Eastern District of New York

Following five weeks of trial, a federal jury in Central Islip, New York, returned a guilty verdict today against Eric Smith, a Crips street gang member also known as “Esama” and “Esco,” on 11 counts, including murder in-aid-of racketeering, racketeering, Hobbs Act robbery, and conspiracy to murder rival gang members. Smith faces a mandatory term of life imprisonment when he is sentenced by United States District Judge Joanna Seybert.

The verdict was announced by 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 (FBI).

During the trial, the government proved that Smith was a ranking member of the Rollin’ 60s set of the Crips, a racketeering enterprise based in Roosevelt, New York, that engaged in murder, attempted murder, narcotics trafficking and firearms trafficking to maintain control of the Roosevelt community for nearly a decade. Smith, who nicknamed himself “Esama da Bomba” in reference to Osama Bin Laden, bragged on social media and to fellow gang members about being the gang’s “top shooter.” The evidence at trial showed Smith lived up to this title. In accordance with the gang’s “on sight” rule, which required members to attack the rival Bloods in Roosevelt whenever possible, using whatever means available, Smith participated in a dozen shootings of rival gang members or their homes. The evidence also showed that Smith shot a man outside a busy nightclub in Freeport and brazenly shot at rivals on residential streets. In addition, the evidence showed that Smith participated in a half dozen robberies with his fellow gang members to acquire cash and drugs for the gang to sell on the streets of Roosevelt.

Among the crimes Smith was convicted of was the December 15, 2010 murder of 19-year-old James McClenic, a member of the rival Bloods street gang. In that December 2010 murder, Smith, drove through the streets of Nassau County for hours, looking for McClenic. At approximately 6:20 p.m., Smith found McClenic sitting in a parked car in a crowded gas station on Hempstead Turnpike in Hempstead, New York. With innocent bystanders standing nearby, Smith, wearing a black ski mask and armed with a .40 caliber semi-automatic pistol, crept alongside the vehicle in which McClenic was a passenger, and opened fire into the vehicle at close range. Smith fatally shot McClenic in the neck.

According to the evidence, in the wake of the murder and after attempted retaliation by the Bloods against Smith and his fellow Crips, Smith and the leader of the Rollin’ 60s Crips, Raphael Osborne, dispatched younger members of their gang to retaliate. The younger Crips, acted at Smith’s direction, and fired more than a dozen shots into the home of McClenic’s grieving family on the day of the victim’s burial.

Smith was also convicted for his role in two robberies that he committed with the aid of fellow members of the Rollin’ 60s in the fall of 2010. The first robbery involved Smith and a fellow gang member stealing crack cocaine and cash from a victim he pistol-whipped in an effort to force the victim to disclose the location of the drugs. In the second robbery, Osborne directed Smith and fellow Rollin’ 60s members to the home of a drug dealer where Smith and a fellow gang member robbed the dealer of cash and drugs at gunpoint.

“The defendant’s crimes and those of his fellow gang members demonstrated a disregard for human life and the safety of citizens of the Roosevelt community. The defendant took a young man’s life because of his allegiance to a violent street gang. Such gangs like the Rollin’ 60s terrorize communities through violence and drug dealing,” stated Acting United States Attorney Rohde. “This Office, together with our law enforcement partners, will remain vigilant in bringing gang members to justice.” Ms. Rohde thanked the Nassau County District Attorney’s Office and the Nassau County Police Department for their assistance in the investigation.

“The subject in this case had such little regard for human life he took pride in killing people and terrorizing the community, so much so that he nicknamed himself glorifying one of the world’s worst terrorists, Osama bin Laden,” stated Assistant Director-in-Charge Sweeney. “Our FBI Long Island Gang Task Force won’t rest until we search out and stop every gang member who believes they are above the law and can get away with being such immoral criminals.”

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 135 years. To date, ten defendants have been sentenced:

• June 21, 2016, Jahmani Hamilton was sentenced to a term of imprisonment of ten years;

• August 4, 2016, Kurtis Philip was sentenced to a term of imprisonment of ten years;

• August 5, 2016, Courtney Smith was sentenced to a term of imprisonment of ten years;

• September 23, 2016, Merlyn Benitez was sentenced to a term of imprisonment of ten years;

• 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;

• 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;

• November 4, 2016, Tyshawn Gitto was sentenced to 13 years’ imprisonment;

• January 13, 2017, Branden Short was sentenced to 30 months’ imprisonment;

• April 21, 2017, Rommel Lobban was sentenced to 15 years’ imprisonment; and

• April 25, 2017, Daquanne Nunn was sentenced to 13 years’ imprisonment;

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:

 

ERIC SMITH (a/k/a Esama)

Age: 29

Roosevelt, Long Island

 

E.D.N.Y. Docket No. 14-CR264 (JS)

An indictment was unsealed today in the United States District Court for the Eastern District of New York charging Larry Pagett, also known as “Biz,” “Biz Loc” and “Molotovbizzz,” with murder in-aid-of racketeering. Pagett was arraigned today at the federal courthouse in Williamsport, Pennsylvania.

The charges 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 James P. O’Neill, Commissioner, New York City Police Department (NYPD).

As detailed in the indictment and detention memorandum, Pagett was a leader of the Eight Trey Crips gang. On August 28, 2015, in order to maintain and increase his position in the gang, Pagett shot and killed a rival gang member, Chrispine Philip, also known as “Droppa,” inside the Buda Hookah Lounge in the Prospect-Lefferts Gardens section of Brooklyn. Surveillance video from the Buda Hookah Lounge depicts the defendant removing a firearm in a crowded bar and shooting the victim several times in the back and in the head while the victim tried to escape. The defendant then fled the Buda Hookah Lounge, climbing over several of the customers who had fallen to the ground.

“As alleged, the defendant, a leader of the Eight Trey Crips, brazenly shot and killed a rival gang member in a Brooklyn bar crowded with patrons,” stated Acting United States Attorney Rohde. “Together with our law enforcement partners, the FBI and the NYPD, we will use all available resources to hold accountable those who endanger the lives of the residents of our community.”

“Gang members have shown they will do whatever necessary to maintain their control over their turf and retaliate against those who they see as a threat,” stated Assistant Director-in-Charge Sweeney. “The suspect in this case allegedly shot and killed someone in a crowded nightclub, not considering the dozens of innocent people who could have been hurt or worse killed as well. The violence these gangs spread impacts people every day, so we will continue to go after the leadership who use murder and violence to threaten our communities.”

“As alleged, the defendant in this case shot and killed a rival gang member to elevate his status in the Eight Trey Crips,” stated NYPD Commissioner O’Neill. “The deadly shooting happened inside of a crowded lounge, injuring several others in the shooting, and several more with the panic that ensued. Today’s indictment reinforces the message that law enforcement is committed to fighting gun violence and gang activity wherever and whenever we find it.”

The charge contained in the indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces mandatory life imprisonment.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Patrick T. Hein and Mathew S. Miller are in charge of the prosecution.

The Defendant:

LARRY PAGETT
Age: 37
Brooklyn, New York

EDNY Docket No. 17-CR-306

Earlier today, Joseph Valerio, of Smithtown, New York, was sentenced at the federal courthouse in Central Islip, to 60 years’ imprisonment for the production, transportation, receipt and possession of child pornography. The sentencing proceeding was held before United States District Judge Joseph F. Bianco, who also ordered Valerio to serve a lifetime term of supervised release to follow his prison sentence. Valerio will be required to register as a sex offender.

The sentence was 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 Timothy D. Sini, Commissioner, Suffolk County Police Department (SCPD).

“This lengthy prison sentence ensures that the defendant will never harm another child as long as he lives and serves as a warning to anyone who victimizes children,” stated Acting United States Attorney Rohde.

“As a parent, hearing details about the child pornography cases we are investigating is extremely hard, so it begins to boggle the mind when the victims are six and two-years-old,” stated FBI Assistant Director-in-Charge Sweeney. “These children can’t fight off their attackers because the abuse is at the hands of adults who are supposed to be feeding, clothing and sheltering them from the evil in the world. No child should ever have to endure this sort of pain, humiliation and abuse. The agents and task force officers on the FBI Child Exploitation Task Force won’t ever stop going after these predators with every tool we have.”

“The crimes committed by Joseph Valerio are despicable and this sentence of 60 years ensures the defendant will spend the rest of his life in prison for these heinous crimes,” stated SCPD Commissioner Sini.

The evidence at trial showed that Valerio paid a woman in Ukraine to produce custom-made videos of child pornography that he scripted. woman, Olena Kalichenko,[1] produced over 30 pornographic videos of a then two-year-old girl that she emailed to Valerio between April and November 2012. After FBI agents discovered Valerio and Kalichenko’s international child exploitation conspiracy, in January 2014, federal agents, joined by members of the Suffolk County Police Department, executed a search warrant at Valerio’s residence in Smithtown. During the search, investigators found several hidden cameras, computers and a stage. A forensic examination of computers and electronic devices recovered by investigators revealed that, in September 2010, Valerio had produced child pornography in the basement of his house involving a then six-year-old Long Island girl. Valerio has been in custody since February 2014.

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

The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Ameet B. Kabrawala and Allen L. Bode are in charge of the prosecution.

The Defendant:

 

Joseph Valerio

Age: 50

Smithtown, New York

 

E.D.N.Y. Docket No. 14 CR 94 (JFB)

 

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[1] On April 1, 2016, Kalichenko pled guilty to conspiracy to sexually exploit a child, sexual exploitation of a child, production of child pornography for importation into the United States, and transportation of child pornography. At sentencing, Kalichenko faces a 15-year mandatory minimum term of imprisonment.

A criminal complaint was unsealed today in federal court in Brooklyn charging medical doctor Martin Tesher with writing thousands of illegal prescriptions for Schedule II controlled substances, particularly opioids such as oxycodone, without a legitimate medical purpose. Tesher was arrested earlier today in Manhattan, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Lois Bloom.

The charges were announced by 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 (DEA), New York Division.

As alleged in the complaint, the defendant operates a family medical practice in Manhattan. Between June 2012 and January 2017, Tesher wrote more than 14,000 prescriptions for oxycodone, totaling over 2.2 million oxycodone pills, a disproportionately high amount for a family practitioner. Opioids, which include heroin, are highly addictive narcotics. Tesher does not have any specialized training in pain management. In some cases, Tesher indicated that he knew that certain of his patients were addicted to oxycodone, or that they were using other illicit substances such as heroin or cocaine, but continued prescribing oxycodone and other opioids to those patients anyway. In one case, on a patient’s first visit, Tesher prescribed the patient 15 oxycodone pills a day without even basic verification that the patient had any injury.

“As alleged, Dr. Tesher used his position as a doctor not to heal but to foster opioid addiction,” stated Acting United States Attorney Rohde. “This Office and our partners at the DEA will continue to hold medical professionals accountable to the fullest extent of the law whenever they abrogate their duties and contribute to the opioid crisis.”

“Dr. Tesher acted no differently than a multi-million dollar heroin ring, distributing more than $20 million worth of opioids,” stated DEA Special Agent-in-Charge Hunt. “In fact, by using his position as a family practitioner, he enabled patients seeking help for substance abuse and turned new patients into opioid addicts by writing unnecessary prescriptions in exchange for cash. Law enforcement has no tolerance for rogue doctors, their medical staff or opioid traffickers, and we are committed to dismantling drug trafficking organizations, be it operating out of a family practitioner’s office or a heroin mill.”

The charges in the complaint 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 (NYPD), Criminal Enterprise Investigations, the Department of Health & Human Services, Office of the 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 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-MJ-504

Earlier today in federal court in Brooklyn, Héctor Trujillo, general secretary of the Guatemalan soccer federation (the “federation”) from 2009 to 2015 and a former judge of the Constitutional Court of Guatemala, pleaded guilty to one count of wire fraud conspiracy and one count of wire fraud in connection with his participation in a scheme to accept hundreds of thousands of dollars in kickbacks. Trujillo also agreed to forfeit $175,000. Trujillo faces a maximum sentence of 20 years’ imprisonment for each count. Today’s plea proceeding took place before United States District Judge Pamela K. Chen.

 

The guilty plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assisting Director in Charge, FBI New York Field Office; and Special Agent in Charge R. Damon Rowe, IRS Criminal Investigation, Los Angeles Field Office.

 

According to court filings and facts presented during the plea proceeding, Trujillo and other officials of the federation agreed to accept hundreds of thousands of dollars in kickbacks from Media World, a sports marketing company based in Miami, in exchange for media and marketing rights to the Guatemalan soccer team’s home World Cup qualifier matches leading up to the 2018 and 2022 World Cup tournaments. Over a period of years, Media World transmitted these kickbacks from its U.S. bank accounts. After Media World wired some of the kickback money to a United States bank account controlled by Trujillo’s associate, the associate wired the money from that account to an account in Guatemala, where Trujillo received his share.

 

The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Money Laundering and Asset Recovery Section, and the Fraud Section, as well as from INTERPOL Washington.

 

Assistant U.S. Attorneys Paul Tuchmann, Samuel P. Nitze, M. Kristin Mace, Keith D. Edelman, and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.

 

The government’s investigation is ongoing.

 

The Defendant:

 

HÉCTOR TRUJILLO

Age: 63

Nationality: Guatemala

 

E.D.N.Y. Docket No. 15 CR 252 (S-1)

A dual citizen of Gabon and France was sentenced to 24 months in prison for his role in a conspiracy to pay bribes to senior government officials across Africa, in violation of the Foreign Corrupt Practices Act (FCPA).

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget 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 Acting Special Agent in Charge Ronald L. Whitsett of Internal Revenue Service-Criminal Investigation (IRS-CI)’s New York office made the announcement.

Samuel Mebiame, 43, who resided in Paris prior to his arrest, was sentenced by U.S. District Judge Nicholas G. Garaufis of the Eastern District of New York. Mebiame pleaded guilty on Dec. 9, 2016, to one count of conspiracy to violate the FCPA.

According to admissions made at his plea hearing, Mebiame formed a conspiracy to provide improper benefits to government officials in multiple countries in Africa. Mebiame admitted that the improper benefits he provided were intended to influence the performance of official governmental duties, and that he took steps to further the conspiracy while physically in New York. Based on court documents, Mebiame worked as a “fixer” on behalf of a joint venture company owned by New-York-based hedge fund Och-Ziff Capital Management Group LLC (Och-Ziff) and its business partner, a Turks and Caicos Islands-registered corporate entity controlled by a co-conspirator. In that role, Mebiame traveled extensively across Africa, Europe and the U.S. and routinely made bribe payments to senior government officials in Africa. Mebaime’s plea documents indicated that at least five senior officials in three countries, Niger, Chad and Guinea, received corrupt payments and various illicit benefits from Mebiame. The officials, each of whom could influence the award of mining, oil and mineral concessions in their countries, received either cash payments, luxury vehicles or extravagant travel including the private rental of an Airbus jet. The bribes paid by Mebiame to the officials were often masked through additional intermediaries or attorneys.

According to court documents, in Niger, Mebiame paid more than $3 million in bribes to a high-ranking government official both directly and through intermediary agents who were selected by the Nigerien official. Mebiame also made payments for luxury cars for that foreign official and directed a $100,000 donation to a charity run by a government official. In return, Mebiame obtained licenses for uranium concessions for the joint venture from the government of Niger. Similarly, in Chad, Mebiame bribed a high-ranking government official with cash payments and luxury foreign travel for the official and the official’s wife. In return, Mebiame obtained uranium concessions for the joint venture, including rights to an asset which had been stripped by the Chadian government, at Mebiame’s urging, from a French-owned company. In Guinea, during a time when the conspirators were seeking to establish a state-owned mining company there, Mebiame made corrupt payments to gain special access to senior Guinean government officials. Mebiame provided the officials with cash and other benefits, including an S-Class Mercedes Benz vehicle and the use of private planes, in exchange for special access and confidential information.

Mebiame’s plea documents indicate that Mebiame repeatedly traveled to the United States between 2007 and 2015, the period of the criminal acts, and used facilities in both New York and Florida to further the conspiracy. Among other activities undertaken by Mebiame cited in court papers, he met with co-conspirators in New York, received funds from co-conspirators to U.S. bank accounts he controlled, and had telephone calls and email correspondence about the scheme.

Following Mebiame’s arrest in Brooklyn last August, as part of the government’s broader investigation, Och-Ziff was charged in September 2016 with violations of the FCPA’s anti-bribery, books and records, and accounting controls provisions for conduct in Libya and the Democratic Republic of Congo, and conduct in Chad and Niger connected to Mebiame and his co-conspirators’ conduct. Och-Ziff entered into a deferred prosecution agreement in connection with those charges. An Och-Ziff subsidiary company, OZ Africa Management GP LLC pleaded guilty to a one-count criminal information related to the payment of extensive bribes in the Democratic Republic of Congo.

The FBI’s New York Field Office and IRS-CI New York investigated the case. Trial Attorney James P. McDonald and Assistant Chief Leo R. Tsao of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys James P. Loonam, Jonathan P. Lax and David Pitluck 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 U.S. Securities and Exchange Commission’s Boston Regional Office provided significant cooperation.

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

Earlier today, Samuel Mebiame, a dual citizen of Gabon and France, was sentenced to 24 months in prison for his role in a conspiracy to pay bribes to senior government officials across Africa, in violation of the Foreign Corrupt Practices Act (FCPA).

The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; Kenneth Blanco, Acting Assistant Attorney General for the Justice Department’s Criminal Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office.

Mebiame, who resided in Paris prior to his arrest, was sentenced by United States District Judge Nicholas G. Garaufis. Mebiame pleaded guilty, on December 9, 2016, to one count of conspiracy to violate the FCPA.

According to admissions made at his plea hearing, Mebiame was part of a conspiracy to provide improper benefits to government officials in multiple countries in Africa. Mebiame admitted that the improper benefits he provided were intended to influence the performance of official governmental duties, and that he took steps to further the conspiracy while physically present in New York City. Based on court documents, Mebiame worked as a “fixer” on behalf of a joint venture company owned by New-York-based hedge fund Och-Ziff Capital Management Group LLC (Och-Ziff) and its business partner, a Turks and Caicos Islands-registered corporate entity controlled by a co-conspirator. In that role, Mebiame traveled extensively across Africa, Europe, and the United States and routinely made bribe payments to senior government officials in Africa. Mebaime’s plea documents indicated that at least five senior officials in three countries, Niger, Chad, and Guinea, received corrupt payments and various illicit benefits from Mebiame. The officials, each of whom could influence the award of mining, oil, and mineral concessions in their countries, received either cash payments, luxury vehicles, or extravagant travel, including the private rental of an Airbus jet. The bribes paid by Mebiame to the officials were often disguised through additional intermediaries or attorneys.

