Eastern District of New York

Earlier today, in federal court in Brooklyn, Robert Burgos and Vanessa Burgos pleaded guilty to an illegal importation of wildlife conspiracy stemming from a scheme to illegally import a dozen Fischer Lovebirds from Indonesia and elsewhere into the United States without a required permit, in violation of the Endangered Species Act.  Today’s proceeding took place before United States Magistrate Judge Ramon E. Reyes, Jr.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Edward Grace, Acting Chief of Law Enforcement, United States Fish and Wildlife Service (FWS), announced the guilty pleas.

Fischer Lovebirds, also known as Agapornis fischeri, are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), an international treaty that protects wildlife that may become endangered due to the demands of international markets.  As a result, Fischer Lovebirds may be imported into the United States from a foreign country only if the importer possesses a valid CITES export or re-export permit from the foreign country of origin.

As detailed in court filings, in late June 2015, a shipment of Fischer Lovebirds, arrived at John F. Kennedy International Airport in Queens, New York, from Madrid, Spain, falsely labelled as Rosy-Faced Lovebirds (or Agapornis roseicollis), which are not CITES-protected.  The shipment was imported by Aviary La Familia, Inc., a Florida-based company operated by the defendants, who are married.  During the time that the shipment was held at the United States Department of Agriculture (USDA) quarantine center in New York, the USDA sent photographs of the lovebirds to a forensic ornithologist at the FWS National Forensics Laboratory, who confirmed that the lovebirds were not Rosy-Faced Lovebirds, but were, in fact, Fischer Lovebirds.

When sentenced, the defendants each face a maximum sentence of five years’ imprisonment.

The government’s case is being prosecuted by Assistant United States Attorney Alicia N. Washington.

The Defendants:

ROBERT BURGOS
Age: 43
Residence: Avon Park, Florida

VANESSA BURGOS
Age: 33
Residence: Avon Park, Florida

E.D.N.Y. Docket No. 17-CR-329 (FB)

Earlier today, at the federal courthouse in Central Islip, Rudy Montour, a Crips street gang member, was sentenced by United States District Judge Joanna Seybert to 15 years of imprisonment following his April 2017 plea of guilty.  The charge arose out of the defendant’s participation in the Rollin’ 60s set of the Crips, a street gang based in Roosevelt, New York, that was responsible for gun violence and drug trafficking for over a decade.  The sentence was imposed to run consecutive to a 13-year New York State prison term of incarceration that Montour is currently serving, thereby requiring him to serve a total of 28 years. 

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

“Rudy Montour chose to kill for the Crips, and now he can serve time for the gang,” stated United States Attorney Donoghue.  “This conduct will not be tolerated and today’s sentence should send a message that this Office, together with our law enforcement partners, will pursue and prosecute members of violent street gangs who seek to inflict violence and fear on our communities.”  Mr. Donoghue extended his grateful appreciation to the law enforcement agencies involved in the investigation, in particular the FBI’s Long Island Gang Task Force and the Gang Investigations Squad of the NCPD.

 

“The investigation into the Rollin’ 60 Crips had a significant impact on the community in Nassau County, stopping years of violence and crime,” stated FBI Assistant Director-in-Charge Sweeney.  “The FBI Long Island Gang Task Force worked side-by-side with our law enforcement partners to bring down this criminal enterprise, and the pressure we are putting on these gangs won’t go away.”

“Defendant Montour is a known gang member and will face severe consequences for his role in the death of Jason Crafton,” stated NCPD Acting Commissioner Ryder.  “The Crips and other violent gangs are committing heinous crimes, thus destroying the fabric of our communities and is not acceptable.  The Nassau County Police Department has zero tolerance for these gangs and will continue to work cohesively with our law enforcement partners to eliminate them from our communities in order to keep our families and children safe.  A job well done by all of our investigative partners.”

According to court filings and statements made during the guilty plea, Montour, also known as “Sus-1,” pleaded guilty to the June 13, 2010 murder of 27-year-old Jason Crafton.  Montour shot and killed Crafton outside of a house party in Uniondale, New York for disrespecting a fellow Crips gang member.  In addition to the murder of Jason Crafton, Montour was responsible for several robberies committed on behalf of the Crips, including the robbery of an aspiring rapper in Roosevelt, as well as trafficking several firearms from Alabama to New York for the gang to use in its war against the rival Bloods street gang.  Montour, who competed with fellow Crips member, Eric Smith, for the title of “top shooter” within the gang, is currently serving a 13-year state prison sentence for attempted murder for his involvement in a 2011 shooting directed at the home of a rival gang member in Freeport, New York.  

 The government’s investigation has led to the arrest and conviction of more than 20 members and associates of the Rollin’ 60s Crips, including its founder Raphael Osborne, who was sentenced in January 2017 to three life sentences plus 145 years.  Eric Smith, the gang’s most violent member, was convicted of racketeering and murder in aid of racketeering, among other charges and faces a mandatory life sentence.  To date, 11 defendants have been sentenced since the inception of the case:

• on June 21, 2016, Jahmani Hamilton was sentenced to a term of imprisonment of ten years;
• on August 4, 2016, Kurtis Philip was sentenced to a term of imprisonment of ten years;
• on August 5, 2016, Courtney Smith was sentenced to a term of imprisonment of ten years;
• on September 23, 2016, Merlyn Benitez was sentenced to a term of imprisonment of ten years;
• on October 13, 2016, Derick Hernandez was sentenced to a term of imprisonment of 20 years that will run consecutively to a four-year state sentence that he is presently serving;
• on October 19, 2016, Kwame Lake was sentenced to a term of imprisonment of five years that will run consecutively to an eight-year state sentence that he is presently serving; 
• on November 4, 2016, Tyshawn Gitto was sentenced to 13 years’ imprisonment;
   
• on January 13, 2017, Branden Short was sentenced to 30 months’ imprisonment;
• on January 13, 2017, Raphael Osborne was sentenced to three life terms, plus 145 years’ imprisonment;

• on April 21, 2017, Rommel Lobban was sentenced to 15 years’ imprisonment;
   
• on April 25, 2017, Daquanne Nunn was sentenced to  13 years’ imprisonment; and
   
• the remaining defendants are pending sentence. 
   

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

The Defendant:

RUDY MONTOUR (also known as “Sus-1”)
Age: 30
Roosevelt, Long Island

E.D.N.Y. Docket No. 14-CR-264 (JS)

Earlier today in federal court in Brooklyn, Michael Andres Miller was sentenced to 15 years’ imprisonment by United States District Judge Kiyo A. Matsumoto for trafficking minors for sex in Queens, New York, New Jersey, and Pennsylvania.  Miller previously pled guilty to this crime on May 9, 2017.  Miller was also ordered to pay restitution in the amount of $9,500 to the minor victims identified in the indictment as Jane Doe #1, Jane Doe #2 and Jane Doe #3.  

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.

“The defendant Michael Andres Miller targeted and recruited young girls to engage in prostitution with adult men for his personal profit and without regard for the harm he was causing these vulnerable victims,” stated United States Attorney Donoghue.  “Today’s sentence holds the defendant accountable for his predatory conduct.  This Office, together with our law enforcement partners, will continue to investigate and prosecute those who seek to profit from the sexual exploitation of children.”  

“Children are supposed to be protected by adults, not used as a means to make money,” stated FBI Assistant Director-in-Charge Sweeney.  “The mere idea that this man sold girls, one as young as 14, and even used them for his own sexual gratification boggles the mind.  The FBI New York Child Exploitation Task Force, which includes the NYPD and other state and local law enforcement agencies, will continue to do all it can to stop these sex traffickers from taking advantage of young girls.”

 According to court filings, the defendant oversaw a sex trafficking ring that preyed upon girls as young as 14 years old.  He recruited girls online, using popular social media applications including “Meet Me” and “Kik,” posted advertisements for them and prostituted them through the web site Backpage.com, and had sex with at least two of these young girls.  In August 2016, police officers arrested the defendant and a co-defendant in a hotel room in Pennsylvania, where they also recovered the middle school identification card of one of the defendant’s victims, who the defendant was prostituting at nearby hotels.

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

The Defendant:

MICHAEL ANDRES MILLER (also known as “Jason m,” “mikegmiller” and “Jay”)
Age:  26
Brooklyn, New York

E.D.N.Y. Docket No. 16-CR-536

An 11-count indictment was unsealed today in federal court in Brooklyn, New York, charging Pamela Harris, a New York State Assemblywoman representing Bay Ridge, Coney Island, Dyker Heights and other nearby communities, with two counts of wire fraud, one count of conspiracy to commit wire fraud, four counts of making false statements, two counts of bankruptcy fraud, one count of witness tampering and one count of conspiracy to obstruct justice.  Harris’s arraignment on the indictment is scheduled for this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr.

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

“As alleged in the indictment, the defendant defrauded government agencies out of tens of thousands of dollars in public funds and tried to fraudulently obtain even more,” stated United States Attorney Donoghue.  “She conducted her schemes victimizing the federal and New York City governments, and then obstructed a federal investigation into her crimes while a sitting New York State Assemblywoman.  When she learned that law enforcement was investigating her various fraud schemes, she pressured witnesses to lie to the FBI and cover them up.  This Office and our law enforcement partners are committed to ensuring that those who serve the public are held accountable under the law to the same extent as the people they are privileged to serve.” 

“Both before and during her tenure as a public servant, as alleged, Assemblywoman Pamela Harris went to great lengths to defraud local and federal agencies out of thousands of dollars,” stated FBI Assistant Director-in-Charge Sweeney.   “In fact, at a time when many residents in her district were dealing with the horrific aftermath of Hurricane Sandy, Harris was busy brewing a storm of her own, one that resulted in her receiving significant payouts by the very federal agency charged with helping those truly in need. As if these allegations weren’t enough, Harris allegedly obstructed a federal investigation into the matters at hand, asking others to lie on her behalf, as alleged. These types of crimes threaten the financial stability of our local and federal governments, but when a public official is involved, even more is at risk. Today we are proud to put an end to this inexcusable scheme.”

“The brazen corruption charged as a result of this investigation tramples on the very definition of a public servant,” stated DOI Commissioner Peters.  “This elected official exploited the public she was elected to serve by stealing from City and federal programs and then concealing the fraud with false statements and asking witnesses to obstruct the investigation, according to the indictment.  DOI thanks the United States Attorney’s Office for the Eastern District of New York and the FBI for their partnership in working together to expose the array of wrongdoing charged in this indictment.”

As alleged in the indictment, between 2012 and 2016, the defendant defrauded various government agencies, including the New York City Council (“NYC Council”), New York City Department of Youth and Community Development (“DYCD”), Federal Emergency Management Agency (“FEMA”), United States Department of Housing and Urban Development (“HUD”), the New York City Build it Back Program (“NYC Build it Back Program”) and United States Bankruptcy Court for the Eastern District of New York (“U.S. Bankruptcy Court”). 

NYC Council / DYCD Fraud Scheme.

 Between August 2014 and July 2015, the defendant, who was at the time the Executive Director of a not-for-profit organization located in Brooklyn, defrauded the NYC Council of nearly $23,000 in discretionary funding by falsely claiming that the not-for-profit would use the funds to rent a studio space.  As part of her scheme, the defendant submitted to DYCD—the government entity responsible for administering and disbursing the NYC Council’s discretionary funds—a forged lease agreement.  Once the not-for-profit received the funding, the defendant diverted the funds to her personal checking account and used the money to pay for personal expenses.

The following year, between approximately July 2015 and January 2017, the defendant committed a nearly identical scheme—this time as a sitting Assemblywoman.  The defendant again defrauded the NYC Council by claiming that funds would be spent on rental space.  In fact, when the not-for-profit received the discretionary funding, the defendant diverted the funds—this time, $11,400—for her personal use. 

FEMA Fraud Scheme.

 Between 2012 and 2014, the defendant defrauded FEMA out of nearly $25,000 by falsely claiming to FEMA she had been forced out of her residence by Hurricane Sandy.  The defendant represented to FEMA that her Coney Island residence was so damaged by Hurricane Sandy that she had to move to a temporary residence in Staten Island after the storm.  In furtherance of the scheme, the defendant submitted to FEMA fake lease agreements that she had purportedly entered into with the landlord of the Staten Island residence, as well as bogus rent payment receipts.  In reality, the defendant continued to live at her Coney Island residence and pocketed the FEMA payments for herself.

HUD/Build it Back Fraud Scheme.

In 2016, while she was a sitting New York State Assemblywoman, the defendant repeated the same misrepresentations and submitted the same fake documents to the NYC Build it Back Program in order to obtain additional financial assistance.  She also made other false claims in order to persuade Build it Back to pay for substantial construction to her home.

Bankruptcy Fraud Scheme.

 In November 2013, the defendant filed for Chapter 13 bankruptcy protection in the United States Bankruptcy Court in Brooklyn.  The defendant, who at the time of her filing was receiving $1,550 each month from FEMA based on the misrepresentations described above, told the Bankruptcy Trustee that she was receiving $1,200 a month in financial assistance from the same landlord that she told FEMA she was paying $1,550 a month in rent.  Neither statement was true.   

Obstruction of Justice and Witness Tampering. 

Finally, between March 2017 and May 2017, after the defendant became aware of the grand jury’s investigation into her various fraud schemes, she instructed witnesses to lie to FBI agents conducting the grand jury investigation, which the witnesses did. 

The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, the defendant faces a maximum sentence of 30 years’ imprisonment on one of the charges relating to making false statements to FEMA; a maximum sentence of 20 years’ imprisonment on each of the wire fraud conspiracy, wire fraud, witness tampering, or obstruction of justice conspiracy charges; and a maximum sentence of five years of imprisonment on each of the bankruptcy fraud or other false statements charges.    

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

The Defendant:

PAMELA HARRIS
Age: 57 
Brooklyn New York

E.D.N.Y. Docket No. 18-CR-11 (JBW)

Earlier today at the federal courthouse in Brooklyn New York, Salvador Jimenez Uribe, also known as “Salvador Uribe Jimenez,” an international narcotics distributor and money launderer, was sentenced by United States District Judge Raymond J. Dearie to 20 years’ imprisonment for narcotics and money laundering charges, including international cocaine importation conspiracy, international narcotics distribution conspiracy, narcotics distribution conspiracy, and money laundering conspiracy. 

The sentence was announced by 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. 

“The defendant trafficked kilograms of cocaine and heroin from South America and Mexico for distribution in the United States, flooding our streets with dangerous drugs, and laundered millions of dollars in narcotics proceeds,” stated United States Attorney Donoghue.  “This sentence demonstrates that those who seek to profit from importing and distributing narcotics in our country will be held accountable.” 

According to court filings and facts presented during court proceedings, the defendant smuggled cocaine, marijuana and heroin across the U.S.-Mexican border, concealing the narcotics in tractor-trailer trucks operated by associates of Mexican drug cartels and delivering the narcotics to co-conspirators in the New York-area. The defendant also laundered millions of dollars in narcotics proceeds using a Queens-based jewelry store, which sent the money to Mexico.  The defendant also facilitated the transport of large quantities of cocaine from Ecuador to the United States, concealing the cocaine in the flaps of cardboard boxes containing bananas, shipped by an Ecuadorian company.

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 Craig R. Heeren are in charge of the prosecution.

The Defendant:

SALVADOR JIMENEZ URIBE      
Age: 52
Residence: Guadalajara, Mexico

EDNY Docket No. 12-CR-603 (RJD)

Attorney General Jeff Sessions has selected the Eastern District of New York to receive additional resources for the fight against violent crime.  The district will receive two additional Assistant U.S. Attorney positions to focus exclusively on violent crime, two of 40 new federal prosecutors in 27 selected locations throughout the United States.

 

“Led by our 94 United States Attorney’s Offices, Project Safe Neighborhoods (PSN) task forces are hitting the streets across America to apprehend and bring violent criminals to justice,” stated United States Attorney General Sessions.  “I have asked Congress for additional PSN funding because I believe nothing will be more effective at reducing violent crime.  “Under this program, I am asking a great deal of our United States Attorneys.  I am both empowering them and holding them accountable for results.  To put them in the best position to impact and reduce violent crime, it is my privilege to announce that through a re-allocation of resources, we will be enlisting and deploying 40 additional violent crime prosecutors across the United States.”

 

“The provision of additional Assistant U.S. Attorney positions reflects the commitment of the Department of Justice to reduce violent crime by identifying and prosecuting gang members whose destructive conduct endangers residents of our District,” stated United States Attorney Donoghue. “Using every law enforcement resource available, this Office and the FBI’s Long Island Gang Task Force will continue to work tirelessly to make our communities safer by bringing to justice those violent criminals who show no regard for human life.”

 

The two additional federal prosecutors will enhance the Office’s ability to prosecute violent crimes committed by members and associates of La Mara Salvatrucha, also known as the MS-13, a transnational criminal organization, with the objective of continuing and increasing the Office’s efforts to dismantle and incapacitate the MS-13 within the Eastern District of New York and beyond.  The prosecutors will also focus on other violent gangs such as the Crips, Bloods, Latin Kings, 18th Street gang, Salvadorans with Pride, and Outlaw motorcycle gangs, all of which have a significant presence in the District. 

 

More information on the locations of those 40 Assistant United States Attorneys and violent crime task forces is below:

 

AUSA Breakdown by District

Northern District of Alabama: 1
Eastern District of Arkansas: 1
Northern District of California: 2
Southern District of California: 1
District of Connecticut: 1
District of Columbia: 1
Central District of Illinois: 1
Northern District of Illinois: 3
Southern District of Indiana: 1
Eastern District of Louisiana: 1
District of Maryland: 3
Western District of Michigan: 1
Eastern District of Missouri: 2
Western District of Missouri: 1
District of Nevada: 2
District of New Mexico: 1
Eastern District of New York: 2
Western District of New York: 1
Northern District of Ohio: 2
Eastern District of Pennsylvania: 1
Middle District of Tennessee: 2
Western District of Tennessee: 2
Eastern District of Texas: 1
Northern District of Texas: 1
Southern District of Texas: 2
Western District of Texas: 1
Eastern District of Wisconsin: 2

A former executive managing director of Och-Ziff Capital Management Group LLC (Och-Ziff), a New York-based hedge fund, was charged in an indictment unsealed today for his alleged participation in a scheme to defraud one of the hedge fund’s clients, a large charitable foundation, when recommending financial investments relating to the African mining sector. 

 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office and Special Agent in Charge James D. Robnett of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) New York office made the announcement.

 

Michael Leslie Cohen, 46, of London, England was charged with one count of conspiracy to commit investment adviser fraud, one count of investment adviser fraud, one count of conspiracy to commit wire fraud, four counts of wire fraud, one count of conspiracy to obstruct justice, one count of obstruction of justice and one count of making false statements.  The indictment was returned under seal by a federal grand jury sitting in Brooklyn, New York on Oct. 5, 2017, and relates to Cohen’s alleged conduct between 2008 and 2013.

 

The indictment alleges that, beginning in or about 2008, Cohen and his co-conspirators carried out a scheme to defraud an Och-Ziff client, a large charitable foundation.  According to the indictment, Cohen violated his fiduciary duties to the charitable foundation by making material misrepresentations and concealing conflicts of interest in connection with a proposed investment in an African mining company.  The indictment alleges, among other things, that Cohen failed to disclose to the charitable foundation that one of the sellers of the African mining company shares owed Cohen millions of dollars on a delinquent $18 million personal loan that Cohen had made to the seller to finance the purchase of a luxury yacht.  The seller allegedly paid approximately $4 million of the African mining company share proceeds to Cohen in repayment of the personal yacht loan.  Cohen did not disclose to the charitable foundation that he had a personal interest in the African mining company and that a portion of shares he controlled would be sold as part of the transaction, the indictment alleges.

 

In addition, the indictment alleges that in order to conceal his fraudulent scheme and self-dealing, Cohen conspired with others to cover up facts about the transaction after the U.S. Securities and Exchange Commission (SEC) began investigating Och-Ziff in 2011.  Cohen and others allegedly engaged in a number of acts to obstruct investigations, including concocting a false, backdated letter and making false statements to federal agents and the SEC. 

 

The charges in the indictment are merely allegations, and the defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.

 

The FBI’s New York Field Office and IRS-CI’s New York office are investigating the case.  Trial Attorney Gerald M. Moody Jr. of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys David C. Pitluck, James P. McDonald, a former Fraud Section trial attorney, and Jonathan P. Lax of the Eastern District of New York are prosecuting the case.  The Criminal Division’s Office of International Affairs provided significant assistance in this matter.  The Department appreciates the significant cooperation and assistance provided by the SEC’s Boston Regional Office in this matter.

