Eastern District of New York

The New Defendants Include Five Current or Former FIFA Executive Committee Members and the Current Presidents of CONCACAF and CONMEBOL; Guilty Pleas for Eight Others, Including Jeffrey Webb and the Former Presidents of the Colombian and Chilean Soccer Federations, also Announced

A 92-count superseding indictment was unsealed earlier today in federal court in Brooklyn, New York, charging an additional 16 defendants with racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with their participation in a 24-year scheme to enrich themselves through the corruption of international soccer.  The superseding indictment also includes additional charges for seven of the defendants still pending extradition following the return of the original indictment last May.  The guilty pleas of eight defendants – including Jeffrey Webb, Alejandro Burzaco and José Margulies, three of the defendants indicted last May – were also announced today.

The new defendants charged in the superseding indictment include high-ranking officials of FIFA, the organization responsible for the regulation and promotion of soccer worldwide, as well as high-ranking officials of other soccer governing bodies that operate under the FIFA umbrella.  The defendants Alfredo Hawit and Juan Ángel Napout – the current presidents of CONCACAF and CONMEBOL, respectively, as well as current FIFA vice presidents and Executive Committee members – are among the 16 additional soccer officials charged with racketeering and bribery offenses.  CONCACAF and CONMEBOL are two of FIFA’s six continental confederations.  The new defendants also include Marco Polo del Nero and Ricardo Teixeira, the current and former presidents of the Brazilian soccer federation, both of whom are also former members of the FIFA Executive Committee, as well as José Luís Meiszner and Eduardo Deluca, the current and former general secretaries of CONMEBOL.  Within UNCAF, the Central American regional soccer union operating within CONCACAF, the charges in the superseding indictment name the current and/or former presidents of nearly every country in the region: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.  Taken together, the 27 defendants in the superseding indictment are alleged to have engaged in a number of schemes all designed to solicit and receive well over $200 million in bribes and kickbacks to sell lucrative media and marketing rights to international soccer tournaments and matches, among other valuable rights and properties.

The charges were announced by Attorney General Loretta E. Lynch, FBI Director James B. Comey, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office, Chief Richard Weber of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Erick Martinez of the IRS-CI Los Angeles Field Office.

Early this morning, Swiss authorities in Zurich arrested two of the defendants charged in the superseding indictment – Hawit and Napout – at the request of the United States.  Also this morning, a search warrant was executed at Media World, a sports marketing company based in Miami.

The new charges unsealed today bring the total number of individuals and entities charged to date to 41.  Of those, 12 individuals and two sports marketing companies have already been convicted as a result of the ongoing investigation.  The convicted defendants have agreed to pay more than $190 million in forfeiture.  In addition, more than $100 million has been restrained in the United States and abroad in connection with the alleged criminal activity.  The United States has issued mutual legal assistance requests seeking the restraint of assets located in 13 countries around the world.

“The Department of Justice is committed to ending the rampant corruption we have alleged amidst the leadership of international soccer – not only because of the scale of the schemes, or the brazenness and breadth of the operation required to sustain such corruption, but also because of the affront to international principles that this behavior represents,” said Attorney General Lynch.  “The message from this announcement should be clear to every culpable individual who remains in the shadows, hoping to evade our investigation: You will not wait us out.  You will not escape our focus.”  Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland for their continuing outstanding assistance and collaboration in this investigation, and to the authorities in a number of other countries, including Brazil and Colombia, for their assistance as well.

“For decades, these defendants used their power as the leaders of soccer federations throughout the world to create a web of corruption and greed that compromises the integrity of the beautiful game,” said Director Comey.  “I want to thank all the agencies for their hard work and for showing the world that we do not tolerate this criminal activity.”

“The charges unsealed today send a clear message to those who corrupted a sport beloved by millions to satisfy their own greed: We are determined to put a stop to bribery and corruption in international soccer and to make room for a new era of integrity and reform,” said U.S. Attorney Capers.  “This indictment is the latest step in that effort, but our work is not done.  While our investigation continues at home, we also look forward to continuing our collaboration with our international partners, including in particular the Swiss authorities, because there is so much yet to be done.”  Mr. Capers extended his thanks to the agents, analysts and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS-CI Los Angeles Field Office, as well as their colleagues in the United States and abroad, for their continuing tremendous effort in this case.  Mr. Capers also thanked the U.S. Marshals Service for its continuing assistance.

“The brazenness with which the individuals indicted today breached the integrity of the U.S. financial system to promote and conceal their criminal schemes is quite alarming,” said Chief Weber.  “While it is one of the most complex worldwide financial investigations ever conducted, it is also an eye opener to everyone that such greed and corruption could be hiding in plain sight within the world’s most popular sport.  By conspiring to enrich themselves through bribery and kickback schemes relating to media and marketing rights, the defendants undermined the process of fair and open competition, corrupting the beautiful game for their own personal gain.”

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

Overview of the Superseding Indictment

As alleged in the superseding indictment, FIFA and its six continental confederations – including CONCACAF, headquartered in the United States, and CONMEBOL, the confederation headquartered in South America – together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of violating the federal racketeering laws.  The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.

Like the original indictment, the superseding indictment alleges that between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering.  Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks.  All told, the soccer officials are charged with conspiring to solicit and receive more than $200 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.

The schemes alleged in the original indictment related to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, as well as schemes related to the payment and receipt of bribes and kickbacks in connection with the sponsorship of the Brazilian soccer federation by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election. 

The new allegations in the superseding indictment relate to a series of bribery schemes in connection with multiple cycles of FIFA World Cup qualifiers and international friendly matches involving six Central American member associations within UNCAF; a bribery scheme implicating many top CONMEBOL officials relating to the sale of broadcasting rights to the CONMEBOL Copa Libertadores over an extended period; and a scheme by an Argentinian sports marketing company to obtain various rights properties from CONCACAF by paying bribes to three Central American soccer officials to cause them to exert their influence in favor of the company.

The 16 New Defendants

As set forth in the superseding indictment, the 16 newly-indicted defendants are all current or former soccer officials who acted at various times in a fiduciary capacity within FIFA and one or more of its constituent organizations:

CONCACAF Region Officials

• Alfredo Hawit: Current FIFA vice president and Executive Committee member and CONCACAF president.  Former CONCACAF vice president and Honduran soccer federation president.
• Ariel Alvarado: Current member of the FIFA Disciplinary Committee.  Former CONCACAF Executive Committee member and Panamanian soccer federation president.
• Rafael Callejas: Current member of the FIFA Television and Marketing Committee.  Former Honduran soccer federation president and former president of the Republic of Honduras.
• Brayan Jiménez: Current Guatemalan soccer federation president and member of the FIFA Committee for Fair Play and Social Responsibility.
• Rafael Salguero: Former FIFA Executive Committee member and Guatemalan soccer federation president.
• Héctor Trujillo: Current Guatemalan soccer federation general secretary and judge on the Constitutional Court of Guatemala.
• Reynaldo Vasquez: Former Salvadoran soccer federation president.

CONMEBOL Region Officials

• Juan Ángel Napout: Current FIFA vice president and Executive Committee member and CONMEBOL president.  Former Paraguayan soccer federation president.
• Manuel Burga: Current member of the FIFA Development Committee.  Former Peruvian soccer federation president.
• Carlos Chávez: Current CONMEBOL treasurer.  Former Bolivian soccer federation president.
• Luís Chiriboga: Current Ecuadorian soccer federation president and member of the CONMEBOL Executive Committee.
• Marco Polo del Nero: Current president of the Brazilian soccer federation.  Announced resignation from FIFA Executive Committee on Nov. 26, 2015.
• Eduardo Deluca: Former CONMEBOL general secretary.
• José Luis Meiszner: Current CONMEBOL general secretary.
• Romer Osuna: Current member of the FIFA Audit and Compliance Committee.  Former CONMEBOL treasurer.
• Ricardo Teixeira: Former Brazilian soccer federation president and FIFA Executive Committee member.

The Convicted Defendants

The following defendants previously pleaded guilty under seal and agreed to forfeit more than $40 million:

On May 26, 2015, Zorana Danis, the co-founder and owner of International Soccer Marketing Inc., a New Jersey-based sports marketing company, waived indictment and pleaded guilty to a two-count information charging her with wire fraud conspiracy and filing false tax returns.  As part of her plea, Danis agreed to forfeit $2 million.

On Nov. 9, 2015, Fabio Tordin, the former CEO of Traffic Sports USA Inc. and currently an executive with Media World LLC, a Miami-based sports marketing company, waived indictment and pleaded guilty to a four-count information charging him with three counts of wire fraud conspiracy and one count of tax evasion.  As part of his plea, Tordin agreed to forfeit more than $600,000.

On Nov. 12, 2015, Luis Bedoya, a member of the FIFA Executive Committee, a CONMEBOL vice president and, until last month, the president of the Federación Colombiana de Fútbol, the Colombian soccer federation, waived indictment and pleaded guilty to a two-count information charging him with racketeering conspiracy and wire fraud conspiracy.  As part of his plea, Bedoya agreed to forfeit all funds on deposit in his Swiss bank account, among other funds.

On Nov. 16, 2015, Alejandro Burzaco, the former general manager and chairman of the board of Torneos y Competencias S.A., an Argentinian sports marketing company, pleaded guilty to racketeering conspiracy, wire fraud conspiracy and money laundering conspiracy.  As part of his plea, Burzaco agreed to forfeit more than $21.6 million.

On Nov. 17, 2015, Roger Huguet, the CEO of Media World and its parent company, waived indictment and pleaded guilty to a three-count information charging him with two counts of wire fraud conspiracy and one count of money laundering conspiracy.  As part of his plea, Huguet agreed to forfeit more than $600,000.

On Nov. 23, 2015, Jeffrey Webb, a former FIFA vice president and Executive Committee member, CONCACAF president, Caribbean Football Union Executive Committee member and Cayman Islands Football Association president, pleaded guilty to racketeering conspiracy, three counts of wire fraud conspiracy and three counts of money laundering conspiracy.  As part of his plea, Webb agreed to forfeit more than $6.7 million.

On Nov. 23, 2015, Sergio Jadue, a vice president of CONMEBOL and, until last month, the president of the Asociación Nacional de Fútbol Profesional de Chile, the Chilean soccer federation, waived indictment and pleaded guilty to a two-count information charging him with racketeering conspiracy and wire fraud conspiracy.  As part of his plea, Jadue agreed to forfeit all funds on deposit in his U.S. bank account, among other funds.

On Nov. 25, 2015, José Margulies, the controlling principal of Valente Corp. and Somerton Ltd, who served as an intermediary who facilitated illicit payments between sports marketing executives and soccer officials, pleaded guilty to racketeering conspiracy, wire fraud conspiracy, and two counts of money laundering conspiracy.  As part of his plea, Margulies agreed to forfeit more than $9.2 million.

As previously announced last May, all money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.

* * * *

The indicted and convicted defendants face maximum terms of incarceration of 20 years for the Racketeer Influenced and Corrupt Organizations Act (RICO) conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering and obstruction of justice charges.  In addition, Tordin and Danis face maximum terms of five and three years in prison, respectively, for the tax charges.  Each defendant also faces mandatory restitution, forfeiture and a fine.

The superseding indictment and guilty pleas unsealed today are assigned to the U.S. District Judge Raymond J. Dearie of the Eastern District of New York.

The government’s investigation is ongoing.

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

The charges and guilty pleas announced today are being prosecuted by Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, M. Kristin Mace, Paul Tuchmann, Keith D. Edelman, Tanya Hajjar and Brian D. Morris of the Eastern District of New York.

The Newly-Indicted Defendants:

ARIEL ALVARADO

Age:   56

Nationality:  Panama

MANUEL BURGA

Age:   58

Nationality:  Peru

RAFAEL CALLEJAS

Age:   72

Nationality: Honduras

CARLOS CHÁVEZ

Age:   57

Nationality:  Bolivia

LUÍS CHIRIBOGA

Age:   69

Nationality:  Ecuador

MARCO POLO DEL NERO

Age:   74

Nationality:  Brazil

EDUARDO DELUCA

Age:   75

Nationality:  ARGENTINA

ALFREDO HAWIT

Age:   64

Nationality:  Honduras

BRAYAN JIMÉNEZ

Age:   61

Nationality:  Guatemala

JOSÉ LUÍS MEISZNER

Age:   69

Nationality:  Argentina

JUAN ÁNGEL NAPOUT

Age:   57

Nationality:  Paraguay

ROMER OSUNA

Age:  72

Nationality:  Bolivia

RAFAEL SALGUERO

Age:   70

Nationality:  Guatemala

RICARDO TEIXEIRA

Age:   68

Nationality:  Brazil

HÉCTOR TRUJILLO

Age:   62

Nationality:  Guatemala

REYNALDO VASQUEZ

Age:   59

Nationality:  El Salvador

The Convicted Defendants:

LUIS BEDOYA

Age:  56

Nationality: Colombia

ALEJANDRO BURZACO

Age:  51

Nationality: Argentina

ZORANA DANIS

Age:  52

Nationality: Belgium

ROGER HUGUET

Age:  52

Nationality: USA, Spain

SERGIO JADUE

Age:  36

Nationality: Chile

JOSÉ MARGULIES

Age:   76

Nationality:  Brazil

FABIO TORDIN

Age:  50

Nationality: Brazil

JEFFREY WEBB

Age:   51

Nationality:  Cayman Islands

E.D.N.Y. Docket Numbers:

United States v. Zorana Danis, 15 Cr. 240 (RJD)

United States v. Jeffrey Webb et al., 15 Cr. 252 (RJD)

United States v. Fabio Tordin, 15 Cr. 564 (RJD)

United States v. Luis Bedoya, 15 Cr. 569 (RJD)

United States v. Sergio Jadue, 15 Cr. 570 (RJD)

United States v. Roger Huguet, 15 Cr. 585 (RJD)

Guilty Pleas for Eight Others, Including Jeffrey Webb and the Former Presidents of the Colombian and Chilean Soccer Federations, also Announced

A 92-count superseding indictment was unsealed earlier today in federal court in Brooklyn, New York, charging an additional 16 defendants with racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with their participation in a 24-year scheme to enrich themselves through the corruption of international soccer.  The superseding indictment also includes additional charges for seven of the defendants still pending extradition following the return of the original indictment last May.  The guilty pleas of eight defendants – including Jeffrey Webb, Alejandro Burzaco and José Margulies, three of the defendants indicted last May – were also announced today.

The new defendants charged in the superseding indictment include high-ranking officials of FIFA, the organization responsible for the regulation and promotion of soccer worldwide, as well as high-ranking officials of other soccer governing bodies that operate under the FIFA umbrella.  The defendants Alfredo Hawit and Juan Ángel Napout – the current presidents of CONCACAF and CONMEBOL, respectively, as well as current FIFA vice presidents and Executive Committee members – are among the 16 additional soccer officials charged with racketeering and bribery offenses.  CONCACAF and CONMEBOL are two of FIFA’s six continental confederations.  The new defendants also include Marco Polo del Nero and Ricardo Teixeira, the current and former presidents of the Brazilian soccer federation, both of whom are also former members of the FIFA Executive Committee, as well as José Luís Meiszner and Eduardo Deluca, the current and former general secretaries of CONMEBOL.  Within UNCAF, the Central American regional soccer union operating within CONCACAF, the charges in the superseding indictment name the current and/or former presidents of nearly every country in the region: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.  Taken together, the 27 defendants in the superseding indictment are alleged to have engaged in a number of schemes all designed to solicit and receive well over $200 million in bribes and kickbacks to sell lucrative media and marketing rights to international soccer tournaments and matches, among other valuable rights and properties.

The charges were announced by Attorney General Loretta E. Lynch, FBI Director James B. Comey, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office, Chief Richard Weber of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Erick Martinez of the IRS-CI Los Angeles Field Office.

Early this morning, Swiss authorities in Zurich arrested two of the defendants charged in the superseding indictment – Hawit and Napout – at the request of the United States.  Also this morning, a search warrant was executed at Media World, a sports marketing company based in Miami.

The new charges unsealed today bring the total number of individuals and entities charged to date to 41.  Of those, 12 individuals and two sports marketing companies have already been convicted as a result of the ongoing investigation.  The convicted defendants have agreed to pay more than $190 million in forfeiture.  In addition, more than $100 million has been restrained in the United States and abroad in connection with the alleged criminal activity.  The United States has issued mutual legal assistance requests seeking the restraint of assets located in 13 countries around the world.

“The Department of Justice is committed to ending the rampant corruption we have alleged amidst the leadership of international soccer – not only because of the scale of the schemes, or the brazenness and breadth of the operation required to sustain such corruption, but also because of the affront to international principles that this behavior represents,” said Attorney General Lynch.  “The message from this announcement should be clear to every culpable individual who remains in the shadows, hoping to evade our investigation: You will not wait us out.  You will not escape our focus.”  Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland for their continuing outstanding assistance and collaboration in this investigation, and to the authorities in a number of other countries, including Brazil and Colombia, for their assistance as well.

“For decades, these defendants used their power as the leaders of soccer federations throughout the world to create a web of corruption and greed that compromises the integrity of the beautiful game,” said Director Comey.  “I want to thank all the agencies for their hard work and for showing the world that we do not tolerate this criminal activity.”

“The charges unsealed today send a clear message to those who corrupted a sport beloved by millions to satisfy their own greed: We are determined to put a stop to bribery and corruption in international soccer and to make room for a new era of integrity and reform,” said U.S. Attorney Capers.  “This indictment is the latest step in that effort, but our work is not done.  While our investigation continues at home, we also look forward to continuing our collaboration with our international partners, including in particular the Swiss authorities, because there is so much yet to be done.”  Mr. Capers extended his thanks to the agents, analysts and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS-CI Los Angeles Field Office, as well as their colleagues in the United States and abroad, for their continuing tremendous effort in this case.  Mr. Capers also thanked the U.S. Marshals Service for its continuing assistance.

“The brazenness with which the individuals indicted today breached the integrity of the U.S. financial system to promote and conceal their criminal schemes is quite alarming,” said Chief Weber.  “While it is one of the most complex worldwide financial investigations ever conducted, it is also an eye opener to everyone that such greed and corruption could be hiding in plain sight within the world’s most popular sport.  By conspiring to enrich themselves through bribery and kickback schemes relating to media and marketing rights, the defendants undermined the process of fair and open competition, corrupting the beautiful game for their own personal gain.”

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

Overview of the Superseding Indictment

As alleged in the superseding indictment, FIFA and its six continental confederations – including CONCACAF, headquartered in the United States, and CONMEBOL, the confederation headquartered in South America – together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of violating the federal racketeering laws.  The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.

Like the original indictment, the superseding indictment alleges that between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering.  Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks.  All told, the soccer officials are charged with conspiring to solicit and receive more than $200 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.

The schemes alleged in the original indictment related to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, as well as schemes related to the payment and receipt of bribes and kickbacks in connection with the sponsorship of the Brazilian soccer federation by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election. 

The new allegations in the superseding indictment relate to a series of bribery schemes in connection with multiple cycles of FIFA World Cup qualifiers and international friendly matches involving six Central American member associations within UNCAF; a bribery scheme implicating many top CONMEBOL officials relating to the sale of broadcasting rights to the CONMEBOL Copa Libertadores over an extended period; and a scheme by an Argentinian sports marketing company to obtain various rights properties from CONCACAF by paying bribes to three Central American soccer officials to cause them to exert their influence in favor of the company.

The 16 New Defendants

As set forth in the superseding indictment, the 16 newly-indicted defendants are all current or former soccer officials who acted at various times in a fiduciary capacity within FIFA and one or more of its constituent organizations:

CONCACAF Region Officials

• Alfredo Hawit: Current FIFA vice president and Executive Committee member and CONCACAF president.  Former CONCACAF vice president and Honduran soccer federation president.

• Ariel Alvarado: Current member of the FIFA Disciplinary Committee.  Former CONCACAF Executive Committee member and Panamanian soccer federation president.

• Rafael Callejas: Current member of the FIFA Television and Marketing Committee.  Former Honduran soccer federation president and former president of the Republic of Honduras.

• Brayan Jiménez: Current Guatemalan soccer federation president and member of the FIFA Committee for Fair Play and Social Responsibility.

• Rafael Salguero: Former FIFA Executive Committee member and Guatemalan soccer federation president.

• Héctor Trujillo: Current Guatemalan soccer federation general secretary and judge on the Constitutional Court of Guatemala.

• Reynaldo Vasquez: Former Salvadoran soccer federation president.

 

CONMEBOL Region Officials

• Juan Ángel Napout: Current FIFA vice president and Executive Committee member and CONMEBOL president.  Former Paraguayan soccer federation president.

• Manuel Burga: Current member of the FIFA Development Committee.  Former Peruvian soccer federation president.

• Carlos Chávez: Current CONMEBOL treasurer.  Former Bolivian soccer federation president.

• Luís Chiriboga: Current Ecuadorian soccer federation president and member of the CONMEBOL Executive Committee.

• Marco Polo del Nero: Current president of the Brazilian soccer federation.  Announced resignation from FIFA Executive Committee on Nov. 26, 2015.

• Eduardo Deluca: Former CONMEBOL general secretary.

• José Luis Meiszner: Current CONMEBOL general secretary.

• Romer Osuna: Current member of the FIFA Audit and Compliance Committee.  Former CONMEBOL treasurer.

• Ricardo Teixeira: Former Brazilian soccer federation president and FIFA Executive Committee member.

 

The Convicted Defendants

The following defendants previously pleaded guilty under seal and agreed to forfeit more than $40 million:

On May 26, 2015, Zorana Danis, the co-founder and owner of International Soccer Marketing Inc., a New Jersey-based sports marketing company, waived indictment and pleaded guilty to a two-count information charging her with wire fraud conspiracy and filing false tax returns.  As part of her plea, Danis agreed to forfeit $2 million.

On Nov. 9, 2015, Fabio Tordin, the former CEO of Traffic Sports USA Inc. and currently an executive with Media World LLC, a Miami-based sports marketing company, waived indictment and pleaded guilty to a four-count information charging him with three counts of wire fraud conspiracy and one count of tax evasion.  As part of his plea, Tordin agreed to forfeit more than $600,000.

On Nov. 12, 2015, Luis Bedoya, a member of the FIFA Executive Committee, a CONMEBOL vice president and, until last month, the president of the Federación Colombiana de Fútbol, the Colombian soccer federation, waived indictment and pleaded guilty to a two-count information charging him with racketeering conspiracy and wire fraud conspiracy.  As part of his plea, Bedoya agreed to forfeit all funds on deposit in his Swiss bank account, among other funds.

On Nov. 16, 2015, Alejandro Burzaco, the former general manager and chairman of the board of Torneos y Competencias S.A., an Argentinian sports marketing company, pleaded guilty to racketeering conspiracy, wire fraud conspiracy and money laundering conspiracy.  As part of his plea, Burzaco agreed to forfeit more than $21.6 million.

On Nov. 17, 2015, Roger Huguet, the CEO of Media World and its parent company, waived indictment and pleaded guilty to a three-count information charging him with two counts of wire fraud conspiracy and one count of money laundering conspiracy.  As part of his plea, Huguet agreed to forfeit more than $600,000.

On Nov. 23, 2015, Jeffrey Webb, a former FIFA vice president and Executive Committee member, CONCACAF president, Caribbean Football Union Executive Committee member and Cayman Islands Football Association president, pleaded guilty to racketeering conspiracy, three counts of wire fraud conspiracy and three counts of money laundering conspiracy.  As part of his plea, Webb agreed to forfeit more than $6.7 million.

On Nov. 23, 2015, Sergio Jadue, a vice president of CONMEBOL and, until last month, the president of the Asociación Nacional de Fútbol Profesional de Chile, the Chilean soccer federation, waived indictment and pleaded guilty to a two-count information charging him with racketeering conspiracy and wire fraud conspiracy.  As part of his plea, Jadue agreed to forfeit all funds on deposit in his U.S. bank account, among other funds.

