Eastern District of New York

Former Suffolk County District Attorney Thomas J. Spota and Christopher McPartland, the former Chief of Investigations and Chief of the Government Corruption Bureau  of the Suffolk County District Attorney’s Office (SCDAO), were convicted today by a federal jury in Central Islip, New York, of all four counts of the indictment charging them with conspiracy to tamper with witnesses and obstruct an official proceeding, witness tampering, obstruction of justice, and being accessories after-the-fact to former Suffolk County Police Department (SCPD) Chief of Department James Burke’s deprivation of a prisoner’s civil rights.  The verdict followed a six-week trial before United States District Judge Joan M. Azrack.  When sentenced, Spota and McPartland each face up to 20 years’ imprisonment.

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 verdicts.

“When a sitting District Attorney and the Chief of the Government Corruption Bureau attempt to obstruct a federal grand jury investigation, it is nothing short of an attack on  the justice system itself, and it will not be tolerated by the Justice Department.  As prosecutors, the defendants were obligated to support the law they enforce, but the criminal actions taken by these men made a mockery of that obligation.  Thankfully, the rule of law has prevailed, and the defendants now must face the consequences of their actions, just like any other defendant who has broken the law,” stated United States Attorney Donoghue.

“Spota and McPartland violated the law by obstructing a federal investigation into the assault on an individual’s civil rights,” stated FBI Assistant Director-in-Charge Sweeney. “Today they are reminded that positions of power come with a great responsibility to respect both the law and public trust.  Any abuse of this privilege will be prosecuted to the fullest extent.”

As proven at trial, Spota and McPartland, the top prosecutors in Suffolk County, abused their leadership positions and authority within the SCDAO to obstruct and attempt to obstruct the FBI and federal grand juries investigating the assault of a SCPD prisoner, Christopher Loeb, in order to protect then-Chief Burke.  On December 14, 2012, Loeb was arrested on larceny charges, among other offenses, in connection with his burglarizing Burke’s department-issued vehicle and stealing Burke’s gun belt and ammunition, as well as a duffel bag containing cigars, sex toys, a pornographic video and a bottle of Viagra.  Loeb was transported to the Fourth Precinct in Hauppauge, New York, where he was assaulted by Burke and other members of the SCPD, while handcuffed and shackled to the floor. 

The evidence at trial consisted of SCPD and SCDAO documents and records, voluminous telephone records, cell site records and testimony from 30 witnesses, including multiple cooperating witnesses.  One such witness was James Hickey, a retired SCPD Lieutenant who was part of the “Inner Circle” that included Spota, McPartland and Burke.  Hickey and several other cooperating and immunized witnesses detailed the defendants’ use of intimidation and threats to pressure witnesses to withhold information, refuse to cooperate with law enforcement, and lie under oath in order to thwart the federal investigation of the Loeb assault.  Hickey supervised the SCPD’s elite Criminal Intelligence Unit, which Burke referred to as his “Palace Guards.”  Three detectives from this unit participated with Burke in the assault of Loeb.  Hickey testified that Burke told him the Intel guys “did themselves proud,” they “beat the hell” out of Loeb, and it was “just like the good old days.” 

Loeb’s case was handled by the SCDAO’s Government Corruption Bureau, supervised by McPartland, although the charges would not typically be handled by that bureau, in an attempt to control the flow of information and cover-up the assault.  In February 2013, after Loeb’s attorney disclosed that her client had been assaulted at the Fourth Precinct, Hickey testified that McPartland advised him to “keep the guys quiet and tight … it’s imperative we keep Jimmy [Burke] out of jail, so we needed to keep the guys quiet and in line.”  Hickey testified that Spota regularly pressured him to keep the Intel detectives quiet by repeatedly inquiring – “Are they holding up?”  “Are they towing the line?” – conveying the message that they should refuse to cooperate with the federal investigation and, if necessary, lie to protect Burke.

In April 2013, the United States Attorney’s Office for the Eastern District of New York and the FBI initiated a federal grand jury investigation into the assault of Loeb. 

On June 25, 2013, FBI Special Agents served members of the SCPD with federal grand jury subpoenas.  That same day, defendants Spota and McPartland learned of the existence of the federal investigation.  McPartland instructed Hickey to debrief his Intel detectives and learn what was said by the FBI agents serving the subpoenas, and find out who might be cooperating with them.  However, because of the threats and intimidation, none of the Intel detectives cooperated with the investigation, and it was closed eight months later, in December 2013.  Through the efforts of the defendants and Burke, the initial grand jury investigation of Burke’s civil rights violation was successfully derailed. 

In or about mid-2015, Spota and McPartland learned that the federal investigation had been reopened, and that its scope had expanded to include an investigation of the obstruction of justice and witness tampering offenses.  The defendants reacted swiftly to obstruct it.  Hickey testified that at a meeting with the defendants in Spota’s office on June 4, 2015, Spota asked him, “Who do you think has flipped?”  In discussing which of the detectives might be a “rat,” cooperating with federal investigators, Spota said about one of the likely cooperators, “If he talks, he’s dead.  He will never work in Suffolk County again.”  In that same meeting, McPartland told Hickey to pass along a message to the Intel detectives, threatening them with prosecution if they cooperated with the investigation.

The defendants’ efforts to thwart the grand jury investigations ultimately failed.  In early December 2015, a federal grand jury in the Eastern District of New York indicted Burke.  Burke pleaded guilty approximately two months later, admitting to his involvement in both the deprivation of Loeb’s civil rights and the conspiracy to obstruct justice.  In November 2016, he was sentenced to 46 months’ in prison. 

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Nicole Boeckmann, Lara Treinis Gatz, Justina L. Geraci and Michael R. Maffei are in charge of the prosecution, and were assisted by Assistant United States Attorney John Durham and Investigator William Hessle.

The Defendants:

THOMAS J. SPOTA
Age:  78
Mount Sinai, New York

CHRISTOPHER McPARTLAND
Age:  54
Northport, New York

E.D.N.Y. Docket No. 17-CR-587 (JMA)

 

An indictment was unsealed today in federal court in Brooklyn charging John Comito, Chief Executive Officer of Staten Island-based AutoExec Computer Systems, Inc. (AutoExec) with mail and wire fraud in connection with the federal program known as E-rate.  Comito was arrested this morning, and was arraigned this afternoon before United States Magistrate Judge Steven M. Gold.  Comito was released on a $500,000 bond.   

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), and David L. Hunt, Inspector General, Federal Communications Commission (FCC-OIG), announced the charges.

“Comito allegedly overbilled the E-rate program and schools for equipment and services in order to enrich himself at the expense of the children the program was designed to serve,” stated United States Attorney Donoghue.  “This Office will vigorously prosecute those who defraud taxpayer-supported programs for personal gain.”

“Instead of completing the work he was trusted and contracted to perform, the defendant allegedly chose to bilk the government and steal from those less fortunate.  Society will swiftly denounce this type of criminal behavior, and Comito will now he held accountable,” stated USPIS Inspector-in-Charge Bartlett.

“An important mission of the Office of Inspector General is to investigate allegations of fraud related to the E-rate Program,” stated FCC Inspector General Hunt.  “We will continue to work with our law enforcement partners to investigate these matters, where the allegation involves a service provider seeking to take advantage of the program by retaining funds for his own purposes rather than providing equipment and services to needy schoolchildren.”     

As set forth in the indictment and other court documents, the E‑rate program distributes funds to schools and libraries serving economically disadvantaged children to purchase telecommunication services, internet access and related equipment.  In order to qualify, educational institutions must certify that they are purchasing equipment and services from a private vendor. The vendor must certify that it is providing the services and equipment as ordered, and is otherwise in compliance with the requirements of the program.  If approved, the E-rate program defrays the cost by up to 90 percent.

From 2013 to 2017, 26 elementary, middle and high schools located in the Diocese of Brooklyn contracted with AutoExec to provide telecommunications equipment and services.  At least eight schools received no equipment or services, and the remaining schools received partial, substandard or non-approved equipment and services.  In total, Comito overbilled the E-rate program, and defrauded the program and schools, in the amount of approximately $426,000.

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

If convicted, Comito faces a maximum sentence of 20 years’ imprisonment on each count of mail fraud and wire fraud. 

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

The Defendant:

JOHN COMITO
Age: 68
Staten Island, New York

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

 

A federal jury in Brooklyn yesterday returned a guilty verdict for public benefits theft and healthcare fraud against Enock Mensah, a social worker participating in the New York State Early Intervention Program (EIP) that provides remedial services to developmentally delayed children.  When sentenced by United States District Judge Sterling Johnson, Jr., the defendant faces up to 10 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 (FBI), and Margaret Garnett, Commissioner, New York City Department of Investigation (DOI), announced the verdict.

“Mensah was more interested in lining his pockets than serving the developmentally delayed children and their families who depend on social work services,” stated United States Attorney Donoghue.  “With today’s verdict, the defendant faces the consequences for abusing the trust placed in him, which should also serve as a deterrent to those who would attempt to defraud public benefit programs.”

“Early intervention therapies are essential to the progress of young developmentally disabled and delayed children. The defendant, convicted today of fraud and other charges, chose greed over honesty – accepting public money as if he had provided these crucial services and pocketing those funds for himself, denying children and their families care that would help them reach important developmental milestones. DOI thanks the U.S. Attorney’s Office for the Eastern District of New York for its prosecution of and partnership in this important investigation,” stated DOI Commissioner Garnett.

From August 2013 to October 2018, Mensah fraudulently billed Medicaid and EIP for more than 1,700 therapy sessions that never occurred, resulting in the theft of more than $145,000 in Medicaid funds and more than $29,000 in New York City Department of Health and Mental Hygiene funds.  At trial, several parents of special needs children testified that Mensah did not provide therapy sessions to their children.  This was despite documents showing that he claimed to have done so and submitted claims forms for payment to the health care agencies.  One parent testified that she was in the Dominican Republic with her autistic child when Mensah billed for two purported therapy sessions with them.  In some cases, Mensah forged the parents’ signatures on these claims forms; in others, he persuaded them to sign blank forms.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Ryan Harris, Anthony Bagnuola, Oren Gleich and Erin Reid are in charge of the prosecution. 

The Defendant:

ENOCK MENSAH
Age: 60
Fort Lee, New Jersey

E.D.N.Y. Docket No. 19-CR-60 (S-1) (SJ)

 

Junior Zelaya-Canales, a regional leader of the 18th Street gang, will be arraigned this afternoon before United States Magistrate Judge Robert M. Levy in federal court in Brooklyn on a fourth superseding indictment charging him with murder in aid of racketeering in connection with the September 2016 fatal shooting of 15-year-old Josue Guzman in Hempstead, New York; conspiracy to murder rival gang members; and attempted murder of rival gang members.  The superseding indictment also charged 18th Street gang members Jonathan Zelaya-Diaz with conspiracy to commit murder and attempted murder in aid of racketeering, and Eric Chavez with attempted murder and assault in aid of racketeering.  Chavez was arrested on Tuesday and ordered detained pending trial.  Zelaya-Diaz remains at large.

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 charges.

As alleged in the superseding indictment and other court filings, the 18th Street gang is a violent street gang with members and associates in Jamaica, Queens, and in various locations across the United States.

“The superseding indictment and arrests announced today are a significant step in dismantling a violent street gang in our district,” stated United States Attorney Donoghue.  “This Office, with the assistance of local and federal law enforcement partners, will not relent until violent street gangs that endanger communities have been eradicated.”  Mr. Donoghue expressed his grateful appreciation to the Nassau County District Attorney’s Office, Nassau County Police Department, Queens District Attorney’s Office and the New York City Police Department (NYPD) for their assistance with the investigations.  

"It defies comprehension these gang members are allegedly murdering and attempting to murder human beings for respect in their gang or in retaliation for some perceived slight,” stated FBI Assistant Director-in-Charge Sweeney.  “Josue Guzman was just 15-years-old when he was shot and killed because someone deemed him to be disrespectful. We may never be able to change the mindlessness of a teenager being killed for no reason, but we can certainly make sure anyone who commits such a grotesque act will suffer the consequences.”

The Guzman Murder

In September 2016, Zelaya-Canales allegedly directed two lower-level gang members to kill Josue Guzman to demonstrate their allegiance to 18th Street gang.  The murder was ordered, in part, because Guzman was believed to have offended 18th Street gang members.  On September 12, 2016, at approximately 1:00 a.m., the Hempstead Police Department responded to a report of shots fired near the intersection of Linden Avenue and Laurel Avenue in Hempstead.  There, the police officers found Guzman’s body lying near the curb, shot once in the back of the head.  Guzman was pronounced dead at the scene.

Attempted Murder of Rival Gang Members

On July 9, 2017, Zelaya-Canales, Zelaya-Diaz and another 18th Street gang member allegedly directed the shooting of rival gang members over a turf dispute in Woodhaven, Queens.  At approximately 10:30 p.m., NYPD officers responded to a 911 call about shots fired in the vicinity of 86th Road in Woodhaven.  There, the police officers recovered nine 9-millimeter shell casings.  

On August 9, 2017, NYPD detectives investigating the shooting executed a search warrant at Zelaya-Canales’s apartment and recovered a 9-millimeter Ruger handgun with a defaced serial number, four rounds of 9-millimeter ammunition, 56 rounds of .357 magnum ammunition, 34 rounds of .380 caliber ammunition and 23 rounds of .38 ammunition.  Ballistic tests subsequently revealed that the Ruger handgun was the weapon that fired the 9-millimeter shell casings found at the scene of the shooting in Woodhaven.

Attempted Murder of “John Doe”

On September 20, 2017, in Jamaica, Queens, Eric Chavez allegedly shot “John Doe” for the purpose of maintaining and increasing his own position in the 18th Street gang, incorrectly suspecting that “Doe” was a member of the rival MS-13 gang.  Chavez and another gang member approached “Doe” with guns drawn and searched him for MS-13 gang tattoos, but discovered none.  Nevertheless, they shot and wounded “Doe” as he fled. 

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

The government’s case is being prosecuted by Assistant United States Attorneys Soumya Dayananda and Jonathan P. Lax.

The Defendants:

JUNIOR ZELAYA-CANALES (also known as “Terco”)
Age: 23
Queens, New York

JONATHAN ZELAYA-DIAZ (also known as “Scooby”)
Age:  25
Hempstead, New York

ERIC CHAVEZ (also known as “Lunatico”)
Age:  20
Queens, New York

E.D.N.Y. Docket No. 18-139 (S-4) (LDH)

 

An indictment was unsealed today in federal court in Brooklyn charging Genaro Garcia Luna, the former Secretary of Public Security in Mexico from 2006 to 2012, with three counts of cocaine trafficking conspiracy and one count of making false statements.  In exchange for multimillion-dollar bribes, the defendant allegedly permitted the Sinaloa Cartel to operate with impunity in Mexico.  Garcia Luna was arrested yesterday by federal agents in Dallas, Texas, and the government will seek his removal to the Eastern District of New York to face these charges.

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

“Garcia Luna stands accused of taking millions of dollars in bribes from ‘El Chapo’ Guzman’s Sinaloa Cartel while he controlled Mexico’s Federal Police Force and was responsible for ensuring public safety in Mexico,” stated United States Attorney Donoghue.  “Today’s arrest demonstrates our resolve to bring to justice those who help cartels inflict devastating harm on the United States and Mexico, regardless of the positions they held while committing their crimes.”  Mr. Donoghue thanked the Drug Enforcement Administration (DEA) offices in New York and Houston, Homeland Security Investigations, New York Field Office (HSI), New York City Police Department (NYPD) and New York State Police (NYSP) for their work on the case.

According to the indictment and other court filings by the government, from 2001 to 2012, while occupying high-ranking law enforcement positions in the Mexican government, Garcia Luna received millions of dollars in bribes from the Sinaloa Cartel in exchange for providing protection for its drug trafficking activities.  From 2001 to 2005, Garcia Luna led Mexico’s Federal Investigation Agency, and from 2006 to 2012, he served as Mexico’s Secretary of Public Security, controlling Mexico’s Federal Police Force.  In exchange for the payment of bribes, the Sinaloa Cartel obtained safe passage for its drug shipments, sensitive law enforcement information about investigations into the Cartel, and information about rival drug cartels, thereby facilitating the importation of multi‑ton quantities of cocaine and other drugs into the United States.  On two occasions, the Cartel personally delivered bribe payments to Garcia Luna in briefcases containing between three and five million dollars.  According to financial records obtained by the government, by the time Garcia Luna relocated to the United States in 2012, he had amassed a personal fortune of millions of dollars.   

Garcia Luna continued to take steps in the United States to conceal his corrupt assistance to drug traffickers.  Specifically, he allegedly submitted an application for naturalization in 2018, in which he lied about his past criminal acts on behalf of the Sinaloa Cartel.

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

The investigation was led by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.  The Strike Force is based at the DEA’s New York Division and includes agents and officers of the DEA, 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 prosecuted by the Eastern District’s International Narcotics and Money Laundering Section and Public Integrity Section.  Assistant United States Attorneys Michael P. Robotti, Ryan Harris and Erin Reid are in charge of the prosecution.

The Defendant:

GENARO GARCIA LUNA
Age:  51
Residence: Florida

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

 

Two indictments and one complaint were unsealed today in federal court in Brooklyn variously charging 12 defendants with racketeering conspiracy, bribery, loansharking, fraud, obstruction of justice and related offenses.  Those charged with racketeering conspiracy were Andrew Campos, an alleged captain in the Gambino organized crime family of La Cosa Nostra; James Ciaccia, George Campos, Vincent Fiore and Richard Martino, alleged Gambino family soldiers; and Renato Barca, Jr., Benito DiZenzo, Mark Kocaj, Frank Tarul and Michael Tarul, alleged Gambino family associates.  The charges relate to the defendants’ criminal activities throughout the New York metropolitan area since February 2013.

Eleven defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr.  One defendant is a fugitive.

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); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation (IRS-CI); and Dermot F. Shea, Commissioner, New York City Police Department (NYPD), announced the charges.

“The outstanding investigative work by this Office’s prosecutors and our law enforcement partners uncovered a litany of crimes allegedly committed by members and associates of the Gambino organized crime family, who still don’t get it – handcuffs and a jail cell are waiting for criminals who threaten violence and commit fraud, money laundering and bribery in furtherance of their enterprise,” stated United States Attorney Donoghue.  Mr. Donoghue thanked the Queens County District Attorney’s Office, the United States Probation Departments for the Eastern and Southern Districts of New York and the Waterfront Commission of New York Harbor for their assistance during the investigation.

“The Gambino members arrested in this case ran the gamut of criminal activity.  Everything from the usual thuggish behavior of beating people up, forcing people to take the fall for their crimes, all the way to defrauding the federal government,” stated FBI Assistant Director-in-Charge Sweeney.  “Several suspects even went to prison, were released, and allegedly went right back to breaking the law.  At some point, these crime families should realize we see what they're doing, and their actions are going to lead them right back to the same prison cells.”

“Financial gain is the primary motivation of any criminal enterprise and these allegations are no different,” stated IRS-CI Special Agent-in-Charge Larsen.  “The criminal investigators of IRS-Criminal Investigation specialize in unraveling such serious charges where multiple financial frauds and extreme measures are utilized for personal enrichment.”

“The NYPD and its law enforcement partners remain committed to eradicating organized crime in New York City,” stated NYPD Commissioner Shea.  “Associates of the Gambino Crime Family – or any other enterprise that seeks to enrich its members through racketeering, bribery, loansharking and fraud – should know that investigators will build strong cases against them, and they will be prosecuted.  I commend the members of the NYPD, the FBI, and the U.S. Attorney’s Office for their work on this case.”

As alleged in the government’s court filings and summarized below, Andrew Campos and members of his crew used bribery, fraud and extortion schemes to infiltrate the construction industry and earn millions of dollars in criminal proceeds.

Honest Services Wire Fraud Bribery Schemes

Andrew Campos, Fiore, Kocaj and DiZenzo operated a carpentry company, CWC Contracting Corp. (“CWC”), and are charged with paying bribes and kickbacks to employees of numerous construction companies and real estate developers.  In exchange, these employees took steps to benefit CWC, including awarding contracts and approving change orders to add or delete from the original scope of a contract.  Specifically, between approximately June 2018 and June 2019, CWC paid hundreds of thousands of dollars in bribes and kickbacks to multiple employees of a real estate development company (described in the indictment as “Construction Company #1”), including John Simonlacaj, the company’s current Managing Director of Development.  CWC paid the bribes in the form of hundreds of thousands of dollars’ worth of free labor and materials used for renovations on Simonlacaj’s residence that was paid for by a fraudulently approved change order.  As Kocaj stated, although the work was paid for by a change order, “it should have been pro bono” because Construction Company #1 “do[es] 50 million a year in business”, and it was “worth it to do some of the paperwork.”  In another intercepted conversation, Fiore described the benefits provided by Simonlacaj, “This director, John.  There’s a beautiful in there.  There’s things we can do with [Kocaj] there, he whispers what he needs to whisper and we get things done.”