A 10-count indictment was unsealed today, in federal court in Brooklyn, charging Michael Leslie Cohen, a former executive managing director of New York-based hedge fund Och-Ziff Capital Management Group LLC (“Och-Ziff”), for his alleged participation in a scheme to defraud one of the hedge fund’s clients, a large charitable foundation, when recommending financial investments relating to the African mining sector.  Cohen is charged with one count of conspiracy to commit investment adviser fraud, one count of investment adviser fraud, one count of conspiracy to commit wire fraud, and four counts of wire fraud.  Cohen is also charged with conspiring to obstruct federal grand jury and U.S. Securities and Exchange Commission (SEC) investigations and making false statements to federal agents.  The indictment was returned under seal by a federal grand jury sitting in Brooklyn, New York on October 5, 2017, and relates to Cohen’s alleged conduct between 2008 and 2013.   
 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal 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 charges.  
 

“As alleged, Michael Cohen violated his fiduciary duties as an investment advisor, deceiving a charitable foundation, in order to enrich himself and his associates,” stated Acting United States Attorney Rohde.  “The deceit continued when he learned that the U.S. government was investigating his activities, was confronted with evidence of the alleged crimes and responded with a cover-up.  The charges announced today reflect this Office’s commitment, together with our law enforcement partners, to hold accountable those in the finance industry who defraud investors.”  Ms. Rohde thanked the SEC, Boston Regional Office, for its significant cooperation and assistance during the investigation. 
 

“As alleged, Cohen turned his back on his fiduciary duties, profiting from the investments of his clients, essentially double dipping at their expense. His further actions of obstructing justice and lying to federal agents speak to his blatant disregard for integrity and the rule of law,” stated FBI Assistant Director-in-Charge Sweeney. “Today's indictment maintains our resolve to hold accountable those who engage in this type of corrupt and illegal activity.”
 

 “Today’s indictment of Mr. Cohen, a former Managing Director of one of the largest hedge funds, alleges the misuse of his position of trust to deceive a charitable foundation,” stated IRS-CI Special Agent-in-Charge Robnett.  “IRS-CI will continue to investigate executives who mislead investors and violate the public trust.”
 

The indictment alleges that, beginning in or about 2008, Cohen and his co-conspirators carried out a scheme to defraud a large charitable foundation and investor (the “Charitable Foundation”).  Cohen violated his fiduciary duties to the Charitable Foundation by making material misrepresentations and omissions in connection with a proposed investment in shares of an African mining company.  Through an Och-Ziff investment fund and joint venture overseen by the defendant, Cohen fraudulently induced the Charitable Foundation to consent to the purchase of shares in the African mining company without disclosing numerous conflicts of interest that existed in the transaction.  Among other things, Cohen failed to disclose that one of the proposed sellers of the shares personally owed Cohen $18 million – for a loan used to finance a luxury yacht – and would use the proceeds from the sale of shares to partially repay his debt to Cohen.  Cohen also failed to disclose that he personally controlled another portion of the shares in the African mining company that would be sold as part of the transaction.

The indictment further alleges that in order to conceal his fraudulent scheme and self-dealing, Cohen conspired with others to cover up facts about the transaction after the SEC began an investigation of Och-Ziff in 2011.  Cohen and others engaged in a number of acts to obstruct both the federal grand jury and SEC investigations, including concocting a false, backdated letter and making false statements to federal agents and the SEC. 
 

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

The case is being handled by the Office’s Business and Securities Fraud Section and the Criminal Division’s Fraud Section.  Assistant United States Attorneys David C. Pitluck, James P. McDonald and Jonathan P. Lax, and Trial Attorney Gerald M. Moody, Jr., are in charge of the prosecution.  The Criminal Division’s Office of International Affairs provided significant assistance in this matter.

 

The Defendant:

 

MICHAEL LESLIE COHEN

Age: 46

Residence: London, England

 

E.D.N.Y. Docket No. 17-CR-544 (NGG)

Attorney General Jeff Sessions today announced the appointment of Richard P. Donoghue as Interim United States Attorney for the Eastern District of New York, pursuant to 28 U.S.C. § 546, which provides that “the Attorney General may appoint a United States Attorney for the district in which the office of United States Attorney is vacant.”  This appointment will take effect on January 5, 2018.

 

“When I became Attorney General, President Trump gave me clear orders to go after MS-13,” stated United States Attorney General Jeff Sessions.  “Since then, this Department of Justice has been relentless, arresting hundreds of MS-13 members from Los Angeles to Long Island.  Today, I am appointing someone as Interim United States Attorney for Eastern District of New York who has tremendous experience prosecuting MS-13: Richard Donoghue.  As a federal prosecutor for more than a decade—including as Criminal Chief of that office—he has been involved in the prosecution of gang members, terrorists, and corrupt public officials.  Every MS-13 member in Long Island should know, Richard Donoghue will use all the tools at his disposal to get criminals off our streets.”

From 2000 to 2011, Mr. Donoghue served as an Assistant United States Attorney (AUSA) in the United States Attorney’s Office for the Eastern District of New York (USAO EDNY), where he held positions including Chief of the Criminal Division and Chief of the Long Island Criminal Division.  As an AUSA, he investigated and prosecuted a wide array of cases, including MS-13 racketeering cases and other violent crime, white collar crime, public integrity offenses, and drug trafficking.  While at the USAO EDNY, Mr. Donoghue received the following awards: the New York City Bar Association’s Henry L. Stimson Medal (2007 awarded annually to outstanding AUSAs), and the Eastern District Association’s Charles E. Rose Award (2009, awarded annually to outstanding AUSAs).  From 1993 to 2000, Mr. Donoghue served on active duty in the U.S. Army JAG Corps, where he held positions including Military Magistrate Judge, Prosecutor, Defense Counsel and Contract Litigator, and from 1993 through 1995, Mr. Donoghue served as a paratrooper in the 82nd Airborne Division.  Mr. Donoghue has received the following military awards: a Meritorious Service Medal (awarded twice – January 2000, January 1999), an Army Commendation Medal (awarded twice – December 1996, January 1996), an Army Achievement Medal (December 1993), and a Humanitarian Service Medal (October 1997).  Mr. Donoghue is currently the Chief Litigation Counsel for CA Technologies, where he oversees the company’s litigation matters worldwide.  He received his B.A., cum laude, from Hofstra University and his J.D. from St. John’s University School of Law.

Upon the appointment of Mr. Donoghue as Interim United States Attorney, Acting United States Attorney Bridget M. Rohde will resume her role as First Assistant United States Attorney.

 

Earlier today, in federal court in Brooklyn, long-time Bonanno crime family member Vincent Asaro was sentenced by United States District Judge Allyne R. Ross to 96 months’ imprisonment for violating the Travel Act by using a telephone to order that a vehicle be burned. Asaro previously pled guilty to this crime on June 27, 2017.  In sentencing Asaro, Judge Ross found that Asaro was a long-time member of the Bonanno organized crime family who had participated in, among other crimes, the 1969 murder of Paul Katz, the 1978 robbery of the Lufthansa Airlines Terminal at John F. Kennedy Airport, and that as of 2013, Asaro was actively involved in loansharking.  Asaro was also ordered to pay $21,276 in restitution for the damages to the car burned in the arson.

 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department, announced the sentence.

 

“Today’s sentence holds Asaro accountable not only for using his power as a member of organized crime to address a perceived slight by another motorist, but for a lifetime of violent criminal activity,” stated Acting United States Attorney Rohde.   “This Office, together with our partners at the FBI, will continue to investigate and prosecute members and associates of organized crime and eliminate the danger they pose to members of our community.” 

 

“An unfortunate chance encounter led an unsuspecting motorist to become embroiled in a high-speed chase at the hands of an enraged Asaro,” stated FBI Assistant Director-in-Charge Sweeney.  “Unsatisfied with the outcome of his pursuit, Asaro dug his heels in. He contacted an associate with access to a local law enforcement database, identified the license plate information of the car, and put in motion a plan to set fire to the vehicle in front of the victim’s residence. Once the arson had occurred, at the hands of those directed to do so, Asaro insisted on checking in person to ensure his orders had been followed. The anger that propelled Asaro to action is reminiscent of so many scripted Hollywood dramas, but unlike the fame and fortune of the big screen, Asaro’s story ends on a different note. Today’s sentence proves that living life in the fast lane is sure to be short lived.”

 

As described in court filings and statements made during court appearances, Asaro was inducted into the Bonanno family more than 40 years ago and has previously held the position of captain and member of the family’s ruling panel.  In early April 2012, Asaro was traveling in a car in Howard Beach when he became enraged at another motorist who had switched lanes in front of Asaro at a traffic light.  Asaro chased the other car at a high rate of speed.  The victim drove into Ozone Park while trying to call the police and describe where he was.  When the victim arrived in an area he knew to contain a red light camera, he intentionally circled the block trying to set off the cameras in an attempt to alert the police to his location. 

 

Shortly thereafter, Asaro contacted an associate of the Gambino organized crime family of La Cosa Nostra who Asaro knew to have access to local law enforcement databases.  The next day, a local law enforcement database accessed the license plate information for the plate of the car the victim was driving, which revealed the victim’s address.  Asaro then directed an associate of the Bonanno organized crime family (“Associate-1”) to set fire to the victim’s car.  Associate-1 then recruited Matthew Rullan and John J. Gotti, Asaro’s co-defendants, to help him carry out the arson. 

 

Associate-1, Gotti and Rullan drove in Gotti’s Jaguar sedan to a service station in the pre-dawn hours of April 4, 2012 where they filled a container with gasoline and proceeded to the residence of the victim.  Associate-1 doused the vehicle with gasoline, and Rullan ignited it.  An NYPD police officer in an unmarked car observed the crime in progress and pursued the Jaguar on a high-speed chase through the streets of Queens until he terminated the pursuit for safety reasons due to Gotti’s reckless driving.  The following day, Associate-1 told Asaro about the arson, and Asaro drove to the auto body shop where the burned car had been towed to confirm that his order had been carried out.

 

In imposing the sentence, Judge Ross concluded that Asaro’s history and characteristics, specifically his longtime association with organized crime and his history of participating in crimes of violence, including the 1969 murder of Paul Katz and the 1978 armed robbery of over $6 million dollars in United States currency and jewelry from the Lufthansa Airlines Terminal, weighed in favor of a significant custodial sentence.  Additionally, Judge Ross found that the nature and circumstances of the charged crime indicated that the defendant remains a danger to the community.

 

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 Defendant:

VINCENT ASARO

Age: 82

Queens, NY

 

E.D.N.Y. Docket No. 17-CR-127 (ARR)

Evan Greebel, a former partner at the New York office of Katten Muchin Rosenman LLP who served as outside counsel to Retrophin Inc., a biopharmaceutical company, was convicted today by a federal jury in Brooklyn of two counts of a superseding indictment charging him with conspiracy to commit securities fraud and conspiracy to commit wire fraud. The verdict followed an 11-week trial before United States District Judge Kiyo A. Matsumoto.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the verdict.

“By helping Retrophin CEO Martin Shkreli steal millions of dollars and cover up Shkreli’s fraud, the defendant Evan Greebel betrayed the trust placed in him by Retrophin’s board of directors to represent the company’s best interests,” stated Acting United States Attorney Rohde.  “Today’s verdict sends a powerful message that this Office, together with our law enforcement partners, will hold lawyers accountable when they use their legal expertise to facilitate the commission of crimes.”  Ms. Rohde thanked the Securities and Exchange Commission, New York Regional Office (SEC), and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG), for their significant cooperation and assistance in this case.

 “Greebel’s conviction highlights the deliberate actions he took in conspiring with hedge fund manager Martin Shkreli to defraud investors,” stated FBI Assistant Director-in-Charge Sweeney.  “While it’s become increasingly more evident that Greebel exploited his knowledge of the law in his efforts to break the law, today we finally see justice served in a case that’s spent no shortage of its time in the spotlight.  Investment fraud remains a priority for the FBI’s New York Office.”

The evidence at trial established that between 2011 and 2014, Greebel conspired with Shkreli and others in a scheme to misappropriate Retrophin’s assets in order to pay off defrauded investors in Shkreli’s hedge funds, MSMB Capital Management LP (MSMB Capital) and MSMB Healthcare Management LP (MSMB Healthcare).  As part of this scheme, Greebel negotiated and prepared so-called “settlement” agreements with certain defrauded MSMB Capital and MSMB Healthcare investors, which caused Retrophin to reimburse those investors more than $2 million in cash and stock for their lost investments in Shkreli’s hedge funds even though Retrophin was not responsible for those losses.  Greebel also arranged for certain other defrauded investors to enter into sham consulting agreements with Retrophin as a means to settle liabilities owed by Shkreli and the hedge funds.

In addition, between 2012 and 2014, Greebel and Shkreli engaged in a scheme to defraud investors and potential investors in Retrophin by attempting to illegally control the price and trading volume of Retrophin’s stock.  Greebel and Shkreli executed this scheme by, among other things, concealing Shkreli’s beneficial ownership and control of the majority of Retrophin’s free-trading shares.  Greebel and Shkreli recruited associates of Shkreli to be nominee shareholders for the majority of Retrophin’s free-trading shares, and they also filed a false document with government regulators to hide the fact that Shkreli controlled those shares.  Greebel and Shkreli not only prevented nominee employees from selling these shares, but also directed that some of the shares be used to settle liabilities owed by the MSMB hedge funds and Shkreli.

When he is sentenced, Greebel faces a maximum of 20 years in prison on the top count of conviction.

In August 2017, co-defendant Shkreli was convicted of securities fraud and securities fraud conspiracy by a federal jury following a six-week trial before Judge Matsumoto. Shkreli is awaiting sentencing.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Alixandra Smith, David Pitluck and David K. Kessler are in charge of the prosecution.  

The Defendants:

 

EVAN GREEBEL

Age: 44

Scarsdale, New York

 

MARTIN SHKRELI

Age: 34

Manhattan, New York

E.D.N.Y. Docket No. 15-CR-637 (KAM)

On Friday, former high-ranking soccer officials Juan Ángel Napout and José Maria Marin were convicted of racketeering conspiracy and related crimes by a federal jury in Brooklyn.  The crimes of conviction related to the defendants’ participation in schemes to accept millions of dollars in bribes in exchange for the media and marketing rights to various soccer tournaments.  In addition to racketeering conspiracy, Napout was also convicted of two counts of wire fraud conspiracy, and Marin was convicted of three counts of wire fraud conspiracy and two counts of money laundering conspiracy.  Today, the jury found the defendant Manuel Burga, former president of the Peruvian soccer federation, not guilty of racketeering conspiracy, the one count on which he was extradited from Peru.[1]  After the jury rendered its verdict, which followed a six-week trial before United States District Judge Pamela K. Chen, Judge Chen remanded Napout and Marin into custody. 

 

At the time of his arrest in December 2015, Napout was the president of the South American soccer confederation, known as CONMEBOL, a member of the FIFA Executive Committee, and a FIFA Vice President.  He had also previously served as president of the Paraguayan soccer federation.  At the time of his arrest in May 2015, Marin was the former head of the Brazilian soccer federation, known as the CBF, and a member of various FIFA standing committees.  As proved at trial, the defendants and their co-conspirators accepted or agreed to accept tens of millions of dollars in bribe payments over the course of the conspiracy.

 

The guilty verdicts were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and R. Damon Rowe, Special-Agent-in-Charge, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS).

 

“As the jury found, defendants Napout and Marin lined their own pockets with millions of dollars in bribes at the expense of the soccer organizations they represented and the people those organizations served,” said  Acting United States Attorney Rohde.  “Now these defendants have been brought to justice, like the others who have been convicted for corrupting a sport beloved across the world, and will face punishment for their criminal conduct.  The guilty verdicts and the evidence at trial highlight the extent of the corruption and the continuing need for reform.”  Ms. Rohde expressed her grateful appreciation to governments around the world, particularly the governments of Switzerland, Brazil, Peru, and Paraguay for their significant assistance in this case.  Ms. Rohde also thanked the Office of International Affairs and the Organized Crime and Gang Section of the U.S. Department of Justice’s Criminal Division in Washington, D.C., for their assistance in this prosecution.   

 

“So much about the game of soccer is ingrained in many cultures around the world, they watch and play it with an almost religious fervor,” stated FBI Assistant Director-in-Charge Sweeney.  “The many subjects we have charged in this expansive and complex investigation used the reverence of fans to make millions of dollars illegally while they thought no one was watching.  Their mistakes were using banks and companies in the United States to hide their misdeeds, but they got caught.  The FBI has worked side-by-side with our national and international partners, traveling all over the world to build this case that wouldn’t have been possible without the great coordination of all the agencies investigating.  We will continue searching out everyone involved in these backroom handshakes, and lucrative bribes that were once just part of the game.”

“As the guilty verdicts reflect, Juan Angel Napout and Jose Maria Marin undermined the soccer-related contracting process by entering into corrupt arrangements with executives of sports marketing companies who were more than willing to pay self-serving bribes,” said Special Agent-in-Charge Rowe of IRS Criminal Investigation.  “IRS Criminal Investigation, along with our law enforcement partners at the U.S. Attorney’s Office and the FBI, will continue to aggressively investigate those individual and corporate entities that use shell companies and financial accounts in bank secrecy jurisdictions, and in the process utilize the U.S. financial system to facilitate crooked practices within the world's favorite sport.”

The Enterprise the Evidence at Trial [2]

As proved at trial, FIFA and its six continental confederations, together with affiliated regional federations, national member associations, and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws.  The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.  The enterprise financed its efforts in significant part by commercializing the media and marketing rights associated with various soccer events and tournaments, often through the sale of multi-year contracts covering multiple editions of the tournaments.

The evidence at trial, including witness testimony, contemporaneously kept ledgers, bank records, emails and text messages, and consensual recordings, established that the defendants and their co-conspirators had engaged in a conspiracy to corrupt the enterprise through racketeering activity.  Specifically, the defendants and their co-conspirators corrupted the FIFA enterprise through the offer and receipt of tens of millions of dollars in bribes and kickbacks paid by sports marketing companies to soccer officials.  In particular, the evidence at trial established that Napout and Marin accepted, or agreed to accept, millions of dollars in bribes in exchange for the media and marketing rights to: (a) multiple editions of the CONMEBOL-sponsored Copa América soccer tournament played periodically by South American national teams, including the Copa América Centenario, a special edition of the tournament played in the United States in 2016; and (b) multiple editions of the CONMEBOL-sponsored Copa Libertadores soccer tournament played annually by South American club teams. 

The Copa América bribes were paid, variously, by principals of the sports marketing companies Traffic, Torneos y Competencias (“Torneos”), and Full Play.  The Copa Libertadores bribes were paid by Torneos and related entities, using Full Play as an intermediary.  In addition, the government proved that Marin agreed to receive millions of dollars worth of bribes in exchange for the media and marketing rights to the Copa do Brasil, a soccer tournament sponsored by the CBF for Brazilian soccer clubs.  Marin received and agreed to receive these bribes from Traffic and a Brazilian sports marketing company named Klefer.

Defendants who have pleaded guilty and corporate entities that have entered agreements with the government have agreed to forfeit more than $200,000,000 in this and related cases, and the government has collected more than $60,000,000 of that figure to date.  The government has also restrained assets around the world in connection with this and related cases, with the assistance of various foreign governments.  As previously announced, all of the forfeited funds are being held in reserve, in order to ensure their availability to satisfy any orders of restitution entered at sentencing for the benefit of individuals or entities that qualify as victims under federal law.

When sentenced by Judge Chen, the defendants convicted at trial face a maximum of 20 years in prison on each count of conviction.  Each of the defendants also faces liability for millions of dollars in forfeiture and/or restitution, in amounts to be determined at the time of sentencing.   

The government’s investigation is ongoing.

The government’s case is being handled by the Office’s FIFA Task Force.  Assistant United States Attorneys Samuel P. Nitze, M. Kristin Mace, and Keith D. Edelman are in charge of the trial prosecution, with assistance from Assistant U.S. Attorneys Paul Tuchmann, Kaitlin T. Farrell, and Brian D. Morris.

The Defendants:

JUAN ÁNGEL NAPOUT
Age: 59
Citizenship: Paraguay

JOSÉ MARIA MARIN
Age: 85
Citizenship: Brazil

E.D.N.Y. Docket No. 15-CR-252 (S-2) (PKC)

 

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[1] Burga was charged in a superseding indictment unsealed on December 3, 2015 with one count of racketeering conspiracy, two counts of wire fraud conspiracy, and two counts of money laundering conspiracy – the same offenses charged against defendant Napout.  Peru extradited Burga on the racketeering conspiracy count.  Accordingly, the second superseding indictment that served as the trial indictment charged Burga in that count alone.

[2] Facts described here are derived from the evidence put before the jury at trial, as well as publicly filed documents and statements made in open court in this and related cases.