On Nov. 25, 2015, José Margulies, the controlling principal of Valente Corp. and Somerton Ltd, who served as an intermediary who facilitated illicit payments between sports marketing executives and soccer officials, pleaded guilty to racketeering conspiracy, wire fraud conspiracy, and two counts of money laundering conspiracy.  As part of his plea, Margulies agreed to forfeit more than $9.2 million.

As previously announced last May, all money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.

The indicted and convicted defendants face maximum terms of incarceration of 20 years for the Racketeer Influenced and Corrupt Organizations Act (RICO) conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering and obstruction of justice charges.  In addition, Tordin and Danis face maximum terms of five and three years in prison, respectively, for the tax charges.  Each defendant also faces mandatory restitution, forfeiture and a fine.

The superseding indictment and guilty pleas unsealed today are assigned to the U.S. District Judge Raymond J. Dearie of the Eastern District of New York.

The government’s investigation is ongoing.

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

The charges and guilty pleas announced today are being prosecuted by Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, M. Kristin Mace, Paul Tuchmann, Keith D. Edelman, Tanya Hajjar and Brian D. Morris of the Eastern District of New York.

 

The Newly-Indicted Defendants:

ARIEL ALVARADO
Age:   56
Nationality:  Panama

MANUEL BURGA
Age:   58
Nationality:  Peru

RAFAEL CALLEJAS
Age:   72
Nationality: Honduras

CARLOS CHÁVEZ
Age:   57
Nationality:  Bolivia

LUÍS CHIRIBOGA
Age:   69
Nationality:  Ecuador

MARCO POLO DEL NERO
Age:   74
Nationality:  Brazil

EDUARDO DELUCA
Age:   75
Nationality:  ARGENTINA

ALFREDO HAWIT
Age:   64
Nationality:  Honduras

BRAYAN JIMÉNEZ
Age:   61
Nationality:  Guatemala

JOSÉ LUÍS MEISZNER
Age:   69
Nationality:  Argentina

JUAN ÁNGEL NAPOUT
Age:   57
Nationality:  Paraguay

ROMER OSUNA
Age:  72
Nationality:  Bolivia

RAFAEL SALGUERO
Age:   70
Nationality:  Guatemala

RICARDO TEIXEIRA
Age:   68
Nationality:  Brazil

HÉCTOR TRUJILLO
Age:   62
Nationality:  Guatemala

REYNALDO VASQUEZ
Age:   59
Nationality:  El Salvador

 

The Convicted Defendants:

LUIS BEDOYA
Age:  56
Nationality: Colombia

ALEJANDRO BURZACO
Age:  51
Nationality: Argentina

ZORANA DANIS
Age:  52
Nationality: Belgium

ROGER HUGUET
Age:  52
Nationality: USA, Spain

SERGIO JADUE
Age:  36
Nationality: Chile

JOSÉ MARGULIES
Age:   76
Nationality:  Brazil

FABIO TORDIN
Age:  50
Nationality: Brazil

JEFFREY WEBB
Age:   51
Nationality:  Cayman Islands

E.D.N.Y. Docket Numbers:

United States v. Zorana Danis, 15 Cr. 240 (RJD)

United States v. Jeffrey Webb et al., 15 Cr. 252 (RJD)

United States v. Fabio Tordin, 15 Cr. 564 (RJD)

United States v. Luis Bedoya, 15 Cr. 569 (RJD)

United States v. Sergio Jadue, 15 Cr. 570 (RJD)

United States v. Roger Huguet, 15 Cr. 585 (RJD)

Bradley Bender, Southampton Town Councilman, pleaded guilty today to conspiring to illegally distribute oxycodone.  The plea was entered before U.S. Magistrate Judge Anne Y. Shields at the federal courthouse in Central Islip. 

Today’s guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent in Charge, Drug Enforcement Administration (DEA), New York.

According to court filings and statements made in court at the time he entered the guilty plea, between July 2012 and June 2015, Bender received phony prescriptions for oxycodone from a Riverhead physician assistant, Michael Troyan, filled those prescriptions, and illegally exchanged the oxycodone pills for cash and steroids with another co-conspirator.  The oxycodone pills were then re-sold to drug abusers.  Troyan was arrested on November 4, 2015, pursuant to an indictment which is currently pending before United States District Judge Denis R. Hurley.

The goverenment’s investigation was led by the DEA’s Long Island Tactical Diversion Squad which is comprised of agents and officers of the DEA, Nassau County Police Department, Rockville Centre Police Department, and Port Washington Police Department.   The  Diversion Squad was also assisted by agents and officers of the Department of Health & Human Services, the Southampton Town Police Department, and the Suffolk County District Attorney’s East End Drug Taskforce.

“Abuse of oxycodone on Long Island has reached epidemic proportions,” stated United States Attorney Capers.  “Councilman Bender’s actions in this oxycodone distribution conspiracy victimized the very community he was entrusted to represent.  Today’s guilty plea should serve as a reminder that no one is above the law, including those entrusted with passing our laws.”  Mr. Capers extended his grateful appreciation to each of the participating law enforcement agencies for their assistance in this case.           

DEA Special Agent in Charge Hunt stated, “Diverted prescription pill distributors are a new breed of drug dealer because many hide in plain view.  In this case, Southampton Town Councilman Bradley Bender allegedly distributed diverted pain medication behind the backs of his constituents.  By allegedly filling fraudulent oxycodone prescriptions for street sales, he was adding fuel to the fire for the opioid problem that is running rampant throughout American cities, unlike other community representatives who are looking for ways to contain it.”   

At sentencing, Bender faces a maximum sentence of 20 years of imprisonment and a $1 million fine.

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

The government’s case is being prosecuted by the Office’s Long Island Criminal Division.  Assistant United States Attorney Allen Bode is in charge of the prosecution.

The Defendant:

Name: BRADLEY BENDER
Age: 52
Residence: Northampton, New York

E.D.N.Y. Docket No. 15-CR-593(ADS)

Granite Construction, Incorporated (Granite), a nationwide construction and public works company that is publicly traded on the New York Stock Exchange, has entered into a non-prosecution agreement and agreed to pay more than $8 million to the federal government and the Metropolitan Transportation Authority Office of Inspector General (MTA-IG) to resolve a criminal investigation into a disadvantaged business enterprise (DBE) fraud scheme perpetrated by Granite’s wholly-owned subsidiary, Granite Construction Northeast, Incorporated (GCN), previously known as Granite Halmar Construction Company, Incorporated.  In addition, Granite will provide continuing cooperation to the government and maintain far-reaching corporate reforms.

The resolution was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Doug Shoemaker, Regional Special Agent-in-Charge, U.S. Department of Transportation, Office of Inspector General; Barry Kluger, Inspector General, Metropolitan Transportation Authority; Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation; and Cheryl Garcia, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in New York.  U.S. Attorney Capers also thanked the Federal Transit Administration, a division of the U.S. Department of Transportation, for its assistance.

Pursuant to the non-prosecution agreement signed today, Granite acknowledged and accepted responsibility for a DBE fraud scheme related to GCN’s work on a contract for the MTA that involved the construction of a bus depot in Maspeth, Queens, NY (the Project).  The Project was largely federally funded. 

The investigation revealed that GCN served as the prime contractor on the Project after being awarded the prime contract for the job by the MTA, a contract for which GCN was ultimately paid approximately $222 million.  The contract required GCN to comply with the Disadvantaged Business Enterprise Program (the DBE program).  Pursuant to that program, as the prime contractor, GCN was obligated to make good faith efforts to subcontract a specified percentage of work on the prime contract to certain disadvantaged business enterprises (DBE companies).   

GCN, certain other non-DBE companies (the actual companies), and a DBE company that acted solely as a front company in connection with the Project (the front company)  conspired to arrange the following scheme to avoid compliance with the DBE program:

(a) the front company would be awarded a subcontract worth approximately $22 million, to perform certain construction work (the specified work) on the Project;

(b) the actual companies would perform the specified work, but payroll would be “run through” the front fompany, with paperwork arranged to make it appear as if the front company was performing the specified work; and

(c) GCN would pay the front company a $500,000 “DBE fee,” although the front company would not perform a “commercially useful function” on the specified work, as required by state and federal regulations. 

As the front companies performed the specified work, GCN submitted to officials from the MTA, as required, periodic progress reports that purported to represent the percentage of work performed by DBE companies on the prime contract.  From 2004 through approximately 2008, GCN falsely represented in those reports that the front company had performed a “commercially useful function” in performing the specified work, when in fact, the specified work had actually been performed by the actual companies, and the front company had not performed any such commercially useful function.[1]  As a result, GCN deprived the MTA of its rights under the prime contract and deprived legitimate DBE companies of the opportunity to perform the specified work and be paid for it. 

In light of a comprehensive internal investigation conducted by Granite, Granite’s complete acceptance of responsibility for GCN’s unlawful conduct, Granite’s cooperation with the government, the fact that the GCN employees most responsible for GCN’s unlawful conduct were separated from GCN and Granite years before the government’s investigation began, and Granite’s far-reaching remedial measures, including site visits by compliance program staff and mandatory training for appropriate Granite managers and employees, the government has agreed not to prosecute Granite or GCN for GCN’s criminal conduct provided that Granite complies for two years with all the terms of the agreement executed today. Significantly, this agreement also secures civil forfeiture to the federal government of $7.25 million in connection with this fraud, as well as a payment of $1 million to the MTA-IG.

“GCN defrauded the MTA by falsely claiming that millions of dollars worth of construction work was performed by a DBE company.  Today’s resolution marks a significant step in our continued effort to eliminate DBE fraud in New York’s construction industry and also recognizes Granite’s decision to timely accept full responsibility, provide complete cooperation, and take remedial measures to enforce best industry practices,” stated U.S. Attorney Capers.  Mr. Capers thanked the investigative agencies for their outstanding commitment and dedication over the course of this investigation.

“As evidenced by the non-prosecution agreement entered into by Granite Construction, Inc., we remain steadfast in our commitment to maintaining the integrity of the U.S. Department of Transportation’s (USDOT) Disadvantaged Business Enterprise program,” said Regional Special Agent-in-Charge Shoemaker, USDOT Office of Inspector General.   “Working with the Secretary of Transportation and other DOT leaders, and our law enforcement and prosecutorial colleagues, we will continue to protect the taxpayers’ investment in our nation’s infrastructure from fraud, waste, abuse, and violations of law.”

“This investigation uncovered a scheme that exploited a program designed to encourage disadvantaged businesses to participate in Metropolitan Transportation Authority projects,” stated IRS-Criminal Investigation Special Agent-in-Charge Kitchen.  “IRS-Criminal Investigation is proud to be part of the collective law enforcement effort on this investigation; it demonstrates the government’s resolve to protect public funds and its commitment to ensure the public’s trust.  The fact that GCN has entered into an agreement with the government will further serve and protect the public’s best interest.”  

“Today’s announcement clearly reflects the firm commitment by our Office and our investigative and prosecutorial partners to utilize all avenues to ensure compliance with DBE requirements and to create and maintain a level playing field on which all qualified DBEs have a fair and equal opportunity to bid for and participate in all MTA projects.  We will continue to direct our energies and share of settlement proceeds to support the MTA Small Business Development Program and other productive efforts to expand opportunities for disadvantaged business enterprises,” stated Inspector General Kluger.  

“Reporting that work was performed by a DBE company involved manipulating American workers and processing their pay through a front company in order to conceal the fraud.  We will continue to work with our law enforcement partners to protect contract opportunities for legitimate disadvantaged businesses,” stated Special Agent-in-Charge Garcia of the New York Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.

The government’s case is being prosecuted by the Office’s Public Integrity Section.  Assistant United States Attorneys Paul Tuchmann and Burton Ryan are in charge of the prosecution.  Assistant United States Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of the funds.

 

---

[1] In August 2013, one of the actual companies, A.J. McNulty & Company, also entered into a non-prosecution agreement with the United States Attorney’s Office for the Eastern District of New York to resolve a criminal investigation into the same scheme.  Under the terms of that agreement, A.J. McNulty agreed to forfeit $850,000 to the federal government and pay $100,000 to the MTA-IG. 

 

Defendant Led Plan to Carry Out Bombing of Crowded Shopping Center in Manchester, England, During Easter Holiday as Part of Global Terrorism Plot by al-Qaeda

Earlier today at the federal courthouse in Brooklyn, New York, Abid Naseer, 29, was sentenced to 40 years in prison by U.S. District Judge Raymond J. Dearie of the Eastern District of New York for multiple terrorism offenses.  The defendant and his accomplices came within days of executing a plot to conduct a bombing at a crowded shopping mall in Manchester, England, as directed by senior al-Qaeda leaders in Pakistan.

The planned attack, which also targeted the New York City subway system and a newspaper office in Copenhagen, had been directed by and coordinated with senior al-Qaeda leaders in Pakistan.  Naseer is the eighth defendant to face charges in federal court related to the al-Qaeda plot, which also involved Adis Medunjanin, Najibullah Zazi and Zarein Ahmedzay, the three members of the cell that targeted New York City.  Naseer was convicted in March 2015 after a three-week jury trial of providing material support to al-Qaeda, conspiring to provide material support to al-Qaeda and conspiring to use a destructive device in relation to a crime of violence.

The sentence was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department (NYPD).

“Abid Naseer was part of an al Qaeda conspiracy that targeted Western countries, including the United States and the United Kingdom, for terrorist attack,” said Assistant Attorney General Carlin.  “His conviction and sentence reflect our dedication to identifying and holding accountable those who seek to target the United States and its allies.  I want to thank the many agents, analysts and prosecutors who are responsible for this successful result.”

“This al-Qaeda plot was intended by the group’s leaders and Naseer to send a message to the United States and its allies,” said U.S. Attorney Capers.  “Today’s sentence sends an even more powerful message in response: terrorists who target the U.S. and its allies will be held accountable for their violent crimes to the full extent of the law.”

“Dispatched by al-Qaeda to the U.K. in 2006, Abid Naseer exploited the educational visa system not to improve his own life, but to take away the lives of many others ‘in large numbers,’” said Assistant Director in Charge Rodriguez.  “Trained in weapons and explosives, he communicated in code to hide his evil intentions.  Found guilty in a court of law, he has been spared the fate of death he wished upon others and will spend considerable time incarcerated in a country he and his co-conspirators failed to take down.”

“This case demonstrates the importance of a closely coordinated international law enforcement approach to an established terrorist network that knows no borders,” said Commissioner Bratton.  “The manner in which these defendants communicated their deadly plans reinforces the need to allow law enforcement the necessary authority and tools to prevent these plots from succeeding in their objectives of mass destruction and death.  I commend our local and international partners in preventing these acts and securing convictions of those responsible for plotting them.”

In approximately September 2008, al-Qaeda leaders in Pakistan recruited Medunjanin, Zazi and Ahmedzay, three friends from New York City, to conduct a suicide bombing attack in New York City.  Those al-Qaeda leaders, including Adnan El-Shukrijumah and Saleh al-Somali, communicated with Zazi about the plot through an al-Qaeda facilitator named “Ahmad,” who was located in Peshawar, Pakistan.  In early September 2009, after Medunjanin, Zazi and Ahmedzay had selected the New York City subway system as their target, Zazi emailed with “Ahmad” in Pakistan about the proper ingredients for the main charge explosive, which included flour and oil.  Zazi pleaded guilty to his role in the plot on Feb. 22, 2010; Ahmedzay pleaded guilty on April 23, 2010; and Medunjanin was convicted after trial on May 1, 2012, and was sentenced to life in prison.  Zazi and Ahmedzay are awaiting sentencing.

The investigation by authorities in the United States and United Kingdom revealed that “Ahmad” had also been communicating with Naseer earlier in 2009.  The evidence at trial established that Naseer and his Pakistani accomplices had been dispatched by al-Qaeda to the United Kingdom in 2006 in order to begin preparations for an attack in that country.  The defendant and his co-conspirators entered the United Kingdom on student visas but then immediately dropped out of the university in which they had enrolled.  The defendant, like Zazi, returned briefly to Peshawar in November 2008, at the same time Zazi and his co-conspirators were receiving weapons and explosives training from al-Qaeda in that region.  After returning to the United Kingdom, the defendant sent messages back and forth to the same email account that “Ahmad” was also using to communicate with the American-based al-Qaeda cell on behalf of Saleh al-Somali, al-Qaeda’s then-head of external operations.  In the messages, the defendant used coded language to refer to different types of explosives.  At the culmination of the plot, in early April 2009, Naseer told “Ahmad” that he was planning a large “wedding” for numerous guests during the upcoming Easter weekend and that “Ahmad” – whom he called “Sohaib” – should be ready.  Notably, Zazi testified that “Ahmad” had instructed him to use the same code of “marriage” to refer to the planned attack on the New York City subway and that Zazi emailed “Ahmad” that “the marriage is ready” just before he drove to New York in early September 2009 to conduct the attack.      

On April 8, 2009, Naseer and several associates were arrested in the United Kingdom.  In connection with these arrests, U.K. authorities conducted searches of the plotters’ homes as well as an internet café used by the defendant to send his messages to “Ahmad,” where they seized a large volume of electronic media.  As demonstrated at trial, a forensic review of the electronic media revealed that Naseer had downloaded several jihadi nasheeds, or anthems, calling for “death in large numbers.”  A document recovered from the raid on Usama bin Laden’s compound in May 2011 contained a letter from Saleh al-Somali to Bin Laden, written on April 16, 2009, that discussed the defendant and his accomplices’ arrests in the United Kingdom.

The case was investigated by the FBI’s Joint Terrorism Task Force.  The Justice Department’s Office of International Affairs, Internal Revenue Service–Criminal Investigation in New York, the U.S. Marshals Service in Brooklyn and the law enforcement authorities in the United Kingdom and Norway, including the Greater Manchester Police and the Norwegian Police Security Service, also provided significant assistance.

The case was prosecuted by Assistant U.S. Attorneys Zainab Ahmad and Michael P. Canty of the Eastern District of New York, and Trial Attorney Josh Parecki the National Security Division’s Counterterrorism Section.

Earlier today at the federal courthouse in Brooklyn, New York, Abid Naseer was sentenced to 40 years by United States District Judge Raymond J. Dearie for multiple terrorism offenses.  The defendant and his accomplices came within days of executing a plot to conduct a bombing at a crowded shopping mall in Manchester, United Kingdom, as directed by senior al-Qaeda leaders in Pakistan.   The planned attack, which also targeted the New York City subway system and a newspaper office in Copenhagen, Denmark, had been directed by and coordinated with senior al-Qaeda leaders in Pakistan.  Naseer is the eighth defendant to face charges in Brooklyn federal court related to the al-Qaeda plot, which also involved Adis Medunjanin, Najibullah Zazi, and Zarein Ahmedzay, the three members of the cell that targeted New York City.  Naseer was convicted in March 2015 after a three week jury trial of providing material support to al-Qaeda, conspiring to provide material support to al-Qaeda, and conspiring to use a destructive device in relation to a crime of violence.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; John P. Carlin, Assistant Attorney General for National Security; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and William J. Bratton, Commissioner, New York City Police Department (NYPD).

“This al-Qaeda plot was intended by the group’s leaders and Naseer to send a message to the United States and its allies,” United States Attorney Capers stated.  “Today’s sentence sends an even more powerful message in response:  terrorists who target the U.S. and its allies will be held accountable for their violent crimes to the full extent of the law.”  Mr. Capers extended his grateful appreciation to the FBI’s Joint Terrorism Task Force, which led the investigation and comprises a large number of federal, state, and local agencies from the region.  He also sent his appreciation to the Internal Revenue Service–Criminal Investigation, New York, the U.S. Marshal Service, Brooklyn, and the law enforcement authorities in the United Kingdom and Norway, including the Greater Manchester Police and the Norwegian Police Security Service, for their outstanding assistance with the case.

“Abid Naseer was part of an al Qaeda conspiracy that targeted Western countries, including the United States and the United Kingdom, for terrorist attack,” said Assistant Attorney General Carlin.  “His conviction and sentence reflect our dedication to identifying and holding accountable those who seek to target the United States and its allies.  I want to thank the many agents, analysts and prosecutors who are responsible for this successful result,” said Assistant Attorney General Carlin.

“Dispatched by al-Qaeda to the U.K. in 2006, Abid Naseer exploited the educational visa system not to improve his own life, but to take away the lives of many others ‘in large numbers.’  Trained in weapons and explosives, he communicated in code to hide his evil intentions.  Found guilty in a court of law, he has been spared the fate of death he wished upon others and will spend considerable time incarcerated in a country he and his co-conspirators failed to take down,” stated FBI Assistant Director-in-Charge Rodriguez.

“This case demonstrates the importance of a closely coordinated international law enforcement approach to an established terrorist network that knows no borders. The manner in which these defendants communicated their deadly plans reinforces the need to allow law enforcement the necessary authority and tools to prevent these plots from succeeding in their objectives of mass destruction and death.  I commend our local and international partners in preventing these acts and securing convictions of those responsible for plotting them,” said Police Commissioner Bratton.                        

During trial the government introduced evidence that in approximately September 2008, al-Qaeda leaders in Pakistan recruited Medunjanin, Zazi, and Ahmedzay, three friends from New York City, to conduct a suicide bombing attack in New York City.  Those al-Qaeda leaders, including Adnan El-Shukrijumah and Saleh al-Somali, communicated with Zazi about the plot through an al-Qaeda facilitator named “Ahmad,” who was located in Peshawar, Pakistan.  In early September 2009, after Medunjanin, Zazi, and Ahmedzay had selected the New York City subway system as their target, Zazi emailed with Ahmad in Pakistan about the proper ingredients for the main charge explosive, which included flour and oil.  Zazi pleaded guilty to his role in the plot on February 22, 2010; Ahmedzay pleaded guilty on April 23, 2010; and Medunjanin was convicted after trial on May 1, 2012 and was sentenced to life in prison.  Zazi and Ahmedzay are awaiting sentence.

The investigation by authorities in the United States and United Kingdom revealed that Ahmad had also been communicating with the defendant earlier in 2009.  The evidence at trial established that the defendant and his Pakistani accomplices had been dispatched by al-Qaeda to the U.K. in 2006 in order to begin preparations for an attack in that country.  The defendant and his co-conspirators entered the U.K. on student visas but then immediately dropped out of the university in which they had enrolled.  The defendant, like Zazi, returned briefly to Peshawar in November 2008, at the same time Zazi and his co-conspirators were receiving weapons and explosives training from al-Qaeda in that region.  After returning to the U.K., the defendant sent messages back and forth to the same email account that Ahmad was also using to communicate with the American-based al-Qaeda cell on behalf of Saleh al-Somali, al-Qaeda’s then-head of external operations.  In the messages, the defendant used coded language to refer to different types of explosives.  At the culmination of the plot, in early April 2009, the defendant told Ahmad that he was planning a large “wedding” for numerous guests during the upcoming Easter weekend, and that Ahmad – whom he called “Sohaib” – should be ready.  Notably, Zazi testified that Ahmad had instructed him to use the same code of “marriage” to refer to the planned attack on the New York City subway and that Zazi emailed Ahmad that “the marriage is ready” just before he drove to New York in early September 2009 to conduct the attack.

On April 8, 2009, the defendant and several associates were arrested in the United Kingdom.  In connection with these arrests, U.K. authorities conducted searches of the plotters’ homes as well as an internet café used by the defendant to send his messages to Ahmad, where they seized a large volume of electronic media.  As demonstrated at trial, a forensic review of that electronic media revealed that the defendant had downloaded several jihadi nasheeds, or anthems, calling for “death in large numbers.”  A document recovered from the raid on Usama bin Laden’s compound in May 2011 contained a letter from Saleh al-Somali to Bin Laden, written on April 16, 2009, that discussed the defendant and his accomplices’ arrests in the U.K.

The government’s case is being prosecuted by the Office’s National Security & Cyber Crime Section.  Assistant United States Attorneys Zainab Ahmad and Michael P. Canty are in charge of the prosecution, with assistance provided by the Justice Department’s National Security Division and Office of International Affairs.