According to court documents, in Niger, Mebiame paid more than $3 million in bribes to a high-ranking government official both directly and through intermediary agents who were selected by one of the Nigerien officials. Mebiame also made payments for luxury cars for that foreign official and directed a $100,000 donation to a charity run by a government official. In return, Mebiame obtained licenses for uranium concessions for the joint venture from the government of Niger. Similarly, in Chad, Mebiame bribed a high-ranking government official with cash payments and luxury foreign travel for the official and the official’s wife. In return, Mebiame obtained uranium concessions for the joint venture, including rights to an asset that had been stripped by the Chadian government, at Mebiame’s urging, from a French-owned company. In Guinea, during a time when the conspirators were seeking to establish a state-owned mining company there, Mebiame made corrupt payments to gain special access to senior Guinean government officials. Mebiame provided the officials with cash and other benefits, including an S-Class Mercedes Benz vehicle and the use of private planes, in exchange for special access and confidential information.

Mebiame’s plea documents indicate that Mebiame repeatedly traveled to the United States between 2007 and 2015, the period of the criminal acts, and used facilities in both New York and Florida to further the conspiracy. Among other activities undertaken by Mebiame cited in court papers, he met with co-conspirators in New York, received funds from co-conspirators to U.S. bank accounts he controlled, and had telephone calls and email correspondence about the scheme.

Following Mebiame’s arrest in Brooklyn last August, as part of the government’s broader investigation, Och-Ziff was charged in September 2016 with violations of the FCPA’s anti-bribery, books and records, and accounting controls provisions for conduct in Libya and the Democratic Republic of Congo, and conduct in Chad and Niger connected to Mebiame and his co-conspirators’ conduct. Och-Ziff entered into a deferred prosecution agreement in connection with those charges. An Och-Ziff subsidiary company, OZ Africa Management GP LLC, pleaded guilty to a one-count criminal information related to the payment of extensive bribes in the Democratic Republic of Congo.

The government’s case is being handled by the U.S. Attorney’s Office Business and Securities Fraud Section, and the Foreign Corrupt Practices Act Unit of the Department of Justice, Fraud Section. Assistant United States Attorneys James P. Loonam, Jonathan P. Lax, and David Pitluck, and Department of Justice Fraud Section Assistant Chief Leo R. Tsao, and Trial Attorney James P. McDonald are in charge of the prosecution. The Criminal Division’s Office of International Affairs provided significant assistance in this matter. The U.S. Securities and Exchange Commission’s Boston Regional Office provided significant cooperation.

 

 

The Defendant:

 

SAMUEL MEBIAME

Age: 43

Libreville, Gabon

 

Today, Tairod Nathan Webster Pugh, a U.S. citizen and former member of the U.S. Air Force, was sentenced to 35 years in prison for attempting to provide material support to the Islamic State of Iraq and Syria (ISIS), a designated foreign terrorist organization, and obstruction of justice. Pugh, of Neptune, New Jersey, was convicted at trial on March 9, 2016.

The sentence was announced by Acting Assistant Attorney General for National Security Dana Boente; Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York; Assistant Director in Charge William J. Sweeney of the FBI’s New York Field Office; Commissioner James P. O'Neill of the NYPD. The sentence was imposed by U.S. District Court Judge Nicholas G. Garaufis.

“With this sentence, Tairod Pugh – an American citizen and former member of the U.S. Air Force where he served as an aircraft mechanic – is being held accountable for attempting to travel to Syria to provide material support to ISIS,” said Acting Assistant Attorney General Boente. “We are committed to bringing to justice all those who seek to provide material support to foreign terrorist organizations. I would like to thank all of the agents, analysts, and prosecutors who are responsible for this result.”

“The defendant turned his back on his country, and the military he once served, to attempt to join a brutally violent terrorist organization committed to the slaughter of innocent people throughout the world and the destruction of our way of life. Today’s sentence sends a powerful message that those who support terrorist groups and seek to obstruct the efforts of our law enforcement community will be brought to justice,” stated Acting U.S. Attorney Rohde. Ms. Rohde expressed her appreciation to the members of the FBI’s Joint Terrorism Task Force, which comprises federal, state and local agencies from across the region, for their work on the investigation.

“The alarming reality of this case is that Pugh served in the U.S. military but ultimately traded in his pledge to defend the United States to defend the Islamic State,” stated Assistant Director in Charge Sweeney. “Today’s sentencing should send a strong message to those who seek to support terrorists groups — they will face serious consequences for their actions. The FBI’s Joint Terrorism Task Force will continue to work with our partners, both here and abroad, to prevent acts of terrorism. This investigation demonstrates the importance of law enforcement coordination and collaboration here and around the world.”

“The defendant broke his oath to defend our nation and instead made repeated attempts to join ISIL on the battlefield of Syria,” stated Commissioner O’Neill. “The work of protecting New York City from those who seek to harm us is ever present. I am thankful for the work of so many whose diligence helps keep this city safe.”

Before traveling overseas to try to join ISIS, the defendant served in the U.S. Air Force as an avionics instrument system specialist and received training in the installation and maintenance of aircraft engines, navigation, and weapons systems. The defendant later worked as an airplane mechanic for numerous companies in the U.S. and Middle East. He lived abroad for more than one year before his arrest in this case.

On Jan. 10, 2015, the defendant traveled from Egypt to Turkey in an effort to cross the border into Syria to join ISIS to engage in violent jihad. Turkish authorities denied the defendant entry and returned him to Egypt. At the time of his detention, the defendant was carrying a laptop computer and four USB drives that he had stripped of their plastic casings in an effort to destroy their contents and thereby make them unavailable to investigators. The defendant was also carrying solar powered chargers, compasses, a black balaclava, and clothing suitable for war-torn Syria. Foreign government officials quickly deported the defendant to the U.S., where the FBI closely monitored him, relying in part on a covert undercover employee who encountered the defendant at John F. Kennedy International Airport in New York City. The defendant was arrested on Jan. 16, 2015, in Asbury Park, New Jersey, and thereafter indicted in the Eastern District of New York.

The defendant’s laptop contained Internet searches for “borders controlled by Islamic state,” the ISIS propaganda video “Flames of War,” as well as terrorist videos he had downloaded, including ISIS execution videos. In the months before he attempted to join ISIS, the defendant made statements to coworkers and on social media establishing his support for ISIS, including advising Facebook followers to “support [ISIS] with your bodies.”

Shortly before he left Egypt for Turkey on his way to Syria, the defendant drafted a letter proclaiming, “I am a Mujahid. I am a sword against the oppressor and a shield for the oppressed. I will use the talents and skills given to me by Allah to establish and defend the Islamic State. There is only 2 possible outcomes for me. Victory or Martyr.”

The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant U.S. Attorneys Samuel P. Nitze, Tiana A. Demas and Mark Bini are in charge of the prosecution, with assistance from Trial Attorney Larry Schneider of the National Security Division’s Counterterrorism Section.

 

Earlier today at the federal courthouse in Brooklyn, New York, Tairod Pugh, an American citizen and former member of the U.S. Air Force, was sentenced to 35 years in prison following his March 9, 2016 trial conviction for attempting to provide material support to a foreign terrorist organization, the Islamic State of Iraq and Syria (“ISIS”), and obstruction of justice. The sentence was imposed by United States District Court Judge Nicholas G. Garaufis.

The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; Dana Boente, Acting 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).

“The defendant turned his back on his country, and the military he once served, to attempt to join a brutally violent terrorist organization committed to the slaughter of innocent people throughout the world,” stated Acting United States Attorney Rohde. “Today’s sentence sends a powerful message that those who support terrorism will be brought to justice by this Office and our law enforcement partners, undeterred by obstructionist efforts." Ms. Rohde expressed her appreciation to the members of the FBI’s Joint Terrorism Task Force, which comprises federal, state, and local agencies from across the region, for their work on the investigation.

“With this sentence, Tairod Pugh – an American citizen and former member of the U.S. Air Force where he served as an aircraft mechanic – is being held accountable for attempting to travel to Syria to provide material support to ISIS,” said Acting Assistant Attorney General Boente. “We are committed to bringing to justice all those who seek to provide material support to foreign terrorist organizations. I would like to thank all of the agents, analysts, and prosecutors who are responsible for this result.”

“The alarming reality of this case is that Pugh served in the U.S. military but ultimately traded in his pledge to defend the United States to defend the Islamic State,” stated Assistant Director-in-Charge Sweeney. “Today’s sentencing should send a strong message to those who seek to support terrorists groups — they will face serious consequences for their actions. The FBI’s Joint Terrorism Task Force will continue to work with our partners, both here and abroad, to prevent acts of terrorism. This investigation demonstrates the importance of law enforcement coordination and collaboration here and around the world.”

“The defendant broke his oath to defend our nation and instead made repeated attempts to join ISIL on the battlefield of Syria,” stated Commissioner O’Neill. “The work of protecting New York City from those who seek to harm us is ever present. I am thankful for the work of so many whose diligence helps keep this city safe.”

Before traveling overseas to try to join ISIS, the defendant served in the U.S. Air Force as an avionics instrument system specialist and received training in the installation and maintenance of aircraft engines, navigation, and weapons systems. The defendant later worked as an airplane mechanic for numerous companies in the United States and Middle East. He lived abroad for more than one year before his arrest in this case.

On January 10, 2015, the defendant traveled from Egypt to Turkey in an effort to cross the border into Syria to join ISIS to engage in violent “jihad.” Turkish authorities denied the defendant entry and returned him to Egypt. At the time of his detention, the defendant was carrying a laptop computer and four USB drives that he had stripped of their plastic casings in an effort to destroy their contents and thereby make them unavailable to investigators. The defendant also was carrying solar powered chargers, compasses, a black balaclava, and clothing suitable for war-torn Syria. Foreign government officials quickly deported the defendant to the United States, where the FBI closely monitored him, relying in part on a covert undercover employee who encountered the defendant at John F. Kennedy International Airport. The defendant was arrested on January 16, 2015, in Asbury Park, New Jersey, and thereafter indicted in the Eastern District of New York.

The defendant’s laptop contained Internet searches for “borders controlled by Islamic state,” the ISIS propaganda video “Flames of War,” as well as terrorist videos he had downloaded, including ISIS execution videos. In the months before he attempted to join ISIS, the defendant made statements to coworkers and on social media establishing his support for ISIS, including advising Facebook followers to “support [ISIS] with your bodies.”

Shortly before he left Egypt for Turkey on his way to Syria, the defendant drafted a letter proclaiming, “I am a Mujahid. I am a sword against the oppressor and a shield for the oppressed. I will use the talents and skills given to me by Allah to establish and defend the Islamic State. There is only 2 possible outcomes for me. Victory or Martyr.”

The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Samuel P. Nitze, Tiana A. Demas, and Mark Bini are in charge of the prosecution, with assistance provided by Trial Attorney Larry Schneider of the National Security Division’s Counterterrorism Section.

The Defendant:

 

TAIROD NATHAN WEBSTER PUGH

Age: 49

Neptune, New Jersey

 

E.D.N.Y. Docket No. 15-CR-116 (NGG)

Earlier today at the federal courthouse in Brooklyn, New York, Shondell Walker, also known as “M-Dot,” a member of the Brooklyn-based Murderous Maddawg Bloods, was sentenced to 30 years in prison for narcotics trafficking and his role as an enforcer for Bloods gang leader Ronald Herron, also known as “Ra Diggs,” or “Ra Digga.” The sentence was imposed by United States District Judge Nicholas G. Garaufis.

 

The sentence was 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); James P. O’Neill, Commissioner, New York City Police Department (NYPD).

“The defendant was an enforcer for a criminal gang that terrorized the Gowanus and Wyckoff Gardens communities for decades,” stated Acting United States Attorney Rohde. “He also testified falsely on behalf of the gang's leader. Together with our law enforcement partners, we are committed to bringing violent criminals to justice and will not be deterred by attempts to obstruct our efforts.”

 

“This case proves the lengths gang members will go to protect their own,” stated FBI Assistant Director-in-Charge Sweeney. “The subject will spend the bulk of his life in federal prison all because he felt allegiance to a deadly and criminal gang. The work of our FBI New York Metro Safe Streets Task Force and our law enforcement partners is vital to stopping the spread of criminal enterprises like these gangs, and we won’t back off until these gangs no longer exist.”

 

“The defendant in this case – the enforcer for a violent gang that plagued the Gowanus Houses and Wyckoff Gardens housing developments for decades – was sentenced to 30 years behind bars,” stated Commissioner O’Neill. “Today’s sentence should be a reminder to those who trade in drugs and violence: We will never stop in our relentless pursuit of justice.”

 

Walker pled guilty pursuant to a plea agreement on October 6, 2011, to conspiring to distribute narcotics. During Herron’s trial, Walker was called as a defense witness and testified falsely on Herron’s behalf. Specifically, Walker testified that Herron had served as a positive role model in the Gowanus and Wyckoff Gardens communities, that he had never seen Herron sell narcotics, and that he had never worked, sold drugs, or carried a firearm on Herron’s behalf. Walker’s claims were substantially undermined by the admission into evidence of a letter he had written from prison in which he stated that he intended to remain loyal to Herron because of their relationship in the Bloods.

 

Herron was convicted after trial and previously sentenced to multiple life terms consecutive to 105 years in prison.

Herron and Walker’s convictions followed dozens of successful prosecutions over the past decade conducted by the U.S. Attorney’s Office for the Eastern District of New York, along with the FBI and NYPD, of violent gang members and drug dealers from the Gowanus and Wyckoff Gardens housing developments.

 

The government’s case is being handled by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Shreve Ariail, Samuel Nitze, and Rena Paul are in charge of the prosecution.

 

The Defendant:

 

SHONDELL WALKER

Age: 31

Brooklyn, New York

 

E.D.N.Y. Docket No. 10-CR-615 (NGG)

 

 

Later today, Gustavo Bermudez-Vanegas will be arraigned at the federal courthouse in Brooklyn, New York, on an international cocaine distribution conspiracy charge. The defendant was arrested in Colombia on a provisional arrest warrant issued from the Eastern District of New York and subsequently extradited from Colombia to the United States on May 25, 2017.

The extradition was announced by 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 (DEA), New York Division.

According to court documents, between February 2016 and July 2016, Bermudez-Vanegas conspired to use airplanes and submarines to transport tonnage quantities of cocaine from Colombia, Ecuador, and Venezuela through Central American countries to Mexico, for the purpose of unlawfully importing the cocaine into the United States for further distribution. Bermudez-Vanegas provided his transportation services to Mexico-based drug cartels.

“The United States will continue to prosecute international narcotics traffickers wherever they may be operating,” stated Acting United States Attorney Rohde. “As alleged, the defendant conspired to transport narcotics across several borders and continents, from South America to the United States. Now he faces justice in the Eastern District of New York, with the help of our law enforcement partners in Colombia, who effectuated his capture and extradition to the United States.” Ms. Rohde thanked the Department of Justice’s Office of International Affairs (OIA) for its assistance with the extradition of the defendant.

 

“The United States has been besieged by drug traffickers bringing drugs into our country. In contrast, drug law enforcement has brought Bermudez-Vanegas, a significant trafficker who used submarines and planes into our country to face charges for such crimes,” stated DEA Special-in-Charge Hunt.

The defendant is scheduled to be arraigned later today before United States Magistrate Judge Robert M. Levy.

If convicted, Bermudez-Vanegas faces a mandatory minimum sentence of 10 years’ imprisonment. The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s Narcotics & Money Laundering Section. Assistant United States Attorneys Michael Robotti, Hiral Mehta, and Ameet Kabrawala are in charge of the prosecution.

The Defendant:

 

GUSTAVO BERMUDEZ-VANEGAS

Age: 57

Colombia

 

E.D.N.Y. Docket No. 16-CR-416 (FB)

 

 

 

 

Earlier today, Joseph Asmar, a citizen of Lebanon, pled guilty at the federal courthouse in Brooklyn, New York, to a money laundering charge for laundering funds he believed to be drug money. Asmar was arrested in Paris, France, in October 2015, on a provisional arrest warrant issued from the Eastern District of New York, and was extradited to the United States on December 21, 2016. The guilty plea was entered before United States District Judge Eric N. Vitaliano.

The guilty plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York.

According to court filings, the investigation, a Drug Enforcement Administration (DEA) undercover operation, determined that between approximately September 2013 and October 2015, the defendant conspired to conduct monetary transactions to assist individuals, whom he believed to be drug traffickers, to conceal drug money. In a series of recorded conversations, Asmar discussed his money laundering network that spanned the globe and provided money laundering services in parts of the Middle East, Europe, Africa, South America, and cities across the United States. Asmar claimed to know how to make large amounts of money appear to be legitimately-derived and suggested that he could use his connections with Hezbollah[1] to provide security for narcotics shipments at transshipment points in Africa and the Middle East. During the course of the investigation, undercover agents provided approximately $400,000 in purported drug proceeds to Asmar and his coconspirators, who laundered the money back to the United States in exchange for a commission.

At sentencing, Asmar faces up to 20 years’ imprisonment.

The government’s case is being prosecuted by the Office’s Narcotics & Money Laundering Section. Assistant United States Attorneys Gina M. Parlovecchio and Ameet B. Kabrawala are in charge of the prosecution.

 

The Defendant:

 

Joseph Asmar

Age: 43

Nationality: Lebanese

 

E.D.N.Y. Docket No. 15-CR-491 (ENV)

 

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[1] Hezbollah has been designated as a foreign terrorist organization by the United States Department of State since 1997.

Three separate multi-count indictments were unsealed this morning in United States District Court for the Eastern District of New York charging three federal correctional officers employed by the United States Bureau of Prisons (BOP) variously with deprivation of civil rights under color of law, aggravated sexual abuse, sexual abuse, sexual abuse of a ward, attempted sexual abuse of a ward and abusive sexual contact. The defendants – Lieutenant Carlos Richard Martinez, Lieutenant Eugenio Perez, and Officer Armando Moronta – were arrested earlier today.

 

The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Marilyn D. Go, at the federal courthouse in Brooklyn. United States v. Martinez is assigned to United States District Judge Brian M. Cogan. United States v. Perez is assigned to United States District Judge Kiyo A. Matsumoto; United States v. Moronta is assigned to United States District Judge Roslynn R. Mauskopf.

 

The arrests are the result of a nearly year-long investigation into allegations of sexual abuse of female prisoners at the Metropolitan Detention Center (MDC) in Brooklyn. The investigation relied upon, among other evidence, the corroborated statements of many female inmate-victims, MDC video surveillance, social media evidence, phone records, documentary records, medical records and physical searches. Following their arrests, Lieutenants Martinez and Perez will be suspended without pay; Officer Moronta was previously suspended without pay for other conduct.

 

The charges and arrests were announced by 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 (OIG); William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

 

“By using their authority and power to prey upon and abuse female inmates in their care, these defendants violated their oaths of public service as well as numerous criminal laws,” stated Acting United States Attorney Rohde. “Our Office is committed to eliminating sexual violence and abuse against inmates in all forms and ensuring that any correctional staff who engage in such conduct are punished.”

 

“Rape, sexual assault, and threats of retaliation must be aggressively investigated and prosecuted, and Justice Department employees who engage in such conduct should know that the OIG will pursue them and bring them to justice,” stated OIG Special Agent-in-Charge Gardella. “The OIG will continue to conduct independent oversight to help ensure that federal prisons are safe, secure, and free from abuse.”