Obstruction of Justice – Martino’s Concealment of Financial Assets  

In 2005, Andrew Campos and Martino were convicted in the Eastern District of New York for their role in a massive scheme to defraud users of adult entertainment services.  Martino was ultimately sentenced to 108 months’ imprisonment and ordered by the court to pay $9.1 million in forfeiture.  After his release from prison, Martino, together with Frank Tarul and others, concealed Martino’s substantial wealth and income, falsely reporting that Martino had limited assets and worked for Tarul’s flooring company.  In reality, as revealed by court-authorized wiretaps, Martino operated multiple companies that earned millions of dollars, including construction work, investments in pizzerias and other business ventures.

Loansharking and Extortion

As detailed in the government’s court filings, various defendants used extortionate means to collect money.  For example, Andrew Campos and Fiore used threats of violence to collect at least $100,000 from one victim.  In a lawfully wiretapped phone conversation on March 13, 2019, Fiore warned the victim, “When you get punched in the face and your teeth get knocked out . . .  you’re not going to laugh no more, okay? . . .  At the end of the day, when you’re upside down [i.e., unable to make certain payments], you deal with him,” referring to Campos. 

Kocaj and Lopez, a former professional boxer, are charged with loansharking, including Kocaj’s recovery of tens of thousands of dollars of a gambling debt on behalf of an Albanian organized crime figure.  Kocaj bragged about his ability to violently collect money, stating that he could send “a couple of my Albanian guys” and have somebody “grab [a potential victim] by the f-----g neck.”   Kocaj helped collect over $30,000, threatening that if the victim did not pay, “[h]e’s going to get his head split open. . . .  These are not the guys to f--- around with. . . .  These Albanians, you know what they’ll do.”  Earlier this morning, law enforcement officers executed a search warrant at Lopez’s home and seized $25,000 in cash, brass knuckles and several large knives.

Retaliation Against Grand Jury Witness – Obstruction of Justice

Andrew Campos allegedly directed that a CWC worker believed to have testified before the grand jury be fired.  Subsequently, during a lawfully recorded conversation on November 22, 2019, Fiore directed that the CWC worker be fired as “a personal favor to Andrew,” because the worker “could’ve pled the Fifth.”  

Additional Charged Schemes

The indictments and complaint include additional alleged criminal schemes, including (1) laundering money by cashing checks made out to others, purportedly for work performed in connection with CWC construction projects; (2) fraudulently procuring cards from the United States Department of Labor indicating completion of certain Occupational Safety and Health Administration training courses when, in fact, the courses were never completed; (3) defrauding the U.S. government by paying CWC employees millions of dollars in cash without making the required payroll tax withholdings and payments; (4) overbilling CWC clients by causing them to pay for fraudulent or inflated work orders; and (5) evading taxes and money laundering, including by having CWC construct Andrew Campos’s residence.

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

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

The Defendants:

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

RENATO BARCA, JR. (also known as “Ronny”)
Age: 32
Bronx, New York

ANDREW CAMPOS
Age: 50
Scarsdale, New York

GEORGE CAMPOS
Age: 72
Peekskill, New York

JAMES CIACCIA
Age: 51
Bronx, New York

BENITO DIZENZO (also known as “Benny”)
Age: 53
New Rochelle, New York

VINCENT FIORE
Age: 57
Briarcliff, New York

MARK KOCAJ (also known as “Chippy”)
Age: 49
Tuckahoe, New York

RICHARD MARTINO
Age: 60
Rye, New York

JOHN SIMONLACAJ (also known as “John Si” and “Smiley”)
Age: 50
Scarsdale, New York

FRANK TARUL (also known as “Bones”)
Age: 45
Bronx, New York

MICHAEL TARUL (also known as “Perkins”)
Age: 43
Bronx, New York

E.D.N.Y. Docket No. 19-CR-577 (FB)

MARK KOCAJ (also known as “Chippy”)
Age: 49
Tuckahoe, New York

E.D.N.Y. Docket No. 19-MJ-1126

ADRIAL LOPEZ (also known as “Adriel Lopez” and “Andrew Lopeck”)
Age:  56
Bronx, New York

 

 

Today, the Department of Justice announced that it has awarded $360,000 to the Office of the Nassau County District Attorney and $275,000 to Suffolk County, New York, as part of more than $376 million in grant funding to enhance state, local and tribal law enforcement operations and reinforce public safety efforts in jurisdictions across the United States.  The awards were made by the Department’s Office of Justice Programs (OJP).

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Katherine T. Sullivan, Principal Deputy Assistant Attorney General, OJP, announced the awards.

“DOJ’s Office of Justice Programs’ grants will provide additional support to our law enforcement and community partners in Nassau and Suffolk Counties to our collective benefit,” stated United States Attorney Donoghue.

“Crime and violence hold families, friends and neighborhoods hostage, and they rip communities apart,” stated OJP Principal Deputy Assistant Attorney General Sullivan. “These programs help restore the health and safety of crime-ravaged communities by supporting prevention activities, aiding in the apprehension and prosecution of perpetrators, facilitating appropriate sentencing and adjudication, and providing communities and their residents the means for recovery and healing.”

The awards are:

Bureau of Justice Assistance Innovative Prosecution Solutions for Combatting Violent Crime Program

The program provides prosecutors with information, resources and training, and technical assistance to develop effective strategies and programs to address and prosecute individuals who commit violent crime.  Recipient: Office of the Nassau County District Attorney, $360,000.

Bureau of Justice Assistance Upholding the Rule of Law and Preventing Wrongful Convictions Program

This program supports state and local policymakers, practitioners and entities that represent individuals with post-conviction claims of innocence to review wrongful conviction claims cases and enact measures to prevent future errors and ensure justice.  Recipient: Suffolk County, New York, $275,000.

The awards announced today support an array of crime-fighting initiatives, including the $250 million Edward Byrne Justice Assistance Grants Program that funds public safety efforts in 929 state, local and tribal jurisdictions.  Funding also supports sex offender registration and notification, law enforcement-based victim services, the testing of sexual assault kits and programs designed to address youth with sexual behavioral problems.

The Office of Justice Programs provides federal leadership, grants, training and technical assistance, and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems.  More information about OJP and its components can be found at www.ojp.gov.

WASHINGTON – Attorney General William P. Barr and Justice Department leadership today announced the recipients of the Third Annual Attorney General’s Award for Distinguished Service in Policing, recognizing the exceptional work of 19 law enforcement officers and deputies from 12 jurisdictions across the country.

The Attorney General’s Award recognizes individual state, local and tribal sworn rank-and-file police officers and deputies for exceptional efforts in policing.  The awarded officers and deputies have demonstrated active engagement with the community in one of three areas: criminal investigations, field operations or innovations in community policing.  The Department received 199 nominations for 414 individuals, ranging from state police departments, to local police, to campus public safety agencies. This award highlights the work that troopers, officers and deputies do to prevent, intervene in and respond to crime and public safety issues. 

Detective William Maldonado of the Suffolk County Police Department (SCPD) is honored for his effort in leading the criminal investigation into La Mara Salvatrucha, also known as MS-13, a transnational criminal organization.  In January 2016, after the SCPD recognized an increase in MS-13-related crime, Detective Maldonado was assigned to assist in the investigation of the November 2015 disappearance of a 35-year-old man; gang involvement was suspected.  During the next six months, there would be three cases of missing teenagers.  Detective Maldonado gathered information that indicated the teens had been murdered by MS-13 gang members.  Detective Maldonado was tasked with managing intelligence from numerous sources and engaging local police precincts to develop intelligence on targeted gang members of interest.  During the course of the investigation, Detective Maldonado was battling cancer, but rarely missed work due to the illness.  When he succumbed to his illness in 2018, all of the murder victims’ remains had been recovered, and multiple arrests had been made by law enforcement.  As a result of the investigation, MS-13’s Sailor Clique in Suffolk County, which was responsible for most of the murders, was eliminated.

“Honoring and supporting the work of law enforcement officers and deputies is a top priority for the Trump Administration, and today is an opportunity for me to personally express my gratitude and commitment to those who risk their lives daily to protect our communities,” said Attorney General Barr.  “The Attorney General’s Award for Distinguished Service in Policing honors exceptional police officers and the vital public service they provide.  The brave men and women in law enforcement are engaged in an unrelenting and often unacknowledged fight to keep our communities safe each and every day.  It is an honor to thank them for their service.”

“Detective Maldonado’s shining legacy is built upon his unflagging commitment to protect the people of Suffolk County and do justice for the victims brutally killed by MS-13 gang members,” stated United States Attorney Donoghue.  “His tenacious work remains an inspiration to all members of law enforcement who are working to eradicate MS-13.”

 “This recognition encapsulates everything Detective Maldonado was, as a person and as a detective,” stated SCPD Commissioner Geraldine Hart.  “Detective Maldonado worked tirelessly as a member of the FBI Long Island Gang Task Force, where he was instrumental in the fight against MS-13 in Suffolk County.  He was proud to be a cop, and we were proud to have him as a member of our SCPD family.  His absence is felt every day.”

Earlier today, at the federal courthouse in Brooklyn, Sherzod Mukumov pled guilty to conspiracy to commit kidnapping.  As alleged in the indictment, Mukumov and his co-conspirators used a Taser to subdue and abduct a victim to collect a debt the victim purportedly owed to one of Mukukmov’s co-defendants.  The plea proceeding was held before United States District Judge I. Leo Glasser.  When sentenced, Mukumov faces up to life 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.

In December 2018, the victim joined a pre-existing scheme of Mukumov and others to help applicants for New York State commercial driver’s licenses cheat on tests administered by the Department of Motor Vehicles, in exchange for cash.  When the victim ended his involvement in the scheme after approximately two weeks, his former co-conspirators claimed he owed them money. 

On the morning of March 28, 2019, Mukumov and his co-conspirators assaulted the victim outside an apartment building in Brooklyn.  While the victim was clinging to the front door of the building, he was shocked multiple times by a Taser device held by one of Mukumov’s co-defendants, and lost consciousness.  The victim subsequently regained consciousness inside a vehicle, with his hands bound.  Mukumov and his co-defendants drove the victim to a deserted area in a parking garage, and took his telephone and other personal items.  They then drove to a bank where they forced the victim to open an account and write them a check in partial payment of the purported debt.  The victim was released later that day, after he was forced to surrender his driver’s license, green card and bank card.

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

The Defendant:

Sherzod Mukumov
Age: 27
Brooklyn, NY

E.D.N.Y. Docket No. 19-CR-223 (ILG)

Earlier today, in federal court in Brooklyn, Dan Zhong, a former diplomat of the People’s Republic of China (PRC), was sentenced by United States District Judge Ann M. Donnelly to 190 months’ imprisonment and a $50,000 fine.  Zhong, the former head of U.S. operations of Chinese Liaoning Rilin Construction (Group) Co. Ltd. (also known as China Rilin) and U.S.-based subsidiaries, including U.S. Rilin, was convicted by a federal jury in March 2019 following a three-week trial on charges of conspiracy to provide forced labor, providing and benefitting from forced labor, concealing passports and immigration documents in connection with forced labor, conspiracy to commit alien smuggling and conspiracy to commit visa fraud.  The Court also ordered Zhong to forfeit his interests in multiple real estate properties and pay approximately $23,000 in restitution as part of the sentence.

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, Department of Homeland Security, Homeland Security Investigations, New York (HSI), and Timothy W. Dumas, Special Agent-in-Charge, U.S. Department of State’s Diplomatic Security Service, New York Field Office (DSS), announced the sentence.

“Unlike Chinese Communist elites, Americans do not practice, condone or tolerate forced labor,” stated United States Attorney Donoghue.  “Mr. Zhong, a former long-time PRC diplomat, oppressed and coerced Chinese construction workers in New York, forcing some to work for years without pay under the threat of physical harm and financial ruin.  Zhong will now pay a heavy price for those crimes.”  Mr. Donoghue expressed his appreciation to the Department of State’s Office of Foreign Missions and the FBI’s Field Office in Newark, New Jersey, for their assistance on the case.

“Zhong forced his workers to work 14-hour days and live in cramped, unsafe conditions, with locks on the doors so they could not escape,” stated HSI Special Agent-in-Charge Fitzhugh.  “Through forced labor, Zhong took advantage of those seeking a new life in America.  Today’s sentencing is a testament to law enforcement’s resolve to arrest and prosecute anyone seeking to exploit people for person gain.”

“The Diplomatic Security Service works to identify and prevent situations where vulnerable individuals are exploited in human trafficking schemes such as this,” stated DSS Special Agent-in-Charge Dumas.  “This case is an especially serious abuse of the legal and immigration systems as it involved a former diplomat of the People’s Republic of China.  DSS agents stationed throughout the world are well-positioned to work with U.S. and foreign partners to stop those individuals who would manipulate instruments of international travel, and profit from the selling of human beings.”

Zhong’s company performed construction work on a variety of PRC government facilities in the United States, including the Permanent Mission of the PRC to the United Nations, the Embassy of the PRC to the United States and PRC Consulates General in the United States.  Zhong and his co-conspirators obtained visas for PRC workers that required them to work only at PRC diplomatic facilities.  In fact, they were forced to work on private construction projects, including a commercial building in midtown Manhattan, and private residences in Queens and on Long Island.  Zhong also used the workers as personal servants – preparing meals, chauffeuring him and performing yard work at his home.

Zhong and his co-conspirators required PRC workers to turn over substantial “security deposits,” including the deeds to their family homes that were subject to forfeiture if they refused to work, as a key element of  the “debt bondage” contracts the workers signed.  Once in the United States, the workers were forced to surrender their passports to Zhong’s co-conspirators.  The workers were required to work 14-hour days, seven days a week, for years without receiving any pay.  Twenty or more workers were housed in one and two-family houses in Jersey City.  Inspections of these houses revealed numerous fire code violations, as well as illegal locks to prevent the workers from escaping.  Zhong and his co-conspirators resorted to physical force and threats to prevent escape by the workers, including forcing the workers’ family members out of their homes in the PRC.  Zhong’s co-defendant in the indictment, Landong Wang, is a fugitive who is believed to be in the PRC.  

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda, Ian C. Richardson and Craig R. Heeren are in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian Morris of the Office’s Civil Division which is handling the forfeiture aspect of the case.

The Defendant:

DAN ZHONG
Age:  49
Livingston, New Jersey

E.D.N.Y. Docket No. 16-CR-614 (AMD)

 

A federal jury in Brooklyn returned a guilty verdict yesterday against defendant Yuan Li for extortion conspiracy and threatening physical violence in furtherance of an extortion plan.  The verdict followed a four-day trial before United States District Judge Brian M. Cogan.  When sentenced, Li faces a maximum sentence of 40 years in prison.

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

“With this verdict, Li now faces punishment for his role in using fear, intimidation and threats of violence to extort a rival who dared to open a gambling parlor on his co-defendant’s turf,” stated United States Attorney Donoghue.  Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office (FBI), and the New York City Police Department for their work on the case.

The government’s evidence at trial established that Li’s co-defendant, Anthony Pineda, operated numerous gambling parlors from which he distributed large amounts of methamphetamine, in Flushing, Queens.  In September 2017, the victim opened a gambling parlor in a building on College Point Boulevard that also housed one of Pineda’s gambling parlors.  On September 28, 2019, Li and Pineda demanded that the victim pay 10 percent of his parlor’s profits. When the victim refused, Pineda brandished a gun and Li reiterated his demand for payment, but to no avail. The next day, Li and Pineda again demanded that the victim provide a percentage of his parlor’s profits.  Fearing for his safety, the victim contacted the FBI.

The trial was part of a larger prosecution of 11 additional defendants who previously pleaded guilty.  On August 14, 2019, lead defendant Anthony Pineda pleaded guilty to conspiracy to distribute 50 grams or more of methamphetamine, possessing a firearm in furtherance of a drug trafficking crime and threatening physical violence in furtherance of an extortion plan.  On various dates between April and September 2019, co-defendants Joung Hwa Yun, Yunfeng Goa, Lu Zhai, Marco Rescino, Jing Wang, Ivan Kaleda and Guanghua Shen each pleaded guilty to conspiracy to distribute 50 grams or more of methamphetamine.   In June and July 2019, co-defendants Nan Zhang and Ting Li each pleaded guilty to conspiracy to distribute five grams or more of methamphetamine.  On May 21, 2019, Si En Li pleaded guilty to operating an illegal gambling business. 

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

Defendant Convicted Yesterday:

YUAN LI (also known as “Mike”)     
Age: 38
Queens, New York

Defendants Awaiting Sentencing:

ANTHONY PINEDA
Age:  37
Queens, New York/San Francisco, California

YUNFENG GAO
Age:  34
Queens, New York

IVAN KALEDA
Age:  29
Queens, New York

SI EN LI
Age:  46
Brooklyn, New York

TING LI
Age:  31
Queens, New York

MARCO RESCINO
Age:  23
San Francisco, California

GUANGHUA SHEN
Age: 45

Queens, New York

JIN WANG
Age:  35
Queens, New York

JOUNG HWA YUN
Age:  41
Queens, New York

LU ZHAI
Age:  31
Queens, New York

NAN ZHANG
Age:  32

E.D.N.Y. Docket No. 18-CR-302 (MKB/BMC)

 

The Department of Justice announced today that the U.S. District Court for the Eastern District of New York entered an injunction against Foo Yuan Food Products Company Inc. (Foo Yuan) of Long Island City, New York, its owner and president Hsing Chuang, and its secretary Susan Chuang.  The injunction permanently enjoins the defendants from preparing, processing, and distributing food products without first taking required remedial action designed to protect consumers from adulterated fish and fishery products.

The injunction stems from a complaint the Department filed in the U.S. District Court for the Eastern District of New York on Aug. 20, 2018, at the request of the U.S. Food and Drug Administration (FDA).  The complaint alleged that the defendants prepare, pack, hold and distribute refrigerated and frozen ready-to-eat fish balls, fried fish cakes and fried fish balls.  According to the complaint, the defendants failed to adequately control the risk of Clostridium botulinum and Listeria monocytogenes (L. mono.) growth and toxin formation in susceptible fish and fishery products. 

“The Department of Justice is committed to enforcing federal laws designed to ensure food safety,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “The Department of Justice works together with the FDA to ensure that Americans are protected from potentially unsafe food.” 

“The defendants’ failure to respond to the serious allegations in the government’s civil complaint was in keeping with their failure to follow FDA regulations in place to protect the public from adulterated fish products,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York.  “The injunction ensures they are out of business until they can comply with all applicable laws and regulations.”

The District Court’s order permanently enjoins defendants from preparing, processing, and distributing food products without first taking required remedial action set forth in the District Court’s order.  The measures include, among other things, retaining an independent expert to assist with remedial efforts, including development and implementation of a Listeria Monitoring Program.  In addition, defendants’ expert must conduct hazard analyses and develop a written Hazard Analysis and Critical Control Point plan for each type of fish or fishery product prepared, processed, or distributed by defendants to effectively control food safety hazards. 

FDA inspected Foo Yuan’s facility in 2014, 2016 and from December 2017 to January 2018.  According to the complaint, at each inspection, FDA documented significant deficiencies.  For example, as alleged in the complaint, during the most recent inspection, FDA observed a failure to maintain the cleanliness of food contact sources, and a failure to ensure that all persons working in direct contact with food, food contact surfaces and food-packing materials conform to hygienic practices to protect against food contamination. 

The complaint noted that, following the October 2014 inspection, the FDA issued a warning letter notifying Foo Yuan and Hsing Chuang that they were in violation of seafood Hazard Analysis and Critical Control Point and current Good Manufacturing Practice regulations, causing their products to be adulterated under the law.

The complaint alleged that defendants violated the Federal Food, Drug, and Cosmetic Act by causing adulterated food to be introduced into interstate commerce or delivered for introduction into interstate commerce.  It also alleged that the defendants further violated the law by causing food to become adulterated while it was being held for sale after the shipment of one or more of its components in interstate commerce. The defendants did not file a response to the complaint.

“Taking steps to keep potentially unsafe food out of the U.S. food supply is at the heart of the FDA’s mission to protect public health,” said Associate Commissioner for Regulatory Affairs Melinda K. Plaisier.  “When a company does not follow good manufacturing practices and fails to come into compliance, the FDA will take action to protect the health and safety of Americans.”

The government is represented by the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Michael Castiglione of the U.S. Attorney’s Office for the Eastern District of New York, with assistance from Associate General Counsel for Enforcement Tara Boland of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.

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 entered a permanent injunction against Foo Yuan Food Products Company Inc. (Foo Yuan) of Long Island City, New York, its Owner and President Hsing Chuang, and its Secretary Susan Chuang.  The injunction permanently enjoins the defendants from preparing, processing and distributing food products without first taking required remedial action designed to protect consumers from adulterated fish and fishery products.

The injunction stems from a civil complaint the Department of Justice filed on August 20, 2018, at the request of the U.S. Food and Drug Administration (FDA).  The complaint alleged that the defendants, who prepare, pack, hold and distribute refrigerated and frozen ready-to-eat fish balls, fried fish cakes and fried fish balls, failed to adequately control the risk of Clostridium botulinum and Listeria monocytogenes (L. mono.) growth and toxin formation in susceptible fish and fishery products.  During inspections over a number of years, the FDA documented significant deficiencies, including failure to maintain clean work surfaces and to ensure that workers were conforming to hygienic practices.