Keppel Offshore & Marine Ltd. (KOM), a Singapore-based company that operates shipyards and repairs and upgrades shipping vessels, and its wholly owned U.S. subsidiary, Keppel Offshore & Marine U.S.A. Inc. (KOM USA), have agreed to pay a combined total penalty of more than $422 million to resolve charges with authorities in the United States, Brazil and Singapore arising out of a decade-long scheme to pay millions of dollars in bribes to officials in Brazil.  KOM USA pleaded guilty today in the Eastern District of New York in connection with the resolution.  In addition, a guilty plea by a former senior member of KOM’s legal department was unsealed. 

 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, John P. Cronan, Acting Assistant Attorney General of the Department of Justice’s Criminal Division, and Stephen E. Richardson, Assistant Director, Federal Bureau of Investigation, Criminal Investigative Division (FBI), made the announcement.

 

“The resolutions with KOM and its U.S. subsidiary are the result of a multinational effort to investigate and prosecute a corruption scheme that resulted in the payment by the defendant companies of over $50 million in bribes to Brazilian officials and in profits for the defendant companies of over $350 million from business corruptly obtained in Brazil,” said Acting U.S. Attorney Rohde.  “In an attempt to conceal their crimes, the defendants used the global financial system – including the United States banking system – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies.  The United States, working with its law enforcement partners abroad, will continue to hold responsible those corporations and individuals who seek to enrich themselves through the corruption of government officials and legitimate governmental functions.”

 

“Today’s resolution once again underscores the importance of the Department of Justice’s collaboration with foreign authorities to hold corrupt companies and individuals accountable for their crimes, while ensuring the fair and appropriate allocation of fines and penalties,” said Acting Assistant Attorney General Cronan.  “This case also represents the first coordinated FCPA resolution with Singapore and the most recent of several coordinated resolutions with Brazil.  The Criminal Division is committed to working with our international partners to ensure that honest, law abiding companies are able to compete on a level playing field across the globe.”

 

“The resolution to this investigation shows to those around the world that the FBI and our law enforcement partners are dedicated to work together to bring justice to companies who play outside the rule of law,” said FBI Assistant Director Richardson.  “The FBI won’t stand by while individuals operate their business illegally using bribes.”

 

The Bribery Scheme

 

According to admissions and court documents, beginning by at least 2001 and continuing until at least 2014, KOM conspired to violate the Foreign Corrupt Practices Act (“FCPA”) by paying approximately $55 million in bribes to officials at the Brazilian state-owned oil company Petrobras, and to the then-governing political party in Brazil, in order to win 13 contracts with Petrobras and another Brazilian entity.  KOM effectuated and concealed the bribe payments by paying outsized commissions to an intermediary, under the guise of legitimate consulting agreements, who then made payments for the benefit of the Brazilian officials and the Brazilian political party.  KOM USA participated in this conspiracy from approximately 2007 to 2014.

 

The Corporate Resolutions

 

KOM entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the U.S. District Court for the Eastern District of New York (the “United States”) in connection with a criminal Information filed today in the Eastern District of New York charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.  In addition, KOM USA pleaded guilty and was sentenced by the Honorable Kiyo A. Matsumoto on a one-count criminal Information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA.  Pursuant to its agreement with the United States, KOM will pay a total criminal fine of $422,216,980, with a criminal penalty due to the United States of $105,554,245, including a $4,725,000 criminal fine paid by KOM USA.  As part of the deferred prosecution agreement, KOM also committed to implement rigorous internal controls and to cooperate fully with the United States’ ongoing investigation.

 

In related proceedings, the company settled with the Ministério Público Federal (MPF) in Brazil and the Attorney General’s Chambers (AGC) in Singapore.  The United States will credit the amount the company pays to Brazil and Singapore under their respective agreements, with Brazil receiving $211,108,490, equal to 50 percent of the total criminal penalty, and Singapore receiving $105,554,245, equal to 25 percent of the total criminal penalty. 

 

In reaching the resolutions with the United States, KOM and KOM USA received credit for their substantial cooperation with the United States’ investigation and for taking extensive remedial measures.  For example, KOM has terminated and otherwise disciplined employees involved in the criminal conduct, and it has implemented an enhanced system of compliance and internal controls to address and mitigate corruption risks.  Accordingly, the criminal penalty reflects a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range.

 

The United States also unsealed charges today against a former senior member of KOM’s legal department, who pleaded guilty to one count of conspiracy to violate the FCPA on August 29, 2017 in the Eastern District of New York.  He is awaiting sentencing. 

 

The case is being prosecuted by Assistant U.S. Attorneys Alixandra Smith and Patrick Hein of the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorneys Derek J. Ettinger and David M. Fuhr and Assistant Chief Christopher J. Cestaro of the Criminal Division’s Fraud Section.  The FBI’s International Corruption squad in Houston investigated this case.  

 

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

A criminal complaint was unsealed earlier today, in federal court in Brooklyn, charging Michael Hitsous with conspiracy to distribute and possession with intent to distribute heroin and fentanyl in Staten Island, New York.  Hitsous was arrested yesterday and is scheduled to make his initial appearance this afternoon before United States Magistrate Judge Steven M. Gold.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Michael E. McMahon, District Attorney, Richmond County District Attorney’s Office (RCDA), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.

As alleged in publicly filed documents, between February 2017 and December 2017, Hitsous sold heroin and fentanyl from his Staten Island home, which resulted in near fatal overdoses of two young women.  Notably, in or about September 2017, Hitsous sold narcotics to a 25-year-old female who overdosed at the defendant’s residence after ingesting drugs that he provided.  While the victim was unconscious, a friend of the victim called emergency medical personnel who arrived in time to resuscitate her.  Despite providing the narcotics that nearly killed the victim, Hitsous continued to regularly sell narcotics from his home knowing the harm they cause.

“As alleged, the defendant Michael Hitsous profited by selling dangerous drugs, including fentanyl and heroin, without regard for the potentially deadly consequences to the users of those drugs,” stated Acting United States Attorney Rohde.  “Together with our law enforcement partners, this Office will work tirelessly to identify and prosecute to the fullest extent of the law those who contribute to the opioid crisis, and, through these efforts, work to save lives by reducing the availability of opioids and to prevent new addictions in our District.” 

“The illegal sale of heroin and fentanyl has caused unimaginable pain to families across Staten Island, as those suffering from addiction illness continue to overdose at alarming rates due to these deadly drugs,” stated District Attorney McMahon. “By investigating each overdose and tracing the dangerous narcotics back to the source, law enforcement has been able to hold drug dealers accountable for the lives they have destroyed and we are proud that our Overdose Response Initiative is getting these results. We will continue working together with our partners in the NYPD and the Eastern District to investigate and prosecute any individual who peddles this poison in our community so that we can save lives and finally put an end to the drug epidemic.”

According to the Centers for Disease Control and Prevention (CDC) and the Department of Justice, drug overdoses have become the leading cause of death for Americans under the age of 50.  The increase in overdose deaths has been driven in large part by fentanyl – a drug that has been described as 50 to 100 times more potent than morphine.  In New York, from 2014 to 2015, fentanyl overdose deaths rose 135 percent, while heroin overdose deaths rose 28 percent. According to the CDC’s latest report analyzing overdose deaths nationally, in 2016 synthetic opioid deaths – which includes fentanyl – more than doubled from 9,580 in 2015 to 19,413 in 2016.    

The arrest was the result of a long-term investigation by the NYPD’s Drug Overdose Task Force whose officers coordinated numerous controlled narcotics purchases from Hitsous.

The charges in the complaint 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 General Crimes Section.  Assistant United States Attorney David Lizmi is in charge of the prosecution. 

The Defendant:

MICHAEL HITSOUS
Age: 26
Residence: Staten Island, New York

E.D.N.Y. Docket No. 17-MJ-1063

A second superseding indictment was unsealed today in federal court in Brooklyn charging medical doctor Martin Tesher with unlawfully prescribing oxycodone and fentanyl to a patient, Nicholas Benedetto, without legitimate medical purpose, which resulted in Benedetto’s overdose death on March 5, 2016 in Staten Island.  Dr. Tesher was previously indicted for unlawfully prescribing thousands of oxycodone pills to patients without a legitimate medical purpose.  Dr. Tesher’s arraignment on the second superseding indictment is scheduled for this afternoon before United States Magistrate Judge Steven M. Gold.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), announced the superseding indictment.

“As alleged, instead of providing his opioid addicted patients with medically appropriate and lawful care, Dr. Tesher quite literally fed their addiction, and, in this case, his actions resulted in the death of a patient,” stated Acting United States Attorney Rohde. “This Office and our law enforcement partners are committed to holding accountable those medical professionals who foster the opioid crisis for personal gain.”

“This investigation led law enforcement to a drug dealer using his doctor’s office as a front for opioid trafficking,” stated DEA Special Agent-in-Charge Hunt.  “Dr. Tesher enabled drug addiction by prescribing medication beyond the scope of legitimate medical practice and need.  Allegedly, his actions resulted in death.  Law enforcement has and will continue to pool resources in order to identify drug sources who feed addiction in our communities.”

As alleged in court filings, the defendant operates a family medical practice in Manhattan.  He was authorized by the DEA to treat up to 30 drug-addicted patients by prescribing them Schedule III, IV or V narcotics to ease their addiction.  Dr. Tesher has, in fact, treated countless patients who identified as or whom he determined to be drug addicts.  Instead of diverting those addicted patients to drug rehabilitation or prescribing them with Schedule III, IV or V drugs as authorized by law, Dr. Tesher prescribed his addicted patients with the very drugs they were addicted to,  Schedule II opioids, such as oxycodone and fentanyl.  While under Dr. Tesher’s care, many of his patients tested positive for drugs such as cocaine, heroin, morphine or methadone.  Even upon learning that information, Dr. Tesher continued to prescribe those patients with Schedule II narcotics that could have been lethal on their own or in combination with the other drugs Dr. Tesher knew his patients were ingesting.    

According to court documents, Benedetto was one of Dr. Tesher’s patients.  While under Tesher’s care, Benedetto drug tested positive for cocaine, heroin, morphine and methadone, in addition to the oxycodone and fentanyl Dr. Tesher was prescribing to him.  Dr. Tesher allegedly continued to prescribe Schedule II narcotics to Benedetto despite several indicators that his patient was addictively abusing those narcotics. Benedetto died of a drug overdose on March 5, 2016, two days after he had been prescribed both oxycodone and fentanyl patches by Dr. Tesher.

If convicted of the top charge, Dr. Tesher will face a mandatory minimum of 20 years’ imprisonment and a maximum of life in prison.  The charges in the superseding indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s investigation was led by the DEA’s Long Island Tactical Diversion Squad, which is comprised of agents and officers of the DEA, Internal Revenue Service, Nassau County Police Department (NCPD), Suffolk County Police Department, Port Washington Police Department, and Rockville Centre Police Department. The DEA Tactical Diversion Squad also worked in conjunction with officers and agents of the New York City Police Department, Criminal Enterprise Investigations, the Department of Health & Human Services, Office of Inspector General, New York City Department of Investigation, and NCPD’s Asset Forfeiture and Intelligence Bureau. 

 This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative.  In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Initiative to mount a comprehensive response to what the United States Department of Health and Human Services Centers for Disease Control and Prevention called an epidemic increase in the abuse of so-called opioid analgesics.  To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 19 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorney Jennifer M. Sasso is in charge of the prosecution. 

The Defendant:

MARTIN TESHER
Age:  81
Manhattan, New York

E.D.N.Y. Docket No. 17-CR-523 (SJ)

Earlier today, in federal court in Brooklyn, Giovanni Zannoni, an Italian national and member of the Italian armed services, pleaded guilty to illegally exporting controlled military technology from the United States to Italy.  As part of his plea, Zannoni agreed to forfeit $436,673.73, in addition to the dozens of gun parts and night vision and thermal imaging devices recovered by the government in connection with this prosecution.  Today’s plea took place before United States District Judge Pamela K. Chen.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Leigh-Alistair Barzey, Special Agent-in-Charge, Department of Defense, Defense Criminal Investigative Service, Northeast Field Office (DCIS), and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, announced the guilty plea.

“The defendant Giovanni Zannoni skirted laws intended to safeguard our national security by keeping specialized technologies out of the wrong hands,” stated Acting United States Attorney Rohde.  “We will investigate and prosecute those who illegally export our defense technology, upon which our troops rely, to the fullest extent of the law.”  Ms. Rohde extended her grateful appreciation to U.S. Department of Defense, Defense Criminal Investigative Service, and U.S. Immigration and Customs Enforcement, Homeland Security Investigations, for their assistance in this case.

“The defendant’s guilty plea is the result of a successful joint investigation conducted by the U.S. Attorney’s Office, HSI and the Defense Criminal Investigative Service (DCIS),” stated DCIS Special Agent-in-Charge Barzey.  “The illegal exportation of controlled military technology poses a significant threat to our national security and DCIS is committed to working with its law enforcement partners to ensure that sensitive defense technology is properly protected.”

“Over a period of four years, Zannoni illegally moved military equipment half way around the globe for a profit, with no concern of the buying agent,” said HSI Special Agent-in Charge Melendez.  “His actions supported the military potential and weapons proliferation of other nations, creating potential national security risks.  Protecting our homeland encompasses many missions, including safeguarding our nation's technologies, and Zannoni will now face the consequences on this actions.”

According to court filings and admissions made in court at the time he entered the guilty plea, between June 2013 and May 2017, Zannoni illegally exported and attempted to export night vision goggles and assault rifle components designated as defense articles on the United States Munitions List.  The export of sensitive night vision equipment and assault rifle components requires a license from the United States Department of State.  The Department of State has placed restrictions on the export of items that it has determined could make a significant contribution to the military potential and weapons proliferation of other nations and that could be detrimental to the foreign policy and national security of the United States.  On May 14, 2017, the defendant was arrested after entering the United States at Miami International Airport.

 When sentenced, Zannoni faces a maximum sentence of 20 years in prison and a $1 million fine.

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorney Nomi D. Berenson is in charge of the prosecution, with the assistance from Trial Attorney Matthew Walczewski of the National Security Division’s Counterintelligence and Export Control Section.

The Defendant:

GIOVANNI ZANNONI
Age:  35
Residence: Gavorrano, Italy

E.D.N.Y. Docket No. 17-CR-565 (PKC)

Earlier today, at the federal courthouse in Brooklyn, Akhror Saidakhmetov, a citizen of Kazakhstan and resident of Brooklyn, New York, was sentenced by United States District Judge William F. Kuntz, II, to 15 years’ imprisonment for conspiring to provide material support to a designated foreign terrorist organization, the Islamic State in Iraq and al-Sham (ISIS).   

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Dana J. Boente, 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.  

“Today, defendant Akhor Saidakhmetov was held accountable for attempting to travel to Syria to wage violent jihad on behalf of ISIS and his intention to kill law enforcement officers in the United States if unable to reach Syria,” stated Acting United States Attorney Rohde.  “We will continue to work closely with the FBI’s Joint Terrorism Task Force in New York to disrupt those trying to support foreign terrorist organizations here or abroad and to prosecute them to the fullest extent of the law.”

“Saidakhmetov's plan was to become a battlefield soldier for ISIS, but should that not come to pass, he was prepared to bring the fight to our streets by attacking police officers and FBI agents in the U.S.,” stated FBI Assistant Director-in-Charge Sweeney. “This case highlights the challenges law enforcement faces in confronting the modern-day terrorist threat. And while this is but one of the many successful investigations carried out by the FBI and our partners on the JTTF, there’s no doubt we have more work to do.”

“The defendant in this case pledged allegiance to ISIS, attempted to travel to Syria, and spoke of purchasing a gun to kill police officers and FBI agents,” stated NYPD Commissioner O’Neill. “He’ll be removed from the United States upon completion of the 15-year sentence announced today. I want to thank the members of law enforcement and the court system for their work on this case. It’s representative of the shared responsibility we have to keep each other, our City, and our nation safe.”

According to previous court filings, beginning in August 2014, Saidakhmetov repeatedly expressed his radical pro-ISIS views and his desire to travel to Syria to fight on behalf of ISIS.  In September 2014, while watching videos of ISIS training camps in Syria, Saidakhmetov stated that he was going to travel to Syria to become a “Mujahid on the path of Allah.”  During the next several months, Saidakhmetov discussed with a co-conspirator their plans to travel to Syria to fight on behalf of ISIS and reached out to purported ISIS representatives for information on traveling to join ISIS. 

Saidakhmetov also stated that if he were unable to travel to Syria to join ISIS, he would attack law enforcement officers in the United States.  Specifically, he stated that he would purchase a handgun or machine gun and shoot police officers and FBI agents. 

On February 19, 2015, Saidakhmetov purchased a ticket to travel from John F. Kennedy International Airport (JFK Airport) in Queens, New York, to Istanbul, Turkey, departing on February 25, 2015.  While at JFK Airport awaiting his flight, Saidakhmetov received approximately $1,600 from a coconspirator to cover his expenses, including the purchase of a firearm after his arrival in Syria to join ISIS.  Saidakhmetov was arrested while attempting to board the flight to Turkey. 

Following completion of his sentence, Saidakhmetov will be removed from the United States.

The government’s case is being handled by the Office’s National Security & Cybercrime Section.  Assistant U.S. Attorneys Alexander Solomon, Douglas M. Pravda, Peter W. Baldwin and David K. Kessler of the Eastern District of New York are in charge of the prosecution, with assistance provided by Trial Attorney Steven Ward of the National Security Division’s Counterterrorism Section. 

The Defendant:

AKHROR SAIDAKHMETOV
Age: 22
Residence: Brooklyn, New York

 E.D.N.Y. Docket No. 15 CR 95 (WFK)

Earlier today, in federal court in Brooklyn, Gerald Tighe and Stephen Kalinoski, were sentenced by United States District Court Judge I. Leo Glasser to six months’ home confinement, four years’ probation, and 300 hours of community service, for wire fraud conspiracy in connection with their operation of Med Prep Consulting, Inc. (Med Prep), a now-defunct Tinton Falls, New Jersey-based medical drug repackager and compounding pharmacy, which sold adulterated and contaminated drug products to healthcare providers across the country.  As part of their sentences, Kalinoski will forfeit $140,000 of criminal proceeds to the government. The amount of forfeiture owed by Tighe and the amount of restitution both defendants must pay to Yale-New Haven Hospital, which discovered it had received drug products from Med Prep contaminated with mold, will be determined by the Court at a later date.  The defendants pleaded guilty to the charges on July 14, 2017.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Mark McCormack, Special Agent-in-Charge of the U.S. Food and Drug Administration’s Office of Criminal Investigations, Metropolitan Washington Field Office (FDA OCI), announced the sentence. 

According to court filings and facts presented during the sentencing, Med Prep processed numerous drugs, including oncology and dialysis drugs, pain medications, anesthesia drugs and operating room drugs, in purportedly aseptic conditions.  In an effort to gain market share, Med Prep repeatedly misrepresented to its customers, who were hospitals and other healthcare providers, that it adhered to, and in some areas exceeded, industry standards and laws applicable to sterile drug preparation.  In fact, Med Prep produced drugs in a facility that fell far short of even the most basic industry standards of cleanliness, creating a risk to the health of already ill patients.  Tighe, as Med Prep’s president and owner, and Kalinoski, as its director of pharmacy and registered pharmacist-in-charge, lied to healthcare providers about Med Prep’s failures to comply with basic sterility practices.  Med Prep halted its production of drug products in the summer of 2013, following an incident in which it had distributed intravenous drugs containing visible mold to Yale-New Haven Hospital.

“Gerald Tighe and Stephen Kalinoski, motivated by a desire to increase profits and cut costs, put patients already suffering from serious illnesses at further risk by distributing drugs that were contaminated or mislabeled,” stated Acting United States Attorney Rohde.  “We will continue to investigate and prosecute those drug repackagers and compounding pharmacies that would place corporate greed ahead of patient safety.”  Ms. Rohde gratefully acknowledged the assistance and cooperation of the FDA’s Office of Criminal Investigations; the United States Department of Health and Human Services, Office of the Inspector General, Office of Investigations; the United States Office of Personnel Management, Office of the Inspector General; the Department of Justice, Civil Division, Consumer Protection Branch and Commercial Litigation Branch; the FDA’s Office of the Chief Counsel; the Office of the Attorney General of New Jersey; and the New Jersey Board of Pharmacy.           

“When people place profits over the public health and distribute unsafe and contaminated drugs, it is the U.S. consumer who is put at risk,” stated FDA OCI Special Agent-in-Charge McCormack. “The FDA will continue to pursue and bring to justice those who endanger the public’s health by distributing adulterated drugs.”

