Eastern District of New York

Earlier today, Thomas Gioeli, who at the time of his arrest was the street boss of the Colombo organized crime family of La Cosa Nostra (the “Colombo Family”), was sentenced to 224 months in prison at the United States Courthouse in Brooklyn, New York. In May 2012, a jury convicted Gioeli of racketeering conspiracy spanning nearly two decades including three murder conspiracies as predicate racketeering acts.1

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation (FBI), New York Field Office.

“Thomas Gioeli rose to power in the Colombo Family by cultivating a lethal crew of criminals loyal to him and the mafia’s twisted code of honor,” stated United States Attorney Lynch. “Today’s sentence signifies the end of Gioeli’s criminal reign and also sends an important message to members and associates of organized crime. We will never stop investigating and prosecuting the violent crimes they commit, no matter how long ago they occurred, and we will hold them accountable, regardless of how long they have avoided justice.” Ms. Lynch praised the FBI and the New York City Police Department for their partnership in the government’s investigation and prosecution and also thanked the Nassau County District Attorney’s Office, the New York County District Attorney’s Office, and the Nassau County Police Department for their assistance.

The evidence at trial established Gioeli’s involvement in a racketeering conspiracy that spanned from 1991 through 2008. The jury found that Gioeli participated in murder conspiracies that culminated in the June 12, 1991 murder of Frank Marasa and the March 25, 1992 murder of John Minerva, who was killed as part of the bloody Colombo Family war that pitted two factions of the crime family against each other in a violent struggle for control of the enterprise. Also in connection with the Colombo Family war, the jury found that Gioeli conspired to kill rival Orena faction members between 1991 and 1993.

Today’s sentencing marks the culmination of a lengthy investigation and prosecution by the U.S. Attorney’s Office and the FBI. Since Gioeli’s arrest in June 2008, over 70 members and associates of the Colombo Family, including its leadership, have been arrested, prosecuted and convicted.

The sentencing proceeding was held before the Honorable Brian M. Cogan, United States District Judge for the Eastern District of New York. During the sentencing proceeding, Judge Cogan found that, in addition to the crimes found proved by the trial jury, the government had proved by a preponderance of the evidence that Gioeli had participated in the 1995 murder of Richard Greaves, a Colombo Family associate, and the 1999 murder of Colombo Family underboss William “Wild Bill” Cutolo, and that Gioeli had a leadership position in the Colombo Family. In addition, Judge Cogan entered orders of forfeiture and restitution against Gioeli, each in the amount of $360,000.

The government’s case was prosecuted by Assistant United States Attorneys Elizabeth A. Geddes, James D. Gatta, and Cristina M. Posa.

The Defendant:

THOMAS GIOELI

Age: 61

___________________________________________________________________________

1 Gioeli’s co-defendant, Colombo Family soldier Dino Saracino, was also convicted at trial of racketeering conspiracy, loansharking, witness tampering, and obstruction of justice. Saracino is scheduled to be sentenced on April 3, 2014.

Mair Faibish, the former Chief Executive Officer of Synergy Brands, Inc., was convicted today by a federal jury in Brooklyn on all three counts of the indictment for defrauding Signature Bank out of $26 million through a massive check kiting scheme, for making false statements to the United States Securities and Exchange Commission (“SEC”) and for defrauding investors by overstating the value of the company. The jury’s verdict followed a three-week trial in United States District Court held before the Hon. Eric N. Vitaliano.

The guilty verdicts were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, James T. Hayes, Jr., Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations (“HSI”), New York Field Office; and Acting Nassau County Police Commissioner Thomas Krumpter.

“Through lies and deceit, the defendant and his co-conspirators took advantage of banks, auditors and unsuspecting investors and stole millions of dollars. Their representations and assurances were not worth the paper the checks were written on. We will vigorously pursue and bring to justice those who would defraud FDIC insured banks and the investing public,” stated United States Attorney Lynch. Ms. Lynch thanked HSI and the Nassau County Police Department for their hard work and dedication through the course of the investigation and prosecution.

The evidence at trial established that Faibish was the former CEO of Synergy Brands, Inc. (“Synergy”), a publicly held food products company that traded on the NASDAQ and Over-the-Counter (“OTC”) exchanges and manufactured and distributed various food products. Together with his co-conspirators, Faibish executed a check-kiting scheme on behalf of Synergy to funnel approximately $ 1.3 billion worth of checks that were not backed by sufficient funds through Signature Bank, Capital One Bank and various Canadian banks. Faibish caused those checks to be deposited into bank accounts of associated food manufacturers and distributors in Canada. The Canadian companies then sent checks in corresponding amounts, which were also not backed by sufficient funds, back to Faibish-controlled third party companies. Because the banks made deposited funds immediately available for withdrawal, the scheme artificially inflated the companies’ account balances while the scheme was ongoing. The defendant and his co-conspirators used Synergy’s fraudulently inflated bank account balances to book millions of dollars in fictitious accounts receivable and revenue.

As a result of this fraud, FDIC insured Signature Bank lost approximately $26 million that the defendant and his co-conspirators had withdrawn before the bank uncovered the scheme. Following the scheme’s collapse, Synergy was taken into bankruptcy and its publicly traded stock became essentially worthless, causing hundreds of thousands of dollars in investor losses.

The trial evidence further established that Faibish falsely inflated the values of Synergy’s sales, cost of goods sold and pre-paid expenses in filings with the SEC for the quarter ending June 30, 2008. These material misrepresentations were breaches of the defendant’s fiduciary duties to investors.

When sentenced by Judge Vitaliano, Faibish faces a sentence of up to 30 years’ imprisonment for bank fraud and securities fraud conspiracy as a result of the check kiting scheme.

The government’s case is being prosecuted by Assistant United States Attorneys Sylvia S. Shweder and Jack Dennehy.

Today’s announcement is part of efforts underway 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 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The Defendant:

MAIR FAIBISH

Age: 54

Residence: Huntington Station, New York

E.D.N.Y. Docket No. 12-CR-265

Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Judith A. Enck, Regional Administrator, United States Environmental Protection Agency (“EPA”) Region 2, today announced the filing of a federal civil environmental complaint against two individuals, Nedjet Yetim and Rachelann Yetim, and 15 related corporate entities for violations of the federal leak prevention requirements for underground storage tanks at four gas stations on Long Island. The violations alleged in the complaint involve underground storage tanks, which typically contain large quantities of gasoline and waste oil and can cause serious environmental damage if allowed to leak.

“As alleged, these defendants ignored their obligations under federal law to safeguard the public from gasoline and waste oil leaks at their underground storage tanks. These violations demonstrate a serious and longstanding disregard for the environment, for the health and safety of their employees, and for the health and safety of residents of Long Island,” stated United States Attorney Lynch. “We are committed to vigorous enforcement of the laws protecting the environment from hazardous wastes.”

EPA’s Regional Administrator Enck added, “The public should be assured that EPA will not stand idly by while owners and operators of underground storage tanks engage in practices that endanger public health and safety. We will continue to pursue prosecution of these and other violators to the full extent of the law.”

The Yetims are alleged to be principals of several of the named corporate entities and to have personally managed, directed, or conducted matters related to pollution and environmental compliance at the facilities. The corporate defendants, all of which are directly related to the individual defendants or were tenants at the relevant facilities, owned and/or operated the gas stations during the periods of the violations alleged in the complaint.

The complaint alleges there were releases from the tanks at all four facilities, each of which is located above a federally-designated Sole Source Aquifer. Among other criteria, a Sole Source Aquifer is an aquifer that supplies 50% of the drinking water consumed within the Sole Source Aquifer’s boundaries. The Sole Source Aquifer designation is a tool to protect drinking water supplies in areas with few or no alternative sources to the groundwater resources, and where, if contamination occurred, using an alternative source would be extremely expensive. The violations alleged in the complaint do not pose an immediate threat to the drinking water of the area’s residents. However, defendants’ compliance with the federal leak prevention requirements for underground storage tanks is vital to ensure the integrity of tanks and prevent the release of petroleum product to soil and groundwater.

According to the complaint, the defendants, as owners and/or operators of the underground storage tanks at the gas stations, have repeatedly failed to comply with numerous federal requirements under the Resource Conservation and Recovery Act (“RCRA”), including failure to (a) install and operate corrosion protection on the piping systems, (b) implement adequate release detection on the tanks and piping systems, (c) install and operate overfill prevention systems, (d) perform testing of automatic line leak detectors (“ALLDs”) for underground piping, (e) conduct required testing of corrosion protection systems, (f) maintain records regarding release detection, (g) properly cap and secure a temporarily-closed tank, and (h) cooperate with the EPA by responding to the EPA’s requests for information about the underground storage tanks that they owned and/or operated. In its complaint, the government seeks injunctive relief requiring the defendants to comply with all applicable requirements of RCRA, as well as monetary penalties of up to $16,000 per tank for each day of violation.

In enacting Subtitle I of RCRA, Congress declared it to be the national policy to regulate the management and operation of underground storage tanks so as to minimize the threat to human health and the environment. RCRA regulations protect the public from releases from underground storage systems, which typically contain petroleum products, usually waste oils and gasoline. Failure to maintain the underground storage tanks that contain petroleum can result in leaks of gasoline and waste oil, which, in turn, can contaminate groundwater.

The government’s case is being prosecuted by Assistant United States Attorney Kenneth M. Abell, with the assistance of Karen Taylor, Assistant Regional Counsel, EPA.

Individual Defendants:

NEDJET YETIM

Age: 50

Residence: Patchogue, NY

RACHELANN YETIM

Age: 29

Residence: Floral Park, NY

Corporate Defendants:

Fast Gasoline, Inc.

Black Realty, Inc.

Hempstead Gasoline Station, Inc.

Elmont Gasoline Corp.

102 Elmont Realty Corp.

TAG Gasoline, Inc.

Target Petroleum, Inc.

Liberty Petroleum, Inc., (d/b/a as Liberty Petroleum – RGV Petroleum, Inc.)

ASLI & Gizem Realty Corp.

NGRV Realty Co., Inc.

Venus Bukey Realty, Inc.

S&B Petroleum, Inc.

Gizem Realty Corp.

PDE Island Park, Inc.

T-Maxx @ Petro Gas, Inc

Gas Stations:

653 Hempstead Turnpike, Elmont NY

1278 Hempstead Turnpike Elmont, NY

725 Wyandanch Avenue North Babylon, NY

4305 Austin Boulevard, Island Park, NY

Alhassane Ould Mohamed, also known as “Cheibani,” a Malian citizen charged with the murder and attempted murder of United States Embassy personnel stationed in Niamey, Niger, in December 2000, will be arraigned today at 2:00 p.m. in the Eastern District of New York. Mohamed was extradited to the United States by the Malian government, and today will be his first appearance on these charges in the United States.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office.

“The investigation indicates that the defendant and his confederate brazenly shot and killed U.S. diplomat William Bultemeier in Niger, and wounded U.S. Marine Christopher McNeely as he bravely risked his life to attempt to save his colleague. Today’s extradition shows that the sacrifice of Mr. Bultemeier and the courage of Staff Sergeant McNeely in service to this country have not been forgotten. The tireless efforts of the United States in bringing the defendant to face these charges demonstrate our commitment to bringing to justice those charged with harming our diplomats and embassy personnel,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the governments of Mali and Niger for their exceptional assistance and cooperation in this investigation.

“An attack on U.S. Government personnel, whether domestic or abroad, is an attack on the United States. The extradition of the defendant by the Malian Government to the United States to face charges of murdering U.S. diplomat Bultemeier and attempting to murder Staff Sergeant McNeely is a testament to the cooperative efforts of our law enforcement and international partners. The arms of our justice system are long and far-reaching, and this case should send a clear message to all fugitives: the U.S. Government will not rest until they are brought to justice for their crimes,” stated FBI Assistant Director-in-Charge Venizelos.

According to the indictment, in the early morning hours of December 23, 2000, the defendant and a co-conspirator accosted a group of employees of the United States Embassy in Niger as they left a restaurant in Niamey, Niger. Carrying a pistol and an AK-47 assault rifle, the two men approached Department of Defense official William Bultemeier as he was about to enter his car, a white sport-utility vehicle bearing diplomatic license plates clearly indicating that it belonged to the United States Embassy. The defendant demanded that Mr. Bultemeier turn over the keys to the diplomatic vehicle and shot Mr. Bultemeier with the pistol. Staff Sergeant Christopher McNeely, the Marine Detachment Commander for the United States Embassy in Niger at the time, ran to Mr. Bultemeier’s aid. The defendant’s co-conspirator then fired his AK-47 at Mr. Bultemeier and Staff Sergeant McNeely, hitting them both. After rifling through Mr. Bultemeier’s pockets to get the car keys, the defendant and his fellow assailant drove away in the United States Embassy vehicle.

Mr. Bultemeier died of the injuries inflicted by the gunshot wounds. Staff Sergeant McNeely survived the shooting, and later retired from the Marine Corps as a Master Sergeant.

On September 13, 2013, a grand jury in the Eastern District of New York returned a sealed indictment charging the defendant with one count of murdering an internationally protected person, in violation of Title 18, United States Code, Section 1116(a), and one count of attempting to murder an internationally protected person, in violation of Title 18, United States Code, Section 1116(a). At the request of the United States, the Malian government thereafter commenced extradition proceedings against the defendant in December 2013, and he was ordered extradited in January 2014 in accordance with the Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons.

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

The government’s case is being prosecuted by Assistant United States Attorneys Zainab Ahmad and Celia Cohen, with assistance from Trial Attorney Jennifer Levy of the Justice Department’s Counterterrorism Section and Trial Attorney Dan E. Stigall of the Justice Department’s Office of International Affairs.

The Defendant:

ALHASSANE OULD MOHAMED

Age: 43

BROOKLYN, NY – Dr. Mikhail L. Presman, a licensed psychiatrist employed by the Department of Veterans Affairs (VA), was sentenced today by Judge I. Leo Glasser in U.S. District Court in Brooklyn, New York, to 18 months’ imprisonment, to be followed by 3 years of supervised release for Medicare fraud. As part of the sentence, Judge Glasser ordered Presman to pay restitution to Medicare and forfeit $1.2 million.

The sentence was announced by U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, and Special Agent-in-Charge Thomas O’Donnell of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).

According to court documents, from January 1, 2006 through May 10, 2013, Dr. Presman submitted approximately $4 million in Medicare claims for home treatment of Medicare beneficiaries notwithstanding his full-time, salaried position as a psychiatrist at the VA hospital in Brooklyn. Contrary to his representations, Dr. Presman did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated. For example, Dr. Presman submitted claims to Medicare for home medical visits at locations within New York City even though he was physically located in China at the time of these purported home visits. Additionally, Dr. Presman submitted claims to Medicare for 55 home medical visits to beneficiaries who were hospitalized on the date of the purported visits.

The case was investigated by the HHS-OIG, with assistance from the Department of Veterans Affairs Office of Inspector General, and brought as part of the Medicare Fraud Strike Force, under the supervision of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. The case was prosecuted by Assistant United States Attorney Patricia E. Notopoulos and Department of Justice Trial Attorney Bryan D. Fields.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Six indictments and a complaint were unsealed today in federal court in Central Islip, New York, charging eight individuals, Rosa Adames, Ramon DeLosAngeles, Robert Diaz, Reyssy Duran, also known as “Tuti,” Nelson Guzman, Alex Rodriguez, Jokasta Taveras and David Turcios, each arising out of schemes to defraud the United States by using stolen Social Security numbers to file false income tax returns seeking refunds.1 Taveras will be arraigned before United States District Judge Leonard D. Wexler; Adames, Diaz, Rodriguez and Turcios will be arraigned this afternoon before United States Magistrate Judge A. Kathleen Tomlinson; DeLosAngeles will be arraigned this afternoon before United States Magistrate Judge Arlene R. Lindsay. Duran and Guzman remain at large. All arraignments will be held at the U.S. Courthouse, 100 Federal Plaza, Central Islip. The cases have been assigned to United States District Judges Leonard D. Wexler, Arthur D. Spatt and Denis R. Hurley.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Shantelle P. Kitchen, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS), Farrell Dolan, Resident Agent-in-Charge, United States Secret Service, Long Island Resident Office (USSS), Philip R. Bartlett, Inspector-in-Charge, New York Division, United States Postal Inspection Service (USPIS), Joseph A. D’Amico, Superintendent, New York State Police (NYSP) and Thomas Krumpter, Acting Police Commissioner, Nassau County Police Department (NCPD).