The complaint further alleged that defendants violated the Federal Food, Drug, and Cosmetic Act by causing adulterated food to be introduced into interstate commerce or delivered for introduction into interstate commerce.  It also alleged that the defendants violated the law by causing food to become adulterated while it was being held for sale after the shipment of one or more of its components in interstate commerce. The defendants did not file a response to the complaint.

The District Court’s order permanently enjoins defendants from preparing, processing and distributing food products without first taking required remedial action set forth in the District Court’s order.  The measures include, among other things, retaining an independent expert to assist with remedial efforts, including development and implementation of a Listeria Monitoring Program.  In addition, defendants’ expert must conduct hazard analyses and develop a written Hazard Analysis and Critical Control Point plan for each type of fish or fishery product prepared, processed or distributed by defendants to effectively control food safety hazards. 

“The defendants’ failure to respond to the serious allegations in the government’s civil complaint was in keeping with their failure to follow FDA regulations in place to protect the public from adulterated fish products,” stated United States Attorney Richard P. Donoghue.  “The injunction ensures they are out of business until they can comply with all applicable laws and regulations.”

“The Department of Justice is committed to ensuring that fish processors comply with federal laws designed to ensure food safety,” stated Assistant Attorney General Jody Hunt of the Justice Department’s Civil Division.  “The Department of Justice will continue to work with the FDA to ensure that Americans are protected from potentially unsafe food.” 

“Taking steps to keep potentially unsafe food out of the U.S. food supply is at the heart of the FDA’s mission to protect public health,” stated Associate Commissioner for Regulatory Affairs Melinda K. Plaisier.  “When a company does not follow good manufacturing practices and fails to come into compliance, the FDA will take action to protect the health and safety of Americans.”

The matter is being handled by Assistant United States Attorney Michael J. Castiglione of the United States Attorney’s Office for the Eastern District of New York together with the Department’s Civil Division’s Consumer Protection Branch, assisted by Associate General Counsel for Enforcement Tara Boland of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.

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.

 

Earlier today, at the federal courthouse in Brooklyn, Leon Campbell was sentenced by United States District Judge LaShann DeArcy Hall to nine years’ imprisonment for his 2013 participation in a murder-for-hire conspiracy and conspiracy to distribute marijuana in Brooklyn and Queens.  Campbell pleaded guilty to the crimes in June 2019. Upon completion of his sentence, Campbell faces deportation from the United States.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, announced the sentence.

“Campbell showed a total disregard for human life, putting a price on the head of someone he suspected of being a federal informant and plotting to execute him,” stated United States Attorney Donoghue.  “The vigilant work of our law enforcement partners enabled them to prevent a murder and hold the defendant responsible for his callous crimes.”  Mr. Donoghue extended his grateful appreciation to the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Department of Homeland Security, United States Marshal Service and New York City Police Department for their assistance during the investigation.

“This murder-for-hire conspiracy reminds us of the extent drug traffickers will go to evade imprisonment,” said DEA Special Agent-in-Charge Ray Donovan.  “And, it underscores the violence associated with the drug trade that pervades throughout time. I applaud the U.S. Attorney’s Office for the Eastern District of New York for their diligent work on this investigation.”   

On April 26, 2013, DEA agents followed Campbell as he was making a delivery of marijuana to a customer in Brooklyn.  Campbell spotted the agents and fled, suspecting his customer was an informant who had provided information to federal law enforcement.  On April 30, 2013, Campbell called co-defendant Williams and offered to pay him $5,000 to kill the suspected informant.  Williams agreed to commit the murder and chose a gang member to carry out the contract.  Subsequently, when Campbell told Williams that he would personally kill the suspected informant but needed an alibi, Williams responded that it would be better to pay someone else to do the job and “get it right.”  Law enforcement agents were monitoring Campbell’s phone and disrupted the murder plot. 

Williams was convicted after trial in January 2018 of murder-for-hire conspiracy.  He is awaiting sentencing. 

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Nathan D. Reilly and Hiral D. Mehta are in charge of the prosecution.

The Defendant:

LEON CAMPBELL (also known as “Country”)
Age: 41
Brooklyn, New York

E.D.N.Y. Docket No. 13-CR-419 (LDH)

A criminal complaint was unsealed today in federal court in Brooklyn charging Lithuanian national Vytautas Parfionovas with computer intrusion, securities fraud, money laundering, bank fraud and wire fraud, among other offenses.  The charged crimes stem from a variety of criminal conduct between 2011 and 2018 in which Parfionovas gained access to U.S.-based computers, including email servers and computers belonging to U.S. financial institutions, in order to steal money from online bank accounts and securities brokerage accounts.  Parfinovas was arrested in Ukraine on October 24, 2019, and was extradited to the United States on November 21, 2019.

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 charges.

“As alleged, the defendant and his co-conspirators stole millions of dollars from U.S. victims while sitting behind keyboards thousands of miles away,” stated United States Attorney Donoghue.  “Cybercriminals are hereby on notice that no amount of distance or subterfuge will protect them, and that we and our law enforcement partners are committed to unmasking, arresting and prosecuting them.”  Mr. Donoghue thanked the Prosecutor Generals Office of Ukraine, the FBI Legal Attaché’s Office in Kiev, the Department of Justice’s Office of International Affairs and the National Cyber Forensic Training Alliance for their assistance in the investigation and the defendant’s extradition.

“The world has become a much smaller place with the advent of the internet, and with that shrinking globe, the days of cyber criminals thinking because they're not in our country they can escape justice are over,” stated FBI Assistant Director-in-Charge Sweeney.  “Our extraordinary partnerships allow the FBI to reach into many of the dark corners where these thieves feel invincible.  If you violate our laws, we will make sure you pay the price.” 

As charged in the criminal complaint, starting in January 2011, Parfionovas and his co-conspirators engaged in a long-running scheme to steal money through a variety of computer intrusions.

In one part of the scheme, Parfionovas and his co-conspirators allegedly obtained login information for victims’ securities brokerage accounts through various methods, including stealing that information from the server of a U.S. securities order management company to which the conspirators gained unauthorized access.  The conspirators then used those accounts to steal money and conduct trades to their own benefit.  Initially, conspirators accessed the victim brokerage accounts and transferred money from those accounts to other accounts under their control.  After financial institutions began to block those unauthorized transfers, Parfionovas and his co-conspirators accessed other victim brokerage accounts without authorization, and placed unauthorized stock trades within those accounts while simultaneously trading profitably in the same stocks from accounts that they controlled.  On or about February 22, 2016, Parfionovas explained this aspect of the scheme to a co-conspirator as follows:  “I take some fraud logins.  Do some s[_]t with stock . . . sometimes 2-3 in day . . . manipulation is 100%.”  In this manner, Parfionovas and his co-conspirators realized financial gains while causing losses of more than $5.5 million.

In another part of the scheme, Parfionovas and his co-conspirators allegedly obtained login information for victim email accounts and accessed those accounts without authorization.  The conspirators then sent email messages from those accounts to the victims’ financial advisers and requested wire transfers from the victims’ financial institutions to overseas bank accounts that the conspirators controlled.  For example, in or about May 2013, Parfionovas and his co-conspirators obtained $50,000 from an investment account that belonged to U.S. victims, and Parfionovas directed the transfer of those funds to a series of bank accounts and ultimately to an individual in Kharkov, Ukraine, where Parfionovas was located.  To defraud another victim, Parfionovas and his co-conspirators obtained control over a victim’s email account and used it to send written instructions—which falsely appeared to have been signed by the victim—to transfer $225,000 from one of the victim’s accounts.

If convicted, the defendant faces up to 30 years’ imprisonment for the money laundering charge, and a mandatory consecutive two-year sentence for the charge of aggravated identity theft.

The charges in the complaint announced today 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 and the Business and Securities Fraud Section.  Assistant United States Attorneys David K. Kessler, Mark E. Bini and Alexander Mindlin are in charge of the prosecution.  The Justice Department’s Office of International Affairs of the Department’s Criminal Division provided significant assistance in securing the defendant’s extradition from Ukraine.

The Defendant: 

VYTAUTAS PARFIONOVAS
Age: 32
Kiev, Ukraine

E.D.N.Y. Docket No. 19-MJ-883

An indictment was unsealed today charging a former chief executive officer (CEO) of Braskem S.A. (Braskem), a publicly traded Brazilian petrochemical company, for his role in a massive bribery and money laundering scheme involving Braskem and its parent company, Odebrecht S.A. (Odebrecht), that resulted in the diversion of hundreds of millions of dollars from Braskem into a secret slush fund that was used, in part, to pay bribes to government officials, political parties and others in Brazil to obtain and retain business. 

Jose Carlos Grubisich, 62, a citizen of Brazil who served as the CEO and a member of the board of directors of Braskem, as well as in various capacities for Odebrecht, was charged with one count of conspiracy to violate the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA), one count of conspiracy to violate the books and records provision of the FCPA and to fail as a corporate officer to certify financial reports and one count of conspiracy to commit international money laundering.  Grubisich was arrested this morning, and is scheduled to be arraigned this afternoon before U.S. District Judge Raymond J. Dearie of the Eastern District of New York.

“Grubisich and other senior executives at Braskem and Odebrecht allegedly engaged in a massive and sophisticated international bribery and money laundering scheme, employing secret slush funds, shell companies, and false accounting,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “As demonstrated by the charges unsealed today, the Department continues to work closely with our domestic and international partners to root out and prosecute corporate fraud and corruption at the highest levels.”

“As alleged in the indictment, Jose Carlos Grubisich used his position as CEO of a major publicly traded petrochemical company to funnel hundreds of millions of dollars through offshore accounts to bribe power brokers and serve the interests of his company,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York.  “Today’s indictment once again demonstrates the commitment of the U.S. Department of Justice to investigate and prosecute those who take advantage of the United States financial system to further their financial crimes.”                                     

As alleged in the indictment, between approximately 2002 and 2014, Grubisich, together with other co-conspirators, including certain former Braskem and Odebrecht employees, engaged in a widespread bribery and money laundering scheme that resulted in the diversion of approximately $250 million of Braskem’s funds into a secret slush fund, which was used, in part, to pay bribes to government officials, political parties and others in Brazil to obtain and retain business and certain business advantages for Braskem.  The slush fund was allegedly generated by payments from Braskem’s bank accounts in Brazil, New York and Florida pursuant to fraudulent contracts with offshore shell companies that were secretly controlled by Braskem.  These shell companies funneled the slush funds to a department within Odebrecht responsible for making bribe payments, which ultimately made corrupt payments on Braskem’s behalf, the indictment alleges.

Additionally, as alleged in the indictment, while CEO of Braskem, Grubisich was involved in negotiating and approving bribes to government officials using money from the slush fund.  These included alleged payments made to ensure that Braskem could retain a contract for a significant petrochemical project in Brazil, and to ensure that Braskem could obtain favorable pricing in contract negotiations with Petroleo Brasileiro S.A. – Petrobras, Brazil’s state-owned and state-controlled oil company.  Grubisich regularly discussed the bribe payments with other co-conspirators, and was kept informed about bribe payments made on behalf of Braskem, the indictment alleges.  Certain of the bribe payments that were allegedly negotiated and authorized by Grubisich were ultimately paid after Grubisich left his position as CEO of Braskem in 2008, but while he continued to serve in other capacities at Odebrecht and Braskem, and while he was a stockholder of Braskem.

Furthermore, as alleged in the indictment, while CEO of Braskem, Grubisich agreed to falsify Braskem’s books and records by causing Braskem to falsely record the payments to the offshore shell companies controlled by Braskem as “commissions.”  Grubisich also signed false certifications submitted to the SEC that, among other things, attested that Braskem’s annual reports fairly and accurately represented Braskem’s financial condition, and that Grubisich, as Braskem’s principal officer, had disclosed all fraudulent conduct by Braskem’s management and other employees with control over Braskem’s financial reporting, the indictment alleges.

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

Braskem and Odebrecht have each pleaded guilty in the Eastern District of New York to one-count criminal informations separately charging each with conspiracy to violate the anti-bribery provisions of the FCPA for their involvement in the widespread bribery and money laundering scheme.  The cases are also assigned to Judge Dearie.

The FBI’s International Corruption squad in New York investigated this case.  Assistant Chief Lorinda Laryea and Trial Attorney Leila Babaeva of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Alixandra Smith and Julia Nestor of the Eastern District of New York are prosecuting the case. 

The Criminal Division’s Office of International Affairs also provided substantial assistance.  The U.S. Securities and Exchange Commission, the Brazilian Ministerio Publico Federal, the Brazilian Departamento de Polícia Federal and the Office of the Attorney General of Switzerland provided significant cooperation.

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

To learn more about the government’s FCPA enforcement efforts, go to www.justice.gov/criminal/fraud/fcpa.

An indictment was unsealed today in federal court in Brooklyn charging Jose Carlos Grubisich, the former Chief Executive Officer (CEO) of Braskem S.A. (Braskem), a publicly traded Brazil-based petrochemical company, for his role in a massive bribery and money laundering scheme involving Braskem and its parent company, Odebrecht S.A. (Odebrecht). The scheme allegedly resulted in the diversion of hundreds of millions of dollars from Braskem to a secret slush fund used, in part, to pay bribes to government officials, political parties and others in Brazil to obtain and retain business.  Grubisich, who also served as a member of the Board of Directors of Braskem, and in various capacities for Odebrecht, was charged with one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA), one count of conspiracy to violate the books and records provisions of the FCPA and one count of conspiracy to commit money laundering. 

Grubisich was arrested this morning, and will be arraigned this afternoon before United States District Judge Raymond J. Dearie. 

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 charges.

 “As alleged in the indictment, Jose Carlos Grubisich used his position as CEO of a major publicly traded petrochemical company to funnel hundreds of millions of dollars through offshore accounts to bribe power brokers and serve the interests of his company,” stated United States Attorney Donoghue.  “Today’s indictment once again demonstrates the commitment of the U.S. Department of Justice to investigate and prosecute those who take advantage of the United States financial system to further their financial crimes.” 

“Grubisich and other senior executives at Braskem and Odebrecht allegedly engaged in a massive and sophisticated international bribery and money laundering scheme, employing secret slush funds, shell companies, and false accounting,” stated Assistant Attorney General Benczkowski.  “As demonstrated by the charges unsealed today, the Department continues to work closely with our domestic and international partners to root out and prosecute corporate fraud and corruption at the highest levels.”

 As alleged in the indictment, between approximately 2002 and 2014, Grubisich and his co-conspirators created a slush fund by making payments from Braskem’s bank accounts in Brazil, New York and Florida pursuant to fraudulent contracts with offshore shell companies secretly controlled by Braskem.  The shell companies then funneled the slush funds to a department within Odebrecht that was responsible for making bribe payments on Braskem’s behalf.

As CEO of Braskem, Grubisich participated in negotiating and approving the bribes to government officials, including the payments made to ensure that Braskem retained a contract for a significant petrochemical project in Brazil and to ensure that Braskem could obtain favorable pricing in contract negotiations with Petroleo Brasileiro S.A. – Petrobras, Brazil’s state-owned and state-controlled oil company.  Grubisich regularly discussed the bribe payments with his co-conspirators and was informed of bribe payments made on behalf of Braskem.  Various bribe payments that were negotiated and authorized by Grubisich were ultimately paid after Grubisich left his position as CEO in 2008, but while he continued to serve in other capacities at Odebrecht and Braskem, and while he was a stockholder of Braskem.

Also while serving as CEO of Braskem, Grubisich agreed to falsify Braskem’s books and records by causing Braskem to record the payments to the offshore shell companies controlled by Braskem as “commissions.”  He also signed false certifications submitted by Braskem to the United States Securities and Exchange Commission that attested to the fairness and accuracy of Braskem’s annual reports and financial condition, and to the disclosure of any fraudulent conduct by Braskem’s management and other employees with control over Braskem’s financial reporting.

On December 21, 2016, Braskem and Odebrecht pleaded guilty in the Eastern District of New York to criminal informations separately charging each with conspiracy to violate anti-bribery provisions of the FCPA for their involvement in the bribery and money laundering scheme.  

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

The case is being prosecuted by Assistant United States Attorneys Alixandra Smith and Julia Nestor of the Office’s Business and Securities Fraud Section, and Criminal Division Fraud Section FCPA Assistant Chief Lorinda Laryea and Fraud Section Trial Attorney Leila Babaeva.  The FBI’s International Corruption squad in New York investigated this case.

The Criminal Division’s Office of International Affairs also provided substantial assistance.  The Securities and Exchange Commission, the Brazilian Ministerio Publico Federal and Departamento de Polícia Federal, and the Office of the Attorney General in Switzerland provided significant cooperation.

The Defendant:

JOSE CARLOS GRUBISICH
Age: 62
Sao Paulo, Brazil

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

Earlier today, in federal court in Brooklyn, Panayiotis Kyriacou, a former investment manager at Beaufort Securities Limited, a brokerage firm in London, pleaded guilty to conspiring to commit securities fraud and to defraud the United States by failing to comply with the Foreign Account Tax Compliance Act (FATCA).  FATCA is a federal law that requires foreign financial institutions to identify their U.S. customers and report information about financial accounts held by U.S. taxpayers, either directly or through a foreign entity (FATCA Information).  FATCA’s primary aim is to prevent U.S. taxpayers from using foreign accounts to facilitate the commission of federal tax offenses.  The guilty plea was entered before United States District Judge Kiyo A. Matsumoto.  When he is sentenced, Kyriacou faces a maximum of 10 years’ imprisonment.

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; 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.  

In announcing the guilty plea, Mr. Donoghue thanked the U.S. Securities and Exchange Commission’s (SEC) New York Regional Office and the Washington, D.C. Office, the City of London Police, the U.K.’s Financial Conduct Authority and the Hungarian National Bureau of Investigation for their significant cooperation and assistance during the investigation.

In the fall of 2016, an Undercover Agent contacted Kyriacou and stated that he was a U.S. citizen interested in opening brokerage accounts at Beaufort Securities to execute trades in several multi-million dollar stock manipulation deals in stocks traded on U.S. over-the-counter markets.  In furtherance of the scheme, Kyriacou and Beaufort Securities opened six brokerage accounts.  Notwithstanding that a U.S. citizen would be the beneficial owner of each of the accounts, at no time did Kyriacou request FATCA Information from the Undercover Agent.  The brokerage accounts were opened for the Undercover Agent in the names of various international business corporations based in Belize, with Belizean nominees listed as the beneficial owners. 

In January 2018, Kyriacou facilitated the manipulation of trading in the stock of HD View 360, Inc., a publicly traded U.S. company that traded under the ticker symbol HDVW, by executing a match trade of HDVW stock.  In addition, Kyriacou agreed to launder what the Undercover Agent represented to be the proceeds of securities fraud through the purchase and sale of artworks.

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

The Defendant:

PETER KYRIACOU
Age: 28
London, England

E.D.N.Y. Docket No. 18-CR-102 (S-1) (KAM)

Earlier today, in federal court in Brooklyn, Maksim Zaslavskiy was sentenced by United States District Judge Raymond J. Dearie to 18 months’ imprisonment for conspiring to commit securities fraud.  The conspiracy stemmed from two Initial Coin Offerings (ICOs) – REcoin Group Foundation, LLC (“REcoin”) and DRC World, Inc., also known as Diamond Reserve Club (“Diamond”) – which Zaslavskiy and others fraudulently marketed to the public.  The amount of restitution will be determined by the Court at a later date.

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 sentence.

 “Zaslavskiy committed an old-fashioned fraud camouflaged as cutting-edge technology,” stated United States Attorney Donoghue.  “This Office will continue to investigate and prosecute those who defraud investors, whether involving traditional securities or virtual currency.”  Mr. Donoghue extended his grateful appreciation to the Securities and Exchange Commission (SEC), New York Regional Office, for their assistance in this case.

In July 2017, Zaslavskiy marketed RECoin as “The First Ever Cryptocurrency Backed by Real Estate,” and subsequently Diamond as an “exclusive and tokenized membership pool” hedged by diamonds.  In reality, Zaslavskiy bought neither real estate nor diamonds, and the certificates he sent to investors were worthless. Zaslavskiy also falsely advertised that REcoin had a “team of lawyers, professionals, brokers and accountants” who would invest the proceeds from the REcoin ICO in real estate, and that 2.8 million REcoin tokens had been sold.

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

The Defendant:

MAKSIM ZASLAVSKIY
Age:  39
Brooklyn, New York

E.D.N.Y. Docket No. 17-CR-647 (S-1) (RJD)

BROOKLYN, NY – A federal jury in Brooklyn returned a guilty verdict on all counts today against Aleksandr Pikus, the manager of medical clinics in Brooklyn and Queens, New York, for his role in multimillion-dollar health care kickback and money laundering schemes.  Specifically, Pikus was convicted of conspiracy to commit money laundering, money laundering, conspiracy to receive and pay health care kickbacks and conspiracy to defraud the United States by obstructing the Internal Revenue Service (IRS).  The verdict followed a two-week trial before United States District Judge Ann M. Donnelly.  When sentenced, Pikus faces a maximum sentence of up to 70 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, Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General, New York Region (HHS-OIG), and Jonathan D. Larsen, Acting Special Agent-in-Charge, IRS Criminal Investigation (IRS-CI), announced the verdict.

