Eastern District of New York

Today, a jury returned its verdict convicting al Qaeda operative Ibrahim Suleiman Adnan Adam Harun, 46, of multiple terrorism offenses including conspiracy to murder American military personnel in Afghanistan and conspiracy to bomb the U.S. embassy in Nigeria. Harun traveled to Afghanistan in the weeks before Sept. 11, 2001 where he joined al Qaeda, trained at al Qaeda training camps and participated in attacks on U.S. and Coalition troops in Afghanistan in which two American service members were killed and others were seriously wounded in 2003. Harun also received training in explosives from an al Qaeda weapons expert and traveled from Pakistan to Nigeria intending to attack U.S. government facilities there.

The guilty verdict was announced by Acting Assistant Attorney General Mary B. McCord for National Security, Acting U.S. Attorney Bridget M. Rohde for the Eastern District of New York, Assistant Director in Charge William F. Sweeney, Jr. of the FBI’s New York Field Office and Commissioner James P. O’Neill of the NYPD.

“Harun is an al Qaeda operative who targeted U.S. personnel and diplomatic facilities across two continents. The evidence presented at trial established that the defendant and other jihadists attacked a U.S. military patrol in Afghanistan, resulting in the death of two American soldiers and the serious injury of others. Today’s guilty verdict ensures that the defendant will be held accountable for his acts of terrorism,” said Acting Assistant Attorney General McCord. “I want to thank the many agents, analysts, and prosecutors whose hard work and dedication made this result possible.”

“As demonstrated by this case, the United States will be tireless in its efforts to hold al-Qaeda members accountable when they target American citizens serving their country abroad. We are firmly committed to bringing such terrorists to justice,” said Acting U.S. Attorney Rohde. Ms. Rohde expressed her grateful appreciation to the Department of Defense Army investigators, the Office of Military Commissions, the Italian Ministry of Justice, the Prosecutor’s Office in Palermo, Italy, the Italian National Police, Guardia di Finanza and Carabinieri authorities for their support and assistance.

“We hope the verdict today shows the public the FBI New York JTTF and our law enforcement partners are still arresting, charging and trying operatives for al-Qaeda 15 years after 9/11 because we won’t give up the obligation to bring terrorists to justice,” said FBI Assistant Director in Charge Sweeney. “It should also prove to anyone who wishes to harm our country, we will not stop, and we will never forget.”

“Al Qaeda operative Ibrahim Suleiman Adnan Adam Harun pledged allegiance to a known terrorist organization, conspiring to kill coalition soldiers in Afghanistan and even bomb a U.S. embassy in Nigeria,” said Commissioner O’Neill. “Today’s conviction holds the defendant responsible for the terror he waged overseas. I am thankful to the detectives, agents, and more than 50 partner agencies on the Joint Terrorism Task Force here in Manhattan and to the prosecutors in the Eastern District of New York who continue bring rigorous terrorism cases in federal court.”

Harun, also known as “Spin Ghul,” “Abu Tamim,” “Esbin Gol,” “Isbungoul,” “Joseph Johnson” and “Mortala Mohamed Adam,” was convicted on all five counts presented to the jury, which include conspiracy to murder U.S. nationals; conspiracy to bomb a government facility; conspiracy to provide material support to a foreign terrorist organization, al Qaeda; providing and attempting to provide material support to al Qaeda; and use of explosives in connection with terrorist activities.

During the two-week trial, the government established that Harun, purportedly a citizen of Niger, traveled from Saudi Arabia to Afghanistan in late summer of 2001 to join a jihadist group. There, he moved into an al Qaeda guesthouse – a registration center for new al Qaeda recruits – where he was living on Sept. 11, 2001. Immediately after the September 11 terrorist attacks, al Qaeda military leaders sent Harun to training camps in Afghanistan, in anticipation of an American invasion. At these camps, he learned how to use weapons and explosives, met top al Qaeda leaders and received his “kunya” (nom de guerre) “Spin Ghul,” meaning the, “White Rose.” Harun then traveled to Waziristan in the Federally Administered Tribal Areas region of Pakistan, where he operated under Abdul Hadi al-Iraqi, one of bin Laden’s deputies who was al Qaeda’s top military commander in Afghanistan at that time.

On April 25, 2003, Harun and fellow al Qaeda jihadists ambushed a U.S. military patrol from Firebase Shkin. Harun fired machinegun rounds and threw grenades at American soldiers while shouting “Allahu Akhbar” or “God is Great.” Two U.S. servicemen were killed in the attack, Private First Class Jerod Dennis, 19, of Oklahoma, and Airman First Class Raymond Losano, 24, of Texas. Several other soldiers were seriously wounded. Harun was also wounded but escaped to Pakistan. A pocket-sized Koran recovered at the scene contained Harun’s fingerprints and a journal describing the attacks contained Harun’s alias.

While recovering from his wounds in Pakistan, Harun met with senior al Qaeda officials – including Abu Faraj al-Libi (Abu Faraj), then al Qaeda’s external operations chief – and expressed his desire to engage in acts of terror against U.S. interests outside of Afghanistan, specifically attacks similar to 1998 al Qaeda bombings of the U.S. embassies in Kenya and Tanzania. Harun also swore “bayat” – or formal allegiance – to bin Laden through bin Laden’s military commander Abdul Hadi.

In summer of 2003, Harun traveled from Pakistan to Nigeria, where he planned to bomb the U.S. Embassy. He recruited accomplices, scouted the Embassy and other potential Western targets, and sent an accomplice to find explosives. He also met with local terrorist leaders to build up al Qaeda’s network in West Africa.

In 2004, Harun directed a co-conspirator to travel from Nigeria to deliver information and materials to al Qaeda leaders in Pakistan. After learning that the co-conspirator had been arrested in Pakistan, Harun fled Nigeria. At approximately the same time, the FBI obtained a hard drive containing a letter written from Harun’s al Qaeda handler to Harun, providing him with detailed instructions on how to attack Americans in Nigeria. The letter specifically instructed Harun to target Americans – whom he described as “the head of the snake” – at “locations where Americans congregate,” such as embassies, hotels and “places where they gather for fun.” The al Qaeda handler also instructed Harun to obtain one ton of explosives for the bombing operation in Nigeria. 

Harun then traveled to Libya where he planned to surreptitiously enter Europe to carry out terrorist attacks against Western interests. In early 2005, however, he was arrested by Libyan authorities and held in custody until his release in June 2011. Subsequently, Harun was arrested on June 24, 2011 by Italian authorities.

Harun was indicted in the U.S. on Feb. 21, 2012, and the Italian Minister of Justice ordered his extradition on Sept. 14, 2012 to face the charges pending in the Eastern District of New York.

When sentenced by U.S. District Judge Brian M. Cogan on June 22, Harun faces a maximum sentence of life in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

The government’s case is being prosecuted by Assistant U.S. Attorneys Shreve Ariail, Melody Wells and Matthew J. Jacobs of the Eastern District of New York, and Trial Attorney Joseph N. Kaster of the National Security Division’s Counterterrorism Section.

Earlier today in United States District Court in Brooklyn, a jury returned its verdict convicting al-Qaeda operative Ibrahim Suleiman Adnan Adam Harun of multiple terrorism offenses including conspiracy to murder American military personnel in Afghanistan and conspiracy to bomb the U.S. Embassy in Nigeria.  Harun traveled to Afghanistan in the weeks before September 11, 2001 where he joined al-Qaeda, trained at al-Qaeda training camps, and in 2003 participated in attacks on U.S. and Coalition troops in Afghanistan in which two American service members were killed and others were seriously wounded.  Harun also received training in explosives from an al-Qaeda weapons expert and traveled from Pakistan to Nigeria intending to attack U.S. government facilities there.

The guilty verdict was announced by Bridget M. Rohde, Acting U.S. Attorney for the Eastern District of New York, Mary B. McCord, 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 O’Neill, Commissioner, New York City Police Department.

“As demonstrated by this case, the United States will be tireless in its efforts to hold al-Qaeda members accountable when they target American citizens serving their country abroad. We are firmly committed to bringing such terrorists to justice,” said Acting U.S. Attorney Rohde.  Ms. Rohde expressed her grateful appreciation to the Department of Defense Army investigators, the Office of Military Commissions, the Italian Ministry of Justice, the Prosecutor’s Office in Palermo, Italy, the Italian National Police, Guardia di Finanza and Carabinieri authorities for their support and assistance.

“Harun is an al-Qaeda operative who targeted U.S. personnel and diplomatic facilities across two continents.  The evidence presented at trial established that the defendant and other jihadists attacked a U.S. military patrol in Afghanistan, resulting in the death of two American soldiers and the serious injury of others.  Today’s guilty verdict ensures that the defendant will be held accountable for his acts of terrorism,” said Acting Assistant Attorney General McCord. “I want to thank the many agents, analysts, and prosecutors whose hard work and dedication made this result possible.”

“We hope the verdict today shows the public the FBI New York JTTF and our law enforcement partners are still arresting, charging and trying operatives for al-Qaeda 15 years after 9/11 because we won’t give up the obligation to bring terrorists to justice. It should also prove to anyone who wishes to harm our country, we will not stop, and we will never forget,” said FBI Assistant Director-in-Charge Sweeney.

“Al-Qaeda operative Ibrahim Suleiman Adnan Adam Harun pledged allegiance to a known terrorist organization, conspiring to kill coalition soldiers in Afghanistan and even bomb a U.S. embassy in Nigeria,” said Police Commissioner O’Neill.  “Today’s conviction holds the defendant responsible for the terror he waged overseas.  I am thankful to the detectives, agents, and more than 50 partner agencies on the Joint Terrorism Task Force here in Manhattan and to the prosecutors in the Eastern District of New York who continue to bring rigorous terrorism cases in federal court.”

Harun, also known as “Spin Ghul,” was convicted of all five counts presented to the jury, which included conspiracy to murder U.S. nationals; conspiracy to bomb a U.S. government facility; conspiracy to provide material support to a foreign terrorist organization, al-Qaeda; providing and attempting to provide material support to al-Qaeda; and use of explosives in connection with a felony offense.

During the two-week trial, the government established that Harun, purportedly a citizen of Niger, traveled from Saudi Arabia to Afghanistan in late summer of 2001 to join a jihadist group.  There, he moved into an al-Qaeda guesthouse – a registration center for new al-Qaeda recruits – where he was living on September 11, 2001.  Immediately after the September 11 terrorist attacks, al-Qaeda military leaders sent Harun to training camps in Afghanistan, in anticipation of an American invasion.  At these camps, he learned how to use weapons and explosives, and met top al-Qaeda leaders.  Harun then traveled to Waziristan in the FATA region of Pakistan, where he operated under Abdul Hadi al-Iraqi, one of bin Laden’s deputies who was a senior al-Qaeda’s military commander at that time.

On April 25, 2003, Harun and fellow al-Qaeda jihadists ambushed a U.S. military patrol from Firebase Shkin.  Harun fired machinegun rounds and threw grenades at American soldiers while shouting “Allahu Akhbar” or “God is Great.”  Two U.S. servicemen were killed in the attack, Private First Class Jerod Dennis, 19, of Oklahoma, and Airman First Class Raymond Losano, 24, of Texas.  Several other soldiers were seriously wounded.  Harun was also wounded but escaped to Pakistan.  A Koran recovered at the scene contained Harun’s fingerprints and a journal describing the attacks contained Harun’s alias.

While recovering from his wounds in Pakistan, Harun met with senior al-Qaeda officials – including Abu Faraj al-Libi (“Abu Faraj”), then al-Qaeda’s external operations chief. Harun expressed the desire to engage in acts of terror against U.S. interests outside Afghanistan, specifically attacks similar to the 1998 al-Qaeda bombings of the U.S. embassies in Kenya and Tanzania.  Harun also swore “bayat” – or formal allegiance – to bin Laden through bin Laden’s military commander Abdul Hadi al Iraqi.

In the summer of 2003, Harun traveled from Pakistan to Nigeria, where he planned to bomb the U.S. Embassy in Abuja, Nigeria.  He recruited accomplices, scouted the Embassy and other potential Western targets, and sent an accomplice to find explosives.  He also met with local terrorist leaders to build-up al-Qaeda’s network in West Africa.

In 2004, Harun directed a co-conspirator to travel from Nigeria to deliver information and materials to al-Qaeda leaders in Pakistan.  After learning that the co-conspirator had been arrested in Pakistan, Harun fled Nigeria.  At approximately the same time, the FBI obtained a hard drive containing a letter written from Harun’s al-Qaeda handler to Harun, providing him detailed instructions regarding how to attack Americans in Nigeria.  The letter specifically instructed Harun to target Americans – whom he described as “the head of the snake” – at “locations where Americans congregate,” such as embassies, hotels and “places where they gather for fun.”  The al-Qaeda handler also instructed Harun to obtain one ton of explosives for the bombing operation in Nigeria. 

Harun then traveled to Libya from where he planned to surreptitiously enter Europe to carry out terrorist attacks against Western interests.  In early 2005, however, he was arrested by Libyan authorities and held in custody until his release in June 2011. Subsequently, Harun was arrested on June 24, 2011 by Italian authorities.

Harun was indicted in the United States on February 21, 2012, and the Italian Minister of Justice ordered his extradition on September 14, 2012 to face the charges pending in the Eastern District of New York.

When sentenced by U.S. District Judge Brian M. Cogan on June 22, 2017, Harun faces a maximum sentence of life in prison.

The government’s case is being prosecuted by the Office’s National Security & Cybercrime Section.  Assistant U.S. Attorneys Shreve Ariail, Melody Wells and Matthew J. Jacobs of the United States Attorney’s Office for the Eastern District of New York, along with Joseph N. Kaster, Trial Attorney, Counterterrorism Section of the Justice Department’s National Security Division, are in charge of the prosecution.

The Defendant:

IBRAHIM SULEIMAN ADNAN ADAM HARUN
Age: 46

E.D.N.Y. Docket No. 12-CR-134

Earlier today, following a week and a half trial, a federal jury in Brooklyn, New York, returned a guilty verdict against Robert Schulman, a former partner of a Richmond-based global law firm, for securities fraud and securities fraud conspiracy.  The indictment charged crimes stemming from Schulman tipping off the executive of an investment advisory firm about the pending merger between Pfizer, Inc. and King Pharmaceuticals, Inc. that Schulman had learned of through his representation of King Pharmaceuticals.  Schulman and his co-conspirators then used that material non-public information to engage in securities transactions ahead of the merger announcement that resulted in more than $400,000 in illegal profits.

When sentenced by United States District Judge Joan M. Azrack, the defendant 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 Philip Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS). 

Ms. Rohde thanked the USPIS 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 David Pitluck and Julia Nestor of the Office’s Business and Securities Fraud Section.

The Defendant:

ROBERT SCHULMAN

Age: 58

McLean, Virginia

 

E.D.N.Y. Docket No. 16-CR-442 (JMA)

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

The sentence was announced by Robert L. Capers, 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.

“The defendant and his partners used fear, intimidation, and threats of violence to demand payment from those who dared to open businesses on their so-called ‘turf’ of Astoria, Queens,” stated United States Attorney Capers. “When his victims refused to pay, the defendant and his partners escalated their efforts to secure payment, brazenly brandishing firearms at their victims. Today’s sentence sends a strong message that criminals who use extortion and violence to profit from others’ hard work in our community will be held accountable and punished.” Mr. Capers extended his grateful appreciation to the members of the Joint Organized Crime Task Force, which includes agents of the FBI and detectives of the NYPD, which led the investigation, as well as the NYPD’s Internal Affairs Division and the FBI’s Public Corruption squad for their cooperation and assistance in the investigation.

“The defendant and his partners in this case coerced an innocent restaurant owner into paying for so-called protective services by using fear and threats of physical violence. The thought that someone can claim an area in any community as their ‘turf’ is not only illegal, it’s beyond comprehension in a normal society. No one should fear a criminal threatening and extorting money from them because of the area where they chose to open a legal and legitimate business,” stated FBI Assistant Director-in-Charge Sweeney.

“Today’s sentence should deter others who believe they can use violence to extort their victims,” said Police Commissioner O’Neill. “My thanks to the prosecutors, detectives, and agents whose work on this investigation led to this sentence. The neighborhood of Astoria is safer today because of your hard work.”

 

According to prior court filings and evidence presented at the trial of co-defendant Redinel Dervishaj, between May and November 2013, Nikolla, Llakatura and Dervishaj 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 paid him a visit and demanded $4,000 per month because the victim had opened in “our neighborhood.” The restaurant owner sought help from his friend Llakatura, at the time an NYPD officer in Staten Island. However, unbeknownst to the victim, Llakatura was conspiring with Dervishaj and Nikolla in the extortion. Llakatura actively discouraged the restaurant owner from reporting the extortion to the police and warned the victim that Dervishaj and his associates would physically harm him if he did not pay. When the victim failed to make the demanded payments, Nikolla violently threatened him on a public street in Queens, pointing a semiautomatic handgun at the victim, ready to fire, before the victim managed to escape in his car. Over the course of five months, each of the three defendants took turns collecting monthly payments from the Astoria restaurant owner, ultimately extorting $24,000 from him.

 

Between April 2012 and November 2013, Nikolla and Dervishaj also conspired and attempted to extort the owner of two nightclubs after he opened a new nightclub in Astoria. Nikolla approached the owner with an extortion demand, indicating to the victim that other businesses in the area were paying him for so-called “protection.” After the owner refused to pay, Nikolla and Dervishaj confronted him at a bar in Queens, trapping him in an enclosed space near the entrance. Nikolla then retrieved a firearm from Dervishaj’s side, stuck the firearm in the victim’s ribs, while yelling at the victim that if he didn’t pay, Nikolla would go to his house and beat him up in front of his wife and children. If the victim then continued to refuse to pay, Nikolla said, he would then beat the wife and children up in front of him.

 

Finally, during 2013, Nikolla, Dervishaj 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 from the proprietor for so-called “protection.” The victim refused to make the demanded payments and ceased 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, badly beat him and pulled a gun on him, in an effort to locate and send a message to the victim. The victim ultimately fled to a foreign country for a period of time to avoid the defendants’ extortionate threats, and sold his social clubs.

 

The government’s case is being prosecuted by Assistant United States Attorneys Nadia Shihata, Patrick Hein and Kristin Mace.

The Defendant:

 

DENIS NIKOLLA

Age: 36

Brooklyn, New York

 

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

Earlier today, Volodymyr Nedoviz, a lawful permanent resident of the United States and citizen of Ukraine, was arrested on federal charges of illegally exporting controlled military technology from the United States to end-users in Ukraine. Federal agents also executed a search warrant at a Philadelphia, Pennsylvania location that was used in connection with Nedoviz’s illegal scheme.

Nedoviz is scheduled to make his initial appearance today at 2:00 p.m. at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York, before United States Magistrate Judge Ramon E. Reyes, Jr.

The arrest and charges were announced by U.S. Attorney Robert L. Capers of the Eastern District of New York; Acting Assistant Attorney General for National Security Mary B. McCord; FBI Assistant Director in Charge William F. Sweeney, Jr., New York Field Office; Special Agent in Charge Angel M. Melendez, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) for New York; and Special Agent in Charge Jonathan Carson, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office.

The complaint alleges that the defendant conspired with others located in both Ukraine and the United States to purchase export-controlled, military-grade equipment from sellers in the United States and to export that equipment to Ukraine without the required licenses. The devices obtained by the defendant and his co-conspirators included some of the most highly powerful and technologically sophisticated night vision rifle scopes and thermal imaging equipment available, including, among others, an Armasight Zeus-Pro 640 2-16x50 (60Hz) Thermal Imaging weapons sight, a FLIR Thermosight R-Series, Model RS64 60 mm 640x480 (30Hz) Rifle Scope, and a ATN X-Sight II 5-20x Smart Rifle Scope. In many cases, the devices purchased by the defendant and his co-conspirators retail for almost $9,000, and they are specifically marketed to military and law enforcement consumers.

As part of the conspiracy, in order to induce U.S.-based manufacturers and suppliers to sell them the export-controlled devices and to evade applicable controls, the defendant and his co-conspirators falsely purported to be United States citizens and concealed the fact they were exporters. The defendant and his co-conspirators also recruited, trained, and paid other U.S.-based individuals to export the controlled devices to Ukraine via various freight forwarding companies. Among other things, the defendant and his co-conspirators instructed the U.S.-based individuals to falsely describe the nature and value of the equipment they were attempting to export. In addition, to conceal their identities, as well as the true destination of the rifle scopes and thermal imaging equipment, the defendant and his co-conspirators instructed that the items be shipped using false names and addresses.

The export of military-grade rifle scopes and thermal imaging equipment requires a license from either the United States Department of State or the United States Department of Commerce. Both the Department of State and the Department of Commerce have placed restrictions on the export of items that they have determined could make a significant contribution to the military potential and weapons proliferation of other nations and that could be detrimental to the foreign policy and national security of the United States.

“The defendant tried to circumvent laws that protect our national security by preventing specialized technologies from falling into the wrong hands,” said U.S. Attorney Capers. “Those who seek to evade the scrutiny of U.S. regulatory and law enforcement agencies by operating in the shadows present a danger to our national security and our allies abroad. We will continue to vigorously prosecute violations of our laws that help maintain the superiority of our armed forces on land, sea, and air.” Mr. Capers expressed his grateful appreciation to the FBI’s Joint Terrorism Task Force.

“Export controls on military technology and equipment are put in place so military-grade gear doesn’t end up in the wrong hands. As we alleged, Nedoviz colluded with co-conspirators to illegally purchase highly powerful, technologically sophisticated equipment intended for law enforcement and military and then export to Ukraine without the proper licenses. The FBI will continue to protect our national security assets as we work with our partners to prevent the exportation of restricted materials,” said Sweeney, FBI Assistant Director in Charge, New York Field Office.

“Nedoviz, a Ukrainian national, falsely pretended to be a citizen of the United States in order to purchase highly sensitive military grade equipment, that would later be illegally exported to Ukraine” said Melendez, Special Agent in Charge, Melendez of HSI New York. “These items including rifle scopes and thermal imaging equipment have strict export controls in order to make sure that our soldiers overseas never have to encounter them on the battlefield. It is a mission we at HSI take very seriously.”

“Today’s arrest demonstrates the Office of Export Enforcement's strong commitment to enforcing our nation's export control and public safety laws. We will continue to work with our law enforcement partners to keep the most sensitive goods out of the most dangerous hands,” said Special Agent in Charge Carson, U.S. Department of Commerce Bureau of Industry and Security, Office of Export Enforcement, New York Field Office.

If convicted of the charges, the defendant faces up to 20 years in prison and a $1 million fine.

The case is being handled by the Office’s National Security and Cybercrime Section. Assistant U.S. Attorneys Peter W. Baldwin and Michael Keilty are in charge of the prosecution, with assistance from Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.