“As alleged, this collection of thieves victimized hundreds of unsuspecting Puerto Rican citizens, using their stolen identities to defraud the IRS and steal taxpayer dollars,” stated United States Attorney Lynch. “This scheme has metastasized throughout the country, which led to the formation of a special task force to combat such crimes. Since the formation of that task force, my Office has worked tirelessly to eradicate such crimes. Today’s arrests demonstrate my Office’s commitment to holding accountable those individuals who take advantage of the federal tax system for personal profit at the expense of the United States and honest taxpayers.”

IRS Acting Special Agent-in-Charge Kitchen stated, “The Internal Revenue Service takes identify theft very seriously. Vigorous criminal investigations and prosecutions are important components of the fight against stolen identity tax refund fraud. Although it has only been in existence for a short time, the “Identify Theft Task Force” has proven to be innovative and effective in these investigations. IRS-Criminal Investigation is proud of its leadership role on this task force and is most appreciative of the spirit of cooperation among its law enforcement partners.”

“Fraudulent schemes such as this have evolved significantly over the last several years,” said Farrell Dolan, Resident Agent-in-Charge of the U.S. Secret Service Long Island Resident Office. “Cooperation between law enforcement has allowed us to focus our resources and respond quickly to uncover criminal activity that exploits tax laws and financial institutions at the expense of US taxpayers.”

USPIS Inspector-in-Charge Bartlett stated, “The arrest of these individuals for participating in a scheme to defraud the IRS and victimize Puerto Rican residents, is an example of the commitment of Postal Inspectors and the law enforcement community to stamp out crime wherever it exists; keeping the mail safe and secure for the public.”

"Identity theft is a rapidly growing crime that causes its victims serious, far-reaching problems," State Police Superintendent Joseph A. D'Amico said. "As alleged, these eight people not only stole Social Security numbers from unsuspecting citizens, but used them to try to defraud the Federal Government. I am pleased that the New York State Police was once again able to partner with the United States Attorney's Office to help bring this important case to a successful conclusion."

According to the indictments, complaint and other court filings by the government, in each scheme, the defendants exploited tax laws that exempt Puerto Rican citizens from filing federal income tax returns, provided they derive their incomes solely from sources within Puerto Rico. The defendants, and coconspirators, illegally obtained identification information for Puerto Rican citizens, including names, dates of birth, and social security numbers, and used that information to file false returns claiming large refunds with the IRS. Once filed, the defendants, and their coconspirators, allegedly bribed Postal Service employees to intercept mailed tax refund checks, which the defendants then negotiated at check-cashing services and banks. The schemes were uncovered in part by a law enforcement officer working in an undercover capacity. If convicted, the defendants face a range of imprisonment between 10 and 35 years.

In mid-2012, the IRS created a task force called the Identity Theft Task Force (ITTF) to address the growing issue of identity theft in New York. The ITTF combines the resources of several agencies to investigate identity theft, including investigating the use of stolen identities to file fraudulent tax returns. The agencies currently participating in the ITTF include the IRS-Criminal Investigation; the Federal Bureau of Investigation; USSS; USPIS; New York City Police Department; Department of Social Security; Federal Deposit Insurance Corporation, Office of Inspector General; Federal Reserve Board, Office of Inspector General; USPIS, Office of Inspector General; Homeland Security Investigations, Immigration and Customs Enforcement; Social Security Administration, Office of Inspector General; Treasury Inspector General for Tax Administration, Department of Treasury, Office of Inspector General; and Department of Labor, Office of Inspector General. Since the creation of the ITTF, the United States Attorney’s Office for the Eastern District of New York has arrested 25 defendants, including today’s cases, which are summarized below, for their roles in such identity theft schemes.

United States v. Rosa Adames, 14-CR-135 (ADS)

Between April 2011 and October 2011, Adames and her coconspirators allegedly cashed more than 100 fraudulently obtained tax refund checks worth approximately $600,000. The checks were cashed at a bank in Amityville.

United States v. Ramon DeLosAngeles, 14-MJ-240

On October 4, 2011, DeLosAngeles was in possession of more than 100 fraudulently obtained tax refund checks worth approximately $900,000.

United States v. Robert Diaz and Alex Rodriguez, 14-CR-133 (ADS)

Between June 2012 and June 2013, Diaz, Rodriguez and their coconspirators allegedly cashed more than 30 fraudulently obtained tax refund checks worth approximately $200,000. The checks were cashed at banks in Elmont, Freeport and Hempstead. Rodriguez and Diaz allegedly bribed a bank teller to cash those checks.

United States v. Reyssy Duran, 14-CR-132 (ADS)

Between June 2012 and June 2013, Duran and his coconspirators allegedly cashed more than 30 fraudulently obtained tax refund checks worth approximately $200,000. The checks were cashed at banks in Elmont, Freeport and Hempstead. Duran allegedly bribed a bank teller to cash those checks.

United States v. Nelson Guzman, 14-CR-134 (JS)

Between August 2011 and November 2013, Guzman and his coconspirators allegedly cashed more than 65 fraudulently obtained tax refund checks worth approximately $430,000. The checks were cashed at a check cashing service in Lindenhurst and Roosevelt. Guzman and his coconspirators allegedly bribed an employee of a check cashing service to cash the refund checks.

United States v. Jokasta Taveras, 14-CR-136 (LDW)

Between December 2011 and March 2012, Taveras and her coconspirators allegedly cashed approximately 14 fraudulently obtained tax refund checks worth approximately $105,000. Taveras worked at a bank in Farmingdale, which is where she allegedly cashed the checks.

United States v. David Turcios, 14-CR-137 (ADS)

Between June 2012 and June 2013, Turcios and his coconspirators allegedly cashed more than 40 fraudulently obtained tax refund checks worth approximately $280,000. The checks were cashed at banks in Elmont, Freeport and Hempstead. Turcios allegedly bribed a bank teller to cash those checks.

The government’s cases are being prosecuted by Assistant United States Attorney Christopher Caffarone.

The Defendants:

ROSA ADAMES

Age: 42

Valley Stream, New York

RAMON DELOSANGELES

Age: 62

Cairo, New York

ROBERT DIAZ

Age: 29

Copiague, New York

REYSSY DURAN

Age: 30

Freeport, New York

NELSON GUZMAN

Age: 44

Copiague, New York

ALEX RODRIGUEZ

Age: 37

Freeport, New York

JOKASTA TAVERAS

Age: 28

Lindenhurst, New York

DAVID TURCIOS

Age: 32

Roosevelt, New York

____________________________________________________________

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

Earlier today, Devon Rodney, also known as “D-Bloc,” a former leader of the violent Brooklyn street gang “Six Tre Outlaw Gangsta Disciples Folk Nation,” also known as the “Folk Nation,” was sentenced to 20 years in prison at the federal courthouse in Brooklyn, New York. Rodney pled guilty on November 15, 2013 to charges of racketeering, including attempted murder and robbery conspiracy as predicate racketeering acts, and brandishing a firearm.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.

“The defendant led the Folk Nation gang in committing senseless acts of violence, including shootings and robberies, which terrorized the residents of the Ebbets Field Houses in Brooklyn. The gang shooting of an innocent 10-year old girl attending a neighborhood block party highlights the moral depravity of the gang life,” stated United States Attorney Lynch. “Every community, including the Ebbets Field Houses community, deserves the opportunity to raise its children without the specter of gang violence.”

The Folk Nation is a nationwide gang active in numerous cities and prisons across the United States. The Six Tre set of the Folk Nation operated out of the Ebbets Field Houses in the Flatbush area of Brooklyn for years. In order to fund its illegal activities, the defendant and other members of the gang committed violent robberies of individuals and commercial establishments, including the Lee Perla jewelry store at the Riverside Square Mall in Hackensack, New Jersey, where they made off with hundreds of thousands of dollars’ worth of luxury watches. In his role as the leader of the Folk Nation, Rodney ordered his subordinates in the gang to commit numerous acts of violence, which often missed their intended targets – perceived rivals or enemies of the gang – and severely injured innocent bystanders. In the attempted murder to which the defendant pled guilty, Rodney ordered the killing of a rival Crips member upon learning that the rival had been spotted near the Ebbets Field projects. In the chaos that ensued when gang members rushed to implement the orders of their leader, an innocent 10-year old girl attending a block party was shot in the neck.

Rodney is one of nine defendants charged in connection with this case by the United States Attorney’s Office for the Eastern District of New York for crimes they committed as members of the Folk Nation. Ms. Lynch thanked the FBI and the New York City Police Department for their outstanding investigative efforts.

The sentence was imposed by United States District Judge Nicholas G. Garaufis.

The government’s case was prosecuted by Assistant United States Attorneys Zainab Ahmad, Berit Berger and Kristin Mace.

The Defendant:

DEVON RODNEY, also known as “D-Bloc”

Brooklyn, New York

Age: 26

Earlier today, Eleuterio Granados-Hernandez was sentenced before Judge Kiyo A. Matsumoto in U.S. District Court in Brooklyn, New York, to 22 years’ imprisonment, to be followed by five years of supervised release, for the sex trafficking of five victims and restitution in the amount of approximately $3 million for three victims.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.

“This defendant preyed on young women with the intent to force them into a degrading life of sexual slavery. He targeted the women, disregarding their dignity, solely to line his pockets in proceeds from the prostitution business,” stated United States Attorney Lynch. “This sentence sends a message to other would-be traffickers that we are committed to eradicating the sex trafficking of young girls.” Ms. Lynch extended her grateful appreciation to the organizations that provided services and advocacy to the victims in this case, including Sanctuary for Families, Safe Horizon, My Sister’s Place and the law firm of King and Spalding.

On August 1, 2012, Granados-Hernandez pled guilty to a superseding information charging that between October 2000 and April 2011, he smuggled five victims, including one minor, from Mexico illegally into the United States and forced each of them to engage in prostitution. Granados-Hernandez, who kept the prostitution proceeds earned by the victims, engaged in a pattern of abuse for over a decade.

According to court documents, Granados-Hernandez smuggled each of the victims with the intent to force then into prostitution. For example, soon after he smuggled the victim identified as Jane Doe #2 to New York, Granados-Hernandez insisted that she work as a prostitute where she provided sexual services for as many as 15 to 18 clients per day.

Similarly, in 2003, Granados-Hernandez smuggled the victim identified as Jane Doe #3 into the United States and soon after forced her into prostitution. Jane Doe #3 worked for Granados-Hernandez for approximately six years and during that period, he beat her and threatened her frequently.

In 2009, Granados-Hernandez met the 17 year-old victim known as Jane Doe #5 in Puebla, Mexico and smuggled her to New York shortly after she turned 18 years old. Three months after her arrival in New York, Granados-Hernandez insisted that Jane Doe #5 work as a prostitute. When Jane Doe #5 refused, Granados-Hernandez physically assaulted her several times. Fearing more violence, Jane Doe #5 worked for Granados-Hernandez as a prostitute until 2010.

In 2005, Granados-Hernandez became romantically involved with the victim identified as Jane Doe #11 when she was 15 years old. Soon after their initial meeting, Granados-Hernandez smuggled her into the United States. Once in the United States, Granados-Hernandez told Jane Doe #11 that she had to work as a prostitute to repay the smuggling debt. Although she initially refused, Jane Doe #11, age 16 at the time, feared physical abuse and relented to working as a prostitute for Granados-Hernandez.

At the sentencing, Jane Doe #11 spoke about her victimization by Granados-Hernandez over a four-year period. She stated that, “When I was just 15 years old he took advantage of my innocence and lied to me so I could be under his control. He promised me a happy life next to him but instead I lived the worst nightmare.” Jane Doe #11 further stated that, “Granados-Hernandez never cared about how much I suffered. To him, I was just an object that brought him money.”

As set forth in court filings, Granados-Hernandez’s brother Samuel Granados-Hernandez and his cousins, Angel Cortez-Granados and Antonio Lira-Robles, also smuggled young women from Mexico illegally into the United States, forced them to work as prostitutes in New York City and elsewhere, and collected profits from their activities. Cortez-Granados, Samuel Granados-Hernandez and Lira-Robles all pleaded guilty to sex trafficking. In September 2013, Cortez-Granados was sentenced to 15 years in prison, in a separate case. At the time of their sentencings, Samuel Granados-Hernandez and Lira-Robles likewise face a 15-year mandatory minimum sentence.

The government’s case was prosecuted by Assistant United States Attorney Soumya Dayananda.

The Defendant:

ELEUTERIO GRANADOS-HERNANDEZ

Age: 31

Mexico

E.D.N.Y. Docket No. CR-11-297 (S-5) (KAM)

Earlier today, Thomas Qualls, the President of International Foreign Currency, Inc., was sentenced to a term of imprisonment of 210 months following his convictions for mail fraud, wire fraud, conspiracy and obstruction of justice. The proceeding was held before the Hon. Dora L. Irizarry, United States District Judge, at the United States Courthouse in Brooklyn. Judge Irizarry also imposed restitution of approximately $817,000.

During the fourth week of his trial, Qualls failed to appear in court on the day closing arguments were scheduled to begin. After determining that Qualls had fled, the court resumed the trial in the defendant’s absence, and the jury returned a verdict of guilty on all counts. Approximately six months later, Canadian authorities apprehended Qualls, and he remained in Canadian custody until he was extradited to the United States.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, U.S. Postal Inspector-in-Charge, New York Division.

“The defendant bilked his clients by stealing their hard-earned money, and when faced with the overwhelming evidence of his misdeeds presented to a jury of his peers, he fled the country,” said United States Attorney Lynch. “This case shows, once again, that you can run, but you cannot hide – we will continue to safeguard the markets by zealously prosecuting fund managers who betray the trust of investors.” Ms. Lynch expressed her grateful appreciation to the United States Marshals Service and the Postal Inspection Service, as well as law enforcement authorities in Canada, for their assistance.

Qualls operated a fraudulent investment firm known as International Foreign Currency, Inc. (“IFC”) in Garden City, New York. Qualls and his co-conspirators purported to invest funds in foreign currency. Instead, Qualls stole investors’ funds and spent them on business and personal expenses, including a Caribbean cruise, expenses for his pets, and payments on a Jaguar automobile. At the trial, multiple former IFC employees testified that the defendant was the head of the company, controlled all the trading and all the company’s funds, and instructed them to provide false and misleading information to prospective investors. The defendant also created falsified account statements to conceal the fraud from investors. Ultimately, investors lost approximately $1 million as a result of the defendant’s scheme. The evidence at trial also established that Qualls participated in multiple prior fraudulent schemes.

The government's case was prosecuted by Assistant United States Attorney Daniel Spector.