“Pikus’s health care schemes were a toxic brew of kickbacks and money laundering that streamed millions of dollars into the pockets of the defendant and his co-conspirators at the expense of the Medicare and Medicaid programs,” stated United States Attorney Donoghue.  “Today’s verdict demonstrates the resolve of this Office and our law enforcement partners to protect taxpayer-funded health care programs upon which our citizens rely.”

“Aleksandr Pikus was the architect of a massive healthcare kickback and money laundering scheme in which he and his co-conspirators stole tens of millions of dollars from the Medicare and Medicaid programs,” stated Assistant Attorney General Benczkowski.  “The jury’s verdict reflects the tireless work of our dedicated prosecutors and law enforcement partners to achieve justice and protect these essential healthcare programs on behalf of American taxpayers.”

“Mr. Pikus brazenly participated in a greed-fueled scheme that stole millions from Medicare and Medicaid,” stated HHS-OIG Special Agent-in-Charge Lampert.  “Along with our law enforcement partners, HHS-OIG will continue to protect the public and the taxpayer funded health care programs that serve those who need them.”

“IRS Criminal Investigation is committed to ensuring that every taxpayer is measured by the same rule of law while paying their fair share,” said IRS-CI Special Agent-in-Charge Larsen.  “Our special agents play a critical role investigating criminal violations of the Internal Revenue Code and related financial crimes. Every day, we entrust medical service providers with our most valuable asset—our health. That is why healthcare kickbacks and money laundering schemes like this one are particularly disturbing. Today’s guilty verdict serves as a reminder that crimes like money laundering and tax fraud will not go unpunished.”

As proven at trial, Pikus and his co-conspirators operated a series of medical clinics for nearly a decade that employed doctors, physical and occupational therapists and other medical professionals who were enrolled in the Medicare and Medicaid programs.  Pikus and his co-conspirators referred individuals to these health care providers who, in turn, submitted nearly $100 million in claims to the Medicare and Medicaid programs.  In return for his referrals, Pikus received illegal kickbacks from the medical providers in the form of checks payable to shell companies that he and his co-conspirators controlled.  Pikus then laundered a substantial portion of the illegal proceeds of the scheme through check-cashing businesses and failed to report that cash income to the IRS.  Pikus used the cash to enrich himself and to pay patient recruiters, including ambulette drivers, who paid beneficiaries to receive treatment at the defendant’s medical clinics.

Pikus is the fifth defendant convicted in this indictment.  In December 2016, Malvina Yablonskaya pleaded guilty to money laundering conspiracy and conspiracy to defraud the IRS.  In November 2017, Maksim Vernik pleaded guilty to money laundering conspiracy.  In December 2017, Denis Satyr pleaded guilty to money laundering conspiracy and conspiracy to defraud the IRS.  In September 2019, Mark Tsyvin pleaded guilty to conspiracy to receive and pay health care kickbacks and conspiracy to defraud the IRS.  The defendants are awaiting sentencing. 

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

The Defendant:

ALEKSANDR PIKUS
Age:  44
Brooklyn, New York

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

The manager in control of multiple medical clinics in Brooklyn and Queens, New York, was found guilty today for his role in a nearly $100 million health care kickback and money laundering scheme.  

After a two-week trial, Aleksandr Pikus, 44, of Brooklyn, was found guilty of one count of conspiracy to commit money laundering, two counts of money laundering, one count of conspiracy to receive and pay health care kickbacks and one count of conspiracy to defraud the United States by obstructing the IRS.  Sentencing has been set for April 8, 2020. 

“Aleksandr Pikus was the architect of a massive healthcare kickback and money laundering scheme in which he and his co-conspirators stole tens of millions of dollars from the Medicare and Medicaid programs,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “The jury’s verdict reflects the tireless work of our dedicated prosecutors and law enforcement partners to achieve justice and protect these essential healthcare programs on behalf of American taxpayers.” 

“Pikus’s health care schemes were a toxic brew of kickbacks and money laundering that streamed millions of dollars into the pockets of the defendant and his co-conspirators at the expense of the Medicare and Medicaid programs,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York.  “Today’s verdict demonstrates the resolve of this office and our law enforcement partners to protect taxpayer-funded health care programs upon which our citizens rely.”

“Mr. Pikus brazenly participated in a greed-fueled scheme that stole millions from Medicare and Medicaid,” said Special Agent in Charge Scott J. Lampert for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG).  “Along with our law enforcement partners, HHS-OIG will continue to protect the public and the taxpayer funded health care programs that serve those who need them.”

“IRS Criminal Investigation is committed to ensuring that every taxpayer is measured by the same rule of law while paying their fair share,” said Special Agent in Charge Jonathan D. Larsen of the IRS Criminal Investigation’s (IRS-CI) New York Office.  “Our special agents play a critical role investigating criminal violations of the Internal Revenue Code and related financial crimes. Every day, we entrust medical service providers with our most valuable asset—our health. That is why healthcare kickbacks and money laundering schemes like this one are particularly disturbing. Today’s guilty verdict serves as a reminder that crimes like money laundering and tax fraud will not go unpunished.”

According to evidence presented at trial, Pikus and his co-conspirators operated a series of medical clinics in Brooklyn and Queens over the course of nearly a decade that submitted approximately $96 million in medical claims.  The clinics employed doctors, physical and occupational therapists, and other medical professionals who were enrolled in the Medicare and Medicaid programs.  In return for illegal kickbacks, Pikus and his co-conspirators referred beneficiaries to these health care providers, who submitted claims to the Medicare and Medicaid programs, the evidence showed.  Pikus then laundered a substantial portion of those proceeds through companies he and his co-conspirators controlled, including by cashing checks at several New York City check-cashing businesses; he and his co-conspirators then failed to report that cash income to the IRS.  Pikus used that cash to enrich himself and others and to pay kickbacks to patient recruiters, including ambulette drivers, who, in turn, paid beneficiaries to receive treatment at the defendant’s medical clinics.  The evidence further established that Pikus used shell companies and fake invoices to conceal his illegal activities.

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

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

The Fraud Section leads the Medicare Fraud Strike Force.  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.

Earlier today, at the federal courthouse in Central Islip, Edward Ambrosino, a former Town of Hempstead Councilman, was sentenced to six months’ imprisonment for tax evasion, to be followed by three years’ supervised release.  The Court also ordered Ambrosino to pay $700,000 in restitution to his former employer and $254,628 in restitution to the Internal Revenue Service (IRS).  Ambrosino pleaded guilty in April 2019.  The sentencing proceeding was held before United States District Judge Joanna Seybert. 

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, IRS-Criminal Investigation, New York (IRS-CI), announced the sentence.

“Ambrosino, a licensed attorney and elected official charged with levying taxes, abused his positions of trust and was himself a tax cheat,” stated United States Attorney Donoghue.  “This is yet another example of a public official on Long Island breaking the law, this time by failing to pay his fair share of taxes like every other citizen.”  Mr. Donoghue expressed his thanks to IRS-CI and the FBI for their help during the investigation. 

“The tax evasion perpetuated by Mr. Ambrosino impacts various services provided by the income taxes collected by the IRS on behalf of all of our citizens,” stated IRS-CI Special Agent-in-Charge Larsen.

As detailed in court filings, Ambrosino was an attorney licensed to practice in New York State, specializing in economic and industrial development and financings, and formerly was “Of Counsel” at a law firm based in Uniondale, New York (the “Law Firm”).  In addition, Ambrosino served as a Councilman for the Town of Hempstead, New York, from March 2003 until he resigned last April.

In 2011, Ambrosino incorporated Vanderbilt Consulting Group, Inc. (“Vanderbilt”).  Ambrosino was the sole shareholder of Vanderbilt.  In September 2012, Ambrosino opened a bank account in the name of Vanderbilt (the “Vanderbilt Bank Account”); he was the sole authorized signer on the Vanderbilt Bank Account. 

From 2013 through 2015, Ambrosino diverted to the Vanderbilt Bank Account more than $800,000 in legal fees from clients, including the Nassau County Industrial Development Agency (NCIDA) and the Nassau County Local Economic Assistance Corporation (NCLEAC), that were due as revenue to the Law Firm. While the defendant neither admitted nor denied wrongdoing with regard to his conduct related to the Law Firm, as part of his sentence, the Court ordered the defendant to pay $700,000 in restitution to the Law Firm. 

Ambrosino also evaded substantial income tax and filed false and fraudulent corporate tax returns on behalf of Vanderbilt for the 2011, 2012 and 2013 tax years.  Ambrosino evaded the assessment of income tax by claiming false and fraudulent business expense deductions and failing to report funds he diverted from the Law Firm.  Specifically, Ambrosino claimed as a business expense rent for a Manhattan apartment that he paid for on behalf of a third-party.  In addition, for the 2013 tax year, Ambrosino failed to claim approximately $335,000 in funds he diverted from the Law Firm on either his personal income tax return or the Vanderbilt corporate tax return.  With respect to the 2014 tax year, Ambrosino did not timely file his personal tax return or the corporate tax return for Vanderbilt.  As a result of Ambrosino’s conduct, the IRS suffered a tax loss of approximately $254,628 and the New York State Tax Department suffered a tax loss of approximately $56,517.  At the time of sentencing, Ambrosino had substantially paid his tax debt to the IRS and the New York State Tax Department.

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:

EDWARD AMBROSINO
Age:  55
North Valley Stream, NY

E.D.N.Y. Docket No. 17-CR-162 (JS)

Earlier today, at the federal courthouse in Central Islip, James Rogers was sentenced to 184 months in prison by United States District Judge Denis R. Hurley for conspiring to commit gunpoint robberies of retail stores in Nassau and Suffolk Counties between August 10, 2015 and December 21, 2015, and brandishing a firearm during the robbery of a Petco Pet store in Hicksville, New York, on August 20, 2015.  Rogers pleaded guilty to the charges in April 2017.

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

At his guilty plea proceeding, Rogers admitted his role in 15 robberies of retail businesses during a four-month period in 11 different towns in Nassau and Suffolk Counties, including the gunpoint robbery of the Petco store, women’s clothing stores and a Babies R’ Us.  On most occasions, Rogers committed the robberies at or near opening or closing times, his face covered with a mask, brandishing a handgun, threatening employees and customers and restraining them using toy handcuffs or plastic zip-tie restraints.  Rogers also stole cash, jewelry and other personal items from his victims before fleeing in a vehicle driven by his co-conspirator.

“The defendant terrorized his victims during a violent crime spree, fully justifying today’s lengthy prison sentence.  Our communities are safer as a result of his incarceration,” stated United States Attorney Donoghue.  Mr. Donoghue expressed his grateful appreciation to the Nassau County Police Department, the Suffolk County Police Department and the U.S. Drug Enforcement Administration for their outstanding work on the case.

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

The Defendant:

JAMES ROGERS
Age:  49
Hempstead, New York

E.D.N.Y. Docket No. 16-CR-530 (DRH)

BROOKLYN, NY – The United States has reached agreement with Paul Mangione, a former Deutsche Bank executive, to settle a civil action filed in September 2017 in which the United States sought civil penalties for Mangione’s conduct in connection with Deutsche Bank’s marketing and sale of two residential mortgage-backed securities (RMBS) in 2007.  The agreement provides for payment of $500,000 in civil penalties in exchange for dismissal of the complaint.

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

“This Office’s settlement with a bank executive in connection with RMBS fraud reflects our commitment to holding individuals accountable for their role in corporate fraud,” stated United States Attorney Donoghue.  Mr. Donoghue thanked the Federal Housing Finance Agency’s Office of the Inspector General for its assistance in conducting the investigation in this matter.

The complaint in the action, United States v. Paul Mangione, alleged that Mangione, a former Managing Director and head of subprime trading at Deutsche Bank, engaged in a scheme to defraud investors in two Deutsche Bank RMBS, ACE 2007-HE4 and ACE 2007-HE5, by misrepresenting the characteristics of the loans backing the two securities and misleading potential investors about the loan origination practices of Deutsche Bank’s wholly-owned subsidiary, DB Home Lending LLC (f/k/a Chapel Funding, LLC), which originated a number of the loans backing the two RMBS.  The complaint stated claims for relief under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud and wire fraud.

The settlement agreement does not constitute an admission by Mangione of any of the facts or of liability or wrongdoing by Mangione, and there has been no trial or adjudication or judicial finding of any issue of fact or law. 

The government’s case was handled by Assistant United States Attorney Edward Newman.  

To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html.

E.D.N.Y. Docket No. 17-CV-5305 (NMG/RL)

Earlier today, after a jury had been selected for trial, Blaise Caroleo pleaded guilty in federal court in Brooklyn to sexual exploitation of a child.  The proceeding took place before United States District Judge Eric N. Vitaliano.  When sentenced, Caroleo faces a statutory minimum sentence of 15 years’ imprisonment and a maximum of 30 years’ imprisonment.  

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

Between approximately January 24, 2016 and October 12, 2016, Caroleo enticed a 14-year-old girl to produce sexually explicit images of herself, and to send these images to him using an Internet application called Kik.  The account name for the application on Caroleo’s cell phone was “Nimfeater.”  A review of Nimfeater’s Kik account revealed a series of messages in which Caroleo requested sexually explicit photos of Kik users who have been identified as minors.

“The defendant is a dangerous predator who, armed with a phone app, targeted young girls for sexual exploitation,” stated United States Attorney Donoghue.  “Protecting children from harm will always be a priority of this Office.”  Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office (FBI), and the FBI’s Human Trafficking and Child Exploitation Task Force for their work on the case.

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 Attorneys Erin E. Argo and Alicia N. Washington.

The Defendant:

BLAISE CAROLEO (also known as “Nimfeater”)
Age:  55
Staten Island, NY

E.D.N.Y. Docket No. 17-CR-177 (S-1) (ENV)

Earlier today, in federal court in Brooklyn, Tammeco Cargill, an armed enforcer for the Nineties Crew street gang, was sentenced to 121 months’ imprisonment by United States District Judge Raymond J. Dearie for racketeering and racketeering conspiracy, including predicate acts of drug trafficking and passport fraud.  Previously, on August 13, 2019, Winston “Pops” Cargill, a drug supplier for the gang and Tammeco Cargill’s father, was sentenced to 36 months’ imprisonment for racketeering and racketeering conspiracy, to run consecutively to a term of 96 months of imprisonment he is currently serving for a separate federal conviction. The defendants were convicted in December 2018 following an eight-day 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), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentences.

“With these sentences, defendants Tammeco and Winston Cargill will pay the price for contributing to their street gang’s corrosive impact on the quality of life and public safety in the Canarsie and Flatbush neighborhoods in Brooklyn,” stated United States Attorney Donoghue.  “Eliminating violent street gangs is a priority of this Office and our law enforcement partners.”

“This sentencing marks the end of the Cargill family business in which violence and drug trafficking played pivotal roles,” stated DEA Special Agent-in-Charge Donovan.  “I applaud the collaboration between law enforcement agencies and the work by the U.S. Attorney’s Office for the Eastern District of New York.  By investigating and arresting drug traffickers, we are taking away sources of supply from the street and saving people’s lives.”   

For more than a decade, the defendants were members of the Nineties Crew, a violent gang that operated as a criminal enterprise and sold narcotics in the Flatbush and Canarsie neighborhoods of Brooklyn.  During that period, the gang trafficked thousands of pounds of marijuana, earned hundreds of thousands of dollars, operated numerous stash houses and relied upon firearms to protect and further the operations of their enterprise.  Tammeco Cargill acted as an enforcer, and Winston Cargill served as one of the gang’s principal marijuana suppliers.  The defendants also fraudulently obtained passports to travel to Jamaica and then illegally re-enter the United States. 

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 International Narcotics and Money Laundering Section.  Assistant United States Attorneys Hiral Mehta and Ryan Harris are in charge of the prosecution.

The Defendants:

TAMMECO CARGILL
Age:  36
Brooklyn, New York

WINSTON CARGILL (also known as “Pops”)
Age:  57
Brooklyn, New York

E.D.N.Y. Docket No. 17-CR-330 (RJD)

An indictment was unsealed today in federal court in Central Islip charging Tameshwar Ammar, a medical doctor in Roslyn, New York, with writing prescriptions for oxycodone, a Schedule II controlled substance, without a legitimate medical purpose.  Ammar was arrested this morning, and is scheduled to be arraigned this afternoon before United States Magistrate Judge Steven I. Locke.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, announced the indictment.

As set forth in the indictment and other court documents, between 2013 and 2019, Ammar illegally prescribed more than 19,000 highly addictive oxycodone pills to two individuals identified in the indictment as John Doe 1 and John Doe 2.  According to a review of Ammar’s medical files for the two individuals, Ammar wrote the prescriptions without any diagnostic proof that either had a legitimate medical necessity.  Ammar prescribed approximately 8,400 oxycodone pills to John Doe 1, knowing that he intended to sell the pills to others.  Ammar prescribed 11,525 30 milligram oxycodone pills to John Doe 2.  After learning that John Doe 2 had been admitted to a psychiatric facility in March 2018, Ammar continued to prescribe John Doe 2 with oxycodone and also prescribed methadone. 

In July 2019, John Doe 2 died of a drug overdose caused by oxycodone, methadone and ketamine.  A search warrant executed at Ammar’s office in October 2017 resulted in the recovery of ketamine. 

“As alleged, Ammar prescribed thousands of highly addictive opioids without a legitimate medical purpose, which makes him a drug dealer and, sadly, in this case one of his customers lost their life,” stated United States Attorney Donoghue.  “This Office and our partners at the DEA are working tirelessly to combat the opioid epidemic on Long Island and elsewhere by prosecuting medical professionals who contribute to the crisis.”  Mr. Donoghue also thanked the U.S. Department of Health and Human Services, Office of Inspector General, New York Region, for their assistance during the investigation.

“The illegal and unethical way Dr. Ammar conducted his medical practice paved a way for patients’ opioid addiction and overdoses,” said DEA Special Agent-in-Charge Donovan.  “The fact that Dr. Ammar prescribed over 8,000 oxycodone pills to one patient for street resale shows his disregard to public health and safety, which are both a good doctor’s main concerns.  I applaud the DEA Long Island Tactical Diversion Squad and the U.S. Attorney’s Office for the Eastern District of New York for their diligent work.”

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

The government’s investigation was led by the DEA’s Long Island Tactical Diversion Squad, comprising agents and officers of the DEA, Nassau County Police Department (NCPD), Suffolk County Police Department, Port Washington Police Department and Rockville Centre Police Department.  The DEA Tactical Diversion Squad also worked in conjunction with officers and agents of the U.S. Department of Health & Human Services’ Office of the Inspector General, and 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 19 health care professionals; taken civil enforcement actions against a hospital, a pharmacy and pharmacy chain; removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers.  The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.

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

The Defendant:

Tameshwar ammar
Age:  51
Amityville, New York

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

A criminal complaint was unsealed today in federal court in Brooklyn charging surveillance and security equipment company Aventura Technologies, Inc. (Aventura), located in Commack, New York, and seven current and former employees with selling Chinese-made equipment with known cybersecurity vulnerability to government and private customers while falsely representing that the equipment was made in the United States and concealing that the products were manufactured in the People’s Republic of China (PRC).  Aventura has generated more than $88 million in sales revenue since November 2010, and the charged scheme has been ongoing since 2006.

In addition to Aventura, the individual defendants charged in the complaint are Jack Cabasso, Aventura’s Managing Director and de facto owner and operator; Frances Cabasso, his wife and Aventura’s purported owner and Chief Executive Officer; senior executives Jonathan Lasker, Christine Lavonne Lazarus and Eduard Matulik; current employee Wayne Marino; and recently retired employee Alan Schwartz. 

Four of the individual defendants are also charged with defrauding the U.S. government by falsely claiming that Frances Cabasso was the owner and operator of the company in order to obtain access to valuable government contracts reserved for women-owned businesses when, in fact, Aventura was actually controlled by her husband, Jack Cabasso.  The Cabassos are also charged with laundering the monetary proceeds of these fraudulent schemes.

Six of the defendants were arrested this morning and are scheduled to be arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr.  Law enforcement agents executed search warrants at Aventura’s headquarters in Commack, New York, and at the home of Jack and Frances Cabasso in Northport, New York.  The government has also seized the Cabassos’ 70-foot luxury yacht, and has frozen approximately $3 million in 12 financial accounts that contain proceeds from the defendants’ unlawful conduct. 

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); Joseph P. Dattoria, Special Agent-in-Charge, U.S. General Services Administration, Office of Inspector General (GSA-OIG); Leigh-Alistair Barzey, Special Agent-in-Charge, Defense Criminal Investigative Service, Northeast Field Office (DCIS);  J. Russell George, Treasury Inspector General for Tax Administration (TIGTA); Troy Miller, Director of Field Operations, U.S. Customs and Border Protection, New York Field Office (CBP); Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York (IRS-CI); Jason T. Hein, Special Agent-in-Charge, U.S. Air Force Office of Special Investigations, Office of Procurement Fraud Investigations, Detachment Six (AFOSI); Leo Lamont, Special Agent-in-Charge, Naval Criminal Investigative Service (NCIS); and Teri L. Donaldson, Inspector General, U.S. Department of Energy, Office of Inspector General (DOE-OIG), announced the charges.