The Defendant:

 

VOLODYMYR NEDOVIZ

Age: 32

Queens, New York

 

E.D.N.Y. Docket No. 17-M-208

Updated April 19, 2017

Earlier today, David Gotterup was re-sentenced at the federal courthouse in Brooklyn, New York, to 135 months in prison for leading a loan modification scheme that defrauded distressed homeowners.  Gotterup pleaded guilty on June 16, 2016, to conspiring to commit wire, mail and bank fraud.  In addition, as part of the sentence, the Court ordered Gotterup to pay $2,500,050 in forfeiture.[1]

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); David Montoya, Inspector General, U.S. Department of Housing and Urban Development (HUD); and Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

According to public filings, from 2008 to 2012, Gotterup and his co-conspirators made a series of false promises to convince more than a thousand distressed homeowners seeking relief through government mortgage modification programs to pay thousands of dollars each in advance fees to numerous companies owned or controlled by Gotterup, including Express Modifications, Express Home Solutions, True Credit Empire, LLC, Green Group Today, Inc., The Green Law Group, Inc., and JG Group.  Among other things, Gotterup directed telemarketers and salespeople to lie to distressed homeowner victims by telling them that they were “preapproved” for loan modifications and that they were retaining a “law firm” and an “attorney” who would complete their mortgage relief applications and negotiate with the banks to modify the terms of their mortgages.  Contrary to these representations, Gotterup and his co-conspirators did little or no work in connection with these fraudulently induced advanced fees.  Gotterup was arrested in October 2015 and has been incarcerated since then. 

 

Gotterup was originally sentenced to 15 years in prison on March 7, 2017. Today’s re-sentencing was held in response to Gotterup’s motion for reconsideration of his earlier sentence.

 

In announcing the sentence, Ms. Rohde extended her appreciation to the agencies that led the government’s investigation and thanked the U.S. Small Business Administration and the Staten Island District Attorney’s Office for its assistance in the case.

           

Today’s proceeding took place before United States District Judge Nicholas G. Garaufis.   

 

*          *          *

 

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Unit.  Assistant United States Attorneys Sylvia Shweder and Bonni Perlin are in charge of the prosecution.

 

*          *          *

The Defendant:

 

DAVID GOTTERUP

Age:  37

Oceanside, NY

 

E.D.N.Y. Docket No. 15-CR-498 (NGG)

 

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[1] Restitution pursuant to the Mandatory Victims Restitution Act will be determined at a later date.

Earlier today, a three-count indictment was unsealed in the United States District Court for the Eastern District of New York charging Tyvon Bannister, also known as “Turtle,” with Murder In-Aid-Of Racketeering, as well as related firearms charges, for the 2014 murder of Rayvon Henriques. The defendant, who faces a mandatory sentence of life imprisonment if convicted of the top charge, was arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr.

The charges were announced by Robert L. Capers, 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).

“This indictment sends a message to all gang members in the Cypress Hills Houses and beyond – we will be relentless in our pursuit of violent gang members who have besieged communities like Cypress for far too long,” stated U.S. Attorney Capers. “My Office, along with our federal partners and the NYPD are committed to reducing shootings and saving lives through a coordinated effort to target the most violent offenders who are doing harm in our communities.”

“It’s hard to fathom what possesses someone to think violent acts promote their reputation, and killing someone is just another way of doing that. The criminal gangs that operate in areas of our community use violence as their calling card, and create an atmosphere of fear. The FBI and our law enforcement partners will do all we can to go after those who put so little value on human life,” stated FBI Assistant Director-in-Charge Sweeney.

“This long-term, coordinated investigation demonstrates the impact of precision policing: targeting those who engage in violence,” said Police Commissioner O'Neill. “The NYPD will not tolerate the East New York community being subjected to continued violence, as detailed in today's indictment. I commend the continued diligence of the detectives, agents, and prosecutors whose work resulted in today's charges.”

As detailed in the indictment and a detention memorandum filed by the government, Bannister is a member of the Cypress Gangsta Crips (CGC), a subset of the Crips street gang that is comprised of individuals residing in and around the Cypress Hills Houses, a large New York City Housing Authority complex in East New York, Brooklyn (Cypress). For years, Cypress has been besieged by gang- and drug-related violence arising largely from a long-standing feud between the CGC, who hail from the “Backside” section (buildings on Linden Avenue) and “Teamside” section of Cypress (buildings on the western end of Sutter Avenue and the northern end of Fountain Avenue), and the Bloods-affiliated gang members who reside in the “Frontside” section of Cypress (buildings on the eastern end of Sutter Avenue). CGC members and associates earn money by trafficking in drugs and firearms and committing robberies, and commit acts of violence to promote their reputation and to protect their enterprise.

On July 8, 2014, Bannister and another gang member allegedly shot and killed Henriques in front of a nightclub in East New York. Henriques, who was 26 years old at the time of his death, was targeted because of his association with the CGC’s chief rivals, the Bloods-affiliated gang members from the “Frontside” section of Cypress.

The indictment is the result of a long-term investigation initiated by the FBI, the NYPD, and the U.S. Attorney’s Office in 2015 in response to gang-related violence in and around Cypress. The investigation has resulted in charges against 21 defendants for drug trafficking, illegal weapons possession, robbery, and murder.

The charges announced today 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 Organized Crime and Gangs Section. Assistant United States Attorneys Margaret E. Gandy, Andrey Spektor, and David Gopstein are in charge of the prosecution.

The Defendant:

 

TYVON BANNISTER

Age: 23

Brooklyn, New York

 

E.D.N.Y. Docket No. 17-CR-116 (BMC)

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Elvis Redzepagic with attempting to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front, which have both been designated by the U.S. Secretary of State as foreign terrorist organizations. Redzepagic was arrested yesterday at his residence in Commack, New York, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Robert M. Levy at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by U.S. Attorney Robert L. Capers of the Eastern District of New York, Acting Assistant Attorney General for National Security Mary B. McCord, of the U.S. Department of Justice, Assistant Director in Charge William F. Sweeney, Jr. of the New York Field Office of the Federal Bureau of Investigation (FBI), and Special-Agent-in-Charge Angel M. Melendez, of HSI New York.

As set forth in court documents, Redzepagic is a 26-year old citizen of the United States. Over the last two years, Redzepagic twice traveled to the Middle East to attempt to join a foreign terrorist organization. Specifically, in 2015, Redzepagic communicated with an individual he believed to be the commander of a battalion in Syria and a member of ISIS or the al-Nusrah Front and made attempts to join him to engage in violent jihad. In July 2015, Redzepagic traveled to Turkey and made multiple attempts to cross the border into Syria to join his associate’s organization. Unable to enter Syria from Turkey, Redzepagic traveled to Jordan in August 2016, but was stopped and deported by Jordanian authorities. In Facebook messages from October 2015, Redzepagic explained that “jihad” is when “you fight for the sake of God” and “die for the sake of Allah,” and he explicitly stated that he traveled to Turkey to “perform Jihad and join Jabhat Al-Nusra.” In subsequent interviews with law enforcement, Redzepagic admitted that at the time he attempted to enter Syria from Turkey, he was prepared to strap a bomb to himself.

“This defendant made numerous attempts to travel to Syria to wage violent jihad,” stated United States Attorney Capers. “We will continue to track down and prosecute individuals like the defendant before they are able to become foreign fighters or harm the United States and its allies.” Mr. Capers extended his grateful appreciation to the FBI’s Joint Terrorism Task Force, which comprises a number of federal, state, and local agencies from the region. Mr. Capers also thanked the Suffolk County Police Department, Nassau County Police Department and the Port Authority Police Department for their assistance.

“According to the complaint, the defendant traveled overseas as part of his attempt to join and provide material support to designated foreign terrorist organizations that were engaged in fighting in Syria,” said Acting Assistant Attorney General McCord. “The National Security Division’s highest priority is countering terrorist threats. We will continue to work to stem the flow of foreign fighters abroad and bring to justice those who attempt to provide material support to designated foreign terrorist organizations.”

“As we alleged, Elvis Redzepagic was persistent in his efforts to travel overseas to ‘perform jihad’ as he said in social media posts. Traveling not once, but twice to the Middle East where he attempted to join ISIS or al-Nusrah Front in 2015 and 2016. Homegrown violent extremists, especially individuals who demonstrate determination like Redzepagic, are only mitigated through the joint efforts of local and federal law enforcement working together to protect our communities,” said Assistant Director-in-Charge Sweeney.

“Redzepagic, a U.S. citizen living in Long Island, made multiple attempts to join ISIS or al-Nusrah Front in Syria where he wanted to engage in violent jihad, which could have resulted in the death of countless individuals” said Special Agent in Charge, Melendez of HSI New York. “This arrest underscores the importance of cooperation between law enforcement agencies across the globe in identifying and bringing these extremists to justice before they are able to commit terrorist attacks.”

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

The government’s case is being prosecuted by Assistant United States Attorneys Saritha Komatireddy and Artie McConnell, with assistance provided by Trial Attorney Dan E. Stigall of the National Security Division’s Justice Department’s Counterterrorism Section.

 

The Defendant:

ELVIS REDZEPAGIC

Age: 26

COMMACK, NY

 

E.D.N.Y. Docket No. 17-M-199

A 41-count second superseding indictment was unsealed today in federal court in Central Islip, which charges thirteen MS-13 members with racketeering, seven murders, attempted murders, assaults, obstruction of justice, arson, conspiracy to distribute marijuana, and related firearms and conspiracy charges.  Four of those defendants were arrested earlier this morning and will be arraigned this afternoon before United States District Judge Joseph F. Bianco at the federal courthouse in Central Islip.  Additionally, during the execution of a search warrant at the home of MS-13 leaders ALEXI SAENZ, also known as “Blasty” and “Big Homie,” and JAIRO SAENZ, also known as “Funny,” this morning, investigators recovered an arsenal of weapons, including a loaded 9mm semi-automatic handgun, numerous rounds of ammunition, including additional 9mm, .38 caliber, .357 caliber, and other assorted rounds, machetes, a sword, a hatchet, and knives.  Further, investigators recovered a quantity of marijuana packaged for resale, ledgers, and MS-13 paraphernalia.

Among the offenses added in the second superseding indictment are murder charges against A. SAENZ, J. SAENZ, SELVIN CHAVEZ, also known as “Flash,” and ENRIQUE PORTILLO, also known as “Oso” and “Turkey,” in connection with the murders of Brentwood High School students Nisa Mickens and Kayla Cuevas, who were killed on September 13, 2016, and murder charges against ELMER ALEXANDER LOPEZ, also known as “Smiley,” “Little Smiley” and “Alex,” GERMAN CRUZ, also known as “Bad Boy,” and two other defendants, who are still fugitives at this time, relating to the murder of Jose Pena, who also attended Brentwood High School and was killed on June 3, 2016, but whose skeletonized remains were not recovered until October 17, 2016.  Two other MS-13 members, who were juveniles at the time of the murders, have been charged with the Cuevas and Mickens murders, and a third juvenile MS-13 member has been charged with the Pena murder.  By statute, those cases remain under seal at this time.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Timothy D. Sini, Commissioner, Suffolk County Police Department (SCPD), and Thomas C. Krumpter, Acting Commissioner, Nassau County Police Department (NCPD).

 “The brutal murders of Nisa Mickens and Kayla Cuevas, and the savage killing of Jose Pena, allegedly committed by these defendants, exemplify the depravity of a gang whose primary mission is murder,” stated United States Attorney Capers.  “As the MS-13 continues its efforts to expand and entrench itself in our communities, both by sending gang members to illegally enter the United States from Central America, and by recruiting new members from our schools and neighborhoods, this Office and the FBI’s Long Island Gang Task Force will continue our mission to dismantle the MS-13 and free our neighborhoods from the terror they cause.”  Mr. Capers expressed his grateful appreciation to all the members of the FBI’s Long Island Gang Task Force.

“Stamping out gangs and the violence they bring to our neighborhoods remains a top priority for the FBI.  Since 2003, the FBI’s Long Island Gang Task Force has been combining the resources of our agents and detectives who, although they are from different agencies, work together in carrying out one mission: to protect the right to live in a society free from violence. Whether you live in Brentwood or the Hamptons, you have a right to safety and security in your neighborhood.  That’s why we’re here today and it’s the reason we’re not going away,” stated FBI Assistant Director-in-Charge Sweeney. 

“The day Nisa Mickens and Kayla Cuevas were heinously murdered, the Suffolk County Police Department made a commitment to their families and to the residents of Brentwood that justice would be served.  Today, in collaboration with the FBI and the United States Attorney’s Office, we have delivered on that promise.  We have also promised to eradicate MS-13 from our streets and we remain fully committed to finishing the job.  We will continue to keep the pressure on this ruthless gang and anyone who associates with them, and we will spare no resource to accomplish our objective.  I want to thank every member of the Suffolk County Police Department for their steadfast determination, commitment and professionalism on this investigation and a special thank you to our partners in the FBI and the U.S. Attorney’s Office for their outstanding work on this case,” stated SCPD Commissioner Sini.

“These recent arrests in a combined multi-jurisdictional law enforcement effort should be a prime example of how these heinous murders by gang members will not go unpunished. I would like to acknowledge the exceptional investigative work which led to the arrests of these defendants and express my sincere condolences to the victims and their families,” stated NCPD Acting Commissioner Krumpter.

The second superseding indictment adds charges against LOPEZ, who previously was charged with two attempted murders, CRUZ and two other defendants in connection with the June 3, 2016 murder of Jose Pena.  As detailed in the second superseding indictment and the government’s detention letter, which was filed earlier today, the MS-13 decided to kill Pena, a member of the MS-13, because he was suspected of violating gang rules.  Prior to the murder, LOPEZ, CRUZ and other members of the Freeport Locos Salvatruchas (FLS) clique of the MS-13 held meetings where they discussed punishing Pena for the rules violations.  After consulting with gang leadership in El Salvador, the FLS members agreed to murder Pena, and tasks were assigned to each of the members of the clique to carry out the plan, including obtaining weapons and a vehicle to be used in the murder.  On June 3, 2016, LOPEZ and several other FLS members lured Pena into a car that was provided by CRUZ.  They drove Pena to a secluded wooded area in Brentwood, where they attacked him, taking turns stabbing and slashing him with knives.   

As detailed in the second superseding indictment and the government’s detention letter, A. SAENZ, J. SAENZ, CHAVEZ, and PORTILLO are charged with the September 13, 2016 murders of Nisa Mickens and Kayla Cuevas.  In the months leading up to the murders, Cuevas was involved in a series of disputes with members and associates of the MS-13.  Approximately one week before the murders, these disputes escalated when Cuevas and several friends were involved in an altercation with MS-13 members at Brentwood High School.  After that incident, the MS-13 members vowed to seek revenge against Cuevas.  On the evening of September 13, 2016, CHAVEZ, A. SAENZ, J. SAENZ, PORTILLO, and other members of the Sailors Locos Salvatruchas Westside (Sailors) clique of the MS-13 agreed to hunt for rival gang members to kill.  They separated into different vehicles and drove around Brentwood looking for targets.  CHAVEZ, PORTILLO, and two other juvenile MS-13 members, who were riding together in one car, saw Cuevas and Mickens walking down Stahley Street.  They recognized Cuevas and called A. SAENZ and J. SAENZ, the leaders of the Sailors clique, who authorized them to kill the two girls.  CHAVEZ, the driver, pulled up close to the girls, then PORTILLO and the other MS-13 members jumped out of the car and attacked them with baseball bats and a machete, striking the girls numerous times in the head and body.  After finishing the attack, PORTILLO and the others got back into the car and CHAVEZ drove them away.  Mickens’s body, which was discovered on Stahley Street shortly thereafter, sustained significant sharp force trauma to the face and blunt force trauma to the head.  Cuevas’s body, which was discovered the following day behind a house adjacent to where Mickens’s body was found, sustained significant blunt force trauma to the head and body and lacerations.

Further, CHAVEZ, PORTILLO, A. SAENZ, J. SAENZ, and JONATHAN HERNANDEZ are all charged with conspiracy to distribute marijuana.  From April 2016 to the present, the defendants sold marijuana and used the proceeds to help finance the Sailors clique’s criminal operations.  Specifically, the MS-13 members sold marijuana and used that money to purchase firearms and ammunition, as well as to send money to MS-13 leaders in El Salvador.

Finally, the second superseding indictment charges HERNANDEZ in connection with the October 7, 2015 assaults of a male and female that occurred on an athletic field located near the Brentwood East Elementary and Brentwood East Middle Schools.  The two victims were there with a group of other individuals when HERNANDEZ and other members of the MS-13 approached and attacked them.  The group ran away, except for the victims who were caught, knocked to the ground, and struck repeatedly with baseball bats and pipes.  The male victim suffered a broken hand and deep lacerations to the face.  The female victim suffered severe pain throughout her body where the weapons had struck her. 

The underlying indictments in this case, filed on July 20, 2016 and November 15, 2016, charged defendants EDWIN AMAYA-SANCHEZ, also known as “Strong,” WILLIAM CASTELLANOS, also known as “Dizzy” and “Satanico,” JHONNY CONTRERAS, also known as “Muerte,” “Reaper” and “Conejo,” REYNALDO LOPEZ-ALVARADO, also known as “Mente,” and LOPEZ, who are all members of the MS-13, with four murders, including the May 26 and 28, 2013 murders of Derrick Mayes and Keenan Russell, the July 14, 2014 murder of Jose Lainez-Murcia, the June 30, 2015 murder of Jonathan Cardona-Hernandez, three attempted murders, as well as related firearms, accessory after the fact, obstruction of justice, and arson offenses.

This second superseding indictment is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international criminal organization.  The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America.  With numerous branches, or “cliques,” the MS-13 is the largest and most violent street gang on Long Island.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2010 alone, this Office has obtained indictments charging MS-13 members with carrying out more than 35 murders in the Eastern District of New York, and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, SCPD, NCPD, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, and Rockville Centre Police Department.

If convicted, all of the defendants charged in the second superseding indictment face up to life in prison or the death penalty, other than CRUZ, who faces up to 10 years in prison, and HERNANDEZ, who faces up to 20 years on each of the assault counts and an additional five years for the conspiracy to distribute marijuana.  The charges in the second superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

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

The Defendants:

 

EDWIN AMAYA-SANCHEZ (“Strong”)

Age:  29

Brentwood, New York
 

WILLIAM CASTELLANOS (“Dizzy” and “Satanico”)

 Age:  20

Central Islip, New York

 

SELVIN CHAVEZ (“Flash”)

Age:  19

Brentwood, New York

 

JHONNY CONTRERAS (“Muerte,” “Reaper” and “Conejo”)

Age:  23

Brentwood, New York

 

GERMAN CRUZ (“Bad Boy”)

Age:  18

Brentwood, New York

 

JONATHAN HERNANDEZ (“Travieso” and “Kraken”)

Age:  19

Brentwood, New York

 

ELMER ALEXANDER LOPEZ (“Smiley,” “Little Smiley” and “Alex”)

Age:  19

Central Islip, New York

 

REYNALDO LOPEZ-ALVARADO (“Mente”)

Age:  24

Brentwood, New York

 

ENRIQUE PORTILLO (“Oso” and “Turkey”)

Age:  19

Brentwood, New York

 

ALEXI SAENZ (“Blasty” and “Big Homie”)

Age:  22

Central Islip, New York

 

JAIRO SAENZ (“Funny”)

Age:  19

Central Islip, New York

 

 

E.D.N.Y. Docket No. 16-CR-403 (S-2)(JFB)

BROOKLYN, NY – Earlier today, Marc Broidy, the founder, Principal and Chief Executive Officer of Broidy Wealth Advisors, LLC, pleaded guilty to investment adviser fraud for defrauding his clients by withdrawing $640,000 in excess management fees, and misappropriating more than $865,000 worth of stock held in trusts, over which he was trustee. The guilty plea was entered before United States District Judge Eric N. Vitaliano at the federal courthouse in Brooklyn, New York. As part of his plea agreement with the government, Broidy has agreed to make restitution to the victims of his fraud. When he is sentenced, Broidy faces up to five years in prison, as well as restitution, criminal forfeiture and a fine.

 

The guilty plea was announced by Robert L. Capers, 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. Mr. Capers thanked the Securities and Exchange Commission for their cooperation and assistance in the investigation.

According to court filings and facts presented at the plea hearing, from approximately November 2010 to July 2016, Broidy had discretionary authority to buy and sell securities in brokerage accounts he set up for his clients and was permitted to deduct management fees from those accounts as compensation. For three of his clients, instead of deducting the amounts he was permitted to bill, Broidy took more than $640,000 in excess fees. To hide his theft, Broidy falsified many of those clients’ Internal Revenue Service Form 1099s so that the forms reflected far less in management fees than Broidy actually took.

One client discovered the theft and forced Broidy to repay the stolen fees in a settlement. To pay the settlement and other personal expenses, such as credit card bills and house and car payments, Broidy sold more than $865,000 worth of stock held in trust accounts that another client had established for his children, and for which he had appointed Broidy trustee. Broidy also encouraged several clients to invest in startup companies that had agreed to pay Broidy a percentage of any money Broidy raised for the companies, but did not disclose his arrangement to his clients.

 

* * *

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

 

* * *

The Defendant:

 

MARC BROIDY

Age: 43

Los Angeles, California

 

E.D.N.Y. Docket No. 17-CR-064 (ENV)

A third superseding indictment was unsealed today in United States District Court in Brooklyn charging Richard Almarez, also known as “Rated R,” Terrell Brown, also known as “Rellz,” Tislam Cato, also known as “Vietnam,” Shaheem Evans, also known as “Sha,” Joseph Isar Ras, also known as “Bada Boom,” and Elvin Sanabria, also known as “Rico,” as members of a conspiracy to deal in firearms, along with six other defendants who were previously charged. The indictment was returned under seal by a federal grand jury on February 23, 2017, and relates to the defendants’ alleged participation in a gun-trafficking operation that was responsible for transporting more than 70 firearms from Georgia to New York between October 2015 and June 2016. At least seven of the firearms that were illegally acquired and distributed by the operation have been recovered by law enforcement officers in the New York area.

The charges were announced by Robert L. Capers, 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 O’Neill, Commissioner, New York City Police Department.

The gun-trafficking operation was run by members and associates of the Gangsta Killa Bloods (GKB), a set of the Bloods street gang, who relied on “straw buyers” (individuals who were lawfully able to purchase firearms) to purchase firearms in Georgia that were then transported to New York, where the newly charged defendants illegally sold them to criminal associates for profit.

Previously, on June 16, 2016, a grand jury in the Eastern District of New York returned an indictment in this case charging straw buyers Micah Isaiah Desuze, Dominique Chanel Fairnot, Jeremy Sanchez, Ashanti Sease-Matthews, and Omar Jermaine Walker with conspiracy to deal in firearms and to make false statements to acquire firearms, as well as substantive counts of making false statements to acquire firearms. The government’s investigation revealed that the straw buyers, several of whom were current or former members of the United States military, lied on Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Forms 4473 by certifying that they were not purchasing the firearms on behalf of other people.

On June 22, 2016, a superseding indictment was filed charging the same straw purchasers and Marquez Bridges, also known as “Tega,” an Atlanta-based GKB member and gun-trafficking facilitator, with conspiracy to deal in firearms and to make false statements to acquire firearms. On November 22, 2016, a second superseding indictment was filed charging the previously-charged defendants (with the exception of Fairnot, who pled guilty before the second superseding indictment was filed) and Bonnay Benford, also known as “Popalot,” a New York-based GKB member and gun trafficking facilitator, with conspiracy to deal in firearms and to make false statements to acquire firearms.