Today’s announcement is part of efforts underway 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 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The Defendant:

THOMAS QUALLS

Age: 45

Brad Russell was convicted today by a federal jury in Brooklyn on all three counts of the indictment for defrauding developers and their clients of more than $9 million through an advance fee scheme and for defrauding investors through an Alaskan gold mine investment scheme. Kristofor Lange, the Vice President of Black Sand Mine, Inc. (“BSMI”), was also convicted on both counts charging him for his role in the gold mine investment scheme.1 The jury’s verdict followed a six-week trial in United States District Court held before the Honorable Dora L. Irizarry. The trials of co-defendants William Lange and Frank Perkins are scheduled to take place on September 22, 2014.2

The guilty verdicts were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Philip R. Bartlett, Inspector in Charge, New York Division, U.S. Postal Inspection Service (USPIS), and W. Jay Abbott, Acting Special Agent in Charge, Federal Bureau of Investigation, Seattle Field Office (FBI).

“Through lies and deceit, the defendants took advantage of a national tragedy and unsuspecting investors and stole millions of dollars so they could line their own pockets. Their representations and assurances were not worth the price of the paper used to print the loan documents and stock certificates. We will vigorously pursue and bring to justice those who would defraud the investing public,” stated United States Attorney Lynch. Ms. Lynch thanked the USPIS and the FBI for their hard work and dedication through the course of the investigation and prosecution. Ms. Lynch also extended her grateful appreciation to the United States Attorney’s Office for the Western District of Washington for their assistance in the case.

The evidence at trial established that Russell, together with others at Harbor Funding Group Inc. (“HFGI”), executed an advance fee scheme by targeting regions affected by Hurricane Katrina. Russell and his co-conspirators told land developers and their clients that HFGI had lenders and funds available to provide financing for their real estate projects. As a condition for financing, HFGI required its clients to place ten percent of the loan amount in an attorney escrow account. Contrary to their representations, HFGI did not have lenders or funds available to finance the loans and stole the deposit money placed in escrow. Russell was the loan processor at HFGI and prepared and maintained the loan documents and escrow agreements. Through this fraudulent scheme, Russell and his co-conspirators stole more than $9 million from approximately 300 individuals.

At trial, the government also proved that Russell and Kristofor Lange, together with others, also executed an investment scheme and induced investors to invest in BSMI through lies and deceit. BSMI claimed that it was going to mine gold and other precious metals on Sitkinak Island in Alaska. Through the use of in-person presentations, cold calls and “webinars,” Russell, Lange, and their co-conspirators, convinced investors to invest in BSMI by lying to them about the credentials of BSMI’s officers and directors, BSMI’s assets and liabilities, the intended use of investor funds, and by concealing their prior involvement in HFGI.

When sentenced by Judge Irizarry, Russell faces a sentence of up to 20 years’ imprisonment for wire fraud conspiracy for the HFGI scheme. Russell and Lange also face a sentence of up to 20 years’ imprisonment for securities fraud and a sentence of up to five years’ imprisonment for conspiracy for the BSMI scheme.

The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes, David C. Woll, Jr. and Alixandra E. Smith.

Today’s announcement is part of efforts underway 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 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The Defendants:

BRAD A. RUSSELL

Age: 42

Residence: Gig Harbor, Washington

KRISTOFOR J. LANGE

Age: 30

Residence: Gig Harbor, Washington

E.D.N.Y. Docket No. 10-CR-968

__________________________________________________________________________

1 Kristofor Lange was not charged in the advance fee scheme.

2 The charges against the co-defendants William Lange and Frank Perkins are merely allegations, and they are presumed innocent unless and until proven guilty.

Earlier today, sitting New York State Assemblyman William F. Boyland, Jr. was convicted by a jury at the federal courthouse in Brooklyn, New York, of twenty-one felony counts, including federal programs bribery, conspiracy to commit federal programs bribery, conspiracy to violate the Travel Act and commit federal programs bribery, extortion, extortion conspiracy, honest services wire fraud, conspiracy to commit honest services wire fraud, federal programs theft and conspiracy to commit mail fraud. Boyland committed each of these offenses by corruptly exploiting his public position representing the 55th Assembly District in Brooklyn, which is comprised of Ocean Hill, Brownsville, Bedford-Stuyvesant, Crown Heights and Bushwick. Upon his convictions, Boyland was automatically expelled from the Assembly. When sentenced, Boyland faces prison terms of up to 20 years on each of the extortion, extortion conspiracy, honest services wire fraud, honest services wire fraud conspiracy and mail fraud conspiracy counts, up to 10 years on each of the federal programs bribery and federal programs theft counts and up to five years on each of the other conspiracy counts. Following his convictions, the Honorable Sandra L. Townes, who presided over the trial, ordered Boyland remanded into custody pending his sentencing on June 30, 2014. Boyland is also subject to up to at least $250,000 in fines on each of the counts of conviction, as well as criminal forfeiture and mandatory restitution.

The convictions were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

“The breadth and pervasiveness of the corruption exposed by this prosecution is staggering. Wherever there was an opportunity for William Boyland to corruptly line his own pockets, he took it. By soliciting bribes, by stealing funds intended to help the elderly, and by defrauding New York State and the Assembly, Boyland cravenly pursued his own interest at the expense of his constituents. In doing so, Boyland not only broke the law, but broke faith with the public he was elected to serve. Today’s verdict ensures that Boyland will be held accountable for his corrupt actions,” stated United States Attorney Lynch. “When our elected officials engage in self-dealing, when they abdicate their responsibilities, when they succumb to greed, the average citizen pays for it dearly, and our democratic system suffers on so many levels. The verdict sends a clear message that we and our partners in the FBI will vigorously investigate and prosecute any public official who trades on a position of power to line his own pocket.” United States Attorney Lynch praised the hard work and dedication of the FBI agents who investigated the case and expressed her thanks to the New York State Comptroller’s Office, the New York State Office of the Aging, the Internal Revenue Service Criminal Investigation Division, the New York State Assembly Department of Finance and the New York City Department of Investigation for their assistance with the investigation.

The evidence admitted at trial proved that, beginning in January 2007 and continuing through December 2011, Boyland engaged in four separate corrupt schemes, ranging from soliciting and accepting over $250,000 in bribe payments, to submitting false travel vouchers to New York State, to stealing state funds intended for the elderly:

1. Carnival Scheme: Boyland extorted and accepted over $14,000 in bribes, in exchange for undertaking official action to benefit a carnival promoter (the “Promoter”) and an undercover FBI agent. Specifically, in August 2010, Boyland met with the Promoter and this undercover FBI agent (“UC1”) on multiple occasions in New York City and discussed the desire of the Promoter and UC1 to hold carnivals in Boyland’s district, for which they needed government approvals. During those meetings, Boyland requested payments in exchange for assisting the Promoter and UC1, and the Promoter and UC1 agreed. Boyland also described various ways in which the bribes could be disguised to hide their true purpose. After these meetings, Boyland directed his Assembly staff to assist the Promoter and UC1 in their efforts to gain government approvals. Boyland then represented to the Promoter and UC1 that he and his staff (i) engaged in discussions with government agencies to assist the Promoter in obtaining carnival-related leases and permits, and (ii) arranged for a non-profit organization to sponsor the Promoter’s carnivals. Boyland also directed his staff to give the Promoter letters of support, on Boyland’s Assembly letterhead, that the Promoter needed in order to operate carnivals in Boyland’s district. In exchange, UC1 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. As was shown to the jury during the trial, Boyland was captured on videotape personally accepting the $7,000 cash bribe at his district office.

2. Real Estate Scheme: Boyland also accepted the $7,000 cash bribe described above in exchange for undertaking official action to benefit UC1 and a second undercover FBI agent (“UC2”) in a purported real estate venture in Boyland’s district. Specifically, Boyland proposed a brazen scheme in which UC1 and UC2 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 UC1 and UC2 that 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 described above, Boyland was later recorded demanding an additional $250,000 bribe payment from UC1 and UC2 as a condition of using his official position to realize the real estate scheme he had proposed.

Recordings of meetings in hotel rooms in Atlantic City and New York City where Boyland discussed the real estate scheme revealed that he recognized the scheme’s corrupt and illegal nature and sought to conceal his own involvement. At the meeting in the hotel in Atlantic City, Boyland stated, “I got a middle guy by the way . . . I gotta stay clean . . . I got a bag man . . . .” Boyland further explained that he did not want to talk on the telephone and preferred in-person meetings: “I stopped talking on the phone a while ago . . . I’m just saying there is no real conversation that you can have . . . especially with what we’re talking about.”

At the meeting in the hotel room in New York City, Boyland reiterated that he wanted UC1 and UC2 to pay him a $250,000 bribe in exchange for the St. Mary’s Hospital project. When UC2 instead countered Boyland’s demand by offering to pay Boyland $5,000 for introductions to other government officials who would be involved in the project, Boyland rejected the counter-proposal, stating that the people whom Boyland could introduce to UC1 and UC2 were worth more than $5,000: “I’m not talking about $5,000 folks. I’m talking about . . . people that can actually get these projects done . . . .”

3. False Voucher Scheme: From January 2007 to December 2011, Boyland stole New York State funds by submitting false New York State Assembly Member Travel Vouchers (“Vouchers”). Boyland submitted over two hundred fraudulent vouchers where he falsely claimed to be in Albany on legislative business when he in fact was not in Albany, including days when Boyland 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 Boyland’s false Vouchers, New York State paid Boyland over $70,000 in fraudulent mileage expense reimbursements and per diem payments.

4. Theft of State Funds for the Elderly: From July 2007 to September 2010, Boyland conspired to defraud New York State and the New York State Office of the Aging (“NYSOA”). 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 mission, as described on its website, was to provide a “social setting that enable[s] elderly individuals to maintain their independence and remain at home in the community.” Notwithstanding his certification, in writing, to the NYSOA that these state funds would not be used for any partisan or political purpose, Boyland directed that the majority of these $200,000 in state funds be used for the benefit of Boyland and his political campaigns by paying for community events that promoted Boyland such as a Senior Lunch Cruise on the Spirit of New York Cruise Line, a fireworks show, and a large end of the summer picnic held at a park in his district, as well as goods that promoted Boyland, such as “Team Boyland” t-shirts distributed at those community events.

The government’s case is being prosecuted by Assistant United States Attorneys Christina B. Dugger, Robert L. Capers and Lan X. Nguyen.

The Defendant:

WILLIAM F. BOYLAND, JR.

Age: 43

Residence: Brooklyn, New York

Earlier today, Laurie Schneider pleaded guilty at the federal courthouse in Central Islip, New York, to wire fraud. The proceeding took place before United States District Judge Dennis R. Hurley. When sentenced, Schneider faces up to 20 years in prison. As part of her plea agreement with the government, Schneider agreed to a $1 million money judgment payable to the United States.

The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

“Laurie Schneider played the part of a successful entrepreneur, willing to help others invest in equipment and machinery deals as well as Long Island real estate. In reality she was a con artist, using lies and false assurances to bilk unsuspecting investors out of millions of dollars. Schneider ran a classic Ponzi scheme, using investor money for her own selfish purposes,” stated United States Attorney Lynch. “This office is committed to vigorously investigating and prosecuting individuals who are responsible for perpetrating financial crimes on the residents of our communities.”

FBI Assistant Director-in-Charge Venizelos stated, “By creating two different fraudulent shell companies and falsifying her connections with foreign companies to potential investors, Schneider was unfortunately able to swindle millions out of innocent investors promising big returns for their backing. Today’s guilty plea also promises a big return for Schneider’s criminal actions -- a million dollar judgment and a possible sentence of 20 years in prison. The FBI remains committed to protecting the investing public from perpetrators who seek to commit financial crimes.”

According to court filings and facts presented during the plea proceeding, Schneider used two shell corporations to operate a $6.9 million Ponzi scheme and steal money from unsuspecting investors. Schneider began accepting money in September 2006 from individuals seeking to earn profits on investments in overseas machinery and equipment deals and real estate on Long Island.

In the first scheme Schneider operated a shell corporation called Janitorial Close-Out City Corp. (“Janitorial Close-Out”). Schneider falsely represented to investors that Janitorial Close-Out bought industrial equipment and machinery manufactured by companies in China for resale in the United States. In order to lure investors, Schneider, among other things, falsely represented that, (1) she personally guaranteed varying high rates of return on investments of up to 60 percent, (2) she had a business contact with strong ties to companies in China that manufactured industrial equipment and machinery and, (3) she would be able to buy the Chinese-made industrial equipment and machinery at wholesale prices which Janitorial Close-Out would later resell in the United States at a 15 to 60 percent profit over a short period of time.

In a subsequent scheme, Schneider operated a shell company incorporated as Eager Beaver Realty LLC (“Eager Beaver”). Schneider touted Eager Beaver’s ability to purchase and sell real property on Long Island that was in foreclosure proceedings or otherwise available to Eager Beaver at significantly low prices. Schneider provided investors with written investment agreements in which she falsely represented and guaranteed that 100 percent of the invested funds would be used by Eager Beaver to purchase foreclosed real property for resale at prices that would enable Eager Beaver to pay as much as a 20 percent return on investment along with a 100 percent return of principal. To further the scheme Schneider used a portion of the money that she obtained from Eager Beaver investors to pay returns to early investors in the China Deals. In reality, Eager Beaver earned no profits. In fact, Schneider was operating a Ponzi scheme, paying returns to early investors using money that she fraudulently obtained from later investors. In addition, Schneider diverted some of the investors’ money to pay personal expenses, including car payments on luxury automobiles and country club dues.

The government’s case is being prosecuted by Assistant United States Attorney Michael P. Canty.

The Defendant:

LAURIE SCHNEIDER

Age: 39

A civil complaint was filed today in federal court in the Eastern District of New York seeking forfeiture of an ancient Roman marble sarcophagus lid featuring a high-relief sculpture of a sleeping woman. According to Italian authorities, the piece matches photographs found in the files of convicted antiquities dealer Gianfranco Becchina. As alleged in the complaint, the antiquity is the property of Italy and is therefore forfeitable as stolen property that was unlawfully introduced into the United States.

The filing of the complaint was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and James T. Hayes, Jr., Special Agent in Charge, U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”), New York.

Becchina, an Italian citizen, operated an antiquities gallery in Basel, Switzerland. In February 2011, he was convicted in an Italian court of illicitly dealing in antiquities. During the investigation that led to his conviction, Swiss and Italian authorities searched Becchina’s Swiss gallery and warehouse and seized Italian archeological artifacts, commercial documents and photographs of thousands of artifacts that Becchina had sold. Among the documents in Becchina’s archive were photographs, commercial records and customs paperwork pertaining to the marble sarcophagus lid. According to these records, Becchina purchased the marble sarcophagus lid in Italy and shipped it to his gallery in Switzerland in 1981. Thirty years later, the marble sarcophagus lid, now restored, reappeared at a public exhibition in New York. On February 20, 2014, HSI agents located the antiquity in a storage facility in Long Island City, New York.

“Whether looted cultural property enters our ports today or decades ago, it is our responsibility to see that it is returned to its rightful owners, in this case, the Italian people,” stated United States Attorney Lynch. “We will continue to use all legal tools available to us to seize, forfeit and repatriate stolen cultural property.” Ms. Lynch thanked the Italian Ministry of Cultural Heritage and the Italian Carabinieri Protection of Cultural Heritage Command for their assistance.

“The forfeiture of this sarcophagus lid brings us one step closer to returning this stolen treasure to its rightful owner, the Italian people,” said James T. Hayes Jr. special agent in charge of HSI in New York. “HSI is committed to intercepting and recovering stolen cultural artifacts and repatriating them to their rightful owners.”

The government’s case is being handled by Assistant United States Attorney Karin Orenstein.