 
The case is being prosecuted by Assistant United States Attorneys Alixandra E. Smith, Ameet B. Kabrawala and Erin E. Argo, with assistance provided by Assistant United States Attorney Tanya Hill of the Office’s Civil Division.   

The Defendants:

GERALD TIGHE
Age:  59
West Long Branch, New Jersey

STEPHEN KALINOSKI
Age:  53
Middletown, New Jersey

E.D.N.Y. Docket No. 15 CR 62 (ILG)

A 14-count indictment was unsealed today in federal court in the Eastern District of New York charging three owners of independent diagnostic testing facilities in Brooklyn for their roles in an allegedly fraudulent scheme that involved submitting over $44 million in claims to Medicare and private insurers, which included government-sponsored managed care organizations. Defendant Iskanderova is expected to make an initial appearance this afternoon before U.S. Magistrate Judge Edwin G. Torres of the Southern District of Florida at the federal courthouse in Miami.  The case has been assigned to U.S. District Judge Margo K. Brodie.

 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, John P. Cronan, Acting Assistant Attorney General of the Justice Department’s Criminal Division, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), James D. Robnett, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), New York Region, announced the indictment.

 

Tea Kaganovich and Ramazi Mitaishvili were the co-owners of Sophisticated Imaging, East Coast Diagnostics, East Shore Diagnostics, East West Management and RM Global.  Syora Iskanderova, also known as “Samira Sanders,” was the owner of Global Testing, Liberty Mobile Imaging, Liberty Mobile Testing, Med Tech Services and Scanwell Diagnostics.  The three defendants were each charged with one count of health care fraud, two counts of making false claims to a federal agency, one count of conspiracy to pay health care kickbacks, two counts of paying health care kickbacks and four counts of money laundering.  Kaganovich and Mitaishvili were also charged with one count of conspiracy to defraud the United States by obstructing the lawful functions of the IRS.  Iskanderova was also charged with two counts of making false statements to federal agents. 

 

According to the indictment, beginning in approximately January 2014 and continuing through at least December 2016, Kaganovich, Mitaishvili and Iskanderova executed a scheme in which they submitted fraudulent claims to Medicare, Medicaid managed care plans and other health care benefit programs for diagnostic testing services.  As part of the scheme, the defendants allegedly paid kickbacks for the referral of beneficiaries who submitted themselves to diagnostic testing and other purported medical services.  The indictment also alleges that the beneficiaries themselves received kickbacks as part of the scheme.  The defendants allegedly submitted and caused to be submitted claims to Medicare, Medicaid managed care plans and other health care benefit programs for services that misrepresented which diagnostic testing company purportedly performed the services.  The indictment further alleges that the defendants disguised their illicit payments by moving the proceeds of this illegal activity through shell companies and engaged in financial transactions greater than $10,000 involving the proceeds of unlawful activity.  Kaganovich and Mitaishvili are alleged to have falsely reported to the IRS that the illegal payments made to co-conspirators were legitimate business expenses, which caused relevant tax forms to falsely under-report business income and claim deductions.  In addition, the indictment alleges that Iskanderova, on two separate occasions, lied to federal agents about her role in the alleged fraud scheme.   

 

As alleged in the indictment, the defendants submitted and caused to be submitted at least $44 million in claims to Medicare, Medicaid managed care plans and other health care benefit programs for diagnostic testing services and were paid at least $19 million on those claims.

 

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

 

The FBI, IRS-CI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  Trial Attorneys Debra Jaroslawicz and Richard Powers of the Fraud Section are prosecuting the case. 

 

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

 

The Defendants:

 

TEA KAGANOVICH

Age: 45

Residence: Brooklyn, New York

 

RAMAZI MITAISHVILI

Age: 57

Residence: Brooklyn, New York

 

SYORA ISKANDEROVA (also known as “Samira Sanders”)

Age: 42

Residence: Brooklyn, New York

 

E.D.N.Y. Docket No. 17-CR-649 (MKB)

Three owners of independent diagnostic testing facilities in Brooklyn, New York, were charged in an indictment unsealed today for their roles in an allegedly fraudulent scheme that involved submitting over $44 million in claims to Medicare and private insurers, which included government-sponsored managed care organizations.

 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office, Special Agent in Charge James D. Robnett of the Internal Revenue Service-Criminal Investigation (IRS-CI) New York Office and Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations made the announcement.

 

Tea Kaganovich, 45, and Ramazi Mitaishvili, 57, both of Brooklyn, were the co-owners of Sophisticated Imaging, East Coast Diagnostics, East Shore Diagnostics, East West Management and RM Global.  Syora Iskanderova aka Samira Sanders, 42, also of Brooklyn, was the owner of Global Testing, Liberty Mobile Imaging, Liberty Mobile Testing, Med Tech Services and Scanwell Diagnostics.  The three defendants were each charged with one count of health care fraud, two counts of making false claims to a federal agency, one count of conspiracy to pay health care kickbacks, two counts of paying health care kickbacks and four counts of money laundering.  Kaganovich and Mitaishvili were also charged with one count of conspiracy to defraud the United States by obstructing the lawful functions of the IRS.  Iskanderova was also charged with two counts of making false statements to federal agents.  The indictment was filed on Nov. 22 and unsealed upon the arrest of the defendants this morning.  Defendants Kaganovich and Mitaishvili are expected to make an initial appearance this afternoon before U.S. Magistrate Judge Steven M. Gold of the Eastern District of New York at the federal courthouse in Brooklyn.  Defendant Iskanderova is expected to make an initial appearance this afternoon before U.S. Magistrate Judge Edwin G. Torres of the Southern District of Florida at the federal courthouse in Miami.  The case has been assigned to U.S. District Judge Margo K. Brodie.

 

According to the indictment, beginning in approximately January 2014 and continuing through at least December 2016, Kaganovich, Mitaishvili and Iskanderova executed a scheme in which they submitted fraudulent claims to Medicare, Medicaid managed care plans and other health care benefit programs for diagnostic testing services.  As part of the scheme, the defendants allegedly paid kickbacks for the referral of beneficiaries who submitted themselves to diagnostic testing and other purported medical services.  The indictment also alleges that the beneficiaries themselves received kickbacks as part of the scheme.  The defendants allegedly submitted and caused to be submitted claims to Medicare, Medicaid managed care plans and other health care benefit programs for services that misrepresented which diagnostic testing company purportedly performed the services.  The indictment further alleges that the defendants disguised their illicit payments by moving the proceeds of this illegal activity through shell companies and engaged in financial transactions greater than $10,000 involving the proceeds of unlawful activity.  Kaganovich and Mitaishviliare are alleged to have falsely reported to the IRS that the illegal payments made to co-conspirators were legitimate business expenses, which caused relevant tax forms to falsely under-report business income and claim deductions.  In addition, the indictment alleges that Iskanderova, on two separate occasions, lied to federal agents about her role in the alleged fraud scheme.    

 

As alleged in the indictment, the defendants submitted and caused to be submitted at least $44 million in claims to Medicare, Medicaid managed care plans and other health care benefit programs for diagnostic testing services and were paid at least $19 million on those claims.

 

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

 

The FBI, IRS-CI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  Trial Attorneys Debra Jaroslawicz and Richard Powers of the Fraud Section are prosecuting the case. 

 

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Earlier today, in federal court in Brooklyn, Lamont Moran was sentenced by United States District Judge I. Leo Glasser to 84 months’ imprisonment to be followed by four years of supervised release, after his conviction for conspiring to distribute more than 100 grams of heroin.  The defendant ran a heroin distribution operation near the Baisley Park Houses in South Jamaica, Queens from 2015 until his arrest in September 2016.  Moran pled guilty to the charge in April 2017.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York), William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Division (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.

“The defendant Lamont Moran promoted and profited from the opioid epidemic in our District,” stated Acting United States Attorney Rohde.  “Today he was held accountable.  Together with our law enforcement partners, this Office will continue to investigate and prosecute those like the defendant who seek to line their own pockets by selling these dangerous drugs and harming our community.”

According to court filings, the defendant was affiliated with the violent street gang “Get it in Stacks” (also known as “GI$”), a subset of the nationwide Bloods gang operating near the Baisley Park Houses in South Jamaica, Queens.  The defendant supervised street-level dealers near the Baisley Park Houses—including at least one GI$ member and several elderly heroin addicts—who distributed heroin and fentanyl labeled with brand names such as “Batman,” “Call of Duty” and “Sleepys.”  The defendant also sold heroin and fentanyl directly to users.  From March 2016 to August 2016, for example, the defendant made more than 15 drug sales to a confidential FBI source.  On many of these occasions, the defendant sold the source fentanyl instead of heroin—without ever revealing this fact to the source. 

The defendant acknowledged in post-arrest statements that he personally did not use heroin: “I don’t use this [expletive].  I don’t touch this [expletive]. . . .  I don’t view it as drugs, I view it as money.”  A search of the defendant’s phone revealed more evidence of gang affiliation, plus photographs of the defendant with wads of cash and multiple firearms.

Four other defendants have been charged with heroin distribution crimes in this case, and each has pleaded guilty.  On August 8, 2017, co-defendant Michael Singletary was sentenced to a year and a day of imprisonment for a single incident of heroin distribution.  On October 3, 2017, co-defendant David Young—one of the defendant’s street-level dealers—was sentenced to 36 months’ imprisonment.  On October 27, 2017, co-defendant William Parker—a career offender and another one of the defendant’s street-level dealers—was sentenced to 96 months’ imprisonment.  Co-defendant Dennis Pristell—a street-level dealer who worked for the defendant—is awaiting sentencing.   

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

Defendant Sentenced Today:

LAMONT MORAN
Age: 30
Residence: Queens, New York

Defendants Previously Sentenced:

WILLIAM PARKER
Age: 53
Residence: Queens, New York

MICHAEL SINGLETARY
Age: 43
Residence: Baldwin Harbor, New York

DAVID YOUNG
Age: 66
Residence: Queens, New York

Defendant Awaiting Sentencing:

DENNIS PRISTELL

Age: 57

Residence: Queens, New York

 

E.D.N.Y. Docket No. 16-CR-506 (S-1) (ILG)

An 11-count indictment was unsealed today in federal court in Brooklyn charging Richard Luthmann, George Padula III, and Michael Beck with kidnapping and kidnapping conspiracy, extortionate collection of credit, conspiracy to commit extortionate collection of credit and brandishing a firearm during the commission of those crimes.  Luthmann and Padula were also charged with conspiracy to commit wire fraud, money laundering, money laundering conspiracy and aggravated identity theft, and Luthmann was additionally charged with access device fraud and a second count of aggravated identity theft.  A fourth defendant, Stephen Cotogno, was charged by complaint with participating in the same wire fraud conspiracy as Luthmann, Padula and Beck.  Luthmann, Padula, Beck and Cotogno were arrested earlier today and will be arraigned this afternoon before United States Magistrate Judge Robert M. Levy.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jonathan Carson, Special Agent-in-Charge, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office (Commerce), announced the charges.

“As alleged, Richard Luthmann crossed the line from attorney to violent criminal and fraudster,” stated Acting United States Attorney Rohde.  “Luthmann and his coconspirators cheated scrap metal customers in order to make easy money for themselves, took advantage of a disabled man to conceal their fraud, and used gunpoint extortion to collect a purported debt.  Whether such crimes are committed on the street or in a law office, this Office and our law enforcement partners will investigate and prosecute them to the fullest extent of the law.”  Ms. Rohde expressed her grateful appreciation to the FBI and Commerce, who are responsible for leading the investigation, and thanked the Department of Homeland Security, Homeland Security Investigations, the New York City Police Department and the Social Security Administration for their assistance.

“After allegedly devising a scheme to cheat potential business partners, an attorney and his cohorts threatened using a purported organized crime syndicate to manage those who disagreed with the fraud,” stated FBI Assistant Director-in-Charge Sweeney.  “They are even accused of forcing a blind man to take part in their criminal attempt at profiting in business without working for it.  The FBI Organized Crime Task Force will continue going after those who think the law doesn't apply to them.”

The Fraud Scheme

According to court documents, beginning in the summer of 2015, Luthmann, who is a practicing lawyer on Staten Island, New York, along with Padula and another co-conspirator
(“Co-Conspirator 1”) agreed to defraud companies seeking to purchase scrap metal.  In part, the scheme involved contracting with victims to ship them containers of valuable scrap metal, but then filling the shipping containers primarily with cheap filler material.  Luthmann had encouraged Co-Conspirator 1 to involve Padula in the fraud because Padula claimed that his father was a member of a New York-based organized crime family and that his uncle was a high-ranking member of that crime family.  Luthmann said Padula could use his organized crime connections to settle any disputes that arose with disgruntled victims.  Cotogno participated in the scheme by renting his warehouse to the co-conspirators at an above-market price, making suggestions for filler material and helping procure filler material.  

To facilitate the fraud, Luthmann registered fake companies, including one called Omni Metal Corporation (“Omni”), with the New York Department of State, and recruited a client of his law practice (the “client”), who was blind and living on public assistance, to be the nominal president of Omni.  When the client expressed concern that he could face criminal exposure or lose his public assistance if the government learned about the arrangement, Luthmann assured the client that the government would not find out. 

Luthmann, Padula and Co-Conspirator 1 agreed to have the client open bank accounts to facilitate the fraud, and between October 2015 and December 2015, victims wired over half-a-million dollars into these accounts.  That money was then transferred into accounts controlled by Luthmann or Co-Conspirator 1, including Luthmann’s attorney trust account, or was withdrawn in cash and split among Luthmann, Padula and Co-Conspirator 1.

The Kidnapping and Extortion

On December 5, 2016, Luthmann asked Co-Conspirator 1 to meet him at his law office to sign some paperwork and said that they would then go out together for the evening.  When Co-Conspirator 1 arrived at the office, Luthmann was not there.  Co-Conspirator 1 contacted Luthmann, who told him to wait inside a conference room in the office.  While
Co-Conspirator 1 was waiting, Padula and Beck entered the room and blocked him from exiting.  Beck pulled out a gun, aimed it at Co-Conspirator 1’s head and knee and said he (Beck) was owed $10,000 because he had purchased a $7,000 debt that Co-Conspirator 1 owed Padula, and had added a $3,000 “vig,” or interest payment.  Co-Conspirator 1 was eventually allowed to leave, but Padula told him not to contact the police. 

Padula and Luthmann had previously told Co-Conspirator 1 that Beck was an enforcer for the organized crime family to which Padula’s family members belonged, and that he was “muscle” for Padula.  Moreover, in August 2016, Luthmann and Padula told
Co-Conspirator 1 that they had arranged for Beck to conduct a “sit down” with members of Chinese organized crime to resolve a conflict that arose out of the scrap metal fraud.

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

If convicted of the charges, defendants Luthmann, Padula, and Beck each face up to life imprisonment. Cotogno faces up to 20 years’ imprisonment if convicted of wire fraud conspiracy.  

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

The Defendant:

RICHARD LUTHMANN
Age: 38
Residence: Staten Island, New York

GEORGE PADULA III
Age:  29
Residence: Staten Island, New York

MICHAEL BECK
Age: 59
Residence: Staten Island, New York

STEPHEN COTOGNO
Age:  48
Residence: Holmdel, New Jersey

E.D.N.Y. Docket No. 17-CR-664 (JBW)

A federal jury in Brooklyn returned a guilty verdict today against Sean Price on four counts of a superseding indictment charging him with interstate and foreign enticement to engage in sexual activity, interstate and foreign transportation of a minor to engage in sexual activity, a Mann Act violation, and attempted sexual exploitation of a child. The verdict came after a four-day trial before United States District Judge Nicholas G. Garaufis.

Bridget M. Rohde, Acting 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 New York (HSI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the verdict.

“The jury has held defendant Sean Price accountable for his predatory conduct, which included luring a teenage girl from her home in Australia across the world to the United States so that he could engage in an illicit sexual relationship with her,” stated Acting United States Attorney Rohde.  “Today’s verdict should send a strong message that this Office, together with our law enforcement partners, will work tirelessly to identify those who would sexually exploit minors and prosecute those abusers to the fullest extent of the law.”  Ms. Rohde expressed her appreciation to the New South Wales Police Force and the Australian Federal Police for their assistance in the investigation and prosecution of this matter, and commends the Australian authorities and the NYPD on the investigation and cooperation that ultimately led to the recovery of the missing girl.

 “Price lured a teenage girl across the globe to satisfy his own sordid desires, taking advantage of her youth and preying on her vulnerability,” stated HSI Special Agent-in-Charge Melendez.  “These cases are a harsh reminder of the importance of educating our young people on the dangers of sexual predators on the internet.  HSI New York’s Trafficking in Persons Unit maintains an unwavering commitment to investigate these crimes around the world, targeting and arresting predators who transport minors for sex.  And we continue to collaborate with our global partners, like the Australian Federal Police, while relying on local partnerships as with the NYPD.”

The evidence at trial established that in the fall of 2016, Price established an online relationship with a 16-year-old girl who lived in Australia.  By January 2017, they were communicating with each other daily through messages on Facebook, with much of the discussion concerning Price’s desire to engage in sex with the girl, and how she could travel from Australia to join Price in New York City without law enforcement or her parents finding out.  The Facebook chat messages demonstrated that Price, who was 39-years-old at the time, openly discussed the girl’s age with her, and Price told her repeatedly that he wanted to be sexually intimate with her.

Price and the girl also discussed obtaining a fake passport so the girl could travel internationally, and Price offered to impersonate her father to help her get through airport security in the United States.  In chat messages, Price told the girl that they would soon be laughing at her parents and when she told Price that she did not need parental permission to fly internationally, Price responded: “So you coming to papa?”  After months of planning, Price wired the girl over $900 to purchase a plane ticket to fly to Los Angeles in late March of this year.  Shortly afterwards, on April 11, 2017, the girl flew on a roundtrip ticket from Sydney, Australia to Los Angeles, California, where Price was waiting for her arrival.  Price hired a rental car, and he drove across the country to Price’s home in Jamaica, Queens. 

Price admitted in a post-arrest statement that he and Jane Doe were involved sexually during their cross-country trip, and while they were living in Queens until she was found by law enforcement in his home four weeks later.  Following her successful recovery by officers of the NYPD, Jane Doe was returned to her family in Australia.

When sentenced, Price faces up to life in prison. 

The government’s case is being prosecuted by Assistant United States Attorneys Taryn A. Merkl and Monica K. Castro.

The Defendant:

SEAN PRICE
Age: 39
Residence: Queens, New York

E.D.N.Y. Docket No. 17-CR-301 (NGG)

Earlier today, John R. Lakian, a manager of Capital L Financial Group, LLC (Capital L) and Aegis Capital Fund, LLC (Aegis Capital Fund), was sentenced to 55 months’ imprisonment, having pleaded guilty to two counts of securities fraud for defrauding investors out of millions of dollars in two separate schemes.  The Court also ordered Lakian to pay restitution to the victims in the amount $15,640,582.46. The sentencing took place before United States District Judge Frederic Block at the federal courthouse in Brooklyn.
 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
 

“Lakian and his co-defendant stole millions of dollars entrusted to them by investors, many of them hard-working individuals who have been robbed of financial security in their retirement years by the defendants’ fraudulent scheme,” stated Acting United States Attorney Rohde.  “This Office, together with our partners at the FBI, is committed to bringing to justice those who deceive the investing public in order to line their own pockets.”

“While Lakian and his co-defendant were living in the lap of luxury, those who invested not only their money with him, but their faith in him, were unwittingly funding this lavish lifestyle,” stated FBI Assistant Director-in-Charge Sweeney.  “Today's sentencing should remind all investment fund managers of their obligation to put the interests of their clients ahead of their own. If you don't, we won't let you get away with it.”
 

Between 2009 and 2013, Lakian was involved in two schemes to steal investors’ money.  In the first, he and his co-defendant, Diane Lamm, obtained more than $11 million by promising Capital L investors that their money would be used to purchase, consolidate, and sell registered investment advisory businesses.  Instead, Lakian and his co-defendant diverted more than $3 million to themselves and to entities, including hospitality businesses, that they owned and controlled.  In the second scheme, Lakian and his co-defendant embezzled money through their management of Aegis Capital Fund, a North Carolina-based investment fund that was placed into liquidation in 2011.  Prior to the liquidation, Lakian and his co-defendant directed more than $2.4 million of Fund assets into hospitality businesses without informing the Fund’s investors that Lakian and his co-defendant owned and controlled these businesses.  More than $1.9 million of the $2.4 million of fund assets was never recovered by the investors.  Additionally, following the Fund’s liquidation, instead of returning investment proceeds to investors, Lakian and his co-defendant diverted more than $2 million of investors’ money to themselves and to their hospitality businesses.  The government has identified credit card charges and company expenses or purposes unrelated to the purchase, consolidation and sale of registered investment advisers.  Charges were incurred, for example, for clothing, furniture and fine art from luxury stores such as Bergdorf Goodman, Gucci, and Paul Stewart; stays at the Palace and Waldorf Astoria hotels in New York City; getaways at luxury resorts; and items for Lakian and his co-defendant’s restaurant business.