“As alleged, the defendants falsely claimed for years that their surveillance and security equipment was manufactured on Long Island, padding their pockets with money from lucrative contracts without regard for the risk to our country’s national security posed by secretly peddling made-in-China electronics with known cyber vulnerabilities,” stated United States Attorney Donoghue.  “With today’s arrests, the defendants’ brazen deceptions and fraud schemes have been exposed, and they will face serious consequences for slapping phony ‘Made in the U.S.A.’ labels on products that our armed forces and other sensitive government facilities depended upon.”  Mr. Donoghue expressed his appreciation to U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit for their work on the case. 

“Greed is at the heart of this scheme, a reprehensible motive when the subjects in this case allegedly put into question the security of men and women who don uniforms each day to protect our nation,” stated FBI Assistant Director-in-Charge Sweeney.  “There is no mistaking the cyber vulnerabilities created when this company sold electronic surveillance products made in the PRC, and then using those items in our government agencies and the branches of our armed forces.  I cannot stress enough that we will do everything we can to search out and stop any other company willing to cut corners and pocket profits that endanger the lives of Americans, and make this country less safe.”

“The laws in place regulating government contracts ensure both the taxpayer and government receive quality goods and services at competitive prices.  In addition, they provide a fair opportunity and level playing field for all businesses seeking government contracts.  The General Services Administration’s Office of Inspector General will continue to work closely with our law enforcement partners to aggressively investigate allegations of fraud against the United States Government,” stated GSA-OIG Special Agent-in-Charge Dattoria.

 “The arrests and other enforcement operations that occurred today were the direct result of a joint investigative effort,” stated DCIS Special Agent-in-Charge Barzey.  “The introduction of counterfeit parts and materials into the U.S. Defense Department’s supply chain poses a significant risk and impacts America’s military readiness and our national security.  The DCIS is committed to working with its law enforcement partners and the U.S. Attorney's Office, Eastern District of New York, to ensure that individuals and companies who engage in fraudulent activity, at the expense of the U.S. military, are investigated and prosecuted.”

 “TIGTA’s mission includes investigating allegations of waste, fraud or abuse involving the Internal Revenue Service (IRS),” stated TIGTA Inspector General George.  “Mr. Cabasso and his co-conspirators secured products from outside of the U.S. while purporting that these products were made in America.  They then sold these products to the U.S. Government, including the IRS and other Government agencies.  TIGTA is committed to investigating and working with our law enforcement partners to root out this type of fraud from the Government contracting and procurement process.  I want to thank U.S. Attorney Donoghue for the steadfast support that he and his talented prosecutors gave to this investigation.”

“U.S. Customs and Border Protection provided the critical link to an ongoing investigation that resulted in the takedown of an elaborate criminal enterprise,” stated CBP Director of Field Operations Miller.  “This case serves as a great example of collaborative law enforcement efforts to uncover and dismantle criminal enterprises that seek to defraud the United States government for personal gain while jeopardizing our national defense and causing economic harm to their competitors.”

“In today’s global economy, ‘Made in the USA’ is too sacred of a mark to fraudulently use for one’s self interest,” stated IRS-CI Special Agent-in-Charge Larsen.  “IRS-Criminal Investigation works diligently with our law enforcement partners to uncover con artists devising elaborate schemes to become independently wealthy. These allegations have serious national security implications that go beyond shameless attempts at personal enrichment.”

“Product substitution is a serious crime that puts our men and women in uniform at greater risk,” stated NCIS Special Agent-in-Charge Lamont.  “Our Sailors, Marines, and other armed services personnel deserve to have equipment that meets the highest standards for safety and performance, which will not fail them when it matters most.  Substandard and counterfeit parts simply cannot be depended upon.  Investigating product substitution and mitigating risks to the Department of the Navy supply chain is a top priority for the Naval Criminal Investigative Service.  NCIS has a cadre of Special Agents trained in all aspects of economic crime, tirelessly fighting fraud in the procurement process.”

“Ensuring the integrity of the US Air Force procurement process and the quality of the products provided to our warfighters is a top investigative priority of the Air Force Office of Special Investigations,” stated AFOSI Special Agent-in-Charge Hein.  “Those who seek to conduct business with the Air Force must be candid and truthful.  AFOSI will aggressively investigate those who attempt to defraud the Air Force, and will work with our law enforcement partners to identify and prosecute those who would take advantage of the USAF and its interests.  The victims are not just our men and women in uniform, but every American taxpayer.”

“The Department of Energy’s Office of Inspector General remains committed to ensuring the integrity and security of the Department’s vendors, especially given the serious nature of the Department’s mission,” stated DOE Inspector General Donaldson. “We take allegations of conspiracy against the U.S. Government very seriously and will aggressively investigate these matters to protect the Department and the American taxpayers. We appreciate the collaborative efforts of the DOJ and our other law enforcement partners.”

The Country of Origin Fraud and Unlawful Importation Scheme

As charged in the criminal complaint and in court documents filed today,[1] for over a decade Aventura lied to its customers, including the U.S. military, the federal government and private customers in the United States and abroad.  Under federal government procurement laws and regulations a product’s country of origin can impact a procurement officer’s decision to purchase a product.  A product’s country of origin also matters to some private sector customers.  In addition, all products imported into the United States must be marked with their country of origin.  Over the past decade, Aventura made upwards of $88 million, including over $20 million in federal government contracts, while claiming that it was manufacturing its products at its headquarters in Commack.  In fact, Aventura does not manufacture anything in the United States.  Instead, since at least 2006, Aventura has been importing products primarily from the PRC, then reselling them as American-made or manufactured in a small number of other countries. 

Notably, Aventura imported networked security products from PRC manufacturers with known cybersecurity vulnerabilities, and resold them to U.S. military and other government installations while claiming that they were American-made.  Aventura similarly deceived private customers in the United States and abroad who paid a premium for what they believed to be American-made goods.  As a result, Aventura not only defrauded its customers, but also exposed them to serious, known cybersecurity risks, and created a channel by which hostile foreign governments could have accessed some of the government’s most sensitive facilities. 

For this conduct, Aventura and the seven individual defendants are charged with unlawful importation and conspiracy to commit wire and bank fraud.

In the course of its investigation, the government intercepted and covertly marked numerous shipments from PRC sources to Aventura’s Commack headquarters.  In some cases, cameras shipped from the PRC were pre-marked with Aventura’s logo and the phrase “Made in USA,” accompanied by an American flag.  In many instances, the items were later resold to government agencies to whom the defendants falsely represented that the products were American-made.

For example, in March 2019 the U.S. Navy ordered from Aventura a $13,500 laser-enhanced night vision camera that was specified as American-made on Aventura’s U.S. General Services Administration (GSA) price list.  (In fact, no item on Aventura’s GSA price list is listed as being made in the PRC.)  In April 2019, at a shipping facility in Jamaica, Queens, a team led by CBP officers intercepted a shipment from a PRC manufacturer (“PRC Manufacturer-3”) to Aventura that contained a camera matching the Navy’s order and surreptitiously marked it for later identification using a method that would not be apparent to a casual observer.[2] Two weeks later, that same camera was delivered to Naval Submarine Base New London in Groton, Connecticut. 

In another instance, in September 2018, the Department of Energy (DOE) ordered approximately $156,000 worth of networked automated turnstiles from Aventura, to be installed at a facility in Tennessee.  Aventura’s GSA price list described the turnstiles as American-made.  In January 2019, turnstiles matching DOE’s order were intercepted in a shipment from a PRC manufacturer and marked by CBP; one month later, they arrived at the DOE facility in Tennessee.  The crates shipped by Aventura to the DOE appeared identical to those that the CBP-led team had inspected, except that the shipping labels from the PRC directing the crates to Aventura had been peeled off, leaving behind visible traces of paper and glue.  A special agent with the DOE-OIG placed a call to Lazarus regarding the turnstile shipment in May 2015.  During the call, Lazarus falsely stated that the turnstiles were “U.S. made [in] New York.” 

As a third example, in 2018, Aventura sold the U.S. Air Force 25 body cameras for use by Air Force security personnel at an Air Force base.  Aventura was contractually required to provide goods from a limited set of countries that did not include the PRC.  In August 2018, however, an Air Force service member observed Chinese characters on the built-in screen of one of the body cameras.  The body camera was sent for analysis to a specialist, who downloaded its firmware and found numerous indications that the camera was manufactured in PRC.  The camera contained multiple preloaded images that were apparently designed to display on the built-in screen—including the U.S. Air Force logo, the logo of the PRC Ministry of Public Security and the logo of PRC Manufacturer-1.  All three logos had been saved to the camera’s firmware using the same software, on a computer that was set to a time zone in the PRC—indicating that the camera’s manufacturer in the PRC had been aware that the U.S. Air Force was a likely end user of the camera.

The defendants, working with counterparts in the PRC, took extraordinary steps to conceal this scheme.  In November 2018, Jack Cabasso exchanged emails with an employee of a PRC manufacturer of surveillance equipment (PRC Manufacturer-2), identifying the need to “hide” the name of PRC Manufacturer-2 from Aventura’s customers.  Cabasso wrote that Schwartz was “putting together a list” of steps to be taken.  One week later, Cabasso stressed the need to take steps so that “they cannot trace” the product to PRC Manufacturer-2, adding, “The housings are a problem since you publish them on your website but nothing we can do about that.”  Cabasso added that “the biggest problem” was that PRC Manufacturer-2’s initials were marked on its circuit boards, and said that he had “lost several potential customers” because of similar practices by another PRC manufacturer (PRC Manufacturer-1).  The employee responded that the company’s initials would be removed from all circuit boards shipped to Aventura.  Lasker was copied on all of the emails in this sequence.

Similarly, in December 2018, Jack Cabasso and Marino exchanged emails with employees of another PRC-based digital video equipment manufacturer (PRC Manufacturer-4).  Marino complained to the employees that “communication from the server to the client contains [PRC Manufacturer-4’s name] visible in clear text.  This should be changed.”  When one of the employees wrote that this could not be changed, Cabasso responded: “WE CANNOT HAVE CUSTOMERS ABLE TO SEE” PRC Manufacturer-4’s name, later adding, “we also sent a sample to a customer and he found [PRC Manufacturer-4]. . . branding in the [operating system] which is a problem.”  Schwartz and Lasker, among others, were included on these communications.

On or about November 23, 2016, Jack Cabasso sent an email to a GSA representative accusing 12 other GSA contractors of selling products to the U.S. Government that were manufactured by a PRC manufacturer of surveillance equipment (PRC Manufacturer-1).  Cabasso asserted that this was a “big problem” and “doesn’t get any worse,” because PRC Manufacturer-1 was “actually the Communist Chinese Government and ha[d] ‘significant’ cybersecurity issues aside from” compliance with U.S. laws specifying country-of-origin requirements for government purchases.  Cabasso stated that PRC Manufacturer-1 “will acknowledge they manufacture no products outside of China,” and appended an article about the removal of cameras manufactured by PRC Manufacturer-1 from the U.S. Embassy in Afghanistan.

Notably, Aventura was importing security equipment from PRC Manufacturer-1 while Jack Cabasso was complaining to GSA about other contractors’ supposed dealings with the company.  For example, bank records show that Aventura wired funds to PRC Manufacturer-1 in the PRC on or about October 31, 2016 and November 29, 2016.  And, law enforcement records show that on or about December 13, 2016, Aventura imported from PRC Manufacturer-1 in PRC an approximately 1,800-pound shipment of goods manifested as “digital video.”

In November 2018, Jack Cabasso and Matulik communicated with a potential distributor in Qatar, who asked for assurance that Aventura’s cameras were American made.  Cabasso responded: “I believe Ed confirmed that they are made in the Aventura factory here in New York and [anyone] may visit at any time.”  Cabasso attached what purported to be a photograph of Aventura’s assembly line, depicting a row of seated individuals in blue lab coats and protective hairnets working at laboratory benches—a photograph that also appears on Aventura’s website.  In reality, this photograph first appeared in a trade publication article recounting a reporter’s visit to PRC Manufacturer-1’s manufacturing facility in Hangzhou, PRC, and it depicts PRC Manufacturer-1’s assembly line, not Aventura’s.

The Scheme to Misrepresent Aventura as a Woman-Owned Small Business

Jack and Frances Cabasso, along with Lasker and Lazarus, falsely represented on numerous occasions that Frances Cabasso was the chief executive of Aventura.  In fact, the true chief executive officer of Aventura was Jack Cabasso, and Frances Cabasso played a minimal role at the company.  This misrepresentation gave Aventura access to government contracts that were set aside for women-owned small businesses, a category that is legally defined to include only those businesses owned by women, where management and daily operations are also controlled by one or more women. 

In order to win these set-asides, the defendants represented to the public that Frances Cabasso controlled Aventura.  Aventura’s website and its GSA webpage identify Aventura as a woman-owned business, and the defendants repeatedly certified to the GSA and stated to government procurement officers that Aventura is a woman-owned business.  For example, on or about January 13, 2014, a GSA employee emailed Frances Cabasso to “verify if Aventura Technologies, Inc. is a Woman-Owned business.”  She replied: “Yes we are still a certified women-owned business.”  Aventura has won numerous contracts from the federal government on the strength of its status as a woman-owned business.

As Jack Cabasso repeatedly admitted, he was the true chief executive officer of Aventura.  In 2017, Jack Cabasso emailed an Air Force procurement officer, stating in part, “I am the Managing Director of Aventura Technologies and the senior most person within the organization.”  Similarly, in a 2018 deposition, Cabasso said that his job responsibilities were to “oversee all operations of the company.”  By contrast, Frances Cabasso has worked as a bookkeeper at an unrelated accounting firm since 2011 and is rarely present at Aventura’s offices.  At times, emails sent to Frances Cabasso’s email address appear to have been auto-forwarded to Jack Cabasso who sometimes signed his responses in Frances’s name.  The defendants joked about the fact that Frances Cabasso did not work at Aventura.  For example, in an instant message exchange on December 5, 2016 between Jack Cabasso and Lazarus, both defendants discussed moving another employee into “Fran’s” office—the office of the purported owner of the company—putting the name “Fran’s” in quotation marks.

The Money Laundering Scheme

Jack and Frances Cabasso siphoned Aventura’s illegal profits out of the company through a network of shell companies and intermediaries.  The funds were then directed to investments owned by the Cabassos or controlled for their benefit. 

Between 2016 and 2018, Aventura transferred approximately $2 million to an attorney escrow account belonging to a Long Island, New York-based law firm (Law Firm-1), some of which appears to have been intended to conceal the source of the funds.  For example, on or about May 24, 2016, Aventura transferred $450,000 to Law Firm-1.  On the same day, Law Firm-1 paid a total of $435,000 towards the purchase of a new home for a relative of Jack and Frances Cabasso.

Similarly, in early 2018, Aventura transferred $675,000 to Law Firm-1.  Those funds were loaned out to a separate company for use in purchasing a house.  When that company repaid the loan to Law Firm-1, the proceeds, totaling approximately $682,000, were transferred to Frances Cabasso.

In addition to the transactions through Law Firm-1, Aventura has transferred at least $2.75 million to shell companies owned by Frances Cabasso.  Those funds were then transferred to a number of accounts, including Frances Cabasso’s personal bank account and the business account of a lawyer retained by Jack Cabasso.  Some of these funds were returned to Aventura’s bank accounts, in transactions having no discernible economic purpose.

In addition to these and other transfers, Aventura has made approximately $1 million in payments since 2013 related to the Cabassos’ 70-foot luxury yacht, known as the Tranquilo, which is moored in the gated community where the Cabassos reside.  Although Aventura is the purported owner of the Tranquilo, the yacht appears to have no connection with Aventura’s corporate business, and its rental income flows to the Cabassos, not to Aventura. 

***

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

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Ian C. Richardson, Alexander Mindlin, Kayla Bensing and Claire Kedeshian are in charge of the prosecution.

The FBI has established an email hotline for potential victims.  If you have information regarding Aventura’s crimes or believe that you may be a victim, please send an email to NY-AventuraVictims@fbi.gov

The   Defendants: 

AVENTURA TECHNOLOGIES, INC.
Commack, New York

FRANCES CABASSO
Age: 59
Northport, New York

JACK CABASSO
Age: 61
Northport, New York

JONATHAN LASKER
Age: 34
Port Jefferson Station, New York

CHRISTINE LAVONNE LAZARUS
Age: 45
Shirley, New York

WAYNE MARINO
Age: 39
Rocky Point, New York

EDUARD MATULIK
Age: 42
North Massapequa, New York

ALAN SCHWARTZ
Age: 70
Smithtown, New York

E.D.N.Y. Docket No. 19-MJ-1035

 

---

[1] As the introductory phrase signifies, the entirety of the text of the complaint and the description of the complaint set forth herein, constitute only allegations and every fact described should be treated as an allegation.

[2] The numerals used to identify the manufacturers in this press release correspond to the way they are referred to in the criminal complaint.

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

“The revitalized Project Safe Neighborhoods program is a major success,” stated Attorney General William P. Barr.  “It packs a powerful punch by combining advanced data with local leadership, further reducing violence in communities across the country and improving overall public safety.  U.S. Attorneys continue to focus their enforcement efforts against the most violent criminals and work in partnership with federal, state, local and tribal police.  The Justice Department’s relationships across the board have never been stronger.”

“The arrests, guilty pleas and sentencings of more than 60 gang members and associates  prosecuted by the Eastern District of New York for violent crimes and drug trafficking have made our neighborhoods safer,” stated United States Attorney Donoghue.  “Working closely with our federal and local law enforcement partners, we will continue to target violent street gangs.”

The PSN initiatives in the EDNY over the last year include:

MS-13 Enforcement

MS-13 on Long Island

In October 2019, an MS-13 gang member was sentenced to 25 years in prison for his participation in the fatal attack with machetes and a baseball bat on a man in Brentwood on October 13, 2016.

In September 2019, an MS-13 gang member was sentenced to 50 years in prison for his participation in the murders of four young men with knives, wooden clubs and an axe in a park in Central Islip on April 11, 2017.

In July 2019, an MS-13 member pleaded guilty to racketeering charges for his participation in the murder of a fellow gang member in Brentwood on June 3, 2016 and the attempted murder of a suspected rival outside the Brentwood public library on January 15, 2016. 

In June 2019, an MS-13 gang member was sentenced to 55 years in prison for his participation in the murders of four young men with knives, wooden clubs and an axe in a park in Central Islip on April 11, 2017.

In May 2019, an MS-13 gang associate was convicted at trial of racketeering, murder, assault and firearms charges in connection with the January 30, 2017 murder of a man suspected of being a member of a rival gang and the wounding of a female employee in a deli in Central Islip.

In January 2019, an MS-13 gang member was sentenced to 27 years in prison for the June 30, 2015 murder in Central Islip of a teenager suspected of being associated with a rival gang.

The investigations that led to these prosecutions and convictions were conducted by the Federal Bureau of Investigation’s (FBI) Long Island Gang Task Force. 

MS-13 in Queens

In September 2019, three MS-13 gang members were charged in a superseding indictment with racketeering offenses, including the murder of a teenager in Alley Pond Park.  

In June and July 2019, three MS-13 gang members from Queens and the Bronx pleaded guilty to assault in aid of racketeering charges for beating and stabbing an inmate who they believed was a member of a rival gang inside a pre-trial detention facility. 

In May 2019, an MS-13 gang member was sentenced to more than 25 years in prison for shooting a teenager suspected of being a member of the rival 18th Street gang in Jamaica.  The victim was left paralyzed. 

The investigations that led to these prosecutions and convictions were conducted by the FBI/New York City Police Department (NYPD) Safe Streets Task Force.

Coney Island Gang Enforcement

In September 2019, three members of the West End Enterprise, a Coney Island-based street gang, pleaded guilty to a racketeering conspiracy involving their participation in a murder outside the Mermaid Houses.  The victim was shot to death in retaliation for what the defendants believed was his role in setting up the murder of a high-ranking member of the West End Enterprise.  The investigation was conducted with the FBI and NYPD.

Bloods Gang Enforcement

In October 2019, six members and associates of the Red Stone Gorillas set of the Bloods street gang on the east end of Long Island were charged in a superseding indictment with racketeering, murder, robberies, narcotics trafficking and firearms offenses. The investigation was conducted with the FBI’s Long Island Gang Task Force, Suffolk County District Attorney’s Office (SCDA) and the Suffolk County East End Drug Task Force.

In September 2019, a member of the Bloods street gang on Long Island was indicted for racketeering and the September 2, 2016 murders of two individuals. The investigation was conducted by the FBI, Homeland Security Investigations and the Suffolk County Police Department (SCPD).  

In August 2019, six members of the Bloods street gang on Long Island were indicted for trafficking heroin, fentanyl, fentanyl analogues, cocaine and crack cocaine in and around Babylon.  The investigation was conducted by the FBI, the Drug Enforcement Administration, SCDA and SCPD.

In July 2019, 17 members and associates of the Makk Balla Brims set of the Bloods street gang in Jamaica, Queens, were indicted for racketeering, including violent predicate acts related to their participation in a robbery crew.  The investigation was conducted by the FBI and NYPD.

