Eastern District of New York

“Chief Judge Dora L. Irizarry has notified me that the Court, pursuant to 28 U.S.C. § 546(d), has appointed me to serve as the United States Attorney for the Eastern District of New York.  I am deeply grateful to the Court for the opportunity to continue to serve as the U.S. Attorney.  I am equally grateful to the women and men of the Eastern District who have created and maintained a tradition of honor, integrity and excellence.  Together, we will pursue justice, protect the people of this great nation and be faithful to the rule of law.”

Today, the United States will return approximately 3,800 Iraqi artifacts to the Republic of Iraq at a repatriation ceremony at the residence of the Republic of Iraq’s Ambassador to the United States in Washington, D.C.  The artifacts were smuggled into the United States for delivery to Hobby Lobby Stores, Inc. (“Hobby Lobby”), a nationwide arts-and-crafts retailer based in Oklahoma City, Oklahoma, and two of its corporate affiliates.  Hobby Lobby agreed to forfeit these artifacts and $3 million to resolve a civil forfeiture complaint and multi-year investigation by the United States Attorney’s Office for the Eastern District of New York and U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI).

U.S. Immigration and Customs Enforcement (ICE) Acting Director Thomas D. Homan and Iraq’s Ambassador to the United States Fareed Yasseen will sign the ceremonial certificates transferring ownership of the artifacts from the United States to Iraq.  Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Ian Saunders, Acting Assistant Commissioner, Office of International Affairs, U.S. Customs and Border Protection will also participate in the repatriation ceremony.

“The Republic of Iraq, standing on the land that was once home to the storied city-states and kingdoms of Mesopotamia, has a celebrated heritage as a cradle of civilization,” stated U.S. Attorney Donoghue.  “We are proud to have played a role in removing these pieces of Iraq’s history from the black market of illegally obtained antiquities and restoring them to the Iraqi people.”  U.S. Attorney Donoghue thanked Dr. Eckart Frahm of Yale University and Dr. Elizabeth C. Stone from Stony Brook University (SUNY) for their assistance.

“On behalf of U.S. Immigration and Customs Enforcement (ICE), and thanks to the hard work of the Office of the Special Agent in Charge in New York, it is a great honor for me to return so many priceless cultural artifacts to the people of Iraq,” stated ICE Acting Director Homan.  “I would like to thank my colleagues at U.S. Customs and Border Protection and the U.S. Attorney’s Office for the Eastern District of New York for making this repatriation possible,” Homan added.  “We will continue to work together to prevent the looting of antiquities and ensure that those who would attempt to profit from this crime are held accountable. This ceremony should serve as a powerful reminder that nobody is above the law.”

Background

In July 2010, Hobby Lobby’s president and a consultant traveled to the United Arab Emirates (UAE) to inspect a large number of cuneiform tablets and other antiquities being offered for sale.  Following this trip, an expert on cultural property law warned Hobby Lobby that cuneiform tablets and cylinder seals were particularly likely to have been looted from Iraqi archaeological sites.  Hobby Lobby proceeded to purchase a set of 5,548 artifacts in late 2010.  Two-thirds of these artifacts were shipped in 2010 and 2011 by foreign antiquities dealers who made false statements on shipping labels, failed to file formal entry papers with U.S. Customs and Border Protection, and supplied fabricated provenances and sham invoices.

In July 2017, the government filed a civil forfeiture complaint and a stipulation of settlement in which Hobby Lobby consented to the forfeiture of approximately 3,500 ancient cuneiform and bullae that comprised part of the 2010 purchase, plus 144 cylinder seals and $3 million.  Hobby Lobby also agreed to identify, turn over to the United States and forfeit any additional artifacts from the 2010 purchase that came to light.  Hobby Lobby further agreed to adopt internal policies and procedures governing its importation and purchase of cultural property, provide appropriate training to its personnel, hire qualified outside customs counsel and customs brokers, and submit quarterly reports to the U.S. Attorney’s Office on any cultural property acquisitions for 18 months.  In addition, Hobby Lobby stipulated to a statement of facts that related the history of its purchase of thousands of Iraqi artifacts in 2010, the red flags surrounding that acquisition, and the improper shipments of these artifacts.

In September 2017, pursuant to its obligations under the stipulation with the government, Hobby Lobby advised the government that it was in possession of 245 additional cylinder seals that were part of the 2010 purchase.  In October 2017, Hobby Lobby shipped these cylinder seals to the United States and subsequently entered into a stipulation with the United States consenting to their forfeiture. 

The Repatriated Antiquities

The antiquities being repatriated to Iraq at today’s ceremony consist of approximately:

• 450 cuneiform tablets
• 3,000 clay bullae
• 371 cylinder seals[1]
  Cuneiform is an ancient system of writing on clay tablets that was used in ancient Mesopotamia thousands of years ago.  The names of people, places and months used on a number of the cuneiform tablets confirm that they originated in the area of modern-day Iraq.  Clay bullae are balls of clay on which seals have been imprinted.  Cylinder seals are small engraved stone cylinders.  When rolled on wet clay, they create raised images in the clay that can include pictures and cuneiform writing. 
  All of the artifacts were civilly forfeited in the Eastern District of New York.  Iraq’s petitions for their return were approved by the chief of the Money Laundering and Asset Recovery Section of the Department of Justice.
  The government’s case was handled by Assistant United States Attorneys Karin Orenstein and Ameet Kabrawala.
   

E.D.N.Y. Docket No. 17-CV-3980 (LDH) (VMS)

[1] In February 2018, 18 of the 144 cylinder seals that Hobby Lobby delivered to the government in connection with the July 2017 settlement were determined to be Egyptian Scarabs and are not included in this repatriation.

Andres Lopez Elorez was arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Marilyn Go on an indictment charging him with conspiring to import and distribute heroin into the United States.  The defendant was arrested in Spain on a provisional arrest warrant issued from the Eastern District of New York and subsequently extradited from Spain to the United States on April 30, 2018.  Judge Go ordered Elorez detained pending trial.

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

 “As alleged in the indictment, Elorez is not only a drug trafficker, he also betrayed a veterinarian’s pledge to prevent animal suffering when he used his surgical skills in a cruel scheme to smuggle heroin in the abdomens of puppies,” stated United States Attorney Donoghue.  “Dogs are mans’ best friend and, as the defendant is about to learn, we are drug dealers’ worst enemy.”  Mr. Donoghue expressed his appreciation to the United States Marshals Service, the DEA’s New York Division, Miami Division, Bogota Country Office and Madrid Country Office; The Colombian National Police; the Government of Spain and the Spanish Guardia Civil.

 “Twelve years ago, our investigation unmasked drug traffickers’ inhumane callousness,” stated DEA Special Agent-in-Charge Hunt.  “Over time, drug organizations’ unquenchable thirst for profit leads them to do unthinkable crimes like using innocent puppies for drug concealment, or nowadays pushing lethal amounts of fentanyl onto our streets.  This week, the veterinarian allegedly responsible has been brought to New York to face the charges against him.  I applaud the United States Marshal Service, the U.S. Attorney’s Office Eastern District of New York and our international law enforcement partners for their commitment to this investigation.” 

According to the superseding indictment and facts presented in court, between September 2004 and January 2005, Elorez was a member of a conspiracy, based in Colombia, that smuggled heroin into the United States using various methods to conceal the narcotics from detection by law enforcement.  In addition to human couriers transporting the heroin, Elorez and his coconspirators used animal couriers.  Elorez, utilizing his skill as a veterinarian, surgically implanted packets of liquid heroin in the bellies of puppies in order to conceal the narcotics from authorities.  When the dogs arrived in the United States from Colombia, the heroin was surgically removed from their bodies.

The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of the crimes charged, the defendant faces a mandatory minimum sentence of 10 years’ imprisonment, and up to life imprisonment.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  The Justice Department’s Office of International Affairs handled the extradition in this matter.  Assistant United States Attorneys Nathan D. Reilly and Alicia N. Washington are in charge of the prosecution.

The Defendant:

 ANDRES LOPEZ ELOREZ
Age:  38
Country of Birth: Colombia

E.D.N.Y. Docket No. 5-CR-835 (S-1) (SJ)

A superseding indictment was unsealed today in federal court in Brooklyn, charging 18th Street gang members and associates Yanki Misael Cruz-Mateo, Yoni Alexander Sierra, Jose Jimenez Chacon and Saudi Levy Ramirez, with the February 2, 2018 murder and murder conspiracy of a member of the rival MS-13 gang.  Cruz-Mateo also faces firearms-related charges.  The defendants were arraigned this afternoon before United States District Judge LaShaan DeArcy Hall.

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), Richard A. Brown, District Attorney of Queens County, and James P. O’Neil, Commissioner, New York City Police Department (NYPD), announced the superseding indictment.

“As alleged in the superseding indictment, the defendants are charged with murdering a suspected rival MS-13 member.  We will continue to work with our state and local partners to break this senseless cycle of violence by eradicating all violent street gangs that threaten our communities,” stated United States Attorney Donoghue.

“Our outstanding partnerships with local, state and federal law enforcement agencies are again showing results, and proving we are all in this together to rid communities of all criminal gangs,” stated FBI Assistant Director-in-Charge Sweeney.  “The investigators have shown their dedication to each and every case they discover, because no one deserves to die at the hands of these violent groups.  The FBI New York Metro Safe Streets Task Force won’t let these rival gangs use our neighborhoods for their turf war.”

“This indictment is another example of law enforcement working together to eliminate gang violence.  The defendants in this case are accused of carrying out the merciless execution of a rival gang member,” stated Queens District Attorney Brown.  “Gang warfare in our City streets puts every man, woman and child in danger.  We will not tolerate violent street gangs turning our neighborhoods into killing fields.  My office will continue to work diligently with our law enforcement partners to rid our communities of this kind of violence and brutality.”

“The magnitude of violence exhibited in this case will not be tolerated,” said NYPD Police Commissioner O’Neill. “These individuals would not be facing arraignment today without the collaboration between law enforcement and the public to stop and prevent violence.”

As alleged in the superseding indictment and detailed in court filings, the defendants are members and associates of the Jamaica, Queens and Kingston, New York chapters of the violent street gang 18th Street.  On the night of February 2, 2018, a victim, known to the grand jury as John Doe 2, was discovered in the vicinity of 160th Street and 85th Avenue in the Jamaica Hills section of Queens.  The victim had been shot multiple times in the head and torso.  Several days after the murder, Cruz-Mateo admitted in text messages to shooting the victim because he believed the victim was a member of the rival MS-13 gang.  Sierra, Chacon and Ramirez are  charged with the murder conspiracy of John Doe 2, along with Cruz-Mateo.

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

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

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

The Defendants:

YANKI MISAEL CRUZ-MATEO (also known as “Yankee Mateo,” “Doggy” and “Wino”)
Age: 19
Jamaica, New York

YONI ALEXANDER SIERRA (also known as “Arca,” “Arca Angel” and “Wasson”)
Age: 20
Queens, New York

JOSE JIMENEZ CHACON (also known as “Little One”)
Age: 20
New Brunswick, NJ

SAUDI LEVY RAMIREZ (also known as “El Malo” and “Little Bad”)
Age: 25
Queens, New York

E.D.N.Y. Docket No. 18-139 (S-1) (LDH)

Earlier today, at the federal courthouse in Brooklyn, Fareed Mumuni was sentenced to 17 years’ imprisonment by United States District Judge Margo K. Brodie.  Mumuni pleaded guilty on February 9, 2017 to all counts of an indictment charging him with conspiring and attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization, assaulting and conspiring to assault federal officers, and attempted murder of federal officers.   

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

“Heroic American law enforcement officers remain locked in a life-and-death struggle with terrorists like Fareed Mumuni,” stated United States Attorney Donoghue.  “We will do everything in our power to work with the FBI, the NYPD and all our Joint Terrorism Task Force partners to incapacitate terrorists and protect the American people.  I commend the FBI Special Agents and Task Force Officers for doing an outstanding job in this case.”

“The women and men of law enforcement put their lives on the line to keep us safe every day.  We will not tolerate attacks on them or plots to kill Americans,” said Assistant Attorney General Demers.  “I applaud the tireless efforts of the agents and prosecutors that led to the defendant’s arrest and conviction.  The National Security Division remains committed to defending our country and taking action against those who would harm it.”

 “Mumuni now follows a familiar path of like-minded individuals before him - to federal prison. His intent was clear, but our resolve to thwart individuals like this is even more resolute,” stated FBI Assistant Director-in-Charge Sweeney.  “I would like to thank the many JTTF agents and task force personnel, surveillance teams and FBI SWAT agents who interdicted Mumuni and his associates, often at great personal risk. Thank you for keeping our city safe.”

As alleged in the indictment and in other court filings, Mumuni pledged allegiance to ISIS, and he and co-conspirator Munther Omar Saleh discussed and worked to raise money to travel to ISIS-controlled territories.  Mumuni stated that if he were unable to travel to join ISIS, then he would fight in the United States. 

Saleh informed ISIS attack facilitator Junaid Hussain that Saleh, Mumuni, and three other co-conspirators located in New York and New Jersey had confronted law enforcement officers who were surveilling them continuously.  Saleh sought and received authorization from Junaid Hussain permitting Mumuni to conduct a suicide “martyrdom” attack by using a pressure-cooker bomb against law enforcement officers who were following the co-conspirators and thus preventing them from traveling to join ISIS.

On June 17, 2015, during the execution of a search warrant at his residence in Staten Island, Mumuni charged at an FBI agent with a kitchen knife as the agents attempted to clear the house.  Mumuni stabbed the FBI agent multiple times in the torso, using sufficient force to break off the tip of the knife.  The agent was saved from serious injury or death only by his magazine carrier, which deflected and chipped the point of Mumuni’s knife while Mumuni was thrusting it into the agent’s side.  Fortunately, the agent sustained only minor injuries.   

Saleh was sentenced on February 6, 2018 to 18 years’ imprisonment for conspiring and attempting to provide material support to ISIS, and assaulting and conspiring to assault federal officers.

The case was prosecuted by Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda and Ian C. Richardson, of the Office’s National Security and Cybercrime Section, with assistance provided by Trial Attorneys Robert Sander and Justin Sher of the National Security Division’s Counterterrorism Section.

The Defendant:

FAREED MUMUNI
Age:  23
Staten Island, New York

E.D.N.Y. Docket No. 15-CR-393 (MKB)

Fareed Mumuni, 23, of Staten Island, New York, was sentenced today to 17 years in prison, to be followed by 10 years of supervised release.  Mumuni pleaded guilty on Feb. 9, 2017 to all counts in an indictment charging him with conspiring and attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization, assaulting and conspiring to assault federal officers, and attempted murder of federal officers.   

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Assistant Director in Charge William F. Sweeney, Jr. of the FBI’s New York Field Office, and Commissioner James P. O’Neill of the NYPD announced the sentence.  The sentenced was issued by U.S. District Judge Margo K. Brodie.

“The women and men of law enforcement put their lives on the line to keep us safe every day.  We will not tolerate attacks on them or plots to kill Americans,” said Assistant Attorney General Demers.  “I applaud the tireless efforts of the agents and prosecutors that led to the defendant’s arrest and conviction.  The National Security Division remains committed to defending our country and taking action against those who would harm it.”

“Heroic American law enforcement officers remain locked in a life-and-death struggle with terrorists like Fareed Mumuni,” said U.S. Attorney Donoghue.  “We will do everything in our power to work with the FBI, the NYPD and all our Joint Terrorism Task Force partners to incapacitate terrorists and protect the American people.  I commend the FBI Special Agents and Task Force Officers for doing an outstanding job in this case.”

“Mumuni now follows a familiar path of like-minded individuals before him – to federal prison. His intent was clear, but our resolve to thwart individuals like this is even more resolute,” said Assistant Director in Charge Sweeney.  “I would like to thank the many JTTF agents and task force personnel, surveillance teams and FBI SWAT agents who interdicted Mumuni and his associates, often at great personal risk. Thank you for keeping our city safe.”

As alleged in the indictment and in other court filings, Mumuni pledged allegiance to ISIS, and he and co-conspirator Munther Omar Saleh discussed and worked to raise money to travel to ISIS-controlled territories.  Mumuni stated that if he were unable to travel to join ISIS, then he would fight in the United States. 

Saleh informed ISIS attack facilitator Junaid Hussain that Saleh, Mumuni and three other coconspirators located in New York and New Jersey had confronted law enforcement officers who were surveilling them continuously.  Saleh sought and received authorization from Junaid Hussain permitting Mumuni to conduct a suicide “martyrdom” attack by using a pressure-cooker bomb against law enforcement officers who were following the coconspirators and thus preventing them from traveling to join ISIS.

On June 17, 2015, during the execution of a search warrant at his residence in Staten Island, Mumuni charged at an FBI agent with a kitchen knife as the agents attempted to clear the house.  Mumuni stabbed the FBI agent multiple times in the torso, using sufficient force to break off the tip of the knife.  The agent was saved from serious injury or death only by his metal magazine carrier, which deflected and chipped the point of Mumuni’s knife while Mumuni was thrusting it into the agent’s side.  Fortunately, the agent sustained only minor injuries. 

This case was prosecuted by Assistant U.S. Attorneys Alexander A. Solomon, Douglas M. Pravda, and Ian C. Richardson, with assistance provided by Trial Attorneys Robert Sander and Justin Sher of the National Security Division’s Counterterrorism Section.  

The former head of global foreign exchange cash trading at HSBC Bank plc, a subsidiary of HSBC Holdings plc (collectively HSBC), was sentenced to prison today for his role defrauding an HSBC client through a scheme commonly referred to as “front running.”  The Court remanded Johnson to the custody of the Bureau of Prisons.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue of the Eastern District of New York, Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation (FDIC) and Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office made the announcement.    

Mark Johnson, 51, a United Kingdom citizen, was sentenced to serve 24 months in prison by U.S. Distict Judge Nicholas Garaufis of the Eastern District of New York.  In addition, Judge Garaufis ordered that the defendant pay a fine of $300,000.  A federal jury convicted the defendant on Oct. 23, 2017, following a four-week trial, of one count of wire fraud conspiracy and eight counts of wire fraud. 

“Mark Johnson, an executive at one of the world’s largest financial institutions, cheated his client out of millions and now he’s going to prison for it,” said Acting Assistant Attorney General Cronan.  “This sentencing should serve as a warning to those who engage in crooked financial schemes: The Justice Department’s Criminal Division and our law enforcement partners are watching.  We are committed to protecting our financial system from harm and we will hold corporate executives accountable for their crimes.”  

“Mark Johnson exploited confidential information and betrayed a client in order to generate profits for HSBC and enrich himself,” stated United States Attorney Donoghue.  “Johnson has been held accountable for his crimes and today’s sentence should serve as a deterrent to fraudsters seeking to cheat their victims by manipulating important benchmarks, such as the FX spot fixings.  This Office, together with our law enforcement partners, is committed to bringing to justice those who undermine public confidence in the operation of the financial markets through such schemes.”

“Today’s sentencing holds Mr. Johnson accountable for his egregious conduct to improperly manipulate the foreign currency market, misuse his position, and breach the customers’ trust,” said FDIC Inspector General Lerner.  “We are dedicated to working with our law enforcement partners in order to combat crimes that undermine the integrity of financial institutions and bring culpable bank insiders to justice.”

 “Leaders of financial service organizations such as HSBC are held to the utmost standard of integrity, which Mark Johnson failed to uphold,” said Assistant Director in Charge McNamara.  “The FBI will not falter in assuring that justice will be brought to those that use company finances for their own personal gain.”

According to the evidence presented at trial, in November and December 2011, Johnson cheated an HSBC client out of millions of dollars by misusing information provided to him by that client, which had hired HSBC to execute a foreign exchange transaction related to a planned sale of one of the client’s foreign subsidiaries.  HSBC was selected to execute the foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011.  HSBC’s agreement with the client required the bank to keep the details of the client’s planned transaction confidential.  Instead, Johnson misused confidential information he received about the client’s transaction to cheat the client out of millions of dollars, the evidence showed. 