For their role as gun distributors in the gun-trafficking operation, the six newly charged defendants face a maximum sentence of five years’ imprisonment for conspiring to deal in firearms, the sole count with which they are charged in the third superseding indictment. The defendants who acted as straw buyers face maximum sentences of five years’ imprisonment on each of the two conspiracy counts, and maximum sentences of ten years’ imprisonment on each of the substantive counts of making a false statement to acquire firearms with which they are charged. The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by Assistant United States Attorneys Rena Paul and Margaret E. Gandy.

The Defendants:
 

RICHARD ALMAREZ

Age: 42

Westchester, New York

 

BONNAY BENFORD

Age: 30

Brooklyn, New York

 

MARQUEZ BRIDGES

Age: 26

Atlanta, Georgia

 

TERRELL BROWN

Age: 34

Miami, Florida

 

TISLAM CATO

Age: 35

Brooklyn, New York

 

MICAH ISAIAH DESUZE

Age: 25

Atlanta, Georgia

 

SHAHEEM EVANS

Age: 41

Bronx, New York

 

JOSEPH ISAR RAS

Age: 35

Brooklyn, New York

 

ELVIN SANABRIA

Age: 29

Englewood, New Jersey

 

JEREMY SANCHEZ

Age: 27

Lancaster, Pennsylvania

 

ASHANTI SEASE-MATTHEWS

Age: 23

Atlanta, Georgia

 

OMAR JERMAINE WALKER

Age: 29

Savannah, Georgia

 

E.D.N.Y. Docket No. 16-CR-326 (ARR)

BROOKLYN, NY – Earlier today, Christopher F. Castaldo, a former registered broker who was the owner of two subscription-based investment research firms, pleaded guilty to conspiracy to commit securities fraud in connection with the fraudulent market manipulation of ForceField Energy Inc. (ForceField), a publicly-traded company listed on the NASDAQ under the ticker symbol “FNRG.” The guilty plea was entered before United States Magistrate Judge Ramon E. Reyes, Jr. at the federal courthouse in Brooklyn, New York. When sentenced, Castaldo faces up to five years in prison, as well as restitution, criminal forfeiture, and a fine.

The guilty plea was announced by Robert L. Capers, 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.  Mr. Capers thanked the Securities and Exchange Commission, New York Regional Office, for their cooperation and assistance in the investigation.

According to court filings and facts presented at the plea hearing, between January 2009 and April 2015, the defendant, 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 defendants’ fraudulent scheme caused a loss of approximately $131 million to the investing public.       

Between June 2011 and June 2014, Castaldo received commission payments, or kickbacks, in cash and in ForceField stock, from a ForceField executive for promoting the purchase of ForceField stock to investors, including by contacting subscribers who paid to receive independent investment research from Castaldo’s companies.  Castaldo and employees working at his direction did not disclose his compensation arrangement while soliciting his paid subscribers to purchase ForceField’s stock.  In addition, during some of the periods in which Castaldo was promoting the purchase of ForceField’s stock to his subscribers, Castaldo was actively selling ForceField stock he had received.  Castaldo did not disclose this to the subscribers who were being solicited to purchase ForceField stock.

             

*          *          *

The government’s case is being prosecuted 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:
 

CHRISTOPHER F. CASTALDO

Age:  45

Residence: Glen Head, New York

 

E.D.N.Y. Docket No. 16-CR-234 (S-1) (BMC)

Alexander Posobilov, 62, of Houston, Texas, was sentenced to 135 months in prison for conspiring to export and illegally exporting controlled microelectronics to Russia, and for conspiring to launder money. 

The sentence was announced by Acting Assistant Attorney General for National Security Mary B. McCord and U.S Attorney Robert L. Capers for the Eastern District of New York. The sentencing took place before Senior U.S. District Judge Sterling Johnson, Jr.

“With this sentence, Alexander Posobilov is being held accountable for evading export laws and illegally exporting American microelectronics to Russia for military use,” said Acting Assistant Attorney General McCord. “Export laws exist as an important part of our national security framework and protecting national assets from ending up in the hands of our potential adversaries is one of our highest priorities.”

“Posobilov helped lead a criminal operation that through lies and subterfuge profited handsomely from the unlawful sale and export of sophisticated American microelectronics for use by the Russian military,” stated U.S. Attorney Capers. “Today’s sentence shows that those who compromise the national security of the United States for their personal financial gain will face serious punishment.” Mr. Capers extended his grateful appreciation to the FBI’s Houston Field Office and the Department of Commerce for their leading roles in the investigation.

Posobilov, as well as ten other individuals and two corporations – ARC Electronics, Inc. (ARC) and Apex System, L.L.C. (Apex) – were indicted in October 2012. Posobilov and two co-conspirators were subsequently convicted at trial on all counts in October 2015. Of the remaining defendants, five pleaded guilty and three remain at large. ARC is now defunct, and Apex, a Russian-based procurement firm, failed to appear in court. 

Posobilov joined ARC in 2004, where he ascended to become the procurement manager and day-to-day director of the company. Between approximately October 2008 and October 2012, Posobilov managed a team of employees who worked to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the U.S. and to export those high-tech goods to in Russia, while evading the government licensing system set up to control such exports. These commodities have applications and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers. Russia was not capable of producing many of these sophisticated goods domestically. Between 2002 and 2012, ARC shipped approximately $50,000,000 worth of microelectronics and other technologies to Russia. ARC’s largest clients were certified suppliers of military equipment for the Russian Ministry of Defense. 

To induce manufacturers and suppliers to sell these high-tech goods to ARC, and to evade applicable export controls, Posobilov and his co-conspirators provided false end user information in connection with the purchase of the goods, concealed the fact that they were exporters and falsely classified the goods they exported on export records submitted to the Department of Commerce. 

Ultimate recipients of ARC’s products included a research unit for the Russian FSB internal security agency, a Russian entity that builds air and missile defense systems and another that produces electronic warfare systems for the Russian Ministry of Defense.

The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant U.S. Attorneys Richard M. Tucker and Una A. Dean, as well as Trial Attorney David Recker from the National Security Division’s Counterintelligence and Export Control Section, are in charge of the prosecution. Assistant U.S. Attorney Claire Kedeshian is handling the forfeiture aspects of the case.

Earlier today in United States District Court in Brooklyn, Alexander Posobilov was sentenced to 135 months’ imprisonment for conspiring to export and illegally exporting controlled microelectronics to Russia, as well as for conspiring to launder money.

 

Posobilov, together with ten other individuals and two corporations – ARC Electronics, Inc. (ARC) and Apex System, L.L.C. (Apex) – were indicted in October 2012. Posobilov and two co-conspirators were subsequently convicted at trial on all counts in October 2015. Of the remaining defendants, five pleaded guilty and three remain at large. ARC is now defunct, and Apex, a Russian-based procurement firm, failed to appear in court.

 

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Acting Assistant Attorney General for National Security Mary B. McCord.

 

“Posobilov helped lead a criminal operation that through lies and subterfuge profited handsomely from the unlawful sale and export of sophisticated American microelectronics for use by the Russian military,” stated United States Attorney Capers. “Today’s sentence shows that those who compromise the national security of the United States for their personal financial gain will face serious punishment.” Mr. Capers extended his grateful appreciation to the Federal Bureau of Investigation, Houston Field Office and the Department of Commerce for their leading roles in the investigation.

“With this sentence, Alexander Posobilov is being held accountable for evading export laws and illegally exporting American microelectronics to Russia for military use,” said Acting Assistant Attorney General McCord. “Export laws exist as an important part of our national security framework and protecting national assets from ending up in the hands of our potential adversaries is one of our highest priorities.”

Posobilov joined ARC in 2004, where he ascended to become the procurement manager and day-to-day director of the company. Between approximately October 2008 and October 2012, managed a team of employees who worked to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to in Russia, while evading the government licensing system set up to control such exports. These commodities have applications and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers. Russia was not capable of producing many of these sophisticated goods domestically. Between 2002 and 2012, ARC shipped approximately $50,000,000 worth of microelectronics and other technologies to Russia. ARC’s largest clients were certified suppliers of military equipment for the Russian Ministry of Defense.

To induce manufacturers and suppliers to sell these high-tech goods to ARC, and to evade applicable export controls, Posobilov and his co-conspirators provided false end user information in connection with the purchase of the goods, concealed the fact that they were exporters, and falsely classified the goods they exported on export records submitted to the Department of Commerce.

Ultimate recipients of ARC’s products included a research unit for the Russian FSB internal security agency, a Russian entity that builds air and missile defense systems and another that produces electronic warfare systems for the Russian Ministry of Defense.

Today’s sentencing took place before United States District Senior Judge Sterling Johnson, Jr.

The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Richard M. Tucker and Una A. Dean, as well as Trial Attorney David Recker from the National Security Division’s Counterintelligence and Export Control Section, are in charge of the prosecution. Assistant United States Attorney Claire Kedeshian is handling the forfeiture aspects of the case.

The Defendant:

 

ALEXANDER POSOBILOV

Age: 62

Houston, Texas

 

E.D.N.Y. Docket No. 12 CR 626 (SJ)

Earlier today in federal court in Brooklyn, Paulino Ramirez-Granados, a member of the Granados family sex trafficking ring, based in Tenancingo, Tlaxcala, Mexico, was sentenced to over 15 years’ incarceration and five years’ supervised release by United States District Judge Kiyo Matsumoto, based on his guilty plea to trafficking young Mexican women into the United States and forcing them into prostitution. He was also ordered to pay restitution to Jane Doe #1 in the amount of $1,229,760. Paulino Ramirez-Granados is the latest member of the Granados organization to be sentenced in this case since 2013.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York. The sentence was based on the defendant’s guilty plea last July to federal sex trafficking charges.

As established during court proceedings, the defendant, working with other members of the Granados family, smuggled numerous young women from Mexico to New York between 2000 and 2010, and then forced them, using threats and violence, to work as prostitutes in New York City and elsewhere. The male members of the Granados trafficking ring used false promises of romance and marriage to lure the victims into relationships and convince them to travel to the United States to make money so that they could build homes for themselves in Mexico. As further established in sentencing proceedings in this investigation, the victims of the Granados family were also routinely subjected to violence, threats and sexual assaults by the defendants. The defendant Paulino Ramirez-Granados additionally impregnated one of the women and then threatened that she would never see her child again if she did not continue to prostitute for him.

"This extensive Mexican sex trafficking operation has preyed upon countless young women, exploiting and dehumanizing these victims in terrible ways, in order to line their own pockets. This prosecution and sentence signify the dismantling of an exploitative family organization and our continued commitment to seeking justice for its victims,” stated United States Attorney Capers.

“With a promise of companionship and a better life in the United States, Paulino Ramirez-Granados, instead trafficked unsuspecting women from Mexico into a life of exploitation and prostitution here in New York,” said HSI New York Special Agent-in-Charge Melendez. “HSI agents will relentlessly pursue human trafficking organizations and its members until they are all dismantled and brought to justice.”

Jane Doe #1 stated that the defendant Paulino and his co-conspirator “made promises that we would escape poverty if I worked in prostitution. But it never happened …. Women who are forced into prostitution never do so. [The defendant and his co-conspirator] were the ones who escaped poverty through the sexual slavery of myself and other women. I see now how I was utilized and forced into prostitution with false promises of love, and I never received that love. I lost the best moments of my life, when I could have been with my family.”

“For years I cried in silence. I carry with me the scars of [the defendant and his co-conspirator’s] abuse every day, but I can no longer be silent. I am here today so that [the defendant] may never be able to force another woman into prostitution. For myself, for the other women he has victimized, and for the women I hope he never has the chance to hurt in the future…”

Since 2009, the Department of Justice and HSI have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative aimed at strengthening high-impact prosecutions under both U.S. and Mexican law. The initiative is aimed at dismantling human trafficking networks operating across the U.S.-Mexico border, bringing human traffickers to justice, reuniting victims with their children and restoring the rights and dignity of human trafficking victims held under the trafficking networks’ control. These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of more than 50 defendants in multiple cases in New York, Georgia, Florida, and Texas since 2009, and numerous Mexican federal and state prosecutions of associated sex traffickers. In the Eastern District of New York’s comprehensive anti-trafficking program, more than 70 defendants have been indicted in sex trafficking cases to date, and provided assistance to more than 135 victims, including 39 minors. In addition, through the Eastern District of New York’s anti-trafficking program, 18 children have been reunited with their victim-mothers.

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

The Defendant:

 

PAULINO RAMIREZ-GRANADOS

Age: 39

Tenancingo, Mexico

 

 

E.D.N.Y. Docket No. 11-CR-557

BROOKLYN N.Y. – Jacob Alexander, also known as “Kobi Alexander,” an Israeli national, was sentenced earlier today to 30 months in prison after having pleaded guilty to securities fraud for his role in a stock options backdating scheme involving Comverse Technologies Inc. (Comverse). Alexander was a former Chief Executive Officer and Chairman of the Board of Directors of Comverse, which was traded on the NASDAQ stock market. Comverse was a component stock of the S&P 500 and the NASDAQ 100 at the time of the offense. Last year, Alexander was extradited from Namibia after having been indicted in the Eastern District of New York more than ten years ago. Today’s sentence represents the longest term of incarceration imposed by a court in connection with an options backdating scheme.
 

The sentencing was announced by U.S. Attorney Robert L. Capers of 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 addition, Mr. Capers thanked the Securities and Exchange Commission (SEC) and the Department of Justice’s Office of International Affairs (OIA) for their cooperation and assistance in the prosecution.

“Today’s sentence should send a powerful message to high ranking executives that corporate rank is no shield to criminal liability. CEOs and other members of the C-suite who commit crimes will be held to account to the full extent of the law. For more than ten years, law enforcement pursued Kobi Alexander, and now he has finally been punished for his role in a securities fraud scheme,” stated United States Attorney Capers. “We will continue to follow the evidence in all of our cases, wherever it may lead, and protect the investing public.”

“Kobi Alexander thought he could outwit the law, not once, but twice. First by committing the crimes he’s accused of, and a second time by fleeing the country when he became aware his actions had caught up to him. This case serves as a reminder that the FBI's reach is global, and our commitment to seeing justice served doesn't stop at a border—out of sight will never mean out of mind, and we don’t let you get away that easily,” stated FBI Assistant Director-in-Charge Sweeney.

According to documents filed in this case, Comverse was a communications software company with offices in Woodbury, New York. Between 1998 and 2006, the defendant and his coconspirators engaged in a fraudulent backdating scheme using hindsight to select the issuance date of Comverse stock options, which they awarded to themselves and Comverse employees, and then lied about this practice to investors in public filings and elsewhere. In doing so, the defendant and his coconspirators were able to select issuance dates when Comverse stock was trading lower, thereby awarding themselves and Comverse employees “in-the-money” options without properly accounting for these options in Comverse’s financial disclosures to investors. By backdating options, the defendant and his coconspirators violated accounting rules and caused Comverse to overstate its profits. Additionally, the backdated options also violated the terms of Comverse’s stock option plans that were approved by its shareholders. As the top recipient of stock options in every company-wide grant, the defendant gained approximately $30 million in paper profits from the scheme. Ultimately, the defendant agreed to pay $60 million in forfeiture and civil settlements, which was applied as restitution to compensate Comverse and its shareholders.

When the defendant’s conduct came to light, he attempted to obstruct justice by offering to bribe a witness to make false statements to federal investigators. Shortly before being charged in connection with his scheme, and after he was aware of the government’s investigation, the defendant moved to Namibia, where he relocated with his family. The government promptly sought the defendant’s extradition.

Today's proceeding took place before United States District Judge Nicholas G. Garaufis.

* * *

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney James P. Loonam is in charge of the prosecution and led the Office’s efforts to secure Alexander’s extradition from Namibia, with assistance from the Department of Justice’s Office of International Affairs.

* * *

 

The Defendant:

 

JACOB ALEXANDER, also known as “Kobi Alexander”

Age: 64

 

E.D.N.Y. Docket No. 06-CR-628 (NGG)

An indictment and two complaints were unsealed today in the United States District Court for the Eastern District of New York charging nine defendants with conspiring to distribute heroin and/or oxycodone in Staten Island, New York.

Eight defendants were arrested earlier today in Staten Island and Brooklyn and are scheduled to be arraigned before Magistrate Judge James Orenstein in Brooklyn this afternoon. One additional defendant was arrested earlier today in Arizona, and her initial appearance is scheduled this afternoon before United States Magistrate Judge David K. Duncan at the federal court house in Phoenix, Arizona. The government will seek to remove to New York for prosecution the defendant arrested out of state.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, and Commissioner James P. O’Neill of the New York City Police Department (NYPD).

“These defendants allegedly pushed heroin and oxycodone for months, contributing to the opioid plague that has caused great suffering on Staten Island,” stated United States Attorney Capers. “Today’s arrests demonstrate this Office’s commitment to marshal all available resources necessary to investigate and prosecute those who peddle these highly addictive narcotics in our communities.” Mr. Capers expressed his appreciation to the Richmond County District Attorney's Office for its participation in today's arrests.  

DEA Special Agent in Charge Hunt stated, “Since the millennium, statistics show a steady rise of drug overdoses in New York City with fatalities skyrocketing these past five years. Throughout that time, Staten Islanders weathered the storm termed by many as the ‘opioid epidemic’, with users transitioning from abusing diverted prescription medication, to heroin, to heroin mixed with fentanyl. By collaborating resources with our state, local and federal law enforcement partners, we arrested nine dealers responsible for fueling opioid addiction on Staten Island.”

“America’s addiction to opioids is dependent on drug-pushing organizations like this. Selling rock and prescription drugs out of their front door, in their own community, is inexcusable,” said Melendez, Special Agent-in-Charge for HSI New York. “These arrests demonstrate the collaborative and continuing endeavor to attack the persistent problem of drug trafficking in New York and the surrounding communities.”

“As alleged, these individuals distributed heroin and oxycodone in their own community, and by doing so they endangered the lives of those who live and work around them by contributing to the supply of highly addictive narcotics that have led to numerous overdoses and deaths. The NYPD is committed to holding accountable those who are responsible for this deadly flow of poison and ensuring they are brought to justice,” said Police Commissioner O’Neill.

As alleged in the indictment and complaints unsealed today, as part of its investigation of narcotics trafficking by defendant Michael Calabria, DEA agents uncovered a narcotics distribution ring involving the defendants Joseph Calabria, Stephen Delpriore, Devida Lombardo, Ugo Gallo, Carol Monforte, Vincent Maniscalco, Glenn DePaolo and Maria DePaolo. As alleged in the court filings, the defendants conspired to distribute heroin and/or oxycodone from September 2016 to January 2017.

These arrests were the result of a long-term investigation by the U.S. Drug Enforcement Administration’s New York Organized Crime Drug Enforcement Strike Force, which is comprised of agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Federal Bureau of Investigation, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, the New York Department of Taxation and Finance, the Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.

The charges in the indictment and complaints are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of the most serious offense, the defendants face up to 20 years of imprisonment.

The government’s case is being prosecuted by Assistant United States Attorneys Karthik Srinivasan and Alicia N. Washington.

The Defendants:

 

 

MICHAEL CALABRIA

Age: 49

Staten Island, NY

 

JOSEPH CALABRIA

Age: 52

Staten Island, NY

 

STEPHEN DELPRIORE

Age: 55

Staten Island, NY

 

DEVIDA LOMBARDO

Age: 46

Staten Island, NY

 

UGO GALLO

Age: 46

Staten Island, NY

 

CAROL MONFORTE

Age: 57

Staten Island, NY

 

VINCENT MANISCALCO

Age: 55

Brooklyn, NY

 

GLENN DEPAOLO

Age: 59

Staten Island, NY

 

MARIA DEPAOLO

Age: 55

Staten Island, NY

 

E.D.N.Y. Docket Numbers:

United States v. Michael Calabria, et al, 17-CR-91

United States v. Carol Monforte et al, 17-MJ-170

United States v. Ugo Gallo, 17-MJ-171

A complaint was unsealed yesterday in the United States District Court in Brooklyn charging ten defendants with operating an international steroid manufacturing and distribution ring. Seven defendants will be arraigned today at the United States Courthouse in Miami, Florida. Two defendants will be arraigned at the United States Courthouse in Phoenix, Arizona, and one remaining defendant is being sought in Phoenix.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Carl J. Kotowski, Special Agent in Charge, Drug Enforcement Administration (DEA), New Jersey Division.

As set forth in the complaint and other publicly filed documents, the charges against the defendants stem from an investigation into a Miami-based company named Wellness Fitness Nutrition, LLC (“WFN”). WFN’s founder and CEO, Richard Rodriguez, purported that WFN was an “FDA compliant” pharmacy and laboratory licensed to distribute anabolic steroids, which are controlled substances under federal law. In fact, the investigation revealed that WFN was not licensed by the DEA to distribute steroids and routinely dispensed steroids to customers without the requisite medical prescriptions. WFN marketed and sold its wide array of anabolic steroids through its website www.wellnessfitnessnutrition.com.

During the year-long investigation which began in 2015, led by the New Jersey DEA Tactical Diversion Squad, Special Agents and Task Force Officers were able to track the purchase of raw steroid materials by WFN from various companies in China. This raw steroid powder was shipped to a clandestine laboratory in Phoenix, Arizona where it was subsequently manufactured by the defendants into both liquid and pill-form steroids. The finished steroid product was then sent back to Miami where it was labeled, packaged and shipped to WFN’s domestic and international customers. Over the course of the investigation, undercover New Jersey DEA special agents and Task Force Officers made undercover purchases of over $30,000 worth of illicit anabolic steroids from the WFN defendants. A review of WFN customer lists revealed that WFN shipped steroids to at least 50 customers in the Eastern District of New York.

Additionally, the financial investigation into WFN revealed that the company laundered over a million dollars in illicit proceeds back into the operation of its national distribution ring and moved at least ten million dollars in illicit proceeds through various WFN and related entities’ bank accounts.

Today, in connection with the arrests, Task Force Officers executed search warrants at the clandestine lab in Phoenix, Arizona and at the WFN offices and shipping facility located in Miami, Florida.

“As alleged, the defendants made millions of dollars through the illicit online sales of anabolic steroids while operating under the guise of an ‘FDA-compliant’ health and wellness business,” stated United States Attorney Capers. “This case serves as a message that my Office and our law enforcement partners will not allow the widespread illegal distribution of anabolic steroids to go unchecked.” Mr. Capers expressed his appreciation to the DEA Arizona Division, DEA Miami Division, Homeland Security Investigations New Jersey Division, Customs and Border Protection Port of New York/Newark, and U.S. Postal Service Inspection Service New Jersey Division for their assistance during the course of this year-long investigation.

“The results of this investigation send a clear message to the public. It doesn’t matter if you are peddling heroin, cocaine or steroids. If you break the law, we will dedicate the necessary resources to put an end to this type of distribution,” stated DEA Special Agent in Charge Kotowski.