The Defendant:

ABID NASEER
AGE: 29

E.D.N.Y. Docket No. 10-CR-019 (RJD)

Earlier today at the federal courthouse in Central Islip, New York, Juan Garcia, also known as “Cruzito,” a member of La Mara Salvatrucha, also known as the MS-13 street gang, was sentenced to life by United States District Judge Joseph F. Bianco.  Garcia and two other MS-13 members, Adalberto Ariel Guzman and Rene Mendez Mejia, shot and killed 19-year-old Vanessa Argueta and her two-year-old son, Diego Torres, in Central Islip, New York, on February 5, 2010.  Garcia and Mejia shot Argueta in the chest and head, respectively, and Guzman shot Torres twice in the head.  After committing the murders, Garcia and his co-conspirators fled to El Salvador.  Guzman and Mejia were arrested in May 2010, but Garcia remained a fugitive for four years until March 2014, when, after being placed on the FBI’s Ten Most Wanted Fugitives List, he surrendered to law enforcement authorities in Nicaragua, waived extradition, and was returned to the United States for prosecution.  He pled guilty on October 15, 2014.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

 “The MS-13 is infamous for committing senseless and brutal acts of violence, but, even for the MS-13, the murders of Vanessa Argueta and Diego Torres were particularly depraved and callous,” United States Attorney Capers stated.  “However, as a result of the tenacious investigation and prosecution jointly conducted by this Office and our law enforcement partners, Garcia and his co-conspirators have been captured, convicted, and justly sentenced for cold-bloodedly executing a young mother and her two-year-old child.”  United States Attorney Capers expressed his sincere gratitude to the members of the FBI’s Long Island Gang Task Force, the FBI’s Violent Criminal Threat Section, and the FBI’s Legal Attaches for El Salvador and Panama, for their unwavering commitment to bring Garcia and his co-conspirators to justice for the Argueta and Torres murders.

“Today’s sentencing is the final chapter in the government’s commitment to get justice for the victims. Garcia and his fellow MS-13 members senselessly and callously murdered a young mother and her toddler five years ago. The FBI is committed to working with our partners to not only root-out gangs in our communities but also bring their crimes to justice,” stated FBI Assistant Director-in-Charge Rodriguez. 

Garcia and other MS-13 members, including MS-13 leader, Heriberto Martinez, Guzman, and Mejia plotted to kill Argueta because they believed she had disrespected the MS-13 by sending rival gang members to attack Garcia. 

Martinez was convicted in March 2013, following a six-week trial, in connection with the Argueta murder, as well as the March 6, 2010 murder of Nestor Moreno in Hempstead, New York, and the March 17, 2010 murder of Mario Alberto Canton Quijada in Far Rockaway, New York, and later sentenced to life in prison, plus 60 years.  Guzman was convicted on charges relating to the Argueta and Torres murders in September 2013, following a three-week trial, and later sentenced to life in prison, plus 35 years.  Mejia pled guilty to the Argueta and Torres murders and is pending sentence. 

The convictions of Garcia and his codefendants are 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 25 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, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, and Suffolk County Police Department.

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

The Defendant:

Juan Garcia
Age:  22
Baldwin/Inwood, New York

E.D.N.Y. Docket No. 10-CR-471 (JFB)

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging John Wolf with conspiring to possess methamphetamine with intent to distribute and possession and distribution of child pornography.  The defendant was arrested earlier today at his residence, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Robert M. Levy at the U.S. 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, Diego Rodriguez, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office, and James J. Hunt, Special Agent in Charge, Drug Enforcement Administration, New York.

As set forth in the complaint, the defendant, a Manhattan dentist, provided dental services to a drug dealer in exchange for methamphetamine, some of which the defendant would use personally and some of which he would distribute to others. 

The defendant also used his dental office as a place to view and distribute child pornography.  In recorded conversations with an FBI undercover agent, the defendant admitted that he possessed child pornography and provided the undercover agent with a flash drive containing files depicting child pornography, including videos of children as young as toddlers being raped by adult men.     

United States Attorney Capers expressed his grateful appreciation to the Federal Bureau of Investigation and the Drug Enforcement Administration, the agencies responsible for leading the investigation, and thanked the New York City Police Department and the New York State Police for their assistance.

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 Attorney Moira Kim Penza.

The Defendant:

Name: John Wolf
Age: 59
New York, New York

If you have information regarding this case, or you believe you or a family member may have been a victim, please contact the FBI at 212/384-5000.

Charged Offenses Include Sex Trafficking, Interstate Prostitution, Alien Smuggling, Money Laundering, Racketeering and Racketeering Conspiracy in Connection with Scheme to Compel Mexican Women and Girls into Prostitution in the United States 

A 27-count indictment was unsealed yesterday in the U.S. District Court for the Eastern District of New York charging eight defendants with racketeering and racketeering conspiracy involving predicate acts of sex trafficking by force, fraud and coercion, sex trafficking of minors, interstate prostitution, alien smuggling, money laundering and related offenses. 

Over the past two days, five defendants were arrested in Mexico and two in Queens, New York, as part of a coordinated bilateral law enforcement action.  A third U.S. defendant is currently in federal custody in West Virginia.  The eight defendants are Jovan Rendon-Reyes, aka Jovani, 32, of Mexico; Saul Rendon-Reyes, aka Satanico, 37, of Queens; Guillermina Rendon-Reyes, 44, of Mexico; Francisco Rendon-Reyes, aka Pancho, 27, of Queens; Jose Rendon-Garcia, aka Gusano, 32, of Mexico; Felix Rojas, 45, of Mexico; Odilon Martinez-Rojas, aka Chino or Saul, 44, currently of Brucetown Mills, West Virginia; and Severiano Martinez-Rojas, 50, of Mexico.

The charges were announced by Attorney General Loretta E. Lynch; Director Sarah R. Saldaña of U.S. Immigration and Customs Enforcement (ICE); Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division; and U.S. Attorney Robert L. Capers of the Eastern District of New York.

“This case demonstrates the Justice Department’s steadfast commitment to ending human trafficking,” said Attorney General Lynch.  “As set forth in the indictment, these defendants used force, fraud, and coercion to lure young women and girls into their control, smuggle them into the United States, and exploit them for profit – an abhorrent violation of both the law and basic human dignity.  In the days ahead, the Department of Justice will continue to act decisively to hold traffickers accountable, protect vulnerable individuals, and assist survivors of this heinous crime.  I want to thank the prosecutors and law enforcement officers who worked tirelessly on this case, and our partners in the government of Mexico for their invaluable assistance.”

“Today’s joint operation reflects our commitment to working with Mexico to bring to justice human traffickers who have no regard for human life,” said Director Saldaña.  “We are resolute in our efforts to not only arrest the human traffickers behind this vile crime, but also to rescue the victims whose lives have tragically been forever changed.”

“Vindicating the rights of vulnerable individuals is among the highest priorities of the Department of Justice and the Civil Rights Division,” said Principal Deputy Assistant Attorney General Gupta.  “The defendants are charged with operating a scheme across international borders to exploit young women and girls by prostituting them for the benefit of the defendants.  We will work tirelessly to pursue justice for those held in modern-day slavery.”

“Human trafficking in any form will not be tolerated,” said U.S. Attorney Capers.  “We remain steadfast in our commitment to prosecute sex traffickers and those who would enslave women and children for monetary gain.  We will not rest until international trafficking organizations are eliminated.”

The indictment alleges that the defendants were members of an international criminal organization, identified in the indictment as the Rendon-Reyes Trafficking Organization, which engaged in sex trafficking and related criminal activity between December 2004 and June 2014 in Queens, Atlanta and Jemison, Alabama, among other locations.  The defendants used force, threats of force, fraud and coercion to cause young women and girls from Mexico and Latin America to engage in prostitution in the United States.

Since 2009, the Department of Justice and ICE’s Homeland Security Investigations (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 over 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 charges unsealed yesterday are the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted over 65 defendants in sex trafficking cases and provided assistance to over 130 victims, including 36 minors.  In addition, through the Eastern District of New York’s anti-trafficking program, 18 children have been reunited with their victim-mothers.

The U.S.-based defendants were arraigned yesterday before U.S. Magistrate Judge James Orenstein of the Eastern District of New York at the federal courthouse in Brooklyn.

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

In announcing the indictment, Attorney General Lynch, Director Saldaña, Principal Deputy Assistant Attorney General Gupta and U.S. Attorney Capers commended the HSI’s New York Office, the HSI Mexico Attaché Office, the FBI’s Atlanta Division, the U.S. Attorney’s Office of the Northern District of Georgia, 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 this bilateral enforcement action.  The Justice Department also acknowledged the non-governmental victim service providers and advocates for their dedicated efforts to restore and improve the lives of survivors of trafficking and their families in connection with this case and others.

The case is being prosecuted by Assistant U.S. Attorneys Taryn A. Merkl and Margaret Lee of the Eastern District of New York and Trial Attorney Benjamin Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.

Rendon-Reyes et al Indictment

A twelve-count indictment was unsealed today in the United States District Court in Brooklyn charging seven defendants with crimes including conspiracy to distribute of heroin, crack cocaine, powder cocaine and marijuana, use and possession of firearms in furtherance of a drug crime, and firearms trafficking.  The defendants were arraigned today before United States Magistrate Judge Robert M. Levy, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges and arrests were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Delano A. Reid, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division (ATF); William J. Bratton, Commissioner, New York City Police Department (NYPD) and Thomas C. Krumpter, Acting Commissioner, Nassau County Police Department (NCPD).

In response to rising violence in the area, the FBI, ATF, NYPD and NCPD conducted a joint investigation resulting in today’s charges against members of a Far Rockaway-based narcotics and firearms trafficking organization.  As detailed in the detention memorandum filed today by the government, during the course of the investigation law enforcement agents monitored a court-ordered wiretap on a cellular telephone used by a leader of the organization which documented the defendants’ distribution of heroin and other narcotics.  In one call, organization members discussed packaging a quantity of heroin for resale representing more than 1,500 individual doses with a retail value of more than $15,000.  As part of the investigation, law enforcement agents and officers purchased from the defendants heroin representing some 2,500 individual doses and more than a dozen firearms, including two assault rifles.  Today, in conjunction with the arrests, agents executed search warrants at three locations in Far Rockaway resulting in the seizure of heroin, firearms, scales and other narcotics paraphernalia.

The intercepted telephone calls also demonstrate the organization’s possession and sale of firearms and willingness to resort to violence to resolve drug disputes.  For example, in a call intercepted on September 29, 2015, between a coconspirator and a narcotics customer, the customer recounted a previous incident in which the defendant Jose Perez threatened to shoot the customer over money owed to the organization.  The coconspirator told the customer “I know he pulled a gun, but you played yourself, that’s why. . . .  He did that because you owed me money.  That’s why I told him not to shoot you.”  In a call intercepted on September 30, 2015, in which defendant Jose Crespo and a coconspirator discussed their concerns about law enforcement activity in the area, Crespo confirmed that defendant Jermaine Stephenson was holding the organization’s firearms.  Stephenson’s role as the holder of the organization’s firearms was corroborated in a separate recording made by a cooperating witness on September 11, 2015, in which a coconspirator described Stephenson as the organization’s “holster.”  Most recently, in a recording made by a cooperating witness on November 11, 2015, a coconspirator informed the cooperating witness that he keeps a firearm “on standby” at his house and would be willing to use it to resolve a dispute the cooperating witness claimed to be having.

“This prosecution deals a fatal blow to a group allegedly responsible for funneling illegal guns and drugs into Far Rockaway,” stated United States Attorney Capers.  “We are committed to dismantling such criminal organizations and removing the scourge of illegal guns and drugs – and the violence that ensues – from our neighborhoods and making our communities safe for their residents.”

FBI Assistant Director-in-Charge Rodriguez stated, “Engaging in the illegal distribution of firearms and drugs is an extremely dangerous combination, one that promotes violent activity and degrades the core of our communities.  The defendants’ alleged actions highlight the looming danger that’s imminent when criminals bring guns and drugs into our neighborhoods.  The FBI will continue to aggressively investigate these cases, work with our partners to disrupt and dismantle such activity, and minimize the threat these criminals pose to the innocent members of our community.”

ATF Special Agent-in-Charge Reid stated, “Just as important as making these arrests and virtually dismantling this alleged criminal organization is the fact that the ATF and its law enforcement partners have drastically improved the quality of life in the Far Rockaway area. I am extremely thankful for the inter agency cooperation during the course of this investigation and am confident that the prosecution of these defendants will be swift and comprehensive.  This group’s days of illegally dealing in heroin have come to an end.”

“Today’s arrests and indictments are the result of the coordinated efforts of law enforcement to stop the flow of illegal firearms and narcotics into Far Rockaway.  I commend the hard work of the investigators involved in the case whose efforts resulted in these individuals being brought to justice,” said NYPD Commissioner Bratton.

“Crime has no boundaries and this case is an example of how partners in law enforcement utilized talented personnel and resources to bring these seven defendants to justice,” said Acting NCPD Police Commissioner Krumpter.  “Today’s arrests should serve as a deterrent to criminals as we at the Nassau County Police Department are committed to working with our fellow law enforcement partners to ensure public safety.”

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted of the most serious offense, six of the defendants face maximum sentences of life imprisonment, and one defendant faces up to 20 years of imprisonment.  

The government’s case is being prosecuted by The Office’s Organized Crime & Gangs Section.  Assistant United States Attorney Kevin Trowel is in charge of the prosecution.

The Defendants:

JOSE CRESPO, also known as “Santana” and “San”
Age: 54
Bronx, NY

RAY JOHNSON, also known as “Moreno” and “Spoon”
Age: 30
Queens, NY

JERMAINE STEPHENSON, also known as “Half”
Age: 34
Queens, NY

JOSE PEREZ
Age: 39
Queens, NY

ISMAEL DEVALLE, also known as “Ish”
Age: 40
Queens, NY

MIRIAM GAITHER
Age: 34
Queens, NY

GRACE JAEN, also known as “Gracie” and “Graciela”
Age: 31
Queens, NY

Robert L. Capers, United States Attorney for the Eastern District of New York, today announced the filing of a Complaint and Settlement Agreement in United States v. Triborough Bridge and Tunnel Authority a/k/a MTA Bridges and Tunnels, Civil Action No. CV-15-6417 to settle violations of Title VII of the Civil Rights Act of 1964 ("Title VII").

In its Complaint, the United States alleges that the Triborough Bridge and Tunnel Authority ("TBTA") routinely required pregnant Bridge and Tunnel Operating Force Officers, whose duties include protecting the safety and security of many of the major bridges and tunnels in the New York City area, to surrender their guns and work in less than full duty status regardless of their physical condition or ability to perform the requirements of the job. In one case, Officer Lori Ann DiPalo, then early in her pregnancy, provided a written opinion from her personal physician certifying that she could perform the full range of her duties. Nonetheless, without examining her, the TBTA determined that simply because DiPalo was pregnant, she could not perform her full duties or safeguard a firearm. The TBTA stripped DiPalo of her firearm privileges and forced her to choose between toll booth duty or disability leave for the remainder of her pregnancy.

Under the terms of the settlement, the TBTA will revise its EEO policy to reflect Title VII’s requirements, as well as create a new policy addressing fitness for duty status and workplace accommodations for Bridge and Tunnel Officers. The TBTA will also train all its employees on Title VII and the protection that Title VII affords pregnant employees. The TBTA will pay Officer DiPalo $100,000 in damages and $106,500 in damages collectively to a group of twelve other officers affected by the TBTA’s discriminatory practice.

"Title VII prohibits discrimination against pregnant employees" stated U.S. Attorney Capers. "This Settlement Agreement ensures that pregnant Bridge and Tunnel Operating Force Officers able to perform their duties will not be forced to accept lesser roles simply because they are pregnant."

The United States’ claims were litigated by Assistant United States Attorney Kelly Horan Florio. The United States Equal Employment Opportunity Commission also participated in the settlement process.

BROOKLYN, NY – Late yesterday, defendants Gary Kershner, an Arizona business owner, and Songkram Roy Sahachaisere, a California stock promoter, were convicted by a federal jury in Brooklyn on all counts for their role in a $95 million international market manipulation scheme.  The jury’s verdict followed a five week trial before United States District Judge Eric N. Vitaliano.  The defendants were convicted of conspiracy to commit securities fraud, conspiracy to commit wire fraud, two counts of securities fraud, four counts of wire fraud, and two counts of making false statements to federal agents.  Kershner and Sahachaisere are the eighth and ninth defendants convicted in this case.

The guilty verdicts were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“Through lies and deceit, the defendants took advantage of the investing public and sold them worthless stock of shell companies that were propped up by false press releases.    We and our partners in law enforcement are committed to rooting out fraud in the financial markets,” stated United States Attorney Capers.  Mr. Capers extended his appreciation to the FBI, which led the government’s investigation, and thanked the Internal Revenue Service, Criminal Investigation, New York; Homeland Security Investigations, Department of Homeland Security, Buffalo; Treasury Inspector General for Tax Administration; the Royal Canadian Mounted Police; and law enforcement authorities in England, Thailand, and China for their assistance in this case.

The evidence at trial established that Kershner and Sahachaisere, together with others, engaged in an international “pump and dump” operation,  fraudulently inflating the share price of worthless penny stocks, and then dumping billions of shares on unsuspecting victim investors across the globe.  Kershner was responsible for drafting the false press releases and Sahachaisere was responsible for promoting the worthless companies based on the false press releases.

When sentenced by United States District Judge Eric N. Vitaliano, Kershner and Sahachaisere face a sentence of up to 20 years in prison.

This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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’s 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, visit http://www.StopFraud.gov.

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Christopher A. Ott, Tyler Smith, and Mark Bini are in charge of the prosecution, with assistance provided by Assistant United States Attorney Melanie Hendry of the Office’s Civil Division, which is responsible for the forfeiture of assets.

The Defendants:

Gary Kershner
Age: 75
Tucson, Arizona

SONGKRAM ROY SAHACHAISERE
Age: 45
Newport Beach, California

E.D.N.Y. Docket No. 13-CR-452 (S-2) (ENV)

Earlier today, Jamal Laurent, a member of a set of the violent street gang Folk Nation operating primarily in the Crown Heights and East Flatbush neighborhoods of Brooklyn, was sentenced to five consecutive terms of life imprisonment at the federal courthouse in Brooklyn, New York.  Last week, on November 6, 2015, one of Laurent’s co-defendants, Trevelle Merritt, was sentenced to 40 years of imprisonment.  On March 18, 2015, both defendants, along with a third defendant, Yasser Ashburn, were convicted, following a jury trial, of racketeering and racketeering conspiracy, including as racketeering acts the murders of Courtney Robinson, Brent Duncan, and Dasta James, and related crimes.  Ashburn is scheduled to be sentenced on January 8, 2016, and faces a mandatory term of life imprisonment.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and William J. Bratton, Commissioner, New York City Police Department (NYPD).

 “The defendants committed a string of shootings, robberies, and other senseless acts of violence that for years terrorized the law-abiding members of their community,” stated United States Attorney Capers.  “We hope that the sentences imposed give a measure of comfort and closure to the victims and their families, and serve as a warning and deterrent to those who would continue to commit crimes in the name of this violent gang.”  Mr. Capers expressed his grateful appreciation to the FBI and the NYPD, the agencies that led the government’s investigation. 

From approximately 2007 until their arrests, the defendants, all members of the Folk Nation gang, were responsible for numerous acts of gang-related violence, including homicides, non-fatal shootings, and robberies in and around Crown Heights and East Flatbush, as well as elsewhere in the tri-state area.

During the course of the summer of 2010, Laurent committed seven armed robberies and three shootings.  On June 19, 2010, Laurent shot and killed 18-year-old Brent Duncan while Duncan sat in his car outside a party in Brooklyn.  Laurent subsequently told a friend that he shot Duncan because Duncan was a member of the rival Crips gang, but no evidence ever established that Duncan belonged to, or was even associated with, that gang.

On July 7, 2010, the same day that Laurent robbed three individuals at gunpoint, Laurent also attempted to murder Louis Ivies, who Laurent believed to be a member of the Crips.  After greeting Ivies on the street, Laurent removed a gun from his waistband and fired at him eight times, hitting him five times.  Ivies was seriously injured but ultimately survived.

During a three-week period in January 2011, Merritt and fellow gang members participated in a robbery spree that culminated in murder.  In the first two robberies, Merritt and others robbed two residents of the Ebbets Field Houses of their cell phones.  On January 28, 2011, Merritt, Laurent, and another man attempted to rob Dasta James at his residence on McKeever Place in Brooklyn.  During the course of the robbery, James was shot in the back and head.  He was taken to Kings County Hospital, where he died.

The government’s case is being prosecuted by the Office’s Organized Crime & Gangs Section.  Assistant United States Attorneys Darren LaVerne, M. Kristin Mace, and Margaret Lee are in charge of the prosecution.

The Defendants:

JAMAL LAURENT, also known as “Tails”
Age: 25
Brooklyn, NY

TREVELLE MERRITT, also known as “Tiger”
Age: 22
Brooklyn, NY

E.D.N.Y. Docket No. 11-CR-303 (NGG)

Michael Troyan, a physician assistant who operated two urgent care clinics on the east end of Long Island was arrested this morning pursuant to a grand jury indictment[1] with conspiring to illegally distribute oxycodone, a highly addictive prescription pain medication.  Also this morning, a search warrant was executed at the East End Urgent and Primary Care in Riverhead by the DEA’s Long Island Tactical Diversion Squad which is comprised of agents and officers of the DEA, Nassau County Police Department, Rockville Centre Police Department, and Port Washington Police Department.   The Long Island Tactical Diversion Squad was also assisted by agents and officers of the Department of Health & Human Services, the Southampton Town Police Department, and the Suffolk County District Attorney’s East End Drug Taskforce.  The defendant is scheduled to be arraigned this afternoon before United States Magistrate Judge Gary R. Brown at the United States Courthouse in Central Islip, New York.

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

The indictment and public filings allege that between November 2011 and October 2015, Troyan, a physician assistant with authority to prescribe controlled substances, issued prescriptions for thousands of oxycodone pills to co-conspirators for the purpose of illegally re-selling the pills for cash.  Troyan was captured on video in an undercover operation writing phony prescriptions for oxycodone and receiving large quantities of cash at his Riverhead medical office for prior illegal sales.  Troyan was receiving half of the profit from the sale of the oxycodone pills.

United States Attorney Capers stated, “As alleged, Troyan abused his authority to prescribe controlled substances and his position of trust as a physician assistant to illegally sell oxycodone in exchange for cash.  Such abuse by health care professionalswill not be tolerated.”  Mr. Capers extended his grateful appreciation to each of theparticipating law enforcement agencies for their assistance in this case.          

DEA Special Agent in Charge James J. Hunt stated, “People who are addicted to opioid painkillers are forty times more likely to be addicted to heroin.   Cashing in on heroin’s hold over American communities, it is alleged that Michael Troyan wrote prescriptions to oxycodone dealers on the East End in exchange for half the cash profits from the resulting drug sales.  DEA and our law enforcement partners will continue to identify the diverted painkiller suppliers, be it an oxy street dealer, a rogue doctor, or a greedy physician’s assistant.”      

If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment and a $1 million fine.

This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative.  In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this jurisdiction, 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 Prescription Drug 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 so-called opioid analgesics. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 18 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and a pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers.  The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.

The government’s case is being prosecuted by the Office’s Long Island Criminal Division.  Assistant United States Attorney Allen Bode is in charge of the prosecution.

The Defendant:

Name: MICHAEL TROYAN
Age: 37
Residence: Riverhead, New York

 

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

BROOKLYN, NY -- Darren Ofsink, a Manhattan attorney and founder of Ofsink LLC; Michael Morris, a registered broker and managing director of Halcyon Cabot Partners, Ltd. (Halcyon); and Darren Goodrich, a registered broker; were arrested earlier today on charges of securities fraud, wire fraud, and conspiracy to commit securities fraud, mail fraud, and wire fraud in connection with a $300 million market manipulation scheme.  In addition to the three defendants arrested today, the eleven-count superseding indictment unsealed this morning charges four additional defendants who were arrested in July 2014: Abraxas J. Discala, also known as “AJ Discala,” the Chief Executive Officer of OmniView Capital Advisors LLC; Ira Shapiro, the Chief Executive Officer of CodeSmart Holdings, Inc., a publicly traded company; Craig Josephberg, a registered broker; and Kyleen Cane, a Las Vegas attorney and managing partner of Cane Clark LLP.[1]  Three defendants, Marc Wexler, Matthew Bell, and Victor Azrak, who were charged in the underlying indictment, have pleaded guilty and are awaiting sentencing.