Shortly before the transaction, Johnson and other traders acting under his direction purchased Pounds Sterling for their own benefit in their HSBC “proprietary” accounts.  Johnson then caused the $3.5 billion foreign exchange transaction to be executed in a manner that was designed to “ramp,” or drive up, the price of the Pound Sterling, benefiting their proprietary positions and HSBC at the expense of their client.  As part of the scheme, Johnson and his co-conspirators also made misrepresentations to the client about the transaction that concealed the self-serving nature of their actions.  The evidence showed that in total, Johnson and the traders he supervised generated HSBC profits of roughly $7.3 million from the execution of the transaction, including profits generated from the front-running conduct. 

The investigation was conducted by the FDIC’s Office of Inspector General and the FBI’s Washington Field Office.  Assistant Chiefs Carol L. Sipperly and Brian R. Young and Trial Attorney Blake Goebel of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Lauren Elbert of the Eastern District of New York’s Business and Securities Fraud Section are prosecuting the case.

The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country, focusing on cases of national significance and international scope.  Fraud Section prosecutors have vast experience in investigating and prosecuting securities and financial fraud, health care fraud and foreign corruption.  The Section is routinely the national leader in large, sophisticated white collar investigations and prosecutions, frequently in partnership with U.S. Attorneys’ Offices and in coordination with foreign law enforcement agencies.  Learn more about the Criminal Division’s Fraud Section at: https://www.justice.gov/criminal-fraud.

Earlier today, in federal court in Brooklyn, Mark Johnson, the former head of global foreign exchange cash trading at HSBC Bank plc, a subsidiary of HSBC Holdings plc (collectively HSBC), was sentenced by United States District Judge Nicholas G. Garaufis to 24 months’ imprisonment for committing wire fraud and wire fraud conspiracy, to be followed by five years’ supervised release.  The Court also ordered Johnson to pay a $300,000 fine.  Johnson was convicted by a federal jury in October 2017, following a four-week trial, of one count of wire fraud conspiracy and eight counts of wire fraud.  The Court remanded Johnson to the custody of the Bureau of Prisons.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation (FDIC) and Assistant Director-in-Charge Nancy McNamara, Federal Bureau of Investigation, Washington Field Office (FBI), announced the sentence.

“Mark Johnson exploited confidential information and betrayed a client in order to generate profits for HSBC and enrich himself,” stated United States Attorney Donoghue.  “Johnson has been held accountable for his crimes and today’s sentence should serve as a deterrent to fraudsters seeking to cheat their victims by manipulating important benchmarks, such as the FX spot fixings.  This Office, together with our law enforcement partners, is committed to bringing to justice those who undermine public confidence in the operation of the financial markets through such schemes.”

“Mark Johnson, an executive at one of the world’s largest financial institutions, cheated his client out of millions and now he’s going to prison for it,” stated Acting Assistant Attorney General Cronan.  “This sentencing should serve as a warning to those who engage in crooked financial schemes: The Justice Department’s Criminal Division and our law enforcement partners are watching.  We are committed to protecting our financial system from harm and we will hold corporate executives accountable for their crimes.”

 “Today’s sentencing holds Mr. Johnson accountable for his egregious conduct to improperly manipulate the foreign currency market, misuse his position, and breach the customers’ trust,” stated FDIC Inspector General Lerner.  “We are dedicated to working with our law enforcement partners in order to combat crimes that undermine the integrity of financial institutions and bring culpable bank insiders to justice.”

“Leaders of financial service organizations such as HSBC are held to the utmost standard of integrity, which Mark Johnson failed to uphold,” stated FBI Assistant Director-in-Charge McNamara. “The FBI will not falter in assuring that justice will be brought to those that use company finances for their own personal gain.”

As established at trial, HSBC was selected in 2011 to execute a foreign exchange transaction on behalf of a client, which would require converting approximately $3.5 billion into British Pounds Sterling.  HSBC’s agreement with the client required the bank to keep the details of the planned transaction confidential.  Instead, Johnson misused that confidential information, defrauding the client.   

Shortly before the transaction, which occurred in December 2011, Johnson and other traders acting under his direction purchased Pounds Sterling for HSBC’s benefit in their HSBC “proprietary” accounts.  Johnson then caused the $3.5 billion foreign exchange transaction to be executed in a manner designed to “ramp,” or drive up, the price of the Pounds Sterling, benefiting their proprietary positions and HSBC at the expense of their client.

As part of their scheme, Johnson and his co-conspirators made misrepresentations to the client about the transaction that concealed the self-serving nature of their actions.  In total, Johnson and the traders he supervised generated profits for HSBC of roughly $7.3 million from the execution of the transaction. 

The investigation was conducted by the FDIC’s Office of Inspector General and the FBI’s Washington Field Office.  Assistant Chiefs Carol Sipperly and Brian Young and Trial Attorney Blake Goebel of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Lauren Elbert of the Eastern District of New York’s Business and Securities Fraud Section are prosecuting the case.

The Defendant:

Mark Johnson
Age:  51
Residence: United Kingdom

E.D.N.Y. Docket No. 16-CR-457

Long Island-based pediatrics practice Freed, Kleinberg, Nussbaum, Festa & Kronberg M.D., LLP, doing business as Pediatrics and Adolescent Medicine (the “Practice”), as well as current and former partner physicians of the Practice, including Arnold W. Scherz, M.D., Mitchell Kleinberg, M.D., Michael Nussbaum, M.D., Robert Festa, M.D., and Jason Kronberg, D.O. (“Partners”), have agreed to pay $750,000 to resolve allegations that they billed the Medicaid Program for services provided by physicians who were not enrolled in the program.  The settlement, which resolved government claims under the federal False Claims Act and the New York State False Claims Act, was approved by United States District Judge Joanna Seybert.

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

“Providers serving Medicaid beneficiaries must be properly credentialed and thoroughly vetted to ensure that proper care is provided and to preserve the integrity of the Medicaid Program, which serves our neediest citizens,” stated United States Attorney Donoghue.  “Today’s settlement reflects this Office’s commitment to safeguarding taxpayer programs like Medicaid by vigorously investigating allegations of fraud in False Claims Act cases.”

Mr. Donoghue thanked the Medicaid Fraud Control Unit of the Office of the New York State Attorney General for its assistance in the investigation.

The government’s investigation revealed that, from July 1, 2004 through December 31, 2010, the Practice and Partners employed a number of physicians who were not enrolled in the Medicaid Program who provided care to Medicaid patients.  Because the physicians were not enrolled in the program, the Practice and Partners could not seek reimbursement from Medicaid for the services provided by these physicians.  The defendants nonetheless did so by submitting requests for payment under the Partners’ Medicaid provider identification numbers, thereby misrepresenting the identities of the individuals who were actually providing treatment to the Practice’s pediatric Medicaid beneficiaries.  This improper billing practice occurred at many of the Practice’s Long Island locations, including facilities in Holbrook, Port Jefferson, Shirley and Wading River.  

The allegations were brought to the government’s attention through the filing of a complaint pursuant to the qui tam provisions of the False Claims Act.  Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery. 

The government’s case was handled by Assistant United States Attorney Jolie Apicella of the Office’s Civil Division. 

E.D.N.Y. Docket No. 14-CV-3943 (JS)

Daniel Rendon-Herrera, also known as “Don Mario,” will be arraigned this afternoon before United States Magistrate Judge Viktor V. Pohorelsky at the federal courthouse in Brooklyn on charges of leading a continuing criminal enterprise.  In May 2009, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated Rendon-Herrera as a “Special Designated Narcotics Trafficker,” pursuant to the Foreign Narcotics Kingpin Designation Act.  The defendant was arrested in Colombia on a provisional arrest warrant issued from the Eastern District of New York and subsequently extradited from Colombia to the United States on April 23, 2018.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, James P. O’Neill, Commissioner, New York City Police Department (NYPD), and George P. Beach II, Superintendent, New York State Police (NYSP), announced the extradition.  The case resulted from a long-term investigation by the DEA’s New York Organized Crime Drug Enforcement Task Force, which is comprised of agents and officers of the DEA, NYPD and NYSP.

“As alleged in the indictment, Rendon-Herrera led a major Colombian drug trafficking enterprise that imported tons of cocaine into the United States and employed hitmen who carried out acts of violence across North and South America in furtherance of the organization,” stated United States Attorney Richard P. Donoghue.  “The United States is committed to cooperating with our international partners to dismantle illicit organizations like Clan Usuga and stem the destructive effects wrought by this violent armed criminal group.”  Mr. Donoghue extended his grateful appreciation to the DEA’s offices in Miami and Bogota, HSI’s El Dorado Task Force, the United States Department of State, the Department of Justice’s Office of International Affairs and the Colombian National Police.

“Don Mario was the most feared narco-terrorist in Colombia.  He is known as the old man who ignited Clan Usaga’s reign of terror while besieging the United States with hundreds of tons of cocaine,” stated DEA Special Agent-in-Charge Hunt.  “This extradition stems from his arrest in the jungles of Colombia nine years ago and was made possible by local, state, federal and international law enforcement efforts.”

 “This case demonstrates that those involved in the distribution of narcotics will be vigorously investigated and prosecuted across international lines,” stated HSI New York Special Agent-in-charge Melendez. “Rendon-Herrera and his criminal organization destroyed many lives across two continents through mass distribution and sale of cocaine and targeted murders. Drug trafficking organizations must be dismantled at every level, from the street dealer to the international supplier and right up to drug kingpins like Rendon-Herrera.  This extradition is significant for U.S. law enforcement efforts and will disrupt the flow of substantial quantities of drugs from entering our country.”

 “Don Mario is one of the most significant drug traffickers of our time, recognized for moving multi-ton shipments of cocaine to the United States at a moment’s notice,” stated NYPD Police Commissioner O’Neill.  “The defendant also founded the most influential drug trafficking organization in Columbia ever, responsible for the death of untold numbers by overdose and many more from kidnappings and targeted assassinations, all to protect their illicit trade. Today our country—and the nation of Columbia—will be safer because of relentless and persistent work from all those involved in bringing this kingpin to an American courtroom.”

 “I commend the dedicated teamwork of the New York Organized Crime Drug Enforcement Strike Force which was instrumental in the takedown of this dangerous drug trafficker and bringing him to justice,” stated NYSP Superintendent Beach.  “Because of the task force’s aggressive strategy to stop this type of criminal behavior, they are preventing the infiltration of dangerous narcotics into our communities and helping to remove the violent criminals who profit at the expense of our communities.  We will continue to be vigilant in working together with our law enforcement partners to keep these harmful narcotics off our streets and our neighborhoods safe.”

According to the indictment, Rendon-Herrera was the founder and one of the principal leaders of Clan Usuga (formerly referred to as Los Urabenos), the largest and most influential BACRIM (banda criminal or criminal group) in Colombia.  Between approximately June 2003 and December 2014, Clan Usuga was involved in multi-ton shipments of cocaine from Colombia to Mexico and Central America for ultimate importation into the United States.  Under Rendon-Herrera’s leadership, Clan Usuga coordinated the production, purchase and transfer of shipments of cocaine, as well as the receipt of shipments of cocaine in Mexico and Central America.  Clan Usuga also controlled territory in various areas in Colombia and imposed a “tax” on any drug traffickers operating in regions under Clan Usuga’s control.  Specifically, Clan Usuga charged a set fee for every kilogram of cocaine that was manufactured, stored or transported through areas controlled by Clan Usuga. 

Clan Usuga also employed “sicarios,” or hitmen, who committed murders, assaults, kidnappings and assassinations.  Clan Usuga utilized these acts of violence to collect drug debts, maintain discipline, control and expand drug territory and to promote and enhance the prestige, reputation and position of the organization. 

The extradition of Rendon-Herrera is the result of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the United States Attorney’s Office for the Eastern District of New York, DEA and HSI.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

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

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Gina M. Parlovecchio, Margaret Lee and Marcia M. Henry are in charge of the prosecution.  The Justice Department’s Office of International Affairs handled the extradition in this matter.

The Defendant:

DANIEL RENDON-HERRERA (also known as “Don Mario”)
Age:  54
Antioquia, Colombia

E.D.N.Y. Docket No. 14-CR-625 (S-3) (DLI)

Earlier today, at the federal courthouse in Brooklyn, William Nelson, former Director of Procurement at the Richmond County District Attorney’s Office (RCDA), pleaded guilty to theft of government funds relating to his embezzlement of over $440,000 from the RCDA.  The plea was entered before United States Magistrate Judge Cheryl L. Pollak. 

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, and Mark G. Peters, Commissioner, New York City Department of Investigation, announced the guilty plea.

According to the indictment and facts presented during the guilty plea, for approximately 10 years between 2006 and 2016, Nelson stole over $440,000 from the RCDA as part of a long-term scheme to defraud the RCDA of funds.  Specifically, Nelson used two RCDA American Express credit cards to purchase items such as jewelry, clothing, toys, sporting goods and memorabilia, alcohol, video games and movies, electronics, knives,  handbags, collectibles, event tickets, meals, lodging, airfare, excursions, and online services that he then used for his own benefit and the benefit of others.  Nelson also used the online payment system PayPal to directly transfer thousands of dollars from the RCDA credit cards to his own personal bank account.  In furtherance of his scheme, Nelson took steps to hide his embezzlement, which included concealing the itemized credit card statements, mischaracterizing the nature of the purchases, and using his authority as Director of Procurement to approve payments of his fraudulent personal expenditures. 

As part of his plea agreement, Nelson is required to pay forfeiture in the amount of $441,262.30, as well as restitution in the same amount to the RCDA.  When sentenced, the defendant faces up to 10 years’ imprisonment.

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

The Defendant: 

WILLIAM NELSON
Age: 44
Staten Island, New York

E.D.N.Y. Docket No. 17-CR-394 (RJD)

Actor Allison Mack was arrested this morning on an indictment unsealed today in federal court in Brooklyn charging her and Keith Raniere, also known as “Vanguard,” with sex trafficking, sex trafficking conspiracy and forced labor conspiracy.  Mack will be arraigned on the indictment this afternoon before United States Magistrate Judge Cheryl L. Pollak.  Raniere was previously arrested on a complaint and ordered detained.  Raniere will be arraigned on a date to be determined.     

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 indictment, Allison Mack recruited women to join what was purported to be a female mentorship group that was, in fact, created and led by Keith Raniere,” stated United States Attorney Donoghue.  “The victims were then exploited, both sexually and for their labor, to the defendants’ benefit.  This Office and our law enforcement partners are committed to prosecuting  predators who victimize others through sex trafficking and forced labor.”  Mr. Donoghue expressed his grateful appreciation to the FBI for leading the investigation, and thanked the New York State Police, the FBI Albany Field Office, the New York State Office of the Attorney General, the New York State Department of Health and the United States Attorney’s Office for the Northern District of New York for their assistance.

“Today we announce an additional arrest, and an indictment, in a case that brought to light an inconceivable crime,” stated FBI Assistant Director-in-Charge Sweeney. “As this pyramid scheme continues to unravel, we ask anyone who might have been a victim to reach out to us with information that may further our investigation.”

Nxivm and The Source

According to court filings, during the past 20 years, Raniere established a series of purported self-help programs within his umbrella organization “Nxivm” (pronounced NEX-i-um).  Nxivm is based in Albany, New York and has operated centers in the United States, Mexico, Canada and South America.  Nxivm maintains features of a pyramid scheme, as its courses cost thousands of dollars each and participants (“Nxians”) are encouraged to pay for additional classes and to recruit others to take classes in order to rise within the ranks of Nxivm.  A number of Nxians were residents of the Eastern District of New York when they were recruited, and Nxivm has held promotional recruiting events in Brooklyn.  Mack is credited in publicly available materials with co-creating a Nxivm program, called The Source, which recruited actors.   

As detailed in court filings, in 2015, Raniere created a secret society within Nxivm called “DOS,” an acronym that stands for a Latin phrase that loosely translates to “Lord/Master of the Obedient Female Companions,” or “The Vow.”  DOS operated with levels of women “slaves” headed by “masters.”  Slaves were expected to recruit slaves of their own (thus becoming masters themselves), who in turn owed service not only to their own masters but also to masters above them in the DOS pyramid.  Raniere stood alone at the top of the pyramid.  Other than Raniere, all members of DOS were women.  Mack is one of the women in the first level of the pyramid immediately below Raniere. 

Mack and other DOS masters recruited DOS slaves by telling them that they were joining a women-only organization that would empower them and eradicate purported weaknesses that the Nxivm curriculum taught were common in women.  Mack and other DOS masters concealed Raniere’s status at the top of the pyramid from new recruits. 

As a pre-condition to joining DOS, women were required to provide “collateral,” which included highly damaging information about friends and family members, nude photographs and/or rights to the recruit’s assets.  DOS slaves were told that their collateral could be released for any number of reasons, including telling anyone about DOS’s existence or leaving DOS.  Many DOS slaves were branded on their pelvic areas using a cauterizing pen with a symbol which, unbeknownst to them, incorporated Raniere’s initials.  During the branding ceremonies, slaves were required to be fully naked, and a master would order one slave to film the branding while the others restrained the slave being branded. 

According to court filings, Mack directly or implicitly required her slaves, including Jane Does 1 and 2, as identified in the Indictment, to engage in sexual activity with Raniere.  In exchange for this, Mack received financial and other benefits from Raniere.  Jane Doe 1 and Jane Doe 2 believed that if they did not participate in those activities with Raniere, their collateral would be released. 

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

If convicted of the crimes charged, Raniere and Mack each face mandatory minimum sentences of 15 years’ imprisonment, and up to life imprisonment.      

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Moira Kim Penza and Tanya Hajjar are in charge of the prosecution.  Assistant United States Attorney Karin Orenstein is in charge of the forfeiture portion of the case.

The Defendants:

KEITH RANIERE (also known as “Vanguard”)
Age:  57
Residence: Waterford, New York

ALLISON MACK
Age: 35
Residence: Brooklyn, New York

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

If you have information regarding this case, or you believe you or a family member may have been a victim, please contact the FBI at 212-384-1000.

Earlier today, in federal court in Brooklyn, Dwayne C. Hans, was sentenced by United States District Court Judge Sterling Johnson to 36 months’ imprisonment and ordered to pay $134,000.00 in restitution for orchestrating a series of frauds between July 2015 and October 2016, including by masquerading as an authorized representative of a U.S. financial institution and as a defense contractor.  Hans previously pleaded guilty to one count of wire fraud and one count of computer intrusion.

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), New York Field Office, and Robert A. Westbrooks, Inspector General, Pension Benefit Guaranty Corporation (PBGC), announced the sentence.

“Hans has been held accountable for engaging in brazen fraud schemes intended to steal millions of dollars by using U.S. government websites,” stated United States Attorney Donoghue.  “Investigating and prosecuting cyber criminals is a priority of this Office, in order to protect the integrity of computer systems that help our government and the private sector operate.”

“Hans advanced his own interests at the expense of various government entities responsible for distributing taxpayer dollars,” stated FBI Assistant Director-in-Charge Sweeney.  “We have a responsibility to uphold the public’s confidence in the security of both government and private sector computer networks. Today’s sentencing brings us one step closer to achieving this goal.”

 “We want to thank our law enforcement partners and the U.S. Attorney’s Office for bringing to justice those who attempt to steal from the Pension Benefit Guaranty Corporation,” stated PBGC Inspector General Westbrooks.  “The PBGC protects the retirement benefits of more than 40 million American workers and retirees.  The Corporation does not receive tax dollars and relies upon premium income.  Our office will remain vigilant in safeguarding PBGC insurance programs and the integrity of its web applications.”