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 twenty years’ imprisonment.

The government’s case is being prosecuted by Assistant United States Attorneys Michael T. Keilty and Kaitlin T. Farrell. Assistant United States Attorney Claire Kedeshian of the Office’s Civil Division is responsible for the seizure and forfeiture of assets.

The Defendants:
 

RICHARD RODRIGUEZ

Age: 37

Miami, Florida

 

JOHN FERRELL

Age: 36

Miami, Florida

 

NANCY MELO-RODRIGUEZ

Age: 39

Miami, Florida
 

EDWARD JACOB LIFF

Age: 34

Phoenix, Arizona

 

XZAVIER APODACA

Age: 30

Phoenix, Arizona

 

BYRON OLIVER

Age: 37

Phoenix, Arizona

 

ERICK VITTITOW

Age: 29

Miami, Florida

 

BADER ALASKARI

Age: 34

North Bay Village, Florida

 

BERNARD DURAN

Age: 43

Miramar, Florida

 

JONATHAN GONZALEZ

Age: 37

Miami, Florida

 

 

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

Two managers of a Brooklyn, New York medical clinic were charged in an indictment unsealed today related to their alleged participation in a $2.1 million fraud scheme involving medically unnecessary occupational therapy services.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Robert L. Capers of the Eastern District of New York, Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations, Special Agent in Charge Kathy A. Enstrom of Internal Revenue Service Criminal Investigation’s (IRS-CI) New York Office and New York State Medicaid Inspector General Dennis Rosen of the Office of the Medicaid Inspector General (OMIG) made the announcement. 

Iezabel Zeltser, 52, of Brooklyn, was charged in an indictment filed yesterday in the Eastern District of New York with one count of conspiracy to commit health care fraud, one count of conspiracy to commit money laundering and three counts of money laundering.  Rafael Gilkarov, 51, of Brooklyn, was charged in the indictment with one count of conspiracy to commit money laundering and three counts of money laundering.  The defendants made initial appearances today, Feb. 15, at 2:30 p.m. EST before U.S. Magistrate Judge Cheryl L. Pollack of the Eastern District of New York.

According to allegations in the indictment, Zeltser and Gilkarov operated Evercare Occupational Therapy LLC, a Brooklyn medical clinic purported to provide medically necessary occupational therapy services to Medicare and Medicaid beneficiaries.  The defendants allegedly paid patients to submit themselves to medically unnecessary therapy services provided by unlicensed aides.  To conceal the scheme, Zeltser and Gilkarov allegedly used a skeleton crew of licensed occupational therapists to create fake medical charts.  The defendants in turn laundered a substantial portion of the proceeds through shell companies, using the cash to enrich themselves and to pay kickbacks to the beneficiaries, the indictment alleges.

According to the indictment, Evercare submitted approximately $2.1 million in fraudulent claims to the Medicare and Medicaid programs for services which were not medically necessary or not provided and was paid approximately $1 million on those claims.

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

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

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 3,000 defendants who have collectively billed the Medicare program for more than $11 billion.  In addition, HHS Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov. 

Earlier today, Munther Omar Saleh, 21, of Queens, New York, pleaded guilty at the federal courthouse in Brooklyn, New York, to all charges in an indictment charging him with conspiring and attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and with assaulting and conspiring to assault federal officers. Saleh’s co-defendant, Fareed Mumuni, 22, of Staten Island, New York, pleaded guilty yesterday, on Thursday, February 9, to conspiring and attempting to provide material support to ISIL, assaulting and conspiring to assault federal officers and attempted murder of federal officers. Saleh faces up to 53 years of imprisonment at sentencing, while Mumuni faces up to 85 years of imprisonment at sentencing. Saleh’s and Mumuni’s guilty pleas were accepted by U.S. District Judge Margo K. Brodie, who has scheduled both sentencing hearings for May 16.

The announcement was made by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Robert L. Capers for the Eastern District of New York, Assistant Director in Charge William F. Sweeney, Jr. of the FBI’s New York Field Office and Commissioner James P. O’Neill of the New York City Police Department (NYPD).

“Munther Omar Saleh and Fareed Mumuni conspired to provide material support to ISIL and devised a plan to conduct an attack in New York. During his arrest, Mumuni stabbed an FBI agent numerous times, but thankfully the agent’s body armor protected him from the defendant’s attack and the defendant was safely apprehended by law enforcement,” said Acting Assistant Attorney General McCord. “Counterterrorism is the National Security Division’s highest priority. We will continue to seek justice against any individuals who conspire to provide material support to designated foreign terrorist organizations, and those who attempt to harm the brave law enforcement officials who risk their lives to protect us.”

“In the name of ISIL’s false and hateful ideology, these defendants attacked the law enforcement officers who work tirelessly to preserve the safety of our communities,” stated U.S. Attorney Capers. “We are especially grateful that an FBI Special Agent survived the violent attack perpetrated by Fareed Mumuni, who repeatedly stabbed the agent in the chest during the execution of a search warrant in a terrorism investigation. We and our partners on the Joint Terrorism Task Force remain ever-vigilant in our efforts to protect our citizens and allies and by bringing terrorists to face justice. Today’s convictions will help incapacitate these defendants and sends a strong message to those who would follow in their footsteps.” Mr. Capers thanked the West Midlands Police in the United Kingdom for their assistance in providing evidence related to foreign coconspirators.

“Today’s guilty pleas show just how close the threat of homegrown terrorism exists for New York City. From their respective homes in Queens and Staten Island, Saleh and Mumuni conspired to place a pressure cooker bomb in the New York metro area on behalf of ISIL. Mumuni even attacked an FBI agent when a court-authorized search was being conducted by the Joint Terrorism Task Force at his home in Staten Island. Threats like this are exactly why protecting the United States from a terrorist attack remains the FBI’s number one priority,” stated Assistant Director in Charge Sweeney.

“Saleh and Mumumi engaged in plotting attacks against New York City in the name of ISIL. They received instructions from senior ISIL leaders in Syria. They were committed to violence. When the arrests were made the defendants were armed. One attacked an FBI agent with a large knife. The detection and disruption of these plots is a credit to the partnership between the FBI-NYPD Joint Terrorism Task Force and the NYPD's Intelligence Bureau,” said Police Commissioner O'Neill.

As alleged in the indictment and in other court filings, Saleh and Mumuni conspired to support ISIL by helping their co-conspirators attempt to travel to ISIL-controlled territory in order to join ISIL, and by plotting to use a pressure-cooker bomb to conduct a terrorist attack in the New York metropolitan area on behalf of ISIL. As part of their support for ISIL, Saleh and Mumuni, together with other co-conspirators, assisted New Jersey resident Nader Saadeh’s planned travel to ISIL-controlled territory. Saleh personally accompanied Saadeh to John F. Kennedy International Airport where Saadeh departed on a flight for Jordan in the first leg of a planned trip to ISIL-controlled territory. Saadeh was subsequently apprehended and pleaded guilty in the U.S. District Court for the District of New Jersey to conspiring to provide material support to ISIL. Working with ISIL fighters located overseas, Saleh and Mumuni also coordinated their plot to conduct a terrorist attack in New York City. Saleh sought and received instructions from an ISIL attack facilitator to create a pressure-cooker bomb and discussed with the same ISIL attack facilitator potential targets for a terrorist attack in New York City.

As detailed in court documents, Saleh informed ISIL fighters that his co-conspirators, five individuals located in New York and New Jersey, had confronted law enforcement officers who were continuously surveilling them. Saleh also sought and received religious authorization from an ISIL fighter permitting Mumuni to conduct a suicide “martyrdom” attack by using a pressure-cooker bomb against law enforcement officers who were following the co-conspirators and thus preventing them from traveling to join ISIL.

On June 13, 2015, Saleh and another individual were arrested in Queens after they charged at a federal officer who was performing physical surveillance of Saleh. Saleh and the other individual were armed with knives. Following his arrest, Saleh admitted to agents that he had discussed with Mumuni physically attacking the law enforcement officers who were surveilling Mumuni. On June 17, 2015, during the execution of a search warrant at his residence in Staten Island, Mumuni was arrested after he repeatedly stabbed an FBI agent in the torso with a large kitchen knife. Fortunately, the knife did not penetrate the agent’s protective body armor and he sustained only minor injuries.

During a search of the vehicle used by Mumuni, investigators recovered a second large knife. In his post-arrest interview, Mumuni admitted that Saleh had informed him that an ISIL member had sanctioned Mumuni’s planned suicide attack on law enforcement and that Saleh and Mumuni had discussed using a pressure-cooker bomb to carry out the attack. Mumuni further admitted that he had kept the knife he used to attack the agent wrapped in a t-shirt in his bed, as well as the knife recovered from the vehicle, specifically for use in an anticipated confrontation with law enforcement officers.

The government’s case is being prosecuted by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda and Ian C. Richardson for the Eastern District of New York are in charge of the prosecution, with assistance provided by Trial Attorneys Justin Sher and Robert Sander of the National Security Division’s Counterterrorism Section.

Earlier today, Munther Omar Saleh of Queens, New York, pleaded guilty at the federal courthouse in Brooklyn, New York, to all charges in an indictment charging him with conspiring and attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), and with assaulting and conspiring to assault federal officers. Saleh’s co-defendant, Fareed Mumuni, of Staten Island, New York, pleaded guilty yesterday, on Thursday, February 9, 2017, to conspiring and attempting to provide material support to ISIL, assaulting and conspiring to assault federal officers, and attempted murder of federal officers. Saleh faces up to 53 years of imprisonment at sentencing, while Mumuni faces up to 85 years of imprisonment at sentencing. Saleh’s and Mumuni’s guilty pleas were accepted by United States District Judge Margo K. Brodie, who has scheduled both sentencing hearings for May 16, 2017.

The pleas were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Acting Assistant Attorney General for National Security Mary B. McCord, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Commissioner James P. O’Neill of the New York City Police Department (NYPD).

As alleged in the indictment and in other court filings, Saleh and Mumuni conspired to support ISIL by helping their coconspirators attempt to travel to ISIL-controlled territory in order to join ISIL, and by plotting to use a pressure-cooker bomb to conduct a terrorist attack in the New York metropolitan area on behalf of ISIL. As part of their support for ISIL, Saleh and Mumuni, together with other coconspirators, assisted New Jersey resident Nader Saadeh’s planned travel to ISIL-controlled territory. Saleh personally accompanied Saadeh to John F. Kennedy International Airport where Saadeh departed on a flight for Jordan in the first leg of a planned trip to ISIL-controlled territory. Saadeh was subsequently apprehended and pleaded guilty in the United States District Court for the District of New Jersey to conspiring to provide material support to ISIL. Working with ISIL fighters located overseas, Saleh and Mumuni also coordinated their plot to conduct a terrorist attack in New York City. Saleh sought and received instructions from an ISIL attack facilitator to create a pressure-cooker bomb and discussed with the same ISIL attack facilitator potential targets for a terrorist attack in New York City.

As detailed in court documents, Saleh informed ISIL fighters that his coconspirators—five individuals located in New York and New Jersey—had confronted law enforcement officers who were surveilling them continuously. Saleh also sought and received religious authorization from an ISIL fighter permitting Mumuni to conduct a suicide “martyrdom” attack by using a pressure-cooker bomb against law enforcement officers who were following the coconspirators and thus preventing them from traveling to join ISIL.

On June 13, 2015, Saleh and another individual were arrested in Queens after they charged at a federal officer who was performing physical surveillance of Saleh. Saleh and the other individual were armed with knives. Following his arrest, Saleh admitted to agents that he had discussed with Mumuni physically attacking the law enforcement officers who were surveilling Mumuni. On June 17, 2015, during the execution of a search warrant at his residence in Staten Island, Mumuni was arrested after he repeatedly stabbed an FBI agent in the torso with a large kitchen knife. Fortunately, the knife did not penetrate the agent’s protective body armor, and he sustained only minor injuries. During a search of the vehicle used by Mumuni, investigators recovered a second large knife. In his post-arrest interview, Mumuni admitted that Saleh had informed him that an ISIL member had sanctioned Mumuni’s planned suicide attack on law enforcement and that Saleh and Mumuni had discussed using a pressure-cooker bomb to carry out the attack. Mumuni further admitted that he had kept the knife he used to attack the agent wrapped in a t-shirt in his bed, as well as the knife recovered from the vehicle, specifically for use in an anticipated confrontation with law enforcement officers.

“In the name of ISIL’s false and hateful ideology, these defendants attacked the law enforcement officers who work tirelessly to preserve the safety of our communities,” stated United States Attorney Capers. “We are especially grateful that an FBI Special Agent survived the violent attack perpetrated by Fareed Mumuni, who repeatedly stabbed the agent in the chest during the execution of a search warrant in a terrorism investigation. We and our partners on the Joint Terrorism Task Force remain ever-vigilant in our efforts to protect our citizens and allies by bringing terrorists to justice. These convictions will help incapacitate these defendants and send a strong message to those who would follow in their footsteps.” Mr. Capers thanked the West Midlands Police Counterterrorism Unit in the United Kingdom for their assistance with regard to foreign coconspirators.

“Munther Omar Saleh and Fareed Mumuni conspired to provide material support to ISIL and devised a plan to conduct an attack in New York. During his arrest, Mumuni stabbed an FBI agent numerous times, but thankfully the agent’s body armor protected him from the defendant’s attack and the defendant was safely apprehended by law enforcement,” said Acting Assistant Attorney General McCord. “Counterterrorism is the National Security Division’s highest priority. We will continue to seek justice against any individuals who conspire to provide material support to designated foreign terrorist organizations, and those who attempt to harm the brave law enforcement officials who risk their lives to protect us.”

“Today’s guilty pleas show just how close the threat of homegrown terrorism exists for New York City. From their respective homes in Queens and Staten Island, Saleh and Mumuni conspired to place a pressure cooker bomb in the New York metro area on behalf of ISIL. Mumuni even attacked an FBI agent when a court-authorized search was being conducted by the Joint Terrorism Task Force at his home in Staten Island. Threats like this are exactly why protecting the United States from a terrorist attack remains the FBI’s number one priority,” stated Assistant Director-in-Charge Sweeney.

“Saleh and Mumumi engaged in plotting attacks against New York City in the name of ISIL. They received instructions from senior ISIL leaders in Syria. They were committed to violence. When the arrests were made the defendants were armed. One attacked an FBI agent with a large knife. The detection and disruption of these plots is a credit to the partnership between the FBI-NYPD Joint Terrorism Task Force and the NYPD’s Intelligence Bureau,” said Police Commissioner O'Neill.

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

The Defendants:

 

MUNTHER OMAR SALEH

Age: 21

Queens, New York

 

FAREED MUMUNI

Age: 22

Staten Island, New York

 

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

Earlier today, at the federal courthouse in Brooklyn, New York, Ercan Findikoglu, a Turkish citizen also known by the online nicknames “Segate,” “Predator,” and “Oreon,” was sentenced to eight years for his leadership role in organizing and carrying out three cyberattacks on the global financial system between 2011 and 2013 that caused more than $55 million in losses. Findikoglu pleaded guilty on March 1, 2016, to computer intrusion conspiracy, access device fraud conspiracy, and effecting transactions with unauthorized access devices. In addition, as part of the sentence, the Court ordered Findikoglu to pay $55,080,226.14 in restitution. Today’s proceeding was held before United States District Judge Kiyo A. Matsumoto.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and David E. Beach, Special Agent in Charge, United States Secret Service, New York Field Office.

“Findikoglu was a skilled hacker who chose to use his considerable computer talents for criminal financial gain and to wreak economic havoc, rather than for legitimate pursuits. The defendant was responsible for hacking into computer networks of financial institutions across the globe and causing tens of millions of dollars in losses. Today’s sentence effectively neutralizes Findikoglu for years, and also should serve as a strong warning to those who seek to abuse their technical skills to breach the networks of trusted financial institutions,” stated United States Attorney Capers. Mr. Capers praised the extraordinary efforts of the Secret Service in investigating these complex network intrusions.

“Today’s sentencing brings one of the world’s most prolific cyber-criminals to justice,” stated Special Agent in Charge David Beach of the New York Field Office. “The relentless pursuit by the Secret Service and our international partners to identify and apprehend such criminals demonstrates the success of the law enforcement community to safeguard our nation’s financial infrastructure.”

 

According to public court filings, Findikoglu and his co-conspirators used sophisticated intrusion techniques to hack into the systems of credit and debit card processing companies, manipulated network administrator privileges at the victim card processing companies, manipulated account balances of prepaid debit cards to eliminate withdrawal limits on those cards, and stole the personal identification numbers (PINs) associated with the compromised debit cards. Findikoglu and his co-conspirators then disseminated the stolen card numbers and PINs worldwide to trusted associates who encoded magnetic stripe cards with the compromised debit card data. The associates then distributed these cards to teams of cashing crews, who used the cards to make fraudulent ATM withdrawals on a massive scale across the globe. As a result of the effective elimination of withdrawal limits, these cyber-attacks were known as “unlimited operations.”

Findikoglu organized and carried out three such unlimited operations. In the first operation on February 27 and 28, 2011, Findikoglu’s cashing crews withdrew approximately $10 million through approximately 15,000 fraudulent ATM withdrawals in 18 countries. In a second operation on December 21 and 22, 2012, Findikoglu’s cashing crews withdrew approximately $5 million through approximately 5,000 fraudulent ATM withdrawals in 20 countries. During this second operation, in New York alone, cashers conducted more than 700 fraudulent ATM withdrawals, totaling nearly $400,000 in losses, at more than 140 different ATM locations over the course of just two and a half hours. In a third operation on February 19 and 20, 2013, Findikoglu’s cashing crews withdrew approximately $40 million through approximately 36,000 fraudulent ATM withdrawals in 24 countries. During this third operation, in New York alone, cashers conducted nearly 3,000 fraudulent ATM withdrawals, totaling approximately $2.4 million in losses, over the course of approximately 10 hours.

Findikoglu was paid a significant portion of the illegal proceeds from these unlimited operations.

The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Douglas M. Pravda, Richard M. Tucker, and Saritha Komatireddy are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of assets. The Justice Department’s Office of International Affairs provided assistance.

The Defendant:

 

ERCAN FINDIKOGLU

Aliases: Segate, Predator, Oreon

Age: 35

Nationality: Turkish

 

E.D.N.Y. Docket No. 13-CR-440 (KAM)

A three-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Richard Jacobellis with distributing heroin that caused the death of 20-year-old Nicholas Weber, and conspiring with others to distribute heroin. Jacobellis was arrested earlier today in Ridge, New York, and his arraignment will be this afternoon before United States District Judge Joanna Seybert at the United States Courthouse in Central Islip, NY. If convicted, the defendant faces a statutory mandatory minimum sentence of 20 years’ imprisonment and a maximum sentence of life.

The charges were announced by Robert L. Capers, 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 Timothy D. Sini, Police Commissioner, Suffolk County Police Department (SCPD).

“As alleged, the defendant is a drug dealer who for years peddled poisonous heroin to Long Islanders,” stated United States Attorney Capers. “The heroin epidemic on Long Island has cut short far too many young lives, like Nicholas.’ To those heroin dealers who flood our streets with this highly addictive narcotic, be forewarned: if you sell heroin, my Office and our law enforcement partners will prosecute you.”

DEA Special Agent-in-Charge Hunt stated, “A life lost too soon paved law enforcement’s trail to a drug dealer’s door. investigates sources of supply worldwide as well as the local sources responsible for pushing heroin and fentanyl into our communities. Two months ago, DEA quickly turned an online tip into a high priority, joint investigation with the Suffolk County Police Department and the Eastern District of New York that identified the alleged drug dealer who caused the death of twenty-year-old Nicholas Weber. This arrest serves as a reminder to drug dealers that they will eventually face the consequences of their actions.”

Police Commissioner Sini stated, “As I’ve made clear on numerous occasions, we will stop at nothing to hold drug dealers accountable for their depraved indifference to human life. This prosecution is the culmination of a multi-jurisdictional investigation, which sends a clear message to dealers in Suffolk County: every time you sell heroin in this County, you risk spending the rest of your life in prison.”

As detailed in the indictment and court filings, Jacobellis distributed heroin on Long Island from 2012 to the present. Jacobellis’s heroin has caused the death of one young man and nearly killed another. Indeed, in March 2015, one of Jacobellis’s drug customers overdosed after using heroin that Jacobellis sold to him; fortunately, SCPD officers were able to quickly administer Naloxone, a nasal spray that reverses the effect of an opioid overdose, and save that young man’s life.

Undeterred, Jacobellis continued selling heroin to Long Island residents, according to the indictment. As charged, on May 17, 2016, Jacobellis drove from his home in Ridge to Kings Park and sold $100 of heroin to Weber. Weber used that heroin and died shortly thereafter. Nicholas Weber was a graduate of Kings Park High School. While in high school, he was the Suffolk County wrestling champion for his weight class, and upon graduation, he was attending Suffolk County Community College and had been accepted to Stony Brook University where he was going to study physics starting in the fall of 2016.

According to the indictment and court filings, despite learning that his heroin killed Weber, the defendant continued to sell heroin up until a few weeks ago. Indeed, in mid-January 2017, a confidential informant who was working with law enforcement contacted the defendant for the purpose of arranging a heroin transaction. The defendant agreed to sell heroin to the confidential informant. Shortly thereafter, the defendant met the confidential informant and consummated the transaction.

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 Section. Assistant United States Attorney Christopher C. Caffarone is in charge of the prosecution.

The Defendant:

RICHARD JACOBELLIS

Age: 23

Ridge, New York

E.D.N.Y. Docket No. 17-CR-052 (JS)

Robert L. Capers, United States Attorney for the Eastern District of New York, Christina D. Scaringi, Special Agent in Charge, North East Region, Office of the Inspector General for the Department of Housing and Urban Development, and Jay N. Lerner, Inspector General for the Federal Deposit Insurance Corporation announced the settlement of claims against Franklin First Financial, Ltd., its Chief Executive Officer, Frederick Assini, its Chief Operating Officer, Christopher Bertman, and Andrew Dauro, a manager of the company. The case, United States v. Rainy Day Holdings, LLC. et al., Civil Action No. CV-15-5576 is pending in federal court in Central Islip, NY before United States District Judge Joseph F. Bianco.

Franklin First, Assini, Bertman, and Dauro participated in the Direct Endorsement Program, a United States Department of Housing and Urban Development (HUD) program that allowed Franklin First to make mortgage loans which were insured by the Federal Housing Administration (FHA) in the event of default. If the FHA determined that Franklin First’s mortgages defaulted within the first two years at a rate 100% or higher than other lenders within the same geographic region, the FHA could have audited, immediately suspended, or sought to permanently remove Franklin First from the Direct Endorsement Program. As alleged in the government’s complaint, the defendants made surreptitious mortgage payments for borrowers on at least one hundred eleven FHA-insured loans that otherwise would have become delinquent or gone into default within two years of origination by Franklin First. As a result, the defendants deprived HUD of critical loan performance information needed to determine whether Franklin First should remain eligible for participation in the Direct Endorsement Program.