Ofsink and Morris will be arraigned later today before Magistrate Judge Viktor V. Pohorelsky, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.  Goodrich’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 312 North Spring Street, Los Angeles, California.  Discala, Shapiro, Josephberg, and Cane will be arraigned on the superseding indictment at a later date.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“As alleged, licensed professionals such as Ofsink, Morris, and Goodrich abused their positions of trust and became part of an elaborate scheme designed to defraud the securities markets and the investing public through false and misleading press releases and manipulated trading activity.  The three were entrusted to be gatekeepers to the securities markets but instead perpetrated one of the largest market manipulation schemes ever, and by doing so, preyed upon unsuspecting and elderly investors,” stated United States Attorney Capers.  “Today’s three arrests and the seven arrests last year, reflect the scope of this fraud and our commitment to bring to justice those who abuse our financial markets in order to fraudulently enrich themselves.”  Mr. Capers expressed his appreciation to the FBI for its tireless efforts in leading the investigation and thanked the United States Securities and Exchange Commission, New York Regional Office, for their significant cooperation and assistance.

“Using investment schemes like ‘pump and dump,’ ‘wash trades,’ and ‘match trades,’ the defendants were able to manipulate stock prices to profit themselves while defrauding unsuspecting investors.  The FBI is committed to investigating and bringing to justice those who prey upon trusting individuals for their own personal gain.” stated FBI Assistant Director-in-Charge Rodriguez.

As alleged in the indictment and other court filings, between October 2012 and July 2014, the defendants agreed to defraud investors and potential investors in four public companies: CodeSmart Holdings, Inc. (CodeSmart), trading under the ticker symbol ITEN; Cubed, Inc. (Cubed), trading under the ticker symbol CRPT; StarStream Entertainment Inc. (StarStream), trading under the ticker symbol SSET; and The Staffing Group, Ltd. (Staffing Group), trading under the ticker symbol TSGL (collectively, the Manipulated Public Companies) by artificially controlling the price and volume of traded shares in the Manipulated Public Companies through  false and misleading press releases, false and misleading SEC filings, fraudulent concealment of the defendants’ and their co-conspirators’ ownership interests, engineering price movements and trading volume in the stocks, and unauthorized purchases of stock in accounts of unwitting investors.

The CodeSmart Manipulation Scheme

In early May 2013, the defendants engineered a reverse merger of CodeSmart, a private company, with a shell public company.  After gaining control of CodeSmart’s three million purportedly unrestricted shares, the defendants, including Ofsink and Morris, on two occasions fraudulently inflated CodeSmart’s share price and trading volume and then sold their shares at a profit when the price reached desirable levels -- a scheme commonly referred to as a “pump and dump.”  The first pump and dump occurred between approximately May 13, 2013 and August 21, 2013.  During this period, the defendants manipulated CodeSmart’s stock price by raising it from $1.77 to a high of $6.94, before causing it to drop to $2.19.  The second pump and dump occurred between approximately August 21, 2013 and September 20, 2013.  During this period, the defendants manipulated CodeSmart’s stock price by raising it from $2.19 to a high of $4.60, before causing it drop to $2.13.

CodeSmart’s market capitalization at its highest closing price of $6.94 per share on July 12, 2013 was $86,347,800.  However, that same day, CodeSmart filed with the SEC an amended Form 10-K, in which it listed only $6,000 in total assets, $7,600 in revenue, and a net loss of $103,141.  By December 30, 2013, CodeSmart’s stock was trading at $0.66 per share, and on July 9, 2014, its stock closed at $0.01 per share.

The defendants profited by selling CodeSmart stock, issued to them at pennies, to unsuspecting investors, often without the investors’ knowledge and consent.  Additionally, the defendants, including investment advisers and brokers, were selling CodeSmart shares in their personal trading accounts at the same time that they were purchasing that stock in their clients’ and customers’ accounts.  During the first pump and dump, the defendants and their co-conspirators sold approximately 800,000 shares of CodeSmart in their personal accounts while they purchased virtually the identical amount in unsuspecting investors’ accounts.

The Cubed Manipulation Scheme

In March 2014, the defendants took Cubed public through an asset purchase agreement.  Between April 22, 2014 and April 30, 2014, they concocted trading volume in this stock by purchasing more than 50% of the total number of Cubed shares purchased during this period.

A judicially-authorized wiretap of Discala’s cellular telephone revealed that the defendants and their co-conspirators fraudulently manipulated Cubed’s stock by artificially controlling the price and volume of that stock through, among other things, wash trades and matched trades.[2]  Rather than generating significant market interest and causing a quick pump and dump that would elicit regulators’ scrutiny this time, the defendants gradually increased the price of Cubed’s stock to give it the appearance of a legitimate company with genuine and steady market demand for the security.  The defendants used an escrow account maintained by Cane to successfully control the price and volume of Cubed’s stock.  For example, on May 20, 2014, during a telephone call between Discala and Azrak, Discala emphasized his control over Cubed’s share price through the use of the escrow account, stating, “I’m the [expletive] brake and the gas, [expletive].  If I take my foot off the brake it’s 55 [dollars] tomorrow (laughter).”

On June 23, 2014, Cubed reached its highest closing price of $6.75 per share, resulting in a market capitalization of approximately $200 million.  Previously, Cubed filed with the SEC a Form 10-Q and reported less than $1,500 in cash, zero revenue, negative stockholders’ equity, a net loss of $15,000, and accrued professional fees of $131,824.

This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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’s 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, visit http://www.StopFraud.gov.

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Walter M. Norkin, Shannon C. Jones, Winston M. Paes and Patrick Hein are in charge of the prosecution, with assistance provided by Assistant United States Attorney Claire Kedeshian of the Office’s Civil Division, which is responsible for the forfeiture of assets.

The Defendants:

ABRAXAS J. DISCALA, also known as “AJ Discala”
Age:  44
Residence: Norwalk, Connecticut

IRA SHAPIRO
Age:  54
Residence: Congers, New York

CRAIG JOSEPHBERG
Age:  42
Residence: New York, New York

KYLEEN CANE
Age:  60
Residence: Las Vegas, Nevada

DARREN GOODRICH
Age:  37
Residence: Manhattan Beach, California

DARREN OFSINK
Age:  46
Residence: Merrick, New York

MICHAEL MORRIS
Age:  63
Residence: Merrick, New York

E.D.N.Y. Docket No. 14-CR-399 (S-1) (ENV)

 

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

[2]           Wash trades are purchases and sales of securities that match each other in price, volume, and time of execution, and involve no change in beneficial ownership.  For example, a wash trade occurs when Investor A buys 100 shares at $5.00 of Company A through Broker A while simultaneously selling 100 shares at $5.00 of Company A through Broker B.  Matched trades are similar to wash trades but involve a related third person or party who places one side of the trade.  For example, a matched trade occurs when Investor A buys 100 shares at $5.00 of Company A through a broker, while Investor B, who coordinates with Investor A, simultaneously sells 100 shares at $5.00 of Company A through a broker.  Both wash trades and matched trades are used to create the appearance that the stock price rose as a result of genuine market demand for the securities.

Earlier today, in federal court in Brooklyn, Fausto Bonifaz was sentenced to 151 months’ imprisonment, to be followed by 20 years of supervised release, for coercing and enticing three minors, ages 12 and 13, to engage in sexual activity.  As part of the sentence, the defendant will be required to register as a sex offender.  Bonifaz pled guilty in March 2015.

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

Bonifaz began to sexually abuse the victims in 2009, when they were 12 and 13 years old.  Over the course of the next year, he sexually assaulted one of the victims on a weekly basis at her home at the Fort Hamilton Army base, which he admitted at the time of his guilty plea and at sentencing.  At sentencing, the government presented evidence that Bonifaz also abused two other minor victims, again at the Fort Hamilton Army base.

In announcing the sentence, Mr. Capers expressed his grateful appreciation to the Federal Bureau of Investigation, the agency responsible for leading the government’s investigation.

The sentencing proceeding took place before Sr. United States District Judge Raymond J. Dearie.

The government’s case is being prosecuted by Assistant United States Attorney Tiana Demas.

This case was brought as part of Project Safe Childhood, a nationwide initiative to protect children by combatting the sexual exploitation and abuse of minors.  Led by United States Attorneys’ Offices around the country, Project Safe Childhood marshals federal, state, and local resources to apprehend and prosecute individuals who exploit children and to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.

The Defendant:

Name: FAUSTO BONIFAZ
Age: 40
Queens, New York

E.D.N.Y. Docket No. 14-575 (RJD)

Earlier today, William D. Gulick, Jr., a registered sex offender from Commack, Long Island, pled guilty at the federal courthouse in Central Islip, New York, to receiving child pornography in interstate commerce.  The proceeding took place before United States Magistrate Judge Steven I. Locke.  At sentencing, Gulick faces a mandatory minimum sentence of 15 years in prison and a maximum of 40 years in prison.

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

“Registered Sex Offenders such as the defendant are on notice that we are committed to protecting children and will vigorously prosecute those who victimize them,” stated United States Attorney Capers.  “The penalties for repeated child exploitation offenses under federal law are deservedly severe.”  Mr. Capers thanked the U.S. Immigrations Customs Enforcement’s (ICE), Homeland Security Investigations (HSI) and the Suffolk County Police Department (SCPD) for their assistance in the investigation.

As detailed in the indictment and court filings, in the fall of 2014, HSI agents, as part of an ongoing effort to locate individuals sharing child pornography, traced child pornography observed via peer-to-peer online trading software back to the defendant’s Commack residence.  The images and videos he downloaded involved the rape of children as young as toddlers.  During execution of a search warrant on the residence, SCPD Emergency Services officers were forced to use a Taser device to disarm and apprehend the defendant.

Gulick, Jr. is a registered sex offender based upon a prior child abuse conviction in Suffolk County in 1998 for Sexual Abuse in the 1st Degree and a 2013 conviction for Possessing a Sexual Performance of a Child under 16.  At the time of his arrest in this case, the defendant was on probation for the 2013 conviction and had recently been released from custody.

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

The Defendant:

William D. Gulick, Jr.
Age:  36
Commack, New York                                             

E.D.N.Y. Docket No. 14 CR 608 (ADS)

Earlier today, after a month-long trial, Alexander Posobilov, Shavkat Abdullaev and Anastasia Diatlova were convicted of all counts, including conspiring to export, and illegally exporting, controlled microelectronics to Russia.  Posobilov was also convicted of money laundering conspiracy.  These defendants, all of whom worked at Arc Electronics Inc. (Arc), a Houston-based corporation, and eight other individuals were originally charged in October 2012.  Five members of the conspiracy, including Arc owner Alexander Fishenko, previously pleaded guilty to related charges.

The convictions were announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director Randall C. Coleman of the FBI's Counterintelligence Division and Director Douglas Hassebrock of the Department of Commerce’s Office of Export Enforcement.

“Alexander Posobilov, Shavkat Abdullaev and Anastasia Diatlova evaded U.S. export laws to illegally send sophisticated microelectronics to Russia,” said Assistant Attorney General Carlin.  “By purposefully circumventing U.S. law, including the International Emergency Economic Powers Act and the Arms Export Control Act, the defendants jeopardized our national security.”

“These defendants were key players in a sprawling scheme to illegally export sophisticated technology to Russia,” said U.S. Attorney Capers.  “Through lies and deceit, the defendants and their co-conspirators sold over $30 million of microchips, much of which was destined for Russian military and intelligence agencies.”

“By putting a halt to this conspiracy, and stopping the flow of these dual-use components to the Russian military and intelligence services, this verdict represents a clear victory for our national security,” said Assistant Director Coleman.

“Today's convictions send a strong message to those who willfully evade export control laws and jeopardize the national security of the United States,” said Director Hassebrock.  “This case is the result of outstanding collaborative investigative work by the Justice Department, the Commerce Department and the FBI to break up a network whose aim was to illegally ship sophisticated U.S.-origin technology to Russia.”

The evidence at trial established that between approximately October 2008 and October 2012, these defendants and their co-conspirators obtained advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and exported those high-tech goods to Russia, while carefully evading the government licensing system set up to control such exports.  The microelectronics shipped to Russia included analog-to-digital converters, static random access memory chips, microcontrollers and microprocessors.  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 does not produce many of these sophisticated goods domestically.

Posobilov was the Procurement Director of Arc, Abduallev was the Shipping Manager and Diatlova was a salesperson.  To induce manufacturers and suppliers to sell them these high-tech goods, and to evade applicable export controls, the defendants and their co-conspirators often provided false end user information in connection with the purchase of the goods, concealed the fact that they were resellers and falsely classified the goods they exported on export records submitted to the Department of Commerce.  For example, Arc falsely claimed to be a traffic light manufacturer on its website.  In fact, Arc manufactured no goods and operated exclusively as an exporter.

Despite this subterfuge, the evidence established that the defendants were supplying Russian government agencies with sophisticated microelectronics.  For example, the investigation uncovered a letter sent by a specialized electronics laboratory of Russia’s Federal Security Service (FSB), Russia’s primary domestic intelligence agency, to an Arc customer regarding certain microchips obtained for the FSB by Arc.  The letter stated that the microchips were faulty and demanded that the defendants supply replacement parts.

Shortly before trial, Arc President Alexander Fishenko pleaded guilty to all charges against him, including acting as an agent of the Russian government without prior notification to the Attorney General, as well as conspiring to export, and illegally exporting, microelectronics to Russia, money laundering conspiracy and obstruction of justice.  Fishenko is currently awaiting sentencing.

When sentenced by U.S. District Judge Sterling Johnson Jr. of the Eastern District of New York, defendants Posobilov, Abdullaev and Diatlova face up to five years in prison for the conspiracy conviction, and up to 20 years in prison for each violation of the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act (AECA).  Posobilov also faces up to 20 years in prison for money laundering conspiracy.

The case is being prosecuted by Assistant U.S. Attorneys Daniel Silver, Una Dean, Richard Tucker and Claire Kedeshian of the Eastern District of New York, as well as Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.

Earlier today, after a month-long trial, Alexander Posobilov, Shavkat Abdullaev and Anastasia Diatlova were convicted of all counts, including conspiring to export, and illegally exporting, controlled microelectronics to Russia.  Posobilov was also convicted of money laundering conspiracy.  These defendants, all of whom worked at Arc Electronics, Inc. (Arc), a Houston, Texas-based corporation, and eight other individuals were originally charged in October 2012.  Five members of the conspiracy, including Arc owner Alexander Fishenko, previously pled guilty to related charges.

The convictions were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, John P. Carlin, Assistant Attorney General for National Security, Randall C. Coleman, Assistant Director of the FBI's Counterintelligence Division, and Douglas Hassebrock, Director of the Commerce Department Office of Export Enforcement.

“These defendants were key players in a sprawling scheme to illegally export sophisticated technology to Russia,” stated United States Attorney Capers.  “Through lies and deceit, the defendants and their co-conspirators sold over $30 million of microchips, much of which was destined for Russian military and intelligence agencies.”

“Alexander Posobilov, Shavkat Abdullaev and Anastasia Diatlova evaded U.S. export laws to illegally send sophisticated microelectronics to Russia,” said Assistant Attorney General Carlin.  “By purposefully circumventing U.S. law, including the International Emergency Economic Powers Act and the Arms Export Control Act, the defendants jeopardized our national security.”

“By putting a halt to this conspiracy, and stopping the flow of these dual-use components to the Russian military and intelligence services, this verdict represents a clear victory for our national security,” said Assistant Director Coleman of the FBI’s Counterintelligence Division.

“Today’s convictions send a strong message to those who willfully evade export control laws and jeopardize the national security of the United States.  This case is the result of outstanding collaborative investigative work by the Justice Department, the Commerce Department and the FBI to break up a network whose aim was to illegally ship sophisticated U.S.-origin technology to Russia,” said Director of the Commerce Department Office of Export Enforcement Hassebrock.    

The evidence at trial established that between approximately October 2008 and October 2012, these defendants and their co-conspirators obtained advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and exported those high-tech goods to Russia, while carefully evading the government licensing system set up to control such exports.  The microelectronics shipped to Russia included analog-to-digital converters, static random access memory chips, microcontrollers and microprocessors.  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 does not produce many of these sophisticated goods domestically.

Posobilov was the Procurement Director of Arc, Abduallev was the Shipping Manager and Diatlova was a salesperson.  To induce manufacturers and suppliers to sell them these high-tech goods, and to evade applicable export controls, the defendants and their co-conspirators often provided false end user information in connection with the purchase of the goods, concealed the fact that they were resellers and falsely classified the goods they exported on export records submitted to the Department of Commerce.  For example, Arc falsely claimed to be a traffic light manufacturer on its website.  In fact, Arc manufactured no goods and operated exclusively as an exporter.

Despite this subterfuge, the evidence established that the defendants were supplying Russian government agencies with sophisticated microelectronics.  For example, the investigation uncovered a letter sent by a specialized electronics laboratory of Russia’s Federal Security Service (FSB), Russia’s primary domestic intelligence agency, to an Arc customer regarding certain microchips obtained for the FSB by Arc.  The letter stated that the microchips were faulty and demanded that the defendants supply replacement parts.

Shortly before trial, Arc President Alexander Fishenko pled guilty to all charges against him, including acting as an agent of the Russian government without prior notification to the Attorney General, as well as conspiring to export, and illegally exporting, microelectronics to Russia, money laundering conspiracy and obstruction of justice.  Fishenko is currently awaiting sentencing.

When sentenced by United States District Judge Sterling Johnson, Jr., defendants Posobilov, Abdullaev and Diatlova face up to five years in prison for the conspiracy conviction, and up to 20 years in prison for each violation of the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act (AECA).  Posobilov also faces up to 20 years in prison for money laundering conspiracy.

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

The Defendants:

Alexander Posobilov
Age: 61

Shavkat Abdullaev
Age: 37

Anastasia Diatlova
Age: 41                                             

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

Earlier today, an indictment was unsealed charging Rodney Muschette, also known as “Stitch,” with the retaliation murder of a federal informant in Atlanta, Georgia, on December 31, 2008.[1]  Muschette is a member of the Eight Trey Crips gang, a Crips set operating in and around Brooklyn, New York.  If convicted, Muschette will face mandatory life imprisonment.  Muschette, who was arrested this morning, was presented for arraignment earlier today at the United States Courthouse in Raleigh, North Carolina.

The charge and arrest were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); William J. Bratton, Commissioner, New York City Police Department (NYPD); and George N. Turner, Chief of Police, Atlanta Police Department (APD).

“This Office has a long history of prosecuting and convicting Crips gang members who have pursued violence and lawlessness in neighborhoods throughout Brooklyn,” stated U.S. Attorney Capers.  “The charged retaliation murder is among the most vicious crimes its members have committed.  This prosecution should serve as a reminder that this Office and our law enforcement partners will do everything in our power to hold accountable those who use violence to silence witnesses or otherwise obstruct justice.”  Mr. Capers extended his grateful appreciation to the FBI Charlotte, NC, Field Office, the FBI Raleigh, NC, Resident Agency, and the FBI Atlanta, GA, Field Office for their assistance.

“Today’s arrest of Rodney Muschette, also known as ‘Stitch,’ shows that justice has no time limit.  Muschette is charged with the retaliation murder of a federal informant in December 2008.  The FBI will continue to work with our law enforcement partners to bring to justice all those involved in gang related activity, especially those who seek to obstruct justice through murder,” stated FBI Assistant Director-in-Charge Rodriguez.

“In partnership with the U.S. Attorney’s Office, the Atlanta Police Department has removed another dangerous and violent criminal from Atlanta streets,” said Atlanta Police Chief Turner.  “As alleged, Mr. Muschette mercilessly took the life of Mr. Nashwad Johnson and those actions will not go unpunished.  The Atlanta Police Department is committed to cracking down on criminal activity and individuals that threaten the safety and quality of life for Atlanta residents and visitors.”

NYPD Commissioner Bratton stated, “Today’s arrest and indictment demonstrate the NYPD’s commitment to bringing justice in the senseless execution of this witness,” said Police Commissioner William J. Bratton.  “Thanks to the continued efforts of the investigators and prosecutors who aggressively pursued this case, Rodney Muschette will be held accountable for this murder, as alleged.”

On December 30, 2008, the leader of the Eight Trey Crips was sentenced in Brooklyn federal court to 110 months’ imprisonment based on his conviction for possessing a firearm as a felon in connection with a June 2005 shooting in Brooklyn, New York.  Fellow gang member Nashwad Johnson, also known as “Nash,” had witnessed that shooting.  At the leader’s sentencing proceeding, he stated his belief that Johnson was a federal informant, and he repeated this belief in a telephone conversation with his sister that night and confirmed that his fellow gang members also knew about Johnson’s status as an informant.

At or around the time of that sentencing, Muschette and other members of the gang traveled with Johnson from Raleigh, North Carolina, to Atlanta, Georgia.  Shortly before midnight on New Year’s Eve in 2008 – one day after the leader was sentenced – Muschette and others carried out their plan to kill Johnson because they believed that he had provided information to federal law enforcement about their gang.  Muschette and his coconspirators drove Johnson to a wooded area off of an Atlanta highway.  There, Muschette shot Johnson eleven times, including five shots in Johnson’s back, ending his life.

            The government’s case is being prosecuted by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Elizabeth A. Geddes and Patrick T. Hein are in charge of the prosecution.

The Defendant:

RODNEY MUSCHETTE, also known as “Stitch”
Age: 34

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[1] The charge contained in the indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.

Robert L. Capers, United States Attorney for the Eastern District of New York, today announced the filing of a Complaint and Consent Judgment in United States v. City of New York, Civil Action No. CV-15-5986 to settle violations of the Americans with Disabilities Act, 42 U.S.C. §§ 12134-34 (the ADA), in the City’s homeless shelter system.

In its complaint, the United States alleges that the City of New York denied sign language interpreters and other auxiliary aids and services to deaf and hard of hearing individuals in its homeless shelter system.  The complaint alleges that workers at DHS’ homeless family shelter intake facility often attempted to communicate through the use of handwritten notes or by relying on family members to provide sign language interpretation.  In one case, workers at the City’s family shelter intake facility relied on the four year-old daughter of RK[1], a deaf single mother, to interpret.  The complaint also alleges that the failure to provide necessary auxiliary aids and services, including visual doorbells and fire alarms, endangered the lives of hearing-impaired individuals and denied them the services provided to other shelter residents, such as job and housing placement assistance.

Under the terms of the settlement, the City has agreed to take appropriate steps to ensure effective communication with applicants for family shelter who are deaf or hard of hearing, including providing qualified sign language interpretation services.  The City has also agreed to retrofit at least 10 dwelling units for families with children, six units for adult families, 200 beds for single men, and 100 beds for single women with accessible features, including visual alarms and doorbells.  Employees within the homeless shelter system who interact regularly with residents or applicants for shelter will receive training in effective communication.  The City will pay RK $2,500.00.

“The ADA requires the City to communicate effectively and provide auxiliary aids and services to the deaf or hard of hearing,” stated U.S. Attorney Capers.  “This settlement ensures that vulnerable residents in the City’s homeless shelter system receive appropriate City services.”

The United States’ action was filed contemporaneously with settlement of Ihetu et al. v. City of New York et al., Civil Action No. CV-13-01732 (MKB/VMS), in which a mother who is deaf and her three children alleged similar ADA violations against the City and homeless family shelter operators.

The United States’ claims were litigated by Assistant United States Attorneys Kelly Horan Florio and Michael J. Goldberger.

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[1] RK is identified by initials only to protect her confidentiality.