Between July 2015 and December 2015, Hans submitted bids to the Defense Logistics Agency (DLA), an agency within the United States Department of Defense, for contracts in the names of two different companies he created.  The contracts on which Hans bid related to the provision of various items to the DLA, including electrical measurement equipment.  Hans falsely claimed that those companies had numerous employees and were capable of filling the contracts.  In reality, the companies had no employees and no ability to service the contracts.  The DLA awarded at least 52 contracts, worth approximately $533,209.70, to Hans’s companies and sent at least $11,999.32 to those companies.

In early 2016, Hans created numerous bank accounts in the name of a U.S. financial institution (Financial Institution 1).  In April 2016, Hans accessed a website maintained by the United States General Services Administration that allowed companies that worked with the U.S. government to provide information about how the government should disburse money to those companies.  Hans modified payment information in an entry associated with Financial Institution 1 in order to redirect payments to accounts he controlled.  As a result, a U.S. government agency transferred approximately $1.521 million to Hans instead of to Financial Institution 1.  Those transfers were ultimately detected and disrupted before Hans withdrew or transferred the money.

In addition, between April 2016 and June 2016, Hans used a computer to initiate electronic transfers of approximately $134,000 from two corporate bank accounts held by Financial Institution 1.  Hans directed the fund transfers to purchase publicly traded stock, invest in real estate in Brooklyn and to pay utility bills.

Finally, between June 2016 and October 2016, Hans accessed a website maintained by the PBGC, a U.S. government agency that insures certain pension plans, through which the administrators of pension plans can submit claims for reimbursements.  Hans, who was not the administrator of any pension plan, created an account on the PBGC website and then submitted requests to be reimbursed a total of $1.633 million for expenses related to three pension plans.  The three plans for which Hans requested reimbursements did not exist, and he had incurred no such expenses.  The PBGC detected the fraud before any payments were issued.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorney David K. Kessler is in charge of the prosecution with assistance from the DLA and PBGC Office of Inspector General.

The Defendant:

DWAYNE C. HANS
Age: 28
Residence: Richland, Washington

E.D.N.Y. Docket No. 17-CR-256 (SJ)

An indictment was unsealed today in federal court in Brooklyn, charging 12 members and associates of the Mac Baller Brims, a subgroup or “set” of the nationwide Bloods street gang (the “Mac Ballers”), with conspiracy to distribute and possess with intent to distribute crack cocaine and heroin.  The alleged crimes were committed in and around the Louis H. Pink Houses in the East New York neighborhood of Brooklyn (the “Pink Houses”), as well as in the Claremont and University Heights neighborhoods of the Bronx and locations in the state of Maine.  A second indictment, charging Hassen Ford with distributing crack cocaine in the Pink Houses, was also unsealed today.  This morning, during the execution of search warrants at locations tied to the Mac Ballers in Brooklyn and the Bronx, members of law enforcement seized two firearms, quantities of heroin and crack cocaine, and drug paraphernalia.  A starter pistol was also seized from Ford’s residence.  The defendants’ arraignments are scheduled this afternoon before United States Magistrate Judge Cheryl L. Pollak.

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 indictments.

“As alleged in court filings, the defendants are members of a Bloods set that has endangered communities by supplying illicit drugs and protecting their trafficking operation with firearms,” stated United States Attorney Donoghue.  “Today’s arrests mark a milestone in dismantling the Mac Baller Brims and the threat they have posed to law abiding citizens in our District and beyond.”

“There is an odd glamorization of dealing drugs, firing guns and killing people in gang culture that defies comprehension.  Someone allegedly bragging about almost going to jail because he was going to shoot someone shouldn’t be an accepted form of conversation or behavior,” said FBI Assistant Director-in-Charge Sweeney.  “The FBI NY Metro Safe Streets Gang Task Force investigates gangs and arrests members because they pose a significant danger to the people in their communities.  We are fully invested in the pursuit of these violent offenders who think it’s cool to threaten someone’s life.”

“Today’s arrests bring a dangerous set of blood gang members off our streets,” stated NYPD Police Commissioner O’Neill. “My thanks to the detectives, agents, and prosecutors whose work made today’s arrests and charges possible.”

As alleged in the indictments and other court filings, the defendant Kevin St. Hill was responsible for drug and gun-related crimes in the Pink Houses and is also a ranking member of the Mac Ballers.  St. Hill received his drug supply, in part, from the defendant Mario Rabb, a Mac Baller member who sold crack cocaine and heroin on Webster Avenue in the Bronx.  Rabb also supplied Mac Baller members Felix Collazo and Malcolm Hogue with quantities of drugs.  The drug-trafficking operation was responsible for the distribution of significant amounts of crack cocaine and heroin in Brooklyn and the Bronx, as well as heroin in Maine.

Court-authorized wiretaps on phones used by several defendants confirmed that Lavon Barrett holds the highest-ranking position among non-incarcerated Mac Ballers, having been appointed as the “Don,” or leader, for “the whole t[o]wn” in late December 2017, and that St. Hill was appointed to oversee the Mac Ballers’ operations in Brooklyn.  In other intercepted conversations, members of the gang related accounts of their using firearms and violence to protect their interests.  For example, in a series of calls in November 2017, St. Hill threatened a group of individuals with a firearm (referred to as a “hammer”) in the Pink Houses:  Barrett called codefendant Shatavia Walls and asked her to “bring the hammer downstairs.”  Subsequently, Barrett recounted how close he came to actually shooting: “I was about to be in jail because I was about to fire.”  In yet another intercepted call, Barrett and Collazo discussed Collazo’s need to get ammunition for his firearm “ASAP” because he had to “take care of something.”  After offering Collazo bullets from Barrett’s firearm, Collazo promised he was going to “make a statement” and bragged about the resolve of the gang’s members to protect their turf:  “Can’t f*** with the Macs” because Mac Ballers will “die for this sh**, ride for this sh**, and let it fly” – or shoot – “for this sh**.” 

The charges in the indictments are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of the most serious charges, the defendants Barrett, Berthely, Collazo, Gethers, Rabb, Kevin St. Hill and Shawn St. Hill each face a mandatory minimum sentence of 10 years’ imprisonment and a maximum of life imprisonment.

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

The Defendants:

LAVON BARRETT
Age:  31
Hempstead, New York

MATTEW BERTHELY
Age: 32
Brooklyn, New York

FELIX COLLAZO
Age: 37
Bronx, New York

DWAYNE DAVIS
Age: 29
Brooklyn, New York

STEVEN GETHERS
Age: 31
Bronx, New York

TERRY HEARD
Age: 50
Bronx, New York

MALCOLM HOGUE
Age: 25
Bronx, New York

MARIO RABB
Age: 45
Bronx, New York

KEVIN ST. HILL
Age: 32
Brooklyn, New York

SHAWN ST. HILL
Age: 32
Brooklyn, New York

SHATAVIA WALLS
Age: 30
Brooklyn, New York

CHARLES WARD
Age: 41
Bronx, New York

E.D.N.Y. Docket Nos. 18-CR-185 (FB)

HASSEN FORD
Age: 43
Brooklyn, New York

E.D.N.Y. Docket Nos. 18-CR-183 (AMD)

A seven-count indictment was unsealed today in federal court in Central Islip charging Bloods gang member Lawrence Lewis, also known as “L Boogs,” with the July 29, 2017 murder of John Birt, firearms offenses, and narcotics possession and distribution.  Lewis was arrested yesterday and is scheduled to be arraigned this afternoon 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), Angel M. Melendez, Special Agent-in-Charge, United States Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, Timothy D. Sini, District Attorney for Suffolk County, and Geraldine Hart, Acting Commissioner, Suffolk County Police Department (SCPD), announced the charges.

“As alleged, this Bloods member committed a senseless murder in furtherance of his violent gang,” stated United States Attorney Donoghue.   “The defendant’s arrest should send a loud and clear message that this Office, working collaboratively with our federal and local law enforcement partners, is committed to eradicating gang violence on Long Island and throughout our district, to make our communities safer.”

“The simple act of taking a photo ended in a man losing his life, all because a gang member was allegedly offended and decided to retaliate,” stated FBI Assistant Director-in-Charge Sweeney. “It’s hard to fathom how the suspect in this case weighed exposing his illegal drug trade, and his illegal weapons because he wanted to prove how tough he is to his rivals.  The FBI Long Island Gang Task Force is committed to rooting out the violent gangs and their destructive behavior in our communities.”

“Once murder is added to the list of allegations against Lewis, it is evident that the alleged distribution of large amounts of cocaine and heroin in Long Island neighborhoods was only the tip of his criminal activity,” stated HSI Special Agent-in-Charge Melendez.  “We will not stand by while violent gang members roam free in our communities. Lewis had little regard for the life he took or the lives he affected by dealing drugs, and he will now need to face the consequences of his crimes.”

“It is a top priority of the Suffolk County District Attorney’s Office to prosecute members of dangerous, violent street gangs to the fullest extent of the law,” stated Suffolk County District Attorney Sini.  “This individual showed a total disregard for human life and for the law, which will not be tolerated. Today’s indictment is a reinforcement of our Office’s commitment to combating gang violence in our communities and our dedication to working collaboratively with our law enforcement partners to keep Suffolk County residents safe.”

“The Suffolk County Police Department will continue working with our law enforcement partners to bring criminal gang members and their associates to justice,” stated SCPD Acting Commissioner Hart. “The arrest of this murderer will send yet another powerful message to gangs across Long Island that illegal activities will not be tolerated.”

According to the indictment and statements made during the arraignment, between January 2016 and March 2018, Lewis utilized his membership in the Bloods street gang to distribute large quantities of cocaine base and heroin in Suffolk County.  In order to protect his supply of narcotics and secure his ability to distribute his narcotics, Lewis possessed a number of firearms, including a Mossberg .22 caliber rifle and a Ruger .45 caliber semi-automatic pistol. 

On July 29, 2017, Birt and several friends were posing for a photo at the Illusions Gentlemen’s Club in Deer Park when they were approached by an associate of Lewis who was also a member of the Bloods.  The associate attempted to display a Bloods gang hand signal in the photo and a dispute ensued.  Lewis pulled out a handgun and fatally shot Birt.  

If convicted, Lewis faces a maximum term of life imprisonment.       

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

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Christopher C. Caffarone, Mark E. Misorek and Special Assistant United States Attorney Kathleen A. Kearon are in charge of the prosecution. 

The Defendant

LAWRENCE LEWIS
Age: 36
Residence: Calverton, New York  

E.D.N.Y. Docket No. 18-CR-187 (JS)

A three-count indictment was unsealed today in federal court in Central Islip, New York, charging Blake Kantor, also known as “Bill Gordon,” with conspiracy to commit wire fraud, obstruction of an official proceeding and making false statements to Special Agents of the Federal Bureau of Investigation.  Kantor was arrested by federal authorities today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Gary R. Brown.

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), James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), and James McDonald, Director, Division of Enforcement, U.S. Commodity Futures Trading Commission (CFTC), announced the charges. 

As alleged in the indictment, in March 2014, Kantor established a company known as Blue Bit Banc or Blue Bit Analytics, Ltd. (“BBB”) that sold binary options, a type of investment in which investors are promised an opportunity to be paid predetermined amounts based upon the particular price of securities, commodities or other investments at particular points in time.  To establish Blue Bit Banc, Kantor used approximately $10,000 drawn from a bank account established at a TD Bank branch located in Suffolk County within the Eastern District of New York.  From approximately 2014 to 2017, Kantor and others solicited and took in approximately $2.1 million from approximately 713 investors in BBB’s binary options.  Kantor did not inform those investors, however, that a computer software used by BBB allowed BBB to fraudulently alter data associated with binary options investments so that the probability of investors earning a profit favored BBB and disadvantaged investors.  To further the scheme, Kantor directed the opening of bank accounts—including one in the island nation of St. Kitts and Nevis—using aliases and the identifying information of other people.  Kantor further converted monies that investors invested into ATM Coin, a worthless cryptocurrency that Kantor misleadingly told investors was worth substantial sums of money. 

As also alleged in the Indictment, in October 2017, Kantor directed a co-conspirator to alter lists of BBB customers after FBI agents informed Kantor that they were investigating his involvement in binary options.  Thereafter, Kantor met with FBI agents and falsely stated in substance that he had not been involved in binary options since August 2013 when, in reality, he had established BBB around March 2014 and was employed there until around October 2017.

“As alleged, Kantor used a computer program to generate manipulated data to cheat hundreds of investors out of their hard-earned savings,” stated United States Attorney Donoghue.  “To cover-up his fraudulent scheme, Kantor then lied to the FBI and ordered the alteration of documents that would assist agents in identifying his victims.  We will continue to work closely with our law enforcement partners to vigorously prosecute individuals who defraud the investing public and obstruct law enforcement’s ability to detect and prosecute financial crimes.”

“The all-or-nothing option Kantor’s victims were offered at the onset of their investment had a predetermined ending, one in which they stood to face significant financial losses, as alleged,” stated FBI Assistant Director-in-Charge Sweeney.  “The odds were stacked against them from the beginning, while Kantor had everything to gain.  The FBI will continue to be a major force in confronting those who think they can evade the law and make an easy profit off the misfortune of others.”

“In addition to enforcing the nation’s tax laws, the Special Agents of IRS-Criminal Investigation take particular interest in cases where our expertise is warranted to uncover allegations of financial fraud,” stated IRS-CI Special Agent-in-Charge Robnett.  “The allegations outlined in this indictment detail acts of deceit and offshore money movement in the evolving world of cryptocurrency, which impacts the trust investors have with our financial system.”

“The CFTC is committed to working in parallel with our law enforcement partners to ensure that fraudsters in our markets are brought to justice and customers are protected,” stated CFTC Division of Enforcement Director McDonald.  “This type of coordination is particularly important in cases like this one, where the alleged scheme stretched across multiple markets, including the market for virtual currencies.”

If convicted, Kantor faces a maximum term of imprisonment of 20 years on each of the conspiracy to commit wire fraud and obstruction of an official proceeding charges and five years on the false statements charge. 

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

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:

BLAKE KANTOR (also known as “Bill Gordon”)
Age:  42
Residence: Manhattan, New York

E.D.N.Y. Docket No. 18-CR-177 (SJF)

Earlier today, in federal court in Brooklyn, Patrick Morgan Schiro, a resident of Rockville Centre, New York, and the founder of Black Rock Morgan LLC (BRM), was sentenced by United States District Court Judge LeShann DeArcy Hall to 28 months’ imprisonment, with restitution amount to be determined, for orchestrating a wire fraud scheme that defrauded five investors of approximately $440,000.  Schiro previously pleaded guilty to wire fraud pursuant to a plea agreement with the government.

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, announced the sentence. 

According to court filings and facts presented at the plea hearing, Schiro incorporated BRM, a purported investment management business, in February 2014.  From approximately July 2014 to October 2015, Schiro used false and misleading statements to induce five individuals to invest approximately $440,000 with BRM, and he concealed his prior federal conviction for securities fraud from at least four of them.  For example, Schiro falsely told one investor that BRM had many clients, managed millions of dollars in assets, and had “a team of investment professionals with significant sector-specific expertise.”  Once he had the funds, Schiro also deceived his investors by telling them that their investments were performing well.  For example, Schiro told one investor that his investment of approximately $242,000 was valued at $711,000.  

Contrary to these representations, Schiro invested only a small amount of the funds and used a significant amount of the money for his personal expenses, including approximately $190,000 to pay one of his children’s university tuition.  When investors asked for their money back, Schiro often ignored their requests or provided false or misleading excuses.  For example, when one investor asked to redeem $250,000 from his account, Schiro caused an email to be sent to that investor stating that the request had been denied because: “Consistent with our AML [anti-money laundering] responsibilities and U.S. patriot act regulations wire transfer withdrawals and redemptions MUST and will ONLY be sent to the bank account associated with your BRM Account.”  In fact, no such policies were in place to prevent the transfer requested by the investor.

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

The Defendant: PATRICK MORGAN SCHIRO
Age:  46
Rockville Centre, New York

E.D.N.Y. Docket No. 17-CR-130 (LDH)

Earlier today, in federal court in Central Islip, New York, Eric Erb, a former investment adviser and hedge fund manager, was sentenced by United States District Judge Arthur D. Spatt to 57 months’ imprisonment to be followed by 3 years’ supervised release.  In August 2017, Erb pleaded guilty to wire fraud in connection with a scheme to defraud investors in a hedge fund and other investment vehicles that Erb managed from an office in Babylon, New York.  As part of the sentence, Erb was ordered to pay $5.3 million in restitution to victims of his crime, a $5.3 million forfeiture judgment and to forfeit $215,000 in proceeds that he earned from the sale of his former residence in Bay Shore, New York. 

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. 

“Erb blatantly lied to investors who entrusted him with their hard-earned retirement savings, stealing from them to finance his own lifestyle of country club dues, home renovations and private school tuition,” stated United States Attorney Donoghue.  “This Office and our law enforcement partners are committed to holding accountable criminals like Erb who defraud the investing public.” 

“Erb’s scheme had a devastating impact on his victims, leaving them to suffer financial losses directly and personal losses indirectly,” stated FBI Assistant Director-in-Charge Sweeney.  “The FBI is committed to working with our law enforcement partners to ensure this type of behavior ceases to exist.”

According to court filings and facts presented at the plea hearing, between approximately January 2016 and February 2017, Erb solicited approximately $5.4 million from investors under the promise that he would follow investors’ instructions when making various investments, including in Individual Retirement Accounts, annuities, real estate investment trusts, hedge funds and an initial public offering.  The victims were led to believe that their investments with Erb were earning profits, when, in fact, they were suffering losses and their investments were financing the defendant’s lifestyle of home renovations, country club dues and private school tuition.  When these investments began to fail, Erb emailed investors false earnings statements showing that their investments were earning profits when, in fact, they were generating losses; made wire transfers between banks in Long Island and Florida to fund investments that investors did not authorize him to make; and falsified payee information on checks that investors wrote to fund investments so that Erb could use investors’ monies to benefit himself and his companies.  During his plea allocution, Erb admitted to stealing approximately $3 million from 38 investors. 

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:

ERIC ERB
Age:  40
Residence: Levittown, New York

E.D.N.Y. Docket No. 17-CR-413 (ADS)

Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Tae Hung Kang, also known as “Kevin Kang,” and John Won with conspiring to commit wire and securities fraud, securities fraud, and conspiring to commit money laundering, in connection with schemes involving foreign exchange trading that targeted members of the Korean-American community.  Kang was also charged with substantive wire fraud.  The defendants were arrested today and are scheduled to be arraigned this afternoon before United States Magistrate Judge Sanket J. Bulsara.

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

“As alleged in the indictment, Kang and Won lured investors with false promises of great profits to be made in the foreign exchange market, and then stole their money,” stated United States Attorney Donoghue.  “This Office, together with our law enforcement partners, is committed to investigating and prosecuting fraudsters who prey upon the investing public.”  Mr. Donoghue expressed his appreciation to the United States Commodities and Futures Trading Commission and the FBI Field Office in Atlanta for their assistance during the investigation.  

“As alleged, Kang and Won pursued victims with specific placement of advertisements in Korean-language newspapers, preying upon the kinship of their target group and exploiting their affiliation with this particular community,” stated FBI Assistant Director-in-Charge Sweeney.  “In addition, they falsely represented their trading credentials while persuading investors to contribute additional money in stock—money that was eventually misappropriated. The FBI will continue to dedicate resources to uncovering financial crimes of all kinds, especially those that seek to capitalize on the trust and affinity of innocent victims.”

As alleged in court documents, dozens of investors in the Eastern District of New York were defrauded in connection with the two charged schemes, both of which involved foreign exchange trading.  Foreign exchange trading refers to trading one currency for another in an effort to profit from fluctuating exchange rates.  In connection with the first alleged scheme, investors were enticed by advertisements placed by the defendants in Korean-language newspapers and other promotional materials to open foreign exchange trading accounts that would be managed by Kang, Won and others at their company FOREXNPOWER.  Kang and Won promised investors double-digit returns, claiming to have a secret algorithmic trading method that would generate large profits with minimal risk.  In fact, Kang and Won had minimal trading experience, their algorithmic trading method never performed as promised, and investors suffered substantial losses.