 

“As alleged, those charged today trapped their victims in a cycle of fear and intimidation while carrying out various acts of sexual abuse,” stated FBI Assistant Director-in-Charge Sweeney. “This type of conduct is never acceptable, especially at the hands of those who misuse the power afforded them as public servants. We want the public to know we take these crimes seriously and will continue to investigate any and all activity that violates the basic human rights of those within our prison system.”

Carlos Martinez

 

As alleged in publicly filed documents, over a period of five months from December 2015 to April 2016, the defendant Carlos Martinez used physical force and fear to repeatedly rape a sentenced female prisoner at the MDC. Martinez forced himself on his victim almost every weekend for a period of approximately two months, often multiple times per weekend, exploiting her fear of being sent to the Special Housing Unit and facing additional jail time to ensure her silence. Concerned about a potential investigation of his contact with his victim, Martinez ceased assaulting her for a period of time, before raping her one last time shortly before her transfer to immigration custody. At the time of Martinez’s crimes, he was an active-duty Lieutenant at the MDC, with supervisory and disciplinary authority over inmates.

 

Eugenio Perez

 

As alleged in publicly filed documents, over a period of three years from 2013 to 2016, the defendant Eugenio Perez used his position as a Lieutenant at the MDC to engage in sexual acts and contact with five different female inmates detained at the MDC and under the defendant’s supervisory and disciplinary authority. In many cases, Perez’s conduct involved the use of physical force, intimidation and threats of retaliation against his victims. Specifically, on multiple occasions, Perez lured the victims into isolated situations by arranging for them to clean the Lieutenants’ office area at night, and then requiring them to perform oral sex on him, in many cases using force, intimidation and fear of adverse consequences to ensure the victims’ compliance.

 

Armando Moronta

 

As alleged in publicly filed documents, the charges relating to the defendant Armando Moronta involve three separate victims. Between May and June 2016, Moronta engaged in criminal sexual contact and acts with female inmates, including inserting his fingers into the vagina of a female inmate and causing inmates to perform oral sex on him while he was assigned to guard their unit.

 

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. Martinez and Perez each face a maximum sentence of life imprisonment, and Moronta faces a maximum sentence of 60 years’ imprisonment, if convicted on all counts.

The investigation is ongoing; anyone with relevant information about prison corruption is asked to contact OIG through its Hotline at (800) 869-4499, or https://oig.justice.gov/hotline/.

The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Nicole M. Argentieri, Marisa Megur Seifan, and Nadia I. Shihata are in charge of the prosecution.

 

The Defendants:

CARLOS MARTINEZ

Age: 47

Brooklyn, NY

 

EUGENIO PEREZ

Age: 46

Brooklyn, NY

 

ARMANDO MORONTA

Age: 39

Brooklyn, NY

 

E.D.N.Y. Docket Nos. 17 CR 279 (RRM); 17 CR 280 (KAM); and 17 CR 281 (BMC)

A federal grand jury sitting in the Eastern District of New York returned an indictment on April 12, which was unsealed today, charging a former Brooklyn resident, who operated a precious metals brokerage firm with tax evasion and aiding and assisting in the preparation of false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

According to the indictment, Christopher Wolf operated Rothchild & Associates LLC, in Brooklyn, New York, and was in the business of selling precious metals to investors over the telephone.  Although Wolf controlled all aspects of Rothchild’s operations, it was technically owned by a third party. 

Wolf allegedly concealed the income he earned from Rothchild by causing his commissions to be paid to shell corporations and diverting the funds from those corporations to his own personal use.  According to the indictment, Wolf filed a false 2010 individual income tax return that did not report the income he earned from selling precious metals and he failed to file a 2011 income tax return, despite earning brokerage commissions.  The indictment further alleges that Wolf caused the shell corporations to file false 2010 and 2011 corporate tax returns that claimed deductions for phony expenses.

An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.

If convicted, Wolf faces a statutory maximum sentence of five years in prison for tax evasion and three years in prison for aiding and assisting the preparation or presentation of a false tax return.

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Sean Green and Mark Kotila of the Tax Division, who are prosecuting the case.

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

 

Earlier today in federal court in Brooklyn, Costas Takkas pleaded guilty to money laundering conspiracy in connection with his receipt and transmission of millions of dollars in bribes paid to now-former CONCACAF president and FIFA vice president, Jeffrey Webb. Takkas, a former general secretary of the Cayman Islands soccer federation, was the attaché to Webb at the time of Takkas’s arrest in Zurich, Switzerland pursuant to an indictment unsealed in May 2015 alleging various corrupt schemes in organized soccer. At sentencing, Takkas faces a maximum sentence of 20 years. Today’s plea proceeding took place before United States District Judge Pamela K. Chen.

 

The guilty plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director in Charge, FBI New York Field Office; and Special Agent in Charge R. Damon Rowe, IRS Criminal Investigation, Los Angeles Field Office.

 

According to court filings and facts presented during the plea proceeding, Webb accepted a $3 million bribe in exchange for using his influence as a soccer official to award and enforce a contract granting two sports marketing companies the media and marketing rights to home World Cup qualifier matches played by teams representing soccer federations of the Caribbean Football Union during the 2018 and 2022 qualification cycles. Webb, Takkas, and representatives of Traffic USA, one of the sports marketing companies, arranged for Traffic USA to secretly funnel half of Webb’s $3 million bribe through front companies and accounts controlled by Takkas. After receiving this $1.5 million, Takkas distributed these funds at Webb’s direction. Media World, the other sports marketing company, paid approximately $500,000 of its $1.5 million share of the bribe money through a sham transaction involving a false invoice, to accounts controlled by Takkas. Webb pleaded guilty to racketeering conspiracy and other offenses on November 23, 2015 and, in his allocution, he admitted, among other things, accepting this bribe.

 

The guilty plea announced today is part of an investigation into corruption in international soccer led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Money Laundering and Asset Recovery Section, and the Fraud Section, as well as from INTERPOL Washington.

 

Assistant U.S. Attorneys Paul Tuchmann, Samuel P. Nitze, M. Kristin Mace, and Keith D. Edelman of the Eastern District of New York are in charge of today’s prosecution.

 

The government’s investigation is ongoing.

 

The Defendant:

 

COSTAS TAKKAS

Age: 60

Nationality: United Kingdom

 

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

 

Today in federal court in Brooklyn, Naveed Khan, a registered broker, was sentenced to 24 months in prison and two years of supervised release after having pleaded guilty to securities fraud for his role in the fraudulent market manipulation of ForceField Energy Inc. (ForceField), a publicly-traded company that was listed on the NASDAQ under the ticker symbol “FNRG.”

 

The sentencing was announced by 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.

According to court filings and facts presented at the plea hearing, between January 2009 and April 2015, Khan, together with others, engaged in a scheme to defraud investors in ForceField, a purported worldwide distributor and provider of LED lighting products and solutions, by artificially controlling the price and volume of traded shares of ForceField through, among other means: (1) using nominees to purchase and sell ForceField stock without disclosing this information to investors and potential investors; (2) orchestrating the trading of ForceField stock to create the appearance of genuine trading volume and interest in the stock; and (3) concealing payments to stock promoters and broker dealers who promoted and sold ForceField stock to investors and potential investors while claiming to be independent of the company. The fraudulent scheme caused a loss of approximately $131 million to the investing public.

 

Between February 2015 and April 2015, Khan received commission payments, or kickbacks, from a ForceField executive for purchasing ForceField stock in his clients’ brokerage accounts. Khan did not disclose to his clients the kickbacks he was receiving for their purchase of ForceField stock. Khan and his co-conspirators took pains to conceal their participation in the fraudulent scheme by using prepaid, disposable cellular telephones and encrypted, content-expiring messaging applications to communicate with each other, and by paying kickbacks in cash.

 

Today’s proceeding took place before United States District Court Judge Brian M. Cogan.

 

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

 

The Defendant:

 

NAVEED KHAN

Age: 35

Residence: Staten Island, New York

 

E.D.N.Y. Docket No. 16-CR-234 (BMC)

An indictment was unsealed earlier today at the federal courthouse in Brooklyn charging Robert N. Bertrand, the Chief Financial Officer of Soupman, Inc., with 20 counts of failure to pay Medicare, Social Security, and federal income taxes. Soupman, Inc., which is based in Staten Island, and licenses the name and recipes of Al Yeganeh, the “Soup Nazi” character from the television series “Seinfeld.” The defendant will be arraigned this afternoon before United States Magistrate Judge Marilyn D. Go.

The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and James D. Robnett, Special Agent in Charge, Internal Revenue Service-Criminal Division, New York Field Office (IRS).

As alleged in the indictment and publicly filed documents, Bertrand had a corporate responsibility to collect, truthfully account for, and pay Medicare, Social Security, and federal income taxes (collectively, “trust fund taxes”) for Soupman’s employees. However, between 2010 and 2014, Bertrand paid Soupman employees on the side in unreported cash amounts, and compensated certain employees in large unreported stock awards. Bertrand never reported this employee compensation to the IRS, and never paid trust fund taxes on the cash payments or the stock awards, despite a 2012 warning from an external auditor that these payments should be reported to the IRS. From 2010 through 2014, Soupman’s total approximate unreported cash and stock compensation was $2,850,967.59, and the total approximate tax loss to the United States was $593,971.52.

“As alleged, the United States was fleeced out of more than half a million dollars through the defendant’s corporate misdeeds,” stated Acting United States Attorney Rohde. “Tax crimes like those alleged in the indictment hurt every American citizen. My Office and our law enforcement partners will prosecute such crimes to the full extent of the law.”

“IRS Criminal Investigation, along with the Justice Department, realizes the negative consequences employment tax evasion has on the solvency of the United States government,” stated Special Agent-in-Charge Robnett. “However, this type of evasion also results in the loss of future Social Security and Medicare benefits for the employees of Soupman Inc. as well.”

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of the offense, Bertrand faces a maximum sentence of five years’ imprisonment.

The government’s case is being handled by the Office’s General Crimes Division. Assistant United States Attorney Kaitlin T. Farrell is in charge of the prosecution.

The Defendant:

 

Robert N. Bertrand

Age: 62

Norwalk, Connecticut

 

E.D.N.Y. Docket No. 17-CR-186 (RRM)

Earlier today, Massimo Dabusco, also known as “Max,” pled guilty at the federal courthouse in Brooklyn, New York, to conspiracy to commit extortion. According to court filings and facts presented during the plea proceeding, Dabusco was formerly an Inspector with the New York City Department of Buildings (DOB) and a silent partner in a business, A&G Contracting Group Corp. (A&G), a demolition and excavation company.

The plea was 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 Mark G. Peters, Commissioner New York City Department of Investigation (DOI).

According to court filings, between December 2013 and June 2015, Dabusco abused his position as a DOB Inspector by threatening punitive action against contractors and property owners in an effort to benefit A&G. In one instance, Dabusco threatened to use his authority at the DOB to shut down all of a contractor’s existing jobs if the contractor did not pay outstanding fines owed by A&G. Dabusco also unlawfully warned contractors about impending DOB inspections in an effort aid another contractor. Dabusco resigned his job as a DOB Inspector in August 2015.

Today’s plea took place before United States District Court Chief Judge Dora L. Irizarry.

When sentenced, Dabusco faces up to 20 years in prison, as well as forfeiture and a fine of up to $250,000.

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

The Defendants:

 

MASSIMO DABUSCO

Age: 54

Yorktown Heights, New York

 

E.D.N.Y. Docket No.16-CR-559 (DLI)

Noel Blackman, who practiced as a medical doctor and was the former Health Minister of Guyana and Executive Member of the World Health Organization, was sentenced to 50 months’ imprisonment and three years of supervised release today for illegally distributing oxycodone, a highly addictive prescription painkiller. Additionally, United States District Judge Joanna Seybert ordered Blackman to forfeit $536,200 in illegal proceeds. The sentence followed the defendant’s guilty plea on August 24, 2016.

The sentence was announced by 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), New York Division; and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.

Between 2015-2016, Blackman prescribed more than 365,000 30-milligram oxycodone pills from “pain management” clinics that he worked out of in Elmhurst, Queens, Franklin Square, Long Island and Cypress Hills, Brooklyn. During his guilty plea allocution before Judge Seybert last August, Blackman admitted that, in exchange for $300 cash payments, he wrote oxycodone prescriptions for 1,920 30 milligram oxycodone pills to persons whom he knew had no legitimate medical need for that highly-addictive drug. As described in court papers, that amount of oxycodone was worth up to $57,600 on the street.

According to court filings, on February 7, 2016, HSI agents removed Blackman from a plane at John F. Kennedy International Airport en route to Guyana and arrested him in connection with the illegal distribution of oxycodone. At the time of his arrest, more than $30,000 was found concealed in Blackman’s luggage. Following his arrest, Blackman admitted that he believed that some of his patients were addicted to oxycodone.

Blackman has forefeited his medical license and will no longer be allowed to practice medicine in the United States.

“Today’s sentence should send a clear message to other doctors and medical professionals that when they abandon their oaths and act as drug dealers, we will prosecute them to the fullest extent of the law,” stated Acting United States Attorney Rohde. “Blackman violated his professional oath to put his patients’ legitimate medical needs first, and instead chose to line his pockets with the proceeds of sales from oxycodone, which has ravaged communities in New York City and on Long Island. Together with our law enforcement partners, we will continue to vigorously prosecute illegal prescription drug distribution.” Ms. Rohde thanked the DEA’s Long Island Tactical Diversion Squad, comprised of agents and officers from the DEA, Nassau County Police Department, Rockville Centre Police Department, Suffolk County Police Department, Port Washington Police Department and Internal Revenue Service, for its participation and assistance in the investigation.

“Prescribing ‘oxys’ in exchange for cash is no different than a street dealer’s hand to hand drug transaction; both are illegal and fuel drug misuse in our communities. Today's sentencing is a result of law enforcement’s collaborative work,” stated DEA Special Agent-in-Charge Hunt.

“Blackman prescribed highly addictive pills to people who had no legitimate need. To add to his crime, he knowingly handed out prescriptions for oxycodone to individuals he knew were already addicted,” stated HSI Special Agent-in-Charge Melendez. “Blackman’s actions make him no different than the street-corner drug pusher. Today’s sentencing should stand as a reminder to others that we will continue our joint law enforcement efforts to ensure that crooked doctors like Blackman can no longer put pen to pad and cause more harm.”

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

The Defendant:

 

NOEL BLACKMAN
Age: 69
Valley Stream, New York

E.D.N.Y. Docket No. 16-CR-89 (JS)

Earlier today, James C. Brewer, a former Revenue Officer of the Internal Revenue Service (IRS) who was assigned to the Edison, New Jersey IRS office before his arrest, was sentenced to six months’ imprisonment and ordered to pay $73,548.00 in restitution. Brewer pled guilty on September 19, 2016 to filing or preparing false tax returns, wire fraud and mail fraud, all in connection with a scheme to falsify tax returns he filed on behalf of himself and others and enrich himself with inflated refunds from those returns. Brewer also pled guilty to committing perjury in United States Tax Court in 2012 in a successful effort to obtain a tax credit for himself to which he was not entitled.

The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), Newark Field Office; Rodney A. Davis, Special Agent-in-Charge, Treasury Inspector General for Tax Administration (TIGTA), Washington Field Division.

“James Brewer engaged in a tax fraud and identity theft scheme in which he cheated the very tax system he was entrusted to uphold,” stated Acting United States Attorney Rohde. “Today’s sentence reminds government employees they will be held to the level of integrity expected of them, and assures honest taxpayers that no one who commits fraud is above the law.” Ms. Rohde expressed her grateful appreciation to the United States Attorney’s Office for the District of New Jersey, the United States Attorney’s Office for the District of Nevada, the IRS-CI, Las Vegas Field Office and the Treasury Inspector General for TIGTA, Denver Field Division for their assistance in this case.

According to court filings and statements made during the guilty plea, as part of a scheme to fraudulently reduce his taxable income and increase his tax refunds, for four tax years Brewer failed to report any income he received in connection with his unauthorized tax preparation business, which he operated in violation of IRS rules; underreported the gross receipts he earned from an Internet retail business, which he also operated in violation of IRS rules; and claimed false dependents, all on federal tax returns he prepared and filed on his own behalf.

As part of his unauthorized tax preparation business, Brewer also engaged in a multi-year scheme in which he prepared and filed false tax returns for others. Brewer listed false dependents and false deductions on these returns, among other materially false information, in order to fraudulently cause his clients to receive a refund to which they were otherwise not entitled or fraudulently inflate their refunds. In doing so, Brewer listed the names and social security numbers of various individuals on those tax returns as dependents without those individuals’ authorization, including those of two minor children. As part of this scheme, Brewer also diverted a portion of those clients’ refunds to himself, in some cases without his clients’ authorization or knowledge.

Finally, in an effort to fraudulently obtain for himself a tax credit for first time homebuyers, Brewer lied under oath about his residency when he testified in a matter in the United States Tax Court.

The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Marisa Seifan and Moira Kim Penza are in charge of the prosecution.

The Defendant:

 

JAMES C. BREWER

Age: 40

Staten Island, New York

 

E.D.N.Y. Docket No. 15 CR 209 (PKC)

 

Earlier today, Jose Gonzalez, Kevin Paniagua and Francisco Ramos were arrested and charged with assault and attempted murder in aid of racketeering, along with a related firearms charge by members of the Federal Bureau of Investigation (FBI) and the New York City Police Department (NYPD). The defendants’ initial appearance is scheduled for this afternoon before United States Magistrate Judge Cheryl L. Pollak, at the federal courthouse in Brooklyn.

The charges 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 James P. O’Neill, Commissioner, New York City Police Department (NYPD).

According to court filings, Gonzalez, also known as “Flaco,” and Paniagua, also known as “Stomper,” are members of the La Mara Salvatrucha, or MS-13, and Ramos is an MS-13 associate. On October 23, 2016, Ramos drove Gonzalez, Paniagua and another gang member to Jamaica, Queens, in the vicinity of 179th St. and 90th Ave., allegedly to assault an individual targeted because they believed he was a member of one of MS-13’s chief rivals, the 18th Street gang. Gonzalez, Paniagua and another MS-13 member beat the victim viciously and then Paniagua pulled out a gun and shot the victim in the head. Paniagua attempted to shoot the victim a second time, but the gun apparently malfunctioned. The victim is now a paraplegic as a result of the shooting.

“As alleged in the complaint, the defendants were members and an associate of MS-13, an international gang known for its culture of murder,” said Acting United States Attorney Rohde. “They sought to spread fear throughout the community by attempting to kill an individual they suspected to be a rival gang member. We will work with our law enforcement partners to make our communities safer by holding accountable those who are responsible for such acts of violence.” Ms. Rohde thanked the Queens District Attorney’s Office for its assistance in the investigation.

“MS-13 feeds on violence and chaos, and forces people to live in fear. As we arrest and charge more gang members, they’re seeing they can’t operate in the shadows and escape getting caught,” stated FBI Assistant Director-in-Charge Sweeney. “The FBI New York Office is committed to disrupting violent gangs like MS-13 that operate in the New York metropolitan area. We and our law enforcement partners will not stop investigating and rounding up members who hope to rebuild their hierarchy after we make arrests.”