E.D.N.Y. Docket No. 14-CV-1318

Sleeping.Beauty.Exhibits A-B

Michael Romano, 47, the leader of a telemarketing scheme that defrauded elderly investors across the country, was sentenced today in federal court in Brooklyn, New York, to 20 years in prison to be followed by five years of supervised release. As part of the sentence, Romano was ordered to pay $9,139,727.10 in restitution to the defrauded victims and forfeit $32,220,617, the illegal gains of the eleven-year fraud scheme. In June 2011, after a five-week trial, Romano was convicted of mail and wire and money laundering conspiracy.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.

“Michael Romano and those acting at his direction stole millions of dollars from the Greatest Generation. Romano took advantage of the trusting nature of hundreds of senior citizens across the United States by promising to sell them rare collectible coins, when in fact he was selling them near worthless change. Many of the victims purchased the coins in order to leave a legacy for their children and grandchildren. We remain committed to protecting all members of our communities from these illegal telemarketing schemes and will insure that fraudsters are stripped of their ill-gotten gains,” stated United States Attorney Lynch. Ms. Lynch thanked the United States Postal Inspection Service, the agency responsible for leading the government’s investigation, for its assistance in this case.

Between 1997 and 2008, Romano successively ran three coin companies, Wall Street Rare Coins, Atlantic Coin Company and Northeast Gold and Silver, located in Massapequa and Lindenhurst, New York. From these locations, the defendant and others defrauded elderly victims from all 50 states over an 11-year period. Romano falsely represented to his victims that the coins he sold were of a collectible grade. He then induced victims to buy even more coins using high-pressure tactics aimed at convincing investors that their coins would be more valuable if they purchased complete sets.

The sentencing proceeding was held before U.S. District Judge Sterling Johnson, Jr.

The government’s case is being prosecuted by Assistant United States Attorneys Lara Treinis Gatz, Christopher Ott and Diane Leonardo.

Today’s announcement is part of efforts underway 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 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The Defendant:

MICHAEL ROMANO

Age: 47

Earlier today, at the federal courthouse in Brooklyn, Gjavit Thaqi, one of the leaders of an international drug trafficking syndicate run by ethnic Albanians located in the United States, Canada and Europe (the “syndicate”), and Robert Rudaj, a member of the syndicate, were sentenced to 120 months and 110 months, respectively. Thaqi, whose 22-year criminal history includes prior convictions for cocaine trafficking and illegal gun trafficking, previously pled guilty to trafficking more than a thousand pounds of marijuana from Canada and Mexico, and large quantities of diverted prescription pills, such as oxycodone. Rudaj, a Career Offender whose criminal career includes multiple prior convictions for assault and burglary, previously pled guilty to trafficking hundreds of pounds of marijuana and to assault. The sentences also included terms of supervised release of five years for both defendants.

The sentences were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James Hunt, Acting Special Agent-in-Charge of the Drug Enforcement Administration, New York; and James T. Hayes, Jr., Special Agent-in-Charge, Homeland Security Investigations (HSI), New York.

“The sentences announced today hold to account two of the most prolific drug traffickers and violent members of an international criminal syndicate that smuggled narcotics throughout North America and the world. For over a decade, the defendants ran a global clearinghouse for illegal narcotics, with America’s streets and youth their ultimate end point,” stated United States Attorney Lynch. “We will continue to vigorously prosecute those who would poison the streets of our communities with drugs and violence.”

The syndicate operated by Thaqi was comprised of inter-related ethnic Albanian family clans (also known as “fis”) with hundreds of associated members, workers and customers spanning three continents. In operation for more than a decade, the syndicate was responsible for organizing the importation and distribution of tens of thousands of kilograms of hydroponic marijuana from Canada and Mexico, substantial quantities of MDMA from the Netherlands and Canada, hundreds of kilograms of cocaine from Mexico, Colombia, Venezuela and Peru, and large quantities of diverted prescription pills, such as oxycodone. The drugs were distributed in various locations in the United States, including New York, California, Georgia, Colorado and Florida, as well as in Canada and Europe.

The four-year investigation revealed that most of the marijuana smuggled from Canada and Mexico was concealed in tractor trailers, typically in hundred pound quantities, with some shipments weighing as much as 1,200 pounds. The marijuana shipments were stored in warehouses and stash locations throughout Brooklyn, Queens and the Bronx, before distribution. Kilogram quantities of cocaine were obtained from sources in the United States and exported to Albania and other locations in Europe concealed in hidden compartments inside luxury automobiles – ostensibly under the auspices of legitimate car dealerships which were actually controlled by syndicate members. Until the arrests of its members in July 2011, members of the syndicate, including Thaqi, were involved in negotiations to obtain hundreds of kilograms of cocaine from sources in South America for transport through the United States to Canada and Europe. Thaqi and other members of the syndicate were also involved in obtaining large shipments of oxycodone, and distributed thousands of oxycodone pills in New York which had been diverted from pain clinics in Florida.

Members of the syndicate were undeterred from committing further violence even after their arrest. For example, defendant Rudaj, who was often used by the syndicate to intimidate drug trafficking associates who owed the syndicate drug proceeds, was involved in the brutal assault of a fellow inmate at the Metropolitan Detention Center in Brooklyn, New York.

During the course of the investigation, federal agents seized more than 1,200 pounds of marijuana, approximately $2,000,000 in suspected drug proceeds, 22 handguns, a military/police-issue assault rifle and hundreds of rounds of ammunition. In total, 49 members and associates of the syndicate have been convicted in the case.

U.S. Attorney Lynch expressed her grateful appreciation to the DEA Special Operations Division, the Department of Justice Office of International Affairs, DEA Newark Division, DEA Denver Division, DEA Miami Division, DEA Albany District Office, DEA Rome Country Office, the HSI Attache in Vienna, HSI Attache in Toronto, HSI Albany Office, HSI Denver Office, HSI Newark Office, HSI Miami Office, the United States Bureau of Alcohol, Tobacco, Firearms and Explosives, the Monmouth County (New Jersey) Prosecutor’s Office, the Westchester District Attorney’s Office and the New York Attorney General’s Office for their assistance.

The sentencing proceedings were held before by U.S. District Judge Dora L. Irizarry.

The government’s case is being prosecuted by Assistant United States Attorneys Steven Tiscione, Gina Parlovecchio and Claire Kedeshian.

The Defendants:

GJAVIT THAQI

Age: 43

ROBERT RUDAJ

Age: 40

Earlier today at the federal courthouse in Brooklyn, Akbar Ahmad Sherzai, an independent contractor for a trucking company operating in Afghanistan that was responsible for delivering fuel to U.S. Army installations, pleaded guilty to his role in offering a U.S. Army serviceman $54,000 in bribes to falsify documents to reflect the successful delivery of fuel shipments that Army records indicate were never delivered. When sentenced, he faces a maximum of 15 years imprisonment and a $250,000 fine.

The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

“The defendant sought to use deception, corruption and greed to enrich his company at the risk of jeopardizing the U.S. Army’s supply lines in Afghanistan. Attempts to corrupt American officials will not be tolerated, either at home or abroad,” stated United States Attorney Lynch. Ms. Lynch extended her grateful appreciation to the Special Inspector General for the Afghanistan Reconstruction, Homeland Security Investigations, and the Federal Bureau of Investigation for their assistance in this case.

The U.S. Army regularly contracts with local Afghan trucking companies to transport U.S. military equipment, fuel, and other supplies throughout Afghanistan. To ensure the companies fulfilled these requests, the U.S. Army used transportation movement requests (TMRs), which, when properly completed, verified that the shipments were successfully completed, before approving payments to the trucking companies.

In April 2013, Sherzai approached a U.S. military serviceman to discuss fuel delivery missions that had been classified by the U.S. Army as “no-shows,” meaning that the fuel had not been delivered. Sherzai offered the serviceman a bribe to falsify the TMRs to reflect successful deliveries so that Sherzai’s company would receive payment and avoid penalties for failed fuel deliveries. The serviceman, under the supervision of law enforcement, continued to meet with Sherzai to discuss payments for the falsification of records. On two separate occasions, Sherzai paid the serviceman bribes in cash on American military bases in Afghanistan. On another occasion, Sherzai arranged for the serviceman’s bribe to be transferred to the United States through a hawala, an informal money transfer system. In total, Sherzai paid the serviceman $54,000 in cash to falsify fourteen TMRs. Each “no show” delivery mission, absent the fraudulent TMRs, would have resulted in a fine of the company by the U.S. government of $75,000.

Sherzai was arrested on a criminal complaint on September 24, 2013. The guilty plea proceeding was held before U.S. Magistrate Judge Robert M. Levy.

The government’s case is being prosecuted by Assistant U. S. Attorney Amir H. Toossi and Trial Attorney Daniel Butler of the Fraud Section, Criminal Division, U.S. Department of Justice.

The Defendant:

AKBAR AHMAD SHERZAI

Age: 49

Centerville, Virginia

Citizenship: Dual United States and Afghanistan

E.D.N.Y. Docket No. 14-Cr-60 (MKB)

A superseding indictment was returned last Friday charging defendants Christian Keston John, Marvin Johnson and Shaquan Jones, who were members of a violent criminal enterprise, with racketeering, consisting of 23 predicate acts, including six murders, two attempted murders, three armed robberies, kidnapping, murder-for-hire, and gambling on dog fighting, among other crimes, all of which occurred in the Bushwick, Bedford-Stuyvesant and East New York areas of Brooklyn.1 Johnson was arraigned earlier today at federal court in Brooklyn before U.S. Magistrate Judge Robert M. Levy, and the defendants Christian John and Shaquan Jones will be arraigned on Friday, also before Magistrate Judge Levy.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and William J. Bratton, Commissioner, New York City Police Department.

According to court papers, the enterprise, known as the “Hull Street Crew,” began its violent conduct in 2000 with the murder of Charlemagne Lormand, followed by the 2005 murder of Shamell Etienne and the 2008 murder of Daquane Shelton. In 2006, the defendants allegedly murdered Earle Kevin Obermuller when they bound his entire head with duct tape, dragged him down to a basement, tied him to a chair on a bed of charcoals, and then set him on fire. The indictment also charges the 2011 murders of Jason Bostic and Aaron Formey, who were murdered in a similar manner when they were bound with duct tape, pushed down the stairs to a basement, and shot multiple times. The Hull Street Crew enriched its members through drug trafficking and gambling on dog fights, and committed these violent acts to enhance the enterprise’s prestige and to protect it from rival criminal organizations.

“As set forth in the indictment, the Hull Street Crew rained down brutal violence onto the streets of Brooklyn for over a decade. The defendants pledged their allegiance to the Crew and its violent methods, committing a brutal murder and other senseless acts of violence. This indictment brings to a halt the Hull Street Crew’s reign of terror over the streets of Brooklyn,” stated United States Attorney Lynch. “Working together with the FBI and the NYPD, we stand committed to ending the scourge of violence in our communities and bringing to justice those who commit such violent acts. We hope that this prosecution will bring some measure of closure to the families of the victims who have suffered not only because of the loss of loved ones, but also by not knowing who was responsible for these crimes.”

FBI Assistant Director-in-Charge Venizelos stated, “Violence is the rule, not the exception, in the Hull Street Crew. As alleged, this criminal enterprise used illegal means, including murder and kidnapping, to intimidate rivals and instill fear in the innocent public. Today’s indictment illustrates the FBI’s continued effort to work with our law enforcement partners to disrupt and dismantle violent criminal enterprises that terrorize our communities.”

Police Commissioner Bratton stated, “Members of this violent and vicious crew operated on the streets of Brooklyn for more than a decade, but with this investigation and indictment we send a message to those who choose to operate within a ruthless criminal operation – you will be brought to justice and eradicated from our communities. The Hull Street Crew was shut down thanks to the tireless efforts of the investigators from the NYPD Detective Bureau, the Federal Bureau of Investigation, and the United States Attorney’s Office, Eastern District of New York.”

The case has been assigned to U.S. District Judge Frederic Block. If convicted of murder, the defendants face a maximum sentence of life imprisonment, or possibly the death penalty.

The government’s case is being prosecuted by Celia A. Cohen, Gina M. Parlovecchio, and Robert T. Polemeni.

The Defendants:

CHRISTIAN KESTON JOHN

Age: 30

Brooklyn, N.Y.

MARVIN JOHNSON

Age: 30

Brooklyn, N.Y.

SHAQUAN JONES

Age: 31

Brooklyn, N.Y.

___________________________________________________________________________

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

Earlier today, an indictment was unsealed charging disbarred New York attorney Barry Stephen Zornberg with lying to federal investigators about his role in a foreclosure rescue fraud scheme.1 The scheme ensnared at least ten families, defrauding them of approximately $1.3 million in home equity and causing some of them to lose their homes. If convicted, Zornberg faces up to five years’ of imprisonment.

The charges, arrests and seizures were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service (USPIS).

“As set forth in the indictment, the defendant, a disbarred attorney, lied to federal investigators about the role that he played in this fraud scheme, which took advantage of people who were looking to save their homes from foreclosure. A law license is not a license to steal or lie,” stated United States Attorney Lynch. “We are committed to protecting our communities from the abuses of fraud.”

FBI Assistant Director-in-Charge Venizelos stated, “All too often, desperate homeowners fall prey to dishonest foreclosure specialists, many of whom use their experience in mortgage-related industries to carry out their fraudulent schemes. Just as legitimate programs exist to assist distressed homeowners facing this dilemma, so too do con artists who make it their goal to capitalize on the misfortune of others. As alleged, the defendant knowingly exploited vulnerabilities in the foreclosure process, caused serious damage to a number of families, and lied to investigators about his role in the scheme. The FBI continues to support partnerships within the mortgage industry and law enforcement as we work together to combat this serious crime.”

USPIS Inspector-in-Charge Bartlett stated, “The defendant used the dream of home ownership and a fragile economy to lie and steal from trusting individuals. Postal Inspectors and their law enforcement partners used their investigative power and the justice system to ensure he is held accountable for his involvement in this illegal scheme.”

As alleged, the foreclosure rescue fraud was carried out from Empire Property Solutions, LLC ("Empire") in Bethpage, New York. Zornberg and two principals of Empire encouraged distressed homeowners to “refinance” their residences with Empire, when, in reality, the victims were tricked into transferring title to their homes to straw buyers and paying large fees to Empire. As part of this scheme, the victims lost title to their homes, valued in the aggregate at $4.3 million. Zornberg and his partners in the scheme extracted more than $1.3 million in equity from the victim families’ homes, leaving the victim families significantly worse off than when they asked for help. The straw buyers made no payments on the homes, causing the victims’ homes to go into default. Almost all of the victim homeowners face foreclosure due to the scheme and a number have been dispossessed.

As detailed in the indictment, when interviewed by federal investigators, Zornberg, the alleged architect of the scheme, falsely stated that he advised the victims to not continue with the scheme. In fact, he advised the opposite, thereby generating large fees for himself.

The defendant is scheduled to be arraigned on Wednesday, February 12, 2014, at 3:00 p.m., before United States Magistrate Judge A. Kathleen Tomlinson, at the federal courthouse in Central Islip, New York.

The government’s case is being prosecuted by Assistant United States Attorney Christopher A. Ott.

The Defendant:

BARRY STEPHEN ZORNBERG

Age: 54

Hauppauge, New York

_________________________________________________________________________

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

BROOKLYN, NY- A fifteen-count indictment was unsealed this morning in federal court in the Eastern District of New York charging seven defendants with narcotics trafficking, money laundering and firearms offenses based, in part, on their participation in a transnational heroin and cocaine trafficking conspiracy involving the ‘Ndrangheta, one of Italy’s most powerful organized crime syndicates.1 The defendants – ‘Ndrangheta member Raffaele Valente, also known as “Lello,” Gambino associate Franco Lupoi, Bonanno associate Charles Centaro, also known as “Charlie Pepsi,” Dominic Ali, Alexander Chan, Christos Fasarakis, and Jose Alfredo Garcia, also known as “Freddy” – were arrested earlier today. In a coordinated operation, Italian law enforcement authorities arrested 17 members and associates of the ‘Ndrangheta in Calabria, Italy who were involved in the narcotics trafficking conspiracy, among other crimes.