 

Lakian’s co-defendant, Diane Lamm, pleaded guilty in February 2016 to two counts of securities fraud and is scheduled to be sentenced on January 25, 2018.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Whitman G.S. Knapp is in charge of the prosecution.  Assistant United States Attorney Karin Orenstein of the Office’s Civil Division is responsible for the forfeiture of assets.
 

The Defendants:
 

JOHN R. LAKIAN

Age: 74

New York, New York

 

E.D.N.Y. Docket No. 15-CR-0043 (FB)

Earlier today, at the federal courthouse in Brooklyn, Marc Broidy, the founder, Principal, and Chief Executive Officer of Broidy Wealth Advisors, LLC, was sentenced by United States District Judge Eric N. Vitaliano to 42 months’ imprisonment for committing investment adviser fraud, to be followed by three years of supervised release.  The Court also ordered Broidy to pay $1,694,464.00 in restitution to his victims. 

 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.

According to court filings and facts presented at his guilty plea proceeding, from November 2010 to July 2016, Broidy engaged in a scheme to defraud his clients both by taking $640,000 in management fees to which he was not entitled, and also by stealing more than $865,000 worth of stock held in trusts, over which he was trustee, to repay a client who discovered his fraudulent overbilling scheme.  Broidy used the money he stole to pay for personal expenses such as his home mortgage, overseas travel and car payments.  To cover up his theft, Broidy falsified tax records and invoices, and lied to an accountant for one victim.  When one of the victims discovered Broidy’s theft and demanded repayment, Broidy stole from the trust accounts of another client’s children, over which Broidy was trustee, to make the payments.  Broidy also failed to disclose to his clients, as required by law, that he was receiving commissions from companies whose stock he caused his clients to purchase.

 

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Matthew Amatruda is in charge of the prosecution.  Ms. Rohde thanked the U.S. Securities and Exchange Commission, New York Regional Office (SEC), for their assistance during the investigation.

The Defendant:

MARC BROIDY
Age:  43
Residence: Los Angeles, California

E.D.N.Y. Docket No. 17-CR-64 (ENV)

Earlier today, at the federal courthouse in Central Islip, New York, Jack Vitayanon pleaded guilty to conspiring with others to distribute over 500 grams of methamphetamine.  According to court filings and facts presented during the plea proceeding, at the time of his February 2017 arrest in Washington, D.C., Vitayanon was employed as an Attorney-Advisor by the United States Treasury Department, Internal Revenue Service, Office of Professional Responsibility.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations New York (HSI), announced the guilty plea.

Ms. Rohde also expressed her grateful appreciation to the United States Treasury Department Inspector General, HSI’s High Intensity Drug Trafficking Area group in Washington, D.C. and the United States Attorney’s Office for the District of Columbia.  

As detailed in the complaint, Vitayanon conspired with others in Arizona and on Long Island to distribute methamphetamine for several years. Vitayanon negotiated and consummated the sales of distribution quantities of methamphetamine to undercover HSI special agents on Long Island.  The negotiations occurred via recorded internet-based video chats and text messages, and the defendant shipped the methamphetamine from his apartment in Washington D.C. to Long Island via Federal Express.  

The recipient of the package, acting at the direction of law enforcement, recorded a video chat with Vitayanon over the internet on Dec. 15, 2016, and, during the recorded conversation, Vitayanon was observed in his residence smoking what appeared to be methamphetamine from a glass pipe, according to the complaint.

A search of the Vitayanon’s Washington D.C. apartment executed pursuant to a court-authorized search warrant led to the seizure of additional quantities of suspected methamphetamine, drug paraphernalia, packaging materials and drug ledgers.

Today’s proceeding took place before United States District Judge Joanna Seybert.  When sentenced, Vitayanon faces up to life in prison, as well as forfeiture and a fine of up to $10 million.

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

The Defendant:

JACK VITAYANON
Age: 42
Washington, D.C.

E.D.N.Y. Docket No. 17-CR-80 (JS)

A five-count indictment was unsealed earlier today in federal court in Central Islip, New York, charging Zoobia Shahnaz with bank fraud, conspiracy to commit money laundering and three substantive counts of money laundering.  As alleged in the indictment and court filings, the defendant defrauded numerous financial institutions and obtained over $85,000 in illicit proceeds, which she converted to Bitcoin and other cryptocurrencies.  She then laundered and transferred the funds out of the country to support the Islamic State of Iraq and al-Sham (“ISIS”), which has been designated by the U.S. Secretary of State as a foreign terrorist organization.  After consummating the scheme, the defendant attempted to leave the United States and travel to Syria.  Shahnaz, a U.S citizen, was arrested yesterday, and her initial arraignment is scheduled for this afternoon before United States Magistrate Judge A. Kathleen Tomlinson.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.

“As alleged, the defendant Zoobia Shahnaz engaged in a bank fraud scheme, purchased Bitcoin and other cryptocurrencies and laundered money overseas, intending to put thousands of dollars into the coffers of terrorists,” stated Acting United States Attorney Rohde.  “The indictment reflects the resolve of this Office, together with our law enforcement partners, to investigate and prosecute anyone who would seek to support terrorists, including those who would perpetrate financial crimes to do so.”  Ms. Rohde extended her grateful appreciation to the FBI’s Joint Terrorism Task Force comprising a large number of federal, state and local agencies from the region.  

“Syria is a perilous and violent war-torn country, but the subject in this investigation was allegedly so determined to assist ISIS that she planned a covert, illegal entry into Syria,” stated FBI Assistant Director-in-Charge Sweeney.  “On top of which, she allegedly tried to launder virtual currency to bolster terrorists’ dwindling financial support.  The FBI New York Joint Terrorism Task Force kept this woman from her dangerous and potentially deadly goal.  We will do all we can to stop the next person hoping to do the same.  We want to thank our law enforcement partners Suffolk County Police Department, with whom we worked this case side-by-side.”

As set forth in the indictment and court filings, in or about and between March 2017 and the date of her attempted travel to Syria on July 31, 2017, the defendant engaged in a scheme to defraud numerous financial institutions.  Specifically, Shahnaz obtained a loan for approximately $22,500 by way of materially false representations.  She also fraudulently applied for over a dozen credit cards, which she used to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online.  She then engaged in a pattern of financial activity, culminating in several wire transactions, totaling over $150,000, to individuals and apparent shell entities in Pakistan, China and Turkey.  These transactions were designed to avoid transaction reporting requirements, conceal the identity, source and destination of the illicitly obtained monies, and, ultimately, benefit ISIS.

After conducting these financial transactions, the defendant sought to travel to Syria herself.  She was questioned by law enforcement at John F. Kennedy International Airport when she attempted to board a flight to Islamabad, Pakistan.  Her itinerary included a multi-day layover in Istanbul, Turkey – a common point of entry for individuals travelling from Western countries to join ISIS in Syria.

The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Shahnaz faces a maximum of 30 years for the bank fraud charge and 20 years on each money laundering count. 

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

The Defendant:

Zoobia Shanaz
Age: 27
Brentwood, NY

E.D.N.Y. Docket No. 17-CR-0690

Earlier today, at the federal courthouse in Brooklyn, New York, Johnnie Monroe, also known as “Nut,” was sentenced by United States District Judge Brian M. Cogan to 97 months’ imprisonment for conspiring to distribute fentanyl, to be followed by a term of four years’ supervised release.  The fentanyl the defendant distributed was linked to the overdose death of a young mother in West Virginia in April 2015.  Judge Cogan also ordered forfeiture in the amount of $150,000.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration, New York Division (DEA), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence. 

“The death of a woman in West Virginia after ingesting fentanyl pills distributed by defendant Johnnie Monroe did not deter him from shortly thereafter shipping another package of pills containing fentanyl to West Virginia,” stated Acting United States Attorney Rohde.  “Today’s sentence holds Monroe accountable for contributing to the deadly opioid epidemic facing this country.  This Office, together with our law enforcement partners, will continue to identify and prosecute those who contribute to and would seek to profit from this epidemic. Through these efforts, lives will be saved by reducing the availability of opioids and preventing new addictions.”

 

“There are no words to express our sorrow for lives lost as a result of drug overdose; but DEA strives to bring justice to the victims’ families by identifying those responsible for distributing the poison,” stated DEA Special Agent in Charge Hunt.  “Heroin and fentanyl are poison and have been the cause of record breaking numbers of overdoses throughout the U.S.  This sentencing is a reminder that DEA and our law enforcement partners will continue to investigate opioid trafficking organizations and put them in jail.” 

According to the Centers for Disease Control and Prevention and the Department of Justice, drug overdoses have become the leading cause of death for Americans under the age of 50.  Between 2012 and 2015, fentanyl overdose deaths in West Virginia increased by more than 20 percent, according to the DEA.  The recent rise in overdose deaths has been driven in large part by fentanyl—a drug that has been described as 50 to 100 times more potent than morphine.  Opioids have been a particular problem in West Virginia, where the defendant and his co-conspirators trafficked substantial amounts of fentanyl.  One of the victims of these trends was a young mother, who Monroe and his co-conspirators believed they killed with their fentanyl pills.  Upon learning of the young mother’s death, Monroe was intercepted over a judicially authorized wiretap stating, “The girl went out.”  When a co-conspirator asked Monroe what he meant by “went out,” Monroe left no ambiguity that a young woman had overdosed: “Went out!  OD, OD!”  Nonetheless, two weeks later, Monroe mailed another package containing hundreds of pills containing fentanyl to a co-conspirator in West Virginia.

According to the government’s sentencing memorandum, the defendant traveled to West Virginia to sell fentanyl, and, in addition, supplied a significant amount of the crack cocaine that was sold by street-level dealers in the Queensbridge community.  The defendant himself sold crack on 20 separate occasions in deals monitored by the NYPD.  The defendant also agreed to commit an armed robbery of an individual believed to be traveling with $110,000, and went to a bus station in Manhattan to look for the individual.  The failed robbery plot was not for a lack of effort—the targeted victim never arrived.  The next day, Monroe was intercepted over a wiretap bragging to a co-conspirator that they were in position, armed and ready to commit the robbery: “We had biscuits [i.e., firearms], stun guns . . . we would a taken him down.”    

On December 5, 2017, co-defendant Edward Carrillo was sentenced to 126 months’ imprisonment for the same charge of conspiring to distribute fentanyl.  For conspiring to distribute crack-cocaine in Queensbridge, co-defendant Terrell Carmichael was sentenced on November 16, 2017 to 51 months’ imprisonment and co-defendant Kyle Williams was sentenced on December 12, 2017 to 42 months’ imprisonment.  Three additional co-defendants are awaiting sentencing. 

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

Defendant Sentenced Today:

JOHNNIE MONROE, also known as “Nut”
Age: 46
Brooklyn, New York

Defendants Previously Sentenced:

TERRELL CARMICHAEL, also known as “Rell”
Age: 31
Long Island City, New York

EDWARD CARRILLO, also known as “Super Ed”
Age: 43
Manhattan, New York

KYLE WILLIAMS, also known as “Sleepy”
Age: 31
Long Island City, New York

Defendants Awaiting Sentencing:

LASHAWN BALANCE, also known as “Flip”
Age: 41
Princeton, West Virginia

DARRYL KNOWLES
Age: 29
Bronx, New York

MICHAEL YOUNG, also known as “Littles”
Age: 32
Long Island City, New York

E.D.N.Y. Docket No. 16-CR-617 (BMC)

Earlier today, in federal court in Brooklyn, Igor Krugly was sentenced by United States District Judge Brian M. Cogan to 46 months’ imprisonment following his conviction for racketeering, including illegal gambling and extortion conspiracy as predicate acts.  Krugly was a prominent member of a violent, Brooklyn-based, Eastern European criminal syndicate linked to high-ranking members of the Eastern European mafia.  Krugly also agreed to pay criminal forfeiture in the amount of $25,000. Krugly pleaded guilty to the charge in June 2017.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), Angel M. Melendez, Special Agent-in-Charge, Immigration and Customs Enforcement, Homeland Security Investigations New York (ICE-HSI), James D. Robnett, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, (IRS-CI), James P. O’Neill, Commissioner, New York City Police Department (NYPD), and George Beach, Superintendent, New York State Police (NYSP), announced the sentence.

“As a member of an Eastern European organized crime syndicate, Krugly engaged in traditional and pernicious rackets, operating illegal high stakes poker games and perpetuating a related, international extortion conspiracy,” stated Acting United States Attorney Rohde.  “Krugly’s conviction and sentence demonstrate the resolve of this Office and our law enforcement partners to use all available tools to root out the destructive influence of organized crime groups wherever they operate.”

“Krugly was a leader of a criminal enterprise operating in New York that profited from illegal gambling, drug trafficking and other criminal acts,” stated DEA Special Agent-in-Charge Hunt.  “Throughout the investigation, our Strike Force identified Krugly’s role in violent crimes committed in other countries including Russia and Israel.  This conviction is a true testament to law enforcement’s tenacity and successful collaboration between federal, state, local and international law enforcement.”   

“This criminal organization has been connected to arson, assault, illegal gambling and extortion, including using threats for repayment of a gambling debt,” stated HSI Special Agent-in-Charge Melendez.  “Today’s sentencing is the result of the hard work of the men and women from multiple agencies on the DEA’s Strike Force, and we are committed to working with our law enforcement partners and bringing these criminals to justice.”

“When defendants take extreme measures to continue their criminal activity, IRS-CI will add our financial expertise to strengthen these multi-agency investigations,” said IRS-CI Special Agent-in-Charge Robnett.  “Today’s sentence is a direct result of the contributions from our law enforcement partners and prosecutors of the Eastern District of New York, who are committed to combating violations of federal law.”

 “Today’s sentencing is a direct result of the hard work and cooperation among law enforcement at all levels, and I applaud all of our partners for their dedication to fighting organized crime,” stated NYSP Superintendent Beach.  “The disruption of this illegal operation serves as a strong reminder that activities such as racketeering, illegal gambling and the violence that is perpetuated by such crimes will not be tolerated.”

According to court filings, members of the syndicate engaged in a wide range of organized criminal activities, including arson, assault, drug trafficking, extortion, illegal gambling and loansharking.  Krugly co-owned and operated some of the syndicate’s high-stakes poker games in Brooklyn, and he used threats of violence to collect debts.  In mid-2016, after a poker player who owed Krugly tens of thousands of dollars fled the country, Krugly and his co-defendants devised a plan to extort the player with the help of high-ranking members of Eastern European organized crime, known as “Thieves-in-Law” or “Thieves.”  Court-authorized wiretaps captured Krugly planning to track down the player’s family in Russia to find out where he had fled:  “This [expletive] is not [expletive] calling me.  Right now, we need to find him or his father, that’s it  . . . .  they will approach the father, the wife of the father or his people there in Moscow.”  Krugly and his co-defendants ultimately located the player in Israel and enlisted the help of the Thieves to confront him there.  Less than an hour after being approached in Israel, the player contacted Krugly to arrange repayment of his debt.

Krugly was also the co-owner of a high-stakes poker game located inside a storefront at 2663 Coney Island Avenue in Brooklyn, which displayed a large poster bearing the name of the defendant’s private security business, “Pitbull Security,” in the window.  Inside, however, was a professional poker room where Krugly was involved in every aspect of the business including recruiting players, paying out money to winners and collecting debts from losers, and hiring dealers and “massage girls.”

Eleven other members of the syndicate have been charged with racketeering crimes in this case.  One defendant remains a fugitive, and seven have pled guilty to racketeering and related crimes.  On November 13, 2017, co-defendant Isok Aronov was sentenced to a year and a day of imprisonment for unlawful debt collection.  Defendants Leonid Gershman, Aleksey Tsvetkov and Artiom Pocinoc are awaiting trial.  The remaining defendants are awaiting sentencing.

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

Defendant Sentenced Today:

IGOR KRUGLY
Age: 38
Residence:  Brooklyn, New York

Defendant Previously Sentenced: ISOK ARONOV
Age: 32
Residence: Brooklyn, New York

Defendants Awaiting Trial:

 

LEONID GERSHMAN

Age: 34

Residence: Brooklyn, New York

 

ARTIOM POCINOC

Age: 28

Residence: Brooklyn, New York

 

ALEKSEY TSVETKOV

Age: 39

Residence: Brooklyn, New York

 

Defendants Awaiting Sentencing:

 

ERIC BOBRITSKY
Age: 32
Residence: Brooklyn

 

VYACHESLAV MALKEYEV

Age: 33

Residence: Manhattan, New York

 

YUSIF PARDILOV
Age: 52
Residence: Brooklyn, New York

LIBRADO RIVERA

Age: 36

Residence: Brooklyn, New York

RENAT YUSUFOV
Age: 38
Residence: Brooklyn, New York

Fugitive:

VIKTOR ZELINGER

Age: 38

Residence: Brooklyn, New York

 

E.D.N.Y. Docket No. 16-CR-553 (S-2) (BMC)

Earlier today, in federal court in Central Islip, New York, a 13-count superseding indictment was unsealed charging six members and associates of the Gambino organized crime family of La Cosa Nostra and a member of the Bonanno organized crime family of La Cosa Nostra with racketeering conspiracy, including predicate acts of loansharking, operating illegal gambling businesses, narcotics distribution conspiracy and obstruction of justice conspiracy.  The superseding indictment relates to the defendants’ alleged criminal activities on Long Island, in Brooklyn, and elsewhere between January 2014 and December 2017.  The defendants – John “Johnny Boy” Ambrosio, an acting captain in the Gambino family, Frank “Frankie Boy” Salerno, a soldier in the Bonanno family, and Thomas Anzaone, Alessandro “Sandro” Damelio, Joseph Durso, Anthony Rodolico and Anthony Saladino, associates of the Gambino family, were arrested earlier today and are scheduled to be arraigned this afternoon before United States Magistrate Judge Gary R. Brown in federal court in Central Islip.   

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Division (FBI), Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations New York (HSI), Timothy D. Sini, Commissioner, Suffolk County Police Department (SCPD), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.

“Today’s arrests represent a major disruption of La Costra Nostra’s activities on Long Island,” stated acting United States Attorney Rohde.  “As alleged, the defendants engaged in a wide range of illegal and violent conduct in furtherance of their criminal enterprise.  The superseding indictment sends a message that this Office, together with our law enforcement partners, remains committed to diminishing these organized crime families and their deleterious effect on our communities.  Ms. Rohde also praised the exceptional investigative efforts and collaboration of the FBI, HSI, SCPD, and the NYPD.

“The arrests in this case prove organized crime families haven’t gone away, and continue to plague our communities with their general disregard for anything other than their own greed,” stated FBI Assistant Director-in-Charge Sweeney.  “The overt deadly attacks that used to make headlines aren’t as prevalent, but their violent tactics haven’t changed.  Members of these families should take heed that the FBI Organized Crime Task Force and our law enforcement partners haven’t gone away, and we dedicate resources each and every day to putting these criminals in jail.”

“From operating an illegitimate casino and an illegal loan shark operation to distributing cocaine and marijuana, the charges against these individuals are extensive,” stated  HSI Special Agent-in-Charge Melendez.  “We remain committed to working with our law enforcement partners in investigating nefarious criminal organizations like La Cosa Nostra and dismantling their operations.”

“Building this solid case against these ruthless criminals took years of dedicated and collaborative work on behalf of the men and women of the Suffolk County Police Department and our law enforcement partners,” SCPD Commissioner Sini said. “I am extremely proud of our officers and investigators, grateful for the continued partnership between this department and the, NYPD, FBI, HSI and appreciative of the United States Attorney for the Eastern District of New York to bring these criminals to justice.”

Loan Sharking Offenses

As alleged in the indictment and court filings, Ambrosio, also known as “Johnny Boy,” conducted a lucrative loansharking operation in which he, Anzalone, Rodolico, Saladino and others extended extortionate loans to, and used extortionate means to collect from numerous individuals, often charging exorbitant interest rates and employing violent collection methods.  For instance, in an intercepted conversation between Saladino and Anzalone, the two discussed various “gambling debts” owed by other parties, Saladino stated that he would give a debtor “something to be scared about”, but that he did not want a “beef” – a physical altercation – at his “club”, because he was “responsible to John [Ambrosio] for what happen[ed] there.”  In that same call, Saladino offered to “fix” another gambling debtor, saying “by the time we’re done…he’s not going to have an office to play anywhere.”  In another conversation with Ambrosio, an individual asked for Ambrosio’s help collecting a debt and recounted telling the debtor, “I don’t know if you know who I am and where I come from, but I promise you, you will never walk again.”  Ambrosio and Rodolico also allegedly attempted to obstruct the federal grand jury proceeding into their criminal activities by intimidating a loanshark victim into lying to law enforcement.