“Violence, of any kind, has no place in New York City,” said Police Commissioner O’Neill. “The defendants find themselves under arrest and facing serious charges for an attempted murder, as alleged in the complaint.”

The charges announced today 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 Nadia E. Moore and Rena Paul are in charge of the prosecution.

The Defendants:

Jose Gonzalez (“Flaco”)
Age: 18
Queens, New York

Kevin Paniagua (“Stomper”)
Age: 18
Queens, New York

Francisco Ramos
Age: 23
Queens, New York

E.D.N.Y. Docket No. 17-MJ-423

Michael Rizzi, a retired New York City Police Officer, was sentenced today to 15 months’ imprisonment, to be followed by four months’ home confinement and three years of supervised release, for laundering the proceeds of a multi-million dollar prostitution enterprise that he operated.  Additionally, United States District Judge Carol B. Amon ordered the forfeiture of 58 websites and $120,247 seized from merchant accounts, as well as the Florida vacation home that the defendant had purchased using proceeds of his prostitution operation.  The sentence followed the defendant’s guilty plea to one count of conspiring to launder the proceeds of a prostitution enterprise between June 2012 and May 2016.

 

The sentence was announced by 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, Homeland Security Investigations (HSI), New York.

 

As detailed in prior court filings, Rizzi operated a prostitution service under the name BJM/Manhattan Stakes and Entertainment (“BJM”).  BJM advertised its services on dozens of websites, including nycescortsnyc.com, and eliteescortsnyc.com, among others.  BJM employed “phone bookers” to arrange appointments between prostitutes and BJM’s customers, as well as drivers who collected cash and receipts from BJM’s prostitutes.       

 

The prostitutes working for BJM charged their customers as much as $2,000 per hour.  The investigation into the company’s financial records has revealed that several of BJM’s clients spent more than $100,000 on the company’s services, and that some clients paid more than $25,000 for a single night.  Over the course of its operations, BJM collected millions of dollars in payments, including more than $2 million in credit card payments alone between October 2012 and March 2016.

 

BJM is a successor to Pure Platinum Models, another company that offered prostitution services.  Following an investigation by HSI, Pure Platinum Models was closed in 2014 and its owner, Marc Schulman, was convicted in the Eastern District of New York of laundering more than $1 million dollars through the company.

 

“Michael Rizzi left behind a life of law enforcement for a new career in which he flagrantly disregarded the law and exploited others for his own enrichment,” stated Acting United States Attorney Rohde.  “This Office is committed to dismantling money laundering organizations, including those which promote and capitalize on illegal prostitution.”

 

“Leaving behind a life of public service as a member of the NYPD, Michael Rizzi retired into the life of a pimp, running a high end prostitution ring and laundering the proceeds of those crimes,” Special Agent-in-Charge Melendez stated. “The forfeiture of Rizzi’s vacation home, on top of his jail sentence, shows that HSI will continue to aggressively target those who run illegal prostitution rings, as well as proceeds that are generated by this illegal activity.”

 

The government’s case is being handled by the Office’s Narcotics and Money Laundering Section.  Assistant United States Attorneys Jennifer M. Sasso and Erik D. Paulsen are in charge of the prosecution.  Assistant United States Attorney Claire Kedeshian is in charge of the forfeiture.

 

The Defendant:

 

MICHAEL RIZZI

Age: 45

Staten Island, New York

 

E.D.N.Y. Docket No. 16-CR-487 

Earlier today, Paul Cronin pleaded guilty at the federal courthouse in Brooklyn, New York, to a criminal information charging him with one count of wire fraud and one count of making and subscribing a false tax return, in connection with his conduct as Chief Financial Officer (CFO) for United States Council for International Business (USCIB), a not-for-profit organization that advocates for international business and trade.  Pursuant to Cronin’s plea agreement with the government, Cronin agreed to pay more than $1.3 million in restitution as part of the sentence imposed by the Court.  The plea was entered before United States Magistrate Judge James Orenstein.

As detailed in court filings and facts presented during the plea proceeding, Cronin abused his position as the CFO of USCIB to misappropriate more than $1.3 million in funds to pay for personal expenses.  Cronin compounded his criminal conduct by failing to report the embezzled funds as income to the Internal Revenue Service.

The plea was 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 James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS).

“The defendant betrayed his position of trust with a not-for-profit organization to line his own pockets,” stated Acting United States Attorney Rohde. “Our office will remain vigilant in rooting out corrupt actors who undermine faith in organizations designed to further the public good.”

“Cronin’s misappropriation of more than $1 million, and subsequent tax evasion, didn’t support the efforts of free trade, as advocated by the organization, but instead supported his personal efforts to pay his own expenses,” stated Assistant Director-in-Charge Sweeney. “This type of reprehensible and illegal activity won’t be tolerated, and those who employ these schemes will most certainly be brought to justice.”

“In the United States, income is taxable, regardless of whether the source is legal or illegal. Mr. Cronin’s plea today serves as an important reminder that the role of IRS Criminal Investigation becomes even more important in embezzlement and fraud cases due to the complex financial transactions that can take time to decipher,” said IRS Special Agent-in-Charge Robnett. “The victims are not only the taxpayers, but also the individual entities who suffer the financial harm.”

This case has been assigned to United States District Court Judge Raymond J. Dearie.  When sentenced on August 18, 2017, Cronin faces up to 20 years in prison. 

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Alexander A. Solomon and Lan Nguyen are in charge of the prosecution.

The Defendant:

 

PAUL CRONIN

Age: 55

Daniel Island, South Carolina

 

E.D.N.Y. Docket No. 17-CR-190 (RJD)

Earlier today, following a two-week trial, a federal jury in Brooklyn, New York, returned a guilty verdict on all counts against Louis Petrossi, a former registered broker, for his role in a $131 million fraudulent promotion and market manipulation scheme involving ForceField Energy Inc. (ForceField), a publicly-traded company listed on the NASDAQ under the ticker symbol “FNRG.” The defendant used a company called the Wealth Research Institute to induce investors to purchase ForceField stock, for which he received a secret ten percent commission. Petrossi and others also engaged in illegal trading to fraudulently increase the value of the stock. The defendant was convicted of conspiracy to commit securities fraud, conspiracy to commit wire fraud, money laundering conspiracy, and securities fraud. Petrossi is the ninth defendant convicted in this case.

When sentenced by United States District Judge Brian M. Cogan, Petrossi faces a maximum sentence of 20 years’ imprisonment.

The verdict was announced by 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).

Ms. Rohde thanked the FBI for its hard work and dedication in leading the investigation and expressed her appreciation to the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG) for their cooperation and assistance.

The government’s case is being prosecuted by Assistant United States Attorneys Mark E. Bini and Lauren H. Elbert of the Office’s Business and Securities Fraud Section.

The Defendant:

 

Louis Petrossi

Age: 76

Reno, Nevada

 

E.D.N.Y. Docket No. 16-CR-234 (BMC)

Earlier today, Richard K. Lai, a United States citizen, pleaded guilty to a criminal information charging him with two counts of wire fraud conspiracy in connection with his participation in multiple schemes to accept and pay bribes to soccer officials.  Lai also pleaded guilty to one count of failing to disclose foreign bank accounts and agreed to pay more than $1.1 million in forfeiture and penalties.  The plea was entered before United States District Judge Pamela K. Chen at federal courthouse in Brooklyn, New York.

 

            The guilty plea was 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 Special Agent-in-Charge R. Damon Rowe, Internal Revenue Service Criminal Investigation, Los Angeles Field Office (IRS).

 

“Today’s plea marks another important step in our ongoing effort to root out corruption in international soccer,” stated Acting United States Attorney Rohde. “The defendant abused the trust placed in him as a soccer official in order to line his own pockets, and now he will be held to account. The defendant’s breach of trust was particularly significant given his position as a member of the FIFA Audit and Compliance committee, which must play an important and independent role if corruption within FIFA is to be eliminated.”

            “Years of this systemic culture of corruption and greed have tainted one of the world’s most popular sports,” stated Assistant Director-in-Charge Sweeney. “Kickbacks and bribes became the norm for doing business with FIFA, but not anymore. The plea deal today and all the other cases tied to this investigation prove our work isn’t done, and we will continue to pursue anyone who had their hands in illegal activity.”

            “Today’s guilty plea by Guam Football Association president Richard K. Lai, reaffirms the dedication of IRS Criminal Investigation to use our financial investigative expertise to uncover corrupt schemes and illicit payments involving FIFA officials,” stated Special Agent-in-Charge Rowe. “Co-conspirators may try to hide and launder the proceeds of their corrupt self-enrichment, but as mentioned in the legal documents filed today, IRS-CI Special Agents will trace and uncover those funds both through the U.S. financial system and beyond, to offshore jurisdictions in locations such as Asia, the Middle East, and around the globe.”

            As alleged in the criminal information to which he pleaded guilty, Lai, a resident of the U.S. territory of Guam, has served as the president of the Guam Football Association (GFA) since 2001.  In that capacity, Lai had a vote in FIFA presidential elections.  Lai has also served at various times as a member and chair of the Asian Football Confederation (AFC) Finance Committee and a member of the AFC Executive Committee, and is currently a member of the AFC Marketing Committee and the FIFA Audit and Compliance Committee.  

 

            As also set forth in the information, Lai pleaded guilty to a scheme in which he received $100,000 in bribes in 2011 from an official of the AFC who was then running for the FIFA presidency, in exchange for Lai’s vote and support in the then-upcoming FIFA presidential election.

 

            As further described in the information, Lai also pleaded guilty to a scheme in which he received over $850,000 in bribes between 2009 and 2014 from a faction of soccer officials in the AFC region.  Lai received those bribes in exchange for using his influence as a soccer official to advance the interests of the faction that bribed him, including by helping officials in that faction identify other officials in the AFC to whom they should offer bribes.  The goal of this scheme was for the faction to gain control of the AFC and influence FIFA. 

 

            The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office.  The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Money Laundering and Asset Recovery Section, and the Fraud Section, as well as from INTERPOL Washington. 

 

            Assistant U.S. Attorneys Paul Tuchmann, Nadia Shihata, and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.

 

            The government’s investigation is ongoing.

 

The Defendant:

 

RICHARD K. LAI

Age:  55

Nationality:  American

 

E.D.N.Y. Docket No. 17 CR 224 (PKC)

A complaint was unsealed earlier today in Brooklyn federal court charging Robert Burgos and Vanessa Burgos with illegally importing a dozen Fischer Lovebirds into the United States in violation of the Endangered Species Act.  The defendants were arrested this morning in Avon Park, Florida, and their initial appearances are scheduled for tomorrow morning at 9:30 a.m. at the United States Courthouse in Fort Pierce, Florida.[1]   

The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Ed Grace, Deputy Chief of Law Enforcement, United States Fish and Wildlife Service (FWS).

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 alleged in the complaint, 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 run by the defendants, and was being held at the United States Department of Agriculture (USDA) quarantine center in New York. 

Over the course of the investigation, the USDA sent photographs of the lovebirds from the June 11, 2015 shipment to FWS, and a forensic ornithologist at the FWS National Forensics Laboratory confirmed that the lovebirds were not Rosy-Faced Lovebirds, but were, in fact, Fischer Lovebirds. 

As further alleged, the investigation additionally revealed that the defendants allegedly traveled to Indonesia to pick out the Fischer Lovebirds and used Facebook to coordinate the smuggling of the Fischer Lovebirds from Indonesia, including by conspiring with others to falsify import paperwork.  The defendants also arranged for the Fischer Lovebirds to be shipped to Spain prior to entry into the United States in an attempt to evade U.S. restrictions on the import of birds from Indonesia that were in place at the time.

 “For personal profit, the defendants knowingly conspired to evade an international treaty and federal laws enacted to protect a species of birds from the demands of the commercial market, and they will be held to account,” stated Acting United States Attorney Rohde.

“The smuggling of protected birds into the U.S. jeopardizes the health and survival of our native bird species,” Deputy Chief of Law Enforcement Grace stated. “In this case, smugglers allegedly used false documents and purposely traveled through Spain to hide the fact that most of these birds originated in Indonesia.  The vigilance of our special agents and wildlife inspectors exposed this global wildlife trafficking scheme.”

Assistant United States Attorney Alicia N. Washington is in charge of the prosecution.

The Defendants:

 

ROBERT BURGOS

Age: 42

Avon Park, Florida

 

VANESSA BURGOS

Age: 32

Avon Park, Florida

 

E.D.N.Y. Docket No. 17-MJ-306

 

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

 

Eight members of an international criminal organization, known as the Rendon-Reyes Trafficking Organization, entered guilty pleas in federal district court in Brooklyn, New York, this month to Racketeering and other federal charges arising from their scheme to force young women and girls from Mexico and Latin America into prostitution. For over a decade, the defendants smuggled their victims into the United States, then used force, threats of force, fraud, deception, and coercion to compel them to engage in prostitution for the defendants’ profit, generating criminal proceeds which the defendants laundered back to Mexico.

The eight defendants were charged in July 2015 in a 27-count indictment in the Eastern District of New York with Racketeering and Racketeering Conspiracy involving predicate acts of sex trafficking by force, fraud, or coercion, sex trafficking of minors, money laundering, alien smuggling, and interstate transportation for prostitution, in addition to parallel substantive charges.

The defendants were arrested simultaneously in the United States and Mexico in November 2015 as part of bilateral enforcement action. Five of the defendants were apprehended in Mexico by Mexican authorities and later extradited, and three were arrested in the United States by the specialized Trafficking in Persons Unit of the New York Office of the Department of Homeland Security’s Homeland Security Investigations.

Attorney General Jeff Sessions, Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York and Executive Associate Director Peter T. Edge of the U.S. Immigration and Customs Enforcement's Homeland Security Investigations made the announcement.

In a series of guilty pleas entered between April 5 and April 21, 2017, all eight of the defendants pleaded guilty to charges of Racketeering involving predicate acts of sex trafficking by force, fraud, or coercion and sex trafficking of minors.  The defendants are Jovan Rendon-Reyes, aka Jovani, 33, of Mexico; Saul Rendon-Reyes, aka Satanico, 39, of Queens; Guillermina Rendon-Reyes, 46, of Mexico; Francisco Rendon-Reyes, aka Pancho, 28, of Queens; Jose Rendon-Garcia, aka Gusano, 34, of Mexico; Felix Rojas, 47, of Mexico; Odilon Martinez-Rojas, aka Chino or Saul, 45, of Mexico; and Severiano Martinez-Rojas, 52, of Mexico. 

In addition to the Racketeering charges, defendants Jovan Rendon-Reyes, Saul Rendon-Reyes, Felix Rojas, Odilon Martinez-Rojas and Severiano Martinez-Rojas each pleaded guilty to substantive offenses of sex trafficking by force, fraud, or coercion; defendant Jose Rendon-Garcia also pleaded guilty to sex trafficking of a minor; and defendant Francisco Rendon-Reyes pleaded guilty to interstate transportation for the purpose of prostitution. 

Defendants Odilon Martinez-Rojas and Severiano Martinez-Rojas were also charged in a separate bilateral sex trafficking prosecution in the Northern District of Georgia in 2013.  Odilon Martinez-Rojas was convicted in October 2014 and sentenced to 262 months’ imprisonment in January 2015 in that case.  Defendant Severiano Martinez-Rojas had remained a fugitive from that prosecution until apprehended during the November 2015 bilateral enforcement operation.  On April 18, 2017, he pleaded guilty to one count of sex trafficking charged in the Northern District of Georgia case, in proceedings transferred to the Eastern District of New York for entry of the defendant’s guilty plea.

According to documents filed in court and the defendants’ admissions during the plea proceedings, the Rendon-Reyes Trafficking Organization operated as a family-based enterprise that profited by prostituting young women and girls. According to their admissions during plea proceedings, the defendants and their associates recruited young women and girls from Mexico on false promises, smuggled them into the United States, prostituted them in New York, Georgia, and other locations, and retained the prostitution proceeds for members of the family-based criminal organization. During their guilty plea hearings, the eight defendants collectively admitted to participating in the sex trafficking of nine women and two minor girls, as well as the prostitution of a twelfth woman.

 

 “The Department of Justice is committed to bringing to justice anyone who engages in the abominable crime of human trafficking,” said Attorney General Sessions.  “The defendants in this case preyed on vulnerable young women and girls, and brought them to the United States with the sole purpose of subjecting them to degradation that no person should have to endure.  Now these criminals will face justice for their acts, which brazenly disregarded the humanity of the victims, the integrity of our borders, and the rule of law.  I am grateful for the efforts of our investigators and prosecutors, and the strong collaboration between the Eastern District of New York, the Human Trafficking Prosecution Unit, and the federal agents from the New York Office of Homeland Security Investigations.  I also thank our Mexican partners for working closely with us to dismantle trafficking networks and protect innocent lives.”
 

“These convictions bring a measure of justice on behalf of the victims the defendants held in sexual servitude. We will continue to work tirelessly to dismantle human trafficking networks and to condemn all forms of modern-day slavery” said Acting Assistant Attorney General Wheeler.  “The U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative has proven instrumental in countering transnational trafficking threats, and we look forward to building on the momentum of this highly effective engagement with Mexican authorities.”

“This case demonstrates our Office’s continuing commitment to seeking justice for the victims of modern day slavery,” said Acting U.S. Attorney Rohde. “As demonstrated by our efforts over the last decade to bring sex traffickers to justice, the Eastern District of New York remains steadfast in its resolve to eradicate organizations that enslave young women and girls, and to bring trafficking victims out of the shadows. I sincerely hope that these pleas bring some measure of closure for the victims of these heinous crimes.”

Acting U.S. Attorney Rohde also expressed thanks to the members of HSI-New York’s Trafficking in Persons Unit for their leadership on the multi-year investigation of this case, and their continued partnership with the Eastern District of New York in the effort to end human trafficking.

“U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) remains committed to disrupting and dismantling transnational criminal organizations willing to do anything, including victimizing women and girls, to make money,” said HSI Executive Associate Director Edge. “Human trafficking is modern-day slavery, and HSI will continue collaboration with our local, state, federal, and global partners, as well as the NGO community, to bring justice to those impacted by this terrible crime and to assist the victims in their recovery.”

 

When sentenced, each defendant faces a maximum sentence of life imprisonment.  In addition, defendants Jovan Rendon-Reyes, Saul Rendon-Reyes, Felix Rojas, Odilon Martinez-Rojas and Severiano Martinez-Rojas face mandatory minimum sentences of fifteen years of imprisonment pursuant to their convictions for sex trafficking by force, fraud, or coercion, and defendant Jose Rendon-Garcia faces a mandatory minimum sentence of ten years of imprisonment resulting from his conviction for sex trafficking of a minor. As part of the plea agreements, the defendants will also be ordered to pay restitution to the victims identified in the indictment, in an amount to be determined at the time of sentencing. 

 

The investigation, prosecution, bilateral enforcement action, and extraditions of the defendants apprehended in Mexico were coordinated through the U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative.  Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims, and reunite victims with their children.  These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of over 170 defendants in multiple cases in Georgia, New York, Florida, and Texas, in addition to numerous Mexican federal and state prosecutions of associated sex traffickers. The convictions in this case are also the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 70 defendants, assisted more than 135 victims, including 39 minors, reunited 19 victims’ children with their mothers, and secured restitution orders of over $4 million on behalf of trafficking victims.