In the second scheme, investors were persuaded by the defendants to invest their money into stock issued by Safety Capital Management, Inc. (“Safety Capital”), which did business as FOREXNPOWER.  These investors were told their investments would be pooled by Kang and others to conduct foreign exchange trading, or to expand the FOREXNPOWER business, and, again, promised a large return on their investment.  Ultimately, nearly all of the money that was invested in Safety Capital stock, totaling at least $700,000, was misappropriated by the defendants.  The defendants used the stolen money to pay for advertisements targeting investors and promoting FOREXNPOWER. 

If convicted of wire fraud conspiracy, the defendants each face up to 20 years’ imprisonment. 

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

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

The Defendants:

TAE HUNG KANG (also known as “Kevin Kang”)
Age: 55 
Bayside, New York

JOHN WON
Age: 49
Flushing, New York

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

Earlier today, an indictment was unsealed in federal court in Brooklyn charging Rafael Caro Quintero with leading a continuing criminal enterprise and other drug-related crimes through his leadership of the Caro Quintero drug trafficking organization, a faction of the Mexican organized crime syndicate known as the Sinaloa Cartel.  The indictment was returned under seal by a federal grand jury the Eastern District of New York on January 20, 2017, and relates to Caro Quintero’s criminal activities from January 1980 to January 2017.

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

The DEA and Federal Bureau of Investigation also announced today that the FBI has added Caro Quintero to the FBI’s Ten Most Wanted List and that a $20 million reward provided by the United States Department of State is being offered for information leading to his capture.

“As alleged in the indictment, Caro Quintero is drug kingpin responsible for a murder conspiracy targeting those who posed a threat to his drug trafficking organization, including DEA Special Agent Enrique Camarena who bravely worked to stop traffickers like the defendant from flooding our country with dangerous narcotics,” stated United States Attorney Donoghue.  “The passage of time will not stop us from holding Caro Quintero accountable for the murder of one of one of our law enforcement partners.”  Mr. Donoghue extended his grateful appreciation to the DEA Offices in Long Island and Mexico City, the United States Department of State, the Homeland Security Investigations Office in Tucson, Arizona,

“Caro Quintero’s stronghold in the Sinaloa Cartel has lasted for over thirty years, following the kidnapping and brutal murder of Special Agent Camarena,” stated DEA Special Agent-in-Charge Hunt.  “DEA will never forget.  This indictment is a result of tremendous collaboration amongst law enforcement to bring Caro Quintero to justice and sends a message to the Cartel that time makes no difference in our efforts to stop their drug trafficking and related violence.”  

According to the indictment, between January 1980 and January 2017, Caro Quintero led a continuing criminal enterprise responsible for importing into the United States and distributing massive amounts of illegal narcotics and conspiring to murder persons who posed a threat to his narcotics enterprise.  The murder conspiracy includes Caro Quintero’s kidnapping and murder of DEA Special Agent Enrique “Kiki” Camarena in Guadalajara, Jalisco, Mexico in February 1985.

Caro Quintero is also charged with participating in an international heroin, methamphetamine and cocaine distribution conspiracy from February 2015 through January 2017 and an international marijuana distribution conspiracy from January 1980 through January 2017, as well as using firearms in relation to his drug trafficking enterprise.  The millions of dollars generated from these drug sales were then transported back to Mexico. 

As the leader of the criminal enterprise, Caro Quintero employed numerous individuals, each of whom played a  role to ensure the success of the organization, including “sicarios” or hit men who carried out acts of violence in Mexico such as murder and kidnappings to silence potential witnesses and retaliate against anyone who provided information to law enforcement; security personnel for the leadership of the enterprise; “plaza bosses” who controlled the enterprise’ territories; transporters of narcotics and money launderers.

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

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Gina M. Parlovecchio, Michael P. Robotti, Andrew C. Gilman and G. Karthik Srinivasan are in charge of the prosecution.

The Defendant:

RAFAEL CARO QUINTERO
Age:  63
Country of Origin: Mexico

E.D.N.Y. Docket No. 15-CR-208(S-2)

Federal Bureau of Investigation Deputy Director David L. Bowdich, Drug Enforcement Administration (DEA) Acting Administrator Robert W. Patterson, U.S. Department of State Deputy Assistant Secretary James Walsh, and U.S. Marshals Service Acting Associate Director Derrick Driscoll today announced the addition of fugitive Rafael Caro-Quintero to the FBI’s list of “Ten Most Wanted Fugitives.”

Fugitive Rafael Caro-Quintero marks the 518th addition to the “Ten Most Wanted Fugitives” list. Caro-Quintero is wanted for his alleged involvement in the 1985 kidnapping and murder of DEA Special Agent Enrique Camarena Salazar aka “Kiki.” This is the first time a DEA fugitive has been listed on the FBI Top Ten Most Wanted Fugitives List.

In addition, DEA and U.S. Attorney Richard P. Donoghue for the Eastern District of New York today announced the unsealing of an additional indictment against Quintero, alleging his role as leader of a continuing criminal enterprise and the individual responsible for the brutal murder of Camarena. The indictment also details his leadership role in trafficking methamphetamine, heroin, cocaine and marijuana into the United States and elsewhere and reflects his criminal activities from 1980 to 2017. (EDNY Docket No. 15-CO-208(S-2)  

On July 30, 1992, a federal arrest warrant was issued by the U.S. District Court, Central District of California, charging Caro-Quintero with violent crimes in aid of racketeering; conspiracy to kidnap a federal agent; kidnapping of a federal agent; felony murder of a federal agent; aiding and abetting; and accessory after the fact.

“Together with our federal partners at the DEA, the U.S. Marshals Service, and the U.S. Department of State, we are committed to bring to justice this dangerous criminal and cartel leader responsible for the brutal murder of a DEA Agent,” said FBI Deputy Director Bowdich. “Special Agent Camarena was devoted to stopping drug trafficking and breaking the cycle of drug-related crime. He showed tremendous courage to pursue the most violent drug traffickers, and it is because of his courage, and his selflessness, that we're not going to stop looking for Caro-Quintero until we find him and put him back behind bars where he belongs.”

“The DEA is grateful for all of the federal law enforcement agencies that have committed to pursuing Rafael Caro-Quintero until the moment he is captured and returned to his rightful place in prison,” said DEA Acting Administrator Patterson. ‘Kiki’ Camarena holds a special place in our hearts and his sacrifice will always be remembered by the men and women of DEA who carry out our mission every day.”

“Our $20 million Narcotics Reward Program offer reflects the State Department’s commitment to the government-wide effort to track down Caro-Quintero,” said Deputy Assistant Secretary of State Walsh. “We’re pleased to be using the Reward Program to support this reinvigorated law enforcement effort, and at long last bring this criminal to justice.”

“The U.S. Marshals remain steadfast in the pursuit of justice for our brother, DEA Special Agent “Kiki” Camarena,” said U.S. Marshals Associate Director for Operations Derrick Driscoll. “We will continue to leverage all resources and work with our law enforcement partners here and in Mexico to develop the information that will lead to the capture of Rafael Caro Quintero.”  

Caro-Quintero is widely regarded as one of the Mexican “godfathers” of drug trafficking, and helped to form the Guadalajara Cartel in the late 1970s. Allegedly, he became one of the primary suppliers of heroin, cocaine, and marijuana to the United States, and was in charge of the cartel in Costa Rica and the U.S./Mexico border.

In November of 1984, Mexican authorities raided a 2,500 acre marijuana plantation owned by Caro-Quintero. The Guadalajara Cartel blamed Special Agent Camarena for the takedown, and decided to retaliate.

Special Agent Camarena – a former Marine, fireman, police officer, and deputy sheriff – was extremely close to unlocking a million-dollar drug pipeline from Mexico to the United States in 1985. Before he was able to expose the drug-trafficking operations, he was kidnapped en route to lunch with his wife on Feb. 7, 1985, in Guadalajara, Jalisco, Mexico. Allegedly, the direct orders for the kidnapping came from Caro-Quintero. Camarena was surrounded by five armed men who threw him into a car, then sped away. It is believed that Camarena died within two to three days of his kidnapping, but his body was not found until March 5, 1985. Special Agent Camarena is survived by his wife and three sons.

The Department of State’s Narcotics Rewards Program is offering a reward of up to $20 million for information leading to the arrest and/or conviction of Rafael Caro-Quintero. Anyone with information concerning Caro-Quintero should take no action themselves, but should immediately contact the nearest U.S. Embassy or Consulate.

Caro-Quintero is described as follows: Name: Rafael Caro-Quintero, aka “Rafa”
Dates of Birth Used: Oct. 24, 1952; October 2, 1952; Nov. 24, 1952; Oct. 24, 1955; Nov. 24, 1955; March 9, 1963
Height: 6’0”
Weight: Approximately 159 to 170 pounds
Place of Birth: Badiraguato, Sinaloa, Mexico

Rafael Caro-Quintero replaces Jesus Roberto Munguia on the “Ten Most Wanted Fugitives” list.

The FBI’s “Ten Most Wanted Fugitives” list was established in March of 1950. Since then, 484 fugitives have been apprehended or located – 162 of them as a result of citizen cooperation.

Tips may also be directed 1-800-CALL-FBI (1-800-225-5324), or can be submitted online at tips.fbi.gov.

Additional information concerning Caro-Quintero, including his Wanted poster and the FBI’s list of “Ten Most Wanted Fugitives”, can be found by visiting the FBI’s website at www.fbi.gov. 

Earlier today, in federal court in Brooklyn, Robert N. Bertrand, the Former Chief Financial Officer of Soupman, Inc. (“Soupman”), was sentenced by United States District Judge Pamela K. Chen to nine months’ imprisonment for failure to pay Medicare, Social Security and federal income taxes, to be followed by a one year term of supervised release.  Soupman, which is based on Staten Island, licenses its name and recipes from Al Yeganeh, the inspiration for the “Soup Nazi” character on the television series “Seinfeld.”  The Court also ordered Bertrand to pay $78,518.18 in restitution to the United States.  Bertrand pleaded guilty in December 2017.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James D. Robnett, Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the sentence. 

 According to court filings and facts presented during court proceedings, as Soupman’s CFO, Bertrand had a corporate responsibility to collect, truthfully account for and pay Medicare, Social Security and federal income taxes for Soupman’s employees.  Between 2010 and 2014, Bertrand made unreported payments to Soupman employees, and compensated certain employees in large unreported stock awards.  Bertrand never reported this employee compensation to the IRS, and never paid Medicare, Social Security and federal income taxes on the side payments or the stock awards, despite a 2012 warning from an external auditor that these payments should be reported to the IRS.  From 2010 through 2014, Soupman’s total approximate unreported cash and stock compensation was more than $2.85 million, and the total approximate tax loss to the United States was in excess of $593,000.

“Bertrand has been held to account for abusing his position as the CFO of a publicly traded company in a long-running scheme that cheated the nation’s treasury out of hundreds of thousands of dollars,” stated United States Attorney Donoghue.  “Today’s sentencing makes clear that this Office, with our partners at the IRS, will pursue corporate gatekeepers like the defendant who fail to enforce their companies’ tax obligations.”

“Corporate executives such as Mr. Bertrand have a responsibility to collect and turn over all IRS withholding taxes,” stated IRS-CI Special Agent-in-Charge Robnett.  “His failure to withhold and pay over is a clear violation that directly impacts those employees of Soupman Inc. and U.S. taxpayers now and in the future.  Today justice is served, and Mr. Bertrand is being held accountable for his criminal actions.”   

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Kaitlin T. Farrell is in charge of the prosecution.

The Defendant:

Robert N. Bertrand
Age:  63
Norwalk, Connecticut

E.D.N.Y. Docket No. 17-CR-186

Earlier today, at the federal courthouse in Central Islip, Pedro Merchant and Alton Gore, members of the Outlaws street gang, pleaded guilty to a firearm-related murder and assault in-aid-of racketeering charge and using a firearm during the commission of a crime of violence, respectively.  The charges against Merchant related to his participation in the September 11, 2013 murder of Dante Quinones.  The charges against Gore related to his involvement in a September 14, 2014 shooting that wounded two rival gang members.  The guilty pleas were entered before United States District Judge Joseph F. Bianco.

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

 “Merchant’s actions violently ended one life, while Gore attempted to take several others,” stated United States Attorney Donoghue.  “This type of brazen violence in the name of their gang puts entire communities in danger.  Today’s guilty pleas hold these defendants accountable for their crimes and demonstrate the commitment of this Office and our law enforcement partners to remove gangs from the streets of Long Island.” 

“In the midst of their declared war on a rival gang, these members of the Outlaws put innocent people’s lives in danger,” stated FBI Assistant Director-in-Charge Sweeney. “The FBI and our law enforcement partners work every day on investigations targeting these violent criminals, and we will continue until we stop the illegal activity.”

 “Today’s guilty pleas are a direct result of the combined efforts of law enforcement on Long Island which are dedicated to working together to ending gang violence in our area,” stated NCPD Commissioner Ryder.  “The commitment of all Law Enforcement to eradicate gang violence is extremely important and we will not stop until all gang members are behind bars, thus ensuring that our residents and communities are safe. I would also like to congratulate the other agencies and their investigators for their dedication and diligence during this intense investigation.”

According to court filings and statements made during the guilty plea proceedings, Merchant shot and killed 17-year-old Dante Quinones in Hempstead.  The confrontation began when Merchant and fellow Outlaws members approached Quinones to determine whether Quinones’ allegiance was to the Outlaws gang or their rivals, the Bloods.   Merchant pulled out a pistol and shot Quinones several times at close range, killing him. 

In the wake of Quinones’ murder, a gang war ensued between the Outlaws and the Bloods in Hempstead.  During the following year, several shootings occurred between the two gangs, including several involving Gore, who pleaded guilty to the September 14, 2014 shooting of two Bloods members in Hempstead.  In that incident, Gore, along with two other Outlaw members, staked out a home where Bloods members were watching a boxing match.  Gore and his co-conspirators opened fire into the home, wounding a Bloods member in the leg, while another Bloods member was shot in the head and lost an eye. 

When sentenced, each defendant faces a minimum term of 10 years in prison and a maximum term of life imprisonment.

 Co-defendant Everett Brown, also known as “Ev,” an associate of the Outlaws street gang, was sentenced in November 2017 to 10 years’ imprisonment following his guilty plea to discharging a firearm during a crime of violence for his role in one of the shootings of rivals’ homes committed by the gang on August 19, 2014.  

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

The Defendants:

PEDRO MERCHANT (also known as “Dro”)
Age:  25
Valley Stream, New York

ALTON GORE (also known as “A-Murder”)
Age:  27
Hempstead, New York

E.D.N.Y. Docket No. 16-CR-322 (S-1) (LDW)

Earlier today, at the federal courthouse in Brooklyn, Anthony Grado, a member of the Luchese organized crime family, and Lawrence Tranese, an organized crime associate, pleaded guilty to conspiracy to distribute oxycodone.  The proceeding was before United States Magistrate Judge Sanket J. Bulsara.

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 guilty pleas.

“Luchese family member Grado imperiled our community, threatening a doctor to force him to write prescriptions for oxycodone and then trafficking in the addictive drugs,” stated United States Attorney Donoghue.  “Violent threats to a doctor by Mafia defendants, combined with their trafficking of oxycodone pills, posed an especially serious danger to our community.  As demonstrated by today’s guilty pleas, this Office together with our law enforcement partners will be relentless in the prosecution of organized crime and those who contribute to the opioid epidemic.”

“Organized crime groups and other criminal entities are seizing on the outbreak of addiction plaguing our country to make money,” stated FBI Assistant Director-in-Charge Sweeney.  “It shouldn’t be a shock that members of the Luchese crime family used violence to force a member of the medical community to further their criminal enterprise.  The FBI Joint Organized Crime Task Force is committed to aggressively pursuing these groups to stop them from further contributing to the deadly opioid epidemic affecting our country.”

According to court documents and statements at the plea proceedings, Grado and Tranese conspired with others to distribute oxycodone that they obtained through fraudulent prescriptions written on a Brooklyn-based doctor’s prescription pad.  Grado, a Luchese family member, together with Tranese and their coconspirators provided the doctor with the names of people for whom the doctor should write prescriptions.  The doctor then wrote prescriptions in those names for medications containing oxycodone, usually without conducting any examination.  Grado, Tranese and their coconspirators filled the prescriptions and sold the pills.  At other times, Grado held the doctor’s prescription pads himself and either had the doctor write the fraudulent prescriptions at his direction, or completed the prescriptions and later advised the doctor of the details. 

Members of the conspiracy used violence and threats of violence to seize control of the doctor’s prescription pads.  For example, in one recorded conversation, Grado told the doctor that he would make the doctor write “a thousand scripts a day and [expletive] feed you to the [expletive] lions” if the doctor wrote prescriptions without Grado’s approval.  In the same conversation, Grado also told the doctor that if the doctor’s newly ordered prescription pads “go in anybody’s hands,” besides Grado’s, “I’ll put a bullet right in your head.”  During the course of the conspiracy, Grado also ordered one of his associates to stab the doctor, and the associate carried out the order.  Finally, Grado called upon a higher-ranking member of the Luchese crime family to attend a “sit down,” or meeting, to resolve issues related to the pill distribution scheme.

When sentenced, the defendants each face up to 20 years in prison, as well as forfeiture and a fine of up to $1 million.

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

The Defendants:

ANTHONY GRADO
Age:  54
Monroe Township, New Jersey

LAWRENCE TRANESE
Age:  55
Brooklyn, New York

E.D.N.Y. Docket No. 17-559 (S-1)

Earlier today, at the federal courthouse in Central Islip, Edwin Amaya-Sanchez (“Strong”), a member of the Guanacos Little Cycos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, pleaded guilty to firearms-related murder charges in connection with his participation in the July 14, 2014 murder of Jose Lainez-Murcia, who was shot and killed while sitting in a car outside his home in Brentwood.  The guilty plea was entered before United States District Judge Joseph F. Bianco.

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 Stuart J. Cameron, Acting Commissioner, Suffolk County Police Department (SCPD), announced the guilty plea.

“Amaya-Sanchez admitted that he participated in the planning and execution of a murder on Long Island in which the victim was marked for death because he was suspected of having killed MS-13 gang members in El Salvador,” stated United States Attorney Donoghue. “This Office and our partners on the FBI’s Long Island Gang Task Force will continue working tirelessly to eliminate MS-13 and the threat this transnational criminal enterprise presents to our community.”

“MS-13 believes it can operate with its own form of vigilante justice, without any repercussions,” stated FBI Assistant Director-in-Charge Sweeney. “The FBI Long Island Gang Task Force won't allow them to continue terrorizing the community, acting outside of the law.”

 “The Suffolk County Police Department is committed to working with our law enforcement partners in bringing criminal gang members and their associates to justice,” stated SCPD Acting Commissioner Cameron.  “This guilty plea of a murderer will send a strong message to gangs across Long Island that illegal activities will not be tolerated.”

As set forth in prior court filings and the defendant’s statements during his guilty plea, Amaya-Sanchez and other MS-13 members orchestrated the murder of Lainez-Murcia because they suspected that Lainez-Murcia was an assassin who had killed MS-13 members in El Salvador.  Amaya-Sanchez knew where Lainez-Murcia lived, what car he drove, and what time he left for work in the morning, because they previously worked together.  In the early morning hours of July 14, 2014, Amaya-Sanchez drove two other MS-13 members, each of whom was armed with a 9mm handgun, to Lainez-Murcia’s neighborhood and dropped them off.  When Lainez-Murcia left the house and entered his car, the MS-13 members approached and fired multiple times with the 9mm handguns, killing him.  The two MS-13 members ran down the block where Amaya-Sanchez picked them up and drove away.

Amaya-Sanchez, an illegal alien from El Salvador who previously was deported from the United States and illegally returned, faces a mandatory minimum sentence of 10 years’ imprisonment and a maximum sentence of life in prison when sentenced by Judge Bianco on October 17, 2018.  Upon completion of his sentence, the defendant faces deportation from the United States. 