Illegal Gambling Offenses

According to the indictment and other court filings, Ambrosio also was involved with a variety of gambling operations, including illegal poker games, electronic gaming machines and internet sports betting, with Damelio, Durso, Salerno and Saladino being responsible for many of the day-to-day operations.  In one intercepted call, Ambrosio stated that there was no need to travel to a casino – “you can play right here” and “save gas money.” 

Narcotics Trafficking Offenses

As also alleged in the indictment and court filings, defendants Anzalone, Damelio, Durso, Saladino and Salerno distributed a variety of narcotics, including cocaine, marijuana and alprazolam, which is commonly known as Xanax.  Significantly, Saladino and Salerno engaged in the distribution of wholesale quantities of cocaine, including 12 separate sales to an undercover member of law enforcement totaling over half a kilogram.

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

If convicted, Ambrosio, Anzalone, Damelio, Durso and Rodolico face a maximum of 20 years in prison.  Saladino and Salerno each face a mandatory minimum sentence of 10 years and a maximum sentence of life imprisonment for the cocaine conspiracy offenses.

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

The Defendants:

JOHn AMBROSIO (“Johnny Boy”)
Age: 74
Huntington, NY

THOMAS ANZALONE
Age: 44
Queens, NY

ALESSANDRO DAMELIO (“Sandro”)
Age: 49
Queens, NY

JOSEPH DURSO
Age: 26
Glen Cove, NY

ANTHONY RODOLICO
Age: 46
Huntington, NY

ANTHONY SALADInO
Age: 67
Glen Cove, NY

FRANK SALERNO (“Frankie Boy”)
Age: 43
Queens, NY

E.D.N.Y. Docket No. 17-CR-522 (S-1)(SJF)

A six-count indictment was unsealed today in federal court in Central Islip, New York, charging Ralph Colamussi and Roberto Villanueva with conspiring to engage in forced labor of immigrants and visa fraud, as well as related substantive counts, fraud in foreign labor contracting and fraudulent inducement of aliens to enter and remain in the United States in violation of law.  Both defendants were arrested this morning and will be arraigned this afternoon before United States Magistrate Judge Anne Y. Shields.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Thomas M. Cioppa, District Director, United States Citizenship and Immigration Services (USCIS), and Michael Mikulka, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General (DOL-OIG), announced the charges.

“As alleged, Colamussi and Villanueva lured immigrants from the Philippines to the United States with false promises regarding jobs and overtime pay in order to line their own pockets at the expense of the victims,” stated Acting United States Attorney Rohde.  “This Office, together with our law enforcement partners, will hold accountable those who engage in such illegal, exploitive behavior.”

“This case is an example of ruthless labor trafficking hiding in plain sight.  These individuals allegedly committed visa fraud while forcing people to work in their catering hall under horrible conditions, in what seemed to be an inescapable situation,” stated HSI Special Agent-in-Charge Melendez. “It is important for anyone who may believe they are a victim of trafficking to know that our investigations are victim-centered, focusing on keeping the victim safe while bringing their traffickers to justice.”

 “USCIS played a meaningful role in bringing suspects of this inhumane criminal activity to face justice,” said USCIS New York District Director Cioppa. “Supporting cases like these is an important way USCIS fulfills key parts of our mission: safeguarding the integrity of our immigration system and securing the homeland.”

 “An important function of the Office of Inspector General is to investigate allegations of fraud related to the Department of Labor's administration of the H-2B Visa program,” stated DOL-OIG Special Agent-in-Charge Mikulka. “We will continue to proactively work with our law enforcement partners to investigate these types of allegations.”

At the time of the events alleged in the indictment, Colamussi was the owner and operator of Thatched Cottage, a popular catering and wedding venue in Centerport, New York, as well as the owner and operator of the Jellyfish Restaurant, a popular bar located next door to the Thatched Cottage. As alleged in the indictment, between approximately August 2008 and March 2013, Villanueva and Colamussi recruited prospective employees in the Philippines with false promises of jobs with overtime pay, as waiters, servers, cooks, chefs and food preparation. The prospective employees were illegally made to pay the defendants money in advance in order to qualify for the visa interview in the United States and directed to conceal such payments from the United States Department of State during visa interviews.  Workers were not only brought to the United States by means of fraudulent promises of specific employment, but upon arrival, were forced to work at lower than promised wages without overtime.  The  workers were also forced to care for Colamussi’s relatives, including his father, and to perform construction work at the Jellyfish Restaurant.

Workers were brought to the United States on H-2B visas that expired shortly after their arrival in the United States.  Once their H-2B visas expired, workers were allegedly told by Colamussi and Villanueva to apply for student visas and to fraudulently represent that they intended to attend school full-time and had sufficient resources to support themselves during school.  Colamussi and Villanueva, at times, deposited funds in the workers’ bank accounts to give the appearance of resources and then withdrew the funds once the student visas were approved.  The workers continued to work for Colamussi and Villanueva during the term of their student visas, attending school one day a week.

When the workers objected to performing certain jobs or working consecutive shifts, Colamussi and Villanueva threatened to report them to immigration authorities.  Colamussi had many workers whose visas had expired living in the basement of his home in East Northport, New York, and working for him off the books.

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

If convicted, Colamussi and Villanueva face a maximum term of imprisonment of 20 years for forced labor and conspiracy to commit forced labor, 10 years for visa fraud and fraud in foreign labor contracting, and five years for conspiracy to commit visa fraud and inducement of an alien to illegally enter and reside in the United States.  Defendants also face forfeiture of all proceeds and the house in East Northport where the immigrants lived in the basement.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Charles P. Kelly is in charge of the prosecution with the assistance of Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division, which is responsible for the forfeiture of assets.

Earlier today, at the federal courthouse in Brooklyn, George Trevor Porrata was sentenced to five years’ imprisonment for conspiring to commit securities fraud.  The Court also ordered $1,046,385.50 in restitution to victims and $400,000 in forfeiture.  According to court filings and facts presented during his guilty plea proceeding, Porrata led a scheme to induce people to invest in Halberd Corporation, a publicly traded corporation whose shares traded on the over-the-counter exchange under the ticker symbol HALB.  The proceeding took place before United States Chief District Judge Dora L. Irizarry.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.

According to public filings, from March 2010 to September 2013, Porrata directed press releases to be issued with false information to induce people to invest in Halberd, a company that purportedly produced aerial drones but, in fact, existed primarily on paper.  Among other things, Porrata caused press releases to be issued about Halberd opening a sales and marketing office, owning a mass production facility and submitting a bid for a government contract.  Contrary to these representations, this information was false and it caused unsuspecting victims to invest in Halberd and also caused the company’s stock price to be artificially inflated.  Porrata and his co-conspirators sold their own shares of the company at the inflated price and caused investor losses of more than $1 million.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Sylvia Shweder and Matthew Amatruda are in charge of the prosecution.  Assistant United States Attorney Karin Orenstein is in charge of the forfeiture.

The Defendant:

GEORGE TREVOR PORRATA
Age:  46
Residence: West New York, New Jersey

E.D.N.Y. Docket No. 16-CR-93 (DLI)

Earlier today, at the federal courthouse in Brooklyn, Edward Carrillo, also known as “Super Ed,” was sentenced by United States District Judge Brian M. Cogan to 10 ½ years’ imprisonment for conspiring to distribute fentanyl, to be followed by a term of four years’ supervised release.  The fentanyl the defendant distributed was linked to the overdose death of a young mother in West Virginia in April 2015. The judge also ordered forfeiture in the amount of $150,000.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence. 

“The defendant peddled fentanyl from New York City to West Virginia with callous disregard for the human consequences of this dangerous drug,” stated Acting United States Attorney Rohde.  “Carrillo’s sentence should serve as a message that fentanyl dealers who promote and profit from this deadly epidemic will be held accountable for their crimes.”   

“What started as a local investigation targeting a crack cocaine distribution organization turned into a murder mystery upon the death of a young pregnant mother in West Virginia,” DEA Special Agent in Charge James Hunt stated.  “Fentanyl doesn’t discriminate against users, nor do drug dealers whose only concern is profit. Law Enforcement will continue to identify dealers and traffickers responsible for fueling opioid abuse and the rising number of fentanyl-related overdoses.”

According to the Centers for Disease Control and Prevention and the Department of Justice, drug overdoses have become the leading cause of death for Americans under the age of 50.  Between 2012 and 2015, fentanyl overdose deaths in West Virginia increased by more than 20 percent, according to the DEA. The recent rise in overdose deaths has been driven in large part by fentanyl—a drug that has been described as 50 to 100 times more potent than morphine.  Opioids have been a particular problem in West Virginia where the defendant and his co-conspirators trafficked substantial amounts of fentanyl.  One of those deaths was a young mother, whom Carrillo and his co-conspirators believed they killed with their fentanyl pills.  Upon learning of the young mother’s death, Carrillo’s co-conspirator was intercepted over a judicially authorized wiretap stating, “the girl went out.”  When Carrillo asked what the co-conspirator meant by “went out,” the co-conspirator left no ambiguity that a young woman had died: “Went out! OD, OD,” with ‘OD’ referring to a drug overdose.        

According to the government’s sentencing memorandum, in addition to his involvement in the fentanyl conspiracy, the defendant supplied a significant amount of the cocaine that was converted to crack and sold in the Queensbridge community.  He also agreed to commit an armed robbery of an individual believed to be traveling with $110,000.  When Carrillo was arrested in December 2016, law enforcement officers recovered a loaded gun at his apartment, which he used as a grow house for marihuana.  

On November 16, 2017, co-defendant Terrell Carmichael was sentenced to 51 months’ imprisonment for conspiring to distribute crack-cocaine.  The other defendants are awaiting sentencing. 

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

The Defendants:

LASHAWN BALANCE, also known as “Flip”
Age: 41
Princeton, West Virginia

TERRELL CARMICHAEL, also known as “Rell”
Age: 31
Long Island City, New York

EDWARD CARRILLO, also known as “Super Ed”
Age: 43
Manhattan, New York

DARRYL KNOWLES
Age: 29
Bronx, New York

JOHNNIE MONROE, also known as “Nut”
Age: 46
Brooklyn, New York

KYLE WILLIAMS, also known as “Sleepy”
Age: 31
Long Island City, New York

MICHAEL YOUNG, also known as “Littles”
Age: 32
Long Island City, New York

E.D.N.Y. Docket No. 16-CR-617 (BMC)

A Brooklyn, New York, resident pleaded guilty today to aiding and assisting in the preparation of a fraudulent tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Bridget Rohde for the Eastern District of New York.

 

According to documents and information provided to the court, Maria Munoz, 45, owned and operated a Brooklyn-based tax preparation business called Munoz Multiservices Corporation.  From 2010 through 2012, Munoz prepared fraudulent income tax returns for clients that included inflated or fictitious deductions for gifts to charity, unreimbursed employee expenses, personal property taxes and other expenses.  Munoz agreed that she caused a tax loss of $136,789.

 

Sentencing is scheduled for April 26, 2018 before U.S. District Court Judge Kiyo A. Matsumoto. Munoz faces a statutory maximum sentence of three years in prison, a period of supervised release, restitution and monetary penalties.

 

Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Rhode thanked special agents of the Internal Revenue Service Criminal Investigation, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Carl F. Brooker of the Tax Division, who are prosecuting the case.

 

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Ruslan Reizin and Mark Krivoi with extortion conspiracy.  The charges stem from the defendants’ alleged extortion and violent assault of a teenage victim who started an awning-cleaning business in Brooklyn that competed with a similar business operated by Reizin.  Reizin was arrested last night and Krivoi was arrested earlier today and will make their initial appearances this afternoon before United States Chief Magistrate Judge Roanne L. Mann.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Leon Hayward, Acting Director, New York Field Office, U.S. Customs and Border Protection (CBP), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.

 “As alleged, the defendants sought to eliminate a business competitor by beating and intimidating him; they also lined their pockets with thousands of dollars in extortionate payments,” stated Acting United States Attorney Rohde.  “This is no way to ensure a competitive edge.  We will not abide this method of trying to assure a competitive edge.” 

“This case illustrates a text book extortion, the suspects allegedly threatening violence because the victim decided to open his own business,” stated FBI Assistant Director-in-Charge Sweeney. “Our country thrives on a free market, and the ability of people to go out and start their own company is part of the American dream.  The FBI and our law enforcement partners will always pursue those who think to bully others into submission, and threaten free commerce.”

“U.S. Customs and Border Protection is proud of the expertise we provide in support of investigations that result in the takedown of criminal enterprises,” said CBP Acting Director Hayward.  “It is through interagency partnerships and collaborative efforts, like the one leading to today’s arrests, that law enforcement successfully combats today’s criminal organizations.”

According to the criminal complaint and other court filings, in May 2017, Reizin learned that the victim—who formerly worked for Reizin’s awning-cleaning company—had started a similar business in Brooklyn.  Reizin and Krivoi brought the victim to a secluded location in Sheepshead Bay where Reizin allegedly grabbed the victim by the throat, brandished a knife and gave him the choice of having his ear cut off or his throat slashed.  Krivoi allegedly suggested that they should kill the victim.  Reizin then demanded that the victim shut down his business and pay $10,000 to Reizin and a local motorcycle club to which Reizin belongs, and which Reizin claimed supported the extortion.  When the victim replied that he could not afford to pay, Reizin instructed Krivoi to hit the victim, which Krivoi did, repeatedly.  Reizin then offered the victim a “discount,” requiring him to pay $5,000 in monthly installments.  Reizin also told the victim that he and his family would suffer if the victim reported the assault to law enforcement.  Over the next several months, the victim made regular payments to Reizin.  During that period, in a recorded call with the victim, Reizin spoke about “cut[ting] out” the ear of one of the victim’s family members and “forc[ing him] to chew and swallow it.”  

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

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

The Defendants:

RUSLAN REIZIN
Age: 50
Brooklyn, New York

MARK KRIVOI
Age: 54
Brooklyn, New York

E.D.N.Y. Docket No. 17-MJ-1013

Earlier today, at the federal courthouse in Brooklyn, Qian Zheng, also known as “Cash,” was sentenced by United States District Judge Carol Bagley Amon to nine years’ imprisonment for racketeering based on his role as the leader of the Zheng Organization, a violent criminal enterprise that operated in the Sunset Park section of Brooklyn and the Flushing section of Queens for nearly a decade and engaged in violent assaults, extortions and drug distribution.  In January 2017, Zheng pleaded guilty to Count One of the indictment charging that between January 2007 and September 2015, the defendant, together with others, conducted and participated in the affairs of the Zheng Organization through a pattern of racketeering activity. The Court also ordered Zheng to pay $30,550 in restitution.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Thomas Decker, Field Office Director, U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the sentence.

“Qian Zheng was the leader of a criminal enterprise responsible for a variety of rackets including the repeated use of violence to collect extortionate debts,” stated Acting U.S. Attorney Rohde.  “His conviction, and the convictions of other members and associates of his criminal organization, reflects the strong commitment of this Office, along with our partners in law enforcement, to dismantling organized crime groups that spread fear throughout communities of this District.” 

“The subjects in this case terrorized a community with their criminal enterprise and violent tactics,” stated FBI Assistant Director-in-Charge Sweeney. “No one should dread leaving their homes, and going about their daily lives in fear of being harassed or brutally beaten by criminals who believed stealing is easier than making an honest living.  The FBI’s goal has been and always will be to stop these groups from developing and maintaining a stranglehold on local communities.”

“Zheng was ruthless in his lead role in this criminal organization, with multiple assaults and extortions over nearly a decade,” said ERO Field Office Director Decker.  “ERO will continue to work with the FBI and NYPD on these cases in an effort to remove these criminals from New York City streets.”

According to court filings and evidence presented at trials of Zheng Organization members and associates, in 2007 Zheng began running a criminal enterprise that engaged in various criminal activity and numerous acts of violence, specifically as alleged:

In August 2013, Zheng tasked two of his underlings with assaulting both the ex-boyfriend of a woman who hired him to arrange that assault and the ex-boyfriend’s wife.   Zheng provided his underlings with the victims’ home and work addresses, their daily schedule and a photograph of the male victim, and pointed out the victims’ home and car.  Zheng was recorded instructing his underlings to “beat him every time he is seen” and to “break his leg” and “scar the woman’s face.”  Zheng was paid at least $6,000 to carry out the vicious assault.  The victims were ultimately alerted to Zheng’s plan and were not injured.

In December 2013, Zheng attempted to extort a man in New Rochelle, New York.  A recording captured Zheng explaining that his underlings “will bring the guns, fire two gunshots” into the victim’s family’s restaurant and then leave.  Zheng was also recorded explaining that the victim “needs to be punched first.  Otherwise, he won’t pay any money.”  Zheng and three associates went to the victim’s home, but the victim noticed the men and called the police.

In the fall of 2014, Zheng Organization member Guifu Gao, also known as “Chicken Feather,” had a financial dispute that he wanted resolved with violence.  Zheng instructed one of his underlings to carry out an assault.  Gao instructed the underling to cripple the victim and make him handicapped.  Gao further explained that he wanted the victim beaten and his legs broken.  Zheng echoed Gao’s demands and was recorded instructing his underling to “follow [the victim] home and beat him in front of his house at night.  Beat him hard!”  Gao paid the underling $5,000 to carry out the assault but the victim was alerted to Zheng and Gao’s plan and was not injured.

In May 2015, Zheng instructed a number of his underlings, including co-defendants Xin Lin, also known as “Blackie,” Kai Huan Huang, also known as “Shen Shen,” and Xue Jiang Gao, also known as “Xue Zhang,” to extort the owner of a gambling parlor.  Lin, Huang, Jiang Gao and others went to the victim’s parlor, surrounded him and demanded money.  When the victim explained that he did not owe any money, Lin, Huang and Gao beat him with their fists and wooden stools.  The victim was left battered and bruised, with a fractured bone and a permanent deformity.  Zheng’s underlings also destroyed the victim’s gambling parlor, causing thousands of dollars in damage.  Zheng then sent more of his underlings to pressure the victim not to report the incident to law enforcement.

In addition to these acts of violence, Zheng and his underlings regularly distributed narcotics, including ketamine and MDMA, and in January 2014, Zheng operated an illegal high-stakes gambling parlor, run by Zheng Organization members, which grossed more than $60,000 in approximately 36 hours. 

Other Zheng Organization members and associates who were charged in this case have previously been convicted and sentenced for various crimes that they committed with Zheng or at his behest.  Guifu Gao was sentenced on January 24, 2017 to 70 months’ imprisonment for an extortionate collection of credit conspiracy.  Kai Huan Huang, who was convicted after trial, was sentenced on April 6, 2017 to 70 months’ imprisonment for an attempted extortion and extortion conspiracy.  Jiyao Jiang, who was convicted after trial, was sentenced on March 21, 2017 to 28 months’ imprisonment for an extortion conspiracy.  Xue Jiang Gao was sentenced on November 9, 2017 to 60 months’ imprisonment for racketeering.  Xin Lin was sentenced on March 9, 2017 to 78 months’ imprisonment for an extortion conspiracy.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Nadia E. Moore, Maria Cruz Melendez, Ameet Kabrawala and Mathew Miller are in charge of the prosecution.

The Defendants:

QIAN ZHENG, also known as “Cash”
Age: 46
Brooklyn, New York

XIN LIN, also known as “Blackie”
Age: 35
Queens, New York

GUIFU GAO, also known as “Chicken Feather”
Age: 37
Brooklyn, New York

KAI HUAN HUANG, also known as “Shen Shen”
Age: 28
Brooklyn, New York

XUE JIANG GAO, also known as “Xue Zhang”
Age: 32
Brooklyn, New York

JIYAO JIANG, also known as “Yi Qiang”
Age: 45
Queens, New York

ALLEN HUI CHEN, also known as “Yi Hui”
Age: 45
Brooklyn, New York

E.D.N.Y. Docket No. 15-CR-628 (CBA)

The U.S. District Court for the Eastern District of New York entered four consent decrees in two civil actions, permanently barring 14 individuals and entities from operating alleged multi-million dollar international mail-fraud schemes.  The defendants, located around the globe, include:  Swiss corporation BDK Mailing GmbH; Singapore companies Mailing Force Pte. Ltd. and Only Three Pte. Ltd; Chantal Seguy of France; Marion Elchlepp of France; Aurora Jouffroy-Brandtner of Switzerland; U.S. corporation Macromark Inc.; Macromark employee Mary Ellen Meyer; Indian corporation Mail Order Solutions India Pvt. Ltd. (MOSI), and MOSI’s owners, Dharti B. Desai of New York, New York, and Mehul A. Desai of India; and Ercan Barka, a resident of Turkey and New Jersey, Ryan Young of New Jersey, and True Vision LLC, a Delaware-based corporation.