Between February and June 2019, 13 members and associates of the Makk Balla Brims set of the Bloods street gang have pleaded guilty to conspiring to distribute crack cocaine and heroin, as participants in a drug-trafficking network that operated in the Bronx, Brooklyn and  Maine.  The investigation, which initially focused on criminal activity in a New York City Housing Authority complex in East New York, Brooklyn, led to the recovery of two firearms and was conducted by the FBI and NYPD.

In February 2019, a member of the Bloods street gang on Long Island was sentenced to 15 years in prison for the attempted murder of a rival whom the defendant believed was responsible for the murder of a Bloods gang member.  The investigation was conducted by the FBI and Nassau County Police Department (NCPD).

In January 2019, a member of the Brooklyn-based Red Lane Gorillas set of the Bloods gang was indicted for racketeering, including a murder and an attempted murder on Long Island. The investigation was conducted by the FBI, NCPD and NYPD.

Other Street Gang Enforcement

In the past eight months, eight defendants charged in connection with the criminal activities of the Bushwick Crew, a Brooklyn-based enterprise comprised of high-level heroin traffickers and members of the Young Gunners street gang, pleaded guilty to various crimes including murder, using and carrying firearms in relation to drug trafficking and crimes of violence, and heroin trafficking.  The investigation was conducted by the FBI and NYPD.       

In February 2019, a member of the street gang G’z Up, based in Bedford Stuyvesant, Brooklyn, was convicted following a jury trial of two murders. The investigation was conducted by the FBI.

Community Partnerships and Grants

PSN funding provides direct support to local law enforcement agencies as well as prevention, education and awareness programs for at-risk young people and parents.  Presentations regarding gang awareness, internet safety and monitoring your child’s electronic devices all provide students and parents with necessary tools to effectively avoid the dangers of violent crime. 

In October 2019, a PSN award of $500,447 was granted to Suffolk County to oversee and implement various violent crime reduction strategies in Suffolk County, Nassau County and throughout the district.  Resources will be dedicated to enforcement and prevention efforts including funding for prosecutors and police, providing technical training, promoting community outreach efforts and supporting existing gun and gang violence reduction programs.  

To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

 

 

Earlier today, at the federal courthouse in Brooklyn, United States District Judge Nicholas G. Garaufis sentenced the defendant Elozer Porges to 24 months’ imprisonment and 1,000 hours of community service for his leadership role in a multi-million dollar fraud scheme. The Court also ordered Porges to pay more than $3.2 million in restitution to the United States Department of Agriculture and a $150,000 fine.  Porges committed this fraud while serving as the Executive Director of the Central United Talmudic Academy (Central UTA), located in Williamsburg, Brooklyn.  

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), Margaret Garnett, Commissioner, New York City Department of Investigation (DOI), and Bethanne M. Dinkins, Special Agent-in-Charge, United States Department of Agriculture, Office of Inspector General (USDA-OIG), announced the sentence.

“Porges now stands convicted and sentenced as a felon for abusing his position to defraud government programs and steal millions of dollars in taxpayer funds designated to feed needy children,” stated United States Attorney Donoghue.  “Such criminal conduct will not go unpunished.” 

“The Child and Adult Care Food Program (CACFP) was created to provide food and nutrition to those who truly need this assistance. Those who are involved in fraud and abuse of USDA feeding programs will be investigated by our office to the fullest extent,” stated USDA-OIG Special Agent-in-Charge Dinkins.  “Our joint investigation with the Federal Bureau of Investigation and the New York City Department of Investigation is identifying those who sought to profit from the CACFP through illegal schemes. The USDA Office of Inspector General will continue to dedicate investigative resources, working with our law enforcement and prosecutorial partners, in order to protect the integrity of these programs and bring to justice those who commit fraud.”

“School children throughout New York City rely on funding from government programs for their meals every day,” stated DOI Commissioner Garnett.  “This defendant aimed to defraud those vital programs, inflating the number of meals he claimed to need for low-income students, and receiving millions of dollars in subsidies to which Central UTA was not entitled.  Today's prison sentence demonstrates the enduring commitment of DOI and the U.S. Attorney's Office to protecting taxpayer dollars and ensuring those funds go to children in need.”

Between October 2013 and December 2015, Porges and his co-defendant, Joel Lowy, submitted false and misleading monthly claim forms to the New York State Department of Health (NYSDOH) for reimbursement from the federal government for thousands of meals purportedly served to students attending Central UTA schools at three locations.  The claims were submitted pursuant to the CACFP, a program operating under the authority of the United States Department of Agriculture that provides funding to qualifying institutions.  The fraudulent forms resulted in NYSDOH reimbursing Central UTA more than $3 million for meals that had not been served to students.  Instead, the funds were largely spent on non-qualifying evening events attended by adults at a Central UTA facility on Wythe Street.

Lowy pleaded guilty in March 2018 and is awaiting sentencing.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Erik Paulsen and Maria Cruz Melendez are in charge of the prosecution.

The Defendant:

ELOZER PORGES
Age: 46
New York, NY

E.D.N.Y. Docket No. 17-CR-431 (NGG)

Earlier today, at the federal courthouse in Central Islip, Suzanne Silva, the former Chief Operating Officer of Winthrop University Hospital Employees Federal Credit Union, was sentenced to 18 months in prison for embezzling credit union funds during her employment and ordered to pay $465,172 in restitution to the credit union.  Silva pleaded guilty to the embezzlement scheme in March 2019.  The sentencing proceeding was held before United States District Judge Denis R. Hurley. 

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 sentence.

Between March 2011 and June 2018, Silva transferred hundreds of thousands of dollars from operating accounts of the credit union to accounts in her name and the names of family members.  She used the funds to take Caribbean cruises, travel to Cancun and pay thousands of dollars a month for purchases from the Amazon and Etsy websites. 

Silva’s employment was terminated by Winthrop University HEFCU in June 2018. 

“For years, Silva plundered the credit union, abusing her position as its Chief Operating Officer to commit serious crimes – all to serve herself,” stated United States Attorney Donoghue.  “For the next 18 months, she will pay the price for her greed.”

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 Defendant:

SUZANNE SILVA
Age:  35
Carle Place, New York

E.D.N.Y. Docket No. 18-CR-507 (DRH)

A civil complaint against eight real properties located in and around Guadalajara, Mexico was unsealed today in federal court in Brooklyn.  The properties described in the complaint are alleged to have been purchased by Rafael Caro Quintero with drug proceeds obtained through his leadership of the Caro Quintero drug trafficking organization, a faction of the Mexican organized crime syndicate known as the Sinaloa Cartel. 

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 complaint.

“Today’s efforts to seize properties Caro Quintero purchased with blood money reaped from the drug trafficking, addiction and violence he sowed in the United States and Mexico is just the latest step in our pursuit of justice,” stated United States Attorney Donoghue.  “We will never forget that Caro Quintero is responsible for the murder of Special Agent Camarena and he now faces a stark choice between the only available endings - an American prison or a Mexican grave, and now is the time to choose.”  Mr. Donoghue extended his grateful appreciation to the DEA New York Division Organized Crime and Drug Enforcement Strike Force, as well as the DEA Raleigh Resident Office and DEA Mexico City Country Office for their assistance with the case.  

 “The atrocities of Rafael Caro Quintero are not forgotten, and the history of the terror that he has inflicted serves as a constant reminder to the DEA that we will never stop the pursuit for justice,” stated DEA Special Agent-in-Charge Donovan.  “We are proud to show the world, with the unsealing of this civil complaint, that DEA’s commitment to uncover Caro Quintero’s infrastructure and criminal associates is unwavering. DEA will never forget. We will not relent.”

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

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

The government’s case is being prosecuted by Assistant United States Attorney Brendan G. King of the Office’s Asset Forfeiture Unit, and Gina M. Parlovecchio, Michael P. Robotti, Erin Reid and Patricia E. Notopoulos of the Office’s International Narcotics and Money Laundering Section.

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

 

A superseding indictment was unsealed today in federal court in Central Islip charging Michael S. Cohn, Managing Director and Chief Compliance Officer of GPB Capital Holdings, LLC (GPB), with obstruction of justice, unauthorized computer access and unauthorized disclosure of confidential information.  Cohn, a former employee of the Securities and Exchange Commission (SEC), was arraigned this morning before United States Circuit Judge Joseph F. Bianco and released on a $250,000 bond.       

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 Carl W. Hoecker, Inspector General of the SEC Office of Inspector General, announced the charges.

“As alleged in the superseding indictment, the defendant abused the trust placed in him as an SEC employee, obstructing an active investigation,” stated United States Attorney Donoghue.  “No one gets a pass for breaching the security of government computer networks and misusing sensitive and confidential information for their own benefit.”  Mr. Donoghue expressed his appreciation to the New York City Business Integrity Commission and the New York City Police Department for their assistance during the investigation.

“When Cohn left the SEC to join GPB, he left with more than his own career ambitions. The proprietary information he allegedly retrieved—from databases he wasn’t authorized to access—included compromising information about a GPB investigation and sensitive details related to the same. The charges announced today demonstrate the FBI’s commitment to protect the securities industry, in addition to guarding the confidential information that is essential to the success of our investigations,” stated FBI Assistant Director-in-Charge Sweeney. 

“The charges announced by the U.S. Attorney’s Office reflect the Office of Inspector General’s commitment to investigate individuals who obstruct SEC enforcement activities,” stated SEC Inspector General Hoecker.

As set forth in the superseding indictment and other court documents, Cohn previously worked as a Securities Compliance Examiner and Industry Specialist in the SEC’s Enforcement Division, where he assisted investigations into violations of securities laws.  In approximately October 2018, Cohn left the SEC to join GPB, a private equity firm based in Manhattan and Garden City, New York, that manages over $1.5 billion in assets.  However, prior to leaving the SEC, Cohn accessed information on SEC servers relating to an Enforcement Division investigation into GPB.  Cohn was not authorized to access this highly sensitive material, which included confidential information, privileged attorney-client work product and contacts with law enforcement and other regulatory agencies.  During discussions with GPB personnel about obtaining a job there, Cohn advised them that he had inside information about the SEC’s investigation, and on several occasions he disclosed information to members of GPB’s senior management about that investigation. 

The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Cohn faces a maximum sentence of 20 years’ imprisonment on the obstruction of justice count, a maximum of five years’ imprisonment on the unauthorized computer access count and a maximum of one year imprisonment on the unauthorized computer disclosure count. 

The government’s case is being handled by the Office’s Business and Securities Fraud and National Security & Cybercrime Sections.  Assistant United States Attorneys Artie McConnell and Lauren Howard Elbert are in charge of the prosecution. 

The Defendant:

MICHAEL S. COHN
Age: 59
Norwalk, Connecticut

E.D.N.Y. Docket No. 19-CR-97 (S-1) (JFB)

A federal jury in Central Islip returned a guilty verdict on all counts this afternoon against Michael Watts, a former registered broker, for his role in a conspiracy to promote and manipulate the price of shares in Hydrocarb Energy Corp. (Hydrocarb) and other companies. Specifically, Watts was convicted of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, money laundering conspiracy and money laundering.  The verdict followed a three-week trial before United States District Judge Joanna Seybert.  When sentenced, Watts faces a maximum sentence of more than 20 years’ imprisonment.

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

“With today’s verdict, the jury has delivered a measure of closure to the victims, many of them elderly and vulnerable, who were preyed upon by Watts and his co-conspirators,” stated United States Attorney Donoghue.  “The defendant will face another reckoning when he is sentenced for his crimes.”   

As proven at trial, from 2014 to 2016, Watts and his co-conspirators at a Melville-based boiler room artificially inflated the price and trading volume of Hydrocarb stock.  They did so through an illegal cold-calling campaign that used lies and high-pressure sales tactics to lure victim investors, including many elderly victims, into purchasing stock.  Watts, who was one of the largest shareholders in Hydrocarb and knew that the business was failing, also used the boiler room to dump more than $2 million worth of Hydrocarb shares that he owned or controlled on unsuspecting investors in the months leading to the company’s April 2016 bankruptcy.  The government has alleged that the conspiracy’s market manipulation fraudulently inflated the stock price of Hydrocarb and four other companies by more than $147 million. 

Watts is the 13th defendant convicted in this case.  Three others are scheduled for trial in January 2020.  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. 

United States Attorney Donoghue thanked the Federal Bureau of Investigation, New York Field Office, for its hard work and dedication in leading the investigation, and expressed his appreciation to the Securities and Exchange Commission and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group for their cooperation and assistance.

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. 

The Defendant:

MICHAEL WATTS
Age: 63
Sugarland, Texas

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

Earlier today in federal court in Brooklyn, Maruf Alam, the former chief of staff for a New York State assemblyman, pleaded guilty to wire fraud for stealing more than $80,000 of donor contributions from the assemblyman’s campaign account for his own personal use.  Alam admitted that, as part of the scheme, he filed false reports to the New York State Board of Elections (NYSBOE) to conceal his years-long theft.  The proceeding took place before United States District Judge Ann M. Donnelly.  When sentenced, Alam faces up to 20 years in prison.

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

“Alam was caught with his hand in the till, and now he must face the consequences,” stated United States Attorney Donoghue.  “Those who corrupt the political campaign contribution process to enrich themselves will be caught and prosecuted.”  Mr. Donoghue extended his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, and to the enforcement staff at the NYSBOE for their assistance during the investigation.

Alam was employed by a New York State assemblyman in various capacities since 2008, including as chief of staff.  He also acted, on a voluntary basis, as treasurer for the assemblyman’s campaign account, and was responsible for filing periodic disclosure reports with the NYSBOE that reported contributions received and expenditures made by the assemblyman’s campaign committee.  Between approximately January 2012 and January 2019, Alam stole a total of approximately $80,000 from that account, which were funds that had been contributed to support the assemblyman’s candidacy, and deposited the cash into his personal account. 

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Nathan Reilly and Maria Cruz Melendez are in charge of the prosecution

The Defendant:

MARUF ALAM
Age:  29
Brooklyn, New York

E.D.N.Y. Docket No. 19-CR-342 (AMD)

 

WASHINGTON – Eight Assistant United States Attorneys (AUSA), three paralegal specialists and two former AUSAs from the Eastern District of New York (EDNY) were among the 295 department employees recognized by Attorney General William P. Barr for their distinguished public service today at the 67th Annual Attorney General’s Awards Ceremony.  Sixty-two other individuals outside of the department were also honored for their work.  This annual ceremony recognizes employees and other individuals who have demonstrated exceptional achievements, leadership and service to the Department of Justice and the American people.   

“Our greatest strength in our fight for Justice is our people – the thousands of men and women who have dedicated their careers, often at great personal sacrifice, to working for Justice in America, said Attorney General William P. Barr.  “As we reflect on the contributions of each of 357 individuals we honor today, we should hold them up as examples of excellence that continue to inspire our own commitment, and also as reminders of the professionalism and the qualities exhibited throughout the Department.”

“The EDNY honorees, together with our law enforcement partners, successfully litigated extremely complex cases on a world stage, prosecuting Joaquin “El Chapo” Guzman for his countless crimes against the people of the United States and Mexico as a leader of the Sinaloa drug cartel, uncovering corruption and financial crimes at the French multinational bank Société Générale S.A., and dismantling a transnational human trafficking enterprise responsible for the sexual slavery of women trapped in its clutches,” stated United States Attorney Richard P. Donoghue.  “This Office is proud of the far-reaching justice the honorees achieved as a result of their exceptional work.”

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

The Attorney General’s David Margolis Award for Exceptional Service.

United States v. Joaquin "El Chapo" Guzman

The recipients of the Department of Justice’s highest award are Assistant United States Attorneys Gina Parlovecchio, Andrea Goldbarg, Hiral Mehta, Patricia Notopoulos and Michael Robotti; Paralegal Specialists Huda Abouchaer, Melissa Bennett and Eileen Rosado, and the members of their team from the United States Attorney's Office, Southern District of Florida, Department of Justice Criminal Division, Federal Bureau of Investigation, Homeland Security Investigations and Drug Enforcement Administration were also recognized for their exceptional achievements in the investigation and prosecution of Joaquin “El Chapo” Guzman.  Guzman was a principal leader of the Sinaloa Cartel, a Mexico-based international drug trafficking organization responsible for importing and distributing staggering quantities – 10s of thousands of tons - of narcotics from Central and South America into the United States over a 25-year period.  The cartel controlled significant portions of Mexico and relied upon violence and corruption to maintain its power.  Guzman directed his hitmen to kidnap, interrogate, torture and kill members of rival drug organizations, and at times he personally carried out acts of violence.  Guzman utilized a sophisticated encrypted communications network to operate the global narcotics trafficking operation.  To maintain his grip on parts of Mexico and further the interests of the cartel, Guzman took advantage of a vast network of corrupt government officials, from local law enforcement officers, prison guards and state officials, to high ranking members of the armed forces, as well as politicians.  Although indicted in multiple U.S. districts, Guzman was ultimately extradited to EDNY to face the most comprehensive case against him, alleging a 25-year continuing criminal enterprise (CCE), plus multiple substantive international narcotics trafficking and weapons charges.  Following a 12-week trial that included testimony from 56 witnesses, l4 cooperating witnesses, narcotics seizures totaling over 130,000 kilograms of cocaine and heroin, weapons, ledgers, text messages, letters, videos and intercepted recordings detailing the drug trafficking activity of Guzman and his co-conspirators, on February 12, 2019, Guzman was convicted of all counts of the superseding indictment.  On July 17, 2019, Guzman was sentenced to life imprisonment plus 30 years for his role as a leader of a CCE, a charge that included 26 drug-related violations and one murder conspiracy.  The Court also ordered Guzman to pay $12.6 billion in forfeiture.  This successful prosecution was the capstone to a decades-long effort to bring Guzman to justice.

The Attorney General’s Award for Distinguished Service

United States v. Société Générale S.A.

The recipients of the Department of Justice’s second highest award are Assistant United States Attorneys David Pitluck and James McDonald, former Assistant United States Attorney Matthew Amatruda and the members of their team from the DOJ Criminal Division, Federal Bureau of Investigation and Internal Revenue Service were recognized for their outstanding work in a multi-year (2012 - 2018) investigation that uncovered significant financial crimes at French multinational bank Société Générale S.A. (“SGA”), and led to a successful criminal prosecution of the bank resulting in penalties of more than $860 million.  When combined with regulatory penalties imposed in a parallel Commodity Futures Trading Commission case, the total penalties paid by SGA exceeded $l billion.  The team found and reviewed voluminous electronic and documentary material establishing violations of the Foreign Corrupt Practices Act (FCPA), as well as commodities fraud through the manipulation of LIBOR.  The investigation required identifying and obtaining foreign bank records and reviewing thousands of audio recordings made by SGA employees.  In addition, the team conducted multiple international interviews and coordinated with witnesses and law enforcement authorities from an array of foreign countries to obtain the evidence that led to the successful prosecution.  As part of the FCPA case, SGA Société Générale Acceptance N.V, a subsidiary of SGA, pled guilty to conspiracy to violate the FCPA. SGA entered into a deferred prosecution agreement to resolve the FCPA and LIBOR charges.  Notably, the FCPA prosecution team provided significant assistance to French criminal authorities to facilitate the first simultaneous resolution of an FCPA case with the French government.  These cases demonstrate the value of robust and coordinated criminal enforcement, both within the Department and with its law enforcement partners in the U.S. and abroad, and the Department's commitment to holding accountable large financial institutions that engage in corruption and manipulation in the financial markets.

United States v. Rendon Reyes

Assistant United States Attorney Maggie Lee, former Assistant United States Attorney Taryn Merkl and the members of their team from the Civil Rights Division, Criminal Section, and Homeland Security Investigations were recognized for their outstanding work in dismantling a transnational human trafficking enterprise that operated for over a decade, compelling multiple young women and girls into prostitution through deception, manipulation, sexual assault, physical violence, psychological coercion, forced abortions and threats against the victims, their families and their children.  The Rendon-Reyes prosecution team led an extensive investigation, spanning multiple U.S. and Mexican jurisdictions, utilizing victim-centered strategies to identify, stabilize and protect the victims of the trafficking organization.  The team of prosecutors, victim specialists, paralegals and special agents coordinated extensively with Mexican anti-trafficking authorities, through the U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative, to execute an enforcement action carried out simultaneously on both sides of the border, resulting in the arrests of all eight members of this notorious human trafficking organization.  The team went on to secure rapid extraditions of the defendants apprehended in Mexico, and convictions of all defendants charged in a 27-count indictment with multiple counts of racketeering and racketeering conspiracy, involving predicate acts of sex trafficking, money laundering and related violations.  In January 2019, the prosecutions culminated in sentences of 15 to 25 years’ imprisonment for the lead defendants and restored the lives of multiple victims.

A federal judge in the Eastern District of New York has ordered 15 individuals and companies to permanently cease their involvement with fraudulent mailings. According to a complaint filed by the United States in November 2018, the defendants mailed, or assisted the mailing of, thousands of solicitations stylized as individualized notices, which falsely stated recipients had won large sums of money or valuable prizes, but needed to pay a fee to claim the winnings. Yesterday’s order ends defendants’ involvement in these multi-million dollar mail fraud schemes. These cases are part of the Department of Justice’s Elder Fraud Initiative.