In announcing the convictions, Attorney General Sessions, Acting Assistant Attorney Wheeler, and Acting U.S. Attorney Rohde commended HSI New York’s Trafficking in Persons Unit for leading the investigation of the Rendon-Reyes Trafficking Organization; thanked the HSI Mexico City Attaché Office, the Department of Justice’s Office of International Affairs, the State Department, and the New York City Police Department, the FBI’s Atlanta Division, and the U.S. Attorney’s Office of the Northern District of Georgia for their assistance; and praised the government of Mexico for its role in advancing bilateral anti-trafficking enforcement efforts. The Justice Department also acknowledged the non-governmental victim service providers and advocates for their dedicated efforts to restore and improve the lives of survivors of trafficking and their families.

The case against the Rendon-Reyes Trafficking Organization was investigated by HSI New York’s Trafficking in Persons Unit, and is being prosecuted by Assistant U.S. Attorneys Taryn A. Merkl and Margaret Lee of the Eastern District of New York and Deputy Director Benjamin Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.

WASHINGTON – Eight members of an international criminal organization, known as the Rendon-Reyes Trafficking Organization, entered guilty pleas in federal district court in Brooklyn, New York, this month to Racketeering and other federal charges arising from their scheme to force young women and girls from Mexico and Latin America into prostitution. For over a decade, the defendants smuggled their victims into the United States, then used force, threats of force, fraud, deception, and coercion to compel them to engage in prostitution for the defendants’ profit, generating criminal proceeds which the defendants laundered back to Mexico.

The eight defendants were charged in July 2015 in a 27-count indictment in the Eastern District of New York with Racketeering and Racketeering Conspiracy involving predicate acts of sex trafficking by force, fraud, or coercion, sex trafficking of minors, money laundering, alien smuggling, and interstate transportation for prostitution, in addition to parallel substantive charges.

The defendants were arrested simultaneously in the United States and Mexico in November 2015 as part of bilateral enforcement action. Five of the defendants were apprehended in Mexico by Mexican authorities and later extradited, and three were arrested in the United States by the specialized Trafficking in Persons Unit of the New York Office of the Department of Homeland Security’s Homeland Security Investigations.

Attorney General Jeff Sessions, Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York and Executive Associate Director Peter T. Edge of the U.S. Immigration and Customs Enforcement's Homeland Security Investigations made the announcement.

In a series of guilty pleas entered between April 5 and April 21, 2017, all eight of the defendants pleaded guilty to charges of Racketeering involving predicate acts of sex trafficking by force, fraud, or coercion and sex trafficking of minors. The defendants are Jovan Rendon-Reyes, aka Jovani, 33, of Mexico; Saul Rendon-Reyes, aka Satanico, 39, of Queens; Guillermina Rendon-Reyes, 46, of Mexico; Francisco Rendon-Reyes, aka Pancho, 28, of Queens; Jose Rendon-Garcia, aka Gusano, 34, of Mexico; Felix Rojas, 47, of Mexico; Odilon Martinez-Rojas, aka Chino or Saul, 45, of Mexico; and Severiano Martinez-Rojas, 52, of Mexico.

In addition to the Racketeering charges, defendants Jovan Rendon-Reyes, Saul Rendon-Reyes, Felix Rojas, Odilon Martinez-Rojas and Severiano Martinez-Rojas each pleaded guilty to substantive offenses of sex trafficking by force, fraud, or coercion; defendant Jose Rendon-Garcia also pleaded guilty to sex trafficking of a minor; and defendant Francisco Rendon-Reyes pleaded guilty to interstate transportation for the purpose of prostitution.

Defendants Odilon Martinez-Rojas and Severiano Martinez-Rojas were also charged in a separate bilateral sex trafficking prosecution in the Northern District of Georgia in 2013. Odilon Martinez-Rojas was convicted in October 2014 and sentenced to 262 months’ imprisonment in January 2015 in that case. Defendant Severiano Martinez-Rojas had remained a fugitive from that prosecution until apprehended during the November 2015 bilateral enforcement operation. On April 18, 2017, he pleaded guilty to one count of sex trafficking charged in the Northern District of Georgia case, in proceedings transferred to the Eastern District of New York for entry of the defendant’s guilty plea.

According to documents filed in court and the defendants’ admissions during the plea proceedings, the Rendon-Reyes Trafficking Organization operated as a family-based enterprise that profited by prostituting young women and girls. According to their admissions during plea proceedings, the defendants and their associates recruited young women and girls from Mexico on false promises, smuggled them into the United States, prostituted them in New York, Georgia, and other locations, and retained the prostitution proceeds for members of the family-based criminal organization. During their guilty plea hearings, the eight defendants collectively admitted to participating in the sex trafficking of nine women and two minor girls, as well as the prostitution of a twelfth woman.

 

“The Department of Justice is committed to bringing to justice anyone who engages in the abominable crime of human trafficking,” said Attorney General Sessions. “The defendants in this case preyed on vulnerable young women and girls, and brought them to the United States with the sole purpose of subjecting them to degradation that no person should have to endure. Now these criminals will face justice for their acts, which brazenly disregarded the humanity of the victims, the integrity of our borders, and the rule of law. I am grateful for the efforts of our investigators and prosecutors, and the strong collaboration between the Eastern District of New York, the Human Trafficking Prosecution Unit, and the federal agents from the New York Office of Homeland Security Investigations. I also thank our Mexican partners for working closely with us to dismantle trafficking networks and protect innocent lives.”

“These convictions bring a measure of justice on behalf of the victims the defendants held in sexual servitude. We will continue to work tirelessly to dismantle human trafficking networks and to condemn all forms of modern-day slavery” said Acting Assistant Attorney General Wheeler. “The U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative has proven instrumental in countering transnational trafficking threats, and we look forward to building on the momentum of this highly effective engagement with Mexican authorities.”

“This case demonstrates our Office’s continuing commitment to seeking justice for the victims of modern day slavery,” said Acting U.S. Attorney Rohde. “As demonstrated by our efforts over the last decade to bring sex traffickers to justice, the Eastern District of New York remains steadfast in its resolve to eradicate organizations that enslave young women and girls, and to bring trafficking victims out of the shadows. I sincerely hope that these pleas bring some measure of closure for the victims of these heinous crimes.”

Acting U.S. Attorney Rohde also expressed thanks to the members of HSI-New York’s Trafficking in Persons Unit for their leadership on the multi-year investigation of this case, and their continued partnership with the Eastern District of New York in the effort to end human trafficking.

“U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) remains committed to disrupting and dismantling transnational criminal organizations willing to do anything, including victimizing women and girls, to make money,” said HSI Executive Associate Director Edge. “Human trafficking is modern-day slavery, and HSI will continue collaboration with our local, state, federal, and global partners, as well as the NGO community, to bring justice to those impacted by this terrible crime and to assist the victims in their recovery.”

When sentenced, each defendant faces a maximum sentence of life imprisonment. In addition, defendants Jovan Rendon-Reyes, Saul Rendon-Reyes, Felix Rojas, Odilon Martinez-Rojas and Severiano Martinez-Rojas face mandatory minimum sentences of fifteen years of imprisonment pursuant to their convictions for sex trafficking by force, fraud, or coercion, and defendant Jose Rendon-Garcia faces a mandatory minimum sentence of ten years of imprisonment resulting from his conviction for sex trafficking of a minor. As part of the plea agreements, the defendants will also be ordered to pay restitution to the victims identified in the indictment, in an amount to be determined at the time of sentencing.

 

The investigation, prosecution, bilateral enforcement action, and extraditions of the defendants apprehended in Mexico were coordinated through the U.S.-Mexico Bilateral Human Trafficking Enforcement Initiative. Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims, and reunite victims with their children. These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of over 170 defendants in multiple cases in Georgia, New York, Florida, and Texas, in addition to numerous Mexican federal and state prosecutions of associated sex traffickers. The convictions in this case are also the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 70 defendants, assisted more than 135 victims, including 39 minors, reunited 19 victims’ children with their mothers, and secured restitution orders of over $4 million on behalf of trafficking victims.

In announcing the convictions, Attorney General Sessions, Acting Assistant Attorney Wheeler, and Acting U.S. Attorney Rohde commended HSI New York’s Trafficking in Persons Unit for leading the investigation of the Rendon-Reyes Trafficking Organization; thanked the HSI Mexico City Attaché Office, the Department of Justice’s Office of International Affairs, the State Department, and the New York City Police Department, the FBI’s Atlanta Division, and the U.S. Attorney’s Office of the Northern District of Georgia for their assistance; and praised the government of Mexico for its role in advancing bilateral anti-trafficking enforcement efforts. The Justice Department also acknowledged the non-governmental victim service providers and advocates for their dedicated efforts to restore and improve the lives of survivors of trafficking and their families.

The case against the Rendon-Reyes Trafficking Organization was investigated by HSI New York’s Trafficking in Persons Unit, and is being prosecuted by Assistant U.S. Attorneys Taryn A. Merkl and Margaret Lee of the Eastern District of New York and Deputy Director Benjamin Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.

Download: Rendon-Reyes et al Indictment

Earlier today, an indictment was unsealed in Brooklyn federal court charging Fabio Gasperini, an Italian citizen, with crimes related to his hacking of computers, creation of a global botnet, and perpetration of a fraud in which he used bots to mimic “clicks” on website advertisements and obtain advertising revenue.  The charges include computer intrusion, wire fraud conspiracy, wire fraud, and money laundering conspiracy.  The defendant was arrested in Amsterdam, the Netherlands, on June 18, 2016, and was extradited to the United States yesterday.  He is scheduled to be arraigned at 2:00 p.m. today, April 21, 2017, before United States Magistrate Judge Peggy Kuo at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The indictment and extradition were announced by 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).

As alleged in court papers, Gasperini covertly hacked into computer servers owned by companies and individuals in the United States and elsewhere and created an exclusive backdoor that enabled him to access the data and computing power of those servers.  Gasperini’s scheme specifically targeted a type of server that companies and individuals typically use for large-scale data storage and transfer.  Gasperini compromised servers that contained sensitive data and files.

Through his backdoor, Gasperini allegedly implanted malicious software onto the compromised servers.  The malicious software served to further propagate Gasperini’s scheme by scanning the internet and identifying additional vulnerable servers for infection, enabling Gasperini to create a botnet, a network of computers (such as servers) infected with malicious software without users’ knowledge that a malicious actor can remotely control and use for malicious purposes.

Gasperini’s botnet was spread over multiple computer servers around the world.  Gasperini used computer servers in the United States to manage the botnet and to provide instructions and resources to the compromised servers in the botnet.  Gasperini used the botnet to perpetrate a click fraud.  A click fraud is a type of cybercrime in which a malicious actor fraudulently obtains money from advertising companies and businesses. 

Businesses commonly hire online advertising companies to send traffic to their websites.  These advertising companies in turn contract with individuals, typically someone who operates a website, to place on the website certain links advertising the businesses’ products or services, and are then compensated based upon the number of visitors to the website that click on the link.  The advertising companies typically pay the individuals on a per-click basis.  To conduct a click fraud scheme, a malicious actor can, for example, remotely command a botnet to flood a particular website advertisement with electronic communications that register with the advertising company as clicks by a human user on the advertisement.  This type of command falsely and fraudulent inflates the number of clicks reported to the advertising companies, causing them to pay for clicks perpetrated by automated bots rather than clicks completed by potential customers who, in fact, viewed and clicked on the advertisements. 

Some of the malicious software that Gasperini installed onto the servers he had compromised was designed to disguise a compromised server as a web browser and cause it to simulate human clicks on website advertisements through automated electronic commands.  Gasperini’s software was configured to send automated clicks to advertisements hosted on websites that he owned, enabling Gasperini to generate revenue from advertising companies and businesses through fake internet traffic. 

 “Cybersecurity is a priority and we will pursue those who hack into computers, spread malicious software, and victimize U.S. companies and computers until they are brought to justice,” stated Acting United States Attorney Bridget M. Rohde.  Ms. Rohde expressed her grateful appreciation to the Netherlands Ministry of Security and Justice, for their assistance in effecting the defendant’s arrest and extradition; the Italian National Police, Postal and Telecommunications Service, for their assistance in the investigation; the United States Marshals Service, for their assistance in transporting the defendant to the United States; and the U.S. Department of State Regional Security Officer in the Netherlands, for their assistance in facilitating the defendant’s extradition.   

“As alleged, Gasperini hacked into servers to create a global botnet that was used to generate profits from click fraud,” stated, Assistant Director-in-Charge Sweeney.  “This is yet another case that demonstrates the commitment of the FBI’s Cyber Task Force to investigate and bring to justice those who commit cybercrime, regardless of where they may reside.”

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

The government’s case is being prosecuted by the Office’s National Security & Cybercrime Section.  Assistant United States Attorney Saritha Komatireddy is in charge of the prosecution.

The Defendant:

 

FABIO GASPERINI

Age: 34 

Residence: Rome, Italy

 

E.D.N.Y. Docket No. 16-CR-441

Earlier today, Alberto Randazzo, a former sergeant with the New York City Police Department, was sentenced to 28 years in prison, eight years of supervised release and sex offender registration for sexual exploitation and receipt of child pornography.   Today’s sentencing took place before United States District Judge Pamela K. Chen at the federal courthouse in Brooklyn, New York.

The sentence was announced by 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, Homeland Security Investigations (HSI), New York, and James P. O’Neill, Commissioner, New York City Police Department (NYPD).

“Alberto Randazzo lived a double life, publicly serving as an NYPD police officer while privately engaging in conduct to exploit the most vulnerable members of the community – our children,” stated Acting United States Attorney Rohde.  “Together with our law enforcement partners we will continue to strive to protect the most vulnerable among us.” 

“Randazzo held a position with the sole purpose to serve and protect the people of this city. Instead, he targeted certain women, persuaded them to sexually abuse their children and had them send him pictures and videos of the acts,” said Special Agent-in-Charge Melendez. “His behavior is no less than deplorable. It is with continued joint law enforcement efforts that we can target these types of offenders and ensure that they are punished for their heinous deeds.”

“Alberto Randazzo’s exploitation of innocent children is unconscionable. I am grateful to our detectives in Internal Affairs, Homeland Security, and the U.S. Attorney’s Office in the Eastern District of New York for their work in bringing Randazzo to justice for these horrific crimes,” said Police Commissioner James P. O’Neill.

On July 12, 2016, the defendant pleaded guilty to two counts of conspiracy to sexually exploit a child and one count of receipt of child pornography.  According to court filings, from as early as 2010 through 2013, Randazzo targeted women through websites such as Ashley Madison and Match.com and persuaded them to sexually abuse children to whom they had access, so he could watch the abuse.  Randazzo was caught in February 2013, when a witness found disturbing text messages on Randazzo’s phone and uncovered emails from women sending Randazzo pictures of them molesting their children.  When the witness confronted him, Randazzo admitted his sexual interest in mothers having sex with their children.

Based on the information obtained from the witness and the photographs, the Internal Affairs Bureau (IAB) of the NYPD obtained a search warrant for Randazzo’s apartment and found numerous images and videos of child pornography, including a number of videos of child pornography that were created by Randazzo himself.  Randazzo was arrested and charged in Queens Criminal Court.  At the time of his arrest, Randazzo had been a member of the NYPD for 15 years.  While on bail in connection with that case, Randazzo was discovered by Special Agents of HSI to be downloading child pornography, which led to the federal investigation and federal charges being filed. 

At sentencing the government presented evidence that at least five women complied with Randazzo’s solicitations and sexually abused children in order to satisfy his sexual desires.  Randazzo’s victims ranged in age from a few months to eight years old, and he traveled out of state to watch two of them be molested in person.  Randazzo arranged to have the eight-year-old victim drugged so that he would not remember the abuse. 

Three of the women Randazzo solicited have also been charged in the Eastern District of New York. Two have pleaded guilty, one of whom was sentenced to five years imprisonment, one of whom is awaiting sentencing, and another is awaiting trial.

 Ms. Rohde thanked HSI and the NYPD for their joint efforts in bringing Randazzo to justice and thanked the Queens District Attorney’s Office for their continuing assistance.

The government’s case is being prosecuted by Assistant United States Attorneys Tyler Smith and Moira Kim Penza. 

The Defendant:

 

ALBERTO RANDAZZO

Age:  40

Astoria, New York

 

E.D.N.Y. Docket No. 14-CR-189 (PKC)

 

Earlier today, United States District Judge Raymond J. Dearie sentenced the defendant Gregorio Gigliotti to 18 years in prison for narcotics-trafficking and firearms-related offenses.

The sentence was 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 Angel M. Melendez, Special-Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.

Following a two-week trial in July 2016, a federal jury in Brooklyn, New York found the defendant Gregorio Gigliotti and his son, Angelo Gigliotti, guilty of participating in a long-running cocaine importation scheme.  The jury also found the defendant guilty of unlawfully possessing firearms – including a defaced firearm – in furtherance of the drug-trafficking operation.  The defendant’s wife, Eleonora Gigliotti, also participated in the family-run drug-trafficking operation, and in January 2017, pled guilty to conspiring to import cocaine.  Angelo Gigliotti and Eleonora Gigliotti are awaiting sentencing, and face mandatory minimum sentences of 20 years and 5 years, respectively.

The defendants’ arrests arose out of a long-term investigation by the United States Immigration and Customs Enforcement (“ICE”) and the Federal Bureau of Investigation (“FBI”), in coordination with law enforcement authorities in Italy, into a transnational cocaine trafficking operation.  Between October and December 2014, federal law enforcement officers intercepted and seized approximately 55 kilograms of cocaine that had been hidden inside cardboard boxes that contained cassava and sent from co-conspirators in Costa Rica to the defendants in New York.  To facilitate their operation, the defendants used their family-run Italian restaurant in Corona, Queens, Cucino Amodo Mio, as well as a produce importation company, Fresh Farm Export Corp., that was incorporated in 2012 to provide a cover for their drug-trafficking operation.  On March 11, 2015, the day the defendants were arrested, federal law enforcement officers executed a search warrant at Cucino Amodo Mio and recovered one 12 gauge shotgun; one loaded .357 magnum Trooper revolver; one loaded .22 caliber Colt pistol; one loaded .38 caliber Charter Arms revolver; one 9 mm Keltec pistol; one .762 Czech pistol; one .38 caliber Derringer that had a defaced serial number; ammunition magazines; loose ammunition; two handgun holsters; brass knuckles; a handwritten ledger showing the movement of more than $350,000; and more than $100,000 in cash.    