 

Both schemes followed a similar pattern, involving a complicated web of actors located across the world.  Fraudulent “direct mailers” created letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune.  In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee.  The letters appeared to come from legitimate sources, typically on official-looking letterhead, but were in fact fictitious individuals and organizations including “Baroness de Rothman,” “DNF Funds Office,” “Finkelstein & Partner,” the “Harrison Institute,” and Marie de Fortune.  Moreover, even though the solicitations are in reality identical form letters sent to thousands or tens of thousands of recipients – the letters appear to be personally addressed. 

 

“The Department of Justice is committed to protecting all Americans from fraud and exploitation,” Associate Attorney General Rachel Brand said.  “This exploitation is repugnant and the Justice Department will pursue those who target our nation’s seniors and other vulnerable American consumers for financial gain. These consent decrees are just one example of the department’s broad efforts to protect seniors—and every American—from mail fraud.”

 

“The defendants’ preyed on the elderly and other vulnerable citizens through fictitious lotteries and other exploitive games, unfairly enriching themselves at the expense of these victims,” stated Acting U.S. Attorney Bridget Rohde for the Eastern District of New York. “These consent decrees put the defendants out of the exploitation business. This Office is committed to pursuing the perpetrators and enablers of such schemes, in New York and abroad, to hold them accountable and to protect others from being swindled.”

 

“These actions are an important step in dismantling the many components of this fraudulent mass-mailing industry,” said Inspector in Charge Regina Faulkerson.  “The Postal Inspection Service will continue to aggressively investigate everyone involved in facilitating these predatory mailings.”

 

United States v. BDK, et al.

 

The first case, in which consent decrees were entered on November 21, 2017, alleges that the defendants’ fraud scheme victimized hundreds of thousands of Americans and targeted primarily the elderly and vulnerable.  According to the complaint, the victims sent the defendants payments totaling $50 to $60 million annually between 2005 and 2016.

 

The consent decrees entered yesterday resolve the litigation.  As part of the consent decrees, defendants BDK Mailing GmbH, Mailing Force Pte. Ltd. and Only Three Pte. Ltd. (collectively BDK) admit that they acted as “direct mailers” responsible for mailing millions of advertisements, solicitations, or promotional materials on behalf of dozens of fictitious psychics, sweepstakes, lotteries, and other wealth-building programs (collectively “covered direct mailings”) to hundreds of thousands of potential victims throughout the United States each year between 2005 and 2016.  BDK further admits that the solicitations falsely promised that recipients would receive large sums of money, and guaranteed money-making methods or powerful talismans in return for payment of $50 to $55.  In reality, however, the purported senders and the promised winnings were fictitious.  Although victims sent requested payments by cash, check, and credit card, they received nothing in return.  Defendants Macromark, Inc. and Mary Ellen Meyer do not dispute that they facilitated BDK’s rental of numerous “customer lists” containing hundreds of thousands of consumer names used for BDK’s direct mailing campaigns.  Defendant Mail Order Solutions Inc., in turn, printed millions of copies of BDK’s covered direct mailings and delivered them via air cargo and international post into the United States for delivery to unwitting U.S. consumers.

 

United States v. Ercan Barka, et al.

 

The second case, in which consent decrees were entered on October 5, names defendants Barka, Young, and True Vision LLC.  The United States’ amended complaint, filed in May 2017, alleges that Barka and Young worked together as “direct mailers,” sending fraudulent solicitations to hundreds of thousands of American victims through an international web of shell companies.  The complaint alleges that Barka and Young’s mailings informed recipients that they had won prizes including millions of dollars in cash and luxury cars, and that recipients would receive delivery of the prizes upon payment of a fee.  Victims allegedly received nothing in return for their payments, while Young and Barka collected an estimated $29 million from American victims from 2012 through 2016.

 

Under the consent decrees entered in both cases, the defendants may not use the U.S. mail to distribute fraudulent mailings or any mailings promoting similar schemes.  The consent decrees also prevent the defendants from printing, receiving, handling, opening, forwarding, or processing any such direct mailings.  The defendants are also prohibited from creating, renting, or selling any lists of demographic information relating to consumers who have responded to defendants’ or other certain direct mailings.  Nor may the defendants process any payments received in response to certain direct mailings.  Finally, the consent decrees authorize the U.S. Postal Inspection Service to return any victim money or personal checks sent to the defendants and detained by the Postal Inspection Service.

 

The United States’ case is being handled by Chief of Affirmative Civil Enforcement John Vagelatos and Assistant U.S. Attorney Thomas Price of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorneys Ann Entwistle and Gabriel Scannapieco of the Civil Division’s Consumer Protection Branch, in coordination with the U.S. Postal Inspection Service.

 

Additional information on the original enforcement actions and mass mailing schemes is available at: https://www.justice.gov/opa/pr/justice-department-and-law-enforcement-partners-announce-civil-and-criminal-actions-dismantle .  Additional information about the Consumer Protection Branch and its enforcement efforts can 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:

 

BDK MAILING GMBH

 

MAILING FORCE PTE. LTD.

 

ONLY THREE PTE. LTD.

 

CHANTAL SEGUY

Age: 59

Paris, France

 

MARION ELCHLEPP

Age: 26

Paris, France

 

AURORE JOUFFROY-BRANDTNER

Age: 40

Zurich, Switzerland

 

MACROMARK, INC.

 

MARY ELLEN MEYER

Age: 45

Mahopac, New York

 

MAIL ORDER SOLUTIONS INDIA PVT. LTD.

 

DHARTI B. DESAI

Age: 50

New York, New York

 

MEHUL A. DESAI

Age: not available

Mumbai, India

 

E.D.N.Y. Docket No. 16-CV-5264 (NGG)

 

 

 

ERCAN BARKA

Age: 35

Paramus, New Jersey

 

RYAN YOUNG

Age: 35

Upper Saddle River, New Jersey

 

TRUE VISION LLC.

 

E.D.N.Y. Docket No. 16-CV-5266 (ENV)

 

Download Young Consent Decree and Final Judgment

Download Barka Consent Decree and Final Judgment

Download BDK Consent Decree and Final Judgment

Download Macromark Consent Decree and Final Judgment

Download Mosi Consent Decree and Final Judgment

A federal court in New York entered consent decrees in two civil actions, permanently barring 14 individuals and entities from operating alleged multi-million dollar international mail-fraud schemes. 

 

Both schemes followed a similar pattern, involving a complicated web of actors located across the world.  Fraudulent “direct mailers” created letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune.  In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee.  The letters appeared to come from legitimate sources, typically on official-looking letterhead, but were in fact fictitious individuals and organizations including “Baroness de Rothman,” “DNF Funds Office,” “Finkelstein & Partner,” the “Harrison Institute,” and Marie de Fortune.  Moreover, even though the solicitations are in reality identical form letters sent to thousands or tens of thousands of recipients – the letters appear to be personally addressed. 

 

"The Department of Justice is committed to protecting all Americans from fraud and exploitation,” Associate Attorney General Rachel Brand said.  “This exploitation is repugnant and the Justice Department will pursue those who target our nation’s seniors and other vulnerable American consumers for financial gain. These consent decrees are just one example of the department’s broad efforts to protect seniors—and every American—from mail fraud."

 

“The defendants preyed on the elderly and other vulnerable citizens through fictitious lotteries and other exploitive games, unfairly enriching themselves at the expense of these victims,” said Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York. “These consent decrees put the defendants out of the exploitation business.  This Office is committed to pursuing the perpetrators and enablers of such schemes, in New York and abroad, to hold them accountable and to protect others from being swindled.”

 

“These actions are an important step in dismantling the many components of this fraudulent mass-mailing industry,” said Inspector in Charge Regina Faulkerson. “The Postal Inspection Service will continue to aggressively investigate everyone involved in facilitating these predatory mailings.”

 

United States v. BDK, et al.

 

The first case, in which consent decrees were entered on Nov. 21, 2017, names defendants located around the globe, including Swiss corporation BDK Mailing GmbH; Singapore companies Mailing Force Pte. Ltd. and Only Three Pte. Ltd; Chantal Seguy of France; Marion Elchlepp of France; Aurora Jouffroy-Brandtner of Switzerland; U.S. corporation Macromark Inc., Macromark employee Mary Ellen Meyer; Mail Order Solutions India Pvt. Ltd. (MOSI), an Indian corporation; and MOSI’s owners, Dharti B. Desai of New York, New York, and Mehul A. Desai of India.  The United States’ complaint, filed in September 2016, alleges that the defendants’ fraud scheme victimized hundreds of thousands of Americans, and targeted primarily the elderly and vulnerable.  According to the complaint, the victims sent the defendants payments totaling $50 to $60 million annually between 2005 and 2016.

 

The consent decrees, entered yesterday in the U.S. District Court for the Eastern District of New York, resolve the litigation.  As part of the consent decrees, defendants BDK Mailing GmbH, Mailing Force Pte. Ltd. and Only Three Pte. Ltd. (collectively “BDK”) admit that they acted as “direct mailers” responsible for mailing millions of advertisements, solicitations, or promotional materials on behalf of dozens of fictitious psychics, sweepstakes, lotteries and other wealth-building programs (collectively “covered direct mailings”) to hundreds of thousands of potential victims throughout the United States each year between 2005 and 2016.  BDK further admits that the solicitations falsely promised that recipients would receive large sums of money, guaranteed money-making methods and/or powerful talismans in return for payment of a fee of $50 to $55.  In reality, however, BDK admits the purported senders and the promised winnings were fictitious.  Although victims sent the requested fees by cash, check or credit card, they received nothing in return.  Defendants Macromark Inc. and Mary Ellen Meyer do not dispute that they facilitated BDK’s rental of numerous “customer lists” containing hundreds of thousands of consumer names that would be used to address BDK’s direct mailing campaigns.  Defendant Mail Order Solutions Inc., in turn, would print millions of copies of BDK’s covered direct mailings and deliver them via air cargo and international post into the United States for delivery to unwitting U.S. consumers.

 

United States v. Ercan Barka, et al.

 

The second case, in which consent decrees were entered Oct. 5, 2017, names defendants Ercan Barka, a resident of Turkey and New Jersey, Ryan Young of New Jersey, and True Vision LLC, a Delaware-based corporation.  The United States’ amended complaint, filed in May 2017, alleges that Barka and Young worked together as “direct mailers,” sending fraudulent solicitations to hundreds of thousands of American victims through an international web of shell companies.  The complaint alleges that Barka and Young’s mailings informed recipients that they had won prizes including millions of dollars in cash and luxury cars, and that recipients would receive delivery of the prizes upon payment of a fee.  Victims allegedly received nothing in return for their payments, while Young and Barka collected an estimated $29 million from American victims from 2012 through 2016.

 

Under the consent decrees entered in both cases, the defendants may not use the U.S. mail to distribute fraudulent mailings or any mailings promoting similar schemes.  The consent decrees also prevent the defendants from printing, receiving, handling, opening, forwarding, or processing any such direct mailings.  The defendants are also prohibited from creating, renting, or selling any lists of demographic information relating to consumers who have responded to defendants’ or other certain direct mailings.  Nor may the defendants process any payments received in response to certain direct mailings.  Finally, the consent decrees authorize the U.S. Postal Inspection Service to return any victim money or personal checks sent to the defendants and detained by the Postal Inspection Service.

 

The United States’ cases are being handled by Trial Attorneys Gabriel Scannapieco and Ann Entwistle of the Civil Division’s Consumer Protection Branch, and Chief of Affirmative Civil Enforcement John Vagelatos and Assistant U.S. Attorney Thomas Price of the U.S. Attorney’s Office for the Eastern District of New York, in coordination with the U.S. Postal Inspection Service.

 

Additional information on the original enforcement actions and mass mailing schemes is at: https://www.justice.gov/opa/pr/justice-department-and-law-enforcement-partners-announce-civil-and-criminal-actions-dismantle.  Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.    

Earlier today, in federal court in Brooklyn, Suzanna Meliksetyan, an operator of multiple purported durable medical equipment (DME) companies pleaded guilty to one count of conspiracy to commit health care fraud for her role in a scheme to defraud Healthfirst, a non-profit, New York-based health maintenance organization that administers Medicare Advantage plans and New York Medicaid Managed Care plans.  The proceeding was held before United States District Judge Allyne R. Ross.

 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Kenneth A. Blanco, Acting Assistant Attorney General of the Justice Department’s Criminal Division, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Scott J. Lampert, Special Agent-in-Charge, United States Department of Health and Human Services Office of Inspector General’s (HHS OIG), Office of Investigations, announced the guilty plea.

 

As part of her guilty plea, Meliksetyan admitted that she operated a series of purported DME companies that did not in fact provide equipment to any beneficiaries.  The defendant further admitted that she and others called Healthfirst, pretending to represent vendors in Healthfirst’s network.  The companies Meliksetyan operated submitted almost $1 million in false claims to Healthfirst.

 

This case was investigated by the FBI and HHS OIG.  Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section is prosecuting the case. 

 

Defendant:

 

SUZANNA MELIKSETYAN

Age: 28

Residence: Gaithersburg, Maryland

 

E.D.N.Y. Docket No. 17-CR-351 (ARR)

An operator of multiple purported durable medical equipment (DME) companies pleaded guilty today to fraud charges for her role in a scheme to defraud Healthfirst, a non-profit, New York-based health maintenance organization that administers Medicare Advantage plans and New York Medicaid Managed Care plans.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office and Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations made the announcement.

Suzanna Meliksetyan, 28, of Gaithersburg, Maryland, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Alynne R. Ross of the Eastern District of New York.  Sentencing has been scheduled for March 21, 2018 before Judge Ross. 

As part of her guilty plea, Meliksetyan admitted that she operated a series of purported DME companies that did not in fact provide equipment to any beneficiaries.  She further admitted that she and others called Healthfirst, falsely representing themselves as vendors in Healthfirst’s network.  The companies Meliksetyan operated submitted almost $1 million in false claims to Healthfirst, and she admitted to receiving more than $300,000 in connection with those false claims.

 

This case was investigated by the FBI and HHS-OIG.  Trial Attorney Andrew Estes of the Criminal Division’s Fraud Section is prosecuting the case. 

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Four members and one associate of the West End Enterprise, a street gang based in three apartment complexes in Coney Island, New York, will be arraigned this afternoon in federal court in Brooklyn on an indictment charging them with crimes including murder in aid of racketeering, racketeering conspiracy, unlawful use of firearms, witness tampering and robbery.  The 12-count superseding indictment relates to the defendants’ alleged criminal activities between 2011 and 2017.  The defendants, Tysheen Cooper, also known as “Billz,” Maurice Washington, also known as “Moe” and “Flaco,” Sharod Liburd, also known as “Pop,” and Gabriale Herbert are scheduled to be arraigned this afternoon before United States Magistrate Judge Lois Bloom. The defendant Michael Liburd, also known as “Mike Mike” and “Mitty,” is scheduled to be arraigned Tuesday, November 21, 2017, before Magistrate Judge Bloom.  

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Mark G. Peters, Commissioner, New York City Department of Investigation (DOI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.

As detailed in the superseding indictment and other filings, Cooper, Michael Liburd, Sharod Liburd and Washington were members of the West End Enterprise, a street gang composed of individuals residing in and around the Sea Rise Apartments, the Gravesend Houses and Surfside Gardens, also known as the “Mermaid Houses,” located in the western end of Coney Island.  During that time, Cooper, Michael Liburd, Washington and other coconspirators allegedly engaged in narcotics distribution, witness intimidation and acts of violence, including retaliatory shootings against members of a rival gang, known as “Sex Money Murder,” and the January 17, 2016 murder of Antwon Flowers.  Flowers was shot to death as he left an apartment building in the Mermaid Houses development in retaliation for the murder of a West End Enterprise leader, who had been killed in the East New York section of Brooklyn less than a day earlier.  Herbert, Cooper and Sharod Liburd are also charged with a gun-point Hobbs Act robbery.

 “As alleged, the defendants and other members of their street gang have subjected the residents of Coney Island to violent conduct, including murder, over a period of years,” stated Acting United States Attorney Rohde.  “The indictment sends a clear message that this Office, together with our federal and local law enforcement partners, will use every available resource to rid our communities of gangs, and the crimes they commit, by prosecuting gang members to the fullest extent of the law.”  Ms. Rohde extended her thanks to the Drug Enforcement Administration for its assistance in the investigation.

“People usually think of Coney Island as a fun place to ride the rides, and have a hot dog on the beach.  The men charged in this case created a dirty underbelly in a family oriented place, accused of murder, violence and criminal behavior,” stated FBI Assistant Director-in-Charge Sweeney.  “Not only did they allegedly commit these crimes, they did their best to make sure no one would testify against them.  These dangerous gangs don’t have a place on Coney Island, or in any community, and the FBI won’t relent in pursuing cases targeting their leadership.”

 “Ridding drugs, gangs and violence from New York City public housing is essential and this joint investigation resulted in just that,” stated DOI Commissioner Peters.  “Public housing tenants deserve what all New Yorkers want: a safe home for themselves and their children.  DOI is proud to work with our federal and city law enforcement partners to expose and stop these crimes.”

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

 

The superseding indictment is the fifth indictment in the government’s ongoing investigation into gang violence in Brooklyn’s Coney Island neighborhood.  The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Rena Paul and Mathew S. Miller are in charge of the prosecution.

The Defendants:

TYSHEEN COOPER (“Billz”)
Age:  26
Residence: Brooklyn, New York

GABRIALE HERBERT
Age: 20
Residence: Brooklyn, New York

MICHAEL LIBURD (“Mike Mike” and “Mitty”)
Age: 27
Residence: Brooklyn, New York

SHAROD LIBURD (“Pop”)
Age: 20
Residence: Brooklyn, New York

MAURICE WASHINGTON (“Moe” and “Flaco”)
Age: 28
Residence: Brooklyn, New York

EDNY Docket No. 17-CR-296 (PKC)

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, today announced that Telephonics Corporation, based in Farmingdale, New York, has agreed to pay $4,250,000 to the United States to settle claims that Telephonics overbilled the federal government under certain contracts to provide vehicle-mounted counter-improvised explosive device systems (Warlock Systems) to the Army and multi-mode radar systems (LAMPS Systems) to the Navy.

 

The settlement announced today is the result of a joint investigation conducted by the Defense Criminal Investigative Service (DCIS), the U.S. Army Criminal Investigation Command and the Naval Criminal Investigative Service (NCIS).

 

“Defense contractors who enrich themselves at taxpayers’ expense by failing to accurately represent the costs of their goods and services will be held fully accountable.  Taxpayers deserve no less,” stated Acting United States Attorney Rohde.  Ms. Rohde praised the successful partnership between the United States Attorney’s Office, DCIS, NCIS, and the U.S. Army Criminal Investigation Command in detecting and preventing fraud and overbilling. 

 

“The civil settlement announced today is the end result of a successful joint case conducted by DCIS, the U.S. Army Criminal Investigation Command, the Naval Criminal Investigative Service, the Defense Contract Audit Agency and the U.S. Attorney’s Office, Eastern District of New York,” stated Leigh-Alistair Barzey, Special Agent-in-Charge, DCIS Northeast Field Office.  “DCIS and its law enforcement partners will continue to investigate violations of the False Claims Act in order to protect U.S. military members and prevent defense contractors from profiting at the expense of the American taxpayer.” 

 

“This settlement further demonstrates the resolve of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and our law enforcement partners to protect and defend the assets of the United States Army,” stated Special Agent-in-Charge L. Scott Moreland.

 

“Fraud is never a victimless crime,” stated NCIS Northeast Field Office Special Agent-in-Charge Leo Lamont.  “In this case, involving the intentional mischarging of the Navy for critical equipment during a time of war, the victims are not just our men and women in uniform, but all American taxpayers.  NCIS will continue to tirelessly pursue all those who seek to take advantage of the Department of the Navy and its interests.”

 

Between 2004 and 2007, Telephonics, a corporation that provides services, products and technology to the Department of Defense, subcontracted to provide work and materials for the assembly of the Army’s Warlock Systems and the Navy’s LAMPS Systems.  The Warlock Systems are installed in vehicles to interrupt wireless systems designed to trigger improvised explosive devices and are used in Afghanistan and Iraq.  The LAMPS Systems are used on Navy helicopters. 