In addition, the defendants concealed from HUD the fact that Franklin First was making the loan payments by funneling the payments through a purported charitable organization, the Rainy Day Foundation. In the stipulated consent decree, Franklin First, Assini, Bertman, and Dauro admitted to making the improper payments and that the payments altered the company’s delinquency and default rates. Franklin First, Assini, Bertman, and Dauro agreed to pay one million, two hundred fifty-thousand dollars ($1,250,000) to resolve the United States’ claims. With the resolution of the claims against Franklin First, Assini, Bertman, and Dauro, the total settlements arising out of the Rainy Day Foundation matter are $2.399 million.

“This resolution demonstrates our Office’s vigorous pursuit of those who would abuse federal mortgage programs, whether they be companies or individuals. The significant penalty and defendants’ admissions to wrongdoing help to restore the integrity of the FHA mortgage insurance program,” stated United States Attorney Capers. “We would like to thank HUD’s Office of the Inspector General, HUD’s Office of Program Enforcement, and the FDIC Office of the Inspector General for their outstanding work and continued support in investigating this matter.”

Special Agent in Charge Scaringi stated, “This settlement is the latest example of our continued commitment to hold mortgage industry professionals accountable for their actions and should prove to the public that the HUD OIG and the U.S. Attorney's Office remain steadfast in our efforts to root out deceptive practices that victimize the FHA.”

FDIC Inspector General Lerner said, “The FDIC OIG is pleased to support the Department of Justice and the Department of Housing and Urban Development in bringing about today’s settlement. By working together, we broaden the government's efforts to pursue damages resulting from misconduct. The civil penalties imposed today send a strong message that fraudulent practices like those committed by the principals of Franklin First will not be tolerated.”

The United States’ case in this matter is being litigated by Assistant United States Attorneys Edward Newman, John Vagelatos, and Robert Schumacher.

Franklin Settlement Agreement

A two-count indictment was unsealed today in the United States District Court in Central Islip, New York, charging defendant Jaime Rivera, a member of the Almighty Latin King and Queen Nation street gang, with the 2005 murder of C.W. Post student and basketball star Tafare Berryman, as well as a related firearms charge. The defendant is scheduled to be arraigned this afternoon before United States Magistrate Judge Steven I. Locke.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office (FBI), James J. Hunt, Special Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (DEA), and Thomas Krumpter, Acting Commissioner, Nassau County Police Department (NCPD).

“Gang violence has taken the lives of too many innocent young people with bright futures,” stated United States Attorney Capers. “This case should serve as a message to all gang members, if you engage in violent gang activity, our law enforcement partners will not stop pursuing you until you are held accountable for your actions.” Mr. Capers expressed his grateful appreciation to the FBI, DEA, and NCPD.

“The mentality that an innocent person is some sort of threat to a gang member or a gang defies logic. A student who was out having a good time, ended up in the middle of a dangerous situation and was killed for absolutely no reason. No one deserves to die because they found themselves in the wrong place at the wrong time. The FBI Long Island Safe Streets Task Force and our law enforcement partners never gave up and continued to work this case to charge the shooter and now he will be held accountable,” stated Assistant Director-in-Charge Sweeney.

DEA Special Agent in Charge James Hunt stated, “Our job in law enforcement is to bring criminals to justice. By joining forces with the U.S. Attorney’s Office for the Eastern District of New York, Nassau County Police Department and Federal Bureau of Investigation, we identified and arrested the person allegedly responsible for murdering Tafare Berryman, who was tragically taken away from his family and friends 12 years ago. Drug-related violence is just one more casualty of drug trafficking that shatters families and ends lives.”

“Today's announcement is the culmination of an extensive investigation that was worked on collaboratively by numerous law enforcement investigative agencies. Protecting the public is our number one priority and today’s indictment of defendant Rivera was of the utmost importance,” stated Acting Commissioner of Police Krumpter.

As detailed in the indictment and the government’s detention letter filed earlier today, on April 2, 2005, Rivera and other Latin King gang members were present at La Mansion bar and nightclub located at 3942 Long Beach Road, N. Long Beach. Also present at the club were numerous C.W. Post students, including Tafare Berryman and some of his friends, who were celebrating the successful presentation of a fashion show that had taken place at Post earlier that evening. At least one incident occurred inside of the club between some gang members and one of the Post students, which later spilled out into a parking lot across from the club.

At approximately 5:00 a.m. on April 3, 2005, Berryman and a friend exited the club and observed several fights occurring in the parking lot. While walking to their car, Berryman’s friend was hit in the head with a bottle causing a laceration. Berryman and his friend then entered a car and drove away. Several blocks from the club, Berryman’s friend, who was driving, pulled the car over to the side of the road to tend to the laceration on his head which was bleeding profusely. At that point, Rivera pulled up alongside of the parked car and shot Berryman once, killing him because Rivera mistakenly believed that Berryman and his friend were involved in the prior altercation in the parking lot and were a threat to the Latin Kings.

The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of the charges in the indictment, Rivera faces mandatory life in prison and is eligible for the death penalty.

The government’s case is being handled by the Office’s Long Island Criminal Section. Assistant United States Attorney Lara Treinis Gatz is in charge of the prosecution.

The Defendant:

Jaime Rivera
Age: 32

Freeport, New York

 

E.D.N.Y. Docket No. 17-50 (SJF)(SIL)

BROOKLYN, N.Y. – Earlier today, Robert Bandfield, a U.S. citizen and resident of Belize, and Gregg R. Mulholland, a dual U.S. and Canadian citizen, were sentenced to 6 and 12 years in prison, respectively. In May 2016, Bandfield pleaded guilty to money laundering conspiracy for setting up an elaborate and fraudulent structure of shell companies and brokerage firms in Belize and the West Indies that enabled his clients to fraudulently manipulate the stocks of dozens of U.S. publicly-traded companies. That same month, Mulholland, the secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama and Belize City, Belize, pleaded guilty to money laundering conspiracy for fraudulently manipulating the stocks of more than 40 U.S. publicly-traded companies and then laundering more than $250 million in fraudulent proceeds through at least five offshore law firms. As part of the sentences, Bandfield was ordered to forfeit, among other things, $1 million and all his rights and interests in three corporate entities -- IPC Management Services LLC, IPC Corporate Services Inc. and IPC Corporate Services LLC (collectively, “IPC Corp”) -- that he founded and controlled in Belize, whereas Mulholland was ordered to forfeit, among other things, a Dassault-Breguet Falcon 50 aircraft, a Range Rover Defender vehicle, two real estate properties in British Columbia, and funds and securities on deposit at more than 25 bank and brokerage accounts.

 

The sentences were announced by Robert L. Capers, 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); Kathy A. Enstrom, Acting Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Angel M. Melendez, Special Agent-in-Charge, New York, Homeland Security Investigations (HSI).

In addition to the agencies that led the investigation, Mr. Capers thanked the Securities and Exchange Commission (SEC), the Department of Justice’s Office of International Affairs (OIA), the Department of State’s Diplomatic Security Service (DSS) and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG) for their cooperation and assistance in the investigation.

According to the court filings and facts presented at the plea and sentencing hearings, between January 2009 and September 2014, Bandfield, Mulholland and their co-conspirators engaged in three interrelated schemes: (1) to induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (2) to circumvent the payment of capital gains taxes and the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (3) to launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through debit cards and attorney escrow accounts. Between 2010 and 2014, Mulholland controlled a group of individuals (the Mulholland Group). Through these schemes, Bandfield helped his corrupt clients -- who included Mulholland and more than 100 others -- launder more than $250 million in fraudulent proceeds.

 

To facilitate these interrelated schemes, Bandfield and his co-conspirators created shell companies in Belize and the West Indies for the corrupt clients and placed nominees at the helm of these companies. This structure was designed to conceal the clients’ ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enable the corrupt investors to engage in trading under the nominee’s names through brokerage firms also set up in Belize. For example, this structure enabled the Mulholland Group to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK. Using aliases such as “Stamps” and “Charlie Wolf,” Mulholland was intercepted on a court-authorized wiretap on May 15, 2014, admitting to his ownership of “all the free trading” or unrestricted shares of CYNK. Prior to this conversation between Mulholland and his trader at Legacy, there had been no trading in CYNK stock for 24 trading days. Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.

 

Mulholland used the services of a U.S.-based lawyer to launder the more than $250 million generated through his stock manipulation of CYNK and other U.S. companies – directing the fraud proceeds to five law firm accounts and transmitting them back to members of the Mulholland Group and its co-conspirators. Other clients used unidentifiable debit cards to freely transfer their fraudulent proceeds back into the United States.

 

Bandfield’s scheme also enabled the U.S. corrupt clients evade reporting requirements to the IRS by concealing the proceeds generated by the manipulated stock transactions through the shell companies and their nominees. For example, in response to a request received by a U.S. corrupt client from a U.S. transfer agent who had to determine whether the proceeds from manipulative stock trading transaction were taxable under U.S. law, Bandfield forwarded an IRS Form signed by co-defendant Andrew Godfrey as the nominee for the shell company which had been set up at the request of the client. At one point during the government’s investigation, Bandfield boasted to an undercover law enforcement agent that he had specifically designed this “slick” corporate structure to counter then-President Barack Obama’s new laws, a reference to FATCA.

 

* * *

 

Today’s proceeding took place before United States District Judge I. Leo Glasser.

 

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn Kasulis, Winston Paes and Michael Keilty are in charge of the prosecution, with assistance from Assistant United States Attorney Brian Morris of the Office’s Civil Division, who is responsible for the forfeiture of assets.

 

The Defendants:

 

ROBERT BANDFIELD

Age: 72

Belize City, Belize

 

GREGG R. MULHOLLAND

Age: 47

San Juan Capistrano, California

Vancouver, Canada

 

EDNY Docket No. 14-CR-476 (S-2) (ILG)

CENTRAL ISLIP, N.Y. – Earlier today, Daniel Winston LaMarco, a Huntington, New York investment adviser, was sentenced to 42 months in prison and three years of supervised release following his August 2016 guilty plea to wire fraud and commodities fraud. As part of the sentence, LaMarco was also ordered to pay $872,600 in restitution to the investors in a commodity pool he ran which invested in the Foreign Exchange Market. The sentencing proceeding was held before United States District Judge Arthur D. Spatt.

 

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York. Mr. Capers thanked the criminal investigators in the United States Attorney’s Office for their excellent work on this investigation.

Beginning in approximately January 2011, LaMarco began to solicit investors to fund a commodity pool he ran which invested in the Foreign Exchange Market. LaMarco made false claims regarding his investment performance, and touted the safety of his investment strategy. Among his victims, LaMarco encouraged two individuals to invest proceeds from a home equity loan with him. As part of his fraud scheme, LaMarco sent false monthly statements to investors representing that their investments were growing, inducing new investments from the investors, and discouraging them from withdrawing their investments with him. The monthly statements claimed the investments had more than doubled in value and were worth as much as $1,796,126.22. In truth, LaMarco had lost almost all of the investors’ money, which totaled more than $872,000, in the Foreign Exchange Market.

 

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Mark E. Bini is in charge of the prosecution.

 

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

 

The Defendant:

 

DANIEL WINSTON LAMARCO

Age: 51

Huntington, New York

 

E.D.N.Y. Docket No. 16-CR-433 (ADS)

 

Earlier today, Vyacheslav Khaimov pled guilty at the federal courthouse in Brooklyn, New York, to the operation of an unlicensed money transmitting business in connection with his role in an international cybercrime operation.

The plea was announced by Robert L. Capers, 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).

According to court filings, the scheme involved sophisticated malware, which co-conspirators used to obtain unlawful access to victims’ bank accounts – most of which were in U.S. banks. The illegally obtained funds were then transferred via wire to the bank accounts of a network of individuals within the United States who, in turn, further transmitted the money, or portions of the money, either to additional U.S.-based intermediaries or directly overseas. As part of this scheme, Brooklyn-based Khaimov received over $230,000 in funds fraudulently withdrawn from the bank accounts of at least eight bank account takeover victims via wire transfers and cashier’s checks from a network of intermediary “mules.” To date, the FBI has identified over $1.2 million in losses attributable to the malware scheme and more than $6 million in attempted losses.

“The proliferation of malicious software is a scourge on our society. Cybercriminal networks like the network that the defendant allegedly was a part of are responsible for pillaging innocent victims’ bank accounts and wreaking havoc on our financial institutions through the use of malware. They will be pursued and prosecuted to the full extent of the law,” stated United States Attorney Capers.

“Modern-day bank robbers no longer need a gunman and a getaway driver. Today, they just need a malware operator and money mules to carry out their crime from anywhere in the world. Brooklyn-based Vyacheslav Khaimov, pleaded guilty for his role as a money mule in a multi-million dollar malware scheme where he moved funds from victim accounts into other accounts. This is an ongoing investigation conducted by the FBI’s Cyber Task Force. We will continue to investigate all co-conspirators and bring them to justice,” stated FBI Assistant Director-in-Charge Sweeney.

The government’s case is being prosecuted by Assistant United States Attorneys Una A. Dean, Tiana Demas, and Margaret Lee.

The Defendant:

 

VYACHESLAV KHAIMOV

Age: 55

Brooklyn, New York

 

E.D.N.Y. Docket No. 17-CR-25 (ERK)

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Jack Vitayanon with conspiring with others to distribute 500 grams or more of methamphetamine. Vitayanon, an attorney with the Internal Revenue Service, Office of Professional Responsibility in Washington, D.C, was arrested earlier today in Washington D.C.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement(ICE), Homeland Security Investigations (HSI), New York.

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

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

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

“As alleged, the defendant – a federal attorney working for the IRS’s Office of Professional Responsibility – broke bad and supplemented his income by selling distribution quantities of methamphetamine,” stated United States Attorney Capers. “The defendant will now be held to account for his alleged criminal conduct.” Mr. Capers expressed his grateful appreciation to the United States Treasury Department Inspector General, HSI’s High Intensity Drug Trafficking Area group in Washington D.C. and the United States Attorney’s Office for the District of Columbia.

HSI Special Agent-in-Charge Melendez stated, “Selling methamphetamine is a serious crime which is made more egregious when it is committed by a U.S. government attorney assigned to the Office of Professional Responsibility of the IRS.” “People that sell this highly addictive and destructive drug must be brought to justice before more lives are lost to this epidemic.”

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

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

The Defendant:

 

JACK VITAYANON

Age: 41

Washington, DC

 

E.D.N.Y. Docket No. 17-MJ-80

Raul Granados-Rendon, who had been on ICE’s most wanted list since 2010, was arrested in September 2016 in Mexico, following a joint investigation between ICE’s Homeland Security Investigations (HSI) Mexico City, HSI New York and the Mexican Federal Police. He was extradited to the United States on Friday and he was arraigned Saturday, at the federal courthouse in Brooklyn, on a 21-count indictment charging him with racketeering and racketeering conspiracy involving predicate acts of sex trafficking by force, fraud and coercion; sex trafficking of minors; interstate prostitution; alien smuggling and related offenses. Granados-Rendon was ordered detained by U.S. Magistrate Judge Arlene Lindsay.

The extradition and indictment was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York.

The extradition, the latest chapter in our multi-year case against the Granados sex trafficking organization, again demonstrates our resolve to seek justice for victims of modern day slavery. We will not rest until those who seek to profit from the forced slavery of others are brought to justice,” stated United States Attorney Capers.

“We at HSI can think of no better way to end Human Trafficking Awareness month than with the extradition of Raul Granados-Rendon, who has been on our most wanted list for numerous crimes including sex trafficking,” said Special Agent-in-Charge Melendez of HSI New York. “This individual is just one of many who allegedly helped run a sex trafficking organization that was responsible for smuggling numerous women into the United States where they were forced to work as prostitutes against their will. We will not rest until all of these individuals face the justice they deserve.”

As set forth in extradition affidavits and other court papers, between October 1998 and June 2011, members of the Granados sex trafficking organization, including Raul Granados-Rendon and others, illegally smuggled young women into the United States where they were forced to work as prostitutes in New York City and elsewhere in the United States. The organization collected profits from the victims’ activities. When victims refused to work or resisted, members of the organization beat and sexually assaulted them, and threatened the victims’ family members in Mexico, including the victims’ children.

HSI special agents have identified and rescued over 20 additional victims – all Mexican nationals – and arrested over a dozen additional traffickers or smugglers, all members or associates of the Granados family. Several victims were sexually assaulted by their traffickers, while others were physically assaulted. All the victims said the traffickers threatened to harm their family members.

To date, 13 members of the Granados organization have been indicted in the Eastern District of New York on sex trafficking charges. Raul Granados-Rendon was the last fugitive to be arrested and extradited to face the charges.

In announcing the extradition and arraignment, U.S. Attorney Capers commended the HSI’s New York Office, the HSI Mexico Attaché Office and the Department of Justice’s Office of International Affairs, the State Department, and the New York City Police Department for their assistance and praised the government of Mexico for its role in advancing bilateral anti-trafficking enforcement efforts.

The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, he faces a maximum sentence of life in prison.

Since 2009, the Department of Justice and HSI have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative aimed at strengthening high-impact prosecutions under both U.S. and Mexican law. The initiative is aimed at dismantling human trafficking networks operating across the U.S.-Mexico border, bringing human traffickers to justice, reuniting victims with their children and restoring the rights and dignity of human trafficking victims held under the trafficking networks’ control. These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of more than 50 defendants in multiple cases in New York, Georgia, Florida, and Texas since 2009, and numerous Mexican federal and state prosecutions of associated sex traffickers. The extraditions in this case are the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 70 defendants in sex trafficking cases and provided assistance to more than 135 victims, including 39 minors. In addition, through the Eastern District of New York’s anti-trafficking program, 18 children have been reunited with their victim-mothers.

The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorneys Taryn Merkl and Jennifer M. Sasso are in charge of the prosecution.

 

The Defendant:

 

RAUL GRANADOS RENDON

Age: 30

Tenancingo, Mexico

 

 

E.D.N.Y. Docket No. 11-CR-557

Three individuals pleaded guilty this week in connection with a health care fraud scheme involving two Brooklyn, New York clinics that caused approximately $55 million in false and fraudulent claims to Medicare and Medicaid.  

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Robert L. Capers of the Eastern District of New York, Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) New York Regional Office, Acting Special Agent in Charge Kathy A. Enstrom of Internal Revenue Service Criminal Investigation’s (IRS-CI) New York Office and Medicaid Inspector General Dennis Rosen of New York State Office of Medicaid Inspector General (OMIG), made the announcement.

Olga Proskurovsky, 49, and Yuriy Omelchenko, 49, both of Brooklyn, New York, each pleaded guilty to one count of conspiracy to commit health care fraud.  Pursuant to their plea agreements, the defendants agreed to forfeiture money judgments in the amount of $17,216,687.  Isak Aharanov, 42, of Brooklyn, New York, also pleaded guilty to two counts of conspiracy to commit money laundering and one count of conspiracy to defraud the United States.  The defendants pleaded guilty before U.S. District Judge Roslynn R. Mauskopf of the Eastern District of New York.

According to the defendants’ admissions made as part of the plea agreements, Proskurovsky served as a medical biller and Omelchenko worked as a therapist manager at Prime Care on the Bay LLC (Prime Care) and Bensonhurst Mega Medical Care P.C. (Bensonhurst).  The defendants admitted that they assisted in a scheme to defraud the Medicare and Medicaid programs in which patients subjected themselves to medically unnecessary health services, including physical and occupational therapy, provided by unlicensed staff.  To conceal the scheme, Proskurovsky and Omelchenko admitted that occupational and physical therapists falsified patient charts and medical billing documents.  

As part of his plea agreement, Aharanov admitted that he and co-conspirators paid patients in order to induce them to come to Prime Care, Bensonhurst and Total Rehab and Physical Therapy P.C.  Aharanov further admitted that he used a bank account opened in the name of one of his companies to launder funds and generate the cash needed to make these illegal kickback payments.

Fifteen other individuals have pleaded guilty in connection with the scheme.  

HHS-OIG, IRS-CI and the New York State OMIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  Trial Attorneys A. Brendan Stewart and Richard A. Powers of the Fraud Section and Assistant U.S. Attorney F. Turner Buford of the Eastern District of New York, formerly a Fraud Section trial attorney, prosecuted the case.  

The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 3,000 defendants who have collectively billed the Medicare program for more than $11 billion.  In addition, HHS Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov. 

Earlier today, at the federal courthouse in Brooklyn, New York, Christian John, the leader of the “Hull Street Crew,” a violent criminal gang that operated in the Bushwick, Bedford-Stuyvesant, and East New York areas of Brooklyn for more than a decade, was sentenced to life imprisonment, following his conviction after trial in December 2014 on charges of racketeering, murder, attempted murder, murder-for-hire, armed robbery, murder-for-hire, narcotics distribution and gambling on dog fighting. Marvin Johnson, a member of John’s crew, was also sentenced to life imprisonment, following his conviction after trial on murder, robbery and narcotics distribution charges.

The sentences were announced by Robert L. Capers, 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.

U.S. Attorney Capers stated, “Today’s sentence marks a day of closure for the six families whose loved ones were senselessly murdered and for the Brooklyn communities where John and his violent crew wreaked havoc from more than a decade. These life sentences also provide notice to gang members and violent offenders that this Office and our law enforcement partners will be relentless in our efforts to make communities safe for their residents.” Mr. Capers extended his grateful appreciation to the FBI and the New York City Police Department for their outstanding assistance in this case.

As proven at trial, Christian John was found guilty of the 2000 murder of Charlemagne Lormand, the 2008 murder of Barry Haynes, the 2008 murder of Daquane Shelton and the 2011 murders of Jason Bostic and Aaron Formey. Both defendants were found guilty of the 2006 murder of Earle Kevin Obermuller. During the Obermuller murder, the defendants lured the victim to an abandoned building where they duct taped his entire head and watched him suffocate to death. The defendants then set his body on fire. During the 2011 murders of Jason Bostic and Aaron Formey, John ordered his crew members to bind the victims with duct tape and to kill them. Among his many other crimes, John was also found guilty of assaulting a crew member by tying him up and pouring scalding water over his body as retaliation for the crew member being disloyal to John.

The government’s case is being prosecuted by Assistant United States Attorneys Soumya Dayananda and Robert T. Polemeni.

The sentencing proceeding took place before United States District Judge Frederic Block.

The Defendants:

CHRISTIAN KESTON JOHN

Age: 32

Brooklyn, N.Y.

 

MARVIN JOHNSON

Age: 32

Brooklyn, N.Y.

 

E.D.N.Y. Docket No. 11-CR-00405

Denzell Oglesby was arrested today on a criminal complaint filed in federal court in the Eastern District of New York, charging him with the armed robbery of a convenience store in Brooklyn. Oglesby was arrested earlier today while being held in state custody, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Vera M. Scanlon at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Ashan M. Benedict, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and James P. O’Neill, Commissioner, New York City Police Department (NYPD).