Earlier today, Andrew Goodman was sentenced by Judge Margo K. Brodie in United States District Court in Brooklyn, New York, to 10 years imprisonment, to be followed by 10 years of supervised release, for soliciting and enticing a minor to engage in sexual conduct.  Based on his conviction, Goodman also will be required to register as a sex offender.  The victim was between 12 and 15 years of age during the time of the abuse.

The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“Goodman enticed his young victim with gifts and plied the victim with alcohol.  We will take every measure to protect our nation’s most vulnerable individuals from predators such as he,” stated Acting United States Attorney Currie.  Mr. Currie extended his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, the agency responsible for leading the government’s investigation, and thanked the Kings County District Attorney’s Office for its assistance in this case.

Goodman began his sexual abuse of the victim in 2006.  Over the next several years, Goodman sexually assaulted the victim several times a week.  Goodman was previously convicted in New York State court of 48 counts of sexually abusing the same minor, as well as a second victim, and served two years in prison.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Tyler J. Smith and Ameet Kabrawala are in charge of the prosecution.

This case was brought as part of Project Safe Childhood, a nationwide initiative to protect children by combatting the sexual exploitation and abuse of minors.  Led by the United States Attorneys’ Offices around the country, Project Safe Childhood marshals federal, state, and local resources to apprehend and prosecute individuals who exploit children and to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.

The Defendant:

ANDREW GOODMAN
Age:  31
Brooklyn, New York

E.D.N.Y. Docket No. 12-CR-614 (MKB)

Yesterday, a grand jury returned a five-count indictment in federal court in Brooklyn charging Laraine Castellano and her sons, Thomas Scialpi and Dennis Scialpi, with fraud committed in connection with school bus companies they owned and operated that provided transportation to children attending New York City Public Schools.  All three defendants are charged with bank fraud and conspiring to commit bank fraud in connection with over $14 million in bank loans made to the bus companies they controlled.  In addition, Castellano and Thomas Scialpi are charged with conspiring to defraud the United States of over $10 million in payroll taxes for employees of the bus companies.  Thomas Scialpi is also charged with bank fraud and conspiring to commit bank fraud in connection with a $700,000 loan he used to purchase a yacht.  The defendants surrendered this morning and were arraigned today at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The indictment was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Thomas E. Bishop, Acting Special Agent in Charge, Internal Revenue Service-Criminal Investigation (IRS-CI); Cheryl Garcia, Special Agent in Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in New York; and Jonathan Kay, Regional Director, New York Regional Office, Employee Benefits Security Administration, United States Department of Labor.

As alleged in the indictment, Castellano, Thomas Scialpi, and Dennis Scialpi owned various school bus companies (referred to in the indictment as the United Entities) that provided transportation to children attending New York City Public Schools between 2004 and 2011.  During that period, the New York City Department of Education paid the United Entities approximately $310 million for their transportation services.

The 2004 and 2007 Bank Frauds

As alleged, in 2004 at the direction of the defendants, the United Entities applied to Comerica Bank for a $10 million loan (the 2004 Loan).  In support of its loan application, the United Entities submitted to Comerica false and fraudulent financial statements and corporate income tax returns.  The primary purpose of the 2004 Loan was to establish an employee stock ownership plan (ESOP) for the benefit of non-union employees of the United Entities.  On or about October 30, 2007, the United Entities executed another fraudulent loan agreement with Comerica for an additional $4.5 million (the 2007 Loan), related to the ESOP.  However, although the United Entities formally established the ESOP by filing required forms with the United States Department of Labor, it never made any of the required disclosures to their employees and never funded the ESOP as promised.  As a result, nearly all of the United Entities employees who were the intended beneficiaries of the ESOP were unaware that it existed, and those employees never received the benefits to which they were entitled under the ESOP.

In addition, between June 2004 and July 2011, at the direction of the defendants, the United Entities submitted materially false and fraudulent quarterly financial statements to Comerica that misrepresented its financial condition in order to conceal that the United Entities were violating the terms of the agreements for the 2004 Loan and the 2007 Loan.  The United Entities ultimately defaulted on their repayment obligations for both loans.

The 2007 Yacht Loan

In 2007, Thomas Scialpi applied for a $700,615 loan from Soverign Bank for the purpose of purchasing a yacht.  In support of the loan, Scialpi allegedly directed another individual to create false corporate tax returns for one of the United Entities and fictitious W-2 forms.  Scialpi submitted these fabricated documents to Soverign, and Soverign approved the loan and disbursed $700,615 to Scialpi.  Scialpi ultimately defaulted on the loan. 

The Payroll Tax Fraud Conspiracy

As alleged, Laraine Castellano and Thomas Scialpi also created purported professional employer organizations, or PEOs, as part of a conspiracy to defraud the United States of more than $10 million in payroll taxes they owed for wages paid to the United Entities employees.  A PEO is an entity created to perform some or all of a company’s federal payroll tax withholding, reporting, and payment functions.  In 2008 and 2009, Castellano created and controlled entities that purported to be PEOs to handle payroll taxes for United Entities’ employees.  In 2010, the two defendants created and controlled additional entities that purported to be PEOs for United Entities’ employees.  Castellano and Scialpi  were required to collect, account for, and pay to the IRS payroll taxes that were due and owing on wages of United Entities employees.  However, they ensured that the funds transferred from the United Entities to the purported PEOs would be insufficient to satisfy the United Entities’ payroll tax obligations.  When the shortfall in payroll taxes was discovered by the IRS, Castellano and Thomas Scialpi created yet another purported PEO to continue the scheme.  Through these purported PEOs, the two defendants conspired to defraud the United States of more than $10 million in payroll taxes. 

“Companies owned and operated by Laraine Castellano, Thomas Scialpi, and Dennis Scialpi received more than $300 million from city contracts to transport children to New York City public schools.  But that was not enough for these defendants.  As alleged, they used their companies to defraud the federal government and financial institutions of tens of millions of dollars, all to enrich themselves.  We will continue to work closely with our law enforcement partners to protect taxpayers and to vigorously prosecute such criminal activity,” stated Acting United States Attorney Currie.

“The willful failure of a business owner to collect, account for, and pay over payroll taxes is a serious crime investigated by IRS-Criminal Investigation,” said Acting Special Agent in Charge Bishop.  “As alleged, when the defendants created the purported PEOs to circumvent their payroll tax obligations, they potentially deprived their workers of future benefits, the U.S. Government of much needed tax revenue, and effectively left it to the taxpaying public to make up the difference.”

“Employee Stock Ownership Plans are intended to provide retirement income for employees.   We will not countenance individuals using the guise of an ESOP to enrich themselves and deprive employees of retirement benefits while allegedly committing bank fraud and other crimes,” said Regional Director Kay.

If convicted of all counts, Castellano faces a maximum sentence of 65 years imprisonment, Thomas Scialpi faces a maximum sentence of 125 years imprisonment, and Dennis Scialpi faces a maximum sentence of 60 years imprisonment.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Marisa Seifan, Kevin Trowel, and Lan Nguyen are in charge of the prosecution.

The Defendants:

LARAINE CASTELLANO
Age: 72
Staten Island, New York

THOMAS SCIALPI
Age: 51
Saddle River, New Jersey

DENNIS SCIALPI
Age: 44
Staten Island, New York

E.D.N.Y. Criminal Docket No. 15 CR 523

Earlier today in Brooklyn federal court, Marcos Rodriguez, who committed a string of drug robberies and related crimes, was sentenced to 272 months of imprisonment.  The sentencing proceeding was held before U.S. District Judge Sandra L. Townes.  Rodriguez was convicted in July 2011 after a two week jury trial.

The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York.

Rodriguez was a member of a violent robbery crew responsible for more than 100 robberies of narcotics traffickers in the New York metropolitan area and elsewhere that netted more than 250 kilograms of cocaine and $1 million in drug proceeds.  Beginning in approximately January 2001, crew members posing as law enforcement officers staged fake arrests of the traffickers and then forcibly seized the traffickers’ contraband.  The crew members  restrained victims with handcuffs, rope, or duct tape, often brandished firearms and physically assaulted victims, sold the stolen drugs, and divided the proceeds among themselves.

Rodriguez personally participated in at least 15 separate robberies and attempted robberies.  He typically conducted surveillance, acted as a lookout, and helped to sell the seized narcotics.  The robberies and attempted robberies in which Rodriguez directly participated involved at least 54 kilograms of cocaine, 1.3 kilograms of heroin, and approximately $60,000 in drug proceeds.

 In announcing the sentence, Mr. Currie extended his grateful appreciation to the Drug Enforcement Administration, New York Division; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; and the New York City Police Department.

The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Sylvia S. Shweder, Alexander Solomon, and Claire Kedeshian are in charge of the prosecution.

The Defendant:

MARCOS RODRIGUEZ
Age:  47
New York, NY

E.D.N.Y. Docket No. 08-CR-242 (SLT)

Earlier today, Iman Kobeissi, also known as “Iman Kobeissu” and “Iman Kobreissi-Ghadry,” was arraigned at the federal courthouse in Brooklyn, New York, on money laundering conspiracy charges and unlicensed firearms dealing conspiracy for laundering funds she believed to be drug money, and for arranging for the sale of thousands of firearms, including military assault rifles, machine guns, and sniper rifles, to criminal groups in Iran and Lebanon, including Hezbollah, a designated terrorist organization. [1]  Kobeissi was arrested yesterday in Atlanta, Georgia.  An indictment was also unsealed today against Joseph Asmar, an alleged Hezbollah associate who is charged with money laundering conspiracy.  Asmar, Kobeissi’s alleged co-conspirator, was arrested in Paris, France, on a provisional arrest warrant issued from the Eastern District of New York.

The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Carl J. Kotowski, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New Jersey Field Division.

According to court filings, the investigation, a DEA sting operation, determined that between September 2013 and October 2015, the defendants and other Hezbollah-connected associates conspired to conduct monetary transactions to assist individuals, who they believed to be drug traffickers, in concealing their drug money.  In addition to offering to launder narcotics proceeds for a DEA undercover agent posing as a narcotics trafficker, Kobeissi informed him that she had associates in Hezbollah who were seeking to purchase cocaine, weapons, and ammunition.  Asmar, allegedly an attorney with high-level connections at various banks throughout the Middle East and Europe, discussed potential narcotics transactions with the undercover DEA agent and suggested that he could use his connections with Hezbollah to provide security to narcotics shipments.  Kobeissi and Asmar explained that they could arrange for planes from South America laden with multi-ton shipments of cocaine to land safely in Africa as a transit point before the drugs were smuggled to the United States or Europe.

 In a series of recorded conversations, Kobeissi and Asmar discussed their money laundering network that spanned the globe and provided money laundering services to drug traffickers, terrorist organizations, and other criminal groups in Lebanon, Iran, France, Belgium, Bulgaria, Benin, the Democratic Republic of the Congo, Ghana, Nigeria, Cypress, and cities across the United States.  Asmar claimed that, with his connections in the financial world, he could launder any sum of illegal money.  During the course of the investigation, undercover agents provided approximately $400,000 in purported drug proceeds to Kobeissi and Asmar, who laundered the money back to the United States in exchange for a commission.  As alleged, the defendants conspired to launder a total of $8 million in illicit funds on behalf of purported South and Central American drug trafficking organizations.

Kobeissi also allegedly arranged to obtain firearms and heavy weapons for her associates in Hezbollah and other independent criminal groups in Iran.  During recorded conversations between Kobeissi and the undercover DEA agent, Kobeissi stated that she had customers in Iran who would like to purchase a variety of firearms and blue prints for “heavy weaponry.”  In one list Kobeissi provided to the undercover agent containing a request for firearms for her Iran-based customer, Kobeissi included an order for more than 1,000 military-style assault rifles, including M200 sniper rifles, M4 carbine rifles, and Objective Individual Combat Weapons, as well as 1,000 Glock handguns.  In another communication, Kobeissi attempted to obtain thousands of handguns for her Hezbollah associates.  In recorded conversations between Kobeissi and the undercover DEA agent, Kobeissi also discussed the potential for obtaining aircraft parts for her customers in Iran in violation of U.S. sanctions.  In those recordings Kobeissi can be heard stating that they had to hurry and obtain the aircraft parts while there were still sanctions against Iran so they could earn additional money for smuggling in the sanctioned parts.

Kobeissi was arrested on October 8, 2015, following a meeting in Atlanta with a criminal associate allegedly discussing the smuggling of blood diamonds out of Africa as a method to launder millions of dollars in drug proceeds.

“This investigation demonstrates the increasingly global reach of criminal organizations and marks an important victory in disrupting a vast money laundering, drug trafficking, and international arms trafficking network that spanned multiple continents and attempted to provide a pipeline of dangerous weapons to a designated terrorist organization,” stated Acting United States Attorney Currie.  “Through our partnerships with law enforcement agencies around the world, we will continue to target and dismantle transnational criminal organizations.”  Mr. Currie thanked the Department of Justice, Office of International Affairs; DEA New Jersey Field Division; DEA Atlanta Field Office; and DEA France Country Office for their invaluable assistance.

DEA Special Agent-in-Charge Kotowski said, “As alleged, this investigation shows the true relationship between narcotics trafficking and terrorist organizations.  There isn’t any part of the world that the men and women of DEA would not go to track down such criminals.  Today, the world is a little bit safer because of the arrest of these two individuals.”

Kobeissi was arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak at the federal courthouse in Brooklyn and remanded without bail.

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

The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Steven L. Tiscione and Gina M. Parlovecchio are in charge of the prosecution.

The Defendants:

Iman Kobeissi
Age:  50
Beirut, Lebanon

Joseph Asmar
Age:  42
Beirut, Lebanon

E.D.N.Y. Docket No. 15-CR-491 (ENV); 15-M-962

 

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[1] Hezbollah has been designated as a foreign terrorist organization by the United States Department of State since 1995.

An eleven-count indictment was unsealed today in United States District Court for the Eastern District of New York charging David Gotterup, also known as “David Gott,” and Jason Green with conspiracy to commit mail fraud, wire fraud, and bank fraud in connection with a scheme to defraud homeowners who were attempting to modify their mortgage loans, and related mail fraud counts.  The indictment also charged Gotterup with conspiracy to commit wire and bank fraud in connection with a scheme to improperly obtain mortgage loans, and related bank fraud counts, disaster loan fraud, and aggravated identity theft.

The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Christina Scaringi, Special Agent-in-Charge, U.S. Department of Housing and Urban Development, Office of Inspector General (HUD/OIG); and Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

According to court filings, from 2008 to 2012, Gotterup and Green defrauded distressed homeowners who were seeking relief through government mortgage modification programs by convincing more than a thousand homeowners to pay thousands of dollars each in advance fees based on false promises.  Gotterup also defrauded financial institutions and the Federal Housing Administration by obtaining mortgages on properties in Brooklyn and Queens by falsifying loan applications and providing false documentation to support the loan applications.  In addition, Gotterup used another person’s social security number in connection with these schemes.

After Hurricane Sandy in 2012, Gotterup also applied for a low-interest disaster relief loan from the U.S. Small Business Administration (SBA), allegedly using false information to support the application.  As a result, Gotterup received a loan of $113,900 from the SBA.  Instead of using the funds to repair property damaged in the disaster, Gotterup used the money to pay for personal expenses, including wedding-related expenses in Cancun, Mexico.

“These men defrauded distressed homeowners and banks to line their pockets,” stated Acting United States Attorney Currie.  “We are committed to ending these types of predatory fraud schemes.”  Mr. Currie thanked the U.S. Small Business Administration and the Staten Island District Attorney’s Office for its assistance.

“The charges announced today describe a scheme in which the defendants allegedly benefitted from fraudulently obtained proceeds while the cost was transferred to ordinary citizens seeking financial assistance.  They are alleged to have simultaneously defrauded the government by unjustly obtaining disaster relief benefits. Today our message is clear: those who exploit gaps in the mortgage industry, banking sector, and government assistance programs will be made to face the error of their ways,” stated FBI Assistant Director-in-Charge Rodriguez.

“We want to send a message to the real estate industry that my office, along with our law enforcement partners, will expend every resource to fight the growing trend of foreclosure rescue frauds, short sale frauds, and disaster-related frauds that ultimately victimize our struggling homeowners and the U.S. taxpayer,” said HUD OIG Special Agent-in-Charge Scaringi.

“Earlier today SIGTARP agents along with other law enforcement agents arrested‎ Jason Green and David Gotterup, who are charged with a scheme in which they allegedly took advantage of homeowners devastated by the financial crisis by fraudulently misleading those seeking assistance through government mortgage modification programs, including HAMP,” said Special Inspector General Romero for the Troubled Asset Relief Program (SIGTARP). “Gotterup and Green purportedly took thousands of dollars in upfront fees from homeowners, making false promises to provide mortgage modification services.  Homeowners were led to believe that they had retained the legal services of an attorney who would handle the application and negotiations with their banks but in reality little or nothing was done to modify their mortgages.  SIGTARP will continue to aggressively pursue those who commit TARP-related crimes.”

The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Orenstein at the federal courthouse in Brooklyn.  The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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’s 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, visit http://www.StopFraud.gov.

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 Defendants:

DAVID GOTTERUP
Age:  35
Oceanside, NY

JASON GREEN
Age:  35
Oceanside, NY

E.D.N.Y. Docket No. 15-CR-498

Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, and Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, today announced the filing of a consent judgment and order in U.S. v. Sayville Development, et al. to settle alleged violations of the Fair Housing Act. 

In its complaint which was filed in August 2007, the Department of Justice alleged that defendants engaged in a pattern or practice of discrimination against individuals with disabilities in the design and construction of a rental-housing complex for senior citizens on Long Island, New York, called Sayville Commons Apartments.  Subsequent investigation revealed that the same defendants had designed and constructed two additional complexes, Broadway Knolls Apartments in Holbrook, New York, and Oak Creek Commons Condominiums in Oakdale, New York.  All three were developed by Paul Aniboli and designed by Stephen Fellman, an architect.  The consent order, which still must be approved the U.S. District Court for the Eastern District of New York, provides a comprehensive plan to remedy the violations at the three complexes.  

“The requirement that new multifamily housing be built in a manner that is accessible to persons with disabilities has been in place since 1991,” said Principal Deputy Assistant Attorney General Gupta.  “We will continue to enforce this protection vigorously so that persons with disabilities are free to live where they choose without facing unnecessary and unlawful barriers.”

“The Fair Housing Act protects the rights of all individuals, including persons with disabilities, to be free from discrimination,” said Acting U.S. Attorney Currie.  “This settlement will ensure that the apartments in these complexes are accessible to the people living there, so they can fully use and enjoy their homes.”

The accessible and adaptable design provisions of the Fair Housing Act require that ground level apartment units or units that are elevator accessible and are constructed after 1991 be accessible to individuals with disabilities. 

Litigation in this case revealed hundreds of violations of the Fair Housing Act’s requirement that apartments in the complex be designed and constructed to be accessible to and usable by individuals with disabilities.  Violations include a lack of wheelchair accessible routes between dwelling units and common areas, excessively steep cross slopes and running slopes on such accessible routes, kitchen sinks and ranges that were inaccessible, outlets and thermostats that were too high or too low and door thresholds that were too high.

The consent order provides a comprehensive plan to remedy the violations at the three complexes.  It requires defendants to perform substantial specific retrofits, including fixing the accessible routes, high door thresholds and out-swinging bathroom doors, inaccessible thermostats and outlets, and inaccessible kitchen ranges.  In addition, defendants have agreed to be bound by the terms of the consent order for three years, which provides, in part, that they will complete a Fair Housing Act training course and report to the United States any new construction in which they are involved.  The consent order also provides for relief for four aggrieved parties, who, due to disability, had difficulty moving about their own apartments or throughout the complex because of the Fair Housing Act violations.  Defendants will pay $32,500 to compensate victims, who include current and former tenants, and a non-profit fair housing organization, Long Island Housing Services, whose investigation led to this lawsuit.  In addition, the defendants must set aside $5,000 for certain retrofits that will be made at a tenant’s request, and pay the United States a civil penalty of $2,500.           

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.  Persons who believe that they have experienced unlawful housing discrimination may contact the United States Attorney’s Office for the Eastern District of New York at 718-254-7000 or by email at USANYE-CivilRights@usdoj.gov, or the Justice Department Civil Rights Division at 1-800-896-7743, or by e-mail at fairhousing@usdoj.gov, and or contact the Department of Housing and Urban Development at 1-800-669-9777. 

The case is being prosecuted by Assistant U. S. Attorneys Diane C. Leonardo and Rachel G. Balaban of the Eastern District of New York, with assistance from the Department of Justice’s Civil Rights Division.

Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, today announced the filing of a consent judgment and order in United States v. Sayville Development, et al., Civil Action No 07-CV-3622 (JFB/ARL), to settle alleged violations of the Fair Housing Act.

In its complaint, the United States alleged that defendants engaged in a pattern or practice of discrimination against individuals with disabilities in the design and construction of a rental housing complex for senior citizens on Long Island, New York, called Sayville Commons Apartments.  Subsequent investigation revealed that the same defendants had designed and constructed two additional complexes, Broadway Knolls Apartments in Holbrook, New York, and Oak Creek Commons Condominiums in Oakdale, New York.[1] All three were developed by defendant Paul Aniboli and designed by defendant Stephen Fellman, an architect.  The consent order, which still must be approved the U.S. District Court for the Eastern District of New York, provides a comprehensive plan to remedy the violations at the three complexes.  

“The Fair Housing Act protects the rights of all individuals, including persons with disabilities, to be free from discrimination.  This settlement will ensure that the apartments in these complexes are accessible to the people living there, so they can fully use and enjoy their homes,” said Acting U.S. Attorney Currie.

“The requirement that new multifamily housing be built in a manner that is accessible to persons with disabilities has been in place since 1991,” said Principal Deputy Assistant Attorney General Gupta.  “We will continue to enforce this protection vigorously, so that persons with disabilities are free to live where they choose without facing unnecessary and unlawful barriers.”

The accessible and adaptable design provisions of the Fair Housing Act require that ground level apartment units or units that are elevator accessible and are constructed after 1991 be accessible to individuals with disabilities.

Litigation in this case revealed hundreds of violations of the Fair Housing Act’s requirement that apartments in the complex be designed and constructed to be accessible to and usable by individuals with disabilities.  Violations include a lack of wheelchair accessible routes between dwelling units and common areas, excessively steep cross slopes and running slopes on such accessible routes, kitchen sinks and ranges that were inaccessible, outlets and thermostats that were too high or too low, and door thresholds that were too high.

The consent order provides a comprehensive plan to remedy the violations at the three complexes. It requires defendants to perform substantial specific retrofits, including fixing the accessible routes, high door thresholds and out-swinging bathroom doors, inaccessible thermostats and outlets, and inaccessible kitchen ranges.  In addition, defendants have agreed to be bound by the terms of the consent order for three years, which provides, in part, that they will complete a Fair Housing Act training course and report to the United States any new construction in which they are involved.  The consent order also provides for relief for four aggrieved parties, who, due to disability, had difficulty moving about their own apartments or throughout the complex because of the Fair Housing Act violations.  Defendants will pay $40,000 toward compensation for the aggrieved parties, including Long Island Housing Services, a non-profit fair housing organization whose investigation led to this lawsuit, a civil penalty, and a retrofit fund to be used for certain retrofits made at a tenant’s request.          

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.  Persons who believe that they have experienced unlawful housing discrimination may contact the United States Attorney’s Office for the Eastern District of New York at 718-254-7000 or by email at USANYE-CivilRights@usdoj.gov, or the Justice Department Civil Rights Division at 1-800-896-7743, or by e-mail at fairhousing@usdoj.gov, and or contact the Department of Housing and Urban Development at 1-800-669-9777.

 

The United States’ claims were litigated by Assistant U.S. Attorneys Diane C. Leonardo and Rachel G. Balaban, with assistance from the Department of Justice’s Civil Rights Division.

 

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[1] Sayville Commons Apartments are located at 400 Adams Way, Sayville, NY; Broadway Knolls Apartments are located at 2200 Dolphin Lane, Holbrook NY; and Oak Creek Commons Condominiums are located on Oakdale-Bohemia Road, Oakdale, NY.