Today’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international criminal organization.  The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America.  With numerous branches, or “cliques,” the MS-13 is the largest and most violent street gang on Long Island.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 45 murders in the district, and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, SCPD, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, the New York State Police, and the 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, Michael T. Keilty and Raymond A. Tierney are in charge of the prosecution.

The Defendant:

Edwin Amaya-Sanchez (also known as “strong”)
Age:  30
Brentwood, New York

E.D.N.Y. Docket No. 16-CR-403 (S-4)(JFB)

Yesterday, in federal court in Brooklyn, Rodolfo Quiambao, the former President and Chief Executive Officer of the engineering and electrical design firm Rudell & Associates, Inc. (Rudell), was sentenced to 48 months’ imprisonment for federal programs bribery and tax evasion in connection with his scheme to pay bribes and kickbacks to supervisors at Consolidated Edison of New York (Con Ed) in exchange for receiving lucrative contracts and other benefits from the public utility services provider.  Quiambao was also sentenced to pay a $125,000 fine and more than $4.5 million in restitution to the IRS.  At the time of his guilty plea in March 2016, Quiambao agreed to forfeit $1 million in criminal proceeds.  Yesterday’s sentencing took place before United States District Judge Allyne R. Ross. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York; James D. Robnett, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), New York; Michael Nestor, Inspector General, The Port Authority of New York and New Jersey, Office of the Inspector General; and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Custom Enforcement (ICE), Homeland Security Investigations (HSI), in New York, announced the sentence.  

According to court filings and facts presented during court proceedings, starting in approximately 2000, Quiambao surreptitiously and regularly gave Con Ed supervisors hundreds of thousands of dollars in cash and checks in exchange for securing work, including lucrative “sole source” contracts, for his company.  Quiambao also engaged in tax evasion by first concealing and then deducting the bribe payments he paid to the Con Ed supervisors as business deductions on his companies’ tax returns.   

Quiambao’s sentencing was the latest step in the government’s investigation of bribery and kickback schemes involving employees and contractors of Con Ed.  Since 2008, 13 Con Ed supervisors and employees and three Con Ed contractors have been convicted.

The government’s case is being prosecuted by the Office’s Public Integrity Section.  Assistant United States Attorneys Paul Tuchmann and Claire S. Kedeshian are in charge of the prosecution.

The Defendant: RODOLFO QUIAMBAO
Age:  73
Residence: Queens, New York

E.D.N.Y. Docket No. 15-CR-0515

Earlier today, in federal court in Central Islip, defendants Joseph Atias and Sofia Atias were sentenced by United States District Judge Denis R. Hurley to 40 months’ and 28 months’ imprisonment, respectively, following their March 30, 2017 trial convictions for bank fraud and conspiracy to commit bank fraud in connection with the sale of their real property to Sacred Heart Academy in Hempstead for athletic fields. They were also convicted of Medicaid fraud.  As part of their sentences, the defendants were ordered to pay $465,965 in forfeiture and $49,956 in restitution.  

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.

“Joseph and Sofia Atias committed fraud schemes to try to get out from under mortgage debt and to fraudulently obtain Medicaid funds, essentially flaunting the laws to which we all must adhere,” stated United States Attorney Donoghue.  “This Office and our law enforcement partners will make every effort to ensure that those who would manipulate the system are called to account.

“In a clear case of double dipping, the defendants convinced the lending institution of their eligibility to qualify for a short sale on their property, recruited a relative to serve as a straw buyer for the property, and profited from the funds of a subsequent sale of the property,” stated FBI Assistant Director-in-Charge Sweeney.  “At the same time they were running this scheme, they were also found to have engaged in significant fraud against the government. May today’s sentencing remind those who exploit government programs and manipulate gaps in the mortgage and banking sectors that they will face the error of their ways.”

The Bank Fraud Scheme

At trial, the government’s evidence established that shortly before the sale of their property adjacent to Sacred Heart Academy for $925,000, the defendants sold the property in a short sale to Bank of America for $480,000 to discharge their mortgage debt.  In negotiating the short sale with the bank, the defendants and their co-conspirator attorney concealed Sacred Heart Academy’s pending offer and submitted a fraudulent contract of sale and other false documents representing that they did not have funds to pay off the mortgages in full.  As part of the fraudulent short sale, the defendants used a relative as a “straw buyer” of the property to create the appearance of an arms-length sale.  Shortly after that sale, the defendant’s straw buyer sold the property to Sacred Heart Academy for approximately half a million dollars in profit.

The Medicaid Fraud Scheme

The government’s evidence at trial established that between 2009 and 2015 the defendants fraudulently obtained Medicaid funds, by concealing their self-employment income and available cash resources, including trust fund monies and the $465,000 in proceeds from the bank fraud scheme.  

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Charles P. Kelly and Burton T. Ryan, Jr., are in charge of the prosecution.  Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division is handling matters related to forfeiture.       

The Defendants:

SOFIA ATIAS
Age: 48 years old
Residence: Great Neck, New York

JOSEPH ATIAS
Age: 54 years old
Residence: Great Neck, New York

E.D.N.Y. Docket No. 14-CR-403 (DRH)

Earlier today, at the federal courthouse in Brooklyn, Elozer Porges and Joel Lowy pleaded guilty to conspiracy to commit mail and wire fraud relating to their participation in a multi-million dollar fraud scheme.  Porges and Lowy committed this fraud while serving in the administrative offices of Central United Talmudic Academy (“Central UTA”), a school system located in Williamsburg, Brooklyn.  Porges served as Central UTA’s Executive Director, and Lowy served as Porges’s assistant.  The pleas were entered before United States District Judge Nicholas G. Garaufis. 

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), Mark Peters, Commissioner, New York City Department of Investigation, and Bethanne M. Dinkins, Special Agent-in-Charge, United States Department of Agriculture, Office of Inspector General, announced the guilty pleas.

According to the indictment, court filings and facts presented during the guilty plea, from between approximately 2013 and 2015, Porges and Lowy submitted documents to the New York State Department of Health (NYSDOH) specifically falsely claiming that its school children had received meals which, in fact, had never been served.  The defendants fraudulently inflated the number of meals served at various Central UTA schools in order to obtain larger reimbursement payments from the federal government’s Child and Adult Care Food Program (CACFP), a program funded by the United States Department of Agriculture (USDA) and administered by the NYSDOH that is designed to assist schools and other institutions in providing meals to, among others, at-risk children.  In total, Porges and Lowy, fraudulently obtained more than $3 million in reimbursement payments to CUTA.

At their guilty plea proceedings, Porges and Lowy admitted to submitting the inflated meal counts on behalf of Central UTA.  As part of their plea agreements, Porges and Lowy are required to reimburse $3,256,338.68 to the USDA in restitution.   Lowy is also required to pay restitution in the amount of $98,407.21 for food stamp and child care benefits he improperly obtained from New York City agencies.

When sentenced, Porges and Lowy each face a statutory maximum of 20 years’ imprisonment. 

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

The Defendants:

ELOZER PORGES
Age: 43
Brooklyn, NY

JOEL LOWY
Age: 29
Brooklyn, NY

E.D.N.Y. Docket No. 17-CR-431

Earlier today, at the federal courthouse in Brooklyn, Yefferson Rodriguez-Lopez, a member of a violent robbery crew that operated in the New York metropolitan area from 1998 to 2003, was sentenced by United States District Judge Raymond J. Dearie to 18 years’ imprisonment and five years’ supervised release, following his guilty plea to a murder committed in 1999 during a robbery of a narcotics stash house.  Rodriguez-Lopez was arrested on the federal charges in July 2016 and pleaded guilty in March 2017.  

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

According to court filings, between 1998 and 2003, Rodriguez-Lopez was a member of a violent robbery crew that targeted drug dealers in and around New York City, including Brooklyn and Queens.  The robbery crew typically involved between three and five participants; some members of the crew, armed with firearms, would enter an apartment to steal narcotics or currency, while other members of the crew waited outside to serve as lookouts and getaway drivers.  After a robbery, members of the crew generally sold the narcotics they recovered in bulk to other drug traffickers.  Over several years, the crew stole millions of dollars in cash, approximately 90 kilograms of cocaine and approximately 14 kilograms of heroin.

On March 6, 1999, the defendant participated in a robbery of a narcotics stash house in the Bronx.  The defendant and a co-conspirator waited for the victim to enter the narcotics stash house, forcibly pushed themselves in and tied the victim’s hands behind his back.  The defendant placed a gun to the victim’s head and when the victim jerked his head back, it caused the weapon to fire.  Afterwards, the defendant drove away with other members of the robbery crew and discarded his gun.  The defendant evaded arrest for several years by using different aliases and altering his fingerprints. 

Mr. Donoghue extended his grateful appreciation to the DEA’s New York Drug Enforcement Task Force, who conducted the investigation. The task force is comprised of agents and officers of the DEA, New York City Police Department and the New York State Police.  

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

The Defendant:

YEFFERSON RODRIGUEZ-LOPEZ
Age:  43
New York, New York

E.D.N.Y. Docket No. 16-CR-275 (RJD)

Earlier today, in federal court in Brooklyn, Mark Hodge was arrested on a complaint charging him with theft of government property.  Hodge allegedly stole more than $150,000 from the Social Security Administration, the Office of Personnel Management and the Department of Veterans Affairs between March 1999 and July 2017.  Hodge is scheduled to make his initial appearance this afternoon before United States Magistrate Judge Vera M. Scanlon.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and John Grasso, Special Agent-in-Charge, Social Security Administration, Office of the Inspector General (SSA-OIG), announced the charge.

“Month after month for nearly two decades, the defendant allegedly stole government funds intended for his mother, who had died in 1999,” stated United States Attorney Donoghue. “This Office will hold responsible and prosecute those fraudsters who cash government checks meant for our nation’s retirees, veterans, or the disabled.”

“Today’s arrest should serve as a warning to those who choose to selfishly defraud the Social Security Trust Fund,” stated SSA-OIG Special Agent-in-Charge Grasso. “The Social Security Office of the Inspector General vigorously pursues these cases, and we will continue to work jointly with other law enforcement partners to identify and prosecute fraud perpetrators in the future.  I strongly encourage the public to report suspected instances of Social Security fraud to the OIG’s Fraud Hotline at 1-800-269-0271 or https://oig.ssa.gov/report.”

According to the complaint, the three federal agencies had been paying benefits to the defendant’s mother, who had been residing with the defendant until her death in 1999.  Unaware of her death, the agencies continued making payments for her benefit.  Instead of reporting the overpayments, the defendant transferred the funds from a joint bank account in his mother’s name to his own personal checking account.  The defendant continued the fraud in November 2016, when he falsely represented to the Social Security Administration that his mother was alive but unable to be interviewed because she had been hospitalized.

The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, the defendant faces a statutory maximum of 10 years’ imprisonment for theft of government property.

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

The Defendant:

MARK HODGE
Age: 60
Residence: Queens, New York

E.D.N.Y. Docket No. 18-MJ-257

The United States District Court for the Eastern District of New York entered a consent decree today barring Riddhi USA Inc., of Ronkonoma, New York, and its owner, Mohd M. Alam, from distributing adulterated and misbranded dietary supplements pending required remedial action.

The consent decree approved by the U.S. District Judge Leonard D. Wexler requires Riddhi and Alam to destroy, within 15 days, all dietary supplements in their possession, custody or control.  The injunction also requires Riddhi and Alam to implement consumer safety measures before resuming the manufacturing or distributing of dietary supplements.  This includes hiring an independent expert to perform a comprehensive inspection of Riddhi’s facility and requiring the expert to certify that defendants are complying with current good manufacturing practice.   

The consent decree resolves a suit filed on October 23, 2017, at the request of the U.S. Food and Drug Administration (FDA).  According to the complaint, Riddhi and Alam manufactured, prepared, labeled, packed, held and distributed dietary supplements under conditions that failed to comply with current good manufacturing practice regulations.

“Today’s consent decree shows that we will make every effort to ensure that dietary supplement manufacturers comply with good manufacturing practices,” stated U.S. Attorney for the Eastern District of New York Richard Donoghue.  “This Office is committed to safeguarding consumers from adulterated and misbranded dietary supplements.”

 “The injunction entered today demonstrates the Department of Justice’s continuing efforts to protect consumers from adulterated and misbranded dietary supplements,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Chad A. Readler.  “The Department of Justice will continue to work with the FDA to ensure that dietary supplement manufacturers provide accurate information about what is in their products.” 

According to the complaint, FDA documented numerous significant deviations from current Good Manufacturing Practice regulations during its 2017 inspection of Riddhi’s facilities, including failures to:  establish product specifications for identity, purity, strength, and composition of their finished dietary supplements; conduct at least one appropriate test to verify the identity of a dietary ingredient; and establish and follow written procedures for quality control operations.  The complaint alleged that an FDA inspection ending in early 2016 found similar violations.  

In addition, the complaint alleged that Riddhi and Alam misbranded their dietary supplements by failing to comply with certain labeling requirements in the federal Food, Drug, and Cosmetic Act.  For example, as noted in the complaint, the defendants’ products are fabricated from two or more ingredients but fail to list any ingredients on their product labels or labeling.  The complaint also alleged that some of the defendants’ products, including Prenatal Formula, Osteo Gest, Neuroxygen, Inflam-Ease and All-Ease, are misbranded because the products’ label or labeling failed to declare the place of business of the manufacturer, packer or distributor.

Riddhi and Alam agreed to resolve the complaint and be bound by the consent decree permanent injunction.       

The government is represented by Trial Attorney Monica Groat of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Edwin Cortes of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Associate General Counsel for Enforcement Roselle Oberstein 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.

The Defendants:

RIDDHI USA, INC.
Ronkonkoma, New York

MOHD M. ALAM

A federal court enjoined Riddhi USA Inc., of Ronkonoma, New York, and its owner, Mohd M. Alam, from distributing adulterated and misbranded dietary supplements pending required remedial action, the Department of Justice announced today.

The injunction ordered by the U.S. District Court for the Eastern District of New York requires Riddhi and Alam to destroy, within 15 days, all dietary supplements that are in their possession, custody, or control.  The injunction also orders Riddhi and Alam to implement various consumer safety measures before resuming the manufacturing or distributing of dietary supplements.  This includes hiring an independent expert to perform a comprehensive inspection of Riddhi’s facility and requires the expert to certify that all current good manufacturing practice deviations brought to defendants’ attention have been corrected.    

The injunction stems from a complaint the Department filed on Oct. 23, 2017, at the request of the U.S. Food and Drug Administration (FDA).  According to the complaint, Riddhi and Alam manufactured, prepared, labeled, packed, held, and distributed dietary supplements under conditions that failed to comply with current good manufacturing practice regulations.

“The injunction entered today demonstrates the Department of Justice’s continuing efforts to protect consumers from adulterated and misbranded dietary supplements,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “The Department of Justice will continue to work with FDA to ensure that dietary supplement manufacturers provide accurate information about what is in their products.”

“Today’s consent decree shows that we will make every effort to ensure that dietary supplement manufacturers comply with good manufacturing practices,” stated U.S. Attorney for the Eastern District of New York Richard Donoghue.  “This Office is committed to safeguarding consumers from adulterated and misbranded dietary supplements.”

According to the filed complaint, FDA documented numerous significant deviations from current good manufacturing practice regulations during its 2017 inspection of Riddhi’s facilities, including failures to:  establish product specifications for identity, purity, strength, and composition of their finished dietary supplements; conduct at least one appropriate test to verify the identity of a dietary ingredient; and establish and follow written procedures for quality control operations.  The complaint alleged that an FDA inspection ending in early 2016 found deviations in current good manufacturing practice.   

In addition, the complaint alleged that Riddhi and Alam misbranded their dietary supplements by failing to comply with certain labeling requirements in the federal Food, Drug, and Cosmetic Act.  For example, as noted in the complaint, defendants’ products are fabricated from two or more ingredients but fail to declare any ingredients on their product labels or labeling.  The complaint also alleged that some of the defendants’ products, including Prenatal Formula, Osteo Gest, Neuroxygen, Inflam-Ease, and All-Ease, are misbranded because the products’ label or labeling failed to declare the place of business of the manufacturer, packer, or distributor.

The defendants agreed to resolve the complaint and be bound by a consent decree of permanent injunction.  The district court adopted the resolution and entered a permanent injunction against Riddhi and Alam. 

The government is represented by Trial Attorney Monica Groat of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Edwin Cortes of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Associate General Counsel for Enforcement Roselle Oberstein 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 has reached agreement with Barclays Capital, Inc. and several of its affiliates (together, Barclays) to settle a civil action filed in December 2016 in which the United States sought civil penalties for alleged conduct related to Barclays’ underwriting and issuance of residential mortgage-backed securities (RMBS) between 2005 and 2007.  Barclays will pay the United States two billion dollars ($2,000,000,000) in civil penalties in exchange for dismissal of the Amended Complaint.

Following a three-year investigation, the complaint in the action, United States v. Barclays Capital, Inc., alleged that Barclays caused billions of dollars in losses to investors by engaging in a fraudulent scheme to sell 36 RMBS deals, and that it misled investors about the quality of the mortgage loans backing those deals.  It alleged violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud, wire fraud, bank fraud, and other misconduct. 

Agreement has also been reached with the two former Barclays executives who were named as defendants in the suit:  Paul K. Menefee, of Austin, Texas, who served as Barclays’ head banker on its subprime RMBS securitizations, and John T. Carroll, of Port Washington, New York, who served as Barclays’ head trader for subprime loan acquisitions.  In exchange for dismissal of the claims against them, Menefee and Carroll agree to pay the United States the combined sum of two million dollars ($2,000,000) in civil penalties.

  The settlement was announced by Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Laura S. Wertheimer, Inspector General for the Federal Housing Finance Agency (FHFA-OIG).

“This settlement reflects the ongoing commitment of the Department of Justice, and this Office, to hold banks and other entities and individuals accountable for their fraudulent conduct,” stated United States Attorney Donoghue. “The substantial penalty Barclays and its executives have agreed to pay is an important step in recognizing the harm that was caused to the national economy and to investors in RMBS.”

“The actions of Barclays and the two individual defendants resulted in enormous losses to the investors who purchased the Residential Mortgage-Backed Securities backed by defective loans,” stated FHFA Inspector General Wertheimer.  “Today’s settlement holds accountable those who waste, steal or abuse funds in connection with FHFA or any of the entities it regulates.  We are proud to have partnered with the U.S. Department of Justice and the U.S Attorney’s Office for the Eastern District of New York on this matter.”

The scheme alleged in the complaint involved 36 RMBS deals in which over $31 billion worth of subprime and Alt-A mortgage loans were securitized, more than half of which loans defaulted.  The complaint alleged that in publicly filed offering documents and in direct communications with investors and rating agencies, Barclays systematically and intentionally misrepresented key characteristics of the loans it included in these RMBS deals.  In general, the borrowers whose loans backed these deals were significantly less creditworthy than Barclays represented, and these loans defaulted at exceptionally high rates early in the life of the deals.  In addition, as alleged in the complaint, the mortgaged properties were systematically worth less than what Barclays represented to investors.  These are allegations only, which the Defendants dispute, and there has been no trial or adjudication or judicial finding of any issue of fact or law. 

The government’s case has been handled by this Office’s Civil Division.  Senior Counsel F. Franklin Amanat, and Assistant United States Attorneys Matthew R. Belz, Charles S. Kleinberg, Evan P. Lestelle, Matthew J. Modafferi, Josephine M. Vella and Alex S. Weinberg have been in charge of the litigation.  Mr. Donoghue thanks the FHFA-OIG for its assistance in conducting the investigation in this matter.