The seven defendants arrested in the United States are scheduled to be arraigned this afternoon before Chief United States Magistrate Judge Steven M. Gold, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York. The case has been assigned to United States District Judge Sterling Johnson, Jr.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“The ‘Ndrangheta is an exceptionally dangerous, sophisticated and insidious criminal organization, with tentacles stretching from Italy to countries around the world,” stated United States Attorney Lynch. . “The defendant Lupoi sought to use his connections with both ‘Ndrangheta and the Gambino crime family to extend his own criminal reach literally around the globe. Today, thanks to the vigilance and sustained cooperation of the Department of Justice and its law enforcement partners in Italy, the ‘Ndrangheta’s efforts to gain a foothold in New York have been dealt a lasting blow.” Ms. Lynch praised the outstanding investigative efforts of the Federal Bureau of Investigation and expressed her thanks to law enforcement partners in Italy, including the Prosecutor of the Republic of Reggio Calabria; the Italian National Police (INP) and, in particular, the Squadra Mobile of Reggio Calabria and the Servizio Centrale Operativo; the Direzione Centrale per i Servizi Antidroga; and the Direzione Nazionale Antimafia. Ms. Lynch also expressed gratitude to the U.S. Department of Justice Attaché and the Office of the FBI Legal Attaché at the U.S. Embassy in Rome, who coordinated extensive evidence-sharing and coordinated undercover operations.

“As alleged, ‘Ndrangheta’s clan members conspired with members of the Gambino organized crime family in New York in an attempt to infiltrate our area with their illegal activities. Under the auspices of legitimate shipping businesses, the two criminal groups worked together to establish a plan of moving cocaine and heroin between the United States and Italy. Little did they know, there was an ongoing collaboration between the FBI and the Italian National Police to investigate and identify their scheme. This international cooperation between our great law enforcement agencies is one that was established at the beginning of our investigation, and it remains in place today. With every arrest made, both here and in Italy, FBI agents and Italian National Police officers closely coordinated their operations and share the success of this operation,” said FBI Assistant Director-in-Charge Venizelos.

As detailed in the indictment and detention letter filed today, defendant Franco Lupoi, a Brooklyn resident who has lived in Calabria, used his close criminal ties to both the Gambino organized crime family and the ‘Ndrangheta, an Italian criminal organization akin to the Mafia in Sicily and the Camorra in Naples, to pursue criminal activity that stretched across the globe. The Italian charges unsealed today reveal how the ‘Ndrangheta has operated for decades in Calabria in localized clans – known as ‘ndrine – based primarily on close family ties. In this case, Lupoi’s father-in-law, Italian defendant Nicola Antonio Simonetta, is a member of the Ursino clan of the ‘Ndrangheta. In 2012, Simonetta traveled to Brooklyn and met with Lupoi and an undercover FBI agent, who recorded Simonetta and Lupoi discussing plans to ship narcotics between the U.S. and Italy via the port of Gioia Tauro in Calabria, an infamous hub of ‘Ndrangheta activity. Simonetta revealed that his ‘Ndrangheta associates at the port would guarantee the safe arrival of container ships containing contraband.

As alleged in court documents, Lupoi exploited these underworld connections to link his criminal associates in New York with those in Calabria, forming conspiracies to traffic heroin and cocaine. On the Italian side, he allegedly engaged Italian defendant and ‘Ndrangheta leader Francesco Ursino and others as suppliers of heroin and buyers of cocaine. During two joint FBI-INP operations in Italy, Lupoi and Ursino sold over 1.3 kilograms of heroin to an FBI undercover agent for what they believed was eventual distribution in the United States. In New York, Lupoi, Chan and Garcia sold the undercover agent more than a kilogram of heroin.

As alleged, Lupoi also set into motion a plot to transport 500 kilograms of cocaine, concealed in frozen food, in shipping containers from Guyana to Calabria. In the course of these conspiracies, Lupoi assured his confederates of his relationship with a corrupt port official in Gioia Tauro, indicating that in return for €200,000, the official could guarantee passage of unlimited containers of contraband. In New York, Lupoi joined forces with defendants Alexander Chan and Garcia to orchestrate the Guyana-Italy cocaine conspiracy. In conversations recorded by the undercover agent, the conspirators discussed their connections to Mexican drug cartels operating in Guyana, South America, and plotted to transport 500 kilograms of cocaine internationally, hidden in shipments of frozen fish or pineapples. On the Italian side, Ursino and his coconspirators planned to use a fish importation company to receive the shipment. As set forth in Italian court documents, the conspiracy slowed when shipping containers originating from the same Guyanese shipping company were seized in Malaysia and found to contain over $7 million in cocaine hidden in pineapples and coconut milk.

As set forth in court documents, Lupoi also worked closely with U.S. defendant and ‘Ndrangheta member Raffaele Valente, who sold an illegal silencer and sawed-off shotgun to the FBI undercover agent at the Royal Crown Bakery in Brooklyn. In conversations intercepted on Italian wiretaps, Valente revealed that he had assembled a group of well-armed men in New York and that their base of operations was as secure as “Fort Knox.” Valente also discussed his devotion to St. Michael the Archangel as the purported “patron saint” of the ‘Ndrangheta and exhorted Italian defendant Andrea Memmolo to wear a special ring as a sign of pride and mutual recognition. Valente and Lupoi are charged with conspiracy to transfer a firearm, and Valente is charged with two counts of illegal possession of a silencer. Valente is also charged in Italy with the crime of mafia association based on his role in establishing an ‘Ndrangheta cell in New York.

As alleged, Lupoi further maintained a network of money laundering associates in New York. He and his codefendants Dominic Ali, Charles “Charlie Pepsi” Centaro, and Christos Fasarakis, an employee of Alma Bank in Brooklyn, laundered more than $500,000 in funds that they believed were the proceeds of narcotics and illegal weapons trafficking. Centaro was recorded describing his access to bank accounts with millions of dollars through which he could launder and conceal criminal proceeds.

If convicted, Lupoi, Chan and Garcia face a maximum sentence of life imprisonment; Ali, Centaro and Fasarakis face a maximum sentence of twenty years’ imprisonment on each money laundering charge; and Valente faces a maximum sentence of ten years’ imprisonment on each firearms charge.

The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Kristin Mace and Kevin Trowel.

The Defendants:

FRANCO LUPOI

Age: 44

Brooklyn, NY

DOMINIC ALI

Age: 55

Brooklyn, NY

CHARLES CENTARO, a.k.a. “Charlie Pepsi”

Age: 50

Brooklyn, NY

ALEXANDER CHAN

Age: 46

New York, NY

CHRISTOS FASARAKIS

Age: 42

Brooklyn, NY

RAFFAELE VALENTE, a.k.a. “Lello”

Age: 42

Brooklyn, NY

JOSE ALFREDO GARCIA, a.k.a. “Freddy”

Age: 47

New York, NY

E.D.N.Y. Docket No. 14-CR-042 (SJ)

___________________________________________________________________________

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

Earlier today, in federal court in Brooklyn, New York, three brothers were sentenced to lengthy prison terms following their pleas of guilty to sex trafficking charges. Benito Lopez-Perez and Anastasio Romero-Perez were sentenced to 18 years of imprisonment to be followed by 5 years of supervised release, and Jose Gabino Barrientos-Perez, was sentenced to 10 years and one month of imprisonment, to be followed by 5 years of supervised release. The defendants, who are Mexican nationals, transported Mexican females from Mexico to the United States illegally, forcing them to work as prostitutes in New York City and elsewhere. The defendants were arrested in Mexico in October 2011 and extradited to the United States in December 2012. Today’s sentences are the latest in the Office’s comprehensive anti-trafficking program, which has to date indicted over 55 defendants in sex trafficking cases and rescued over 100 victims, including over 17 minors.

The sentences were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.

“The defendants preyed upon the young and vulnerable, abducting one of their victims at age 14, and forcing them into a life of sexual slavery in Mexico and the United States. Working together with our law enforcement partners at home and abroad, we stand firm in our resolve to vigorously investigate and prosecute those who would subject others to modern-day slavery,” stated United States Attorney Lynch. “These sex traffickers have now been held to account for the horror and violence that they inflicted on their victims. We hope that these sentences bring some measure of closure to the victims as they attempt to heal from the mental and physical abuse inflicted by the defendants.” Ms. Lynch thanked the Mexican authorities and other entities that assisted with the extradition and successful prosecution of this case.

“The individuals sentenced today exploited and enslaved women for personal profit while terrifying and traumatizing them through rape, violence, and intimidation,” stated HSI Special Agent-in-Charge Hayes. “No prison sentence can ever do justice for the pain and suffering experienced by these victims, but knowing that justice has been served on their tormentors will hopefully allow for the beginning of a healing process that these women so justly deserve.”

The sex trafficking involved at least four victims, and the defendants used various methods to force these women and girls to work in prostitution, ranging from abduction, rape, assault and threats of violence, to psychological coercion. One minor victim, identified in court papers as Jane Doe 1, was primarily trafficked by the defendant Benito Lopez-Perez. Jane Doe 1 met Lopez-Perez in 2005 in Mexico when she was 14 years old. After attending a movie with a group that included Lopez-Perez, he took Jane Doe 1 to his family home and raped her. Lopez-Perez then forced Jane Doe 1 into prostitution, first in Mexico and later, after arranging to smuggle her across the border, in the United States, where Jose Gabino Barrientos-Perez also participated in the victim’s sex trafficking. Jane Doe 1 was required to service 10 to 40 clients per day, on threat of physical abuse, and was kept under the defendants’ control for five years until she escaped in 2010.

At age 14, the victim identified as Jane Doe 2 met the defendant Romero-Perez while she was living with her sister (also a victim and identified in court papers as Jane Doe 3), who was married to Jose Gabino Barrientos-Perez. Jane Doe 2 began a romantic relationship with Romero-Perez, who subsequently persuaded the victim to work as a prostitute to pay off a debt. Romero-Perez brought Jane Doe 2 to a bar where she was closely monitored to ensure she kept none of the money she earned. When she refused to work, or did not earn enough money, Romero-Perez beat her. In approximately October 2008, Romero-Perez and Lopez-Perez arranged to smuggle Jane Doe 2 into the United States where she was forced to work as a prostitute in New York, New Jersey, and Connecticut, servicing approximately 12 to 15 clients per day. While she was in the United States, Romero-Perez raped and beat Jane Doe 2 on several occasions.

Jane Doe 3 was primarily trafficked by her husband, the defendant Jose Gabino Barrientos-Perez. Approximately one year after the birth of their son, Barrientos-Perez persuaded Jane Doe 3 to work as a prostitute, telling her he needed the money pay off debts and to provide for their baby. Barrientos-Perez brought Jane Doe 3 to Tijuana and Mexico City to work in prostitution, beating her on several occasions in order to force her to work. In 2006, Barrientos-Perez arranged to smuggle Jane Doe 3 into the United States and ultimately to New York City to work as a prostitute under the defendant’s threats of violence. Jane Doe 3 paid Barrientos-Perez approximately $700-$1,000 per week from her prostitution earnings – when she paid less, the defendant threatened that he would not let her see her children.

Jane Doe 4 was trafficked by the defendant Romero-Perez beginning at the age of 20, after she was pressured into a romantic relationship with him. After approximately three months of working as a prostitute in Mexico, Jane Doe 4 was smuggled into the United States. Romero-Perez promised his victim that they would get jobs and have an apartment together, but after they arrived, Romero-Perez told her that she needed to prostitute herself to support them. Like the other victims, Jane Doe 4 gave the majority of the prostitution proceeds to Romero-Perez and his family members.

Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in the Procuraduría General de la República (PGR), the Secretaría de Seguridad Pública (SSP), Procuraduría Social de Atención a las Víctimas de Delitos (PROVICTIMA), and non-governmental partners in the United States and Mexico in a Bilateral Human Trafficking Enforcement Initiative. Through this Initiative, the United States and Mexico have worked together to bring high-impact prosecutions under both U.S. and Mexican law to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, prosecute human traffickers, rescue human trafficking victims, and reunite victims with their families. Other significant bilateral cases have been prosecuted in Atlanta, Georgia, and Miami, Florida.

United States Attorney Lynch extended her grateful appreciation to the Department of Justice’s Office of International Affairs for its assistance in obtaining the extraditions of the defendants, and the New York City Police Department for its longstanding partnership in the Office’s coordinated anti-trafficking program. Ms. Lynch also thanked the many victim service providers and advocates for their dedicated efforts to restore and improve the lives of survivors of trafficking, in particular, Safe Horizon; Sanctuary for Families; Restore NYC; LifeWay Network; the New York City Bar Justice Center; The Legal Aid Society, Civil Division (Bronx); My Sister’s Place; the Mt. Sinai Sexual Assault and Violence Intervention Program; Bellevue Hospital Center, and the law firms of Skadden, Arps, Slate, Meagher & Flom LLP and Wilmer Cutler Pickering Hale and Dorr LLP.

The sentences were imposed by Chief United States District Judge Carol B. Amon.

The government’s case was prosecuted by Assistant United States Attorneys Taryn A. Merkl, Elizabeth Geddes, and Erik Paulsen.

The Defendants:

Name: BENITO LOPEZ-PEREZ

Age: 35

Name: ANASTASIO ROMERO-PEREZ

Age: 40

Name: JOSE GABINO BARRIENTOS-PEREZ

Age: 52

E.D.N.Y. Docket No. CR-11-199 (CBA)

Peter Liounis, a resident of Staten Island, was convicted today by a federal jury in Brooklyn on all nine counts of the indictment for defrauding investors of millions of dollars through Grayson Hewitt, a purported lawsuit funding investment firm. Liounis lied to potential investors and promised them a fixed rate of return on their investments. Rather than make investments as promised, Liounis and his coconspirators stole the investors’ money to purchase gold for their own use. Through the scheme, Liounis defrauded investors of approximately five million dollars. The jury’s verdict followed a two-week trial in United States District Court before the Hon. I. Leo Glasser. Liounis was convicted of six counts of wire fraud, one count of mail fraud, one count of wire and mail fraud conspiracy, and one count of securities fraud.

The verdict was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Philip R. Bartlett, Postal Inspector in Charge, U.S. Postal Inspection Service, New York Division; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Department of Homeland Security, Homeland Security Investigations (HSI), New York; and Steven G. Hughes, Special Agent-in-Charge, United States Secret Service.

"As the evidence at trial showed, Liounis lied to his victims over and over again, and went on to steal the savings of hard-working individuals. His victims’ needs meant nothing to him, as they were just the means he used to the end of filling his own pockets," stated United States Attorney Lynch. "We will tirelessly pursue individuals who seek to profit through this type of fraud." Ms. Lynch extended her appreciation to the Postal Inspection Service, New York Division; Department of Homeland Security, Homeland Security Investigations; and the United States Secret Service for their assistance in the investigation.

The evidence at trial established that from May 2010 through April 2012, Liounis used the alias "Mark Anderson," to solicit potential investors for Grayson Hewitt. Liounis told potential investors that Grayson Hewitt purchased plaintiffs’ rights to future recoveries in personal injury and other lawsuits, and promised them a return of fifteen percent or more. To perpetrate the scheme, Liounis and his coconspirators sent the victims bogus account statements. In a series of calls captured by a court-ordered wiretap, the son of an investor sought the return of his father's money so that the son could place his father, who had suffered a heart attack, into assisted living. Although the father had some $23,000 left in his Grayson Hewitt account, Liounis falsely told the son that his father had been depleting the account and had only $3,000 remaining. Liounis then sent the father and son a "get well fruit basket." In another call, a Grayson Hewitt investor expressed skepticism about the company, noting "I see this as a Bernie Madoff deal." Liounis responded, "this is no way, no how, a Bernie Madoff...believe that!...You gotta understand, the amount of money we handle here, uh, we'd go away for a hell of a lot longer than Bernie did."