 

Earlier today, at the federal courthouse in Central Islip, New York, Cedric Moss, was sentenced to 15 years in prison by United States District Judge Joanna Seybert.  Moss pleaded guilty to conspiring to illegally distribute oxycodone, a highly addictive prescription pain killer, on October 9, 2014.

The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration.

“Cedric Moss masterminded a criminal organization that for over a year forged prescriptions for a highly addictive and dangerous prescription drug, fueling an increasing addiction crisis on Long Island and elsewhere.  Today’s sentence serves as a reminder to those who flood our streets with illegally obtained drugs that they will be prosecuted to the full extent of the law,” stated Acting U.S. Attorney Kelly T. Currie.  Mr. Currie extended his grateful appreciation to the DEA, the agency responsible for leading the government’s investigation, and thanked the New York City Office of the Special Narcotics Prosecutor for its assistance in this case.

DEA Special Agent in Charge Hunt stated, “Cashing in on a national health crisis, Cedric Moss oversaw the diversion of millions of dollars’ worth of diverted pain medication throughout Long Island.  Today’s sentencing demonstrates the will of law enforcement to continue to investigate and arrest those who illegally distribute opioids in our communities.” 

As detailed in the defendant’s guilty plea allocution and court filings, between January 2013 and February 2014, Moss and his organization illegally obtained and sold more than 95,000 oxycodone 30 mg tablets, which were trafficked throughout Long Island, New York City, and the East Coast.  The organization illegally obtained stolen blank prescription pads to create forged prescriptions using computer software and printers.  More than 190 “runners” then posed as patients and filled the prescriptions at various pharmacies.  Previously, three members of Moss’s organization pleaded guilty to felony charges for their participation in this scheme.

Moss’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative.  In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this jurisdiction, 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 Prescription Drug 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 so-called opioid analgesics.  So far, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 16 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and a pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers.  The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals. These prosecutions are the product of investigations led by the DEA’s Tactical Diversion Squad, comprising agents and officers of the DEA, Nassau County Police Department, Rockville Centre Police Department, and Port Washington Police Department.

The government’s case is being prosecuted by the Office’s Long Island Criminal Division.  Assistant United States Attorney Michael P. Canty is in charge of the prosecution.

 

The Defendant:

CEDRIC MOSS
Age: 48
Residence: Jamaica, New York

E.D.N.Y. Docket No. 14-CR-147 (JS)

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Ana P. Leon, also known as Ana P. Gonzalez, Sandra E. Leon, also known as Sandra E. Chavarria, and Ivan D. Pelaez with mail and wire fraud and conspiring to commit those offenses.[1]  Ana P. Leon was arrested earlier today and her initial appearance is scheduled for this afternoon before United States Magistrate Judge Steven I. Locke at the United States Courthouse, 100 Federal Plaza, Central Islip, New York.  Sandra E. Leon and Pelaez are currently at large.

The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI)

According to the criminal complaint, the three defendants participated in a scheme in which seven elderly victims from across the United States were told that they had won large cash prizes, often as much as $3.5 million, in a purported sweepstakes.  In some instances, the victims were informed by phone and letter that these sweepstakes were operated by federal government agencies, such as the Government Accountability Office.  Victims were directed to send check or wire transfers that would supposedly cover taxes and fees due on the sweepstakes winnings to post office boxes that one of the defendants established in Suffolk County’s East Hampton and Amagansett or to bank accounts that the defendants established, which had mailing addresses in East Hampton, Amagansett, Hampton Bays, and Manhattan.  Victims sent more than $695,000 by mail or wire transfers, some of which was withdrawn as cash in ATM transactions or used to pay for personal expenses such as airline tickets.

“As described in the complaint, the defendants enriched themselves by taking advantage of elderly Americans,” stated Acting United States Attorney Currie.  “We are committed to protecting seniors from such schemes.”  Mr. Currie expressed his appreciation to FBI field offices in New York, Georgia, Florida, Michigan, Arizona, Texas, and Wisconsin for their assistance.

“As alleged, the defendants took advantage of seniors by claiming they had literally hit the jackpot by winning a cash prize, often as much as $3.5 million, with the stipulation they just had to pay supposed taxes and fees.  The senior victims were directed to wire money or send checks only to never see the winnings they were promised.  The money the victims paid netted the defendants more than a half a million dollars.  The FBI is committed to investigating and bringing to justice those who seek to profit at the expense of  defrauding  the senior community,” stated FBI Assistant Director-in-Charge Rodriguez.

The government’s case is being prosecuted by the Office’s Long Island Criminal Division.  Assistant United States Attorney Bradley T. King is in charge of the prosecution.  Assistant United States Attorney Madeline O’Connor is handling matters related to forfeiture.

The Defendants:

ANA P. LEON
Age:  50
East Hampton, NY

SANDRA E. LEON
Age:  47
Hampton Bays, NY

IVAN D. PELAEZ
Age:  51
East Hampton, NY

E.D.N.Y. Docket No. 15-M-922 (SIL)

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

Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, David A. Montoya, Inspector General for the Department of Housing and Urban Development, and Frederick W. Gibson, Acting Inspector General for the Federal Deposit Insurance Corporation, announced the filing of a civil suit against the Rainy Day Foundation, Inc., a purported charitable “counseling fund,” together with its associated business entities and principals.  The case was filed today in federal court in Central Islip and has been assigned to United States District Judge Joseph F. Bianco.

The complaint alleges that in at least 865 instances, the Rainy Day Foundation, together with five Eastern District of New York-based mortgage lenders and their principals, defrauded the United States and various banks insured by the Federal Deposit Insurance Corporation (“FDIC”), resulting in millions of dollars of mortgage losses, and requiring the United States to pay over $5,605,237 in false claims.

The defendant mortgage lenders participated in a federal program sponsored by the United States Department of Housing and Urban Development (“HUD”) that allowed the lenders to make mortgage loans that are insured by the Federal Housing Administration (“FHA”) in the event of default.  The defendant mortgage lenders then sold those loans to federally-insured banks.

The complaint alleges that the mortgage lenders’ loans went into “early payment default” at more than twice the average default rate of other lenders, and that the lenders conspired with the Rainy Day Foundation to conceal their high default rates from HUD to avoid removal from HUD’s program.  Specifically, the defendant mortgage lenders funneled their own money through the Rainy Day Foundation to make defaulting borrowers' monthly payments to the banks in order to conceal the defaults from HUD and the banks.  When the loans had aged beyond the bank’s contractual right to force repurchase, or past the period that HUD monitored for early payment defaults, the lenders would stop making payments, leaving the borrowers without any further support.

When the Rainy Day Foundation attracted scrutiny from the United States, it quickly reorganized as a new business, Default Mitigation Services (“DMS”), to continue the Rainy Day Foundation’s money funneling activities under a new name.  The United States alleges that defendants sought to further conceal their activities by claiming that the illicit payments were charitable “grants” made by a small American Indian tribe, located in Ely Nevada – the Ely Shoshone tribe.  In reality, DMS was again funneling money from the defendant mortgage lenders, through Ely Shoshone tribal bank accounts, to the banks holding the loans.

The complaint seeks treble damages and penalties under the False Claims Act, 31 U.S.C. § 3729 et seq.; fines under the Financial Institutions Recovery, Reform and Enforcement Act ("FIRREA"), 12 U.S.C. § 1833a; and damages and indemnification under the common law theories of gross negligence, breach of fiduciary duty and unjust enrichment.

“Fraudulent practices, such as those alleged here, compromise the integrity of the FHA mortgage insurance program, and harm both the housing market and homeowners by contributing to loan defaults and housing foreclosures,” stated Acting United States Attorney Currie.  “We will continue to vigorously use all means at our disposal to stop those who engage in such activity.”

HUD Inspector General Montoya stated, “When HUD's Office of the Inspector General uncovers fraud, we devote all of the available necessary investigatory resources to make certain that those individuals and entities are brought to justice and that the FHA Insurance Fund is reimbursed for the losses sustained.  The Rainy Day Foundation and its multiple subsidiary companies solicited the business of FHA Direct Endorsement Lenders by promising to manipulate HUD databases to hide the existence of delinquent loans from the FHA.  Such behavior will not be tolerated.”

FDIC Acting Inspector General Gibson said “The FDIC-OIG was pleased to support the Department of Justice and the Department of Housing and Urban Development in investigating this matter and in helping to ready this civil suit. Together we can broaden the government's efforts to pursue damages resulting from misconduct that has harmed the nation's financial institutions and its mortgage markets.”

United States Resolves Claims Against New York-Based Lender

In a related action, the United States filed a separate civil suit against, and simultaneous settlement with, the Intercontinental Capital Group, Inc. (“ICG”), a New York mortgage lender with offices in Bohemia, New York, its President, Dustin DiMisa, and its former Chief Executive Officer, Richard Steinberg.  The complaint alleges that, on eleven occasions, ICG and its principals also transferred funds to the Rainy Day Foundation in order to make payments for borrowers on the lender’s behalf.  The indirect payments artificially suppressed ICG’s comparative delinquency and default rates, as compiled and computed by the FHA.  In the settlement, ICG, DiMisa and Steinberg admitted to making the payments and that the payments altered the company’s delinquency and default rates.  ICG, DiMisa and Steinberg agreed to pay four hundred twenty-four thousand, eight hundred and fifty-nine dollars ($424,859) in settlement of the United States’ claims.

The United States’ cases are being litigated by Assistant United States Attorneys Edward Newman, John Vagelatos and Robert Schumacher.

The Defendants:      

RAINY DAY HOLDINGS, LLC, an Idaho-incorporated limited liability corporation, with its principal place of business in Baltimore, Maryland.

THE RAINY DAY FOUNDATION, INC., a Maryland-incorporated 501(c)(3) corporation, domiciled in the District of Columbia.

DEFAULT MITIGATION SERVICES, LLC, an Idaho-incorporated limited liability corporation, with its principal place of business in Boise, Idaho. 

RICK DEL SONTRO, the Chief Executive Officer of the Rainy Day Foundation.

TODD LUDLOW, a Senior Vice-President of the Rainy Day Foundation and founder and managing partner of Default Mitigation Services.

ROBERT CLUTE, a Senior Vice-President of the Rainy Day Foundation and Managing Partner of Rainy Day Holdings.

CHRIS HAUVER, Lender Relations Representative and Administrator for the Rainy Day Foundation.

KELLY SCHWEDLAND, marketer for Default Mitigation Services.

MICHAEL SHRUM, Delinquency Reduction Services Manager for the Rainy Day Foundation.

CHRISTOPHER NAILLON, Account Executive at the Rainy Day Foundation and an employee of Default Mitigation Services.

FRANKLIN FIRST FINANCIAL, LTD., a New York-incorporated limited company and mortgage lender, with its principal place of business in Melville, New York.

FREDERICK ASSINI, the Chief Executive Officer of Franklin First Financial.

ANTONIO BAINES, Senior Vice-President of Operations for Franklin First Financial.

ANDREW DAURO, a Manager at Franklin First Financial.

CHRIS BERTMAN, Chief Operating Officer at Franklin First Financial.

MAX KANE, Chief Financial Officer of Mortgage Source, a now defunct mortgage lender, with its principal place of business in Garden City, New York.

JOANN MEDEIROS, Chief Operating Officer of Mortgage Source.

CONTINENTAL MORTGAGE BANKERS, INC. d/b/a FINANCIAL EQUITIES, a New York corporation and mortgage lender, with its principal place of business in Westbury, New York.

WALTER STASHIN, President of Continental Mortgage Bankers.

GREGG MARCUS, Managing Director of Somerset Investors Corp, d/b/a Somerset Mortgage Bankers, a now defunct mortgage lender located in Melville, New York.

INTERCONTINENTAL CAPITAL GROUP, INC., a New York corporation and mortgage lender with offices in Bohemia, New York.

DUSTIN DIMISA, President and Managing Director of Intercontinental Capital Group.

RICHARD STEINBERG, former Chief Executive Officer of Intercontinental Capital Group.

Earlier today at the federal courthouse in Central Islip, New York, James Peister was sentenced to six years in prison and three years of supervised release, following his November 10, 2014 guilty plea to committing securities fraud for defrauding 74 investors of $17.9 million by operating a Ponzi scheme.  As part of the sentence, Peister was ordered to pay $9,657,218.65 in restitution to the victims of his fraud and $17.9 million in forfeiture, which includes his residence in St. James, New York, and his Hummer sports utility vehicle.

The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“For nearly a decade, Peister lulled his victims into a false sense of security through empty promises of reliable growth and conservative investing.  After stealing millions of dollars in inheritances and retirement savings, Peister now faces his own retirement in prison while his victims struggle to rebuild their lives,” stated Acting United States Attorney Currie.  “Would-be fraudsters take note that you, like Peister, who prey on the investing public will be held accountable.”  Mr. Currie thanked the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) for their cooperation and assistance.

FBI Assistant Director-in-Charge Rodriguez stated, “Today's sentencing marks a closing for Peister's $17 million Ponzi scheme, although for his victims, who lost their inheritance and retirement savings, there is no closure that can make them whole again. The FBI is committed to investigating and bringing to justice those who prey upon trusting individuals for their own personal gain.”

Between January 2000 and June 2009, Peister raised more than $17 million from at least 74 investors in connection with an investment fund that he managed.  He had assured those investors that their money would be invested safely in a variety of securities, including stocks, futures, and fixed income instruments.  Instead of investing the money as he had promised, Peister misappropriated the money to run a Ponzi scheme.  Among other things, he used the investors’ money to pay millions of dollars in redemptions to his victim investors to keep the scheme afloat and to purchase luxury items such as an expensive estate in St. James and a Hummer luxury vehicle.  To avoid detection and continue the scheme, Peister sent phony account statements to investors that falsely showed that their funds were invested and performing well and submitted bogus financial statements to the investment fund’s independent auditor.  As a result, investors believed that the funds were performing satisfactorily, and they continued to invest their money with Peister.  Peister’s Ponzi scheme collapsed in the wake of the financial crisis in 2008, when he could no longer keep up with demands for redemptions from nervous investors.

This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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’s 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, visit http://www.StopFraud.gov.

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Jacquelyn M. Kasulis and Jonathan P. Lax are in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian D. Morris of the Office’s Civil Division, which is responsible for the forfeiture of assets.

The Defendant:

JAMES M. PEISTER
Age:  63
St. James, New York

E.D.N.Y. Docket No. 14-CR-328 (JFB)

Yesterday, a 12-count superseding indictment was unsealed in federal court in Brooklyn charging Alvaun Thompson, also known as “LP,” “Love Pimpin,” “Legit Pimp” and “AT,” with three counts of child sex trafficking, one count of production of child pornography, and various other prostitution-related offenses.  The defendant’s arraignment is scheduled for Monday, September 21, 2015, before United States District Judge I. Leo Glasser.

The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and William J. Bratton, Commissioner, New York City Police Department.

As alleged, from 2013 until his arrest in January 2015, the defendant recruited and enticed two minor victims to engage in prostitution and commercial sex acts.  One of Thompson’s victims was 13 years old when he began exploiting her through commercial sex.  While inducing one minor victim to engage in sexually explicit activity, the defendant used his cell phone to create a pornographic video recording of the minor.  The defendant regularly promoted and managed his prostitution business over the Internet and on two occasions transported his victims to other States intending for them to engage in prostitutions. 

“As alleged, the defendant sexually exploited vulnerable minor victims for profit,” stated Acting United States Attorney Currie.  “We will aggressively investigate and prosecute those who would sexually exploit our children.”

FBI Assistant Director-in-Charge Rodriguez stated, "The sexual exploitation of children promotes the practice of inducting innocent victims into a life of prostitution and trapping them in a life of misery. This is an epidemic that is spreading rapidly throughout the nation, and the migratory nature of these crimes makes it critical for the FBI and our law enforcement entities to work together to tackle this widespread problem."

“There is no place in our city for the abuse of minors, particularly when the crime is sexual in nature.  I commend the work of the NYPD investigators, FBI agents, and the prosecutors of the U.S. Attorney’s Office for the Eastern District of New York who have tirelessly pursued this case,” said Police Commissioner Bratton.

If convicted, the defendant faces a mandatory minimum term of 15 years imprisonment and a maximum sentence of life imprisonment.  The charges in the indictment are merely allegations, and the defendants is presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by the Office’s General Crimes Section.  Assistant United States Attorneys Matthew J. Jacobs and Jennifer S. Carapiet are in charge of the prosecution.

The Defendant:

Alvaun Thompson
Age:  28
 

E.D.N.Y. Docket No. 15-CR-80 (ILG)

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Ali Saleh with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization.  Saleh was arrested earlier today at his residence in Queens, New York, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Roanne L. Mann at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Assistant Attorney General for National Security John P. Carlin, Assistant Director in Charge Diego G. Rodriguez of the New York Field Office of the Federal Bureau of Investigation (FBI), and Commissioner William J. Bratton of the New York City Police Department.

As set forth in court documents, Saleh is a 22-year-old citizen of the United States.  In the last year, Saleh made multiple attempts to travel to the Middle East to join ISIL.  In August 2014, he made a flight reservation to travel from New York’s John F. Kennedy International Airport (JFK) to Istanbul, Turkey.  A few days earlier, Saleh used his Twitter account to post, “I’m ready to die for the Caliphate, prison is nothing.”[1]  Saleh was unable to travel at that time, but continued to pursue his goal of travelling overseas to join ISIL.  For example, in July 2015, Saleh made a flight reservation to travel from JFK to Cairo, Egypt.  On that same day, Saleh used his Twitter account to communicate with an ISIL facilitator who instructed followers to contact him “for hijrah advice to IS in Libya ONLY.”[2]  After speaking with airline personnel, Saleh did not board a flight from JFK Airport.  Over the span of the next two days, Saleh subsequently continued his attempts to travel to the Middle East by visiting Newark Liberty International Airport in New Jersey and Philadelphia International Airport, where he was again denied boarding.

Saleh then made his way to an Amtrak station in Cleveland, Ohio, in an attempt to take a train to Toronto, Canada, and travel to the Middle East from there.  In a subsequent interview with law enforcement officers, Saleh indicated that were he not arrested, he would continue to attempt to travel to the Middle East.

“Saleh was relentless in his attempts to travel to the Middle East to join a terrorist organization,” stated Acting United States Attorney Currie.  “We will continue to track down and prosecute individuals like Saleh before they are able to harm the United States and its allies.”  Mr. Currie 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. Currie also thanked the FBI’s Indianapolis Field Office and the New York City Police Department’s Intelligence Division for their assistance.  

“According to the allegations in the complaint, Ali Saleh attempted to provide material support to ISIL and made repeated efforts to travel overseas to join their ranks,” said Assistant Attorney General Carlin.  “The National Security Division’s highest priority is counterterrorism, and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”

“The persistence of Saleh in his alleged attempts to travel overseas in order to ‘die for the Caliphate,’ did not match the dedication of New York’s Joint Terrorism Task Force (JTTF) to work quickly to identify and interrupt this threat.  We will continue to be vigilant in our attempts to proactively stop threats before harm can occur,” said FBI Assistant Director in Charge Diego Rodriguez.

“By his own words, Ali Saleh was willing to pledge allegiance to, and die for ISIL, an organization that has called for terrorist attacks against the United States,” said Police Commissioner Bratton.  “Saleh’s attempts to travel to Syria and ISIL’s battlefields were halted by good intelligence and smart law enforcement.  I commend the agents and detectives of the Joint Terrorism Task Force as well as the dedicated prosecutors at the office of the United States Attorney for the Eastern District of New York.”

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 National Security & Cybercrime Section.  Assistant United States Attorney Saritha Komatireddy is in charge of the prosecution, with assistance provided by Trial Attorneys Lolita Lukose and Alison Daly of the Justice Department’s Counterterrorism Section.

The Defendant:

ALI SALEH
Age: 22
Queens, New York

E.D.N.Y. Docket No. 15-M-886

 

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[1] In this context, the term “Caliphate” refers to ISIL, given its stated goal of establishing an Islamic caliphate in Iraq and Syria.

[2]  The term “hijrah” is a reference to making a journey, and “IS” is a reference to ISIL.

Defendant Repeatedly Attempted to Travel to the Middle East to Join Terrorist Group

A criminal complaint was unsealed today in the Eastern District of New York charging Ali Saleh, 22, of Queens, New York, with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.  Saleh was arrested earlier today at his residence in Queens and his initial appearance is scheduled for this afternoon before U.S. Magistrate Judge Roanne L. Mann of the Eastern District of New York.

The charges were announced by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department.

As set forth in court documents, in the last year, Saleh made multiple attempts to travel to the Middle East to join ISIL.  In August 2014, he made a flight reservation to travel from New York’s John F. Kennedy International Airport (JFK) to Istanbul.  A few days earlier, Saleh used his Twitter account to post, “I’m ready to die for the Caliphate, prison is nothing.”  Saleh was unable to travel at that time, but continued to pursue his goal of traveling overseas to join ISIL.  For example, in July 2015, Saleh made a flight reservation to travel from JFK to Cairo.  On the same day, Saleh used his Twitter account to communicate with an ISIL facilitator who instructed followers to contact him “for hijrah advice to IS in Libya ONLY.”  Saleh was denied boarding at JFK Airport by airline personnel. Over the span of the next two days, Saleh subsequently continued his attempts to travel to the Middle East by visiting Newark Liberty International Airport in New Jersey and Philadelphia International Airport, where he was again denied boarding.  Saleh then made his way to an Amtrak station in Cleveland in an attempt to take a train to Toronto and travel to the Middle East from there.  In a subsequent interview with law enforcement officers, Saleh indicated that were he not arrested, he would have continued to attempt to travel to the Middle East.

“According to the allegations in the complaint, Ali Saleh attempted to provide material support to ISIL and made repeated efforts to travel overseas to join their ranks,” said Assistant Attorney General Carlin.  “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”

“Saleh was relentless in his attempts to travel to the Middle East to join a terrorist organization,” said Acting U.S. Attorney Currie.  “We will continue to track down and prosecute individuals like Saleh before they are able to harm the United States and its allies.”

“The persistence of Saleh in his alleged attempts to travel overseas in order to ‘die for the Caliphate,’ did not match the dedication of New York’s Joint Terrorism Task Force (JTTF) to work quickly to identify and interrupt this threat,” said Assistant Director in Charge Diego Rodriguez.  “We will continue to be vigilant in our attempts to proactively stop threats before harm can occur.”

“By his own words, Ali Saleh was willing to pledge allegiance to, and die for ISIL, an organization that has called for terrorist attacks against the United States,” said Commissioner Bratton.  “Saleh’s attempts to travel to Syria and ISIL’s battlefields were halted by good intelligence and smart law enforcement.  I commend the agents and detectives of the Joint Terrorism Task Force as well as the dedicated prosecutors at the office of the United States Attorney for the Eastern District of New York.” 

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

The case is being investigated by the FBI’s Joint Terrorism Task Force, the FBI’s Indianapolis Field Office and the New York City Police Department’s Intelligence Division.  The case is being prosecuted by Assistant U.S. Attorney Saritha Komatireddy of the Eastern District of New York, with assistance provided by Trial Attorneys Lolita Lukose and Alison Daly of the National Security Division’s Counterterrorism Section.

Saleh Complaint

Earlier today in federal court in Brooklyn, former New York State Assemblyman William F. Boyland, Jr. was sentenced to 14 years of incarceration in connection with his conviction at trial of 21 felony counts, including federal programs bribery, conspiracy to violate the Travel Act, extortion, honest services wire fraud, federal programs theft, and conspiracy to commit mail fraud.  Boyland committed these offenses by corruptly exploiting his official position representing the 55th Assembly District in Brooklyn, comprising Ocean Hill, Brownsville, Bedford-Stuyvesant, Crown Heights, and Bushwick.  As part of the sentence, the Court also ordered Boyland to forfeit $169,410.14 and pay restitution in the amount of $71,339.66 to the New York State Department of Taxation and Finance and $84,270.48 to the New York State Office of the Aging.  Today’s proceeding was held before United States District Judge Sandra L. Townes.