E.D.N.Y. Docket No. 16-CV-7057 (KAM/JO)

Link to the original press release announcing the filing of the suit:  https://www.justice.gov/usao-edny/pr/united-states-sues-barclays-bank-recover-civil-penalties-fraud-sale-residential

The United States has reached agreement with Barclays Capital, Inc. and several of its affiliates (together, Barclays) to settle a civil action filed in December 2016 in which the United States sought civil penalties for alleged conduct related to Barclays’ underwriting and issuance of residential mortgage-backed securities (RMBS) between 2005 and 2007.  Barclays will pay the United States two billion dollars ($2,000,000,000) in civil penalties in exchange for dismissal of the Amended Complaint.

Following a three-year investigation, the complaint in the action, United States v. Barclays Capital, Inc., alleged that Barclays caused billions of dollars in losses to investors by engaging in a fraudulent scheme to sell 36 RMBS deals, and that it misled investors about the quality of the mortgage loans backing those deals.  It alleged violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud, wire fraud, bank fraud, and other misconduct. 

Agreement has also been reached with the two former Barclays executives who were named as defendants in the suit:  Paul K. Menefee, of Austin, Texas, who served as Barclays’ head banker on its subprime RMBS securitizations, and John T. Carroll, of Port Washington, New York, who served as Barclays’ head trader for subprime loan acquisitions.  In exchange for dismissal of the claims against them, Menefee and Carroll agree to pay the United States the combined sum of two million dollars ($2,000,000) in civil penalties.

The settlement was announced by Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Laura S. Wertheimer, Inspector General, of the Federal Housing Finance Agency Office of the Inspector General (FHFA-OIG).

“This settlement reflects the ongoing commitment of the Department of Justice, and this Office, to hold banks and other entities and individuals accountable for their fraudulent conduct,” stated United States Attorney Donoghue. “The substantial penalty Barclays and its executives have agreed to pay is an important step in recognizing the harm that was caused to the national economy and to investors in RMBS.”

“The actions of Barclays and the two individual defendants resulted in enormous losses to the investors who purchased the Residential Mortgage-Backed Securities backed by defective loans,” stated FHFA-OIG Inspector General Wertheimer.  “Today’s settlement holds accountable those who waste, steal or abuse funds in connection with FHFA or any of the entities it regulates.  We are proud to have partnered with the U.S. Department of Justice and the U.S Attorney’s Office for the Eastern District of New York on this matter.”

The scheme alleged in the complaint involved 36 RMBS deals in which over $31 billion worth of subprime and Alt-A mortgage loans were securitized, more than half of which loans defaulted.  The complaint alleged that in publicly filed offering documents and in direct communications with investors and rating agencies, Barclays systematically and intentionally misrepresented key characteristics of the loans it included in these RMBS deals.  In general, the borrowers whose loans backed these deals were significantly less creditworthy than Barclays represented, and these loans defaulted at exceptionally high rates early in the life of the deals.  In addition, as alleged in the complaint, the mortgaged properties were systematically worth less than what Barclays represented to investors.  These are allegations only, which the Defendants dispute, and there has been no trial or adjudication or judicial finding of any issue of fact or law. 

The government’s case has been handled by this Office’s Civil Division.  Senior Counsel F. Franklin Amanat, and Assistant United States Attorneys Matthew R. Belz, Charles S. Kleinberg, Evan P. Lestelle, Matthew J. Modafferi, Josephine M. Vella and Alex S. Weinberg have been in charge of the litigation.  Mr. Donoghue thanks the FHFA-OIG for its assistance in conducting the investigation in this matter.

E.D.N.Y. Docket No. 16-CV-7057 (KAM/JO)

The press release from the Eastern District of New York orignially announcing the filing of the suit can be found here.

Earlier today, at the federal courthouse in Brooklyn, Parviz Hakimian and Khosrow Hakimian, both of whom are Long Island residents, pleaded guilty to filing false tax returns related to the failure to disclose overseas bank accounts.  Each defendant agreed as part of the guilty plea to pay $7,730,000 in civil penalties.  The guilty pleas were entered before United States District Judge Nicholas G. Garaufis. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the guilty pleas.

“As alleged, both Parviz and Khosrow Hakimian utilized overseas bank accounts to conceal millions of dollars in income from the United States government,” stated United States Attorney Donoghue.  “This Office and our law enforcement partners will continue to work together to ensure that individuals who attempt to evade their responsibilities as taxpayers are held accountable.” 

 “The Hakimian brothers took extreme measures to evade paying millions in taxes, while other taxpayers paid their fair share,” stated IRS-CI Special Agent-in-Charge Robnett.  “This should not and will not be tolerated.  As evidenced by the Hakimian brothers pleading guilty today, those that attempt to evade their tax liabilities by hiding US earnings in secret off-shore accounts will be identified and prosecuted.”

As stated in the charging documents, between 2009 and 2011, both defendants maintained undeclared bank accounts at an Israeli private bank headquartered in Tel Aviv, Israel.  The bank provided private banking services to, and maintained undeclared accounts for, United States taxpayers.  Parviz and Khosrow Hakimian each failed to report these accounts, and the interest income from these accounts, in their tax filings. 

At sentencing, each defendant faces a maximum of three years in prison. 

Assistant United States Attorney Margaret Lee is in charge of the prosecution.

The Defendants:

PARVIZ HAKIMIAN
Age: 70
Great Neck, New York

E.D.N.Y. Docket 18-CR-70 (NGG)

KHOSROW HAKIMIAN
Age: 64
Great Neck, New York

E.D.N.Y. Docket 18-CR-71 (NGG)

Earlier today, a seven-count superseding indictment was unsealed in federal court in Brooklyn, charging Enrique LaPorte, also known as “Chiquito,” Zaida Lopez, Philippe Medina, Carlos Mateo and Clarissa Vasquez, also known as “Clari,” with conspiring to distribute heroin as members of a large-scale trafficking operation that was based in Brooklyn and Queens.  A sixth defendant remains at large.  Defendants Clarissa Vasquez, Peter Vasquez and Luis Lopez are also indicted for laundering narcotics proceeds.  Clarissa Vasquez additionally faces charges for making false statements to law enforcement during the investigation.

The five newly charged defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Steven Gold at the federal courthouse in 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), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.      

“The defendants were part of a large-scale heroin trafficking organization that moved hundreds of thousands of dollars in illicit proceeds across the country from Los Angeles to New York, enriching themselves in the process,” stated United States Attorney Donoghue. “These charges demonstrate the effectiveness of the cooperation among federal, state and local law enforcement in dismantling large-scale trafficking organizations and prosecuting those responsible to the fullest extent of the law.”

Mr. Donoghue expressed his appreciation to the New York Metropolitan Safe Streets Task Force, which is comprised of detectives from the NYPD and special agents from the FBI, and additionally thanked the Ohio State Highway Patrol, Pennsylvania State Police, Indiana State Police, New Jersey State Police, the Chicago Field Divisions of the Drug Enforcement Administration and Homeland Security Investigations, Drug Enforcement Administration New York City Strike Force and Bergen County Prosecutor’s Office for their participation and assistance in the investigation.

“Each day we face another overdose, another loved one lost to the illegal drugs flooding into our communities,” stated FBI Assistant Director-in-Charge Sweeney.  “The subjects in this case allegedly created a cross-country drug trade, using the money to support lavish lifestyles all on the backs of people addicted to drugs that are killing tens of thousands of people all over the country every year.  This case and others we are actively investigating each day on all of our FBI Safe Streets Task Forces illustrate our determination to go after dealers and keep these deadly drugs off the streets.”

According to the charging instruments and other court documents, all of the defendants were members of a large-scale heroin trafficking organization that trafficked hundreds of kilograms of heroin into New York City and had connections to a Mexican cartel.  Between December 2011 and February 2015, law enforcement seized over $800,000 in narcotics proceeds from the organization.  Some of the newly added defendants were found in possession of hundreds of thousands of dollars in narcotics proceeds while transporting them across the country in furtherance of their family-run operation.  For example, in 2011, Ohio State troopers seized over $311,000 from a hidden “trap” inside a vehicle driven by defendant Medina; in 2014, Pennsylvania State troopers seized over $300,000 from a “trap” inside a vehicle registered to defendant Clarissa Vasquez, and in which defendants Zaida Lopez and Enrique LaPorte were traveling; and in 2015, Ohio State troopers stopped a vehicle driven by Carlos Mateo, from which Indiana law enforcement later recovered over $48,000 secreted in a “trap.”          

The proceeds of the illicit narcotics operation funded a lavish lifestyle for the Lopez and Vasquez families, their associates and co-conspirators.  For example, Clarissa Vasquez spent extravagantly on luxury goods and gifts, including gold and diamond encrusted jewelry, 24 karat gold-gilded and “Versace” branded birthday cakes for her brother and fiancée, and boasted of her co-defendants’ exorbitant purchases and expensive vehicles on social media.  While law enforcement seized nearly $1 million in luxury vehicles, including a Rolls Royce Ghost, Lamborghini Hurácan, Audi R8 Spyder, Mercedes CLS63 AMG and Range Rover Sport, nearly $1 million in cash and tens of thousands of dollars’ worth of high fashion shoes and handbags, additional assets of the co-conspirators remain at large.  All proceeds of the narcotics trafficking conspiracy will be subject to forfeiture, according to the indictment. 

The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty. 

If convicted, all of the defendants face mandatory minimum sentences of 10 years’ imprisonment and maximum sentences of life. 

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

The Defendants: ENRIQUE LAPORTE (also known as “Chiquito”)
Age: 41
Brooklyn, New York

ZAIDA LOPEZ 
Age:  41
Brooklyn, New York

PHILIPPE MEDINA
Age: 32
Brooklyn, New York

CARLOS MATEO
Age: 42
Brooklyn, New York

CLARISSA VASQUEZ (also known as “Clari”) 
Age: 30
Brooklyn, New York

E.D.N.Y. Docket No.  17-CR-390 (S-1) (RJD)

Earlier today in federal court in Brooklyn, Besnik Llakatura was sentenced by United States District Judge Eric N. Vitaliano to 171 months’ imprisonment, to be followed by a term of five years’ supervised release, for his convictions on two counts of Hobbs Act extortion conspiracy and one count of brandishing a firearm in relation to a crime of violence.  The charges relate to the defendant’s participation in two schemes to extort small business owners in Astoria, Queens.  At the time of his crimes, Llakatura was an active-duty police officer with the New York City Police Department (NYPD) assigned to the 120th Precinct on Staten Island.  Llakatura was suspended without pay upon his arrest in December 2013 and dismissed from the NYPD following his guilty plea in December 2015.  The Court also imposed restitution in the amount of $10,000 and forfeiture in the amount of $10,000.

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, NYPD, announced the sentence.

“In flagrant violation of his sworn duty to serve and protect the community, former police officer Llakatura, along with his criminal partners, used fear, intimidation and threats of violence to demand payment from hard-working citizens who dared to open businesses on their so-called ‘turf’ of Astoria, Queens,” stated United States Attorney Donoghue.  “Today’s sentence drives home the message that no one is above the law and a police officer who commits crimes against the community he serves will be held fully accountable.”  Mr. Donoghue extended his grateful appreciation to the members of the Joint Organized Crime Task Force, which includes agents of the FBI and detectives of the NYPD, which led the investigation, as well as the NYPD’s Internal Affairs Division for their cooperation and assistance in the investigation.

“Besnik Llakatura took an oath to serve and protect the citizens of New York City as an officer of the NYPD, while simultaneously pledging his allegiance to a violent organized crime group bent on shaking down local Queens business owners within the Albanian community,” stated FBI Assistant Director-in-Charge Sweeney.  “He quickly discovered what happens to those who find themselves on the wrong side of the law, and after his guilty plea, was stripped of his shield of honor. Today’s sentence is a reminder that even those who enforce the rules will still be held to their highest standards.”

According to prior court filings and evidence presented at the trial of co-defendant  Dervishaj, between May and November 2013, Llakatura, Dervishaj and Nikolla conspired and attempted to extort a Queens restaurant owner, demanding monthly payments in exchange for so-called “protection.”  Shortly after the victim opened a restaurant in Astoria, Dervishaj demanded $4,000 per month because the victim had opened it in “our neighborhood.”  The victim sought help from his friend Llakatura, at the time an NYPD officer.  Unbeknownst to the victim, Llakatura was already conspiring with Dervishaj and Nikolla in the extortion scheme.  Llakatura actively discouraged the victim from reporting the extortion to the police, and warned the victim that Dervishaj would hurt him and had ties to dangerous Albanian organized crime figures – including his brother Plaurent Dervishaj, at the time Albania’s most wanted fugitive.  When the victim failed to make the demanded payments, Nikolla – accompanied by Dervishaj – threatened him on a public street in Queens and chased him at gunpoint, before the victim managed to escape in his car.  Shortly thereafter, Dervishaj called the victim and told him that he “got lucky this time.”  Over the course of five months, each of the three defendants took turns collecting monthly extortion payments totaling $24,000. 

During the same time period, Llakatura and his co-defendants also conspired and attempted to extort a proprietor of two social clubs in Astoria.  Accompanied by Dervishaj, Nikolla demanded payments of $1,000 per week, once again for “protection.”  The victim refused to make the demanded payments and stopped going to his social clubs out of fear for his safety.  Court-authorized wiretaps of the defendants’ telephones revealed that all three defendants worked together to locate the victim and force him to pay.  In one instance, the defendants confronted a friend of the victim in an effort to find the victim and send him a message.  Llakatura and his co-defendants threatened, punched and pulled a gun on the victim’s friend, leaving him with injuries to his face.  Upon learning of this assault, the extortion victim fled to a foreign country for a period of time to avoid the defendants’ extortionate threats, and later sold his social clubs.

Co-defendant Redinel Dervishaj, who was convicted of 12 extortion and firearms counts after a three-week trial, was previously sentenced on March 24, 2017 to 57 years’ and one day of imprisonment.  Co-defendant Denis Nikolla, who previously pled guilty to three extortion counts and one firearms count, was sentenced on March 10, 2017 to 18 years’ imprisonment.    

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Nadia Shihata, Patrick Hein and M. Kristin Mace are in charge of the prosecution.

The Defendant: BESNIK LLAKATURA
Age: 38
Residence: Staten Island, New York

E.D.N.Y. Docket No. 13-CR-668 (ENV)

A complaint was unsealed today, in federal court in Brooklyn, charging Kimberly Rojas Orozco, Alexander Brown, also known as “AJ Brown,” and Troy Stanley with conspiracy to commit wire and mail fraud in connection with a lottery telephone scam targeting elderly victims.  The defendants and their co-conspirators allegedly received approximately $260,000 in fraudulently obtained payments from their victims through bank wires or the mail system.  The defendants were arrested today and they will make their initial appearances this afternoon at the federal courthouse in Baltimore, Maryland.    

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, and Gurbir S. Grewal, Attorney General of the State of New Jersey, announced the arrests.

“As alleged in the complaint, the defendants defrauded elderly and vulnerable victims by making false promises of life-changing prizes and deceiving the hopeful victims into paying upfront fees,” stated United States Attorney Donoghue.  “This Office, together with our law enforcement partners, will vigorously pursue the perpetrators of these fraudulent schemes wherever they are located, and hold them accountable.”

“These alleged fraudsters preyed on senior citizens, swindling them out of more than a quarter million dollars,” said HSI Special Agent-in-Charge Melendez. “Instead of showing respect to elders, these individuals chose to cheat them out of their savings; and, now they will be held responsible for their actions.”

“Law enforcement must go the extra mile to protect the elderly, who cannot always protect themselves, and our investigators have done that in this collaborative investigation,” said New Jersey Attorney General Grewal. “These defendants allegedly placed themselves in the lowest ranks of con artists by preying on seniors and callously targeting their life savings.”

According to the complaint, between January 2014 and November 2017, the defendants and others engaged in a telephone scam through which callers convinced seniors that they had won a cash lottery or sweepstakes, and that a large fee or taxes must be paid before the senior could receive their lottery winnings.  The defendants, together with others, received the purported “fees,” approximately $260,000 identified to date, in the form of bank wires, money orders mailed to Brooklyn, or personal checks, and deposited the funds into their personal bank accounts.

The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants face a statutory maximum of 20 years’ imprisonment for wire and mail fraud conspiracy.

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

The Defendants:

KIMBERLY ROJAS OROZCO
Age: 28
Rockville, Maryland

ALEXANDER BROWN (also known as “AJ Brown”)
Age: 28
Rockville, Maryland

TROY STANLEY
Age: 33
Randallstown, Maryland

E.D.N.Y. Docket No. 18-MJ-249

A complaint was unsealed today in federal court in Brooklyn charging Keith Raniere, also known as “The Vanguard,” with sex trafficking, sex trafficking conspiracy and forced labor conspiracy.  Raniere was deported by Mexican authorities after he was found Sunday outside Puerto Vallarta, Mexico in a luxury villa.  Raniere’s initial appearance is scheduled for tomorrow afternoon at the federal courthouse in Fort Worth, Texas.

 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 complaint, Keith Raniere created a secret society of women whom he had sex with and branded with his initials, coercing them with the threat of releasing their highly personal information and taking their assets,” stated United States Attorney Donoghue.  “This Office and our law enforcement partners are committed to the prosecution of those who break the law by preying upon and violating members of our community.”  Mr. Donoghue expressed his grateful appreciation to the FBI for leading the investigation, and thanked the New York State Police, the FBI Albany Field Office, the FBI’s Mexican Legat, the Mexican Federal Police, the New York State Office of the Attorney General, the New York State Department of Health and the United States Attorney’s Office for the Northern District of New York for their assistance.

“As alleged, Keith Raniere displayed a disgusting abuse of power in his efforts to denigrate and manipulate women he considered his sex slaves,” FBI Assistant Director-in-Charge Sweeney stated.  “He allegedly participated in horrifying acts of branding and burning them, with the cooperation of other women operating within this unorthodox pyramid scheme. These serious crimes against humanity are not only shocking, but disconcerting to say the least, and we are putting an end to this torture today.”

Defendant’s Founding of Nxivm

According to the complaint, during the past 20 years, Raniere established a series of purported self-help workshops called “Executive Success Programs” (“ESP”) within his umbrella organization “Nxivm” (pronounced NEX-i-um).  Nxivm is based in Albany, New York and has operated centers in the United States, Mexico, Canada and South America.  Nxivm maintains features of a pyramid scheme, as its courses cost thousands of dollars each and participants (“Nxians”) are encouraged to pay for additional classes, and to recruit others to take classes, in order to rise within the ranks of Nxivm.  A number of Nxians were residents of the Eastern District of New York when they were recruited, and Nxivm has held promotional recruiting events in Brooklyn.  Since Nxivm’s creation, Raniere has maintained poly-amorous relations with its members.

According to the complaint, in 2015, Raniere created a secret society within Nxivm called “DOS,” which loosely translated to “Lord/Master of the Obedient Female Companions,” or “The Vow.”  DOS operated with levels of women “slaves” headed by “masters.”  Slaves were expected to recruit slaves of their own (thus becoming masters themselves), who in turn owed service not only to their own masters but also to masters above them in the DOS pyramid.  Raniere stood alone at the top of the pyramid.  Other than the Raniere, all members of DOS were women. 

Most DOS slaves were recruited from within Nxivm’s ranks.  When new DOS slaves were recruited, they were explicitly told that the organization was women-only, and that the organization would empower them and eradicate weaknesses that the Nxivm curriculum taught were common in women.  Raniere’s status at the top of the structure was concealed from new recruits. 

As a pre-condition to joining DOS, women were required to provide “collateral,” which included highly damaging information about friends and family members, nude photographs and/or rights to the recruit’s assets.  DOS slaves feared that their collateral could be released for any number of reasons, including telling anyone about DOS’s existence or leaving DOS.  Many DOS slaves were branded on their pelvic areas using a cauterizing pen with a symbol which, unbeknownst to them, incorporated Raniere’s initials.  During the branding ceremonies, slaves were required to be fully naked, and a master would order one slave to film the branding while the others restrained the slave being branded.