As detailed in the complaint and as captured on the store’s surveillance camera, Oglesby entered the convenience store with a co-conspirator, who remains at-large. Oglesby pointed a firearm at the convenience store clerk, jumped over the store counter, and forced the store clerk to the floor. Oglesby’s co-conspirator struck and wrestled with the store clerk, while Oglesby stole cash proceeds and other items from the store. As the store clerk continued to resist the robbery, Oglesby repeatedly struck the store clerk in the head with the firearm before he and his co-conspirator fled.

“As alleged, the defendant engaged in a violent gun-point robbery and brutally beat the store clerk. Such wanton violence will not be tolerated,” stated United States Attorney Capers. “The defendant will now be held to account for his crime.” Mr. Capers expressed his grateful appreciation to the ATF and NYPD who are responsible for leading the investigation.

“Oglesby is alleged to have engaged in a brutal act of violence which undermines the safety and security of the people working and residing in the Brownsville section of Brooklyn,” stated ATF Special Agent in Charge Benedict. “The ATF Special Agents and NYPD

Detectives assigned to the SPARTA Task Force are targeting the most violent offenders for prosecution in Federal court. Today’s arrest should serve as a clear warning to those who would engage in an armed robbery that the full force of law enforcement resources may be brought to bear against you.”

“This crime was as brazen as it was brutal. We have no tolerance for this type of violence in our city. I want to thank the detectives, agents, and prosecutors for their thoroughness in ensuring that the defendant is held account for his actions, as alleged in the complaint,” stated NYPD Commissioner O’Neill.

The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a minimum of seven years in prison.

The government’s case is being prosecuted by the Office’s Narcotics and Money Laundering Section. Assistant United States Attorney Andrew C. Gilman is in charge of the prosecution.

The Defendant:

 

DENZELL OGLESBY

Age: 23

Brooklyn, New York

United States Attorney Robert L. Capers announced today that Société Générale, S.A. will pay a $50 million civil penalty to resolve claims related to its activities, which were conducted through several affiliates (together, “SocGen”), in connection with the marketing, sale, and issuance of a residential mortgage-backed security (“RMBS”) named SG Mortgage Securities Trust 2006-OPT2 (“SG 2006-OPT2”). As part of the agreement, SocGen has acknowledged in writing that it made false representations to prospective investors in SG 2006-OPT2. Investors, including federally insured financial institutions, suffered significant losses on their investments in SG 2006-OPT2.

 

The settlement includes a statement of facts agreed to by SocGen, whereby SocGen acknowledges responsibility for its conduct. For example, SocGen acknowledges that it falsely represented to investors that the loans underlying SG 2006-OPT2 were originated generally in accordance with the loan originator’s underwriting guidelines. Indeed, as detailed in the statement of facts, SocGen’s third-party due diligence vendor for SG 2006-OPT2 determined that almost 40% of the loans it reviewed were underwritten outside of guidelines and lacked adequate compensating factors to make the loans eligible for securitization. SocGen acknowledges that it did not disclose these results to investors.

 

Likewise, SocGen represented to investors that, at the time of origination, no loan in SG 2006-OPT2 had a loan-to-value or combined loan-to-value ratio of more than 100% (in other words, that the value of any mortgage on a property did not exceed the value of the property itself) – a representation that SocGen now acknowledges was false. Moreover, SocGen knew that there were industry-wide problems with subprime loan origination practices. As described by a senior member of SocGen’s Contract Finance group, “The whole process [was] a joke.”

 

“SocGen’s acknowledgement of its misconduct in the securitization of SG 2006-OPT2 was a critical component of this resolution. It severely impacted investors and institutions across the United States, including in this district. Most emphatically, it was not a ‘joke’”, stated United States Attorney Capers. “We will not tolerate investment banks making false representations to investors – if and when they do so, they will be held accountable.” Mr. Capers extended his grateful appreciation to the Office of the Inspector General for the Federal Housing Finance Agency for its assistance in conducting the investigation in this matter.

 

The $50 million civil monetary penalty resolves claims under the Financial Institutions Reform Recovery and Enforcement Act of 1989, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. As part of the settlement, SocGen has agreed to fully cooperate with any ongoing investigations related to the conduct covered by the agreement.

 

Assistant U.S. Attorneys Clayton P. Solomon, Morgan J. Clark, and Katharine E.G. Brooker led the government’s investigation.

 

About the RMBS Working Group: The RMBS Working Group, part of the Financial Fraud Enforcement Task Force, was established by the Attorney General in late January 2012. The Working Group has been dedicated to initiating, organizing, and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market that helped precipitate the 2008 Financial Crisis. The Working Group’s efforts to date have resulted in settlements providing for tens of billions of dollars in civil penalties and consumer relief from banks and other entities that are alleged to have committed fraud in connection with the issuance of RMBS.

 

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

Earlier today in Central Islip, NY, Michael Troyan, a physician assistant who operated two urgent care clinics on the east end of Long Island, was sentenced to five years’ imprisonment, three years’ supervised release, and $710,290 forfeiture, following his guilty plea on June 17, 2016, to conspiring to illegally distribute oxycodone. The sentencing proceedings were held before U.S. District Judge Denis R. Hurley.

 

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.

 

Between November 2011 and October 2015, Troyan, who was authorized to prescribe controlled substances, issued prescriptions for thousands of oxycodone pills to co-conspirators for the purpose of illegally re-selling the pills. During the government’s investigation, Troyan was captured on video in an undercover operation writing phony prescriptions at his Riverhead medical office for oxycodone and receiving large quantities of cash – half the profit from prior illegal sales. As part of his guilty plea, Troyan agreed to forfeit $710,290 attributable to illegal prescription sales.

 

One of Troyan’s co-conspirators was Southampton Town Councilman Bradley Bender, who was sentenced on June 24, 2016, to 24 months in prison for his role in the conspiracy. Bender’s resignation as a Councilman was accepted by the Southampton Town Board on the day of his guilty plea, November 24, 2015.

 

“For years, Troyan supplied Bender and others with phony prescriptions for huge quantities of oxycodone pills, which Bender filled and illegally exchanged for cash and steroids with another co-conspirator. The oxycodone pills were then re-sold to drug abusers, sustaining the destructive abuse of opioid analgesics in our communities,” stated United States Attorney Capers. “This sentence serves as a stern warning to all medical professionals entrusted with authority to prescribe controlled substances that there is a price to pay for such criminal conduct.” Mr. Capers expressed his grateful appreciation to the DEA’s Long Island Tactical Diversion Squad, which led the government’s investigation in this case.

 

This case is part of a series of federal prosecutions by the United States Attorney’s Office as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in the Eastern District of New York, 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 Center for Disease Control and Prevention has called an epidemic increase in the abuse of opioid analgesics. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 20 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and a pharmacy chain, removed prescription authority from numerous rogue doctors and physician assistants, 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 was handled by the Central Islip Office. Assistant United States Attorneys Allen Bode and James Knapp are in charge of the prosecution.

 

The Defendant:

 

Name: MICHAEL TROYAN

Age: 38

Residence: Riverhead, New York

BROOKLYN, N.Y. – James Bayfield, a self-described mortgage specialist, was convicted late yesterday by a federal jury in Brooklyn on all four counts charging bank fraud and conspiracy to commit wire fraud and bank fraud for his role in defrauding mortgage lending institutions and large financial institutions, including Amtrust Bank (Amtrust), Bank of America N.A. (BOA) and J.P. Morgan Chase & Co. (Chase), in a multi-million-dollar mortgage fraud scheme. The jury’s verdict followed a two-week trial before United States District Judge Eric N. Vitaliano. Bayfield is the sixth and final defendant convicted in this case.

The guilty verdict was announced by Robert L. Capers, United States Attorney for the Eastern District of New York. Mr. Capers thanked the Federal Bureau of Investigation (FBI); the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG); the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG); the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG); and the New York State Department of Financial Services (DFS) for their hard work and dedication over the course of this multi-year investigation and prosecution.

The evidence at trial established that Bayfield, together with others, caused mortgage loan applications with false information to be submitted to lending institutions in connection with the purchase of residential properties located within the Eastern District of New York. These applications contained fraudulently inflated purchase prices, as well as false information about the assets and income of the purchasers of the properties, many of whom were being compensated as part of the scheme to act as straw purchasers. The defendant and his co-conspirators also provided false down payment checks to make it appear as if the straw purchasers and the other borrowers had made down payments in connection with the purchase of the properties, which was a condition of the lending institutions for issuing the mortgage loans.

To carry out their scheme, the defendant conducted simultaneous purchases and sales of the properties, sometimes called “flips,” in an effort to conceal their criminal involvement and to inflate the value of the properties. For example, a conspirator would purchase a property from a homeowner. That same day, the conspirator would sell the property to a straw purchaser at an inflated value. The defendant and his conspirators, through the use of backdated and falsified documents, concealed from the lending institutions the fact that the purchase and sale had occurred on the same day and made it appear as if the transaction between the homeowner and the conspirator had occurred over 60 days prior to the sale from the conspirator to the straw purchaser.

 

As a result of the false applications and appraisals, the lending institutions were fraudulently induced to issue millions of dollars of mortgage loans secured by properties that had inflated appraisal values to individuals who had insufficient income and assets to qualify for the mortgage loan. In many instances, the straw purchasers and the other borrowers failed to make required mortgage payments to the lending institutions, which caused the mortgage loans to be placed into default status.

When sentenced by United States District Judge Eric N. Vitaliano, Bayfield faces a sentence of up to 20 years in prison.

The government’s case was prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys David Pitluck, Mark Bini and Michael Keilty are in charge of the prosecution.

* * *

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

 

The Defendant:

 

JAMES BAYFIELD

Age: 44

Queens, New York

 

E.D.N.Y. Docket No. 14-CR-356 (S-1) (ENV)

Earlier today in federal court in Central Islip, New York, John McCormick, a former Planner/Estimator for the Department of Public Works of the United States Merchant Marine Academy, located in Kings Point, New York, pleaded guilty to Receiving a Bribe as a Public Official in connection with his participation in a scheme to defraud the United States by steering maintenance and repair contracts to favored contractors. Today’s plea proceeding took place before United States Magistrate Judge Anne Y. Shields.

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Douglas Shoemaker, Regional Special Agent in Charge, United States Department of Transportation – Office of the Inspector General (DOT-OIG), and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS).

 

According to previous court filings, between 2000 and 2014 while McCormick was employed in the Department of Public Works for the United States Merchant Marine Academy, he solicited and submitted fake bids on contracts he supervised in order to steer the awarding of maintenance and repair contracts to favored contractors who paid him bribes.

 

In October 2014, federal agents surveilled and recorded McCormick accepting a bribe from a contractor on the grounds of the United States Merchant Marine Academy. McCormick was arrested shortly thereafter. This plea is the result of a continuing investigation in which the government has previously filed charges against other Academy employees and a number of contractors.

 

“The receipt of bribes on government contracts threatens the quality of the work being performed and the integrity of the contracting process. Such brazen conduct will never be tolerated and the defendant will now be held accountable for his crimes,” stated United States Attorney Capers.

 

“The guilty plea entered into today by John McCormick for Receiving a Bribe as a Public Official, demonstrates that those entrusted with the stewardship of taxpayer dollars will be held responsible for maintaining the highest level of integrity,” said Regional Special Agent in Charge, DOT-OIG, Shoemaker. “Our agents will continue to work with the Secretary of Transportation, and other federal, state, and local law enforcement and prosecutorial colleagues to expose and shut down fraud schemes that adversely affect public trust and DOT-assisted transportation programs.”

 

“Government employees are hired to serve the best interests of the public, not to illegally enrich themselves. Today’s plea by Mr. McCormick underscores our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who violate the public trust,” stated Acting Special Agent in Charge, Enstrom, IRS-Criminal Investigation, New York Field Office.

At sentencing, the defendant faces a maximum of 15 years’ imprisonment. The defendant has also agreed to forfeit $60,000 illegally received by him as part of the scheme. Sentencing is scheduled for May 19, 2017, before United State District Court Judge Arthur D. Spatt, at which time the Court determines restitution.

The government's case is being prosecuted by Assistant United States Attorney Burton T. Ryan, Jr.

The Defendant:

JOHN C. McCORMICK

Age: 60

Atlantic Beach, New York

 

E.D.N.Y. Docket No. 15-CR-490

 

 

 

Akhror Saidakhmetov, 21, a citizen of Kazakhstan and a resident of Brooklyn, New York, pleaded guilty to conspiring to provide material support to the Islamic State in Iraq and the Levant (ISIL), a designated foreign terrorist organization.

The guilty plea was announced by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director-in-Charge William F. Sweeney, Jr. of the FBI’s New York Field Office, Special Agent-in-Charge Angel M. Melendez of Homeland Security Investigations (HSI) New York Field Office and Commissioner James P. O’Neill of the New York City Police Department. The plea took place before U.S. District Judge William F. Kuntz, II.

“Akhror Saidakhmetov admitted that he conspired to provide material support to ISIL and that he was prepared to commit violence overseas or here in the United States,” said Acting Assistant Attorney General McCord. “The National Security Division’s highest priority is counterterrorism. This case reflects our commitment to disrupting and holding accountable those who wish to wage violence on behalf of ISIL, either at home or abroad.”

“The defendant was committed to traveling to Syria to join ISIL or to conducting a domestic terror attack if unable to travel to Syria,” said U.S. Attorney Capers. “Thanks to the efforts of FBI’s Joint Terrorism Task Force in New York, we have prevented two local residents – Saidakhmetov and his codefendant Abdurasul Juraboev – from becoming foreign fighters in Syria or attacking victims here in the United States.”

“As we presented in our case, Akhror Saidakhmetov clearly expressed the desire to commit violence, either domestically or abroad, on behalf of a terrorist organization. His failure to carry out this desire is a testament to the tireless efforts of FBI New York’s Joint Terrorism Task Force. Today’s guilty plea is further testament to the dedicated work on this case by agents and officers who encompass that task force,” said Assistant Director-in-Charge Sweeney.

“Saidakhmetov made threats towards American law enforcement and attempted to join ISIL in its caustic jihad. Terrorism, and its threat to the homeland, is why HSI continues to be a leading contributor to the Joint Terrorism Task Force here in New York and across the country,” said Special-Agent-in-Charge Melendez. “We cannot allow extremists to terrorize our neighborhoods or make threats towards our men and women in blue.”

“This defendant pledged allegiance to ISIL, which has called on its followers to attack the United States and specifically New York City. The defendant also attempted to travel to Syria,” said Commissioner O’Neill. “This guilty plea is another example of the collaborative work of the members of the FBI-NYPD Joint Terrorism Task Force and the prosecutors of the U.S. Attorney for the Eastern District of New York.”  

According to previous court filings, Saidakhmetov became keenly interested in traveling to ISIL-controlled territories in order to wage violent jihad. In August 2014, he made the following online posting referencing a video containing footage of multiple individuals pledging allegiance to ISIL and showing mass executions by ISIL of Iraqi forces captured during ISIL’s takeover of Mosul, Iraq: “Allohu Akbar I was very happy after reading this, my eyes joyful so much victory.”

During the fall and winter of 2014-2015, Saidakhmetov and codefendant Abdurasul Juraboev made plans to travel to Syria to fight on behalf of ISIL. In one recorded conversation, Saidakhmetov remarked that if he was unable to travel to Syria, he would purchase a machine gun and shoot police officers in the U.S. The defendants’ efforts to travel culminated in Saidakhmetov’s arrest on Feb, 25, 2015 at John F. Kennedy International Airport in Queens, New York, while attempting to board a flight for Turkey. Juraboev was also arrested on the same day. At the time of Juraboev’s arrest, he had already purchased a ticket for a flight to Turkey. Juraboev pleaded guilty in August 2016 to conspiring to provide material support to a designated foreign terrorist organization, and is awaiting sentencing.

At sentencing, Saidakhmetov faces up to 15 years in prison.

The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

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

Earlier today, Akhror Saidakhmetov, a citizen of Kazakhstan and a resident of Brooklyn, New York, pleaded guilty to conspiring to provide material support to a designated foreign terrorist organization, the Islamic State in Iraq and the Levant (ISIL). Today’s plea took place before United States District Judge William F. Kuntz, II. At sentencing, Saidakhmetov faces up to 15 years in prison and presumptive removal to his country of origin, Kazakhstan.

The guilty plea was announced by U.S. Attorney Robert L. Capers of the Eastern District of New York, Acting Assistant Attorney General for National Security Mary B. McCord, of the U.S. Department of Justice, Assistant Director in Charge William F. Sweeney, Jr. of the New York Field Office of the Federal Bureau of Investigation (FBI), Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) and New York and Commissioner James P. O’Neill of the New York City Police Department.

According to previous court filings, Saidakhmetov became keenly interested in traveling to ISIL-controlled territories in order to wage violent jihad. In August 2014, he made the following online posting referencing a video containing footage of multiple individuals pledging allegiance to ISIL and showing mass executions by ISIL of Iraqi forces captured during ISIL’s takeover of Mosul, Iraq: “Allohu Akbar I was very happy after reading this, my eyes joyful so much victory.” During the fall and winter of 2014-2015, Saidakhmetov and codefendant Abdurasul Juraboev made plans to travel to Syria to fight on behalf of ISIL. The defendants’ efforts to travel culminated in Saidakhmetov’s arrest on February 25, 2015 at John F. Kennedy International Airport in Queens while attempting to board a flight for Turkey. Juraboev was also arrested on the same day; at the time of his arrest, he had already purchased a ticket for a flight to Turkey. Juraboev pled guilty in August 2015 to conspiring to provide material support to a designated foreign terrorist organization and is awaiting sentencing.

“The defendant was committed to traveling to Syria to join ISIL or to conducting a domestic terror attack if unable to travel to Syria,” said U.S. Attorney Capers. “Thanks to the efforts of FBI’s Joint Terrorism Task Force in New York, we have prevented two local residents – Saidakhmetov and his codefendant Abdurasul Juraboev – from becoming foreign fighters in Syria or attacking victims here in the United States.”

“Akhror Saidakhmetov admitted that he conspired to provide material support to ISIL and that he was prepared to commit violence overseas or here in the United States,” said Acting Assistant Attorney General McCord. “The National Security Division’s highest priority is counterterrorism. This case reflects our commitment to disrupting and holding accountable those who wish to wage violence on behalf of ISIL, either at home or abroad.”

“As we presented in our case, Akhror Saidakhmetov clearly expressed the desire to commit violence, either domestically or abroad, on behalf of a terrorist organization. His failure to carry out this desire is a testament to the tireless efforts of FBI New York’s Joint Terrorism Task Force (JTTF). I would like to thank the men and women on the JTTF who work together every day to keep the region safe,” said Assistant Director-in-Charge Sweeney.

“Saidakhmetov attempted to join ISIL in its violent jihad. Terrorism, and its threat to the homeland, is why HSI continues to be a leading contributor to the Joint Terrorism Task Force here in New York and across the country,” said Special-Agent-in-Charge Melendez, of HSI New York.

“This defendant pledged allegiance to ISIL, which has called on its followers to attack the United States and specifically New York City. The defendant also attempted to travel to Syria,” said NYPD Police Commissioner O’Neill. “This guilty plea is another example of the collaborative work of the members of the FBI-NYPD Joint Terrorism Task Force and the prosecutors of the U.S. Attorney for the Eastern District of New York.”

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

The Defendant:
 

AKHROR SAIDAKHMETOV

Age: 21
 

E.D.N.Y. Docket No. 15 CR 95 (WFK) # # #

Earlier today in federal court in Brooklyn, former New York State Senator John Sampson was sentenced to five years of incarceration following his conviction at trial of obstruction of justice in connection with his efforts to interfere with a federal criminal case against a close associate who had given Sampson an undisclosed $188,500 loan that Sampson never repaid. Sampson was also convicted of two counts of making false statements to agents of the Federal Bureau Investigation. As part of the sentence, the court also imposed a fine of $75,000. Today’s proceeding was held before United States Chief District Judge Dora L. Irizarry.

 

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, FBI, New York Field Office.

 

“John Sampson abused his position as a member of the State Senate and as a member of the bar,” said United States Attorney Capers. “He repeatedly broke the law and then compounded those offenses by obstructing a federal criminal investigation. By his actions, Sampson showed that he was not fit to hold office as a state legislator or practice law. He has now been held to account for his criminal conduct.” Mr. Capers commended the FBI for its outstanding work and expressed his grateful appreciation to the Federal Deposit Insurance Corporation, Office of the Inspector General; the Public Integrity Section of the Department of Justice; and the Office of the Inspector General of the Department of Justice for their assistance in this case.

“Corrupt activity on behalf of our elected officials leaves the public feeling betrayed. Those responsible for upholding the law shouldn’t be the ones breaking it. Although this chapter ends today, the FBI will continue the very important work of investigating public corruption in all its many forms,” said FBI Assistant Director-in-Charge Sweeney.

From 1997 until his conviction by a jury on July 24, 2015, Sampson served in the New York State Senate representing the 19th Senate District in southeastern Brooklyn. From June 2009 to December 2012, Sampson was the leader of the Democratic Conference of the Senate, and from June 2009 to December 2010 he was effectively the leader of the Senate. From January 2011 to December 2012, he was the Senate Minority Leader. Sampson has also served as the chairman of the Senate Ethics Committee and the Senate Judiciary Committee.

 

Obstruction of Justice

 

As established at trial, Sampson obstructed justice by using a personal friend who was a supervisory paralegal at the U.S. Attorney’s Office in an attempt to obtain confidential law enforcement information. Specifically, Sampson requested the identity of cooperating witnesses and their statements to the government to improperly help a Queens businessman, Edul Ahmad, fight a mortgage fraud case brought by the Office against Ahmad. Sampson’s motive was to prevent the possibility of Ahmad cooperating with the government and disclosing that Sampson borrowed $188,500 from Ahmad to replenish escrow accounts from which Sampson, an attorney, had embezzled hundreds of thousands of dollars to fund his unsuccessful 2005 campaign for Kings County District Attorney. Sampson never repaid the loan to Ahmad, failed to report it on his Senate financial disclosure forms as required by law, and used his Senate office in various ways to help Ahmad. At the time of his indictment, Sampson had failed to repay over $160,000 of the embezzled funds. At present, over $80,000 of the embezzled funds remains unpaid.

 

Sampson also endeavored to obstruct the government’s case against Ahmad by arranging for compromised counsel to represent Ahmad’s co-conspirators and by hiring a retired FBI agent to use his connections with law enforcement to obtain confidential law enforcement information.

 

False Statements

 

In February 2012, when Ahmad showed Sampson a document related to the $188,500 loan and told Sampson that the U.S. Attorney’s Office had subpoenaed it, Sampson instructed Ahmad not to give the government the document and to lie to investigators about the document and the loan. He then took the document from Ahmad and kept it. As Chief Judge Irizarry found at today’s sentencing hearing, this conduct constituted witness tampering and evidence tampering. In July 2012, when FBI agents interviewed Sampson and showed him a copy of the document, Sampson falsely claimed he did not recall it.

 

During the same July 2012 interview, Sampson falsely stated to the FBI that he had never asked a Senate staff member to intervene with the New York State Department of Taxation and Finance in an effort to resolve a sales tax liability of a liquor store he owned, in violation of the New York Public Officers law.