“The Department will vigorously pursue those who peddle false promises of wealth,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “I look forward to the day when American consumers no longer find fraudulent mailings in their mailboxes.”

According to the complaint, the 15 defendants participated in the schemes in a variety of ways, including coordinating the mailings, opening and processing victims’ responses to the fraudulent solicitations, managing lists of recipients and respondents, and processing victim payments. Working together, the defendants mailed thousands of solicitations each week that trumpeted the recipients’ supposed good fortune and gave the false impression that the recipients were approved to receive large cash payments. The solicitations were mailed to victims throughout the world. Victims returned their payments to mailboxes located in the United States, but received nothing of value in return. The complaint alleged that, in the last year, the schemes collectively grossed an estimated $4.8 million in fraudulent proceeds.

“These permanent injunctions stop unscrupulous individuals and companies from conducting fraudulent solicitation schemes that targeted the elderly in our district and throughout the country and the world,” said U. S. Attorney Richard P. Donoghue of the Eastern District of New York. “This office will continue to use all available resources to protect victims of get-rich-quick schemes.”

“The U.S. Postal Inspection Service has a long history of investigating fraud schemes and protecting customers from scammers. These defendants were making misleading promises of easy money,” said Inspector in Charge Delany DeLeon-Colon of the U.S. Postal Inspection Service’s Criminal Investigations Group. “Anyone who engages in deceptive practices like this should know they will not go undetected and will be held accountable, regardless of where they are.”

The enjoined defendants reside in the United States, specifically in New York and Arizona, as well as in Canada and Germany. The complaint alleged that defendants Charles Kafeiti of Scottsdale, Arizona; Anthony Kafeiti of Port Jefferson, New York; and Steven L. Diaz of Mt. Sinai, New York, coordinated the schemes. Drew Wilson, of Vancouver, Canada, provided the Kafeitis and Diaz with logistical support. Dennis Hunsaker, of North Las Vegas, Nevada, and his company, Digital Matrix International Inc., enabled the mailings by providing tools that managed lists of recipients and lists of respondents. Carmine Maietta and Elizabeth Maietta, of Westbury, New York, opened and processed victim returns. A German corporation, SixEvolution GmbH, and its operator, David Anthony, processed victim payments.  

The permanent injunctions were issued after the District Court granted the government’s request for a temporary restraining order. The permanent injunctions prohibit defendants from, among other things, sending fraudulent solicitations; receiving, handling, or opening any victim mail responding to solicitations; and using or benefiting from lists of victims who previously responded to solicitations. The defendants are also required to notify the government of any interest or participation in any entity involved in mass-mail marketing and of their use of any U.S.-based mailboxes. The orders also authorize the U.S. Postal Inspection Service to open mail that was detained by law enforcement and return payments to the schemes’ victims.

The government is represented by Trial Attorney Jacqueline Blaesi-Freed of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys Seth Eichenholtz and John Vagelatos of the U.S. Attorney’s Office for the Eastern District of New York. The United States Postal Inspection Service provided investigative support. 

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at 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 www.justice.gov/usao-edny.

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, this past March 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 of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.

CENTRAL ISLIP – The United States District Court for the Eastern District of New York entered permanent injunctions against 15 individuals and companies to cease their involvement with fraudulent mailings.  According to a complaint filed by the United States in November 2018, the defendants mailed, or assisted the mailing of, thousands of solicitations stylized as individualized notices that falsely stated recipients had won large sums of money or valuable prizes, but had to pay a fee to claim the winnings.  Today’s order ends defendants’ involvement in these multi-million dollar mail fraud schemes. These cases are part of the Department of Justice’s Elder Fraud Initiative.

“These permanent injunctions stop unscrupulous individuals and companies from conducting fraudulent solicitation schemes that targeted the elderly in our district and throughout the country and the world,” stated United States Attorney Donoghue.  “This Office will continue to use all available resources to protect victims of get-rich- quick schemes.”

“The Department will vigorously pursue those who peddle false promises of wealth,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “I look forward to the day when American consumers no longer find fraudulent mailings in their mailboxes.”

“The U.S. Postal Inspection Service has a long history of investigating fraud schemes and protecting customers from scammers.  These defendants were making misleading promises of easy money,” stated Delany De Leon-Colon, Inspector in Charge, U.S. Postal Inspection Service Criminal Investigations Group.  “Anyone who engages in deceptive practices like this should know they will not go undetected and will be held accountable, regardless of where they are.”

The 15 defendants participated in the schemes in a variety of ways, including facilitating the mailing of fraudulent solicitations related to three mail fraud schemes that primarily victimized the elderly or vulnerable.  The solicitations informed recipients throughout the world that they had won multi-million dollar cash prizes but needed urgently to pay a fee to claim their winnings.  Although victims sent in the requested fees by cash, check or credit card, they did not receive large cash prizes in return.  The complaint alleged that, in the last year, the schemes collectively grossed an estimated $4.8 million in fraudulent proceeds.

The complaint alleged that defendants Charles Kafeiti of Scottsdale, Arizona; Anthony Kafeiti of Port Jefferson, New York; and Steven L. Diaz of Mt. Sinai, New York, coordinated the schemes.  Drew Wilson, a resident of Vancouver, Canada, provided the Kafeitis and Diaz with logistical support.  Dennis Hunsaker, a resident of North Las Vegas, Nevada, and his company, Digital Matrix International Inc., provided tools that managed lists of recipients and lists of respondents.  Carmine Maietta and Elizabeth Maietta, of Westbury, New York, opened and processed victim returns.  A German corporation, SixEvolution GmbH, and its operator, David Anthony, processed victim payments. 

The permanent injunctions were issued after the District Court granted the government’s request for a temporary restraining order in November 2018. They prohibit defendants from sending fraudulent solicitations; receiving, handling, or opening any victim mail responding to solicitations; and using or benefiting from lists of victims who previously responded to solicitations.  The defendants are required to notify the government of any interest or participation in any entity involved in mass-mail marketing, and of their use of any U.S.-based mailboxes.  The injunction also authorizes the U.S. Postal Inspection Service to open mail that was detained by law enforcement and return payments to the victims of the schemes.

This matter is being handled by Assistant U.S. Attorneys Seth Eichenholtz and John Vagelatos of the United States Attorney’s Office for the Eastern District of New York, and Trial Attorney Jacqueline Blaesi-Freed of the Civil Division’s Consumer Protection Branch.  The United States Postal Inspection Service provided investigative support. 

Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.

E.D.N.Y. Docket No. 18-CV-6581 (JMA)

A federal jury in Brooklyn returned a guilty verdict today against Devone Jefferys for Hobbs Act robbery conspiracy, attempted robbery of heroin and cash and unlawful use and possession of a firearm.  The verdict followed a six-day trial before United States District Judge Kiyo A. Matsumoto.  When sentenced, Jefferys faces a mandatory minimum sentence of five years in prison and a maximum of life imprisonment.

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

“For years, the defendant was on the run and in hiding, trying to avoid paying the consequences for the violence and terror he inflicted.  But with today’s verdict, justice has caught up to him,” stated United States Attorney Donoghue.  Mr. Donoghue thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division, for their outstanding work in the case.

On July 31, 2015, Jefferys and a co-conspirator, posing as NYPD police officers, entered an apartment in Williamsburg, Brooklyn, to steal heroin and cash from a drug dealer who lived there with his mother.  They pointed their guns at those present in the apartment – including a pregnant woman and the drug dealer’s sister – ordered them to lie on the floor and bound them with duct tape.  Jefferys then ransacked the apartment searching for drugs and cash, with his and co-conspirator’s guns fixed on the victims’ heads and the pregnant woman’s stomach.  When Jefferys learned that the drug dealer’s sister had thrown a bag of drugs out a window, he forcibly took her to an outside alleyway, where he assaulted her after he was unable to locate the heroin.  Jefferys was captured on multiple video cameras in the apartment building. 

At the trial, Jefferys’ former girlfriend testified that he told her that he was a fugitive from the police, described the robbery and lived in her car to avoid capture.

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 International Narcotics and Money Laundering Section.  Assistant United States Attorneys Nathan Reilly and Ryan Harris are in charge of the prosecution.

The Defendant:

DEVONE JEFFERYS (also known as “Moneybags”)
Age:  27
Brooklyn, New York

E.D.N.Y. Docket No. 18-CR-359 (KAM)

Earlier today, in federal court in Brooklyn, Hrachya Atoyan pleaded guilty to conspiring with the operator of a Queens-based non-profit organization, Big Apple Music Awards Foundation Inc. (BAMA), to bring Armenian nationals illegally into the United States, and to committing visa fraud.  The guilty plea was entered before United States Magistrate Judge Sanket J. Bulsara.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Todd J. Brown, Director, U.S. Department of State Diplomatic Security Service (DSS), announced the guilty plea.

“Atoyan’s guilty plea brings down the curtain on an elaborate visa fraud scheme to falsely portray applicants as artists and entertainers in order to circumvent our country’s P-3 visa program,” stated United States Attorney Donoghue.

“Exploiting the P-3 non-immigrant visa classification system for culturally unique artist and entertainers makes a mockery out of the legitimate performers for whom that visa was intended,” stated Assistant Attorney General Benczkowski.  “We will work hand in hand with our law enforcement partners to rid the system of fraudsters, like Mr. Atoyan and his co-conspirators, who seek to take advantage of and profit from our immigration system.”

“The Diplomatic Security Service builds strong teams overseas and in the United States to protect the integrity of all U.S. visas and travel documents -- especially those, like the P-3 visa, which allow for entertainers to visit the United States to perform in culturally unique events and deepen our understanding of different cultures,” stated DSS Director Brown. “DSS values our partnership with the U.S. Attorney’s Office and other law enforcement agencies around the world to prevent and jointly combat U.S. passport and visa fraud. Deterring, detecting and investigating U.S. passport and visa fraud is essential to safeguarding our national security.”

Between January 2013 and December 2014, Atoyan and Stella Boyadjian, the operator of BAMA, engaged in a widespread visa fraud scheme to bring foreign nationals illegally into the United States by falsely representing to the United States Citizenship and Immigration Services (USCIS) that they were members of a traditional Armenian performance group and thus qualified for P-3 visas as “culturally unique” artists or entertainers. 

In furtherance of the scheme, the conspirators solicited foreign nationals and, in exchange for fees of up to $10,000, prepared and filed fraudulent P-3 visa applications.  The conspirators acquired fraudulent documentation to support the applications, including fake dance certificates and staged photo sessions where the foreign nationals wore Armenian dance costumes to make it appear as though they were traditional Armenian musicians, singers and performers.

When sentenced, Atoyan faces up to 10 years’ imprisonment.  Boyadjian pleaded guilty to conspiring to bring aliens unlawfully into the United States, visa fraud and aggravated identity theft in March 2019, and also awaits sentencing.

This case was investigated by the DSS Criminal Fraud Investigations and Overseas Criminal Investigations Division, with assistance from the USCIS Fraud Detection and National Security, Center Fraud Detection Operations, Vermont.

The government’s case is being prosecuted by Assistant United States Attorney David Gopstein and Trial Attorney Sasha N. Rutizer of the Criminal Division’s Human Rights and Special Prosecutions Section.

The Defendant:

HRACHYA ATOYAN
Age:  32
Glendale, California

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

 

A man residing in Glendale, California, pleaded guilty today to conspiracy to unlawfully bring in aliens and visa fraud for his role in a multi-year visa fraud scheme that brought Armenian citizens into the United States for profit.

Hrachya Atoyan, 32, pleaded guilty before U.S. Magistrate Judge Sanket J. Bulsara in the Eastern District of New York.  Sentencing is scheduled for Feb. 20, 2020, before U.S. District Judge Margo K. Brodie.  According to the indictment, Atoyan allegedly participated in a transnational network of co-conspirators who engaged in a widespread visa fraud scheme to bring Armenian citizens into the United States by fraudulently claiming to the U.S. Citizenship and Immigration Services (USCIS) that the Armenians were members of performance groups, and thus qualified for P-3 “Culturally Unique Artist” visas.  

“Exploiting the P-3 non-immigrant visa classification system for culturally unique artist and entertainers makes a mockery out of the legitimate performers for whom that visa was intended,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “We will work hand in hand with our law enforcement partners to rid the system of fraudsters, like Mr. Atoyan and his co-conspirators, who seek to take advantage of and profit from our immigration system.”

“Atoyan’s guilty plea brings down the curtain on an elaborate visa fraud scheme to falsely portray applicants as artists and entertainers in order to circumvent our country’s P-3 visa program,” said U.S. Attorney Richard P. Donoghue of the Eastern District of New York.

“The Diplomatic Security Service builds strong teams overseas and in the United States to protect the integrity of all U.S. visas and travel documents – especially those, like the P-3 visa, which allow for entertainers to visit the United States to perform in culturally unique events and deepen our understanding of different cultures,” said Todd J. Brown, Director of the Diplomatic Security Service.  “DSS values our partnership with the U.S. Attorney’s Office and other law enforcement agencies around the world to prevent and jointly combat U.S. passport and visa fraud. Deterring, detecting, and investigating U.S. passport and visa fraud is essential to safeguarding our national security.”

“The elaborate scheme devised in this case demonstrates just how far criminals will go to cheat our already generous immigration system,” said U.S. Citizenship and Immigration Services Acting Director Ken Cuccinelli.  “This transnational criminal conspiracy was taken down thanks to the hard work of officers with USCIS’ Fraud Detection and National Security directorate and our valued law enforcement partners. Thank you for bringing these perpetrators to justice.”

The P-3 nonimmigrant visa classification allows foreign nationals to temporarily travel to the United States to perform, teach or coach as artists or entertainers, under a program that is culturally unique.  A U.S. employer or sponsoring organization is required to submit a USCIS Form I-129 Petition for a Non-Immigrant Worker, along with supporting documentation, attesting that the performances in the United States are culturally unique.

In February 2018, Stella Boyadjian of Rego Park, New York; Atoyan; and Diana Grigoryan, aka “Dina Akopovna,” 42, of the Republic of Armenia were charged in a 15-count indictment with visa fraud and with conspiracy to: defraud the United States, commit visa fraud, and illegally bring aliens into the United States.  Boyadjian and Grigoryan were also charged with related money laundering charges, and Boyadjian was charged with aggravated identity theft.  Boyadjian previously pleaded guilty on March 4, 2019 in the Eastern District of New York.

As alleged in the indictment, Boyadjian ran a non-profit organization called Big Apple Music Awards Foundation (BAMA) based in Rego Park, New York.  Boyadjian used the Big Apple Music Awards Foundation as well as formal and informal music industry contacts in the United States and Armenia to perpetuate the scheme.  Atoyan, Boyadjian, and others solicited Armenian citizens who wanted to come to the United States and charged them between $3,000 and $10,000 to be included on the Form I-129 Petitions.  Boyadjian and other associates in Armenia then acquired fraudulent performer certificates and organized staged photo sessions where the aliens wore traditional Armenian folk outfits to make it appear as though they were traditional Armenian performers.  After being trained how to defeat U.S. visa interviews, the individual aliens presented these certificates and photos to U.S. consular officers during their visa interviews.  Once the Armenians entered the United States, some would pay Boyadjian and her associates additional money to be included in another fraudulent petition asking for P-3 visa extensions.  As alleged in the indictment, Atoyan himself came to the United States on a P-3 visa obtained in connection with a Form I-129 submitted by BAMA.

This case was a joint investigation by the DSS’s Criminal Fraud Investigations and Overseas Criminal Investigations Division with assistance from the USCIS Fraud Detection and National Security, Center Fraud Detection Operations - Vermont.  Trial Attorney Sasha N. Rutizer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney David Gopstein of the Eastern District of New York are prosecuting the case.

Earlier today, at the federal courthouse in Central Islip, Raymond R. Pellegrino, a chiropractor with offices in West Hempstead and Hicksville, New York, was sentenced by United States District Judge Joanna Seybert to 18 months’ imprisonment for committing health care fraud.  The Court also ordered Pellegrino to forfeit $504,444 and to pay restitution of $2,427,101.13 to Anthem Blue Cross/Blue Shield (BC/BS). 

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

Between December 2013 and September 2014, Pellegrino used the National Provider identification numbers of medical doctors who worked for him on a part-time basis to submit fraudulent claims for medical services to BC/BS.  The claims falsely indicated that osteopathic manipulation and other services had been provided to patients by the doctors.  As a result, Pellegrino received more than $2.4 million in payments from BC/BS for services that he knew had not been provided.   

“Pellegrino abused his chiropractic license by manipulating insurance claims instead of patients’ muscles, and now will pay the price for stealing millions of dollars from an insurance company,” stated United States Attorney Donoghue.  Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, the U.S. Department of Health and Human Services and the New York State Department of Financial Services for their assistance with the case.

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

The Defendant:

RAYMOND R. PELLEGRINO
Age:  50
McKinney, Texas,

E.D.N.Y. Docket No. 18-CR-496 (JS)

Earlier today, at the federal courthouse in Brooklyn, Rahmel Smith, a leader of the Eight Trey Cowboy Crips gang that operates in Flatbush, pleaded guilty to conspiracy to distribute cocaine base, heroin and marijuana, and use of a firearm in relation to a drug trafficking crime.  When sentenced, he faces a mandatory minimum sentence of 15 years’ imprisonment and a maximum of life imprisonment.  The guilty plea was entered before United States District Judge Allyne R. Ross.

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

“The defendant is now facing a significant prison sentence for endangering the Flatbush community not only by dealing dangerous drugs, but also by using firearms in connection with his gang’s drug trafficking,” stated United States Attorney Donoghue.  “This Office will continue to working tirelessly with our law enforcement partners to dismantle and eradicate violent street gangs like the Eight Trey Cowboy Crips.”  Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, and the New York City Police Department for their outstanding work on the case.

Between May 2018 and February 2019, Smith directed fellow gang members to sell crack cocaine, heroin and marijuana on a daily basis. As part of the government’s investigation, law enforcement agents and officers intercepted numerous telephone communications during which Smith discussed narcotics transactions with fellow gang members.  Between May 10, 2018 and December 18, 2018, under the supervision of law enforcement, a confidential informant made 12 crack cocaine purchases from Smith in the total amount of approximately 280 grams. 

As part of his plea agreement with the government, Smith will forfeit three firearms he used in furtherance of the gang’s drug trafficking, specifically, a .25 caliber Lorcin pistol, a Jimenez 9mm pistol and a Romarm Cugir rifle, commonly referred to as an AK-47.          

Two co-defendant gang members, Michael Martin and Shakim Carr, pleaded guilty in May 2019 and October 2019, respectively, to conspiracy to distribute and possess with intent to distribute cocaine base, heroin and marijuana, and are awaiting sentencing.

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.

This case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Erin Reid and Temidayo Aganga-Williams are in charge of the prosecution.

The Defendant:

RAHMEL SMITH (also known as “Mello”)
Age: 30
Brooklyn, New York

Defendants Who Previously Pleaded Guilty:

SHAKIM CARR (also known as “Sha”)
Age:  39
Brooklyn, New York

MICHAEL MARTIN (also known as “Scooter”)
Age:  26
Brooklyn, New York

E.D.N.Y. Docket No. 19-CR-137 (ARR)

 

Joseph Guida, an employee of New York City Department of Environmental Protection, pleaded guilty today to using a stash house in Mastic, Long Island to produce ecstasy (MDMA) and grow marijuana.  The plea was entered before United States District Judge Joan M. Azrack at the federal courthouse in Central Islip.  When sentenced, Guida faces up to 20 years in prison.  As part of his guilty plea, Guida agreed to forfeit his interest in the Mastic residence and a Dodge Durango that he used in connection with his drug operation. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York Field Office (HSI), and Troy Miller, Director of Field Operations, U.S. Customs and Border Protection, New York Field Office (CBP), announced the guilty plea.

“Guida turned a house in a residential neighborhood into a drug factory, with total disregard for the danger posed to his neighbors by the volatile chemicals used to manufacture ecstasy,” stated United States Attorney Donoghue.  “Today’s guilty plea is the result of swift action taken by this Office, working closely with our law enforcement partners, to safely shut down the defendant’s illegal drug operation.”  Mr. Donoghue expressed his grateful appreciation to the Drug Enforcement Administration, New York State Police Contaminated Crime Scene Emergency Response Team, Suffolk County Police Department and New York City Police Department for their assistance during the investigation.

“Guida created a clandestine lab in his home to manufacture synthetics drugs and grow illegal marijuana. He sought to make a profit from his criminal business while endangering those in his community,” stated HSI Special Agent-in-Charge Fitzhugh.  “It was the seamless collaboration with our partners at CBP, DEA and New York State Police before and during this investigation that allowed law enforcement to shut down Guida and his illicit enterprise.”

“This case serves as a great example of collaborative law enforcement efforts to combat international narcotics trafficking conspirators,” stated CBP Director Miller.  “U.S. Customs and Border Protection thanks our partners at HSI and DEA for their continued cooperation.”

