerce.  For instance, as alleged in the complaint, ABH made claims on product labeling that such products could be used to treat such medical conditions as cancer, heart disease, HIV and AIDS, even though the FDA had not approved those products for such purported uses, nor were there any published adequate and well-controlled investigations showing that such products are generally recognized as safe and effective for any use.

ABH and Islam agreed to resolve the complaint and be bound by the consent decree of permanent injunction.

The government is represented by Assistant U.S. Attorney Evan Lestelle of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Joshua Fowkes of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Litigation William Thanhauser of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.

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.  Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.

The Defendants:

ABH NATURE’S PRODUCTS, INC.
Edgewood, New York

ABH PHARMA, INC.
Edgewood, New York

STOCKNUTRA.COM, INC.
Edgewood, New York

MOHAMMED JAHIRUL ISLAM

E.D.N.Y. Docket No. 19-CV-6589 (LDH) (RLM)

Aurora Betancourt, a Canadian citizen, will be arraigned today in federal court in Brooklyn before United States Magistrate Judge Steven M. Gold on an indictment charging her with conspiring to distribute, and distribution of, fentanyl.  Betancourt was arrested in Colombia on December 28, 2018, and extradited to the United States on December 18, 2019.

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

 “As alleged in the indictment, Betancourt arranged the transportation of what she and her co-conspirators referred to as heroin, but what was in fact fentanyl, a synthetic opioid substitute even more potent than heroin,” stated United States Attorney Donoghue.  “Thanks to the outstanding work by law enforcement officers, Betancourt’s alleged plan to flood our streets with this extremely dangerous drug was thwarted, and she will now face justice for her actions.”  Mr. Donoghue extended his grateful appreciation to Drug Enforcement Administration Galveston, Texas office and the United States Marshals Service.

“Narcotics such as fentanyl and heroin are destroying lives and terrorizing communities across the United States, as well as here in New York.  As alleged, the defendant showed a flagrant disregard for human life and public safety, by arranging with her associates to have a significant amount of fentanyl transported to New York,” stated FBI Assistant Director-in-Charge Sweeney.  “Today’s arrest demonstrates the commitment of the FBI and our law enforcement partners to holding accountable anyone who would perpetuate the cycle of addiction contributing to the opioid crisis.”

“Allegedly responsible for attempting to transport 13 kilos of highly addictive fentanyl onto the streets of New York City, Betancourt will now have to answer for her actions that could have resulted in overdoses and deaths in our city,” stated HSI Special Agent-in-Charge Fitzhugh.  “Fentanyl has claimed the lives of far too many Americans, and so seizures and arrests like this are an important step to help rid the streets of this deadly epidemic.”

According to court documents, at a meeting in Queens, New York, in July 2017, Betancourt conspired with others to transport narcotics from Houston, Texas, for distribution in the New York metropolitan area.  The conspirators referred to the narcotics as “grasa,” a code for heroin.  DEA agents seized the narcotics in Texas before they could be transported.  Subsequent laboratory testing revealed that the narcotics were actually fentanyl, a highly potent synthetic opioid that can serve as a substitute for heroin and frequently results in overdoses by users.  The total weight of the seizure was approximately 13 kilos, at the time the second largest seizure of fentanyl by the DEA.  DEA estimated the street value of the fentanyl in New York at approximately $800,000.

If convicted of either count of the indictment, Betancourt faces a mandatory minimum of 10 years’ imprisonment and a maximum of life imprisonment.

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

The government’s case is being handled by the Office’s International Narcotics and Money Laundering section.  Assistant United States Attorney Alicia N. Washington is in charge of the prosecution.

The Defendant:

AURORA BETANCOURT
Age:  35
Canada

E.D.N.Y. Docket No. 18-CR-623 (ARR)

Marlon Thompson was arraigned this afternoon in federal court in Central Islip before United States Magistrate Judge A. Kathleen Tomlinson on an indictment charging him with conspiracy to distribute cocaine base and heroin from April 2018 through May 2019, and distribution of a controlled substance containing fentanyl resulting in the fatal overdose of a Fredrick Koenig of Selden, New York, on December 26, 2018.  Thompson was ordered detained pending trial.

Thompson was previously detained on state charges and was transferred into federal custody today. 

Richard P. Donoghue, 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 charges.

“Marlon Thompson showed no regard for human life when he allegedly sold a lethal dose of fentanyl to the victim,” stated United States Attorney Donoghue.  “This Office will continue to work tirelessly with our law enforcement partners to prosecute those who contribute to the opioid epidemic.”  Mr. Donoghue thanked the Suffolk County District Attorney’s Office and the Suffolk County Police Department for their assistance on the case.

“Drug trafficking trends indicate that poly-drug doses are being sold on the street without customers’ knowledge of its potency,” said DEA Special Agent-in-Charge Donovan.  “Case in point, a toxic cocktail containing fentanyl resulted in a fatal overdose.  I applaud our law enforcement partners on their diligent work throughout this investigation.”

If convicted of distributing a controlled substance causing the death of Koenig, the defendant faces a mandatory minimum term of 20 years’ imprisonment and up to a maximum of life in prison.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  The government’s investigation is continuing.

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

The Defendant:

MARLON THOMPSON
Age:  38
Selden, New York

E.D.N.Y. Docket No. 19-CR-596 (DRH)