 

The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Paul Tuchmann, Alexander A. Solomon, and Marisa Megur Seifan are in charge of the prosecution.

The Defendant:

 

JOHN L. SAMPSON.

Age: 51

Brooklyn, New York

 

E.D.N.Y. Docket No. 13-CR-269 (DLI)

Robert L. Capers, United States Attorney for the Eastern District of New York, today announced the closing of its case against New York City over conditions of patient care and treatment in NYC Health + Hospitals/Kings County, also known as Kings County Hospital Center’s Behavioral Health Service (“BHS”). In a letter dated January 10, 2017 to the Honorable Kiyo A. Matsumoto, Mr. Capers requested that Judge Matsumoto close the case because the BHS is in substantial compliance with the requirements of a January 2010 Consent Judgment between the United States and the City of New York. The Court granted that motion today.

 

The Consent Judgment was entered after the United States conducted an investigation of the BHS in 2008 and 2009 and concluded that it was failing to properly assess, diagnose, supervise, monitor, and treat its patients. The investigation also revealed violations of patients’ rights, including the improper use of chemical and physical restraints. Hospital Police assaulted patients and handcuffed them to beds and radiators. In a tragic incident in 2008, a patient, Esmin Green, was left unattended and died on the floor as clinical staff and hospital police ignored her. BHS also discharged patients to the community without adequate plans for their care. As a result, large numbers of patients returned to the facility. In addition, the facility was dilapidated and filthy.

 

In January 2010, the United States and the City entered into the Consent Judgment for the purpose of bringing about a complete overhaul of the BHS, including its initial triage procedures, its assessment and diagnostic procedures, and its treatment planning, as well as its medication management, nursing, discharge planning, and fire and life safety planning. Significantly, the Consent Judgment also included provisions for the reform of KCHC’s Hospital Police force.

 

In the seven years since the parties signed the Consent Judgment, the BHS has become a model acute care psychiatric facility. The BHS now addresses the critical needs of the vulnerable, mentally ill population that it serves. Its treatment plans and mental health care are individualized, person-centered, and recovery oriented. It has also developed clinical approaches to identify and address potential patient aggression and self-harm. As a result, suicide attempts and self-harm have dropped significantly. Nurses are more attentive and play a significant and assistive role in helping patients get better. Medication is used only for the purpose of treating patients and not for the purpose of controlling their behavior. In addition, the rate of recidivism has dropped sharply as a result of robust discharge planning. And, the BHS is now housed in a new building, which is well-lit, sanitary, and safe.

 

“This Office takes great pride in the transformation of the Kings County Hospital Center’s Behavioral Health Service and the dramatic improvements in patient care that have resulted from our collaboration with the City,” said U.S. Attorney Capers. “The remarkable changes at the BHS should ensure that tragedies like the death of Esmin Green never occur again.”

 

The case was handled by Michael J. Goldberger, Chief of Civil Rights in the Office’s Civil Division.

The Justice Department, along with federal partners, announced today a $7.2 billion settlement with Deutsche Bank resolving federal civil claims that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007.  This $7.2 billion agreement represents the single largest RMBS resolution for the conduct of a single entity.  The settlement requires Deutsche Bank to pay a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  Under the settlement, Deutsche Bank will also provide $4.1 billion in relief to underwater homeowners, distressed borrowers and affected communities.

“This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public,” said Attorney General Loretta E. Lynch.  “Deutsche Bank did not merely mislead investors: it contributed directly to an international financial crisis.  The cost of this misconduct is significant: Deutsche Bank will pay a $3.1 billion civil penalty, and provide an additional $4.1 billion in relief to homeowners, borrowers, and communities harmed by its practices.  Our settlement today makes clear that institutions like Deutsche Bank cannot evade responsibility for the great cost exacted by their conduct.”

“This $7.2 billion resolution – the largest of its kind – recognizes the immense breadth of Deutsche Bank’s unlawful scheme by demanding a painful penalty from the bank, along with billions of dollars of relief to the communities and homeowners that continue to struggle because of Wall Street’s greed,” said Principal Deputy Associate Attorney General Bill Baer.  “The Department will remain relentless in holding financial institutions accountable for the harm their misconduct inflicted on investors, our economy and American consumers.” 

“In the Statement of Facts accompanying this settlement, Deutsche Bank admits making false representations and omitting material information from disclosures to investors about the loans included in RMBS securities sold by the Bank.  This misconduct, combined with that of the other banks we have already settled with, hurt our economy and threatened the banking system,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “To make matters worse, the Bank’s conduct encouraged shoddy mortgage underwriting and improvident lending that caused borrowers to lose their homes because they couldn’t pay their loans.  Today’s settlement shows once again that the Department will aggressively pursue misconduct that hurts the American public.”

“Investors who bought RMBS from Deutsche Bank, and who suffered catastrophic losses as a result, included individuals and institutions that form the backbone of our community,” said U.S. Attorney Robert L. Capers for the Eastern District of New York.  “Deutsche Bank repeatedly assured investors that its RMBS were safe investments.  Instead of ensuring that its representations to investors were accurate and transparent, so that investors could make properly informed investment decisions, Deutsche Bank repeatedly misled investors and withheld critical information about the loans it securitized.  Time and again, the bank put investors at risk in pursuit of profit.  Deutsche Bank has now been held accountable.”  

“Deutsche Bank knowingly securitized billions of dollars of defective mortgages and subsequently made false representations to investors about the quality of the underlying loans,” said Special Agent In Charge Steven Perez of the Federal Housing Finance Agency, Office of the Inspector General. “Its actions resulted in enormous losses to investors to whom Deutsche Bank sold these defective Residential Mortgage-Backed Securities. Today’s announcement reaffirms our commitment to working with our law enforcement partners to hold accountable those who deceived investors in pursuit of profits, and contributed to our nation’s financial crisis.  We are proud to have worked with the U.S. Department of Justice and the U.S Attorney’s Office for the Eastern District of New York.”

As part of the settlement, Deutsche Bank agreed to a detailed Statement of Facts.  That statement describes how Deutsche Bank knowingly made false and misleading representations to investors about the characteristics of the mortgage loans it securitized in RMBS worth billions of dollars issued by the bank between 2006 and 2007.  For example:

• Deutsche Bank represented to investors that loans securitized in its RMBS were originated generally in accordance with mortgage loan originators’ underwriting guidelines.  But as Deutsche Bank now acknowledges, the bank’s own reviews confirmed that “aggressive” revisions to the loan originators’ underwriting guidelines allowed for loans to be underwritten to anyone with “half a pulse.”  More generally, Deutsche Bank knew, based on the results of due diligence, that for some securitized loan pools, more than 50 percent of the loans subjected to due diligence did not meet loan originators’ guidelines.
   
• Deutsche Bank also knowingly misrepresented that loans had been reviewed to ensure the ability of borrowers to repay their loans.  As Deutsche Bank acknowledges, the bank’s own employees recognized that Deutsche Bank would “tolerate misrepresentation” with “misdirected lending practices” as to borrower ability to pay, accepting even blocked-out borrower pay stubs that concealed borrowers’ actual incomes.  As a Deutsche Bank employee stated, “What goes around will eventually come around; when performance (default) begins affecting profits and/or the investors who purchase the securities, only then will Wall St. take notice.  For now, the buying continues.”
   
• Deutsche Bank concealed from investors that significant numbers of borrowers had second liens on their properties. In one instance, a supervisory Deutsche Bank trader specifically instructed his team that if investors asked about second liens, “‘[t]ell them verbally . . . [b]ut don’t put in the prospectus.’”  Deutsche Bank knew that these second liens increased the likelihood that a borrower would default on his or her loan.
   
• Deutsche Bank purchased and securitized loans with substantial defects to provide “flexibility” to the mortgage originators on whom Deutsche Bank’s RMBS program depended for a continued supply of loans.  Indeed, after the president of a large mortgage originator told Deutsche Bank he was “very upset with the rejection percentage,” Deutsche Bank’s diligence team was instructed, on three separate occasions, to clear loans it previously determined should be rejected.  
   
• While Deutsche Bank conducted due diligence on samples of loans it securitized in RMBS, Deutsche Bank knew that the size and composition of these loan samples frequently failed to capture loans that did not meet its representations to investors.  In fact, Deutsche Bank knew “the more you sample, the more you reject.”
   
• Deutsche Bank knowingly and intentionally securitized loans originated based on unsupported and fraudulent appraisals.  Deutsche Bank knew that mortgage originators were “‘giving’ appraisers the value they want[ed]” and expecting the resulting appraisals to meet the originators’ desired value, regardless of the actual value of the property.  Deutsche Bank concealed its knowledge of pervasive and consistent appraisal fraud, instead representing to investors home valuation metrics based on appraisals it knew to be fraudulent.  Deutsche Bank misrepresented to investors the value of the properties securing the loans securitized in its RMBS and concealed from investors that it knew that the value of the properties securing the loans was far below the value reflected by the originator’s appraisal. 
   
• By May 2007, Deutsche Bank knew that there was an increasing trend of overvalued properties being sold to Deutsche Bank for securitization.  As one employee noted, “We are finding ourselves going back quite often and clearing large numbers of loans [with inflated appraisals] to bring down the deletion percentages.”  Deutsche Bank nonetheless purchased and securitized such loans because it received favorable prices on the fraudulent loans.  Ultimately, Deutsche Bank enriched itself by paying reduced prices for risky loans while representing to investors valuation metrics based on appraisals the Bank knew to be inflated.
   
• Deutsche Bank represented to investors that disclosed borrower FICO scores were accurate as of the “cut-off date” of the RMBS issuance.  However, Deutsche Bank knowingly represented borrowers’ FICO scores as of the time of the origination of their loans despite the bank’s knowledge that these scores had often declined materially by the cut-off date.

Assistant U.S. Attorneys Edward K. Newman, Matthew R. Belz, Jeremy Turk, and Ryan M. Wilson of the U.S. Attorney’s Office for the Eastern District of New York investigated Deutsche Bank’s conduct in connection with the issuance and sale of RMBS between 2006 and 2007. The investigation was conducted with the Office of the Inspector General for the Federal Housing Finance Agency.

The $3.1 billion civil monetary penalty resolves claims under FIRREA, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud.  It is one of the largest FIRREA penalties ever paid.  The settlement does not release any individuals from potential criminal or civil liability.  As part of the settlement, Deutsche Bank has agreed to fully cooperate with investigations related to the conduct covered by the agreement.

Deutsche Bank will also provide $4.1 billion in the form of relief to aid consumers harmed by its unlawful conduct.  Specifically, Deutsche Bank will provide loan modifications, including loan forgiveness and forbearance, to distressed and underwater homeowners throughout the country.  It will also provide financing for affordable rental and for-sale housing throughout the country. Deutsche Bank’s provision of consumer relief will be overseen by an independent monitor who will have authority to approve the selection of any third party used by Deutsche Bank to provide consumer relief.

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

About the RMBS Working Group:

The RMBS Working Group, part of the Financial Fraud Enforcement Task Force, was established by the Attorney General in late January 2012.  The Working Group has been dedicated to initiating, organizing, and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market that helped precipitate the 2008 Financial Crisis.  The Working Group’s efforts to date have resulted in settlements providing for tens of billions of dollars in civil penalties and consumer relief from banks and other entities that are alleged to have committed fraud in connection with the issuance of RMBS.

# # #

WASHINGTON --The Justice Department, along with federal partners, announced today a $7.2 billion settlement with Deutsche Bank resolving federal civil claims that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007. This $7.2 billion agreement represents the single largest RMBS resolution for the conduct of a single entity. The settlement requires Deutsche Bank to pay a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). Under the settlement, Deutsche Bank will also provide $4.1 billion in relief to underwater homeowners, distressed borrowers and affected communities.

 

“This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public,” said Attorney General Loretta E. Lynch. “Deutsche Bank did not merely mislead investors: it contributed directly to an international financial crisis. The cost of this misconduct is significant: Deutsche Bank will pay a $3.1 billion civil penalty, and provide an additional $4.1 billion in relief to homeowners, borrowers, and communities harmed by its practices. Our settlement today makes clear that institutions like Deutsche Bank cannot evade responsibility for the great cost exacted by their conduct.”

 

“This $7.2 billion resolution – the largest of its kind – recognizes the immense breadth of Deutsche Bank’s unlawful scheme by demanding a painful penalty from the bank, along with billions of dollars of relief to the communities and homeowners that continue to struggle because of Wall Street’s greed,” said Principal Deputy Associate Attorney General Bill Baer. “The Department will remain relentless in holding financial institutions accountable for the harm their misconduct inflicted on investors, our economy and American consumers.”

 

“In the Statement of Facts accompanying this settlement, Deutsche Bank admits making false representations and omitting material information from disclosures to investors about the loans included in RMBS securities sold by the Bank. This misconduct, combined with that of the other banks we have already settled with, hurt our economy and threatened the banking system,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “To make matters worse, the Bank’s conduct encouraged shoddy mortgage underwriting and improvident lending that caused borrowers to lose their homes because they couldn’t pay their loans. Today’s settlement shows once again that the Department will aggressively pursue misconduct that hurts the American public.”

 

“Investors who bought RMBS from Deutsche Bank, and who suffered catastrophic losses as a result, included individuals and institutions that form the backbone of our community,” said U.S. Attorney Robert L. Capers for the Eastern District of New York. “Deutsche Bank repeatedly assured investors that its RMBS were safe investments. Instead of ensuring that its representations to investors were accurate and transparent, so that investors could make properly informed investment decisions, Deutsche Bank repeatedly misled investors and withheld critical information about the loans it securitized. Time and again, the bank put investors at risk in pursuit of profit. Deutsche Bank has now been held accountable.”

 

“Deutsche Bank knowingly securitized billions of dollars of defective mortgages and subsequently made false representations to investors about the quality of the underlying loans,” said Special Agent In Charge Steven Perez of the Federal Housing Finance Agency, Office of the Inspector General. “Its actions resulted in enormous losses to investors to whom Deutsche Bank sold these defective Residential Mortgage-Backed Securities. Today’s announcement reaffirms our commitment to working with our law enforcement partners to hold accountable those who deceived investors in pursuit of profits, and contributed to our nation’s financial crisis. We are proud to have worked with the U.S. Department of Justice and the U.S Attorney’s Office for the Eastern District of New York.”

 

As part of the settlement, Deutsche Bank agreed to a detailed Statement of Facts. That statement describes how Deutsche Bank knowingly made false and misleading representations to investors about the characteristics of the mortgage loans it securitized in RMBS worth billions of dollars issued by the bank between 2006 and 2007. For example:

• Deutsche Bank represented to investors that loans securitized in its RMBS were originated generally in accordance with mortgage loan originators’ underwriting guidelines. But as Deutsche Bank now acknowledges, the bank’s own reviews confirmed that “aggressive” revisions to the loan originators’ underwriting guidelines allowed for loans to be underwritten to anyone with “half a pulse.” More generally, Deutsche Bank knew, based on the results of due diligence, that for some securitized loan pools, more than 50 percent of the loans subjected to due diligence did not meet loan originators’ guidelines.

• Deutsche Bank also knowingly misrepresented that loans had been reviewed to ensure the ability of borrowers to repay their loans. As Deutsche Bank acknowledges, the bank’s own employees recognized that Deutsche Bank would “tolerate misrepresentation” with “misdirected lending practices” as to borrower ability to pay, accepting even blocked-out borrower pay stubs that concealed borrowers’ actual incomes. As a Deutsche Bank employee stated, “What goes around will eventually come around; when performance (default) begins affecting profits and/or the investors who purchase the securities, only then will Wall St. take notice. For now, the buying continues.”

   

• Deutsche Bank concealed from investors that significant numbers of borrowers had second liens on their properties. In one instance, a supervisory Deutsche Bank trader specifically instructed his team that if investors asked about second liens, “‘[t]ell them verbally . . . [b]ut don’t put in the prospectus.’” Deutsche Bank knew that these second liens increased the likelihood that a borrower would default on his or her loan.

• Deutsche Bank purchased and securitized loans with substantial defects to provide “flexibility” to the mortgage originators on whom Deutsche Bank’s RMBS program depended for a continued supply of loans. Indeed, after the president of a large mortgage originator told Deutsche Bank he was “very upset with the rejection percentage,” Deutsche Bank’s diligence team was instructed, on three separate occasions, to clear loans it previously determined should be rejected.

• While Deutsche Bank conducted due diligence on samples of loans it securitized in RMBS, Deutsche Bank knew that the size and composition of these loan samples frequently failed to capture loans that did not meet its representations to investors. In fact, Deutsche Bank knew “the more you sample, the more you reject.”

• Deutsche Bank knowingly and intentionally securitized loans originated based on unsupported and fraudulent appraisals. Deutsche Bank knew that mortgage originators were “‘giving’ appraisers the value they want[ed]” and expecting the resulting appraisals to meet the originators’ desired value, regardless of the actual value of the property. Deutsche Bank concealed its knowledge of pervasive and consistent appraisal fraud, instead representing to investors home valuation metrics based on appraisals it knew to be fraudulent. Deutsche Bank misrepresented to investors the value of the properties securing the loans securitized in its RMBS and concealed from investors that it knew that the value of the properties securing the loans was far below the value reflected by the originator’s appraisal.

• By May 2007, Deutsche Bank knew that there was an increasing trend of overvalued properties being sold to Deutsche Bank for securitization. As one employee noted, “We are finding ourselves going back quite often and clearing large numbers of loans [with inflated appraisals] to bring down the deletion percentages.” Deutsche Bank nonetheless purchased and securitized such loans because it received favorable prices on the fraudulent loans. Ultimately, Deutsche Bank enriched itself by paying reduced prices for risky loans while representing to investors valuation metrics based on appraisals the Bank knew to be inflated.

• Deutsche Bank represented to investors that disclosed borrower FICO scores were accurate as of the “cut-off date” of the RMBS issuance. However, Deutsche Bank knowingly represented borrowers’ FICO scores as of the time of the origination of their loans despite the bank’s knowledge that these scores had often declined materially by the cut-off date.

Assistant U.S. Attorneys Edward K. Newman, Matthew R. Belz, Jeremy Turk, and Ryan M. Wilson of the U.S. Attorney’s Office for the Eastern District of New York investigated Deutsche Bank’s conduct in connection with the issuance and sale of RMBS between 2006 and 2007. The investigation was conducted with the Office of the Inspector General for the Federal Housing Finance Agency.

 

The $3.1 billion civil monetary penalty resolves claims under FIRREA, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. It is one of the largest FIRREA penalties ever paid. The settlement does not release any individuals from potential criminal or civil liability. As part of the settlement, Deutsche Bank has agreed to fully cooperate with investigations related to the conduct covered by the agreement.

 

Deutsche Bank will also provide $4.1 billion in the form of relief to aid consumers harmed by its unlawful conduct. Specifically, Deutsche Bank will provide loan modifications, including loan forgiveness and forbearance, to distressed and underwater homeowners throughout the country. It will also provide financing for affordable rental and for-sale housing throughout the country. Deutsche Bank’s provision of consumer relief will be overseen by an independent monitor who will have authority to approve the selection of any third party used by Deutsche Bank to provide consumer relief. To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html

 

About the RMBS Working Group:

 

The RMBS Working Group, part of the Financial Fraud Enforcement Task Force, was established by the Attorney General in late January 2012. The Working Group has been dedicated to initiating, organizing, and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market that helped precipitate the 2008 Financial Crisis. The Working Group’s efforts to date have resulted in settlements providing for tens of billions of dollars in civil penalties and consumer relief from banks and other entities that are alleged to have committed fraud in connection with the issuance of RMBS.

 

Download Settlement Agreement

• Download Annex 1 -- Statement of Facts
• Download Annex 1A -- Statement of Facts Appendices A through D
• Download Annex 2 -- Consumer Relief
• Download Annex 3 -- RMBS Covered by the Settlement

 

Earlier today at the federal courthouse in Brooklyn, New York, Troy Barrow, a resident of Brooklyn, was sentenced to 42 months in prison and three years of supervised release, following his July 11, 2016 guilty plea to two counts of an indictment charging him with firearms trafficking, in violation of 18 U.S.C. § 922(a), and being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g).

The sentencing was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Ashan M. Benedict, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) New York Field Division, and James P. O’Neill, Commissioner, New York City Police Department.

According to public court filings, Barrow was arrested after an undercover investigation by the ATF’s Joint Firearms Task Force between September 2014 and December 2015. During the investigation, Barrow sold fourteen firearms and ammunition to undercover law enforcement officers in twelve different sales. The firearms included a mix of semiautomatic pistols and revolvers. The defendant also offered to procure additional weapons, including an AK-47 assault rifle and a machine pistol with a high capacity magazine. During one conversation recorded by law enforcement using a hidden video camera, the defendant expressed an interest in getting a revolver for himself because it was less likely to leave behind shell casings that could be used to investigate a shooting. And during another recorded conversation, the defendant explained that, if arrested, he would not cooperate with the government against others and would instead “do a bid”—go to jail. The defendant then added: “I know what I’m getting myself in.”

“Criminals like the defendant who brazenly and illegally sell guns on our streets pose a great threat to the safety of our local communities,” stated U.S. Attorney Capers. “We will never cease in our efforts to disrupt such dangerous dealings through determined investigation and prosecution.”

Special Agent in Charge Benedict said, “Troy Barrow, acting with a wanton and callous disregard for how they might be used, trafficked firearms acquired outside New York into our communities in New York City. Through the efforts of the Joint Firearms Task Force and the United States Attorney’s Office, Barrow has earned a lengthy sentence in federal prison as a just reward for his actions.”

The sentence was imposed by United States District Judge Jack B. Weinstein.

Assistant United States Attorney David K. Kessler is in charge of the prosecution.

The Defendant:

TROY BARROW
Age: 48

 

E.D.N.Y. Docket No. 16-CR-94 (JBW)

Earlier today, at the federal courthouse in Central Islip, New York, Raphael Osborne, also known as “Gusto,” a Crips street gang leader from Roosevelt, New York, was sentenced to three consecutive life sentences plus 145 years in prison following his conviction after trial in April 2016. Osborne was convicted of racketeering, conspiracy, robbery, attempted murder, witness retaliation, assault with a dangerous weapon, drug conspiracy, and brandishing and discharging firearms during the commission of these offenses. These charges arose out of the defendant’s participation in, and leadership of the Rollin’ 60s set of the Crips that for many years engaged in criminal activity in Roosevelt, New York, an area victimized by a high rate of gang and drug-related violent crime.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York. Mr. Capers extended his grateful appreciation to each of the law enforcement agencies for their assistance, in particular the Gang Investigations Squad of the Nassau County Police Department and the FBI’s Long Island Gang Task Force.