Liounis faces a maximum sentence of 20 years on each of the nine counts of conviction.

The government’s case was prosecuted by Assistant United States Attorneys Michael Yaeger and Justin Lerer, with assistance from Assistant United States Attorney Daniel Spector.

This case was brought in coordination with President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The Task Force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The Defendant:

PETER LIOUNIS

Age: 42

Staten Island, New York

Earlier today, two members of the Ñetas street gang, Alvaro Cabral, also known as “Boobi,” and Jason Cabral, also known as “J-Live,” pleaded guilty to the 2004 murders of Anthony Marcano and Fabian Mestres. Stephanie DiCarlo-Cabral, an associate of the gang and at the time the girlfriend of Jason Cabral, pleaded guilty to robbery and using a firearm in connection with the robbery of Marcano and Mestres. Today’s pleas took place before United States District Judge Joanna Seybert. When sentenced, the defendants face life in prison.

The pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and William J. Bratton, Commissioner, New York City Police Department (NYPD).

“These were brutal, senseless gang murders. The defendants stuffed the victims into the trunk of a car in the dog days of August, and then drove them to their execution,” stated United States Attorney Lynch. “We hope the victims’ families can take some measure of solace in knowing that the individuals who are responsible for their sons’ murders have been brought to justice.” Ms. Lynch expressed her grateful appreciation to the Suffolk County Police Department, the Tampa Division of the FBI, and United States Attorney’s Office, Middle District of Florida, for their cooperation and assistance in the investigation.

The defendants targeted one of the victims, Anthony Marcano, because of his affiliation with a rival gang, the Latin Kings. On August 10, 2004, at the direction of Jason Cabral, the leader of gang, the defendants devised a plan to rob and kill 17-year-old Marcano. As part of the plan, the defendants lured Marcano to a house in Brentwood. Marcano arrived with 17-year-old Fabian Mestres, a fellow “Pee Wee” member of the Latin Kings street gang. Once inside the house, Marcano and Mestres were restrained with duct tape, and their drugs, money, and jewelry were stolen. The victims were stuffed into the trunk of a car and driven to a warehouse in Queens where Luis Benitez , with the assistance of Alvaro Cabral, shot them with a shotgun. Mestres was shot once in the head, and Marcano was shot once in the head and once in the back of the neck. Marcano’s and Mestres’s bodies were found behind a warehouse in Queens the following day.

The government’s case is being prosecuted by Assistant United States Attorneys Nicole Boeckmann and Christopher C. Caffarone.

The Defendants:

ALVARO CABRAL

Age: 28

Apollo Beach, Florida

JASON CABRAL

Age: 36

Riverview, Florida

STEPHANIE DICARLO-CABRAL

Age: 29

Riverview, Florida

1. Luis Benitez pleaded guilty to the murders of Marcano and Mestres on November 7, 2013.

Sampson Superseding Indictment
 

Criminal Complaint
 

Dervishaj Indictment
 

BROOKLYN, NY - Pavel Zborovskiy, 57, of Brooklyn, NY, pleaded guilty today to conspiracy to pay and receive illegal health care kickbacks in connection with a $13 million health care fraud and money laundering scheme.

U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office, and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) made the announcement.

Zborovskiy pleaded guilty before U.S. District Judge Nina Gershon of the Eastern District of New York and is the sixth defendant to plead guilty in connection with the scheme. At sentencing on May 28, 2014, Zborovskiy faces a maximum penalty of five years in prison and a fine of more than $2.5 million.

“Pavel Zborovskiy and his criminal associates manipulated elderly Medicaid and Medicare patients, paying them kickbacks to induce them to receive medically unnecessary treatments and services in a scheme to defraud those programs out of millions of dollars,” stated United States Attorney Lynch. “Protecting taxpayer funded programs like Medicaid and Medicare is a priority of this Office and the Department of Justice. Today’s sentence represents a clear warning to those who seek to defraud Medicaid and Medicare that they will be held accountable for their crimes.”

According to court documents, from 2010 to 2012, Zborovskiy, working through an ambulette company, recruited patients to attend a Brooklyn clinic called Cropsey Medical Care PLLC. An ambulette is a vehicle that is licensed by New York State’s Medicaid program to transport beneficiaries to and from medical facilities when such transportation is medically necessary. Zborovskiy’s ambulette company transported the patients he had recruited to and from Cropsey Medical, and billed Medicaid for such transportation. Once Zborovskiy’s beneficiaries were transported to Cropsey Medical, Zborovskiy and others paid such beneficiaries cash kickbacks to induce them to continue to attend the clinic and to receive medically unnecessary physical therapy, diagnostic testing, and other services. Such purported medical services were then billed by Cropsey Medical to Medicare and Medicaid.

According to court documents, from approximately November 2009 to October 2012, Cropsey Medical submitted more than $13 million in claims to Medicare and Medicaid, seeking reimbursement for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy, and diagnostic tests.

The case was investigated by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of New York. The case is being prosecuted by Trial Attorney Sarah M. Hall and Assistant U.S. Attorney Shannon 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 more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with 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.

Michael J. Scaglione, Esq., an attorney in Coral Gables, Florida, was sentenced today in federal court in Brooklyn, New York, to six months in prison to be followed by four months of home detention with electric monitoring to be served during a two-year term of supervised release. As part of the sentence, Scaglione was ordered to perform 200 hours of community service and to forfeit approximately $31,950 to the government. In October 2013, Scaglione pleaded guilty to a money laundering charge for laundering over $750,000, which he believed were the proceeds of a penny stock fraud scheme. In July 2013, Scaglione was arrested after taking possession of $500,000 in cash from an undercover federal agent posing as a criminal stock promoter in connection with a government sting operation.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Toni Weirauch, Special Agent in Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS).

“Abusing his position as an attorney by laundering money, Scaglione not only violated the code of ethics by which he was bound – he also broke the law. Those attorneys who seek to misuse the trust that is instilled in them by the public to perpetrate crime are on notice that they will be held accountable for their crimes,” stated United States Attorney Lynch. Ms. Lynch thanked the FBI and the IRS for their work on this investigation.

From approximately February to July 2013, Scaglione exploited his position as an attorney to launder money through an escrow account for an undercover law enforcement agent who posed as a corrupt stock promoter. Scaglione believed that the undercover agent was a middleman for a network of corrupt stock brokers who fraudulently inflated prices of worthless stock in exchange for high commissions. Scaglione agreed to launder what he believed were proceeds of this stock fraud through his attorney escrow account to hide that money from the United States Securities and Exchange Commission and the IRS. In total, Scaglione funneled over $750,000, including $88,000 in cash given to him in a Federal Express box in the lobby of a Miami Beach hotel, through the escrow account into the undercover agent=s bank account in Long Island, New York. Scaglione carefully structured the movement of these funds to avoid triggering financial reporting requirements. In exchange, Scaglione collected over $25,000 in fees. In recorded conversations, Scaglione assured the undercover agent that their conversations were “completely privileged” and that his money was “safe” with Scaglione. When the undercover agent explained to Scaglione that he did not “want to go to jail,” Scaglione stated to the undercover agent that the escrow account was “tight as can be.” On the day of his arrest, Scaglione accepted an additional $500,000 in cash from the undercover agent, which Scaglione believed to be proceeds from the stock fraud, at a hotel in Miami Beach, Florida.

The government’s case is being prosecuted by Assistant United States Attorney Jacquelyn Kasulis.

Today’s announcement is part of efforts underway 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 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The Defendant:

MICHAEL J. SCAGLIONE

Age: 42

Residence: Miami Springs, Florida

E.D.N.Y. Docket No. 13-CR-553

Daniel Greenberg, the president and owner of Classic Closeouts, LLC, a now-defunct Internet seller of discounted clothing and personal items, was convicted today by a federal jury in Central Islip on all thirteen counts for defrauding thousands of customers through unauthorized use of the credit and debit card numbers they had provided in connection with a purchase at an earlier time. The jury’s verdict followed a two-week trial in United States District Court before the Honorable Arthur D. Spatt. Greenberg was convicted of eight counts of wire fraud, one count of access device fraud, one count of aggravated identity theft, and three counts of money laundering.

The verdict was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Postal Inspector-in-Charge, United States Postal Inspection Service, New York Division.

“Daniel Greenberg’s Classic Closeouts was a classic scam. When his business ran into trouble, Greenberg helped himself to his customers’ credit card numbers and then had the audacity to fight them when they tried to have the charges removed,” stated United States Attorney Lynch. “We will tirelessly pursue justice for consumers who trust online merchants only to have that trust betrayed.” Ms. Lynch extended her grateful appreciation to the Postal Inspection Service and the Federal Trade Commission for their assistance in the investigation. The FTC brought this matter to the attention of the U.S. Attorney’s Office after having filed a parallel civil action.

The evidence at trial established that from approximately June 2008 through at least April 2009, Greenberg charged victims’ credit cards or debited their bank accounts on over 60,000 occasions, without the victims’ authorization and without the victims purchasing merchandise. Greenberg used credit and debit card information retained by Classic Closeouts from earlier purchases and then fraudulently charged their credit or debit cards, often charging the same card multiple times over the course of several weeks and months. When victims disputed the unauthorized charges with their credit card companies and banks, Greenberg falsely asserted that the charges were valid because the customers had enrolled in an alleged “frequent shopper club” that he claimed required a one-time charge. As a result of Greenberg’s false representations, some of the victims’ credit card companies and banks declined to issue credits despite the victims’ protests, and certain victims were pressured into paying the fraudulent charges plus late fees and interest.

When sentenced Greenberg faces up to 20 years’ imprisonment for each of the eight counts of wire fraud, 15 years’ imprisonment on the access device fraud charge, up to 10 years’ imprisonment for the money laundering charges, and two years’ mandatory imprisonment on the aggravated identity theft charge to run consecutively to sentences imposed on the other charges.

The government’s case was prosecuted by Assistant United States Attorneys Walter Norkin and Charles Rose.

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 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.

The Defendant:

DANIEL GREENBERG

Age: 40

Lawrence, New York

BROOKLYN, N.Y. — U.S. Attorney William J. Hochul, Jr. announced today that a federal jury convicted Joseph Romano, 51, of Levittown, N.Y., of conspiring to murder the Assistant United States Attorney who prosecuted him for engaging in an eight-year, multi-million dollar fraud involving the telemarketing of coins. The jury also convicted the defendant of conspiring to murder the United States District Judge who sentenced him to 15 years in prison for that fraud. The defendant faces a maximum penalty of life in prison, a fine of $250,000, or both, in addition to forfeiture of over $200,000 when he is sentenced in March.

“A threat against a member of the criminal justice system, such as a Judge or an attorney, is nothing less than an attempt to subvert the system, and as such will not be tolerated,” said U.S. Attorney Hochul.

According to the Government’s trial evidence, the defendant agreed to pay $40,000 to an undercover police officer, whom he thought was a hit-man, to kill the federal judge and prosecutor. The defendant also requested that the hit-man cut off their heads in exchange for a “bonus.” Law enforcement authorities learned of the plot in August 2012 from another inmate at the Nassau County Correctional Center where Romano was being held. During the subsequent investigation, two undercover law enforcement officers, posing as hit-men, met with Romano and co-conspirator, Dejvid Mirkovic, numerous times at locations on Long Island, including the Correctional Center.

At the first meeting, Romano offered to pay one of the undercover officers $3,000 to assault an individual with whom he had a financial dispute. Co-conspirator Mirkovic then met with one of the undercover officers and paid him $1,500 as a down payment for the assault. After one of the undercover officers showed proof of the purported assault of the intended victim - in fact, a staged photograph and an identification card - Mirkovic paid the undercover officer the $1,500 balance.

Later that same day, Mirkovic again met with the undercover officer, relayed Romano’s instructions to murder the federal judge and prosecutor, and offered $40,000 for the commission of the two murders. In addition, Mirkovic indicated that Romano wanted the federal judge and prosecutor beheaded and the body of the prosecutor mutilated, and that he was willing to pay extra for those services. Over the following weeks, the undercover officer received $22,000 in cash down payments for the murders and was promised payment of the final $18,000 when the murders were completed. At the time of the arrests of Romano and Mirkovic on October 9, 2012, law enforcement officers recovered $18,000 in cash and a loaded 9mm semi-automatic handgun at Mirkovic’s residence in Lake Worth, Florida.

In March 2013, Dejvid Mirkovic pleaded guilty to conspiracy to murder was sentenced to 24 years in prison in August 2013.

Today’s conviction was the latest development in an investigation handled by Special Agents and Task Force Officers of the Federal Bureau of Investigation, New York Office, under the direction of Assistant Director-in-Charge George Venizelos. The government’s case is being prosecuted by Assistant United States Attorneys Marshall L. Miller, Una A. Dean, and Brian Morris of the Eastern District of New York, under the supervision of U.S. Attorney William J. Hochul of the Western District of New York.

Romano Ind
 

BROOKLYN, N.Y. —U.S. Attorney William J. Hochul, Jr. announced today that a federal jury convicted Joseph Romano, 51, of Levittown, N.Y., of conspiring to murder the Assistant United States Attorney who prosecuted him for engaging in an eight-year, multi-million dollar fraud involving the telemarketing of coins. The jury also convicted the defendant of conspiring to murder the United States District Judge who sentenced him to 15 years in prison for that fraud. The defendant faces a maximum penalty of life in prison, a fine of $250,000, or both, in addition to forfeiture of over $200,000 when he is sentenced in March.

“A threat against a member of the criminal justice system, such as a Judge or an attorney, is nothing less than an attempt to subvert the system, and as such will not be tolerated,” said U.S. Attorney Hochul.

According to the Government’s trial evidence, the defendant agreed to pay $40,000 to an undercover police officer, whom he thought was a hit-man, to kill the federal judge and prosecutor. The defendant also requested that the hit-man cut off their heads in exchange for a “bonus.” Law enforcement authorities learned of the plot in August 2012 from another inmate at the Nassau County Correctional Center where Romano was being held. During the subsequent investigation, two undercover law enforcement officers, posing as hit-men, met with Romano and co-conspirator, Dejvid Mirkovic, numerous times at locations on Long Island, including the Correctional Center.

At the first meeting, Romano offered to pay one of the undercover officers $3,000 to assault an individual with whom he had a financial dispute. Co-conspirator Mirkovic then met with one of the undercover officers and paid him $1,500 as a down payment for the assault. After one of the undercover officers showed proof of the purported assault of the intended victim - in fact, a staged photograph and an identification card - Mirkovic paid the undercover officer the $1,500 balance.

Later that same day, Mirkovic again met with the undercover officer, relayed Romano’s instructions to murder the federal judge and prosecutor, and offered $40,000 for the commission of the two murders. In addition, Mirkovic indicated that Romano wanted the federal judge and prosecutor beheaded and the body of the prosecutor mutilated, and that he was willing to pay extra for those services. Over the following weeks, the undercover officer received $22,000 in cash down payments for the murders and was promised payment of the final $18,000 when the murders were completed. At the time of the arrests of Romano and Mirkovic on October 9, 2012, law enforcement officers recovered $18,000 in cash and a loaded 9mm semi-automatic handgun at Mirkovic’s residence in Lake Worth, Florida.

In March 2013, Dejvid Mirkovic pleaded guilty to conspiracy to murder was sentenced to 24 years in prison in August 2013.