The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office.

“As he demonstrated time and again, Boyland, a lawmaker himself, lacked any respect for either the law or his constituents who elected him,” said Acting U.S. Attorney Currie.  “Officials who would seek to sell the power and influence of their office to the highest bidder are on notice that they will be held to account for their crimes.”  Mr. Currie praised the outstanding work of the FBI and expressed his grateful appreciation to the New York State Comptroller’s Office, the New York State Office of the Aging, the Internal Revenue Service-Criminal Investigations, the New York State Assembly Department of Finance, and the New York City Department of Investigation for their assistance.

“Boyland was elected to represent his district, not cash in on them. By repeatedly taking unscrupulous opportunity after opportunity–from bribes to fraudulent vouchers to misappropriation of state funds intended to help seniors–Boyland only showed he was only trying to help himself.  Today’s sentencing should serve as a warning to those in public office who seek to profit from their positions rather than legislate from them–they are not above the law.  The FBI remains committed to investigating and bringing to justice public officials who seek to misuse their power.”

The evidence admitted at trial established that, beginning in January 2007 and continuing through December 2011, Boyland engaged in four corrupt schemes.

Carnival Extortion Scheme.  In August 2010, Boyland met with a carnival promoter and an undercover FBI agent on multiple occasions to discuss the promoter’s desire to hold carnivals in Boyland’s district, for which government approvals were required.  Boyland requested payments in exchange for his assistance, and the promoter agreed.  In furtherance of the scheme, Boyland described various ways in which the bribes could be concealed, directed his Assembly staff to assist the promoter obtain government approvals, arranged for a non-profit organization to sponsor the promoter’s carnivals, and directed his staff to give the promoter letters of support on Boyland’s Assembly letterhead.  In exchange, the undercover FBI agent  paid Boyland three separate bribes – $7,000 in cash, a $3,000 check with the payee line left blank, and $3,800 worth of money orders that were deposited into Boyland’s campaign bank account. 

Real Estate Scheme.  Boyland also accepted the $7,000 cash bribe described above in exchange for undertaking official action to benefit two FBI undercover agents in a purported real estate venture in Boyland’s district.  In this scheme, the undercover agents would purchase the former St. Mary’s Hospital in Boyland’s district for $8 million, obtain state grant money to renovate the hospital, and resell it for $15 million to a non-profit organization that Boyland claimed to control.  Boyland assured the agents he would use his influence as an Assemblyman to secure state grant money for the project and handle any zoning issues that arose.  After accepting the $7,000 cash bribe, Boyland later demanded an additional $250,000 bribe payment from the agents as a condition of using his official position to carry out the scheme.

False Voucher Scheme.  From January 2007 to December 2011, Boyland submitted over 200 fraudulent vouchers in which he falsely claimed to be in Albany on legislative business when he in fact was not in Albany, including days when he was in New York City meeting with the undercover FBI agents and demanding $250,000 in bribes, days when he was in North Carolina and Virginia visiting with family and friends, and for days when he was in Istanbul, Turkey.  In reliance on the false vouchers, New York State paid Boyland over $70,000 in fraudulent mileage expense reimbursements and per diem payments.

Theft of State Funds for the Elderly.  Between July 2007 and September 2010, Boyland conspired to defraud New York State and the New York State Office of the Aging.  Boyland, a member of the Assembly’s Committee on the Aging, steered $200,000 of New York State member item funds to a Brooklyn-based non-profit organization whose purported mission was to provide a “social setting that enable[s] elderly individuals to maintain their independence and remain at home in the community.”  Boyland certified that these state funds would not be used for partisan or political purpose, but then directed that the majority of the funds be used to benefit himself and his political campaigns by paying for community events that promoted Boyland.

The government’s case is being prosecuted by the Office’s Public Integrity Section.  Assistant United States Attorneys Lan X. Nguyen and Marisa Megur Seifan are in charge of the prosecution.  Assistant United States Attorney Tanya Hill is responsible for handling the forfeiture of assets.

The Defendant:

WILLIAM F. BOYLAND, JR.
Age: 45
Brooklyn, New York

E.D.N.Y. Docket No. 11-CR-850 (SLT)

A criminal complaint was unsealed this morning in Brooklyn federal court charging Gerald Surya, M.D., with falsely certifying physical examinations for commercial drivers.  Specifically, the complaint charges that Dr. Surya certified that he had examined applicants for commercial driver’s licenses (CDLs) and found them physically fit to drive heavy commercial vehicles when in fact he had not performed those examinations.  The defendant’s initial appearance is scheduled later today before United States Magistrate Judge Roanne L. Mann, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charge was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Douglas Shoemaker, Regional Special Agent-in-Charge, United States Department of Transportation-Office of Inspector General (USDOT-OIG).

As set forth in the complaint, drivers of certain commercial vehicles, such as school buses and heavy transportation trucks, must possess a CDL, issued by the New York State Department of Motor Vehicles (DMV), pursuant to regulations set forth by the United States Department of Transportation (USDOT).  Before obtaining a CDL, all applicants must pass written and road tests related to safely driving such large vehicles.  In addition, the applicants must be examined and certified fit to drive such vehicles by a physician or other qualified medical personnel authorized by the USDOT to conduct such examinations. Upon receipt of the certification, the applicant must file a copy with the DMV.  Further, on a monthly basis, USDOT certified medical examiners are required to electronically transmit to USDOT copies of certifications they have executed for CDL applicants.

As alleged in the complaint, Dr. Surya was authorized to conduct USDOT mandated medical examinations and certifications for CDL applicants and purportedly performed such examinations at his JFK Medport office, located at JFK airport in Queens, New York.  In fact, the applicants were not examined by Dr. Surya, but instead by other JFK Medport staff members who had little or no medical training and were not authorized to conduct the mandated medical examinations.   

“Dr. Surya’s conduct put at risk pedestrians as well as other drivers.  We are committed to aggressively investigating and prosecuting those who would commit crimes that compromise the safety of the public,” stated Acting United States Attorney Currie.  Mr. Currie extended his appreciation to the Federal Motor Carrier Safety Administration for its assistance.

“As evidenced by the arrest of Dr. Gerald Surya on charges related to unlawful medical examinations for applicants of Commercial Driver’s Licenses, ensuring safety on the nation’s roadways remains a high priority for the Office of Inspector General (OIG), the Department of Transportation (DOT) and the Federal Motor Carrier Safety Administration (FMCSA),” said  DOT-OIG regional Special Agent-in-Charge Shoemaker.  “Working with our DOT, FMCSA, law enforcement and prosecutorial colleagues, we will continue our vigorous efforts to prevent, detect, and prosecute violations of laws and regulations, CDL and otherwise, designed to ensure the public’s safety.”

The charge in the complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted, the defendant faces a maximum sentence of 15 years of imprisonment.

The government’s case is being prosecuted by the Office’s Public Integrity Section.  Assistant United States Attorney Michael H. Warren is in charge of the prosecution.  

 

The Defendant:

GERALD SURYA
Age: 45
Residence: New Hyde Park, New York

E.D.N.Y. Docket No. 14-M-853

Earlier today in Brooklyn federal court, Steven H. Dickman was sentenced to 33 months of imprisonment.  Dickman stole an attorney’s identity and collected legal fees from more than 50 clients to whom Dickman falsely claimed he was that attorney.  The sentencing proceeding was held before U.S. District Judge Allyne Ross.  Dickman pleaded guilty to one count of wire fraud in December 2014.

The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

As set forth in court filings, Dickman was admitted to the New York Bar in 1969 but resigned from the bar in 1987 when he was investigated for attorney misconduct.  In 2009, Dickman stole the identity of a victim-attorney and assumed that victim-attorney’s status as a member of the New York Bar.  Dickman then represented himself to be the victim-attorney to putative clients in order to obtain legal fees from them.  In 2012, Dickman submitted an application to be admitted to practice law in the United States District Court for the Eastern District of New York and falsely swore an oath affirming that his name was that of the victim-attorney, that he was an attorney, and that he was a member in good standing of the New York Bar.

As part of his sentence, Dickman was also ordered to forfeit $20,000.  The Court did not impose restitution today, but scheduled a restitution hearing for December 18, 2015.

The government’s case is being prosecuted by the Office’s Public Integrity Section.  Assistant United States Attorney Lan Nguyen is in charge of the prosecution.

The Defendant:

Steven H. Dickman
Age:   70
Brooklyn, NY

E.D.N.Y. Docket No. 14-CR-610 (ARR)

Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, James Hunt, Special Agent-in-Charge, Drug Enforcement Administration, New York Field Division (DEA), and Thomas E. Bishop, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Division (IRS), announced today the unsealing of an indictment in Brooklyn federal court charging three alleged leaders of an international money laundering organization for their role in brokering a series of financial transactions designed to conceal the source of illegal narcotics trafficking.  The defendants allegedly used the Chinese and Hong Kong financial system and the shipment of counterfeit goods around the world to launder over $5 billion for drug cartels based in Mexico and Colombia.

“As alleged, the defendants and their co-conspirators laundered billions of dollars in illegal narcotics proceeds on behalf of several of the largest drug cartels in the world.  The organization used a variety of methods to conceal the source of the drug proceeds in an operation that stretched around the globe,” stated Acting United States Attorney Currie.  Mr. Currie thanked the Department of Justice, Office of International Affairs; DEA Dallas Field Office; New York City Police Department; New York State Police; DEA Beijing Country Office; DEA Hong Kong Country Office; IRS Beijing Country Office; IRS Hong Kong Country Office; the Financial Investigations Group of the Hong Kong Customs and Excise Department; and the Chinese Ministry of Public Security.

“These indictments are a result of a lengthy and extensive investigation that tracked the profit of billions of dollars made by drug traffickers through five continents.  Allegedly, the three defendants provided the financial lifeline for drug cartels to operate and push illegal drugs into the United States,” said Drug Enforcement Administration Special Agent-in-Charge Hunt.

“Attacking the proceeds from the sale of illegal drugs is a proven technique for dismantling drug organizations of all sizes,” said IRS Acting Special Agent-in-Charge Bishop.  “Collaborations between IRS-Criminal Investigation and the DEA are successful, as our joint investigations bring together highly skilled drug investigators with highly skilled financial investigators in the fight against global narcotics trafficking organizations.  Accordingly, we are pleased to partner with the DEA and the U.S. Attorney’s Office in this trade-based money laundering investigation.”

As alleged in the indictment, the investigation determined that from approximately January 1, 2004 to the present, members of an international organization of money launderers and drug trafficking organizations conspired to carryout trade-based money laundering activities in China, Colombia, the United States, Spain, Ecuador, Venezuela, and elsewhere.  The group was led by Colombian nationals based in Guangzhou, China (the Guangzhou Enterprise).  The Guangzhou Enterprise laundered money through bank accounts in Hong Kong and China on behalf of drug trafficking organizations in Mexico and Colombia to fund purchases of counterfeit goods in China, which were then shipped to Colombia and elsewhere for resale.

The Enterprise typically paid Colombian pesos to the drug traffickers in exchange for their U.S. dollar proceeds of drug trafficking at a heavily discounted exchange rate, which reflected the risks incurred by the money brokers.  The Enterprise then located Colombian or other South American customers – usually businesses – that needed U.S. dollars to pay for imported goods or services.  They then sold the U.S. dollars to those customers, who used the money to purchase goods and services in China for resale.

The investigation revealed that the Guangzhou Enterprise, led by Christian Duque-Aristizabal, Jhon Hincapie-Ramirez and Henry Poveda, among others, was responsible for laundering over $5 billion in narcotics proceeds.

Duque-Aristizabal was arrested in Panama City, Panama, on July 13, 2015, and Hincapie-Ramirez was arrested in Cali, Colombia, on August 13, 2015.  The government is currently seeking their extradition to the United States.  Poveda was arrested in Honolulu, Hawaii, on August 23, 2015.  Poveda was arraigned earlier today before the Hon. Carol B. Amon at the U.S. District Court in Brooklyn.

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 the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Amir H. Toossi, Tyler J. Smith, and Ameet B. Kabrawala are in charge of the prosecution.

The Defendants:                                           

CHRISTIAN DUQUE-ARISTIZABAL
Age: 36

JHON HINCAPIE-RAMIREZ
Age: 54

HENRY POVEDA
Age: 49

E.D.N.Y. Docket No. 15-Cr-81

Alexander Fishenko, 49, of Houston, and a dual citizen of the United States and Russia, pleaded guilty today to acting as an agent of the Russian government within the United States without prior notification to the Attorney General, conspiring to export and illegally exporting controlled microelectronics to Russia, conspiring to launder money and obstruction of justice.

The plea was announced by Assistant Attorney General for National Security John P. Carlin and Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York.

“Alexander Fishenko illegally acted as an agent of the Russian government in the United States and evaded export laws by sending microelectronics and other technology with military applications to Russia,” said Assistant Attorney General Carlin.  “By purposefully circumventing U.S. law, including the International Emergency Economic Powers Act and the Arms Export Control Act, the defendant jeopardized our national security.  I would like to thank the many members of law enforcement whose tireless efforts led to this guilty plea.”

“Fishenko lined his pockets at the expense of our national security,” said Acting U.S. Attorney Currie.  “This prosecution highlights the importance of vigorously enforcing United States export control laws.” 

As alleged in the indictment and reflected in court filings, between approximately October 2008 and October 2012, Fishenko led a conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to Russia, while carefully evading the government licensing system set up to control such exports.  The microelectronics shipped to Russia included analog-to-digital converters, static random access memory chips, microcontrollers and microprocessors.  These commodities have applications in and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers.  Russia does not produce many of these sophisticated goods domestically.

According to the indictment and other court filings, in 1998, Fishenko founded Arc Electronics Inc. (Arc), which was also indicted, in Houston.  Between 2002 and the present, Arc has shipped approximately $50 million worth of microelectronics and other technologies to Russia.  Fishenko also served as an executive of co-defendant Apex System L.L.C. (Apex) a Moscow-based procurement firm.  Apex, working through subsidiaries, served as a certified supplier of military equipment for the Russian government.  Fishenko exported many of these high-tech goods, frequently through intermediary procurement firms, to Russian end users, including Russian military and intelligence agencies.  To induce manufacturers and suppliers to sell them these high-tech goods and to evade applicable export controls, Fishenko and his co-conspirators often 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.  For example, Arc falsely claimed to be a traffic light manufacturer on its website.  In fact, Arc manufactured no goods and operated exclusively as an exporter.

Despite this ploy, the investigation revealed that the defendants were supplying Russian government agencies with sophisticated microelectronics.  For example, the investigation uncovered a letter sent by a specialized electronics laboratory of Russia’s Federal Security Service (FSB), Russia’s primary domestic intelligence agency, to an Apex affiliate regarding certain microchips that Arc obtained for the FSB.  The letter stated that the microchips were faulty and demanded that the defendants supply replacement parts.

The guilty plea took place before U.S. District Judge Sterling Johnson Jr. of the Eastern District of New York.  At sentencing, Fishenko faces up to 20 years in prison for each violation of the International Emergency Economic Powers Act and the Arms Export Control Act, up to 20 years in prison for money laundering conspiracy and obstruction of justice and up to 10 years in prison for acting as a Russian agent.  The defendant will also face potential criminal forfeiture and fines.

Ten other individuals and two corporations were originally charged in October 2012.  Four members of the conspiracy have pleaded guilty and three are scheduled to commence trial on Sept. 21, 2015.

The case is being investigated by the FBI and the Department of Commerce.  The case is being prosecuted by Assistant U.S. Attorneys Daniel Silver, Una Dean, Richard Tucker and Claire Kedeshian of the Eastern District of New York, as well as Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section. 

Earlier today, Alexander Fishenko, a dual citizen of the United States and Russia, pled guilty at the federal courthouse in Brooklyn, New York, to all charges pending against him, including acting as an agent of the Russian government within the United States without prior notification to the Attorney General, conspiring to export, and illegally exporting, controlled microelectronics to Russia, conspiring to launder money, and obstruction of justice.  Fishenko, ten other individuals, and two corporations were originally charged in October 2012.  Four members of the conspiracy previously pled guilty, and three are scheduled to commence trial on September 21, 2015.[1]

The guilty plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and John P. Carlin, Assistant Attorney General for National Security.

“Fishenko lined his pockets at the expense of our national security,” stated Acting United States Attorney Currie.  “This prosecution highlights the importance of vigorously enforcing United States export control laws.”  Mr. Currie thanked the Federal Bureau of Investigation and the Department of Commerce for their leading roles in the investigation.

“Alexander Fishenko illegally acted as an agent of the Russian government in the United States and evaded export laws by sending microelectronics and other technology with military applications to Russia,” said Assistant Attorney General Carlin.  “By purposefully circumventing U.S. law, including the International Emergency Economic Powers Act and the Arms Export Control Act, the defendant jeopardized our national security.  I would like to thank the many members of law enforcement whose tireless efforts led to this guilty plea.”

As alleged in the indictment and reflected in court filings, between approximately October 2008 and October 2012, Fishenko led a conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to Russia, while carefully evading the government licensing system set up to control such exports.  The microelectronics shipped to Russia included analog-to-digital converters, static random access memory chips, microcontrollers, and microprocessors.  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 does not produce many of these sophisticated goods domestically.

In 1998, Fishenko founded Arc Electronics, Inc. (Arc), which was also indicted, in Houston, Texas.  Between 2002 and the present, Arc has shipped approximately $50,000,000 worth of microelectronics and other technologies to Russia.  Fishenko also served as an executive of co-defendant Apex System, L.L.C. (Apex) a Moscow, Russia-based procurement firm.  Apex, working through subsidiaries, served as a certified supplier of military equipment for the Russian government.  Fishenko exported many of these high-tech goods, frequently through intermediary procurement firms, to Russian end users, including Russian military and intelligence agencies.  To induce manufacturers and suppliers to sell them these high-tech goods, and to evade applicable export controls, Fishenko and his co-conspirators often 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.  For example, Arc falsely claimed to be a traffic light manufacturer on its website.  In fact, Arc manufactured no goods and operated exclusively as an exporter.

Despite this subterfuge, the investigation revealed that the defendants were supplying Russian government agencies with sophisticated microelectronics.  For example, the investigation uncovered a letter sent by a specialized electronics laboratory of Russia’s Federal Security Service (FSB), Russia’s primary domestic intelligence agency, to an Apex affiliate regarding certain microchips obtained for the FSB by Arc.  The letter stated that the microchips were faulty and demanded that the defendants supply replacement parts.

Today’s proceeding took place before United States District Judge Sterling Johnson, Jr.  When sentenced, Fishenko faces up to 20 years in prison for each violation of the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act (AECA), up to 20 years in prison for money laundering conspiracy and obstruction of justice, and up to 10 years in prison for acting as a Russian agent, as well as criminal forfeiture and fines.

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

The Defendant:

ALEXANDER FISHENKO
Age:  49
Houston, Texas

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

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[1] As to the defendants awaiting trial, the charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

Michael Conway, the President of Choice Office Solutions LLC (Choice Office), was arrested earlier today on charges of wire fraud and aggravated identity theft in connection with a scheme where he forged lease agreements to defraud an individual investor and De Lage Landen Financial Solutions Partner (DLLFSP) of approximately $3.5 million.  Earlier today, FBI agents also executed a search of Choice Office’s offices in Fairfield, New Jersey.  The defendant’s initial appearance is scheduled for this afternoon before United States Magistrate Judge Cheryl L. Pollak at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges and arrest were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“As charged in the criminal complaint, Conway claimed to have lucrative contracts to lease office equipment with more than 50 companies, including law firms, universities, and a major league baseball franchise, and relied on these lease contracts to obtain financing.  In reality, the only one making money on these phony lease agreements was the defendant himself,” stated Acting United States Attorney Currie.  

“Crime does not need to be violent to have a devastating impact on society.  White collar crimes, like the ones alleged herein, can reach more victims and have a disparate impact on the most vulnerable persons and businesses.  Fraud disguises itself as legitimate and true, while abusing trust and eroding faith in fair and honest dealings.  The FBI will continue to investigate lack of integrity leading to criminal activities in order to protect the community from such harm,” stated FBI Assistant Director-in-Charge Rodriguez.

According to the complaint unsealed this morning in Brooklyn federal court, from approximately 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, Conway 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 $3.1 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 ostensibly 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.

The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted, Conway faces a mandatory minimum sentence of two years imprisonment and a maximum sentence of 22 years.

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Winston Paes and Celia Cohen 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:  39
Verona, New Jersey

Singh Charged with Fraudulently Under-Reporting to the IRS Over $17 Million of His Businesses’ Sales and Wages and Submitting False Documents to FEMA to Obtain Over $900,000 in Disaster Relief Funds

A 13-count indictment was unsealed this morning in federal court in Central Islip charging Harendra Singh, also known as “H. Singh,” with five counts of honest services wire fraud, one count of honest services wire fraud conspiracy, one count of federal program bribery, one count of disaster relief fraud, two counts of conspiring to defraud the United States, one count of impeding the Internal Revenue Service, one count of tampering with evidence, and one count of obstruction of justice.[1]  Singh was arrested this morning and will be arraigned later today before the Hon. A. Kathleen Tomlinson, United States Magistrate Judge, at the United States Courthouse, 100 Federal Plaza, Central Islip, NY.

The indictment was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Shantelle P. Kitchen, Special Agent- in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS-CI).

“As alleged, Harendra Singh ran his businesses through fraud and deceit, using bribes and kickbacks to tilt the playing field in the Town of Oyster Bay.  He accomplished this by lying to FEMA and the IRS in order to obtain hundreds of thousands of Hurricane Sandy disaster relief funds to which he was not entitled and evading taxes on millions of dollars of sales and wages,” stated Acting United States Attorney Currie.  “The obligation to deal honestly is shared by everyone in our society, and we and our partners in the FBI and IRS-CI are unwavering in our commitment to root out corruption at all levels.”

“The charges alleged in today’s indictment describe an outpouring of greed.  As alleged, Singh put local business owners at a significant disadvantage, siphoned funds from public money he was not entitled to, and sidestepped his responsibility to pay taxes on underreported income.  Today’s arrest is proof of the FBI’s continued determination to work with our partners in rooting out those who engage in unlawful schemes for profit,” stated FBI Assistant Director-in-Charge Rodriguez.

“IRS-Criminal Investigation, in its mission of ensuring that everyone pays their fair share of taxes, investigates business owners who willfully do not report all of their business receipts and who willfully fail to collect and pay over payroll taxes to the government, said Special Agent-in-Charge Kitchen.  “Obviously, taxes are needed to keep the government running, so when people and businesses do not pay their fair share, they increase the burden on law abiding taxpayers.  When business owners do not collect payroll taxes, they compound this burden and harm their own employees, potentially depriving them of future government benefits that are funded by these collections, like Social Security payments.”

The Town of Oyster Bay Loan Scheme

Singh owned and operated restaurants and food concessions located primarily in Nassau County (collectively, the Singh entities), and was awarded agreements with the Town of Oyster Bay (the Town), including concession agreements to operate various food concessions within the Town.  The indictment charges that Singh paid bribes and kickbacks to a Town employee (identified in the indictment as co-conspirator #3) in exchange for the co-conspirator’s assistance in obtaining the Town’s guarantee of two loans totaling approximately $20 million that two of Singh’s businesses received from a private corporate financing company (identified in the indictment as the Lender).  As a result, were Singh’s entities to default on the loans, the Town would be responsible for repaying the Lender the entire amount of the loan.

The first loan, which closed in November 2011, was for $7,843,138.  Approximately one week after the loan closed, Singh gave co-conspirator #3 an envelope with five checks, each in the amount of $5,000; the five checks were made out to “cash.”  The second loan, which closed in June 2012, was for $12,273,748.  Approximately one week after closing, Singh gave co-conspirator #3 an envelope with five additional checks, each in the amount of $5,000; the five checks were each made out to “cash.”  In addition, Singh paid for co-conspirator #3 and a relative to travel to Asia a few weeks after the second loan closed, including all transportation and hotel expenses.