Between 2003 and 2013, members of the gang followed an “on sight” rule established by Osborne that commanded gang members to attack rival Bloods in Roosevelt whenever possible and by whatever means available. In addition, numerous other shootings and murders were committed at Osborne’s direction. During the trial, the government elicited details of 15 shootings and three homicides that were committed by members of the Rollin’ 60s during Osborne’s reign and established that the gang financed its activities through firearms and narcotics trafficking. In one of those shootings, Osborne ordered the murder of a federal informant in October 2012. Beginning in the spring of 2012, law enforcement, with the aid of a Rollin’ 60s gang member informant, began purchasing firearms from the gang. After the informant attempted to purchase a firearm from Osborne, Osborne became suspicious and ordered other gang members to kill him. On October 13, 2012, a gang member lured the informant from his Hempstead home to a location where a fellow gang member was waiting. The informant was shot five times at close range, leaving him paralyzed.

Osborne was also responsible for distributing crack cocaine, heroin, marijuana, and methylone, commonly known as “molly,” and for bringing hundreds of illegal firearms to Long Island, including revolvers, semi-automatic handguns, assault rifles, and submachine guns.

The government’s investigation led to the arrest of 20 members and associates of Osborne’s gang. Of those defendants, 18 have been convicted, with the final two defendants pending trial. Osborne is the eighth defendant to be sentenced since the inception of this case:

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

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

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

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

• on October 13, 2016, Derick Hernandez was sentenced to a term of imprisonment of 20 years that will run consecutively to a four-year state sentence that he is presently serving;

• on October 19, 2016, Kwame Lake was sentenced to a term of imprisonment of five years that will run consecutively to an eight-year state sentence that he is presently serving; and

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

 

The government’s case was prosecuted by Assistant United States Attorneys Nicole Boeckmann, Christopher Caffarone, and Michael Maffei.

The Defendant:

Raphael Osborne (a/k/a Gusto)
Age: 31

E.D.N.Y. Docket No. 14-264 (S-5) (JS)

The Justice Department announced today that it has filed a motion to intervene in Common Cause New York et al. v. Board of Elections in the City of New York et al, a private lawsuit alleging that the New York City Board of Elections failed to comply with Section 8 of the National Voter Registration Act of 1993 (NVRA).  The lawsuit was filed by private plaintiffs on Nov. 3, 2016.

The department alleges that the New York City Board of Elections’ Brooklyn Borough Office violated the NVRA by improperly removing more than 117,000 registered voters from the voter registration rolls prior to the April 2016 primary election.  According to the complaint in intervention, the Board of Elections purged these voters based solely on their failure to vote in past elections, which violates Section 8(b)(2) of the NVRA.    

The department also alleges ongoing concerns with the oversight of voter list maintenance procedures by the New York City Board of Elections, in violation of federal law.  Without intervention, these deficiencies could lead to the same or similar NVRA violations occurring again in the future.  

“Federal law demands careful maintenance of the voter rolls to ensure lists are kept accurate, without unjustifiably and unlawfully purging eligible citizens,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “The department appreciates the continued cooperation of the New York City Board of Elections, including proactive steps taken to start remedying violations that have occurred – but more is necessary to reach full compliance with the law.”

“The right of citizens to vote is a critical part of democratic process,” said U.S. Attorney Robert L. Capers of the Eastern District of New York.  “We will work tirelessly to ensure that, in the future, the New York City Board of Elections fulfills its statutory obligation to maintain the rolls properly, and provide appropriate notice to voters when it does so.”

Section 8 of the NVRA addresses voter registration list maintenance procedures in elections for federal office.  Programs to maintain accurate and current voter registration lists must be uniform, nondiscriminatory and in compliance with the Voting Rights Act of 1965.  Moreover, programs to maintain accurate and current voter registration lists may not remove voters solely by reason of a voter’s failure to vote. 

More information about the NVRA and other federal voting laws is available on the division’s website at www.justice.gov/crt/voting.  Complaints about voter registration practices may be reported to the Civil Rights Division’s Voting Section at 1-800-253-3931.

Brooklyn BOE Complaint in Intervention

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Armando Moronta, a federal correctional officer employed by the United States Bureau of Prisons (BOP) at the Metropolitan Detention Center in Brooklyn, New York (MDC), and Alicia Alonso, the girlfriend of an inmate being held at the MDC, with carrying out a bribery scheme to bring contraband into the MDC for inmates.

The defendants’ initial appearances are scheduled for this afternoon before United States Magistrate Judge Marilyn D. Go at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Robert L. Capers, 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), and William F. Sweeney, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI).

As set forth in the complaint, Alonso provided Moronta with contraband, including cellular telephones, the narcotic Suboxone, and the synthetic narcotic “K2,” together with thousands of dollars in bribe payments. Moronta, using his position as a federal correctional officer, then smuggled the contraband into the MDC on approximately twelve occasions between March 2016 and December 2016 and distributed it to inmates under his guard for their use and further distribution.

“As alleged in the complaint, Moronta abused his position of trust as a federal correctional officer thereby compromising a vital component of our criminal justice system and potentially endangering the safety and well-being of other MDC employees and inmates. Such reckless and illegal acts will not be tolerated. Those who commit, or assist others in committing, these crimes will be aggressively investigated and prosecuted to the full extent of the law,” stated United States Attorney Capers. Mr. Capers expressed his grateful appreciation to the OIG and FBI.

OIG Special Agent in Charge Gardella stated, “Whether you are a federal correctional officer, a police officer, or anyone else in a position of authority and public trust, you should know that we vigorously investigate all allegations of individuals betraying their oath of office, and we will bring you to justice.”

FBI Assistant Director in Charge Sweeney stated, “Smuggling drugs into a federal prison is not only illegal, it’s inherently dangerous and puts peoples’ lives at risk. The fact that a corrections officer is alleged to have done so in exchange for money violates the oath he swore to uphold. His badge does not allow him special privilege, or put him above the law.”

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

The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Kevin Trowel, Nadia Shihata, and Andrew C. Gilman are in charge of the prosecution.

The Defendants:

 

ARMANDO MORONTA

Age: 38

Brooklyn, New York

 

ALICIA ALONSO

Age: 31

Woodbridge, New Jersey

Earlier today, Michael Conway, the President of Choice Office Solutions LLC, was sentenced by United States District Judge William F. Kuntz to 4 years in prison. In February 2016, Conway had pleaded guilty to wire fraud in connection with a scheme where he forged numerous lease agreements to defraud an individual investor and De Lage Landen Financial Solutions Partner (DLLFSP) of more than $4.5 million. As part of the sentence, Conway was also ordered to pay $3,555,493.40 to the individual investor and $1,203,516 to DLLFSP in restitution.

 

The sentence was announced by Robert L. Capers, 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).

According to court filings and facts presented at the sentencing hearing, between March 2014 to August 2015, Conway forged lease agreements with various companies in the business of leasing office equipment, and then used these fraudulent agreements to obtain financing from private investors. As part of the scheme, he induced an individual investor to become partners with him in the leasing business. Conway would then purportedly secure a lease from a company, present the signed lease and invoices to the individual investor, who would provide funds to purchase the office equipment to be leased. In this manner, Conway presented the individual investor with leases from approximately 58 companies, including law firms, universities, hospitals, and hotels, and the individual investor paid Conway approximately $3.5 million to purchase office equipment. In reality, most of the leasing agreements that Conway provided to the individual investor were fraudulent, and Conway pocketed most of the individual investor’s money.

 

One of the fraudulent leasing agreements was purportedly with the New York Mets. Relying on it, the individual investor wire transferred approximately $500,000 to Conway’s bank account to purchase office equipment. Conway then used the same forged lease agreement, and a forged authorization letter from the New York Mets purportedly signed by Jeffrey Wilpon, the team’s Chief Operating Officer, to obtain financing from DLLFSP. Based on these fraudulent documents, DLLFSP wire transferred a total of approximately $313,000 to Conway’s bank account. Through this and other forgeries, Conway defrauded DLLFSP of more than $1 million.

 

* * *

 

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Winston Paes and David Pitluck are in charge of the prosecution.

 

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit ww.StopFraud.gov.

The Defendant:

 

MICHAEL CONWAY

Age: 41

Verona, New Jersey

 

E.D.N.Y. Docket No. 16-CR-052 (WFK)

Justin Kaliebe, 22, of Babylon and Bay Shore, New York, was sentenced to 13 years in prison and 20 years of supervised release with special conditions (including computer monitoring, a prohibition on contact with jihadists, search conditions, mental health treatment and a curfew, among others) following his guilty plea on Feb. 8, 2013. Kaliebe pleaded guilty to both counts of a felony information, which charged him with attempting to provide material support to terrorists, in violation of 18 U.S.C. § 2339A(a), and attempting to provide material support to a designated foreign terrorist organization, al-Qaeda in the Arabian Peninsula, also known as Ansar al-Sharia (collectively, AQAP), in violation of 18 U.S.C. § 2339B(a)(1).

 

The sentencing was announced by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Robert L. Capers for the Eastern District of New York, Assistant Director-in-Charge William F. Sweeney, Jr. of the FBI’s New York Field Office and Commissioner James P. O’Neill of the New York City Police Department (NYPD).

 

"With this sentence, Justin Kaliebe is being held accountable for his attempt to travel overseas to join Al-Qaeda in the Arab Peninsula and engage in violent jihad," said Acting Assistant Attorney General McCord. "One of our highest priorities is to protect our country by identifying, disrupting and holding accountable those who provide or attempt to provide material support to designated foreign terrorist organizations.”

 

“This case is a sobering reminder that the call to violent jihad can reach deep into our local communities. Even when given the opportunity to abandon his plan to join al-Qaeda, this defendant made clear his intentions to commit himself fully to terrorism,” stated U.S. Attorney Capers. “If not for the vigilance and commitment of our dedicated investigators, he might well have succeeded in empowering a dangerous enemy.” Mr. Capers expressed his sincere appreciation to all the members of the FBI’s Joint Terrorism Task Force (JTTF) and the NYPD Intelligence Division for their work on the investigation.

 

“Providing material support to terrorists is a serious crime that should have serious consequences. Today’s sentencing of Justin Kaliebe shows just that. Kaliebe set out to provide material support to Al-Qaeda in the Arabian Peninsula in 2013 by attempting to travel to Yemen, after making plans months in advance. He didn’t get past JFK thanks to the hard work of the FBI’s Joint Terrorism Task Force and the NYPD Intelligence Division,” stated Assistant Director-in-Charge Sweeney.

 

“Kaliebe’s commitment to join al-Qaeda in the Arabian Peninsula was as alarming as it was sinister. And early in 2013, Kaliebe was arrested at John F. Kennedy airport trying to fulfill his dream of joining the jihad in Yemen. Thankfully, Kaliebe was met at the airport by NYPD detectives and FBI agents investigating his support of this terrorist group’s agenda. Thanks, as always, to those on the FBI-NYPD Joint Terrorism Task Force and at the U.S. Attorney’s Office in the Eastern District for their investigation of this case and many others,” stated Commissioner O’Neill.

 

According to the court filings, including sentencing memoranda, and evidence introduced during a sentencing hearing, Kaliebe attempted to travel from the U.S. to Yemen for the purpose of joining AQAP and waging violent jihad. During numerous meetings and recorded conversations and email correspondence with undercover law enforcement officers, Kaliebe explained that he had been searching for an opportunity to travel abroad and fight jihad for two years – long before Kaliebe first approached the undercover officers about his plans to join a terrorist group. Kaliebe repeatedly expressed his desire to travel to Yemen in order to join AQAP and to help carry out its violent extremist agenda.

 

Kaliebe also demonstrated extensive knowledge of terrorist organizations, including AQAP and al-Qaeda, and current and former leaders of those terrorist organizations. For example, Kaliebe referenced, and at times quoted, Anwar al-Awlaki, the now-deceased former member and senior leader of AQAP, as well as Omar Abdel Rahman (the “Blind Sheik”), Ayman al-Zawahiri, the current leader of al-Qaeda, and Usama Bin Laden. Further, Kaliebe demonstrated detailed knowledge of various terrorist attacks that were carried out by AQAP in Yemen, as well as other attacks carried out by al-Qaeda around the world.

 

According to a June 4, 2012, recorded conversation, which was admitted into evidence during the sentencing hearing, Kaliebe observed that “the crime that they would charge people like us with” was conspiracy “to kill, maim and kidnap in foreign countries,” a reference to a federal criminal statute that has previously been used to charge other individuals who departed or attempted to depart the U.S. in order to fight jihad abroad. Later, during that same conversation, Kaliebe stated that, once he arrived in Yemen, he expected to fight the “Yemeni army” and “those who are fighting against the Sharia of Allah . . . whether it’s the U.S. drones or the, their puppets, in the Yemeni army . . . or, who knows, if American agents or whatever, U.S. Special Forces . . . who they got over there.” When asked if he was afraid to die, Kaliebe responded “I wanna . . . . It’s what anyone would want, any believer would want.” During another recorded conversation described in the government’s sentencing memorandum, which took place on July 9, 2012, Kaliebe stated that he had been inspired by several sheiks, including “Sheik Usama,” “who showed how he could bring an entire nation to its knees.”

 

Beginning in approximately July 2012, Kaliebe saved money to finance his travel to Yemen, which he then used to apply for and purchase a U.S. passport, and to purchase an airline ticket to Oman, from where he intended to travel by land to Yemen. During a recorded meeting on July 30, 2012, Kaliebe stated that he was saving money “as a means to go to Yemen to fight jihad.”

 

On Dec. 26, 2012, Kaliebe sent an email in which he swore his loyalty to the leaders of AQAP and al-Qaeda, respectively, writing, “I pledge my loyalty, allegiance and fidelity to the Mujahedeen of Al-Qaa'idah in the Arabian Peninsula and its leaders, Shaykh Abu Baseer Nasir Al-Wuhayshi and Shaykh Ayman Al-Zawahiri, hafidhahum Allah! May Allah accept this from me and may he allow me to fight in his cause til the day that I leave this dunya [this world].”

 

On Jan. 8, 2013, Kaliebe reaffirmed his commitment to jihad, telling an NYPD Intelligence Division undercover officer, in a recorded conversation, which was also admitted into evidence during the sentencing hearing, that he understood “there’s a way out, but for me, the only way out is [martyrdom].” Additionally, Kaliebe paid homage to several terrorist leaders, telling the undercover law enforcement officer that: “[My] standard is Abu Dujana. [M]y standard is Abu Mus’ab Al-Zarqawi. My standard is Sheik Anwar Al-Awlaki and Sheik Usama, both who bore witness to the truth with their blood.”

 

Finally, Kaliebe stated, “Oh Allah, please allow me, please allow me and my brother…to fight jihad in your cause oh Allah. Oh Allah, please give us one of the two victories, victory on the ground or victory through [martyrdom.]”

 

On Jan. 21, 2013, Kaliebe’s efforts culminated in an attempt to board a flight to Muscat, Oman at John F. Kennedy Airport in Queens, New York. He was arrested at the airport by members of the FBI’s JTTF and the NYPD Intelligence Division. On Feb. 8, 2013, Kaliebe waived indictment and pleaded guilty to attempting to provide material support to AQAP and to attempting to provide material support to terrorists. Kaliebe’s co-conspirator, Marcos Alonso Zea, who also attempted to travel to Yemen to join AQAP. Once Zea’s own attempt failed, he assisted Kaliebe’s efforts to join the terrorist group. Zea was previously convicted and sentenced to 25 years in prison by the Honorable Sandra J. Feuerstein.

 

The government’s case is being prosecuted jointly by the National Security and Cybercrime Section, and the Long Island Criminal Section of the U.S. Attorney’s Office for the Eastern District of New York. Assistant U.S. Attorneys Seth D. DuCharme and John J. Durham for the Eastern District of New York are in charge of the prosecution, with assistance provided by Trial Attorney Kelli Andrews of the National Security Division’s Counterterrorism Section.

Earlier today at the federal courthouse in Central Islip, New York, Justin Kaliebe, an American citizen and resident of Babylon and Bay Shore, New York, was sentenced to 13 years in prison and 20 years of supervised release with special conditions (including computer monitoring, a prohibition on contact with jihadists, search conditions, mental health treatment and a curfew, among others) following his February 8, 2013, guilty plea to both counts of a felony information, which charged him with attempting to provide material support to terrorists, in violation of 18 U.S.C. § 2339A(a), and attempting to provide material support to a designated foreign terrorist organization, al-Qaeda in the Arabian Peninsula, also known as Ansar al-Sharia (collectively, AQAP), in violation of 18 U.S.C. § 2339B(a)(1).

The sentencing was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mary B. McCord; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and James P. O’Neill, Commissioner, New York City Police Department (NYPD).

According to the court filings, including sentencing memoranda, and evidence introduced during a sentencing hearing, Kaliebe attempted to travel from the United States to Yemen for the purpose of joining AQAP and waging violent jihad. During numerous meetings and recorded conversations and email correspondence with undercover law enforcement officers, Kaliebe explained that he had been searching for an opportunity to travel abroad and fight jihad for two years – long before Kaliebe first approached the undercover officers about his plans to join a terrorist group. Kaliebe repeatedly expressed his desire to travel to Yemen in order to join AQAP and to help carry out its violent extremist agenda. Kaliebe also demonstrated extensive knowledge of terrorist organizations, including AQAP and al-Qaeda, and current and former leaders of those terrorist organizations. For example, Kaliebe referenced, and at times quoted, Anwar al-Awlaki, the now-deceased former member and senior leader of AQAP, as well as Omar Abdel Rahman (the “Blind Sheik”), Ayman al-Zawahiri, the current leader of al-Qaeda, and Usama Bin Laden. Further, Kaliebe demonstrated detailed knowledge of various terrorist attacks that were carried out by AQAP in Yemen, as well as other attacks carried out by al-Qaeda around the world.

According to a June 4, 2012 recorded conversation, which was admitted into evidence during the sentencing hearing, Kaliebe observed that “the crime that they would charge people like us with” was conspiracy “to kill, maim and kidnap in foreign countries,” a reference to a federal criminal statute that has previously been used to charge other individuals who departed or attempted to depart the United States in order to fight jihad abroad. Later, during that same conversation, Kaliebe stated that, once he arrived in Yemen, he expected to fight the “Yemeni army” and “those who are fighting against the Sharia of Allah . . . whether it’s the U.S. drones or the, their puppets, in the Yemeni army . . . or, who knows, if American agents or whatever, U.S. Special Forces . . . who they got over there.” When asked if he was afraid to die, Kaliebe responded “I wanna . . . . It’s what anyone would want, any believer would want.” During another recorded conversation described in the government’s sentencing memorandum, which took place on July 9, 2012, Kaliebe stated that he had been inspired by several sheiks, including “Sheik Usama,” “who showed how he could bring an entire nation to its knees.”

Beginning in approximately July 2012, Kaliebe saved money to finance his travel to Yemen, which he then used to apply for and purchase a United States passport, and to purchase an airline ticket to Oman, from where he intended to travel by land to Yemen. During a recorded meeting on July 30, 2012, Kaliebe stated that he was saving money “as a means to go to Yemen to fight jihad.”

On December 26, 2012, Kaliebe sent an email in which he swore his loyalty to the leaders of AQAP and al-Qaeda, respectively, writing, “I pledge my loyalty, allegiance and fidelity to the Mujahedeen of Al-Qaa'idah in the Arabian Peninsula and its leaders, Shaykh Abu Baseer Nasir Al-Wuhayshi and Shaykh Ayman Al-Zawahiri, hafidhahum Allah! May Allah accept this from me and may he allow me to fight in his cause til the day that I leave this dunya [this world].”

On January 18, 2013, Kaliebe reaffirmed his commitment to jihad, telling an NYPD Intelligence Division undercover officer, in a recorded conversation, which was also admitted into evidence during the sentencing hearing, that he understood “there’s a way out, but for me, the only way out is [martyrdom].” Additionally, Kaliebe paid homage to several terrorist leaders, telling the undercover law enforcement officer that:

[My] standard is Abu Dujana. [M]y standard is Abu Mus’ab Al-Zarqawi. My standard is Sheik Anwar Al-Awlaki and Sheik Usama, both who bore witness to the truth with their blood.

Finally, Kaliebe stated, “Oh Allah, please allow me, please allow me and my brother…to fight jihad in your cause oh Allah. Oh Allah, please give us one of the two victories, victory on the ground or victory through [martyrdom.]”

On January 21, 2013, Kaliebe’s efforts culminated in an attempt to board a flight to Muscat, Oman at John F. Kennedy Airport in Queens, New York. He was arrested at the airport by members of the FBI’s Joint Terrorism Task Force and the NYPD Intelligence Division. Thereafter, on February 8, 2013, Kaliebe waived indictment and pled guilty to attempting to provide material support to AQAP and attempting to provide material support to terrorists. Kaliebe’s co-conspirator, Marcos Alonso Zea, who also attempted to travel to Yemen to join AQAP and, once his own attempt failed, assisted Kaliebe’s efforts to join the terrorist group, previously was convicted and sentenced to 25 years in prison by the Honorable Sandra J. Feuerstein.

“This case is a sobering reminder that the call to violent jihad can reach deep into our local communities. Even when given the opportunity to abandon his plan to join al-Qaeda, this defendant made clear his intentions to commit himself fully to terrorism,” stated U.S. Attorney Capers. “If not for the vigilance and commitment of our dedicated investigators, he might well have succeeded in empowering a dangerous enemy.” Mr. Capers expressed his sincere appreciation to all the members of the FBI’s Joint Terrorism Task Force and the New York City Police Department, Intelligence Division, for their work on the investigation.

“With this sentence, Justin Kaliebe is being held accountable for his attempt to travel overseas to join Al-Qaeda in the Arab Peninsula and engage in violent jihad,” said Acting Assistant Attorney General McCord. “One of our highest priorities is to protect our country by identifying, disrupting, and holding accountable those who provide or attempt to provide material support to designated foreign terrorist organizations.”

“Providing material support to terrorists is a serious crime that should have serious consequences. Today’s sentencing of Justin Kaliebe shows just that. Kaliebe set out to provide material support to Al-Qaeda in the Arabian Peninsula in 2013 by attempting to travel to Yemen, after making plans months in advance. He didn’t get past JFK thanks to the hard work of the FBI’s Joint Terrorism Task Force and the NYPD Intelligence Division,” stated FBI Assistant Director-in-Charge Sweeney.

“Kaliebe’s commitment to join al-Qaeda in the Arabian Peninsula was as alarming as it was sinister. And early in 2013, Kaliebe was arrested at John F. Kennedy airport trying to fulfill his dream of joining the jihad in Yemen. Thankfully, Kaliebe was met at the airport by NYPD detectives and FBI agents investigating his support of this terrorist group’s agenda. Thanks, as always, to those on the FBI-NYPD Joint Terrorism Task Force and at the U.S. Attorney’s Office in the Eastern District for their investigation of this case and many others,” stated Police Commissioner O’Neill.

The government’s case is being prosecuted jointly by the Office’s National Security and Cybercrime Section and the Long Island Criminal Section. Assistant United States Attorneys Seth D. DuCharme and John J. Durham are in charge of the prosecution, with assistance provided by Trial Attorney Kelli Andrews of the National Security Division’s Counterterrorism Section.

The Defendant:

 

JUSTIN KALIEBE

Age: 22

Babylon and Bay Shore, New York

 

E.D.N.Y. Docket No. 13-072 (DRH)