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

The Defendants:

 

GREGORIO GIGLIOTTI

Age:  61

Malba, New York

 

E.D.N.Y. Docket No. 15-CR-204 (S-2) (RJD)

Four defendants were arrested today on charges of securities fraud conspiracy and money laundering conspiracy for their involvement in schemes to fraudulently manipulate the stock of BioCube, Inc. (BioCube), a U.S. publicly traded company, and to launder approximately $2 million in illegal proceeds using offshore bank and brokerage accounts.  Since 2010, BioCube has purported to have a series of different business purposes, including, most recently, planning to market and distribute devices for detecting marijuana on a user’s breath.  The charged individuals are: Chris Messalas, a former securities broker previously barred by the Securities and Exchange Commission (SEC); Boris Rubizhevky, the former Chief Executive Officer of BioCube; Michael Garnick, a Philadelphia-based attorney; and Dimitrios Argyros, an anti-money laundering consultant.  Messalas, Rubizhevsky and Garnick were charged with securities fraud conspiracy.  Messalas and Argyros were charged with money laundering conspiracy.      

Argyros was arrested at JFK International Airport after arriving on a flight from Cyprus via London, Messalas was arrested at his home in New York and Rubizhevsky was arrested in New Jersey.  Their initial appearances are scheduled for this afternoon before United States Magistrate Judge Cheryl L. Pollak at the federal courthouse in Brooklyn.  Garnick was arrested in Pennsylvania.  His initial appearance is scheduled for this afternoon before Magistrate Judge Thomas J. Rueter at the federal courthouse in Philadelphia, Pennsylvania. 

The charges 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 Kathy A. Enstrom, Acting Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI).

 “As alleged in the criminal complaint, the defendants planned a pump and dump scheme, and money laundering of the proceeds, using offshore accounts and an anti-money laundering consultant to avoid detection by law enforcement,” stated Acting United States Attorney Rohde.  “Together with our law enforcement partners, we will continue our efforts to protect the investing public, safeguard the financial integrity of our banking system and prevent the use of offshore bank and brokerage accounts to subvert U.S. laws and regulations.”  Ms. Rohde thanked the Securities and Exchange Commission for its cooperation and assistance on the investigation.

“When would-be stockholders purchased shares of BioCube, Inc., they knew about the market risks involved in investing,” stated Assistant Director-in-Charge Sweeney. “What they didn’t know was that the odds had already been stacked against them, as alleged, in this ruse concocted by the four individuals charged today. Those who employ schemes to capitalize on other people’s losses will most certainly be brought to justice, and we’re here to remind criminals that this type of dishonorable behavior will never be acceptable.  As such, the FBI and our partners will continue to uphold the promise we made to those who invest their trust in us.”

“At this time of year, when hard working citizens are sitting down to prepare their tax returns, IRS-Criminal Investigation (IRS-CI) remains vigilant in our pursuit of those unscrupulous individuals that defraud the American public as well as the government,” stated Acting Special Agent-in-Charge Enstrom. “IRS-CI is proud to bring our forensic accounting skills to this joint venture and help put a stop to this and other types of white collar crime, as alleged in the criminal complaint.”

According to the complaint unsealed today in Brooklyn federal court, Messalas, Rubizhevsky and Garnick engaged in a scheme to defraud BioCube’s investors and potential investors by concealing Messalas’s beneficial ownership and control of BioCube shares, so that Messalas could exercise control over the price and trading of BioCube’s stock. 

As the complaint further alleges, Messalas and Argyros engaged in a related conspiracy to launder approximately $2 million in proceeds of the BioCube “pump and dump” scheme by depositing BioCube shares into offshore accounts in the names of nominees in locations including Cyprus and the Bahamas.  The scheme was designed to launder a portion of the fraudulent proceeds from the stock manipulation scheme from the United States through offshore accounts, and circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA).  As alleged in the complaint, Argyros touted his ability to capitalize on his anti-money laundering expertise during conversations with an individual posing as a co-conspirator in the money laundering scheme who, unbeknownst to Argyros, was working with the FBI.  

The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of the charges against them, Messalas faces a maximum sentence of 25 years’ imprisonment, Rubizhevsky and Garnick face maximum sentences of five years’ imprisonment, and Argyros faces a maximum sentence of 20 years’ imprisonment.

*          *          *

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Tyler Smith, Alicyn Cooley and Jack Dennehy are in charge of the prosecution.

 

*          *          *

The Defendants:

 

CHRIS MESSALAS

Age:  50

Staten Island, New York

 

BORIS RUBIZHEVSKY

Age:  66

Closter, New Jersey

 

MICHAEL GARNICK

Age:  58

Philadelphia, Pennsylvania

 

DIMITRIOS ARGYROS

Age:  50

Ho-Ho-Kus, New Jersey

 

E.D.N.Y. Docket No. 17-MJ-321

Fernando Marte was arraigned this morning before United States Magistrate Judge Cheryl L. Pollak at the federal courthouse in Brooklyn. Marte has been charged in a two-count indictment with conspiring to import, and with importing, more than five kilograms of cocaine from the Dominican Republic.

The charges were announced by 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, Homeland Security Investigations, New York; Leon Hayward, Acting Director, U.S. Customs and Border Protection, Field Operations New York; and Gregory Null, Special Agent-in-Charge, U.S. Department of Homeland Security, Office of the Inspector General.

As alleged in the indictment and in a previously filed complaint, beginning in January 2016, Marte, an employee of the United States Customs and Border Protection (CBP) who worked at John F. Kennedy International Airport (JFK), conspired to import cocaine into the United States from the Dominican Republic. On February 7, 2017, while on duty for CBP, Marte approached two individuals who had arrived together at JFK on a flight from the Dominican Republic. Marte escorted the individuals to the baggage claim area where they loaded two suitcases onto a baggage cart. Marte then escorted one of the individuals and the baggage cart through the secondary inspection point in the terminal.

Upon searching the suitcases, CBP officers recovered 45 brick-shaped packages containing approximately 45 kilograms of cocaine. Further investigation has revealed that Marte previously escorted at least one other drug smuggler from the Dominican Republic through the inspection area at JFK Airport.

“Law enforcement officers who use their official positions to commit crimes pose a particularly grave threat to our communities by not only facilitating crime but by undermining respect for law enforcement,” stated Acting United States Attorney Rohde. “The charges announced today send a message to those who would so betray the public.” Ms. Rohde extended her appreciation to CBP’s Office of Professional Responsibility for its work on the investigation.

“As a public servant entrusted with border security and keeping dangerous drugs out of our country, Officer Marte instead allegedly sought to serve himself and stained the badge he wore by doing so, by allowing cocaine to flow through JFK airport and into our city. For corrupt officers who think they can hide behind their badge as they engage in transnational criminal activity, today’s indictment shows you will be caught and brought to justice,” stated Special Agent-in-Charge Melendez.

“U.S. Customs and Border Protection stresses honor and integrity in every aspect of our mission. If you have integrity, you will not taint the image or disgrace the hard work of the men and women who wear the CBP uniform. There is no place in our ranks for individuals who violate our laws and break the trust of the American people. I thank our law enforcement partners for their assistance in helping to preserve the core values of our agency - vigilance, service and integrity,” stated Acting Director Hayward.

“Mr. Marte’s arraignment is a step in the right direction to maintain the public’s trust. This investigation was a concerted effort among law enforcement partners that worked tirelessly to hold Mr. Marte accountable,” stated Special Agent-in-Charge Null.

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

 

The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys David K. Kessler, G. Karthik Srinivasan, and Elizabeth Macchiaverna are in charge of the prosecution.

 

The Defendant:

 

FERNANDO MARTE

Age: 28

Farmingdale, New York

 

E.D.N.Y. Docket No. 17-CR-191 (ERK)

Earlier today, Vincent Vertuccio, who has maintained a long affiliation with the Bonanno organized crime family of La Cosa Nostra, pleaded guilty at the federal courthouse in Brooklyn, New York, to conspiring to alter records for use in a grand jury investigation and to making and subscribing a false tax return. The plea was entered before United States District Judge Eric N. Vitaliano. Pursuant to Vertuccio’s plea agreement with the government, Vertuccio agreed to pay over $1 million in restitution as part of the sentence imposed by the Court.

The plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; Kathy A. Enstrom, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS); Michael C. Mikulka, Special Agent-in-Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations (DOL-OIG); and Michael Nestor, Inspector General for the Port Authority of New York and New Jersey (Port Authority-OIG). For its investigative work and assistance in the case, Ms. Rohde also extended her grateful appreciation to the Federal Bureau of Investigation, New York Field Office.

According to court filings and facts presented during the plea proceeding, Vertuccio was under investigation by a grand jury in the Eastern District of New York for conspiring to defraud the Port Authority of New York and New Jersey in connection with the One World Trade Center project located in lower Manhattan, as well as related money laundering and tax crimes. As uncovered through the grand jury investigation, Vertuccio had hidden his control of Crimson Construction Corporation (Crimson) during the bidding process for the One World Trade Center project in light of his ties to organized crime and so as to hide taxable income that he received through Crimson. As part of the investigation, the grand jury issued a subpoena in March 2013 to a Manhattan jewelry store for records relating to some of Vertuccio’s unreported income, which he received in the form of high-end jewelry. Vertuccio conspired to alter the invoices and sales receipts issued by the Manhattan jewelry store before the store provided the records to the grand jury, thereby concealing some of his taxable income and his role in Crimson. In addition to the obstruction scheme, Vertuccio also admitted to filing a false tax return for calendar year 2011. The investigation revealed that Vertuccio directed that a substantial amount of money from Crimson’s bank accounts be used to pay for his personal expenses, which Vertuccio failed to report as taxable income on his federal personal income tax returns.

When sentenced by Judge Vitaliano, Vertuccio faces up to 20 years in prison. As part of the plea, Vertuccio agreed to make restitution payments to the Port Authority in the amount of $1,089,771.09 and to the Internal Revenue Service in the amount of $374,057.30. The trial against Vertuccio’s alleged co-conspirator on the obstruction of justice charge, attorney John Servider, is scheduled to begin on June 12, 2017.

The government’s case is being handled jointly by the Office’s Organized Crime & Gangs Section and the Public Integrity Section. Assistant United States Attorneys M. Kristin Mace, Lan Nguyen, Jonathan P. Lax and Tanya Hajjar are in charge of the prosecution.

The Defendant:

 

VINCENT VERTUCCIO, a/k/a “Vinny”

Age: 61

Maspeth, New York

 

E.D.N.Y. Docket No. 15-CR-174 (ENV)

Today, at the federal courthouse in Central Islip, New York, James Rogers pleaded guilty to conspiring to commit gunpoint robberies of commercial retail stores in Nassau and Suffolk Counties between August 10, 2015 and December 21, 2015 and the brandishing of a firearm during the robbery of a Petco Pet Store in Hicksville, New York on August 20, 2015.

The plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, Thomas C. Krumpter, Acting Nassau County Police Commissioner (NCPD), and Timothy D. Sini, Suffolk County Police Commissioner (SCPD).

As part of the plea, Rogers admitted his role in 15 robberies that occurred in 11 different towns in Nassau and Suffolk Counties, including the gunpoint robbery of Petco, various women’s clothing stores and a Babies R’ Us. On almost every occasion, Rogers committed the robberies at or near the opening or closing time of the businesses, his face covered, brandishing a black handgun, threatening employees and customers, and restraining them using toy handcuffs or plastic zip-tie restraints. Rogers took United States currency, jewelry and personal items from his victims, and fled the locations in a car or sports utility vehicle driven by his co-conspirator.

“Addressing violent crimes that terrorize our neighborhoods and jeopardize the safety of our citizens is a priority, and the defendant will now be held accountable for his actions,” stated Acting United States Attorney Rohde. Ms. Rohde extended her grateful appreciation to the Drug Enforcement Administration for its assistance on the case.

“This case is yet another example of great collaboration among law enforcement agencies in the region,” stated SCPD Commissioner Sini. “Let the message be clear: Suffolk and Nassau police departments, working with our federal law enforcement partners, will not tolerate perpetrators of violent crime in our communities.

“Defendant Rogers committed fifteen armed robberies in Nassau and Suffolk counties, preyed on unsuspecting business owners and their customers, thus becoming one of our top law enforcement priorities. Society is a safer place now that this defendant will be incarcerated,” stated Acting NCPD Commissioner Krumpter.

Today’s plea took place before United States District Judge Joseph F. Bianco. When he is sentenced on October 18, 2017, Rogers faces up to life in prison.

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

The Defendant:

 

JAMES ROGERS

Age: 47

Hempstead, New York

 

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

Earlier today, Hani Kabbara pleaded guilty to conspiracy to commit wire fraud. The plea was entered before United States Magistrate Judge Steven M. Gold at the federal courthouse in Brooklyn.

The guilty plea was announced by 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).

“In this 21st century version of an age-old scam, Kabbara conned unwitting victims, many of them elderly, into sending hundreds of thousands of dollars to himself and his co-conspirators,” stated Acting United States Attorney Rohde. “This Office is committed to protecting innocent victims targeted by predators like Kabbara who operate in cyberspace.”

“Kabbara preyed on well-intentioned victims, many who were in the U.S. and elderly, when he used a telephone scheme to extort them under the guise a loved one had been arrested and the victim needed to send money in order for the grandchild to be released from jail,” stated FBI Assistant Director in Charge Sweeney. “He masterminded his schemes from what he thought was the safety of his home in Canada, hiding behind encrypted chats and online monikers. Facing up to 20 years in prison puts an end to his calculating, criminal ways. This case again showcases the commitment of the FBI’s Cyber Task Force to investigate those involved in cybercrime and bring them to justice, no matter where in the world they may reside.”

Between February 2014 and August 2016, Kabbara, also known as “The Mayor,” ran a sophisticated scheme that used overseas call centers to extort money from unsuspecting victims, many of them elderly, in the United States. Kabbara and his co-conspirators used various threats and deceit, for example telling the victim that a grandchild had been arrested and the victim needed to send money in order for the grandchild to be released from jail. Kabbara and the co-conspirators demanded payment from his victims in the form of MoneyPaks, which are vouchers that can be loaded with cash and then used to fund prepaid debit cards. The defendant sold the MoneyPaks in online criminal forums or, with his co-conspirators, transferred the funds onto prepaid debit cards that had been obtained using stolen identities. The defendant and his co-conspirators, who communicated with each other anonymously in cyberspace through dark web forums and encrypted chat applications, then used a crew of workers in and around the New York area to withdraw funds from the debit cards, consolidate the cash and send it back to the defendant in Canada.

When he is sentenced by United States District Judge Margo K. Brodie on July 6, 2017, Kabbara faces up to 20 years in prison, as well as criminal forfeiture and fines.

The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorney Una A. Dean is in charge of the prosecution.

The Defendant:

 

HANI KABBARA

Age: 32

Quebec, Canada

 

E.D.N.Y. Docket No. 16-CR-472

An eight-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Edward Ambrosino with wire fraud, tax evasion, making and subscribing to false corporate tax returns, and failing to file a return or pay tax.  The indictment was returned under seal by a federal grand jury sitting in Central Islip, New York on March 28, 2017.  Ambrosino was arrested this morning and will be arraigned this afternoon before United States District Judge Joanna Seybert at the federal courthouse in Central Islip, New York.  

The charges 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 Acting Special Agent-in-Charge Kathy A. Enstrom, Internal Revenue Service-Criminal Investigation (IRS-CI).

 “As alleged in the indictment, the defendant, an elected public official, defrauded his former employer and committed a variety of tax offenses,” stated Acting United States Attorney Rohde. “Today’s indictment is a reminder of the obvious, that public officials are not exempt from paying their fair share of taxes and otherwise complying with the laws of the United States, just like any other citizen.”

“In this case as charged, Ambrosino’s crimes claimed as a victim, the law firm for whom he worked,” stated Assistant Director in Charge Sweeney.  “As alleged, he also committed tax fraud, all the while serving as an elected public official.  The FBI is committed to working with our law enforcement partners to ensure this type of behavior ceases to exist, no matter who is at fault.”

 “The IRS enforces the nation’s tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others. The indictment alleges, Mr. Ambrosino intentionally sought to undermine the tax laws of the United States, violate the public trust while ignoring the fiduciary responsibility he has with his employer,” stated Acting Special Agent-in-Charge Enstrom.

As detailed in the indictment, Ambrosino was an attorney licensed to practice in New York State, specializing in economic and industrial development and financings.  Between approximately November 2001 and December 2015, he was “Of Counsel” at a law firm based in Uniondale, New York (the “Law Firm”).  In addition, since March 2003, Ambrosino has served as a Councilman for the Town of Hempstead, New York.  Since 2010, he has also acted as Special Counsel to the Nassau County Executive.

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

As alleged in the indictment, from 2013 through 2015, in contravention of his compensation agreement with the Law Firm, Ambrosino diverted legal fees that he was required to provide to the Law Firm and deposited them into the Vanderbilt Bank Account.  Among Ambrosino’s clients from whom he received legal fees were components of Nassau County, New York, including the Nassau County Industrial Development Agency (the “NCIDA”) and the Nassau County Local Economic Assistance Corporation (the “NCLEAC”).  Between 2013 and 2015, Ambrosino received more than $1.3 million in payments from the NCIDA and NCLEAC.  Of this amount, Ambrosino deposited more than $800,000 into a bank account, for which he was the sole signatory, rather than submitting the payments to the Law Firm as required under his compensation agreement. 

As further alleged in the indictment, Ambrosino evaded substantial income tax due and owing by him and filed false and fraudulent corporate tax returns on behalf of Vanderbilt.  For the 2011, 2012 and 2013 tax years, Ambrosino evaded the assessment of income tax by, among other things, deducting rent expenses on the Vanderbilt corporate tax returns that he knew were not business expenses.  Specifically, Ambrosino claimed rent for a Manhattan apartment paid for by him on behalf of a third-party as a business expense.  Ambrosino’s personal tax returns included the losses flowing from Vanderbilt for the 2011 and 2012 tax years.  In addition, for the 2013 tax year, Ambrosino failed to claim approximately $315,000 in funds he diverted from the Law Firm on either his personal income tax return or the Vanderbilt corporate tax return.  With respect to the 2014 tax year, Ambrosino did not timely file his personal tax return or the corporate tax return for Vanderbilt.  As a result of Ambrosino’s conduct, the IRS suffered a tax loss of approximately $254,628.

If convicted, Ambrosino faces a maximum term of imprisonment of 20 years for the wire fraud charge, five years for each charge of tax evasion, three years for each charge of making and subscribing to false corporate tax returns, and one year for failing to file a tax return.  The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by the Office’s Long Island Criminal Division.  Assistant United States Attorneys Catherine M. Mirabile and Raymond A. Tierney are in charge of the prosecution. 

 

The Defendant:

EDWARD AMBROSINO

Age:  52
 

North Valley Stream, NY

 

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

Harvey Christian was sentenced today to 50 years in prison by United States District Judge Eric N. Vitaliano at the federal courthouse in Brooklyn. Christian was convicted at trial in October 2014 on charges of racketeering -- including two murder conspiracies, firearms possession and trafficking in crack cocaine. The charges arose out of Christian’s long-time dominance of a drug crew that operated in the Park Hill housing complex in the Clifton neighborhood of Staten Island.

The sentence was announced by 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).