As detailed in the complaint, some DOS masters gave their slaves, including Jane Does 1 and 2 as described in the complaint, work which directly or implicitly required the slaves to have sex with Raniere.  These DOS masters received financial benefits from Raniere.  According to the complaint, both Jane Doe 1 and Jane Doe 2 believed that if they did not have sex with the defendant, their collateral could be released. 

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

If convicted of the crimes charged, Raniere faces a mandatory minimum sentence of 15 years’ imprisonment, and up to life imprisonment.      

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Moira Kim Penza and Tanya Hajjar are in charge of the prosecution. 

The Defendant:

KEITH RANIERE (also known as “The Vanguard”)
Age:  57
Residence: Waterford, New York

E.D.N.Y. Docket No. 18-MJ-132

A two-count indictment was unsealed today in federal court in Brooklyn charging attorney Scott Brettschneider, also known as “Mighty Whitey,” Charles Gallman, also known as “T.A.,” Richard Marshall, also known as “Love,” and Reginald Shabazz-Muhammad, also known as “Reggie,” with conspiring to make false statements and making false statements to the United States Bureau of Prisons (“BOP”).  Brettschneider was arrested earlier today and will be arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Steven M. Gold.  Gallman and Marshall were arrested on March 22, 2018 and ordered detained.  Shabazz-Muhammad is still at large.  The case has been assigned to United States District Judge Carol B. Amon.     

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 Richard A. Brown, District Attorney of Queens County, announced the charges. 

 “The defendants, including a practicing attorney, participated in a scheme to gain a narcotics trafficker early release from prison by falsely informing the Bureau of Prisons that he was a candidate for a drug rehab program,” stated United States Attorney Donoghue.  “This Office and our law enforcement partners are committed to ensuring that the resources to fight drug addiction go to the people who need them, not the drug dealers who put poison on our streets and who deserve to serve the entirety of their prison sentences.”  

“Those charged today allegedly conspired to release an inmate from prison under the auspices that he was eligible to receive treatment from the BOP’s Residential Drug Abuse Program when, in fact, he was not,” stated FBI Assistant Director-in-Charge Sweeney.  “Petitioning to send a known drug dealer back onto our streets before his sentence is served, and providing false documentation to prove he’s eligible for early release, is a reckless prospect that risks the well-being of society as a whole.  Drug addiction is a serious issue that deserves the appropriate response from all those involved.  We won’t stand for anything less.”

 “Integrity is the foundation of our criminal justice system,” stated Queens District Attorney Brown.  “These allegations go to the core of that foundation and are prejudicial to the administration of justice.  The charges today send a strong message to those who would undermine that integrity that they will be held accountable.  No one can be allowed to ‘fix’ any part of a case.  I commend our federal partners in the United States Attorney’s Office for the Eastern District and the Federal Bureau of Investigation working with my Rackets, Special Victims and District Attorney’s Detective Bureaus for their vigorous pursuit of justice in this matter.”

As alleged in the indictment and detailed in court filings, a federal inmate (Marshall), his defense attorney (Brettschneider) and two other defendants (Gallman and Shabazz-Muhammad) wrote a letter to the BOP, falsely recounting Marshall’s history of substance and alcohol dependence.  The letter was signed by Shabazz-Muhammad, purporting to be Marshall’s treatment provider, and was submitted to the BOP on Marshall’s behalf, for Marshall to fraudulently gain entry into the BOP’s Residential Drug Abuse Program (“RDAP”).  An inmate who is accepted into and successfully completes the RDAP program is potentially eligible to receive a year off his or her sentence.  Shabazz-Muhammad was not Marshall’s treatment provider; he was Brettschneider’s assistant.  Intercepted communications over a court-authorized wiretap revealed the defendants talking to Marshall on a smuggled cell phone in prison, discussing what the letter should state to ensure Marshall’s acceptance into the program.  Gallman predicted that it would “knock a year off his sentence,” and doubted that the BOP would be “scrutinizing it that much.”  As it turned out, the BOP did scrutinize it, and requested that Marshall submit progress reports of his past treatment. 

As alleged in court documents, the charges contained in the federal indictment stem from an investigation conducted by the Queens County District Attorney’s Office.

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

The Defendants:

Scott Brettschneider
Age: 61 
Queens, New York
Mint Hill, North Carolina

Charles Gallman
Age:  56
Queens, New York

RICHARD MARSHALL
Age: 56
Charlotte, North Carolina

Reginald Shabazz-Muhammad
Age:  62
Queens, New York

E.D.N.Y. Docket No. 18-CR-123 (CBA)

Earlier today, at the federal courthouse in Central Islip, Elmer Alexander Lopez (“Smiley”), a member of the Centrales Locos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, pleaded guilty to racketeering charges relating to his participation in the June 3, 2016 murder of Jose Pena, and the July 3, 2016 attempted murder of a suspected rival gang member.  The guilty plea was entered before United States District Judge Joseph F. Bianco.

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 Stuart J. Cameron, Acting Commissioner, Suffolk County Police Department (“SCPD”), announced the guilty plea.

“Lopez and his coconspirators took turns slashing and stabbing to death a fellow MS-13 member because the victim was suspected of violating gang rules, and merely one month later, turned a basketball court into a shooting gallery in a brazen attempt to kill a rival gang member, ” stated United States Attorney Donoghue.  “The killing and attempted murder perpetrated by Lopez are typical of the violence carried out by MS-13 to instill fear within its own ranks and terrorize our community. Today’s guilty plea holds the defendant accountable for his crimes and reflects the unwavering commitment by this Office and our partners with the FBI’s Long Island Gang Task Force to eradicate the scourge that is MS-13.”

“This case is just one in our systematic and focused dismantling of MS-13 on Long Island,” stated FBI Assistant Director-in-Charge Sweeney.  “Our ultimate goal is to eradicate the deadly and violent gang from the communities that have experienced murders, shooting, violence and criminal activity.  The FBI Long Island Gang Task Force and our law enforcement partners have created a massive surge of pressure on MS-13, and this plea shows proof that pressure is paying off.”

“The Suffolk County Police Department thanks the Eastern District of New York for their steadfast commitment to prosecute violent MS-13 gang members,” stated SCPD Commissioner Cameron.  “Today’s news is an example of the ongoing effort by the Suffolk County Police Department and our law enforcement partners to protect the residents of Suffolk County from the scourge of gang violence.  Ridding our community of gangs is a long-term commitment and one that we are strongly committed to.  Gang members should know that if they commit crimes in this county they will be arrested and prosecuted to the fullest extent of the law.”

As set forth in prior court filings, a detention letter, the fourth superseding indictment, and the defendant’s statements during his guilty plea, Lopez and several co-conspirators, who have been charged in the Eastern District of New York, decided to kill Pena, a member of the MS-13, because he was suspected of violating gang rules.  Prior to the murder, Lopez and the other MS-13 members held meetings where they discussed killing Pena because the MS-13 suspected that Pena had cooperated with law enforcement authorities and that he might be homosexual.  After consulting with MS-13 leadership in El Salvador, Lopez and the other MS-13 members agreed to murder Pena and tasks were assigned to each of the co-conspirators to carry out the plan, including obtaining weapons and a vehicle to be used in the murder.  On June 3, 2016, Lopez and the other MS-13 members lured Pena into a car and drove to a secluded wooded area in Brentwood, where they attacked Pena, taking turns stabbing and slashing him with knives until he was dead.  Pena’s body was not discovered until October 17, 2016, more than four months after his murder. 

In addition, Lopez admitted during his guilty plea that, one month after murdering Pena, he and other MS-13 members attempted to kill a suspected rival gang member on Lukens Avenue in Brentwood.  During 2016, Lopez and other members of the MS-13 had a series of conflicts with members of Goon Squad, a rival gang in Brentwood.  On July 3, 2016, at approximately 7:50 p.m., a man identified as John Doe #4 in the fourth superseding indictment was playing basketball with a group of individuals in front of a house on Lukens Avenue.  Lopez and two co-conspirators, who were in a Ford Mustang, saw the group, who they suspected were rival gang members, drove toward them, and one of the MS-13 members shot at the group.  John Doe #4 was struck by a bullet in the shoulder.  The victim received medical treatment and survived the shooting.

Lopez, an illegal alien from El Salvador, faces a maximum sentence of life in prison when sentenced by United States District Judge Joseph F. Bianco on September 13, 2018.  Upon completion of his sentence, the defendant faces deportation from the United States. 

The charges in the fourth superseding indictment against the other defendants remain pending and are merely allegations.  Those defendants are presumed innocent unless and until proven guilty.

Today’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international criminal organization.  The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America.  With numerous branches, or “cliques,” the MS-13 is the largest and most violent street gang on Long Island.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2010, this Office has obtained indictments charging MS-13 members with carrying out more than 45 murders in the Eastern District of New York, and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, SCPD, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, the New York State Police, and the 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, Michael T. Keilty and Raymond A. Tierney are in charge of the prosecution.

The Defendant:

ELMER ALEXANDER LOPEZ (“Smiley”)
Age:  20
Central Islip, New York

E.D.N.Y. Docket No. 16-CR-403 (S-4) (JFB)

Earlier today, in federal court in Brooklyn, Jason Soto, a member of the “Cypress Gangster Crips” street gang, was sentenced by United States District Judge I. Leo Glasser to 10 years’ imprisonment following his conviction at trial for selling a firearm to a convicted felon, unlawfully possessing a firearm and drug trafficking.  In January 2018, following an evidentiary hearing, the Court found that Soto had killed Shakim Rivera in February 2015, and also that Soto had intended to poison an elderly woman in April 2016.

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 sentence. 

 “With today’s sentence, Soto has been held to account for the myriad crimes he committed at the Cypress Hills Houses, including the murder of a gang rival,” stated United States Attorney Donoghue.  “This Office, together with our law enforcement partners, will be relentless in protecting the residents of communities plagued by gang violence from criminals like the defendant who has demonstrated a callous disregard for human life.”

“It is truly astonishing to see how the deadly actions of a few impact a majority of members in a community,” stated FBI Assistant Director-in-Charge Sweeney. “These gang members use threats and actual violence to sow fear, creating their own turf of criminal activity in a place where people just want be safe.  The FBI New York Metro Safe Streets Task Force won’t slow down or ease off our pursuit of these violent gangs.”

As proven at trial, in May 2016, Soto sold a .44 caliber Taurus Special revolver to a confidential informant whom Soto knew to be a convicted felon.  Two months earlier, Soto sold the same informant 28 bags of crack cocaine.  Soto, who has prior felony convictions for assault and robbery, committed the charged crimes while under investigation by the FBI and the NYPD, which conducted a long-term investigation into crime and violence plaguing the residents of the Cypress Hills Houses, a New York City Housing Authority complex in the East New York neighborhood of Brooklyn. 

A court-authorized wiretap of Soto’s phone revealed evidence of other crimes, including Soto discussing the planning and commission of robberies, assaults and murders.

At a hearing held prior to sentencing, the government presented evidence that Soto lured Shakim Rivera to Canarsie where he shot him in the back of the head because he  believed Rivera was responsible for the murder of another member of the Cypress Gangsta Crips, Demetrius Graham, three days earlier.  The government also proved that Soto had discussed his intent to poison an elderly woman with narcotics because she asked his family about a $100 debt he owed.  Soto, in his words, said he was going to “put pain on some 80-year-old chick.”  Members of the FBI and the NYPD were able to prevent the planned attack. 

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Margaret E. Gandy, Andrey Spektor and David N. Gopstein are in charge of the prosecution. 

The Defendant:

 Jason Soto
Age:  29
Brooklyn, New York

E.D.N.Y. Docket No. 16-CR-298 (S-1) (ILG)

Earlier today, a federal grand jury in Brooklyn returned a four-count indictment charging 18th Street gang members and associates Yanki Misael Cruz-Mateo, Israel Mendiola Flores and Sergio Gerardo Herrera-Hidalgo with murder conspiracy and the October 25, 2017 murder of a fellow 18th Street gang member who was suspected of being an informant for law enforcement.  A fourth defendant, Cristian Perez, was indicted for helping Cruz-Mateo to evade capture by law enforcement after the murder.  Cruz-Mateo also faces firearms-related charges.  Cruz-Mateo, Herrera and Perez are in federal custody.  Flores is in custody in Ulster County, New York.  The defendants will be arraigned on the indictment at the federal courthouse in Brooklyn on a date and time to be determined. 

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 Holley Carnright, District Attorney for Ulster County, announced the charges.

“As alleged in the court filings, these defendants committed and concealed a brutal murder against one of their own members because they suspected he had been cooperating with law enforcement,” stated United States Attorney Donoghue.  “Violent street gangs like 18th Street perpetuate bloodshed to maintain allegiance and increase members’ status within the gang. This Office is committed to working with our federal, state, and local law enforcement partners to eradicate these destructive gangs.”  Mr. Donoghue also expressed his appreciation to the United States Attorney’s Office for the Northern District of New York, the New York State Police and the Kingston Police Department for their assistance during the investigation.

“Gang members don’t follow the same rule of law the rest of the community does, showing no hesitation to use violence and murder to further their activities,” stated FBI Assistant Director-in-Charge Sweeney.  “This case proves our dogged work to get them off the streets won’t slow down or stop.  These gang members will now face justice based on the incredible partnership of the FBI, the Ulster County District Attorney’s Office, the New York State Police, the Kingston Police Department and our FBI Albany Division.”

“What these gang individuals did to that young, unarmed man is very, very, disturbing,” stated Ulster County District Attorney Carnright. “My office and the entire law enforcement community of Ulster County have offered and will continue to offer every assistance to Assistant United States Attorneys Dayananda and Lax to assure that these 18th Street gang members are brought to justice.”

As alleged in the indictment and detailed in court filings, 18th Street is a violent street gang comprised primarily of immigrants from Central America and Mexico with members located throughout Queens, New York, and elsewhere, divided into local chapters or “canchas.”  The defendants are members and associates of the 18th Street gang’s chapters in Jamaica, Queens and Kingston, New York. 

On the night of October 24, 2017 into the earlier morning hours of October 25, Cruz-Mateo lured a fellow 18th Street gang member, who was suspected of cooperating with law enforcement, to travel with him by bus from New York City to Kingston.  Once they arrived in Kingston, Cruz-Mateo and the victim met with Herrera-Hidalgo who escorted them to Turkey Point State Forest, a 140-acre wooded park and swamp bordering the western bank of the Hudson River in Ulster County.  Cruz-Mateo, Herrera-Hidalgo and Flores then stabbed the victim repeatedly.  After the murder, Cruz-Mateo returned to Queens and sent a video recording of the attack to another individual.  The video, which was obtained by the FBI, shows Flores slashing the victim across his neck and Cruz-Mateo severing the victim’s ear.  

After the murder, Cruz-Mateo, Flores and Herrera-Hidalgo buried the victim in a makeshift grave in the forest.  In February 2018, after boasting in text messages about shooting a rival MS-13 gang member in Queens, Cruz-Mateo fled to Kingston, where Perez sheltered Cruz-Mateo to conceal his location from authorities.

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted Cruz-Mateo, Herrera-Hidalgo and Flores each face life imprisonment, and Perez faces up to 15 years’ imprisonment.

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

The Defendants:

YANKI MISAEL CRUZ-MATEO (also known as “Yankee Mateo,” “Doggy” and “Wino”)
Age: 19
Jamaica, New York

ISRAEL MEDIOLA FLORES (also known as “Chapito” and “Sinaloa”)
Age: 23
Kingston, New York

SERGIO GERRARDO HERRERA-HIDALOG (also known as “Street Boy”)
Age: 19
Kingston, New York

CRISTIAN PEREZ (also known as “Muletas”)
Age: 20
Kingston, New York

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

A grand jury in Brooklyn has returned a five-count superseding indictment charging Panayiotis Kyriacou, Arvinsingh Canaye, Adrian Baron, and Linda Bullock with conspiracies to defraud the United States by obstructing the functions of the Internal Revenue Service in its administration of 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 (“FATCA Information”) about financial accounts held by U.S. taxpayers either directly or through a foreign entity.  FATCA’s primary aim is to prevent U.S. taxpayers from using foreign accounts to facilitate the commission of federal tax offenses.

Last month, a grand jury in Brooklyn charged Kyriacou, Canaye, Baron, Bullock, and others with conspiracy to commit securities fraud and money laundering conspiracy.

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 James D. Robnett, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the new charges.  

“As alleged in the superseding indictment, Kyriacou, Canaye, Baron, and Bullock  agreed to defraud the United States by opening foreign bank and brokerage accounts without collecting FATCA information to report to the IRS,” stated United States Attorney Donoghue.  “The charges announced today reflect the commitment of this Office and our law enforcement partners to combat tax evasion by identifying fraudulent offshore safe havens that facilitate hiding financial assets from the IRS and to prosecute those individuals who violate U.S. tax laws.” 

Mr. Donoghue thanked the U.S. Securities and Exchange Commission (SEC), both the 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.

“The Justice Department and the Internal Revenue Service are committed to investigating and prosecuting those who promote and facilitate the use of offshore bank accounts to evade U.S. tax,” said Principal Deputy Assistant Attorney General Zuckerman.  “We will continue to pursue those around the globe who seek to violate the Foreign Account Tax Compliance Act and to help U.S. taxpayers conceal such accounts from the Treasury Department and the IRS.”

“Government fraud, in all its many forms, places ethical U.S. taxpayers at a significant disadvantage,” stated FBI Assistant Director-in-Charge Sweeney.  “Those charged allegedly thought they could bypass federal laws in order to benefit and enrich themselves. Today, they are being held accountable.”   

“Devising schemes to evade the reporting requirements of the Foreign Account Tax Compliance Act is a serious violation of the trust between registered foreign financial institutions and the Internal Revenue Service,” stated IRS-CI Special Agent-in-Charge Robnett.  “Criminal Investigation and Large Business & International will continue monitoring compliance with FATCA and will seek prosecution for any registered individuals or entities suspected of willfully aiding U.S. taxpayers with evading reporting requirements.”

The Beaufort Scheme            

As alleged in the superseding indictment, between August 2016 and February 2018, Kyriacou, an investment manager at Beaufort Securities, and Canaye, a general manager at Beaufort Management, together with others, conspired to defraud the United States by failing to comply with FATCA.  Specifically, 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 from which he could execute trades in several multi-million dollar stock manipulation deals.  In furtherance of the stock manipulation scheme, Kyriacou and Beaufort Securities opened six brokerage accounts for the Undercover Agent.  Notwithstanding that a U.S. citizen would be the beneficial owner of each of the accounts, at no time did Kyriacou or Beaufort Securities request FATCA Information from the Undercover Agent. 

In July 2017, Kyriacou introduced the Undercover Agent to Canaye and advised that Canaye could assist with the Undercover Agent’s schemes.  After meeting with the Undercover Agent and discussing the stock manipulation scheme, in January 2018, Canaye and Beaufort Management opened six global business corporations for the Undercover Agent.  The Undercover Agent’s name did not appear on any of the account opening documents.    

The Loyal Scheme                             

In June 2017, the Undercover Agent met with Baron, Loyal Bank’s Chief Business Officer.  During the meeting, the Undercover Agent explained that he was a U.S. citizen and was involved in stock manipulation schemes.  The Undercover Agent further explained that he was interested in opening multiple corporate bank accounts at Loyal Bank.  In July 2017, the Undercover Agent met with Baron and Bullock, Loyal Bank’s Chief Executive Officer.  During the meeting, the Undercover Agent described how his stock manipulation deals operated, including the need to circumvent the IRS’s reporting requirements under FATCA.  In July and August 2017, Loyal Bank opened multiple bank accounts for the Undercover Agent.  At no time did Loyal Bank request or collect FATCA Information from the Undercover Agent. 

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

The case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Jacquelyn M. Kasulis, Michael T. Keilty and David Gopstein are in charge of the prosecution.  The Criminal Division’s Office of International Affairs provided significant assistance in this matter.