The indictment alleges that in late 2012 and 2013, Singh sought an additional loan of approximately $12 million from the Lender in connection with improvements to be made to Singh’s concession facilities at two Town beaches.  To assist Singh, co-conspirator #3 arranged for meetings between the Lender and Town officials.  Although the loan was not ultimately extended, between September 2012 and February 2015, Singh made monthly cash payments to co-conspirator #3 for the lease of a BMW automobile.

The Tax Fraud Schemes

The indictment alleges that Singh fraudulently under-reported to the IRS the true amount of money certain of the Singh entities earned and the wages he paid his workers, thereby lowering significantly the federal taxes he and his businesses owed and paid.  Specifically, for tax years 2009 and 2012, Singh allegedly failed to report approximately $10,000,000 in gross receipts for seven Singh entities.  To facilitate this fraud, Singh employed an individual who, at Singh’s direction, did not record the seven Singh entities’ cash sales as gross receipts in the books and records of those businesses.  Because the profits of those businesses flowed through to Singh as their owner, the failure to properly report the gross receipts of the businesses enabled Singh to under-report his own income on his personal income tax returns.

In addition, from 2010 through 2014, Singh allegedly concealed approximately $7,091,331 of wages paid to employees of the same Singh entities, plus an additional Singh entity, fraudulently depriving the federal government of payroll taxes.  Singh accomplished this scheme by paying a significant portion of the wages paid to employees of these entities “off the books.”  By under-reporting employee hours and even concealing the existence of some employees, Singh caused his payroll processing companies to underreport the employee wages and fail to withhold the proper amount of federal payroll taxes required by law.

The FEMA Fraud Scheme

The indictment also alleges that between October 2012 and January 2015, Singh fraudulently obtained federal disaster relief funds by preparing and filing false and fraudulent documents and invoices with FEMA.  These documents claimed that the Singh entity, “The Water’s Edge,” which operated a restaurant in Long Island City, New York, suffered losses following Hurricane Sandy.  The invoices inflated the amount of losses, often by double or triple the actual amount.  Singh also submitted or caused to be submitted to FEMA fraudulent receipts from vendors that inflated the value of the contents of the building that housed the restaurant.  As a result, Singh fraudulently received approximately $950,000 in disaster relief funds from FEMA.

Obstruction of Justice

Singh is charged with evidence tampering and obstruction of justice in connection with the execution of a search warrant at his offices by FBI Special Agents on August 5, 2014.  When agents questioned Singh about the contents of a locked safe on the premises, he informed the agents that he did not have a key to the safe and that the safe contained guns, for which he had permits.  In fact, the safe contained $175,000 in cash which were diverted cash receipts from a Town beach concession operated by one of the Singh entities.  Following the execution of the search warrant, Singh removed the cash and instructed two others to each take a portion of the cash home for “safekeeping.”  A few days later, Singh instructed those individuals to return the money to his wife.

If convicted, Singh faces terms of imprisonment of up to o 20 years for each honest services wire fraud charge and up to 10 years for the federal program bribery charge, both in connection with the Town loan scheme.  If convicted of any of those charges, the government will seek to forfeit Singh’s properties that constitute or are derived from proceeds of those offenses, including two residences located in Nassau County.  Singh further faces terms of imprisonment of up to 30 years for the disaster relief fraud charge and up to five years for conspiring to defraud the United States in connection with his submitted claims for disaster relief, up to 20 years for each of the obstruction charges, up to five years for the charge of conspiring to defraud the United States in connection with his scheme to under-report gross receipts and payroll taxes, and up to three years for the charge of obstructing and impeding the due administration of the Internal Revenue Laws.

Mr. Currie expressed his appreciation to the Nassau County District Attorney’s Office, the Northern Criminal Enforcement Section of the Tax Division of the Department of Justice, and the New York State Department of Taxation and Finance for their assistance in and cooperation with the investigation.

The government’s case is being prosecuted by the Office’s Public Integrity Section and Long Island Criminal Division.  Assistant United States Attorneys Catherine M. Mirabile, Raymond A. Tierney, and Lara Treinis Gatz are in charge of the prosecution.  Assistant United States Attorney Madeline O’Connor of the Office’s Civil Division will be responsible for the forfeiture of assets.

The Defendant:

HARENDRA SINGH
Age: 56
Syosset, New York

E.D.N.Y. Criminal Docket No. 15-450

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

BROOKLYN, NY – Earlier today, Jeffrey Suh, Kang Young Chung, Sophia Lin, and Emily Shim pleaded guilty to conspiring to commit health care fraud in connection with a $4 million health care fraud scheme.

Today’s guilty pleas were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations’ New York Region (HHS-OIG), and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

The defendants were charged as part of a nationwide Medicare Fraud takedown in June 2015. 

According to court filings and facts presented during the plea proceeding, from approximately December 2010 through June 2013, the four defendants at Plaza Medi Group, Inc. and New Plaza Group, Inc., located in Flushing, NY, submitted more than $4 million in false claims to Medicare for physical therapy, occupational therapy and chiropractic services that were not medically necessary, were often not provided, and otherwise did not qualify for reimbursement.

“Clinic owner Jeffrey Suh and his employees defrauded Medicare for personal financial gain, and they now will be held to account for their crimes,” stated Acting United States Attorney Currie.  “Health care fraud prevention is a priority of the Department of Justice and this office.  We are committed to preserving the resources of the Medicare program for truly needy recipients.”

The fraud scheme that Mr. Suh and his employees engaged in was motivated by nothing more than greed,” said HHS-OIG Special Agent-in-Charge Lampert.  “HHS-OIG and its law enforcement partners will continue to aggressively pursue to the fullest extent of the law those who seek to unlawfully enrich themselves by victimizing participants of the Medicare program.” 

“Public health insurance programs, such as Medicare, incur staggering financial losses when their programs are exploited.  Today, the defendants in this scheme have admitted to their illegal behavior and will now be held accountable for the error of their ways as they face the due process of law,” stated FBI Assistant Director-in-Charge Rodriguez.  

Today’s guilty pleas took place before United States Magistrate Judge Steven M. Gold.  When sentenced, the defendants face up to 10 years in prison, as well as restitution to reimburse Medicare for the false claims paid, fines and forfeiture of $2,808,190 for Suh, $2,183,012 for Chung, $272,641 for Lin, and $115,136 for Shim.

The government’s case is being prosecuted by the Office’s Business and Security Fraud Unit.  Assistant United States Attorneys Sylvia Shweder and Whitman Knapp are in charge of the prosecution, with assistance provided by Assistant United States Attorney Karin Orenstein of the Office’s Civil Division, which is responsible for the forfeiture of assets.

The Defendants:

JEFFREY SUH
Age:  55
Bay Side, New York

KANG YOUNG CHUNG
Age:  42
Woodside, New York

SOPHIA LIN
Age:  34
Rocky Point, New York

EMILY SHIM
Age:  40
Flushing, New York

E.D.N.Y. Docket No. 15-CR-300 (CBA)

A criminal complaint was unsealed today in federal court in Brooklyn charging the CEO of Rentboy.com, Jeffrey Hurant, and six Rentboy.com employees with conspiring to violate the Travel Act by promoting prostitution.  The defendants were arrested this morning and are scheduled to appear before United States Magistrate Judge Marilyn Go at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York; Glenn Sorge, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and William J. Bratton, Commissioner, New York City Police Department.

As alleged in the complaint, Rentboy.com is a male escort advertising site  founded in 1997 which hosts thousands of paid advertisements.  While the site has disclaimers stating that the advertisements are for companionship and not sexual services, Rentboy.com is designed primarily for advertising illegal prostitution.  The website charges subscribers a  minimum monthly fee of $59.95 and up to several hundred dollars to advertise sexual services.  Once the fee is paid, subscribers can select from a number of categories created by Rentboy.com the sexual services they are willing to perform and the price charged.  Subscribers can also include their physical descriptions and provide links to another website where their sexual services are rated by prior customers.  Between 2010 and 2015, Rentboy.com had over $10 million in gross proceeds.

“As alleged, Rentboy.com attempted to present a veneer of legality, when in fact this internet brothel made millions of dollars from the promotion of illegal prostitution,” stated Acting United States Attorney Currie.  Mr. Currie thanked the Drug Enforcement Administration’s Field Office in New York for their assistance in the investigation.

HSI Acting Special Agent in Charge Sorge stated, “The facilitation and promotion of prostitution offenses across state lines and international borders is a federal crime made even more egregious when it’s blatantly advertised by a global criminal enterprise,” said Acting Special Agent in Charge Sorge of HSI New York.  “HSI will use its unique authorities to disrupt and dismantle such organizations and seize the millions of dollars in illegal proceeds they generate.”

“As alleged, Rentboy.com profited from the promotion of prostitution despite their claim that their advertisements were not for sexual services.  Thanks to the detectives, agents, and prosecutors of the U.S. Attorney’s Office in the Eastern District involved in this investigation, these individuals will be held accountable for running this racket,” said Police Commissioner Bratton.

In addition, earlier today the government served warrants authorizing the seizure of over $1.4 million of alleged criminal proceeds from six bank accounts.  The government also took steps to restrain the domain name www.rentboy.com.

The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted each defendant faces up to five years imprisonment and a fine of up to $250,000.

The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Tyler Smith and Melanie Hendry are in charge of the prosecution.

The Defendants:

JEFFREY HURANT
Age:  50
New York, NY

MICHAEL SEAN BELMAN
 Age:  47
New York, NY

CLINT CALERO
 Age:  48
New York, NY

EDWARD LORENZ ESTANOL
 Age:  23
New York, NY

SHANE LUKAS
 Age:  41
New York, NY

DIANA MILAGROS MATTOS
 Age:  43
Queens, NY

MARCO SOTO DECKER
 Age:  28
New York, NY

E.D.N.Y. Docket No. 15-MJ-780

Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Scott J. Lampert, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (HHS-OIG), today announced that three New York hospitals, Benedictine Hospital, Columbia Memorial Hospital, and St. Joseph’s Medical Center, together with SpecialCare Hospital Management Corporation (SpecialCare), a Missouri-based company, and SpecialCare’s chief executive officer, Robert McNutt, had agreed to pay over $8 million to resolve claims that they had defrauded the Medicare and Medicaid programs in connection with detoxification treatment provided to patients at the hospitals.

The settlements resolved claims brought jointly by the United States and the New York State Attorney General’s Medicaid Fraud Control Unit that the defendants operated inpatient drug and alcohol detoxification programs under the name "New Vision" without having received licenses from the New York State Office of Alcoholism and Substance Abuse Services.  Because the programs were unlicensed, the hospitals were not entitled to bill Medicare and Medicaid for treatment provided to patients.  The government also alleged that two of the hospitals, Columbia Memorial and St. Joseph’s, paid SpecialCare for patient referrals in violation of federal and state anti-kickback statutes. Additionally, the government claimed that services provided to New Vision patients were not medically necessary.  The period covered by the government’s allegations spanned 2002-2006.

The government=s claims arose from an investigation of allegations made in suits filed by private individuals pursuant to the False Claims Act, 31 U.S.C. '' 3729-33, United States ex rel. Mathew I. Gelfand, M.D. v. SpecialCare Hospital Management Corp., et al., Civil Action

No. 02-CV-6079, and United States ex rel. Montaperto v. New Parkway Hospital, et al., Civil Action No. 05-CV-491.  United States District Judge Leonard D. Wexler presided over the two cases and approved each of the settlements announced today, including the settlement with St. Joseph’s Hospital which was entered on August 14, 2015.  Under the terms of their agreement with the government, SpecialCare and McNutt agreed to pay $6 million and to be enjoined from doing business with any Medicaid or Medicare provider in New York State for five-years. SpecialCare and McNutt also entered into a Corporate Integrity Agreement with the United States Office of Inspector General of the Department of Health and Human Services.  Pursuant to separate agreements, Benedictine Hospital paid $880,000; St. Joseph’s Medical Center paid $600,000, and Columbia Memorial Hospital paid $650,000.  These settlements bring the total recovery from the government’s investigation into SpecialCare and hospitals with New Vision programs to over $25 million.  Previously, New York Downtown Hospital and Our Lady of Mercy Medical paid $13.4 million and $4.5 million, respectively, to resolve the government’s civil fraud claims.

“Health care providers must understand that they cannot bill Medicare or Medicaid for unlicensed or otherwise unauthorized care.  These practices are not only fraudulent, but inflate the cost of health care in general," stated Acting United States Attorney Currie.  “Those who defraud and jeopardize the nation=s vital, federally-funded health care programs will be held fully accountable."  Mr. Currie thanked New York State Attorney General Eric Schneiderman and his staff, including Acting Director of the New York Medicaid Fraud Control Unit Amy Held and Principal Auditor Investigator Margaret McArdle, for their partnership in investigating the case. 

“Health care providers will be held accountable for the quality of care they deliver and the manner in which that care is provided,” said HHS-OIG Special Agent in Charge Lampert.  “This settlement is another example of HHS-OIG’s commitment to protecting the federally funded health care programs intended for our most vulnerable individuals.”

The United States’ investigation was handled by Assistant U.S. Attorney Richard K. Hayes, with assistance from Affirmative Civil Enforcement Auditor Emily Rosenthal.

Earlier today, John Murphy, the former Chief Executive Officer of Oak Rock Financial, LLC (Oak Rock), was sentenced in federal court in Central Islip, New York to 97 months of imprisonment.  In December 2013, Murphy pled guilty to bank fraud after admitting that he had been lying to various financial institutions and investors regarding Oak Rock’s financial health since January 2009.

The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistance Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“By making fraudulent representations with respect to Oak Rock’s financial position, Murphy caused financial institutions and private investors to suffer millions of dollars in losses,” stated Acting United States Attorney Currie.  “Those who defraud others will be held accountable for their actions.”  Mr. Currie expressed his appreciation to the New York State Department of Financial Services for its assistance in the investigation.

Oak Rock, a financial lending company located in Suffolk County, New York, secured lines of credit for businesses throughout the United States.  During his time as Chief Executive Officer, Murphy misled banks about the state of Oak Rock’s financial health by providing them with false documentation concerning businesses that failed to make timely payments on their loans or that were in default.  Murphy, who was compensated $600,000 a year, failed to address the defaulting loans and instead operated Oak Rock as if it were a sound financial organization through lies and deception.  Specifically, he defrauded the banks by changing delinquency dates to make it appear that loans were current; booking fictitious payments, thereby creating fictitious accounts receivable; and falsifying delinquent accounts receivable by copying data from timely paid accounts so that the defaulting loans appeared to be timely paid and stable.  These misrepresentations caused Israel Discount Bank, Oak Rock’s primary lender, as well as other financial institutions and private investors, to sustain losses totaling in excess of $93 million.

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 sentence was imposed by United States District Judge Leonard D. Wexler.

The case is being prosecuted by the Office’s Long Island Criminal Division.  Assistant United States Attorney Michael P. Canty is in charge of the prosecution.

The Defendant:

JOHN MURPHY
Age: 65
Nesconset, New York

E.D.N.Y Docket No 13-CR-702 (LDW)      

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging current and former cargo handlers at John F. Kennedy International Airport (JFK Airport) with conspiracy to steal United States mail and money laundering.  Frantz Janvier, Machel Scarlett, Tracey Mellisa Sandy, Greguy Janvier, Jamila Malika Allen, and Melbourne Black were arrested earlier today and their initial appearances are scheduled for this afternoon before United States Magistrate Judge Viktor V. Pohorelsky at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Phillip R. Bartlett, Postal Inspector in Charge of the United States Postal Inspection Service’s New York Field Office.

As detailed in the criminal complaint, in a conspiracy spanning over four years, former cargo handlers Frantz Janvier, Machel Scarlett, and Tracey Mellisa Sandy, agreed to steal mail from international flights arriving at and departing from Terminal One of JFK Airport, including Japan Airlines flights carrying mail from Japan.  The cargo handlers targeted mail they believed to contain foreign currency, including Japanese Yen, and then exchanged the foreign currency at currency exchange businesses at JFK Airport and at other financial institutions.  The complaint also charges Frantz Janvier, Greguy Janvier, Jamila Malika Allen, and Melbourne Black with laundering the proceeds of their theft.  As alleged in the complaint, the United States Postal Inspection Service estimates that the loss attributable to the mail theft is likely to exceed $250,000.

“As charged in the complaint, JFK Airport cargo handlers stole foreign currency from the mail and laundered tens of thousands of dollars in the proceeds of that theft through airport currency exchanges and other financial institutions,” stated Acting United States Attorney Currie. “Federal law enforcement authorities are committed to protecting the integrity of the mail, and we will hold accountable those who steal mail or attempt to profit from the theft of mail.”

“These defendants allegedly took advantage of the access given to them by their employer when they devised a scheme to steal US Mail from the cargo of airplanes at JFK and then lie to launder the proceeds for their personal gain,” said Inspector in Charge  Bartlett.  “Let there be no mistake, Postal Inspectors will use every resource to bring criminals to justice for crimes violating the sanctity of the US Postal Service.”. 

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

The government’s case is being prosecuted by the Office’s General Crimes Section.  Assistant United States Attorney Ian C. Richardson is in charge of the prosecution.

The arrests are the latest in a series of recent investigations and prosecutions of airport cargo handlers by the United States Attorney’s Office for the Eastern District of New York and the United States Postal Inspection Service:

In United States v. Hamilton, et al., Docket No. 15-CR-280 (DLI), five defendants, all cargo handlers at Terminal One of JFK Airport, pleaded guilty in June and July 2015 to charges that they stole U.S. letter mail between April 2014 and November 2014.  Evidence included four of the defendants being caught with a total of approximately 500 pieces of stolen letter mail stuffed in backpacks and in articles of clothing.

In United States v. Ali, et al., Docket No. 14-CR-484 (FB), two defendants, both cargo handlers at Terminal One of JFK Airport, pleaded guilty in March 2015 to charges that they stole U.S. letter mail between April 2014 and August 2014.  Evidence included the defendants being caught in August 2014 stashing a bag filled with stolen letter mail in a car parked at JFK Airport.

In United States v. Ramkhelawan, et al., Docket No. 13-CR-692 (DLI), five defendants, all cargo handlers at LaGuardia Airport, pleaded guilty and were sentenced in November 2014 and February and March 2015 on mail theft charges. The defendants stole dozens of high-value electronic devices from the mail, including smartphones, laptops, tablets, and video game consoles worth at least $10,000.

 

The Defendants:

FRANTZ JANVIER
Age:  32
Brooklyn, New York

MACHEL SCARLETT
Age:  37
Queens, New York

TRACEY MELLISA SANDY
Age:  45
Queens, New York

GREGUY JANVIER
Age:  34
Brooklyn, New York

JAMILA MALIKA ALLEN
Age:  24
Brooklyn, New York

MELBOURNE BLACK
Age:  50
Queens, New York

E.D.N.Y. Docket No. 15-M-777

A doctor at a Brooklyn, New York, clinic was sentenced to two years in prison for his role in a $13 million health care fraud scheme.  

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Special Agent in Charge Scott Lampert of the U.S. Department of Health of Human Services-Office of Inspector General (HHS-OIG) New York Region and Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office made the announcement.

Okon Umana, 68, of West Haven, Connecticut, pleaded guilty on Dec. 1, 2014, to conspiracy to commit health care fraud.  In addition to imposing the prison term, U.S. District Judge John Gleeson of the Eastern District of New York ordered Umana to pay $6,429,330 in restitution and to forfeit $6,550,036.

From 2009 to 2012, Umana was the medical director of Cropsey Medical Care PLLC (Cropsey), a health care clinic.  In connection with his guilty plea, Umana admitted that many of Cropsey’s medical services were provided by a physician’s assistant who was acting without supervision by a medical doctor, and that Cropsey nevertheless billed Medicare and Medicaid for the services using Umana’s provider number.  In addition, Umana admitted that in seeking reimbursement for costs purportedly incurred transporting certain beneficiaries to and from Cropsey by ambulette, he falsely certified that transportation by ambulette was medically necessary.

Between November 2009 and October 2012, Cropsey submitted more than $13 million in claims to Medicare and Medicaid for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.  Medicare and Medicaid reimbursed Cropsey more than $6 million for the claimed services and procedures.

Eight other individuals charged in connection with the scheme previously pleaded guilty.  To date, one other individual has been sentenced.

This case is being investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of New York.  This case is being prosecuted by Trial Attorney Sarah Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon C. Jones of the Eastern District of New York. 

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Defendant Purchased Ticket to Travel to Turkey to Join ISIL

Abdurasul Hasanovich Juraboev, 25, a citizen of Uzbekistan and resident of Brooklyn, New York, pleaded guilty today to conspiring to provide material support to a designated foreign terrorist organization, the Islamic State in Iraq and the Levant (ISIL). 

The guilty plea was announced by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI New York Field Office, Acting Special Agent in Charge Glenn Sorge of the Homeland Security Investigations (HIS) New York Field Office and Commissioner William J. Bratton of the New York City Police Department (NYPD). 

According to previous court filings, in August 2014, Juraboev posted a threat on an Uzbek-language website to kill President Obama in an act of martyrdom on behalf of ISIL.  In subsequent interviews by federal agents, Juraboev stated his belief in ISIL’s terrorist agenda, including the establishment by force of an Islamic caliphate in Iraq and Syria.  Juraboev stated that he wanted to travel to Syria to fight on behalf of ISIL but lacked the means to travel.  He stated that if he were unable to travel, he would engage in an act of martyrdom on U.S. soil if ordered to do so by ISIL, such as killing the President or planting a bomb on Coney Island, New York.  During the next several months, Juraboev and a co-conspirator discussed plans to travel to Syria to fight on behalf of ISIL, culminating in Juraboev’s purchase on Dec. 27, 2014, of a ticket to travel from John F. Kennedy International Airport in Queens, New York, to Istanbul, departing on March 29, 2015.

Juraboev pleaded guilty before U.S. District Court Judge William F. Kuntz II of the Eastern District of New York.  At sentencing, Juraboev faces up to 15 years in prison.

“Abdurasul Hasanovich Juraboev 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 Assistant Attorney General Carlin.  “The National Security Division’s highest priority is counterterrorism, and this case reflects our commitment to finding those who wish to provide material support to ISIL and to fight on behalf of the terrorist organization, either at home or abroad, and preventing them from doing so.”

“The defendant planned to travel to Syria to wage jihad on behalf of ISIL, and was prepared to commit a terrorist attack on American soil if he were not able to make that trip,” said Acting U.S. Attorney Currie.  “The defendant’s guilty plea today is a testament to the hard work of the FBI’s Joint Terrorism Task Force in New York to prevent local residents from becoming foreign fighters in Syria or launching terrorist attacks at home.”

“Juraboev clearly expressed the desire to commit violence, either domestically or abroad, on behalf of a terrorist organization,” said Assistant Director in Charge Rodriguez.  “His failure to carry out this desire is a testament to the tireless efforts of FBI New York’s Joint Terrorism Task Force.  We will continue to work day and night, with our law enforcement partners, to ensure the safety of all Americans.”

“Today’s guilty plea is the culmination of just one of many efforts to arrest and prosecute individuals who wish to join terrorist organizations in order to do harm to Americans both here and abroad,” said Acting Special Agent in Charge Sorge.  “As a member of the Joint Terrorism Task Force, HSI will continue to use its unique customs and immigration authorities to root out these evil individuals and bring them to justice.”

“Abdurasul Juraboev was quite clear that he wanted to provide material support to ISIL by fighting in Syria, if not, by his offer to assassinate the President of the United States, or by carrying out a terrorist attack in Coney Island,” said Commissioner Bratton.  “This case is another example of the reach that ISIL has within the United Sates through social media, and the fact that some are willing to follow that call.  I commend the work of the agents and detectives of the Manhattan based Joint Terrorism Task Force.”

The case is being investigated by the FBI’s Joint Terrorism Task Force in New York.  The case is being prosecuted by Assistant U.S. Attorneys Alexander Solomon, Douglas M. Pravda and Peter W. Baldwin of the Eastern District of New York, with assistance provided by Trial Attorney Danya Atiyeh of the National Security Division’s Counterterrorism Section. 

Juraboev Plea Agreement