As proven at trial, Harvey Christian, also known as “Black,” and his brother Anthony Christian, also known as “Nitty,” led a violent narcotics distribution ring in Park Hill from 1991 to 2011. In the mid-1990s, the Christian brothers and their associates – including co-defendant Jason Quinn – sought to take control of more drug territory within Park Hill. To achieve this, they engaged in massive gun battles for months. Beginning in approximately 1994, the enterprise sought to expand its drug distribution operations into a neighboring apartment building, 260 Park Hill, which was controlled by a rival drug crew. This protracted conflict was known by its participants as the “260 Wars.” During one of the battles, in May 1995, law enforcement recovered 77 shell casings inside a residential building, outside on the street, and on a rooftop. One of the Christian brothers’ associates was murdered in that battle. All three trial defendants – Harvey Christian, Anthony Christian and Quinn – were convicted on all counts at trial. Judge Vitaliano previously sentenced Anthony Christian to life in prison and Quinn to 40 years in prison.

Leading up to the arrests of the Christian brothers and Quinn in 2011, multiple search warrants and arrests related to members of the enterprise and their associates were executed in and around Park Hill and elsewhere in New York. These searches and arrests resulted in the seizure of firearms and ammunition, including a Mac-11 pistol, as well as large quantities of crack and powder cocaine. During a search of the Christian brothers’ apartment in the Park Hill housing complex in February 2010, the New York City Police Department (NYPD) recovered multiple bullet-proof vests, crack cocaine and marijuana. When Quinn was arrested in 2011, a search of his home recovered crack cocaine and a firearm.

Ms. Rohde extended her grateful appreciation to the FBI, the NYPD, and the Richmond County District Attorney’s Office.

The government’s case is being prosecuted by Assistant United States Attorneys Allon Lifshitz and Richard M. Tucker.

The Defendant:

 

HARVEY CHRISTIAN

Age: 44

Staten Island, New York
 

E.D.N.Y. Docket No. 11 CR 425 (ENV)

A six-count indictment was unsealed this morning in federal court in Central Islip, New York, charging John Quadrino, the owner/operator of Princess Cut Industries, Inc., Sassy Jewelry Buyers, Inc., and Golden Glitter Trading, Inc. (collectively referred to as the “Gold Purchasing Companies”).  The defendant is charged with wire fraud and wire fraud conspiracy for orchestrating a Ponzi scheme over the course of more than five years utilizing the Gold Purchasing Companies.  The defendant will be arraigned at the federal courthouse in Central Islip this afternoon before United States Magistrate Judge Arlene R. Lindsay.      

The charges 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 (“FBI”), New York Field Office, and Madeline Singas, Nassau County District Attorney.   

As set forth in the indictment, the charges against the defendant stem from a multi-year investigation by the United States Attorney’s Office, the FBI and the Nassau County District Attorney’s Office (“NCDAO”).  The investigation revealed that the defendant represented to potential investors that the Gold Purchasing Companies were involved in the sale of gold, jewelry and diamonds to refineries and jewelers.  The defendant asked investors to invest large sums of money for fixed periods of time in exchange for a guaranteed, fixed rate of return at the end of the agreed upon time period.  Contrary to the representations made by the defendant to investors, the defendant never actually purchased gold, jewelry or diamonds in any significant quantities.  Instead, he systematically engaged in a classic Ponzi scheme over the course of five years, returning investor principal and interest from the investor capital of other victims.  As a result, more than 80 investors invested approximately $13.1 million with the Gold Purchasing Companies and  suffered total losses of approximately $6.3 million.   The defendant used investor capital to, among other things, issue checks to himself and to pay for his personal gambling expenses.

“As alleged, the defendant deceived investors with the promise of purchases of gold and other valuables and guaranteed returns, leading to his own enrichment and victim losses of over $6 million,” stated Acting United States Attorney Rohde.  “We will not permit such conduct to go unanswered.”  Ms. Rohde expressed her appreciation to the FBI and NCDAO for their assistance during the course of this multi-year investigation.

“As alleged, rather than carrying out his plan as promised, Quadrino dangled a shiny prospect in front of his victims while funneling their money into a scheme to defraud others and enrich himself,” said FBI Assistant Director-in-Charge Sweeney, Jr.  “People know there's risk involved in investing, but they shouldn't have to start out with the odds stacked against them. Along with our partners, we remind the public how seriously we take offenses of this nature.”

“This defendant is accused of pilfering the savings of dozens of innocent investors by promising them great returns, but instead he allegedly gambled their money away,” DA Singas said. “Fortunately, working with our law enforcement partners at the Eastern District of the U.S. Attorney’s Office and the FBI, we were able to end this alleged Ponzi scheme before more investors were victimized.”

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of the offense, the defendant faces a maximum sentence of 20 years’ imprisonment per count. 

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Mark E. Misorek is in charge of the prosecution with assistance provided by Special Assistant United States Attorney Matthew Sotirhos of the Nassau County District Attorney’s Office. 

The Defendant:

 

JOHN QUADRINO

Age:  51

Oceanside, New York

E.D.N.Y. Docket No. 17-CR-153 (DRH)

A complaint was unsealed today in United States District Court for the Eastern District of New York charging Mahalia Abraham, an employee of New York City Human Resources Administration’s Office of Research and Program Monitoring, and William Hopkins, with stealing approximately $59,000 in benefits earmarked for the Supplemental Nutrition Assistance Program (“SNAP”) and Temporary Aid to Needy Families Program (“TANF”), which are funded by federal tax dollars.  The defendants will be arraigned this afternoon at the federal courthouse in Brooklyn this afternoon before United States Magistrate Judge Vera M. Scanlon. 

The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Mark G. Peters, Commissioner of the New York City Department of Investigation (“DOI”).    

As set forth in the complaint and other publicly filed documents, the charges against the defendants stem from an investigation that began when one SNAP recipient noticed $56 worth of benefits had been withdrawn from her SNAP electronic benefits transfer card (“EBT”) without her permission.  The investigation revealed that Abraham had accessed more than 100 SNAP and TANF recipients’ files to check their account balances and access their EBT account numbers as well as the names, dates of birth, and social security numbers of the intended recipients.  Abraham passed this information on to her boyfriend, Hopkins, who used this information to change the PIN numbers on their victims’ cards.  Hopkins then keyed in the victims’ EBT card numbers and new PIN numbers at Rite Aid stores throughout Brooklyn in order to withdraw cash and purchase baby formula, which he sold to bodegas for cash.  In total, the defendants Abraham and Hopkins stole approximately $53,000 in SNAP benefits and $6,000 in TANF benefits. 

“As alleged, the defendants used Mahalia Abraham’s position as an HRA employee to access the personal information of public assistance recipients, and to steal tens of thousands of dollars earmarked for needy New Yorkers,” stated Acting United States Attorney Rohde.  “This type of behavior directly contradicts what it means to be a public servant and will not be tolerated.”  Ms. Rohde expressed her appreciation to DOI’s Office of the Inspector General for its assistance during the course of this year-long investigation.

“This case began with a complaint from a recipient who noticed $56 in SNAP benefits missing from her account and ultimately led DOI to uncover tens of thousands of dollars in fraud, according to the charges.  Though this defendant and her associate stole government funds, their victims were vulnerable New Yorkers – like one recipient left to stand on soup kitchen lines while his benefits were diverted to feed their greed.  DOI’s report released today details how this fraud was committed, and the steps that HRA should take to ensure these funds are safeguarded for the people who need them.  DOI thanks the United States Attorney’s Office for the Eastern District of New York for its partnership on this investigation and HRA for its continued cooperation to enact meaningful reforms to tackle fraud,” stated DOI Commissioner Peters.

In conjunction with today’s arrests, DOI issued a report detailing the investigation’s findings and providing recommendations to HRA and other government entities aimed at safeguarding public assistance recipients’ personal data.  A copy of the Report can be found at the following link: http://www1.nyc.gov/site/doi/newsroom/public-reports.page

The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of the offense, the defendants face a maximum sentence of 10 years’ imprisonment. 

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

The Defendants:

 

MAHALIA ABRAHAM

Age:  38

Brooklyn, New York

  

WILLIAM HOPKINS

Age:  41

Brooklyn, New York

 

E.D.N.Y. Docket No. 17-MJ-282

Earlier today, Justin Smith, a Bloods gang member, was sentenced to 101 months imprisonment by United States District Judge I. Leo Glasser for his role in leading an illegal drug distribution operation in Brooklyn and carrying multiple firearms to further his drug distribution activities.

The sentence was announced by 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).

“Justin Smith, a gang member and convicted drug dealer who regularly kept and carried illegal firearms to protect his criminal organization, used an apartment in Wyckoff Gardens as a base of operations to sell crack and heroin, putting the residents of that community at great risk. This office, together with its law enforcement partners, will work tirelessly to address this type of dangerous conduct,” stated Acting United States Attorney Rohde.  Ms. Rohde extended her grateful appreciation to the FBI and thanked the New York City Police Department (NYPD) for their assistance on the investigation. 

The defendant was sentenced following his conviction after a guilty plea on October 28, 2016 to multiple counts of illegal drug distribution and firearm offenses, including possession of a firearm in furtherance of drug trafficking.  Between September 2013 and April 2015, the defendant conspired to possess and distribute illegal narcotics in and around two New York City Housing Authority (NYCHA) housing developments known as the Gowanus Houses and Wyckoff Gardens, located in the Boerum Hill neighborhood in Brooklyn, New York. 

On or about June 18, 2014, NYPD officers entered Smith’s stash house at 185 Nevins Street in Brooklyn, and discovered him with illegal drugs, ammunition, and a firearm.  The officers recovered: 80 plastic bags containing crack cocaine, 51 glassine envelopes containing heroin and two containing a mixture of heroin and cocaine, 1,250 small plastic bags used to package crack cocaine for distribution, 212 empty glassine envelopes used to package heroin for distribution, $1,018 in cash, and a digital kitchen scale used to weigh narcotics.  Additionally, they recovered nine rounds of .45 caliber ammunition, a box containing 31 rounds of 9mm ammunition, and a stolen black 9mm caliber semiautomatic handgun.  The evidence also established that the defendant possessed crack and heroin, as well as firearms, on multiple other occasions in and around Brooklyn.

The government’s case is being handled by the Office’s Narcotics and Money Laundering Section. Assistant United States Attorneys Craig R. Heeren and Michael P. Robotti are in charge of the prosecution.

The Defendant:

JUSTIN SMITH
Age: 23
Brooklyn, New York

E.D.N.Y Docket No. 15-CR-466 (ILG)

Earlier this afternoon, defendants Joseph Atias and Sofia Atias were convicted of bank fraud, conspiracy to commit bank fraud and Medicaid fraud by a jury in federal court in Central Islip. The fraud was designed to, and did, defraud Bank of America of over half a million dollars.  The defendants face penalties of up to 35 years’ imprisonment, the forfeiture of $560,000, and restitution of over $700,000.  After the verdicts, Joseph Atias was remanded to custody pending sentencing by United States District Judge Denis R. Hurley.

The convictions were announced by 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.

“Through a web of lies and false documentation, these defendants stole more than half a million dollars from Bank of America and from Medicaid, which they used to line their own pockets,” stated Acting United States Attorney Rohde.  “The fine work of the FBI to bring these defendants to account for these crimes sends a clear message to anyone who contemplates engaging in mortgage fraud or Medicaid fraud: Do not even attempt it, because you will be caught and held responsible.”  Ms. Rohde extended her grateful appreciation to the Federal Bureau of Investigation, the agency responsible for leading the government’s investigation.

The defendants were convicted of bank fraud and conspiracy to commit bank fraud in connection with the sale of property adjacent to Sacred Heart Academy for $925,000, after the defendants had sold the property in a short sale for $480,000 to discharge their mortgage debt.  In the short sale process, the defendants and a co-conspirator, an attorney who pleaded guilty and testified against the defendants at trial, concealed the offer from Sacred Heart Academy from the Bank of America.  In the short sale process, the defendants submitted a fraudulent contract of sale and other documents with false statements to Bank of America, and obtained approval of a short sale, wherein the proceeds from the sale of the property were less than the total amount of the mortgages on the property.  The defendants submitted these documents to Bank of America, falsely representing that there were no funds to pay the mortgages when, in fact, the defendants knew that Sacred Heart Academy, a high school in Hempstead, New York, had offered to buy the property for an amount sufficient to cover the mortgages on the property.  To accomplish the fraudulent short sale scheme, the defendants used a relative as a straw buyer of the property to create the appearance of an arms-length sale.  Shortly after that sale, the defendant’s straw buyer sold the property to Sacred Heart Academy for approximately half a million dollars in profit.

Regarding the Medicaid fraud count conviction, the jury found the defendants guilty of theft of government funds in connection with their receipt of hundreds of thousands of dollars in Medicaid funds from 2009-2015.  The defendants concealed their self-employment from Medicaid, as well as their available cash resources, including trust fund monies, an inheritance and the $465,000 in proceeds from the above bank fraud, in order to continue on Medicaid, which paid the defendants approximately $2,500 per month.   

The government’s case was prosecuted by Assistant United States Attorneys Charles P. Kelly and Burton T. Ryan, Jr. of the Office’s Long Island Criminal Division.

The Defendants:

Name: SOFIA ATIAS
Age: 47 years old    

Residence: Great Neck, NY

Name: JOSEPH ATIAS
Age: 52 years old

Residence: Great Neck, NY

Earlier today, a 37-count indictment was unsealed in United States District Court for the Eastern District of New York charging 10 members and associates of the Bonanno organized crime family of La Cosa Nostra (the “Bonanno family”) with racketeering conspiracy, including predicate acts of murder conspiracy, attempted murder, extortion, illegal gambling, robbery conspiracy, arson conspiracy, narcotics distribution conspiracy and obstruction of justice conspiracy. The indictment relates to the defendants’ alleged criminal activities in Howard Beach, Queens, and elsewhere between January 1998 and March 2017.

 

The defendants -- Ronald “Ronnie G.” Giallanzo, an acting captain in the Bonanno family, Michael Padavona, Michael Palmaccio and Nicholas “Pudgie” Festa, soldiers in the Bonanno family, and Christopher “Bald Chris” Boothby, Evan “The Jew” Greenberg, Richard Heck, Michael Hintze, Robert “Chippy” or “Chip” Tanico, and Robert Pisani,  associates of the Bonanno family -- were arrested earlier today and are scheduled to be arraigned this afternoon before Magistrate Judge Vera M. Scanlon in Brooklyn federal court.  The case has been assigned to United States District Judge Dora L. Irizarry.

 

The charges were announced by 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 Division (FBI).

 

The indictment is the result of a long-term investigation, with evidence gathered through a variety of methods including wiretap recordings of the defendants, cooperating witnesses, government and public records, electronic evidence and visual surveillance, all of which revealed a pattern of violence and intimidation that the defendants employed to further their enterprise's economic interests.

 

“Today’s arrests reveal La Costra Nostra’s continued presence in the community.  Through acts of violence, including murder conspiracy, loansharking, illegal gambling, robbery and other offenses, the defendants are alleged to have amassed a fortune in ill-gotten gains.  With these arrests, the defendants will be held accountable for their wide-ranging and destructive conduct,” said Acting United States Attorney Rohde. Ms. Rohde thanked the Queens District Attorney's Office, New York City Police Department, United States Probation Department of the Eastern District of New York and the Social Security Administration, Office of the Inspector General, for their assistance on the investigation.

 

“The Mafia hasn’t stopped operating and the crimes these members are charged with today proves that. To put an end to their brand of violence and criminal behavior, the FBI/NYPD Joint Organized Crime Task Force will continue pursuing them with every tool we have. I’d like to commend the work of the agents and detectives who put much time and effort into this investigation,” said Assistant Director-in-Charge Sweeney.

 

Loansharking

 

As alleged in the indictment and detention memo, Giallanzo, an acting captain in the Bonanno family, conducted a lucrative loansharking operation in which he provided money to, among others, defendants Festa, Palmaccio, Padavona, Hintze and Heck to extend extortionate loans to, and collect from, numerous individuals.  Even while incarcerated, Giallanzo kept watch over his illicit loansharking book, directing his associates to commit acts of violence to ensure that the customers paid the exorbitant weekly interest rate.  At one point, Giallanzo had lent over $3 million in extortionate loans to customers.  Padavona, a Bonanno soldier, also conducted his own loansharking business with defendants Greenberg and Tanico.

 

The indictment alleges multiple counts involving threats and acts of violence to collect debts owed to Giallanzo and his associates.

 

For instance, in May 2013, within one month of his release from prison, Giallanzo ordered an associate of the Bonanno family (“Associate-1”) to bring to him a loanshark customer who owed Giallanzo $250,000 but had not been making the required weekly interest payments.  Giallanzo and Associate-1 placed the victim in Associate-1’s car and beat him until the customer soiled himself, while Giallanzo screamed, “Where’s the f-----g money?”

 

As another example, in June 2014, Greenberg described to a customer that he used acts of violence to collect payments.  He said, “I get my s--t.  I blow cars up.  I f------g knock on people’s doors.  I pull them out of their f------g house.”  Greenberg went on to describe his assault of another victim who was late paying a debt. “I f-----g grabbed another kid walking out of his house. I was like, he was like, ‘What’s up?’ I say, ‘What’s up?’ I grabbed him by the ankles, I f------g went like this, his head hit the concrete.”

 

As a result of their illegal activities, including loansharking, illegal gambling, robbery, extortion and other offenses, the defendants earned over $26 million in illicit proceeds, which the indictment alleges will be subject to forfeiture if the defendants are convicted.  In addition to the cash proceeds of the racketeering conduct, the indictment further alleges that the houses belonging to defendants Giallanzo, Padavona, Palmaccio and Festa, and one of Pisani’s businesses, are subject to forfeiture. 

 

Murder Conspiracy/Attempted Murder

 

In addition to the extortion charges, the indictment charges Giallanzo and Padavona with participating in a plot to murder an individual in the summer of 2006.  Giallanzo, who at the time was on pre-trial release for a previous case filed in this District, ordered the murder of the victim because, among other reasons, the victim had robbed members of Giallanzo’s crew.  The dispute lasted several months, during which Giallanzo’s crew and the victim shot at each other on the streets of Howard Beach on several occasions.   

 

Obstruction of Justice and Perjury

 

Padavona and Tanico are separately charged with conspiring and attempting to obstruct the federal grand jury proceeding into their criminal activities by coordinating false testimony by Tanico.  According to wiretap evidence, in April 2014, after Tanico was subpoenaed, he contacted Bonanno soldier Padavona and solicited his help.  Padavona then contacted Tanico’s attorney and arranged to meet to pay Tanico’s legal fees.  The next day, Tanico lied in the grand jury, falsely claiming that he had not spoken with Padavona about the subpoena.

 

Possible Penalties

 

If convicted of the racketeering or loansharking offenses, the defendants face a maximum of 20 years in prison.  If convicted of the obstruction of justice offenses, Padavona and Tanico face a maximum of 20 years in prison.  If convicted of operating an illegal gambling business, Giallanzo, Boothby and Pisani face a maximum of 5 years in prison.  If convicted of perjury, Tanico faces a maximum of 5 years in prison.

 

The government’s case is being prosecuted by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Nicole Argentieri, Lindsay K. Gerdes, Keith D. Edelman and Alicyn L. Cooley are in charge of the prosecution, with assistance provided by Assistant United States Attorney Tanya Y. Hill of the Office’s Asset Forfeiture Unit. 