 

The government contends that Telephonics did not provide accurate cost data in connection with certain contracts for the Warlock and LAMPS Systems.  Specifically, Telephoncs improperly billed the Army and Navy by calculating invoices using: 1) inflated “estimates” when then-current available information showed lower actual costs; and 2) different labor rates than those set forth in relevant contracts.  There was no allegation about the quality of Telephonics’ products or services.  The settlement is not an admission of wrongdoing by Telephonics.

 

The United States’ investigation was handled by Assistant United States Attorneys John Vagelatos and Robert W. Schumacher.

Earlier today, in federal court in Central Islip, New York, Frank DeCarlo, a former supervisory carpenter for the Department of Public Works of the United States Merchant Marine Academy, located in Kings Point, New York, was sentenced by United States District Judge Arthur D. Spatt to nine months’ imprisonment, to be followed by three years of supervised release, for receiving a bribe as a public official.  The Court also imposed a $10,000 fine and a forfeiture order of $48,000 for funds illegally received by DeCarlo as part of the scheme.  DeCarlo pleaded guilty on April 20, 2017, in connection with his participation in a scheme to defraud the United States by steering maintenance and repair contracts to favored contractors in exchange for bribes. 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Douglas Shoemaker, Regional Special-Agent-in-Charge, United States Department of Transportation, Office of the Inspector General (DOT-OIG) and James Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS-CI), announced the sentence.

According to court filings, between 2003 and 2016 while DeCarlo was employed in the Department of Public Works of the United States Merchant Marine Academy, he solicited and submitted fake bids on contracts he supervised in order to steer the awarding of maintenance and repair contracts to favored contractors who paid him bribes.  Using his position, DeCarlo arranged, supervised or effected a majority of construction contracts at the Academy.                     

“DeCarlo’s solicitation of bribes in exchange for the awarding of government contracts compromised the integrity of the procurement system,” stated Acting U.S. Attorney Rohde. “This Office will continue to work with our law enforcement partners to vigorously investigate and prosecute to the fullest extent of the law those corrupt public employees who abuse their positions for their own enrichment.”

“The prosecution of Mr. Frank DeCarlo for bribery at the U.S. Merchant Marine Academy sends a clear signal that those entrusted with the stewardship of taxpayer dollars will be held responsible for maintaining the highest level of integrity,” stated DOT-OIG Regional Special-Agent-in-Charge Shoemaker.  “Accountability is a priority of the Secretary and OIG, and working with our law enforcement and prosecutorial partners, we will continue our vigorous efforts to protect the taxpayers’ investment in our nation’s transportation system from fraud, waste, abuse and violations of law.”                  

“Serving the public is a privilege,” stated IRS CI Special Agent-in-Charge Robnett.  “This sentence sends a message to all those who abuse the public trust that investigators for IRS-CI will uncover these schemes and protect taxpayers and the U.S. Treasury.”  

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

The Defendant:

FRANK DeCARLO
Age:  67
Residence: Franklin Square, New York

E.D.N.Y. Docket No. 17-CR-35 (ADS)

Earlier today, an indictment was unsealed in federal court in Brooklyn charging Ikechukwu Udeokoro and Ayodeji Fasonu for their roles in an alleged scheme to submit over $3.5 million in fraudulent claims to private insurers, which included government-sponsored managed care organizations.  Udeokoro and Fasonu were the owner and manager, respectively, of Meik Medical Equipment and Supply LLC, a purported durable medical equipment (DME) company in Bronx, New York.  The defendants were arrested this morning and their initial appearance is scheduled for this afternoon before United States Magistrate Judge James Orenstein.

 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Kenneth A. Blanco, Acting Assistant Attorney General of the Justice Department’s Criminal Division, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General, New York Region (HHS OIG), announced the charges.

 

According to the indictment, beginning in approximately December 2010 and continuing through at least February 2014, Udeokoro and Fasonu executed a scheme in which they submitted fraudulent claims to private insurers, including those that participated in Medicare Part C, for reimbursement for DME that was purportedly provided to the insurers’ members, many of whom were elderly or disabled and had insurance through Medicare Advantage plans or New York Medicaid Managed Care plans.  As part of the scheme, the defendants allegedly submitted claims to the private insurers for reimbursement for DME such as multi-positional patient support systems and combination sit-to-stand systems, when the defendants in fact provided the insurers’ members either nothing or a far less expensive product, such as a lift chair/recliner.  As alleged in the indictment, Meik Medical Equipment & Supply submitted more than $3.5 million in fraudulent claims.

 

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

 

The FBI and HHS OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section.  Trial Attorney Andrew Estes of the Fraud Section is in charge of the prosecution.

 

The Defendants:

 

IKECHUKWU UDEOKORO

Age:  41

Residence: West New York, New Jersey

 

AYODEJI FASONU

Age:  51

Residence: Stamford, Connecticut

 

E.D.N.Y. Docket No. 17-CR-629 (AMD)

The owner and the manager of a purported durable medical equipment (DME) company in the Bronx, New York, were charged in an indictment unsealed today for their roles in an allegedly fraudulent scheme that involved submitting over $3.5 million in claims to private insurers, which included government-sponsored managed care organizations.

 

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office and Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations made the announcement.

 

Ikechukwu Udeokoro, 41, of West New York, New Jersey, and Ayodeji Fasonu, 51, of Stamford, Connecticut, the owner and manager, respectively, of Meik Medical Equipment and Supply LLC of the Bronx, were charged with one count of health care fraud in an indictment filed in the Eastern District of New York on Nov. 13.  The indictment was unsealed upon the arrest of the defendants this morning, and the defendants are expected to be arraigned this afternoon before U.S. Magistrate Judge James Orenstein of the Eastern District of New York at the federal courthouse in Brooklyn.  The case has been assigned to U.S. District Judge Ann M. Donnelly.

 

According to the indictment, beginning in approximately December 2010 and continuing through at least February 2014, Udeokoro and Fasonu executed a scheme in which they submitted fraudulent claims to private insurers, including those that participated in Medicare Part C, for reimbursement for DME that was purportedly provided to the insurers’ members, many of whom were elderly or disabled and had insurance through Medicare Advantage plans or New York Medicaid Managed Care plans.  As part of the scheme, the defendants allegedly submitted claims to the private insurers for reimbursement for DME such as multi-positional patient support systems and combination sit-to-stand systems, when the defendants in fact provided the insurers’ members either nothing or a far less expensive product, such as a lift chair/recliner.

 

As alleged in the indictment, Meik Medical Equipment & Supply submitted more than $3.5 million in claims.

 

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

The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  Trial Attorney Andrew Estes of the Fraud Section is prosecuting the case. 

 

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Earlier today, Darryl Odom was arrested in connection with the May 25, 2017 armed robbery of Court Street Jewelers located at 60 Court Street in Brooklyn, New York.  Odom and three coconspirators who were previously arrested – Kenneth Davis, Shaka Davis and Lashawn Williams – are charged in a superseding indictment in the Eastern District of New York with Hobbs Act robbery, Hobbs Act robbery conspiracy and brandishing a firearm during the commission of the robbery.  Odom and another coconspirator, Leonard Hinton, are also charged in the indictment with the robbery at knifepoint of a jewelry store at 98 Smith Street in Brooklyn on February 10, 2017.  Odom is scheduled to be arrigned this afternoon before United States Magistrate Judge James Orenstein. 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Ashan M. Benedict, Special Agent-in-Charge, New York Field Division, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and James P. O’Neill, Commissioner, New York City Police Department (NYPD), announced the charges.

According to the court documents, at approximately 5:15 p.m., Odom and his coconspirators entered the jewelry store at 60 Court Street disguised as construction workers while another perpetrator waited outside as a lookout.  Once inside the store, one of the robbers pistol-whipped the store owner with a gun, causing lacerations to his head.  Odom and the other perpetrators grabbed several hundred thousand dollars in cash and jewelry during the robbery.  They fled to a nearby subway station where their images were recorded by surveillance cameras.  Law enforcement officers collected numerous pieces of evidence dropped by the perpetrators in the subway station, including gloves worn during the robbery, a hardhat and an envelope containing approximately $10,000 in cash. 

“As alleged, the defendant and his co-conspirators engaged in a violent gunpoint robbery in broad daylight, then tied-up and beat the store owner,” stated Acting United States Attorney Rohde.  “Thanks to the relentless investigative efforts by our law enforcement partners at the ATF and the NYPD, the defendants will now he held to account for their crimes.” 

“Darryl Odom is alleged to have participated in an armed robbery of a jewelry store during which the store owner was violently assaulted and injured as a result.  The defendants are alleged to have escaped with jewelry, gold and cash,” stated ATF Special Agent-in-Charge Benedict.  “This was a carefully organized crime, even going so far as to have a participant wait outside wearing a disposable hazmat suit hold a sign that asbestos work was underway in order to prevent others from entering the store while the robbery took place.  I would like to extend my gratitude to the Special Agents and NYPD Detectives on the ATF/NYPD SPARTA Joint Robbery Task Force and the U.S. Attorney’s Office for their work in swiftly bringing the defendants to justice.”

 “Thanks to the NYPD and our law enforcement partners these individuals were apprehended following an armed robbery that played out in a local business and on the streets of New York City,” stated Police Commissioner O’Neill. “I commend the investigators involved who worked diligently to ensure these individuals were held accountable for this act of violence.”

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants face a mandatory minimum of seven years in prison.

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorneys Josh Hafetz and Special Assistant United States Attorney Benjamin Saltzman are in charge of the prosecution. 

The Defendants:

DARRYL ODOM
Age: 53
Residence: Bronx, New York

KENNETH DAVIS
Age: 52
Residence: Brooklyn, New York

SHAKA DAVIS
Age: 29
Residence: Brooklyn, New York

LASHAWN WILLIAMS (“Ron Johnson”)
Age: 48
Residence: Bronx, New York

LEONARD HINTON (“Bebe”)
Age: 54
Residence: Brooklyn, New York

E.D.N.Y. Docket No. 17-MJ-668; 17-CR-432 (BMC)

A criminal complaint was unsealed earlier today in federal court in Brooklyn, New York, charging Keith Liwanag with conspiracy to produce child pornography.  Liwanag was arrested today and is scheduled to make his initial appearance this afternoon before United States Magistrate Judge Cheryl L. Pollak. 

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, announced the charges. 

“As alleged, the defendant victimized vulnerable children abroad by soliciting photographs and videos of their sexual abuse in exchange for money,” stated Acting United States Attorney Rohde.  “The safety and protection of children is a priority for this Office and our law enforcement partners and we will pursue those who would endanger children to the fullest extent of the law.”  Ms. Rohde extended her grateful appreciation to INTERPOL’s Crimes Against Children Unit for its investigative work and assistance in the investigation. 

“This individual is alleged to have convinced women overseas to commit sexual acts with children in return for payment,” stated ICE-HSI Special Agent-in-Charge Melendez. “His version of a ‘show,’ among other criminal acts against children, allegedly included enticing a mother to sexually abuse her own son for his pleasure.  We will be relentless in our pursuit of child predators to ensure they face justice for their unfathomable acts.”

According to the complaint, in September and October 2016, Liwanag used a Facebook account to direct women in the Philippines to engage in sexual acts with children in exchange for money, and to produce and send child pornography over Facebook’s private messaging service.  On September 8, 2016, the defendant sent several messages to a woman asking her to sexually abuse a six-year-old boy as part of a “show” in exchange for money.  On September 11, 2016, the defendant sent and received messages from another woman about a “show” with the woman’s son and offered her money to perform a sex act on him.  On October 12, 2016, the defendant sent a message to a third woman soliciting photographs of the sexual abuse of her child.  In response, on October 27, 2016, the woman sent the defendant two images depicting child abuse.  As set forth in court filings, the evidence obtained during the course of the investigation includes 10 recorded video conferences between the defendant and women engaged in the sexual abuse of children.    

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

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

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorneys Tanya Hajjar and Erin Reid are in charge of the prosecution. 

The Defendant:

KEITH LIWANAG
Age: 26
Residence: Queens, New York

Earlier today, three indictments were unsealed in United States District Court for the Eastern District of New York charging four defendants with narcotics trafficking, loansharking and firearms offenses.  The defendants—Damiano Zummo, an acting captain in the Bonanno crime family; Salvatore Russo, an associate of the Bonanno crime family; Paul Semplice, a member of the Gambino crime family; and Paul Ragusa, an associate of the Bonanno and Gambino crime families—were arrested yesterday and are scheduled to be arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak at the federal courthouse in Brooklyn.  In a coordinated operation, Canadian law enforcement authorities today arrested nine organized crime members and associates in Canada, including members of the Todaro organized crime family, who are charged with, among other crimes, narcotics trafficking. 

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

“Today’s arrests send a powerful message that this Office and our law enforcement partners here and abroad are committed to dismantling organized crime groups wherever they are located — whether local or international in scope,” stated Acting United States Attorney Rohde.  “The recording of a secret induction ceremony is an extraordinary achievement for law enforcement and deals a significant blow to La Cosa Nostra.”  Ms. Rohde praised the exceptional investigative efforts of the FBI, and extended special thanks to U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), and the New York City Police Department (NYPD).  Ms. Rohde also expressed her thanks to the Office’s law enforcement partners in Canada, including the Royal Canadian Mounted Police and the GTA Combined Forces Special Enforcement Unit Public Prosecution Service of Canada, Ontario Regional Office. 

“Criminal enterprises, both national and international, contribute to the breakdown of a lawful society,” stated FBI Assistant Director-in-Charge Sweeney.  “And yet, the allure of this gangland culture is often embraced and glamorized in movies and on television, where the threats posed to our economic and national security are seldom displayed. Dismantling and disrupting major international and national organized criminal enterprises is a longstanding area of FBI expertise, which is significantly enhanced through collaboration with our law enforcement partners and our Canadian partners. While we have more work to do, this operation is a giant step in the right direction.”

The coordinated investigation lasted more than two years and revealed criminal activity spanning the United States and Canada.  As detailed in court filings, in 2015, one of the defendants sponsored a confidential informant to become a full-fledged member of the Bonanno crime family and as part of the investigation, law enforcement secretly video- and audio-recorded the induction ceremony, which occurred in Canada.

As detailed in the indictment and other court filings, Zummo, an acting captain in the Bonanno crime family, engaged in a cocaine trafficking conspiracy with Bonanno associate Salvatore Russo and others introduced by the confidential informant.  In one transaction, on September 14, 2017, Zummo and Russo sold over a kilogram of cocaine inside a Manhattan gelato store.  Zummo is also charged with laundering over $250,000 in cash by providing business checks issued to a fictitious consulting company that purported to bill the company for consulting services.  Zummo took a fee of approximately 10 percent for each money laundering transaction.

As also detailed in the indictments and other court filings, Semplice, a member of the Gambino crime family, is charged with conducting a loansharking scheme in which he and others extended extortionate loans with interest rates of up to 54% per year.  The alleged scheme generated thousands of dollars per week for Semplice and others.  Paul Ragusa, a long-standing associate of the Bonanno and Gambino organized crime families, is charged with being a felon in possession of nine firearms, including three automatic assault rifles and one silencer.  As alleged, Ragusa transported the firearms in exchange for $2,000 in cash. 

 

If convicted, Zummo and Russo each face a mandatory minimum sentence of 10 years and a maximum sentence of life imprisonment; Semplice faces a maximum sentence of 20 years’ imprisonment on each of three loansharking charges; and Ragusa faces a mandatory minimum sentence of 15 years and a maximum sentence of life imprisonment under the Armed Career Criminal Act.  

The charges in the indictments 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 Organized Crime and Gangs Section.  Assistant United States Attorneys M. Kristin Mace, Tanya Hajjar and Drew Rolle are in charge of the prosecution. 

The Defendants:

DAMIANO ZUMMO
Age: 44
Residence: Roslyn Heights, New York

SALVATORE RUSSO
Age: 45
Residence: Bellmore, New York

PAUL SEMPLICE
Age: 54
Residence: Brooklyn, New York

PAUL RAGUSA
Age: 46
Residence: Brooklyn, New York

E.D.N.Y. Docket Nos. 17-CR-601 (ENV); 17-CR-612 (PKC); and 17-CR-613 (PKC)

Earlier today, Armando Moronta pled guilty at the federal courthouse in Brooklyn to bribery, narcotics conspiracy and four counts of sexual abuse of a ward.  At the time of the offenses, Moronta was a federal correctional officer employed by the United States Bureau of Prisons (BOP) at the Metropolitan Detention Center in Brooklyn, New York (MDC); he was suspended by the BOP after his initial arrest on bribery and narcotics charges.  The charges stem from two separate indictments.  When sentenced, Moronta faces up to 20 years in prison on the narcotics conspiracy charge and 15 years in prison on each of the bribery and sexual abuse charges.  Moronta has also agreed to forfeiture of $15,000 in bribe payments and is required to register as a sex offender.  The proceeding took place before United States District Judge Roslynn R. Mauskopf.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Ronald G. Gardella, Special Agent-in-Charge, United States Department of Justice, Office of the Inspector General, New York Field Office (DOJ OIG), and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the plea. 

“In a fundamental breach of his duties as a public servant, former federal correctional officer Moronta compromised the safety of the MDC by allowing inmates to have prohibited goods and abusing inmates sexually,” stated Acting United States Attorney Rohde.  “This case serves as a reminder that correctional officers who would so compromise the well-being of their colleagues and charges will be held accountable to the fullest extent of the law.”

“Corruption and abuse of power have no place in our federal correctional system and will not be tolerated,” stated DOJ OIG Special Agent-in-Charge Gardella.  “Moronta’s conduct shattered the safety of his victims and imperiled the security of the MDC.  The OIG will continue to work closely with the BOP and our law enforcement partners to ensure that individuals who abuse the public’s trust in this manner are brought to justice.”

“While the vast majority of law enforcement officers carry out their duties with honor and dignity, Moronta did not,” stated Assistant Director-in-Charge Sweeney.  “May this case serve as an example to anyone who dares to threaten the integrity of the law enforcement profession—just because you’re awarded a badge of honor, it doesn’t mean you can hide behind the shield.”

According to court filings and facts presented during the plea proceeding, between March and December 2016, on approximately 12 occasions, Moronta smuggled cellular telephones and narcotics, including the synthetic narcotic “K2” and Suboxone, into the MDC for use and distribution by male inmates in exchange for thousands of dollars in bribe payments.  Separately, between May and June 2016, Moronta engaged in criminal sexual contact and acts with three female inmates, including fondling a female inmate and causing inmates to perform oral sex on him while he was assigned to guard their unit.

The government’s bribery and narcotics case is being handled by the Office’s Public Integrity and International Narcotics and Money Laundering Sections.  Assistant United States Attorneys Nadia Shihata and Andrew Gilman are in charge of that prosecution.  The government’s sexual abuse case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorney Nadia Shihata is in charge of that prosecution.

The Defendant:

ARMANDO MORONTA
Age: 39
Brooklyn, NY

E.D.N.Y. Docket Nos. 17-CR-036 (RRM) and 17-CR-279 (RRM)

A four-count indictment was returned today charging a self-described day trader with conspiracy to commit wire fraud, conspiracy to commit securities fraud and computer intrusions, securities fraud and conspiracy to commit money laundering. 

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.

As alleged in the indictment, between September 2014 and May 2017, Joseph Willner, 42, of Ambler, Pennsylvania, and others conspired to hack into victims’ online securities brokerage accounts and used them to place unauthorized trades, at times fraudulently liquidating existing positions in the victims’ accounts in order to fund the unauthorized trades.

The indictment further alleges that, as a part of the conspiracy, the defendant used brokerage accounts in his name to place “short sale” offers for publicly-traded companies’ stock at artificially high, above-market prices.  Simultaneously, Willner’s co-conspirators hacked into victims’ online brokerage accounts and used them to place buy orders for the stock at the artificially high prices, matching Willner’s short sale offers.  After using the victims’ accounts to purchase the stock, Willner and his co-conspirators then re-purchased the stock from the victims’ accounts at market or below-market prices.  This series of fraudulent trades usually took place within minutes, and Willner immediately profited based on the difference between his artificially high short sale price, and the lower price at which he subsequently re-purchased the stock. 

According to the indictment, while discussing the scheme in private messages on Twitter, one of Willner’s co-conspirators said: “legal trading too hard.”  Willner responded that he would be a “good trading partner.”  As a result of Willner and his co-conspirators’ alleged actions, the affected brokerage firms lost more than $2 million. 

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

The FBI’s New York field office investigated the case.  Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section, Securities and Financial Fraud Unit, and Assistant U.S. Attorneys Tiana A. Demas, Mark E. Bini and David Kessler of the U.S. Attorney’s Office, Business and Securities Fraud and National Security and Cybercrime Sections, are prosecuting the case.  The U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission provided significant assistance in the investigation.