According to court filings and facts presented at the guilty plea proceeding, between November 2013 and December 2018, Guida used a house in Mastic to manufacture MDMA and marijuana for resale.  In December 2018, CBP officers intercepted a package containing PMK methyl-glycidate (PMK), a MDMA precursor, that was mailed from China to Guida’s apartment in Queens.  HSI agents then interviewed Guida, and he admitted that he ordered the PMK from China and used the Mastic residence as an MDMA lab and marijuana grow-house. 

A subsequent search of the Mastic residence by law enforcement agents, some wearing protective hazmat suits, revealed chemicals and laboratory equipment for manufacturing MDMA, as well as approximately 36 marijuana plants and approximately 1.3 kilograms of processed marijuana. 

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

The Defendant:

JOSEPH GUIDA
Age:  45
Queens, New York

E.D.N.Y. Docket No. 19-CR-12 (DRH)

 

Earlier today, in federal court in Central Islip, Daniel Harris was sentenced by United States District Judge Arthur D. Spatt to 10 years’ imprisonment for possession with intent to distribute more than 500 grams of cocaine and 28 grams of cocaine base, as well as possession of multiple firearms in furtherance of a drug trafficking crime.  Harris pleaded guilty to the charges on April 8, 2019.

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

“With today’s sentence, the defendant is deservedly punished for endangering the residents of eastern Long Island with his drug dealing and arming himself to the teeth to protect his illicit business,” stated United States Attorney Donoghue.  “This Office will continue working relentlessly with our federal and local law enforcement partners to address the dangerous combination of narcotics and firearms.”  Mr. Donoghue thanked the Federal Bureau of Investigation, New York Field Office (FBI), and the Suffolk County East End Drug Task Force for their outstanding work on the case.

As part of an investigation into narcotics trafficking in and around Riverhead, New York, law enforcement agents and officers made multiple purchases of crack cocaine from Harris at his home in Flanders.  On November 14, 2018, Harris was arrested, and a search warrant was executed at his home resulting in the seizure of more than one kilogram of powder cocaine and over 50 grams of cocaine base, $10,073 in cash, a shotgun, a .38 caliber revolver and a 9mm. handgun.  At his guilty plea proceeding, Harris admitted that he kept the firearms to protect his drug trafficking business.

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 Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s 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 prosecuted by Assistant United States Attorney Michael Maffei.

The Defendant:

DANIEL HARRIS
Age: 36 
Flanders, New York

E.D.N.Y. Docket No. 18-CR-628 (ADS)

Yesterday, at the federal courthouse in Brooklyn, Lenard Barletto, a member of the Outlaw Gangsta Crips (“OGC”) and the Shoota Gang, was sentenced to 210 months’ imprisonment for racketeering conspiracy, conspiracy to distribute crack cocaine and conspiracy to murder two gang rivals.  Barletto pleaded guilty to the charges in June 2018.  He is the final gang member to be sentenced in this case, in which 23 defendants, including the gangs’ leaders, were charged and convicted of racketeering conspiracy, murder conspiracy, attempted murder, narcotics trafficking conspiracy and bank fraud, among other crimes.  The sentencing proceedings were held before United States District Judge William F. Kuntz II.

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 James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentences.

“With Outlaw Gangsta Crips and Shoota Gang leaders and members now serving well-deserved prison terms, the East Flatbush community is a much safer place,” stated United States Attorney Donoghue.  “We warn all violent street gang members, in no uncertain terms, to expect a similar fate for menacing our communities.”

“Violent street gangs, and the crews and subsets that splinter off from them, remain a focus of law enforcement wherever their illegal trade in narcotics and brutal rivalries threaten the safety of our city’s neighborhoods and residents,” stated NYPD Commissioner O’Neill.  “We applaud our federal partners for working together in this case to eradicate a criminal franchise and ensure justice for the East Flatbush community with the culmination of this successful prosecution.”

OGC and the Shoota Gang were based in the East Flatbush neighborhood of Brooklyn.  OGC was a violent set of the nationwide Crips street gang, and the Shoota Gang was a local offshoot of OGC that included members of OGC, the Eight Trey Gangsta Crips, the Bosses in Business (“BIB”) and the Bloods.  Between August 9, 2013 and May 12, 2015, members of OGC and the Shoota Gang committed multiple acts of violence, sold drugs and guns, committed robberies and bank fraud and promoted prostitution.  Among the crimes of conviction were the following:

Attempted Murder

On June 3, 2014, Conell Brogdon, a leader of both OGC and the Shoota Gang, and Malik Campbell, a member of the Bloods and the Shoota Gang, attempted to murder a victim identified as John Doe #1.  Brogdon, Campbell and three other Shoota Gang members surrounded John Doe #1 inside the Big Boy Deli on Nostrand Avenue and attempted to steal his necklace.  During the confrontation, Brogdon handed Campbell a gun, and Campbell shot John Doe #1, who survived.

Murder Conspiracy

In January 2014, OGC member Kareem Mitchell, also known as “Pop,” was murdered, and OGC and the Shoota Gang believed BIB was responsible.  In a series of phone calls intercepted pursuant to judicially authorized wiretaps, Parris Desuze, a leader of both OGC and the Shoota Gang, and Lenard Barletto and Courtney Coy, both members of OGC and the Shoota Gang, confirmed that they had firearms and would meet at the location identified by Solomon Artis, another OGC member, to attack two BIB members.  The plan was thwarted by FBI agents and NYPD detectives monitoring the wiretaps, and Artis, Barleto, Coy and Desuze were arrested.  Subsequently, co-conspirator Andre Holman, a member of the Eight Trey Gangsta Crips, was also arrested.

Assault

On July 19, 2014, Cordero Passley, a member of the Eight Trey Gangsta Crips and associate of OGC, assaulted and stabbed a victim on Lenox Road.  The confrontation began when Passley ordered a woman to stop playing a song recorded by an alleged rival gang member and rapper.  When the victim defended the woman, Passley and others attacked him.

Drug Trafficking

Between August 9, 2013 and May 12, 2015, members of OGC and the Shoota gang conspired to sell crack cocaine in Brooklyn, Connecticut, West Virginia and elsewhere.

Bank Fraud Conspiracy

Between January 6, 2014 and January 20, 2015, members and associates of OGC, and members of the Eight Trey Gangsta Crips, conspired to defraud Bank of America, JPMorgan Chase, Citibank and TD Bank.  The conspirators obtained paychecks issued to others and used the information on the checks to create fraudulent checks that appeared to be written by business entities.  Those checks were then deposited into bank accounts, and the deposits were promptly withdrawn.

Convictions and Sentences

• Conell Brogdon, a leader of both OGC and the Shoota Gang, was sentenced to 210 months’ imprisonment for racketeering conspiracy, including predicate acts of attempted murder and conspiracy to distribute crack cocaine.
   
• Parris Desuze, a leader of both OGC and the Shoota Gang, was sentenced to 210 months’ imprisonment for racketeering conspiracy, including predicate acts of conspiracy to murder and conspiracy to distribute crack cocaine.
   
• Lenard Barletto, a member of both OGC and the Shoota Gang, was sentenced to 210 months’ imprisonment for racketeering conspiracy, including predicate acts of conspiracy to murder and conspiracy to distribute crack cocaine.
   
• Malik Campbell, a member of the Bloods and the Shoota Gang, was sentenced to 188 months’ imprisonment for racketeering conspiracy, including predicate acts of attempted murder and conspiracy to distribute crack cocaine.
   
• Courtney Coy, a high-ranking member of both OGC and the Shoota Gang, was sentenced to 168 months’ imprisonment for racketeering conspiracy, including predicate acts of conspiracy to murder and conspiracy to distribute crack cocaine.
   
• Solomon Artis, a member of OGC, was sentenced to 121 months’ imprisonment for racketeering conspiracy, including predicate acts of conspiracy to murder and conspiracy to distribute crack cocaine.
   
• Steven Cherenfant, Stanley Cherenfant and Stephon Rene, brothers and members of the Eight Trey Gangsta Crips and the Shoota Gang, were sentenced to 135, 121 and 121 months’ imprisonment, respectively, for conspiracy to distribute crack cocaine with OGC.
   
• Aikiam Floyd, a member of the Bloods and the Shoota Gang, was sentenced to 121 months’ imprisonment for conspiracy to distribute crack cocaine with OGC.
   
• Andre Holman, a member of the Eight Trey Gangsta Crips and associate of OGC, was sentenced to 87 months’ imprisonment for conspiracy to murder.
   
• Cordero Passley, a member of the Eight Trey Gangsta Crips and an associate of OGC, was sentenced to 46 months’ imprisonment for assault in aid of racketeering.

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

The Defendant Sentenced Yesterday:

LENARD BARLETTO
Age:  31
Brooklyn, New York

Defendants Previously Sentenced:

SOLOMON ARTIS
Age: 30
Brooklyn, New York

DERRICK BIENAIME
Age: 24
Brooklyn, New York

CONELL BROGDON
Age: 32
Brooklyn, New York

DAVON BROWN
Age: 21
Brooklyn, New York

MALIK CAMPBELL
Age: 32
Brooklyn, New York

STANLEY CHERENFANT
Age: 24
Brooklyn, New York

STEVEN CHERENFANT
Age: 28
Brooklyn, New York

COURTNEY COY
Age: 32
Brooklyn, New York

PARRIS DESUZE
Age: 31
Brooklyn, New York

BRANDON GREENIDGE
Age: 34
Brooklyn, New York

CORY HARRIS
Age: 41
Brooklyn, New York

JAMAR HARRY
Age: 30
Brooklyn, New York

ANDRE HOLMAN
Age: 31
Brooklyn, New York

JEFFREY JOSEPH
Age: 34
Brooklyn, New York

SILBERT NICHOLSON
Age: 27
Brooklyn, New York

CORDERO PASSLEY
Age: 25
Brooklyn, New York

GABRIEL PATTERSON
Age: 24
Brooklyn, New York

STEPHON RENE
Age: 23
Brooklyn, New York

AKEEM WATSON
Age: 27
Brooklyn, New York

E.D.N.Y. Docket No. 15-CR-287 (S-1) (WFK)

Defendant Angelina Barini will be arraigned this afternoon in federal court in Brooklyn on a superseding indictment charging her with distributing and possessing with intent to distribute fentanyl, methamphetamine and cocaine that resulted in the fatal overdose of a second Queens man, this one on August 5, 2019.  The arraignment will be held before United States District Judge Brian M. Cogan.  Barini is detained pending trial.

Richard P. Donoghue, United States Attorney for the Eastern District of New York;  Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI); and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the new charges.   

“The defendant Angelina Barini now stands charged with dispensing deadly doses of narcotic drugs to two victims,” stated United States Attorney Donoghue.  “Every life lost to the opioid crisis is of the utmost importance to this Office and our law enforcement partners, and we will work relentlessly to uncover the evidence proving who is responsible for each opioid death.”

“Barini has shown little regard for the life of another, and with the drugs laced with fentanyl that she allegedly peddled, she offered her victims an experience they would never survive,” stated HSI Special Agent-in-Charge Fitzhugh.  “This is a painful reminder to anyone looking to satisfy a high, that their life is not worth anything to those offering deadly drug cocktails for a profit.  The opioid crisis continues to devastate families and take lives, but HSI, with its law enforcement partners, remains committed in investigating overdose related deaths and will hold accountable those who benefit from the addiction of others, some of whom pay the ultimate price.”

The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of causing the death of an overdose victim, Barini faces a mandatory minimum of 20 years’ imprisonment, and a maximum of life imprisonment. 

The government’s investigation is continuing.

Assistant United States Attorneys Soumya Dayananda, Andrew Grubin and Andrew Wang are in charge of the prosecution.

The Defendant:

ANGELINA BARINI
Age:  41
Queens, New York

E.D.N.Y. Docket No. 19-428(S-2) (BMC)

Earlier today, at the federal courthouse in Central Islip, Marlon Guevara, also known as “Mosquito,” a member of the Sailors Locos Salvatruchas Westside clique of La Mara Salvatrucha, also known as the MS-13 (MS-13), a transnational criminal organization, was sentenced by United States Circuit Judge Joseph F. Bianco to 25 years’ imprisonment for his participation in the October 13, 2016 murder of Dewann Stacks, and conspiracy to distribute marijuana.  Guevara pleaded guilty to the charges in January 2019.  Upon completion of his sentence, Guevara faces deportation from the United States.

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), Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the sentence.

“With today’s sentence, Guevara will now pay for participating in the execution of Dewann Stacks as part of MS-13’s warped mission to attack and kill perceived rivals,” stated United States Attorney Donoghue.  “The brutality of this murder is a reminder of the necessity of the Eastern District’s and the FBI’s Long Island Gang Task Force’s commitment to eradicate the MS-13.”

“While today’s sentence might not salve the pain this man inflicted on Mr. Stack’s family, and the community terrorized by the violence going on around them, it does send a message to others they will be held accountable for their murderous and criminal actions,” stated FBI Assistant Director-in-Charge Sweeney.  “Our FBI Long Island Gang Task Force is doing all we can to stop MS-13 from further harming anyone, and we’ve made a truly significant impact.  Having said that, we still need the community members to know they can come forward with information so we can continue the progress.”

“The senseless homicide of Dewann Stacks, who was brutally attacked in an incomprehensible manner, is a reminder of the ruthlessness and violence committed at the hands of MS-13,” stated SCPD Commissioner Hart.  “Our commitment to dismantling MS-13 has led to today’s sentencing, and I would like to thank the Eastern District of New York and the FBI’s Long Island Gang Task Force for their dedication to holding these gang members accountable for their heinous crimes.” 

“Today’s sentencing in the brutal murder of Dewann Stacks by MS-13 gang member Marlon Guevara shows that law enforcement is working together with our state and federal partners.  We will expand every resource to arrest those offenders of these horrific crimes and follow through until conviction and sentencing.  Our combined zero tolerance approach will continue to keep our residents and communities safe,” stated NCPD Commissioner Ryder. 

According to court filings and facts presented during the sentencing proceeding, on October 13, 2016, Guevara and other MS-13 co-conspirators drove around the streets of Central Islip and Brentwood hunting for rival gang members to attack and kill.  They spotted Stacks on American Boulevard in Brentwood and, believing him to be a rival gang member, decided to kill him.  Guevara, wielding a machete, and two other MS-13 members, one armed with a machete and the other a baseball bat, attacked Stacks, beating and hacking him to death.  The victim sustained severe sharp and blunt force trauma to the face and head, rendering him nearly unrecognizable.    

From April 2016 to March 2017, Guevara and members and associates of the Sailors clique sold street-level quantities of marijuana in and around Brentwood.  The profits were turned over to the clique leaders, who purchased more marijuana and firearms and wired money to MS-13 leaders in El Salvador

Guevara was 17 years of age at the time of the murder, and was initially charged by a juvenile information.  He subsequently agreed to be transferred to adult status for trial and, in January 2019, he waived indictment and pleaded guilty.

Today’s sentencing is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13.  The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, and they are primarily immigrants from Central America.  With numerous branches, or “cliques,” the MS-13 is the largest and most violent street gang on Long Island.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 50 murders in the Eastern District of New York, and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, SCPD, NCPD, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, New York State Police and Bureau of Alcohol, Tobacco, Firearms and Explosives. 

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

The Defendant:

MARLON GUEVARA (also known as “Mosquito”)
Age: 20
Brentwood, NEW YORK

E.D.N.Y. Docket No. 18-CR-275 (S-1) (JFB)

Earlier today, at the federal courthouse in Brooklyn, Stanley Fuller was sentenced to 10 years and one month in prison following his guilty plea to two separate heroin distribution conspiracies.  The sentencing was held before United States District Court Judge Jack B. Weinstein.  Fuller pleaded guilty to the charges in April 2019.

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

“Fuller had a lucrative business selling lethal heroin to gang members, but ultimately all he earned for his efforts was a significant prison sentence,” stated United States Attorney Donoghue.  Mr. Donoghue thanked the Department of Homeland Security, New York, the Drug Enforcement Administration, New York Division, and the New York City Police Department for their outstanding work on the case.

Between April 2013 and July 2015, Fuller supplied large quantities of heroin to a “set” of the Bloods street gang known as the Paper Chasing Goons, or POV City, based in Jamaica, Queens.  As part of the government’s investigation, members of law enforcement intercepted numerous telephone conversations with Fuller and gang members discussing heroin sales, demand and prices, as well as the quality of heroin sold under the brand names “Sweet Dreams,” “Pepsi” and “First Take,” and feedback from his distributors about those brands.  Fuller distributed heroin to the gangs’ street-level dealers who, in turn, sold the heroin in the vicinity of Liberty Park, a park in South Jamaica.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Alicia N. Washington, Erin Reid and Jonathan Algor are in charge of the prosecution.

The Defendant:

STANLEY FULLER (also known as “Webo” and “Morty”)
Age: 43
Valley Stream, New York

E.D.N.Y. Docket Nos. 15-CR-382 (S-2) (JBW) and 19-CR-21 (JBW)

 

 

Earlier today, a superseding indictment was unsealed in federal court in Central Islip variously charging six members and associates of the Red Stone Gorillas “set” of the Bloods street gang with racketeering, murder, robberies, narcotics trafficking and firearms offenses.  The superseding indictment adds five new defendants, Jimmy Dean, Roger Foster, Corey Belcher, Willie Belcher and Eric Ross.  Those defendants were arrested this morning in various locations on the East End of Long Island, and will be arraigned this afternoon before United States District Judge Joanna Seybert.  Two defendants, the gang’s alleged leader Jimmy Dean and Terrill Latney, were already in custody, and will be arraigned 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), Timothy Sini, District Attorney, Suffolk County District Attorney’s Office (SCDA), Geraldine Hart, Commissioner, Suffolk County Police Department (SCPD), Keith M. Corlett, Superintendent, New York State Police (NYSP), and David J. Hegermiller, Chief, Riverhead Police Department, announced the charges.

“Through murder, assaults and drug sales, these members and associates of the Bloods’ Red Stone Gorillas posed a grave danger to communities on eastern Long Island,” stated United States Attorney Donoghue.  “This Office, together with our federal and local law enforcement partners, will continue working tirelessly to prosecute defendants like these and eradicate violent street gangs throughout Long Island.”  Mr. Donoghue expressed his grateful appreciation to the FBI’s Long Island Gang Task Force and the Suffolk County East End Drug Task Force for their work on the case.

“These arrests are the culmination of several years of intensive investigation to take out the worst-of-the-worst gang members terrorizing Eastern Long Island communities,” stated FBI Assistant Director-in-Charge Sweeney.  “These subjects have allegedly created such a violent environment in parts of the town where they operate that they were dealing out in the open, without fear.  We put a huge dent in that practice with the first round of arrests in this case, and today's action shows our FBI Long Island Gang Task Force and our law enforcement partners won’t stop until all of them are rounded up.”

“These are extremely dangerous gang members who are responsible not only for conspiring to commit murder, but for consistently driving crime on the East End through drug dealing and illegal firearm offenses,” stated Suffolk County District Attorney Sini. “Eradicating violent street gangs from our community is a top priority for my office. I thank all of our federal and local law enforcement partners for their continued partnership in the investigation and prosecution of gang members.”

“These Blood gang members and their associates engaged in violence and trafficked large quantities of narcotics for years on the East End of Long Island.  Thanks to the diligent work of the FBI’s Long Island Gang Task Force and the Suffolk County East End Drug Task Force— they have been stopped and will be held accountable for their heinous crimes,” stated SCPD Commissioner Hart. “The department will continue to work with our law enforcement partners to rid our communities of violent street gangs.”

“I commend our federal, state, and local law enforcement partners for their commitment to Project Safe Neighborhoods,” stated NYSP Superintendent Corlett.  “The arrests of these criminals are proof that, together, we are making our neighborhoods safer. Through our collaborative efforts, we will continue to target and apprehend gang members like the Blood Gang so they can no longer endanger the lives of New Yorkers through their heinous activities.”   

“We truly appreciate the unprecedented cooperation and assistance from our federal, state and county law enforcement partners in helping us to remove these criminals from our local communities here on the east end of Long Island,” stated Riverhead Police Chief Hegermiller.

As detailed in the superseding indictment and other court filings by the government, the defendants’ gang committed acts of violence and distributed large quantities of crack cocaine, powder cocaine and heroin in the Riverhead area on Long Island for nearly a decade.  On November 17, 2015, while attempting to carry out Dean’s order to kill an individual, Latney, and others fatally shot Thomas Lacolla as he sat in the intended victim’s car.  On August 1, 2015, Foster and others shot and wounded a suspected member of the rival Crips gang and a female bystander.  Following Dean’s arrest in 2016, Latney, Foster and others assumed control of the gang’s drug distribution operations.    

The charges in the indictment are allegations, and the defendants are presumed to be innocent unless and until proven guilty.  If convicted, the defendants face maximum sentences of up to 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.  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.    

The Defendants:

Terrill Latney (also known as “Motis” and “Mo”)
Age: 39
Riverhead, New York

Corey Belcher (also known as “Dot”)
Age: 34
Riverhead, New York

Willie Belcher (also known as “Thug”)
Age: 33
Flanders, New York

JImmy Dean (also known as “Jim Dick”)
Age: 41
Calverton, New York 

Roger Foster (also known as “RJ” and “YG”)
Age: 22
Baiting Hollow, New York

Eric Ross (also known as “Smurks”)
Age: 27
Flanders, New York

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