 

The Defendants:

 

 

RONALD GIALLANZO
Age: 46

Queens, NY

  

MICHAEL PADAVONA

Age: 48

Queens, NY

 

MICHAEL PALMACCIO

Age: 45

Queens, NY

 

NICHOLAS FESTA

Age: 36 

Oceanside, NY

 

CHRISTOPHER BOOTHBY

Age: 37

Queens, NY

 

EVAN GREENBERG

Age: 45

Queens, NY

 

RICHARD HECK

Age: 45

Queens, NY

 

MICHAEL HINTZE                                          

Age: 53

Queens, NY

 

ROBERT PISANI

Age: 44

Queens, NY

 

ROBERT TANICO

Age: 49

Queens, NY

 

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

A two-count indictment was unsealed today in the United States District Court for the Eastern District of New York charging Tara Lenich, a former supervisory Assistant District Attorney with the Kings County District Attorney’s Office (KCDA), with illegally intercepting oral and electronic communications occurring over two cellular telephones. The defendant is scheduled to be arraigned before United States Magistrate Judge Vera M. Scanlon at the Brooklyn federal courthouse this afternoon.

The charges were announced by 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).

As alleged in the indictment, for nearly 16 months between approximately June 2015 and November 2016, Lenich created fraudulent judicial orders as part of her illegal wiretapping scheme. Specifically, she forged the signatures of multiple New York State judges onto the illicitly created judicial orders -- orders that purportedly authorized the KCDA to intercept communications occurring over two cellular telephones. Lenich then misappropriated KCDA equipment to intercept, monitor, and record the communications to and from the two cellular telephones. In furtherance of her scheme, Lenich also created fraudulent search warrants, which she then used to unlawfully obtain text messages relating to the two cellular telephones.

“Tara Lenich violated her duty to the public when she engaged in a long-running scheme to forge judicial documents in order to illegally wiretap telephones,” stated Acting United States Attorney Rohde. “Lenich’s prosecution reflects the Office’s commitment to protecting the public from the misuse of law enforcement tools, particularly by those entrusted to use those tools in accordance with the laws they have sworn to uphold.” In announcing the indictment, Ms. Rohde thanked the Kings County District Attorney’s Office for their cooperation.

“In this case, as alleged, Lenich's illegal wiretapping scheme demonstrates an abuse of power that won't be tolerated within our criminal justice system. Unfortunately, sometimes those close to the law stray far from the truth. As demonstrated today, however, everyone is expected to play by the rules; for this we'll make no exceptions,” stated Assistant Director-in-Charge Sweeney.

The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to five years’ imprisonment on each count.

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

The Defendant:

TARA LENICH

Age: 41
New York, NY

E.D.N.Y. Docket No. 17-CR-154

Earlier today, Aaron Wider, the former owner and Chief Executive Officer of the mortgage bank HTFC Corporation, was sentenced by United States District Judge Arthur D. Spatt to 150 months imprisonment.  Following a four-week jury trial, Wider was convicted on January 25, 2016, of conspiracy to commit bank fraud for defrauding financial institutions out of over $30 million in mortgage proceeds.  In addition, as part of the sentence the Court ordered Wider to pay $22,487,799 in forfeiture and restitution and, at the conclusion of his term of incarceration, serve five years’ supervised release.

 

The sentence was announced by 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.  In announcing the sentence, Ms. Rohde extended her grateful appreciation to the Federal Bureau of Investigation, the New York State Department of Financial Services, and the Nassau County District Attorney’s Office for their work on this case.

 

“Aaron Wider perpetrated a massive mortgage fraud scheme, the effects of which are still felt to this day by financial institutions and homeowners,” stated Acting United States Attorney Rohde.  “Today’s sentence sends a strong message that those who manipulate and abuse the lending process will be held accountable.”

“Wider’s scheme won him millions of dollars in profits and delivered a crushing blow to the financial institutions who became unwitting players in this game.  But as we know, banks aren't the only victims in these types of fraud-for-profits scams. A compromised banking system, which threatens both the stability of our economy and the safety of our assets, is a risk to us all. Today's sentence is a reminder of our commitment to put an end to this type of crime,” stated FBI Assistant Director in Charge Sweeney.

Between 2003 and 2008, Wider operated HTFC, a New York State licensed mortgage bank in Garden City, New York, which issued residential mortgages to borrowers. HTFC did not possess assets to fund these loans, but relied on funding from other banks and financial institutions, known as “warehouse lenders.”  The warehouse lenders, in turn, relied on Wider and HTFC to ensure that home buyers were financially able to pay the mortgages and that the market value of the homes fully collateralized the loans.

 

Instead, Wider and his co-defendants engineered a series of same-day sham transactions to artificially inflate the prices of homes.  Specifically, they contracted to buy homes in Nassau and Suffolk counties from innocent sellers at market prices.  They then submitted fraudulent loan applications and appraisals to the warehouse lenders that nearly doubled the true sales prices of the homes.  The defendants also inflated their own personal assets, used straw purchasers and sham trust entities, and concealed significant liabilities to get loan approval, typically obtaining proceeds for 80 to 100-percent more than the actual value of the homes.  

 

HTFC sold each of its mortgages in the secondary market.  When HTFC’s mortgages went into foreclosure beginning in 2007 and 2008, the secondary market investors only then discovered that the actual value of the collateral was far less than the amount borrowed for each home. 

 

As a result of this scheme, Wider was able to fraudulently obtain over $100 million in loan proceeds, causing over $30 million in losses to financial institutions.

 

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

 

The Defendant:

 

AARON WIDER

Age: 50

Copiague, NY

 

E.D.N.Y. Docket No. 14-CR-221

Earlier today, Redinel Dervishaj was sentenced before Judge Eric N. Vitaliano in U.S. District Court in Brooklyn, New York to 57 years and one day of imprisonment for three counts of Hobbs Act extortion conspiracy, three counts of attempted Hobbs Act extortion, three counts of threatening physical violence in furtherance of an extortion plan, and three counts of brandishing a firearm in connection with these crimes of violence. The charges relate to the defendant’s participation in three schemes to extort small business owners in Astoria, Queens.  Dervishaj was convicted after a three-week trial in April 2016.  Co-defendants Denis Nikolla and Besnik Llakatura, a police officer with the New York City Police Department at the time of the crimes, previously pled guilty.  Nikolla was sentenced on March 10, 2017 to 18 years’ imprisonment.  Llakatura is awaiting sentencing.     

The sentence was 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, and James P. O’Neill, Commissioner, New York City Police Department.

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

 

Between April 2012 and November 2013, Dervishaj and Nikolla also conspired and attempted to extort a businessman who had opened a new nightclub in Astoria.  Nikolla approached this victim with an extortion demand and told him that other businesses in the area were paying him for “protection.”  After the victim refused to pay, Dervishaj and Nikolla confronted him at a bar in Queens.  Nikolla took a gun from Dervishaj, stuck the gun in the victim’s ribs, and yelled that if he didn’t pay, Nikolla would go to his house and beat him in front of his wife and children, and then beat his wife and children.  Dervishaj then gave the victim his phone number so he could make the demanded payments.

 

Finally, during 2013, Dervishaj, Nikolla, and Llakatura also conspired and attempted to extort a proprietor of two social clubs in Astoria.  Accompanied by Dervishaj, Nikolla demanded payments of $1,000 per week, once again for “protection.”  The victim refused to make the demanded payments and stopped going to his social clubs out of fear for his safety.  Court-authorized wiretaps of the defendants’ telephones revealed that all three defendants worked together to locate the victim and force him to pay.  In one instance, the defendants confronted a friend of the victim in an effort to find the victim and send him a message.  Dervishaj violently assaulted the victim’s friend, punching him multiple times in the face, while a gun was held to the back of his head.  The victim ultimately fled to a foreign country for a period of time to avoid the defendants’ extortionate threats, and later sold his social clubs.   

 

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

 

 

The Defendant:

 

REDINEL DERVISHAJ

Age: 40

Queens, New York

 

 

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

BROOKLYN, NY – Two indictments were unsealed this morning in federal court in the Eastern District of New York charging seven defendants variously with arson, bank robbery, Hobbs Act robberies and firearms offenses based, in part, on their participation in the criminal affairs of the Bonanno organized crime family of La Cosa Nostra (the Bonanno family).[1]  The defendants – Vincent Asaro, John J. Gotti, Michael Guidici, Matthew Rullan, also known as “Fat Matt,” Christopher Boothby, also known as “Bald Chris,” Matthew Hattley, also known as “Mack,” and Darren Elliott – were arrested earlier today.  

 

The seven defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Roanne L. Mann, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.  The cases have been assigned to United States District Judge Allyne R. Ross. 

 

The charges and arrests were announced by 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).

 

“The defendants are charged with committing an assortment of violent crimes – arson to exact punishment for a perceived slight and robberies to unjustly enrich themselves.  This Office and its partners will continue to vigilantly pursue such organized violence and stop it in its tracks,” said Acting United States Attorney Rohde.  Ms. Rohde thanked the Queens District Attorney’s Office, the New York City Police Department (“NYPD”), and the Nassau County Police Department’s Major Case Bureau and Robbery Squad for their assistance in the investigations.

 

“A man well-known in organized crime circles allegedly got cut off in traffic, and exacted his revenge by sending his associates to allegedly torch the victim’s car.  The FBI refuses to allow acts like arson, bank robbery and home invasions to be conducted as business as usual, as if it is just another day in the office.  The FBI and our law enforcement partners will continue to aggressively go after those who refuse to follow the laws and prey upon the law-abiding public,” said FBI Assistant Director-in-Charge Sweeney.

 

Arson

 

As alleged in the government’s court filings, Asaro was inducted into the Bonanno family more than 30 years ago and has previously held the position of captain.  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 vehicle at a high rate of speed.  Later, after obtaining the home address of the owner of the other vehicle, Asaro directed an associate of the Bonanno family (“Associate-1”) to set fire to that vehicle.  Associate-1 then recruited Gotti and Rullan to help him carry out the arson. 

 

As further alleged, 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 owner of the other vehicle.  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 vehicle had been towed to confirm that his order had been carried out.

 

Bank Robbery

 

Two weeks after the vehicle arson, Gotti, Rullan, and Guidici allegedly robbed the Maspeth Federal Savings and Loan Association.  On April 18, 2012 at approximately 5:45 p.m., Guidici entered the bank and handed the teller a note demanding money and stating, among other things, “I HAVE A BOMB[.]”  The teller placed $5,491 on the counter, which Guidici took.  Guidici then joined Gotti and Rullan who were waiting outside the bank in a car.  The three defendants then fled the scene together.

 

Home Invasion Robbery

Boothby, an associate of the Bonanno family, and Hattley are charged with robbing a residence in Queens on March 12, 2014.  Boothby remained outside the home as a lookout while Hattley and another Bonanno associate (“Associate-2”) tied up the homeowner’s girlfriend (“Jane Doe”).  The defendants then stole more than $50,000 in cash and hundreds of thousands of dollars’ worth of jewelry, including high-end designer watches and a Cartier ring from Jane Doe’s finger, among other items.

Jewelry Store Robbery and Attempts

Hattley and Elliott are charged with the gunpoint robbery of a jewelry store in Franklin Square, Long Island, making off with approximately $250,000 in merchandise, and the attempted robberies of two other jewelry stores, also in Franklin Square, between August 17, 2011 and May 5, 2012.  The jewelry store owners were menaced with guns and tied up.

 

All of the defendants face a maximum sentence of 20 years’ imprisonment on the robbery, attempted robbery, arson and arson conspiracy charges.  In addition, Asaro, Gotti and Rullan each face a mandatory minimum sentence of five years’ imprisonment if convicted of the arson-related charges and Hattley and Elliot face a mandatory minimum sentence of seven years’ imprisonment if convicted of the firearms charges. 

 

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

 

The Defendants:

VINCENT ASARO

Age: 82

Queens, NY

 

JOHN J. GOTTI

Age: 23

Queens, NY

 

MICHAEL GUIDICI

Age: 22

Queens, NY

 

MATTHEW RULLAN, a.k.a. “Fat Matt”

Age: 26

Queens, NY

 

CHRISTOPHER BOOTHBY, a.k.a. “Bald Chris”

Age: 37

Queens, NY

 

DARREN ELLIOTT

Age: 30

Queens, NY

 

 

MATTHEW HATTLEY, a.k.a. “Mack”

Age: 26

Queens, NY

 

E.D.N.Y. Docket Nos. 17-CR-00127 (RRM) and 17-CR-00128 (ARR)

 

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[1] The charges contained in the indictments are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

 

Earlier today, Zachary Sizemore, an active-duty service member of the United States Air Force, pleaded guilty to the sale without authority of night vision devices and components stolen from the Air Force. Today’s guilty plea took place before Magistrate Judge Peggy Kuo at the federal courthouse in Brooklyn.

On November 29, 2016, the defendant was arrested on the Wright-Patterson Air Force Base in Dayton, Ohio, where he is stationed. He appeared that afternoon at the U.S. Courthouse in Dayton, Ohio, and at the federal courthouse in Brooklyn on December 7, 2016.

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

According to court filings, between July 2013 and November 2016, Sizemore sold night vision devices that he stole from the United States military, including night vision goggles and mini-thermal monoculars. In addition, he created online postings for, and sold or attempted to sell, dozens of items described as night vision equipment or thermal equipment, among other military equipment. Of those postings, Sizemore sold at least 80 such items for approximately $86,000. To date, the DCIS has identified more than $130,000 in losses attributable to Sizemore’s theft.

Night vision devices acquired by the United States military, such as the items the defendant stole and sold, contain components made to military specifications. The military requires the items to be rendered useless for their intended purpose prior to leaving government control. United States military policies prohibit the private sale of fully functional military-issued night vision equipment.

When he is sentenced on June 29, 2017, Sizemore faces a maximum sentence of 10 years in prison.

The government’s case is being prosecuted by the Office’s General Crimes Section. Assistant United States Attorney Nomi D. Berenson is in charge of the prosecution and Assistant United States Attorney Tanisha R. Payne is in charge of the forfeiture.

The Defendant:

ZACHARY SIZEMORE
Age: 24
Dayton, Ohio
 

E.D.N.Y. Docket No. 17-CR-87 (SJ)

BROOKLYN, NY – A three-count indictment was unsealed this afternoon in federal court in Brooklyn, New York, charging Xiaodong Wu, the founder, Chief Executive Officer and Chairman of the Board of Directors of China Medical Technologies, Inc. (China Medical), and Tak Yung Samson Tsang, also known as “Sam Tsang,” the Chief Financial Officer and a member of the Board of Directors of China Medical, with securities fraud, securities fraud conspiracy and wire fraud conspiracy.[1]  Wu and Tsang are alleged to have defrauded China Medical’s noteholders and investors of more than $400 million through misrepresentations about the use of proceeds raised through two note offerings and by then stealing the invested funds by transferring them to entities controlled by, or affiliated with, Wu and Tsang.  The defendants are fugitives.

The charges were announced by 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).

“As alleged, Xiaodong Wu and Samson Tsang deceived unsuspecting investors who thought they were investing in a NASDAQ-listed medical device company but whose investments were stolen and fraudulently transferred to entities in China controlled by Wu and Tsang.  The defendants’ scheme defrauded the investing public of more than $400 million,” stated Acting United States Attorney Rohde.  “Today’s indictment further demonstrates our commitment to protecting investors and to holding accountable those who seek to abuse the financial markets to enrich themselves.”

“As alleged, Wu and Tsang led their victims down a narrow path of deceit.  They betrayed the trust of those who took them at their word, stole their money, and made off with more than $400 million.  Whether you omit key facts or intentionally misrepresent the truth, defrauding investors is a crime you won’t get away with it,” stated FBI Assistant Director-in-Charge Sweeney.

As detailed in the indictment, between January 2005 and November 2012, Wu and Tsang, together with their co-conspirators, orchestrated a scheme to defraud China Medical’s noteholders and investors through material misrepresentations and omissions relating to, among other things, the use of approximately $426 million in investments and the subsequent transfer of these investments to entities controlled by, or affiliated with Wu and Tsang.  China Medical issued three series of notes: (i) on or about November 21, 2006, $150 million of 3.5 percent convertible senior subordinated notes due 2011 (2011 Notes); (ii) on or about August 15, 2008, $276 million of 4 percent convertible senior notes due 2013 (2013 Notes); and (iii) on or about December 6, 2010, $150 million of 6.25 percent convertible senior notes due 2016 (2016 Notes). 

 

Wu and Tsang represented in the offering memoranda for the 2013 Notes and 2016 Notes that they would use the proceeds for general corporate purposes, for the acquisitions of businesses, products and technologies and to repurchase outstanding convertible notes.  Contrary to these representations, most of the money raised through the 2013 Notes and the 2016 Notes was eventually transferred by Wu and Tsang to entities controlled by Wu, Tsang and their co-conspirators.  For example, between November 3, 2006 and December 4, 2008, approximately $303.75 million of the approximately $576 million that China Medical raised in its three note offerings was transferred to an entity that was owned by an associate of Wu and Tsang, and approximately $202 million was subsequently transferred to bank accounts controlled by Wu. Additionally, the intellectual property that was the subject of the note offerings was approximately 20 years old and off-patent, and any value it had was minimal.

 

To execute their fraudulent scheme, Wu and Tsang caused China Medical’s independent director and outside auditor to resign, stopped making public disclosures of material events affecting the value of its securities and stopped making interest payments on the notes.  On August 31, 2012, China Medical filed for Chapter 15 bankruptcy protection in the Southern District of New York.

To date, $246.5 million of the 2013 Notes and $150 million of the 2016 Notes remain outstanding.

 

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The criminal case has been assigned to United States District Judge Kiyo A. Matsumoto.  If convicted, each of the defendants faces a maximum sentence of 20 years’ imprisonment.

 

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The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Lauren H. Elbert and Winston M. Paes are in charge of the prosecution, with assistance provided by Assistant United States Attorney Tanya Hill of the Office’s Civil Division.

 

The Defendants:

 

XIAODONG WU

Age: 59

Residence: PEOPLE’S REPUBLIC OF CHINA

 

TAK YUNG SAMSON TSANG, also known as “Sam Tsang”

Age: 46

Residence: PEOPLE’S REPUBLIC OF CHINA

 

E.D.N.Y. Docket no. 17-cr-144 (Kam)

 

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

Earlier today, Patrick Morgan Schiro, a resident of Rockville Centre, New York, and the founder of Black Rock Morgan LLC (BRM), pleaded guilty to wire fraud for defrauding five investors of approximately $440,000.  The guilty plea was entered before United States District Judge LeShann DeArcy Hall at the federal courthouse in Brooklyn, New York.  As part of his plea agreement with the government, Schiro has agreed to make restitution to the victims of his fraud in an amount to be determined by the Court.  When he is sentenced on August 2, 2017, Schiro faces up to twenty years in prison, as well as restitution, criminal forfeiture, and a fine. 

The guilty plea was announced by 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. 

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

 

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

 

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

 

The Defendant:

 

PATRICK MORGAN SCHIRO

Age:  45

Rockville Centre, New York

 

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