Today’s conviction was the latest development in an investigation handled by Special Agents and Task Force Officers of the Federal Bureau of Investigation, New York Office, under the direction of Assistant Director-in-Charge George Venizelos. The government’s case is being prosecuted by Assistant United States Attorneys Marshall L. Miller, Una A. Dean, and Brian Morris of the Eastern District of New York, under the supervision of U.S. Attorney William J. Hochul of the Western District of New York.

Romano Indictment

Gesuele Complaint
Scolnick Complaint
Ellis Complaint
Valentin Complaint

Five Defendants Arrested and Charged Variously with 45-Year Racketeering Conspiracy, Including Predicate Acts of Murder, Solicitation to Murder, Robbery and Extortion, and Other Crimes

BROOKLYN, NY – Earlier today, an indictment was unsealed charging five members of the Bonanno organized crime family of La Cosa Nostra (the “Bonanno family”) variously with racketeering conspiracy, including predicate acts of murder, conspiracy to commit murder, solicitation to murder, robbery and extortion, and other crimes.1 Bonanno family administration members and captains Vincent Asaro and Thomas Di Fiore, Bonanno family captain Jerome Asaro, Bonanno family acting captain Jack Bonventre, and Bonanno family soldier John Ragano were arrested earlier today and are scheduled to be arraigned this afternoon before U.S. Magistrate Judge Marilyn D. Go at the federal courthouse in Brooklyn.

The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

“As alleged, Vincent Asaro devoted his adult life to the Bonanno crime family, with a criminal career that spanned decades. Far from a code of honor, theirs was a code of violence and brute force. Those suspected of cooperating with law enforcement paid with their lives. Asaro helped pull off the 1978 Lufthansa robbery - still the largest bank robbery in New York history. Neither age nor time dimmed Asaro’s ruthless ways, as he continued to order violence to carry out mob business in recent months. The arrests and charges announced today are a testament to the relentless pursuit of justice by law enforcement,” stated United States Attorney Lynch. Ms. Lynch extended her grateful appreciation to the FBI for its extraordinary work in bringing these defendants to account for the charged crimes.

“These ‘goodfellas’ thought they had a license to steal, a license to kill, and a license to do whatever they wanted. However, today’s arrests of the five members of the Bonanno crime family brings an end to their violent and ruthless ways. As alleged in the indictment, Vincent Asaro and his co-conspirators were not only involved in typical mob activities of extortion and murder, but Asaro himself was in on one of the most notorious heists - the Lufthansa robbery in 1978. It may be decades later, but the FBI’s determination to investigate and bring wiseguys to justice will never waver,” stated FBI Assistant Director-in-Charge Venizelos.

As alleged in the indictment and a detention memorandum filed by the government, over the last 45 years Vincent Asaro and various co-conspirators, including his son Jerome Asaro, engaged in a pattern of violence and threats of violence in order to profit from their illegal activity and evade prosecution. The indictment announced today is the result of a long-term investigation by the Federal Bureau of Investigation that utilized, among other law enforcement techniques, consensual recordings, cooperating witnesses and confidential sources, and electronic and visual surveillance.

1978 Lufthansa Heist

Vincent Asaro is charged for his participation in the 1978 robbery at the Lufthansa Terminal at John F. Kennedy Airport of over $5 million in United States currency and approximately $1 million in jewelry. Asaro, Lucchese crime family associate James “Jimmy the Gent” Burke, and their co-conspirators each expected to receive approximately $750,000 in cash and large quantities of gold jewelry from the proceeds of the robbery.

Murder of Paul Katz

Vincent Asaro is charged with the murder of Paul Katz, who disappeared in 1969, and Asaro and his son Jerome are also charged with accessory after the fact for their roles in moving Katz’s body to prevent its discovery by law enforcement. Vincent Asaro and Burke allegedly strangled Katz with a dog chain because they believed he was cooperating with law enforcement. They then buried his body in the basement of a vacant home in Queens, New York, where it remained until the mid-1980s when, alerted to a state law enforcement investigation into Katz’s murder, Vincent Asaro directed Jerome Asaro and another individual to dig up Katz’s body and move it. Almost 35 years later, in June of 2013, the FBI executed a search warrant at the Queens residence, which was still owned by the Burke family, and recovered remnants of Katz’s remains buried in the basement. Katz’s identity was confirmed through DNA testing.

Solicitation to Murder

Vincent Asaro and Jerome Asaro are charged with solicitation to murder their cousin, identified in the indictment as “John Doe #1,” because he was perceived to be a “rat” for testifying against another family member in a federal trial on fraud charges.

Armed Robberies

Vincent Asaro and Jerome Asaro are charged variously with participating in additional armed robberies and armed robbery conspiracies, including the robbery of approximately $1 million in gold salts.

Extortion

All five defendants, including Thomas Di Fiore, the highest ranking member of the Bonanno family at liberty, are charged with using and conspiring to use extortionate means to collect an extension of credit from a Bonanno family associate. During an April 26, 2013, consensual recording of Vincent Asaro and John Ragano, Ragano asked Asaro, “When do we stab this guy [ ] in the neck? That’s what I want to know.” Asaro responded, “Stab him today.” Asaro continued, “I told you to give him a [ ] beating. Give him a [ ] beating, I told you that. Listen I sent three guys there to give him a beating, already, so it won’t be the first time he got a beating from me.”

The case has been assigned to United States Senior District Judge Allyne R. Ross. If convicted, Vincent Asaro faces life imprisonment, and each of his co-defendants faces a statutory maximum sentence of 20 years’ imprisonment.

The government’s case is being prosecuted by Assistant United States Attorneys Nicole M. Argentieri and Alicyn Cooley.

The Defendants:

VINCENT ASARO

Age: 78

Howard Beach, New York

JEROME ASARO

Age: 55

Bethpage, New York

JACK BONVENTRE

Age: 45

Campbell Hall, New York

THOMAS DI FIORE, also known as “Tommy D”

Age: 70

Commack, New York

JOHN RAGANO, also known as “Bazoo”

Age: 52

Rockaway, New York

E.D.N.Y. Docket No. 14-CR-26 (ARR)

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

Asaro Indictment
Asaro Detention Memo
 

Earlier today, Aleksander Efrosman, the investment manager of Century Maxim Fund, Inc. and AJR Capital, Inc., was sentenced to a term of imprisonment of 188 months following his conviction for wire fraud. Efrosman, who fled the United States, was extradited from Poland and pleaded guilty on October 18, 2012. In addition to the prison term, Efrosman was ordered to pay restitution of approximately $4 million.

The sentence was announced by Loretta E. Lynch, United Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Philip R. Bartlett, U.S. Postal Inspector-in-Charge, New York Division.

“This case proves the old adage: ‘you can run, but you cannot hide.’ Aleksander Efrosman stole over $5 million from unsuspecting investors and fled the country, then engaged in a globetrotting effort to escape justice. But the coordinated efforts of law enforcement resulted in his capture. Today, Efrosman has finally been held to account for his betrayal of his clients’ trust,” stated United States Attorney Lynch. “As proved again today, this office will relentlessly pursue and prosecute the perpetrators of investment fraud schemes.” Ms. Lynch extended her grateful appreciation to the Federal Bureau of Investigation and the Postal Inspection Service for their assistance in this case.

From January 2004 through June 2005, working from offices in Brooklyn and Staten Island, Efrosman defrauded investors by soliciting investments purportedly for the purpose of trading in the stock market and the foreign currency exchange market. Efrosman falsely told investors that he had a history of profitable trading and that the investments would be protected by a "stop-loss" mechanism which ensured that no trade lost more than 3%. Based on these misrepresentations, Efrosman raked in over $5 million from more than 100 investors. Efrosman did not invest the funds as promised, but instead used the funds for his personal benefit, including gambling over $3 million at the Foxwoods casino.

Efrosman fled the United States in 2005 with millions of dollars of investor funds. He first traveled to Cozumel, Mexico, then to Panama and ultimately to Poland, where he assumed the identity of “Mikhail Grosman” and obtained a high quality fraudulent Russian passport. In the meantime, federal agents in the United States pursued leads as to Efrosman’s whereabouts. In a coordinated multinational effort, law enforcement authorities in Austria, the Czech Republic, and Poland tracked, located, and ultimately arrested Efrosman in Krakow, Poland, on May 28, 2010.

The sentence was imposed by United States District Judge Nicholas G. Garaufis at the federal courthouse in Brooklyn, New York.

The government's case was prosecuted by Assistant United States Attorney Daniel Spector.

The Defendant:

ALEKSANDER EFROSMAN

Age: 51

Yall Inc., an Internet-based vendor of consumer electronics, and its principal, Hang Feng (Nick) Wu, have entered into a settlement agreement in which they have agreed to pay the United States $700,000 to resolve allegations that they knowingly underpaid postage on large amounts of mail sent through the United States Postal Service. The settlement agreement has been approved by United States District Judge Roslynn R. Mauskopf.

The settlement was announced today by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the United States Postal Inspection Service.

In its complaint, filed in federal court in Brooklyn, the United States alleged that Yall and Wu sent thousands of underpaid mailings to consumers across the nation and around the world. The government further alleged that Yall and Wu failed to weigh the mail before presenting it to the Postal Service for mailing, while representing that their mail was paid in full. The complaint sought recovery under the False Claims Act, 31 U.S.C. §§ 3729-33, among other remedies. Under the False Claims Act, the government can recover up to three times its actual damages, plus penalties of $5,500 to $11,000 for each false claim.

Yall does business through various websites, including Yallstore.com and the online auction and shopping website eBay.com. Yall sells accessories, peripherals and replacement parts, such as batteries, protective cases, AC adapters, and cables for laptops, cell phones, digital cameras, and handheld game consoles, among other popular electronics items.

“Full and fair competition in business requires a level playing field. Mailers who underpay postage gain an unfair advantage over their competitors, while short-changing the Postal Service of necessary funds to carry out its mission,” said United States Attorney Lynch. "We are committed to protecting the Postal Service from abuse and ensuring its financial viability by holding businesses and business owners accountable for underpaying postage.”

“Postal Inspectors will vigorously pursue individuals who underpay the Postal Service. The Postal Inspection Service appreciates the strong stance U.S. Attorney Lynch has taken against those who seek to take advantage of the Postal Service through underpaying postage,” said Inspector-in-Charge Bartlett.

In reaching this settlement, Yall, Inc. and Wu did not admit liability, and the government did not make any concession regarding the legitimacy of the claims.

This case was investigated by the United States Postal Inspection Service and handled by Assistant U.S. Attorney Ameet B. Kabrawala, with assistance from Affirmative Civil Enforcement Auditor Emily Rosenthal.

Earlier today, Francisco Ponce, a leader of La Mara Salvatrucha, also known as the MS-13 street gang ("MS-13"), pleaded guilty at the federal courthouse in Central Islip, New York, to racketeering, including predicate acts relating to the February 15, 2009, armed robbery of the Pollo Campero restaurant in Lindenhurst, New York, and the September 12, 2009, armed robbery of Los Hermanos Grocery in Brentwood, New York, which resulted in the murder of Miguel Peralta, an employee of that grocery. When sentenced, Ponce faces up to life in prison.

The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

"Ponce was in charge of the MS-13 "brand" in New York, and sought to strengthen it with acts of mayhem. Seeking funds to fuel their violent lifestyle in New York and abroad, he and his cohorts robbed and terrorized Long Island neighborhoods. Miguel Peralta fell victim to their thirst for blood and money when he unknowingly walked in on a robbery at the store at which he worked," stated United States Attorney Lynch. "This office and our law enforcement partners will continue to vigorously investigate and prosecute gang members, especially those who terrorize our communities and, as demonstrated in the tragic murder of Mr. Peralta, kill innocent victims."

FBI Assistant Director-in-Charge Venizelos stated, "Rather than function as a productive member of society, the defendant instead chose a life of crime, intent on spreading fear and violence throughout our community. The FBI is committed to removing these violent criminals from our streets. We will continue to work with our law enforcement partners to dismantle MS-13 and bring to justice every gang member who victimizes the public."

According to court filings and facts presented during the plea proceeding, Ponce and two other MS-13 members, Joyser Velasquez, also known as "Baby Boy,"1 and Carlos Chicas, also known as "Flaco," carried out the September 12, 2009, armed robbery of Los Hermanos Grocery and the murder of Miguel Peralta. Shortly before midnight, Velasquez and Chicas, who were armed with semi-automatic handguns, entered the store, while Ponce waited as the getaway driver. Peralta, who was sweeping a storeroom in the back of the store, heard the commotion, entered the front of the store, and came face to face with Velasquez, who shot him once in the side. Peralta then ran down an aisle where he was confronted by Chicas, who shot him in the head. The robbers then rifled through the cash register, took cash and checks, and fled to the awaiting getaway car that was driven by Ponce.

Several months prior to the Peralta murder, Ponce, Velasquez, and two other MS-13 members, Wilmer Granillo, also known as "Chele," and Freddy Fuentes-Gonzalez, also known as "Pitufo,"2 committed an armed robbery of the Pollo Campero restaurant in Lindenhurst, New York. Specifically, on February 15, 2009, Velasquez, who was armed with a semi-automatic handgun, Granillo and Fuentes-Gonzalez entered the Pollo Campero restaurant, wearing hooded sweatshirts and ski masks, held the employees at gun-point and forced the manager to open the safe, by holding a knife to his throat. The MS-13 members stole approximately $15,000 from the safe and then fled to the car, where Ponce was waiting to drive them away.

Ponce’s conviction further demonstrates the strong connection between members of the MS-13 gang in New York, El Salvador, and elsewhere. As set forth in prior court filings and testimony introduced during two recent MS-13 racketeering trials, between 2009 and 2010, Ponce was the New York leader of "The Program," an initiative by the MS-13's leadership in El Salvador to exercise greater control over the international MS-13 enterprise, including the MS-13 cliques and members in New York, enforce discipline and adherence to the gang=s rules, and cause more money to be sent to MS-13 members in El Salvador and other parts of Central America. Ponce functioned as a liaison between the MS-13 clique leaders in New York and the gang’s hierarchy in El Salvador, organizing "universal meetings," which were meetings attended by the leaders of the New York cliques of the MS-13, and collecting money from the New York cliques to purchase firearms and ammunition, which were used in furtherance MS-13’s violent agenda, and to send money to gang leaders in El Salvador.

Chicas and Granillo, two of Ponce’s co-conspirators in the Peralta murder and Pollo Campero robbery, respectively, are believed to have fled the jurisdiction and remain fugitives.3 The FBI requests that anyone with information regarding their whereabouts telephone (212) 384-1000. Chicas and Granillo should be considered armed and dangerous.

Ponce’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang comprised primarily of immigrants from El Salvador, Honduras, and Guatemala. With numerous branches, or "cliques," the MS-13 is the largest street gang on Long Island. Since 2002, more than 200 MS-13 members, including more than two dozen clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 100 of those MS-13 members have been convicted on federal racketeering charges. Since 2010 alone, this Office has convicted more than 30 members of the MS-13 on charges relating to their participation in one or more 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 Assistant United States Attorneys John J. Durham, Raymond A. Tierney, and Carrie N. Capwell.

The Defendant:

FRANCISCO PONCE ("Spoiler")

Age: 31

Residence: Brentwood, NY

E.D.N.Y. Docket No. 12-063 (JFB)

1 Velasquez is in custody pending trial. The charges in the indictment against Velasquez are merely allegations, and he is presumed innocent unless and until proven guilty.