The Defendants:

PANAYIOTIS KYRIACOU, also known as “Peter Kyriacou”
Age: 26
Residence: London, England

ARVINSIGH CANAYE, also known as “Vinesh Canaye”
Age: 30
Residence: Mauritius

ADRIAN BARON
Age: 63
Residence: Budapest, Hungary

LINDA BULLOCK
Age: 57
Residence: St. Vincent/Grenadines

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

Earlier today, in federal court in Brooklyn, Christopher Arroyo was sentenced to 10 years’ imprisonment for coercing and enticing a minor to engage in sexually explicit conduct.  The sentencing proceeding was held before United States District Judge Jack B. Weinstein, who also imposed a term of five years’ supervised release to follow Arroyo’s prison sentence, during which time he must register as a sex offender, and he will not be allowed unsupervised contact with minors.

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.

“Arroyo sexually exploited a child through social media, using threats and harassment to publicly shame the victim with the explicit images he enticed her to create,” stated United States Attorney Donoghue.  “Today’s sentence will serve not only to protect the public from the defendant for a significant period of time, but it will also serve as a message to other child predators using the Internet to target victims that they will be found and prosecuted to the full extent of the law.”

“The FBI New York Crimes Against Children Task Force won’t ever stop investigating and arresting every predator we can, but it is incredibly difficult to stop predators before they make initial contact,” stated FBI Assistant Director-in-Charge Sweeney.  “Cell phones, computers and social media give sexual criminals easy access to your children that they’ve never had before and that we did not have to contend when we were younger.  Parents, guardians, educators, and other adults can help law enforcement create a much stronger line of defense against these predators.  Please talk with your children and students about their social media presence, and take the time to both learn and teach our children how to protect themselves online.  You can go to https://sos.fbi.gov for ways to start that conversation.” 

As set forth in the charging instruments and the defendant’s plea allocution, beginning in 2012, Arroyo, who was 21 at the time, used Facebook and other social media platforms to meet and then entice a 12-year-old victim to take sexually explicit images of herself and engage in other sexual conduct as directed by Arroyo.  Arroyo continued to exploit this young victim for years, and when the victim refused to comply with Arroyo’s demands, he threatened and harassed her, stating that he would publicly post images of her across the Internet. 

In 2015, Arroyo followed through on those threats, and created multiple fake social media accounts to which he posted explicit images of the victim.  After tracing Arroyo’s online activity to his residence in Queens, FBI agents executed a search of his home and seized multiple computers and other electronic devices.  A forensic examination of those devices revealed that Arroyo had archived images of the victim in an electronic folder bearing her name. 

This prosecution is part of Project Safe Childhood, a nationwide initiative 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.

Assistant United States Attorneys G. Karthik Srinivasan and Drew G. Rolle are in charge of the prosecution.

The Defendant:

CHRISTOPHER ARROYO
Age: 26
Queens, New York

E.D.N.Y. Docket No. 16-CR-376 (S-1) (JBW)

Earlier today, in federal court in Brooklyn, Ronald Giallanzo, also known as “Ronnie G,” an acting captain in the Bonanno organized crime family of La Cosa Nostra (the “Bonanno family”), and Michael Palmaccio, also known as “Mike,” a soldier in the Bonanno family, pleaded guilty to racketeering conspiracy, admitting their involvement in multiple acts of loansharking over 10 years.  On March 8, 2018, Nicholas Festa, also known as “Pudgie,” a soldier in the Bonanno family, also pleaded guilty to racketeering conspiracy and admitted to additional acts of loansharking.  The proceedings were held before Chief United States District Judge Dora L. Irizarry.

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 Division (FBI), announced the guilty pleas.

“Through their acts of violence, Giallanzo, Palmaccio and Festa reaped substantial illicit profits at the expense of their loansharking victims,” said United States Attorney Donoghue.  “With today’s guilty pleas, these defendants are being held responsible for their destructive role in perpetuating organized crime’s presence in the community.”  Mr. Donoghue thanked the Queens County District Attorney’s Office, the New York City Police Department and the U.S. Probation Department of the Eastern District of New York for their assistance in the investigation.

“Mobsters are known for lending large amounts of money at exorbitant rates to individuals who they know lack the financial means of paying off their loans,” said FBI Assistant Director-in-Charge Sweeney.  “They intentionally extort their victims over extended periods of time using threats of violence as a means of collecting their weekly payments.  It’s one of the oldest tricks in the book for these crime families, and they’ve shown no inclination to stop harassing and intimidating communities in our area.  Today’s guilty pleas demonstrate that the FBI’s New York Joint Organized Crime Task Force continues to investigate these organized crime groups to hold them accountable and to protect the public.”

According to the indictment, court filings and facts presented during the plea proceeding, Giallanzo, Palmaccio and Festa were members of a Bonanno family “crew” that operated primarily in Howard Beach, Queens.  Giallanzo operated a lucrative loansharking business in which he provided money to, among others, Palmaccio and Festa, to extend and collect extortionate loans to numerous individuals.  Even while incarcerated for a prior federal conviction for racketeering and extortion conspiracy, Giallanzo kept watch over his illicit loansharking business, directing his associates to commit acts of violence to ensure that the customers paid the exorbitant weekly interest rate.  At one point, Giallanzo had lent over $3 million in extortionate loans to customers.  Giallanzo, Palmaccio and Festa were arrested by the FBI in March 2017.

At his guilty plea, Giallanzo admitted to participating in the affairs of the Bonanno family by extending and collecting extortionate loans to five different victims, and agreed to forfeit $1.25 million.  As part of his agreement with the government, Giallanzo is also required to sell the Howard Beach mansion he constructed with loansharking proceeds while he was on supervised release stemming from his prior federal conviction.  Palmaccio and Festa admitted to participating in the affairs of the Bonanno family by extending and collecting extortionate loans to five victims and two victims, respectively, and each agreed to forfeit $500,000.

When sentenced, Giallanzo, Palmaccio and Festa each face a statutory maximum of 20 years’ imprisonment.  Seven co-defendants have previously pleaded guilty in this case.

The government’s case is being handled by the Office’s Organized Crime & Gangs Section.  Assistant United States Attorneys Nicole M. Argentieri, Lindsay K. Gerdes and Keith D. Edelman are in charge of the prosecution. 

The Defendants:

RONALD GIALLANZO (also known as “Ronnie G”)
Age: 47
Queens, New York

MICHAEL PALMACCIO (also known as “Mike”)
Age: 46
Queens, New York

NICHOLAS FESTA (also known as “Pudgie”)
Age: 37
Oceanside, New York

E.D.N.Y. Docket No. 17-CR-155 (S-1) (DLI)

Earlier today, at the federal courthouse in Brooklyn, George Gonzalez, a former officer with the United States Bureau of Prisons, pleaded guilty to solicitation to commit a crime of violence, and possession of a firearm while subject to a protective order.  The proceeding was held before United States District Judge Roslynn R. Mauskopf.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Ashan M. Benedict, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), New York Field Division, announced the guilty plea.

“With today’s guilty plea, George Gonzalez will go from supervising inmates to being one himself,” stated United States Attorney Donoghue.  “While he attempted to hire gang members to brutally assault his wife and another individual, the defendant’s plan was thwarted thanks to the swift reaction of our law enforcement partners, including the outstanding work of ATF undercover agents.”  Mr. Donoghue expressed his grateful appreciation to the Federal Bureau of Prisons and the United States Department of Justice, Office of the Inspector General, New York Field Office, for their assistance in the investigation.

“ATF remains committed to protecting the public from individuals that seek to spread violence in their community. George Gonzalez hatched a dastardly plan that could have resulted in serious harm and or death to his estranged wife and her new partner but for the valiant efforts of law enforcement spearheaded by ATF Agents and NYPD Detectives,” stated ATF Special Agent-in-Charge Benedict. “I would like to thank the Special Agents and Task Force Officers of the NYPD/ ATF Joint Robbery Task Force, the Federal Bureau of Prisons and the Office of the Inspector General for their coordination and diligent efforts on this case. I would also like to extend my gratitude to the United States Attorney’s Office for their work in prosecuting the case.” 

According to court filings and facts presented during the plea proceeding, on or about and between December 2016 and January 2017, Gonzalez engaged in multiple recorded meetings and conversations with individuals he believed to be gang members, but who were actually undercover ATF agents.  During these meetings, the defendant offered to pay to have his estranged wife and her new domestic partner assaulted and tortured.  Specifically, Gonzalez instructed the undercover agents that they should make it “look like a robbery” and that they could keep whatever valuable items were in the home as partial payment.  The defendant suggested that the undercover agents “take a hammer to the spine” so that the victims would be paralyzed and “suffer…for the rest of their lives.”  The defendant opined that he would “do it himself,” but that he had previously travelled to Florida to confront the intended targets, and the police were called.  The investigation revealed that the defendant, who was assigned at the time to the Metropolitan Detention Center in Brooklyn, was subject to an Order of Protection issued in Family Court, prohibiting him from having any contact with his spouse and requiring him to surrender any firearms in his possession.

As part of the scheme, Gonzalez provided the undercover agents with photographs and pedigree information of the intended victims and offered to pay to have the undercover agents procure firearms and travel from New York to Florida.  During the execution of a search warrant at the defendant's home in Staten Island, two loaded, unlicensed firearms were recovered.

When sentenced, the defendant faces a statutory maximum sentence of 12 ½ years’ imprisonment. 

The government’s case is being prosecuted by Assistant U.S. Attorney Artie McConnell.

The Defendant:

George Gonzalez
Age: 55
Staten Island, New York

E.D.N.Y. Docket No. 17-CR-51 (RRM)

A complaint was filed earlier today, in federal court in Central Islip, New York, charging Juan Jimenez, also known as “Jason,” with possession with intent to distribute over two kilograms of heroin in Brentwood.  Jiminez was arrested Wednesday night and ordered detained after his initial appearance this afternoon before United States Magistrate Judge Gary R. Brown.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, Errol D. Toulon, Jr., Suffolk County Sheriff, and Michael McGowan, Chief, Hempstead Village Police Department, announced the charges.

“As alleged in the complaint, Jiminez was involved in the wholesale trafficking of heroin, contributing to the opioid plague that has caused great suffering on Long Island,” stated United States Attorney Donoghue. “This arrest demonstrates this Office’s commitment to marshalling all available resources necessary to find and prosecute those who peddle these highly addictive narcotics in our communities.”

“DEA worldwide is working together to target opioid traffickers at all levels,” stated DEA Special Agent-in-Charge Hunt.  “This investigation demonstrates our commitment to arrest dealers who push heroin onto our local streets and into the hands of users.”

“This case highlights the importance of our investigators partnering with federal authorities to disrupt the international flow of heroin into the local illicit drug market,” stated Suffolk County Sheriff Toulon.

“Hempstead Police Department is proud to be part of a highly motivated and professional task force that has made a substantial impact on the war on drugs in our community,” stated Hempstead Village Police Department Chief McGowan.

According to court papers, DEA agents uncovered a wholesale heroin distribution ring involving Jimenez, involving plans to ship multiple kilograms of heroin from Colombia for distribution on Long Island.   As part of those negotiations, Jimenez delivered 2.3 kilograms of Mexican “black tar” heroin.

The arrest was the result of a continuing long-term investigation by the U.S. Drug Enforcement Administration’s Long Island District Office, with the assistance of members of the Suffolk County Sheriffs’ Office and Hempstead Village Police.

The charge in the complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted of the crime charged, the defendant faces a mandatory minimum sentence of 10 years’ imprisonment, and up to life imprisonment.

The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Burton T. Ryan, Jr., is in charge of the prosecution.

The Defendant:

JUAN JIMENEZ (also known as “Jason”)
Age: 37
North Babylon, New York

E.D.N.Y. Docket No. 18-MJ-225

Earlier today, in federal court in Brooklyn, Muhanad Mahmoud al Farekh, an American citizen born in Houston, Texas, was sentenced to 45 years’ imprisonment by United States District Judge Brian M. Cogan following his September 29, 2017 trial conviction of multiple offenses covering seven years of terrorist conduct, including conspiracy to murder American military personnel in Afghanistan, conspiracy to use a weapon of mass destruction, conspiracy to bomb a government facility, and providing material support to al-Qaeda. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York; John C. Demers, Assistant Attorney General for the National Security Division; 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 sentence.

“Farekh, a citizen of this country, turned his back on America by joining al-Qaeda and trying to kill American soldiers in a bomb attack on a U.S. military base in Afghanistan.” stated United States Attorney Donoghue.  “This case demonstrates that we will do everything in our power to ensure that those who seek to harm our country and our armed forces will be brought to justice.”  Mr. Donoghue extended his grateful appreciation to the FBI’s Joint Terrorism Task Force (JTTF), which comprises a large number of federal, state, and local agencies from the region. 

“With the sentence handed down today, al Qaeda terrorist Muhanad Mahmoud Al Farekh is being held accountable for his crimes.  Farekh – an American citizen – traveled overseas, joined al Qaeda, and conspired to kill Americans, including through an attack using explosive devices on a U.S. military installation in Afghanistan in 2009,” said Assistant Attorney General Demers.  “Across the globe, the National Security Division will continue to relentlessly pursue and bring to justice those who seek to harm Americans, including our brave servicemen and women who risk their lives in defense of our nation.  I applaud the efforts of the many agents, analysts, and prosecutors who are responsible for this successful result.”

 “Today’s sentencing shows that justice prevails even when terrorist acts are committed in distant foreign locales yet impact American citizens and interests,” stated FBI Assistant Director-in-Charge Sweeney.  “The FBI New York Joint Terrorism Task Force remains dedicated to investigating and bringing terrorists to justice wherever they are.  I would like to thank all of our partner agencies for their continued cooperation and dedication.”

As proven at trial, in March 2007, Farekh and two co-conspirators, all of whom were students at the University of Manitoba, departed Canada for Pakistan with the intention of fighting against American forces overseas.  Before traveling overseas, Farekh and his co-conspirators watched video recordings encouraging violent jihad, listened to jihadist lectures by now-deceased al-Qaeda in the Arabian Peninsula leader Anwar al-Awlaqi, and came to embrace a violent, extremist view of Islam. 

Farekh and his co-conspirators traveled to the Federally Administered Tribal Areas of Pakistan, an area in the northern part of Pakistan that borders Afghanistan and is home to al-Qaeda’s base of operations, where they joined and received training from al-Qaeda.  Taking advantage of his familiarity with the West, Farekh became a member of, and ultimately ascended to, a leadership role within al-Qaeda’s external operations group, which specialized in planning and executing attacks against the United States and its Western allies. 

In January 2009, Farekh helped to build a vehicle-borne, improvised explosive device (VBIED) that was used in an attack on Forward Operating Base Chapman (FOB Chapman), a U.S. military installation that served as the base for the U.S. Provincial Reconstruction Team in Khost, Afghanistan.  On January 19, 2009, two explosives-laden vehicles approached the fence line of FOB Chapman.  At the gate, the first vehicle, a pickup-sized truck, exploded after its operator detonated the VBIED.  The second vehicle, a truck that was carrying approximately 7,500 pounds of explosives, became stuck in the blast crater caused by the first explosion.  The driver abandoned his vehicle without detonating the VBIED, and was shot and killed by local security personnel.  The initial detonation of the first vehicle injured one U.S. serviceman and numerous Afghan nationals.  Forensic technicians recovered 18 latent fingerprints that were determined to be a match to Farekh from adhesive packing tape used to bind together the explosive materials of the second, undetonated VBIED. 

The government’s case is being handled by the Office’s National Security & Cybercrime Section.  Assistant United States Attorneys Richard M. Tucker, Douglas M. Pravda and Saritha Komatireddy, along with Trial Attorney Alicia Cook of the National Security Division’s Counterterrorism Section, are in charge of the prosecution.

The Defendant: MUHANAD MAHMOUD AL FAREKH
Age: 32
Nationality: United States

E.D.N.Y. Docket No. 15-CR-268 (S-2)

Muhanad Mahmoud al Farekh, 32, of Houston, was sentenced today to 45 years following his Sept. 29, 2017 trial conviction of multiple offenses covering seven years of terrorist conduct, including conspiracy to murder American military personnel in Afghanistan, conspiracy to use a weapon of mass destruction, conspiracy to bomb a government facility and providing material support to al-Qaeda.

Assistant Attorney General for the National Security John C. Demers, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Assistant Director in Charge William F. Sweeney, Jr. of the FBI’s New York Field Office and Commissioner James P. O’Neill of the NYPD announced the sentence issued by U.S. District Judge Brian M. Cogan.

“With the sentence handed down today, al Qaeda terrorist Muhanad Mahmoud Al Farekh is being held accountable for his crimes.  Farekh – an American citizen – traveled overseas, joined al Qaeda, and conspired to kill Americans, including through an attack using explosive devices on a U.S. military installation in Afghanistan in 2009,” said Assistant Attorney General Demers.  “Across the globe, the National Security Division will continue to relentlessly pursue and bring to justice those who seek to harm Americans, including our brave servicemen and women who risk their lives in defense of our nation.  I applaud the efforts of the many agents, analysts, and prosecutors who are responsible for this successful result.”

“Farekh, a citizen of this country, turned his back on America by joining al-Qaeda and trying to kill American soldiers in a bomb attack on a U.S. military base in Afghanistan.” stated United States Attorney Donoghue.  “This case demonstrates that we will do everything in our power to ensure that those who seek to harm our country and our armed forces will be brought to justice.”  Mr. Donoghue extended his grateful appreciation to the FBI’s Joint Terrorism Task Force (JTTF), which comprises a large number of federal, state, and local agencies from the region. 

“Today’s sentencing shows that justice prevails even when terrorist acts are committed in distant foreign locales yet impact American citizens and interests,” stated FBI Assistant Director-in-Charge Sweeney.  “The FBI New York Joint Terrorism Task Force remains dedicated to investigating and bringing terrorists to justice wherever they are.  I would like to thank all of our partner agencies for their continued cooperation and dedication.”

As proven at trial, in March 2007, Farekh and two co-conspirators, all of whom were students at the University of Manitoba, departed Canada for Pakistan with the intention of fighting against American forces overseas.  Before traveling overseas, Farekh and his co-conspirators watched video recordings encouraging violent jihad, listened to jihadist lectures by now-deceased al-Qaeda in the Arabian Peninsula leader Anwar al-Awlaqi, and came to embrace a violent, extremist view of Islam.

Farekh and his co-conspirators traveled to the Federally Administered Tribal Areas of Pakistan, an area in the northern part of Pakistan that borders Afghanistan and is home to al-Qaeda’s base of operations, where they joined and received training from al-Qaeda.  Taking advantage of his familiarity with the West, Farekh became a member of, and ultimately ascended to, a leadership role within al-Qaeda’s external operations group, which specialized in planning and executing attacks against the U.S. and its Western allies.

In January 2009, Farekh helped to build a vehicle-borne, improvised explosive device (VBIED) that was used in an attack on Forward Operating Base Chapman (FOB Chapman), a U.S. military installation that served as the base for the U.S. Provincial Reconstruction Team in Khost, Afghanistan.  On January 19, 2009, two explosives-laden vehicles approached the fence line of FOB Chapman.  At the gate, the first vehicle, a pickup-sized truck, exploded after its operator detonated the VBIED.  The second vehicle, a truck that was carrying approximately 7,500 pounds of explosives, became stuck in the blast crater caused by the first explosion.  The driver abandoned his vehicle without detonating the VBIED, and was shot and killed by local security personnel.  The initial detonation of the first vehicle injured one U.S. serviceman and numerous Afghan nationals.  Forensic technicians recovered 18 latent fingerprints that were determined to be a match to Farekh from adhesive packing tape used to bind together the explosive materials of the second, undetonated VBIED.

Assistant U.S. Attorneys Richard M. Tucker, Douglas M. Pravda and Saritha Komatireddy of the Eastern District of New York, along with Trial Attorney Alicia Cook of the National Security Division’s Counterterrorism Section, are in charge of the prosecution.