2 Fuentes-Gonzalez is in custody. He pled guilty and is facing life imprisonment when sentenced.

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

Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced that the United States has entered into a settlement with the City of New York in the case of Ohlmeyer ex rel. United States of America v. City of New York, a whistleblower action brought pursuant to the qui tam provisions of the federal False Claims Act, 31 U.S.C. Sections 3729-33 (the FCA). In its civil complaint, the United States alleged that the City of New York Department of Education (DOE) submitted false claims to Medicaid for psychological counseling services to special education students in the New York City public schools. The settlement calls for the City to pay $1,375,000 to the United States.

“When Medicaid shells out scarce dollars for services that are not provided, both the students in need of psychological support and the public fisc are harmed,” stated United States Attorney Lynch. “We will vigorously pursue entities, including local governmental agencies that seek reimbursement of federal funds to which they are not entitled.”

As described in the complaint, Medicaid pays DOE a flat fee of $223 for each student to whom DOE provides at least two psychological counseling sessions in a calendar month. Half of that money comes from the federal government. DOE is not entitled to any payment if an individual student receives fewer than two counseling sessions in a month. The United States alleged that, between 2001 and 2004, the DOE knowingly billed Medicaid for counseling services to individual students, even though it provided fewer than two counseling sessions per month to those students. In one case, DOE requested 15 months of payments from Medicaid for psychological counseling to a student during the 2001-02 and 2002-03 school years. According to DOE’s own service records, the student received fewer than two counseling sessions in 12 of those months.

Of the settlement amount, 15%, or $206,250, will be paid to the Relator, Dana Ohlmeyer, who initiated the case under the qui tam, or whistleblower provisions of the FCA. The City will also pay FCA attorney’s fees of $40,000.

The case was handled by Assistant United States Attorney Michael J. Goldberger with assistance from Department of Health and Human Services Office of Inspector General Special Agent Elysia Doherty.

Earlier today, at the federal courthouse in Brooklyn, Bajram Lajqi, a member of an international drug trafficking syndicate led by ethnic Albanians located in the United States, Canada, and Europe (the “syndicate”), was sentenced to 115 months in prison -- with credit for the 31 months he has already served -- following his June 27, 2013, guilty plea to trafficking hundreds of pounds of marijuana from Canada and using a firearm in connection with drug trafficking. As a part of the sentence, the court also imposed a term of supervised release of five years.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Brian R. Crowell, Special Agent-in-Charge of the Drug Enforcement Administration, New York (DEA); and James T. Hayes, Jr., Special Agent-in-Charge, Homeland Security Investigations (HSI), New York.

“To Lajqi and his syndicate, the U.S. was the ultimate destination for their deadly mix of narcotics and violence. Lajqi in particular exemplifies the violence tied to large-scale narcotics trafficking, as his drug-fueled quest for revenge led him to gun down a rival outside a Bronx restaurant without regard for the safety of the innocent bystanders around him,” stated United States Attorney Lynch. “We will continue to vigorously prosecute those who would lay waste to the streets of our communities with drugs and violence.”

The syndicate was comprised of several inter-related ethnic Albanian family clans (also known as “fis”), with hundreds of associated members, workers, and customers spanning three continents. In operation for more than a decade, the syndicate was responsible for organizing the importation and distribution of tens of thousands of kilograms of hydroponic marijuana from Canada and Mexico, substantial quantities of MDMA from the Netherlands and Canada, hundreds of kilograms of cocaine from Mexico, Colombia, Venezuela, and Peru, and large quantities of diverted prescription pills, such as oxycodone. The drugs were distributed in various locations in the United States, including New York, California, Georgia, Colorado, and Florida, as well as in Canada and Europe. During the course of the investigation, federal agents seized more than 1,200 pounds of marijuana, approximately $2,000,000 in suspected drug proceeds, 22 handguns, a military/police-issue assault rifle and hundreds of rounds of ammunition. To date, 49 members and associates of the syndicate have been convicted in this case.

On June 4, 2011, an escalating dispute between Bajram Lajqi and another syndicate member over the payment of a drug debt led to Lajqi stalking the victim for several hours before Lajqi pulled out a firearm and attempted to murder the victim inside a crowded Bronx restaurant-bar. The victim escaped temporarily, but Lajqi chased him into the street and repeatedly shot him, resulting in serious wounds.

Ms. Lynch expressed her grateful appreciation to the DEA’s New York Organized Crime Drug Enforcement Strike Force, DEA Special Operations Division, the Department of Justice Office of International Affairs, DEA Newark Division, DEA Denver Division, DEA Miami Division, DEA Albany District Office, DEA Rome Country Office, HSI attache in Vienna, HSI attache in Toronto, HSI Albany Office, HSI Denver Office, HSI Newark Office, HSI Miami Office, the United States Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York City Police Department, the Monmouth County (New Jersey) Prosecutor’s Office, the Westchester County District Attorney’s Office, and the New York Attorney General’s Office for their assistance.

The sentencing proceeding was held before U.S. District Judge Dora L. Irizarry.

The government’s case is being prosecuted by Assistant United States Attorneys Steven Tiscione, Gina Parlovecchio, and Claire Kedeshian.

The Defendant:

BAJRAM LAJQI

Age: 38

U.S. Attorney Loretta E. Lynch announced today that the Eastern District of New York, working collaboratively with other offices as well as on its own, collected over $904 million in criminal and civil actions in Fiscal Year 2013. Of this total amount, $725,564,627.70 resulted from cases handled in conjunction with other U.S. Attorney’s Offices and components of the Department of Justice. Collections from criminal and civil actions handled solely by the Eastern District of New York totaled $178,848,788.63.

In addition, working with partner agencies and divisions, the Eastern District forfeited another $1,319,038,046 in assets tainted by crime. Forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund and the Treasury Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes. The combined joint collections and asset forfeiture recoveries for the Eastern District total of over $2.2 billion exceeds the appropriated $1.86 billion operating budget for all U.S. Attorneys’ Offices nationwide.

Attorney General Holder announced on Thursday that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013. The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.

“The Department’s enforcement actions help not only to ensure justice is served, but also deliver a valuable return to the taxpayer,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the Department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”

“Working with our colleagues across the nation as well as on our own, the Eastern District of New York stands firm in its resolve to protect the public and recover funds for the federal treasury and for victims of crime,” stated U.S. Attorney Lynch. “Collections and asset forfeiture are important tools in our arsenal as we seek to ensure that crime does not pay. We are honored to be part of this web of protection for the American people.”

FY 2013 EDNY COLLECTION HIGHLIGHTS

Health Care Fraud

This past year, working with colleagues in the District of Massachusetts and the Western District of Washington, the Eastern District of New York collected $748 million in a settlement with Amgen Inc. (Amgen). The Amgen settlement resolved criminal and civil liability arising from Amgen’s sale and promotion of Aranesp, a drug that treats anemia, as well as other drugs manufactured by Amgen. The settlement represents the single largest criminal and civil fraud settlement involving a biotechnology company in U.S. history. In its guilty plea, Amgen admitted that it illegally sold the drug with the intention that it be used at “off-label” doses that the FDA had specifically considered and rejected, and for an “off-label” treatment that the FDA had never approved and was later deemed to be extremely harmful to patients, all to increase profits. Amgen pled guilty to misdemeanor misbranding charges, paid a fine of $136 million, and forfeited $14 million. The civil settlement agreement encompassed allegations that Amgen: (1) promoted Aranesp and two other drugs that it manufactured, Enbrel and Neulasta, for “off-label” uses and doses that were not approved by the FDA and not properly reimbursable by federal insurance programs; (2) offered illegal kickbacks to a wide range of entities in an effort to influence health care providers to select its products for use, regardless of whether they were reimbursable by federal health care programs or were medically necessary; and (3) engaged in false price reporting practices involving several of its drugs. As part of the global settlement, Amgen also entered into a Corporate Integrity Agreement with HHS-OIG that will govern its conduct and ensure careful oversight of its branding and marketing practices.

Prescription Drug Initiative

In addition, as part of its Prescription Drug Initiative, the Eastern District worked with colleagues in the Southern District of Florida, the District of Colorado, and the Eastern District of Michigan in resolving an action for civil penalties in the amount of $80 million against Walgreen Pharmacies for its repeated violations of the Controlled Substances Act. The Eastern District action focused on Walgreens stores on Long Island that repeatedly filled bogus prescriptions for highly addictive painkillers that they knew or should have known had no legitimate medical purpose. The Eastern District’s Prescription Drug Initiative seeks to stem the tide of prescription drug and painkiller abuse through both civil and criminal enforcement as well as community education. In another Prescription Drug Initiative matter, medical residents at New York Methodist Hospital in Brooklyn were found to have issued close to 200 prescriptions for the stimulant Adderall without a legitimate medical purpose. Indeed, the Adderall was alternately consumed by the residents or sold in hand to hand transactions or on Craigslist. The hospital entered into a Consent Judgment that not only provided for a civil penalty for violating the CSA but also established a formal program to ensure future compliance.

False Claims Act

Working with the Department’s Civil Frauds Branch, the Eastern District recovered $5.25 million from RxAmerica pursuant to the settlement of one of the first federal False Claims Act cases to involve a Medicare Part D plan, which resolved claims that RxAmerica made false submissions to the Centers for Medicare and Medicaid Services in order to receive higher reimbursements for certain medications. In addition, the Eastern District recovered $8 million from CA, an Islandia, New York-based software and information technology company for knowingly double-billing federal agencies in connection with software maintenance contracts administered by the General Services Administration and Department of Defense.

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

In the Eastern District as well as nationwide, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.

Theodore Sweeten, the president of Symtech International, Inc. (“Symtech”), was sentenced today in federal court in Brooklyn, New York, to 48 months in prison to be followed by three years of supervised release. As part of the sentence, Sweeten was ordered to forfeit more than $600,000 to the government and pay $5,001,949 in restitution to the defrauded investor. Sweeten was remanded into federal custody. In June 2013, Sweeten pleaded guilty to a charge of wire fraud for defrauding an individual investor of $5 million through, among other things, false representations about his investment and environmental expertise.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“Theodore Sweeten conned an unsuspecting investor of $5 million by claiming to have expertise in environmental and financial products, when in reality, his only expertise was in fraud. Sweeten told the victim his money would be safe until their investment goals were accomplished. Instead, he and his cohorts simply stole the money and gave the victim phony documents and a trail of lies, each one more fanciful than the last. Those who seek to prey on the investing public through lies and deceit are on notice that they will be held accountable for their crimes,” stated United States Attorney Lynch. Ms. Lynch thanked the FBI, the agency responsible for leading the government’s investigation.

Sweeten, who claimed he developed and patented the “Clean Air Valve” among other environmental products, defrauded an investor of $5 million by lying to him about his expertise in their joint venture agreement. Sweeten, and two others, induced the victim to make the investment in order to “lease” a credit line of $100 million, which in turn would enable them to generate millions of dollars in profit through special investment programs.1 In furtherance of that scheme, Sweeten and his co-conspirators falsely represented that the victim’s funds would be held in an attorney escrow account pending confirmation of the posting of $100 million in the leased-funds account. In fact, they simply distributed the victim’s $5 million among themselves and falsely represented that a $100 million account had been created at HSBC by sending the victim fabricated bank documents on HSBC letterhead.

When the victim discovered that the bank documents on HSBC letterhead were phony, he requested a refund of the $5 million that he had deposited into the attorney escrow account. In response, Sweeten and his co-conspirators told the victim that the money had been disbursed to the investors who created the $100 million account. Sweeten then claimed innocence and placed the blame for the victim’s lost funds on his co-conspirators. In particular, Sweeten concealed from the victim the fact that he had requested and received more than $600,000 of the escrowed funds more than four months prior to the issuance of the fabricated HSBC documents. When the victim eventually confronted Sweeten about the money that Sweeten had withdrawn from the attorney’s escrow account, Sweeten lied to the victim yet again and told him that he had invested the withdrawn funds on the victim’s behalf into other highly profitable projects, including a gold mine project. Sweeten continued with these lies to the victim, in emails and telephone conversations, for more than three years after stealing the victim’s money.

The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes and Marcia M. Henry.

Today’s announcement is part of efforts underway 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 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The Defendant:

THEODORE SWEETEN

Age: 61

Residence: Ashland, Oregon

E.D.N.Y. Docket No. 12-CR-471

1 The charges against the co-defendants are merely allegations, and they are presumed innocent unless and until proven guilty.

Earlier today, Michael J. McGowan, a former Federal Air Marshal and Border Patrol Agent, was sentenced to 90 years’ incarceration for three counts of Sexual Exploitation of Children. McGowan repeatedly sexually abused three boys over the course of four years between 2000 and 2004 and photographed the abuse. In 2005, McGowan was convicted in U.S. District Court for the Eastern District of New York of one count of Attempting to Receive Child Pornography and sentenced to 20 years’ imprisonment. In 2008, while serving his sentence, McGowan sought from prison to have the photographs destroyed, which led to their discovery and his current prosecution for Sexual Exploitation of Children.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John E. Dupuy, Assistant Inspector General for Investigations, Office of Inspector General in the Department of Homeland Security (OIG-DHS); and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.

“Michal J. McGowan, sexual predator of young boys for personal gratification, went so far as to use his position as a Federal Air Marshal to perpetrate his abuses. Moreover, his prior imprisonment did nothing to deter him from compounding his crimes by reaching out from prison in an attempt to subvert justice and destroy evidence,” stated United States Attorney Lynch. “McGowan’s effective life sentence will ensure that no other child faces abuse at his hands and serves as a warning to those who would commit such crimes that they will be pursued, prosecuted, and prevented from continuing to endanger our most precious resource.” Ms. Lynch expressed her grateful appreciation to the U.S. Postal Inspection Service, the U.S. Bureau of Prisons, and the Drug Enforcement Administration for their outstanding assistance in this investigation.

The initial charges against McGowan arose out of a 2004 United States Postal Inspection Service sting operation in which he ordered child pornography via computer to be delivered to him at his residence in Hicksville, New York. On June 30, 2004, a search warrant was executed at his residence, at which time McGowan claimed to have been investigating child pornography cases in his capacity as a Federal Air Marshal. McGowan was arrested on July 21, 2004, after an analysis of his computer revealed in excess of 1,300 images and videos of child pornography, predominantly of boys between the ages of 10 and 15 years’ old, engaged in sexual activity with other boys and adult males. McGowan pleaded guilty in United States District Court on July 11, 2005 to Attempted Receipt of Child Pornography.

Prior to imposition of sentence for the 2004 child pornography offense, McGowan contacted a then 15-year-old boy via telephone and mail from jail and engaged in a sexual conversation with the boy. The boy later disclosed to federal investigators that McGowan had abused him on a number of occasions when he was 13 years’ old, in Corpus Christi, Texas, where McGowan previously resided. In 2006, following the disclosure of this molestation, as well as McGowan’s calls and letters from jail to the boy, McGowan was sentenced by United States District Judge Sandra J. Feuerstein to 20 years’ imprisonment, to be followed by lifetime supervised release.

On November 27, 2008, while housed at the Federal Correctional Institute in Butner, North Carolina, McGowan wrote a letter to a second victim, a then 18-year-boy, requesting him to recover and destroy a hard drive containing child pornography which McGowan had hidden behind a sheetrock wall at his Hicksville residence. This effort was discovered by Bureau of Prisons personnel, and the boy was interviewed. During the course of the interview, the boy admitted that McGowan had molested him from ages 10 to 14 years’ old, and further led OIG-DHS and HSI investigators to seize the hidden hard drive. Upon examination, the hard drive was found to contain in excess of 1,000 images of child pornography, including images of children as young as five-years-old engaged in sexual conduct, as well as images of McGowan molesting three boys, ages 11 to 13. Several of the photographs were taken in hotel rooms that McGowan had access to as a result of his work as a Federal Air Marshal. Also recovered was a VHS videotape which depicted an unidentified minor boy engaged in sexual activities filmed by McGowan.

Following McGowan’s return to the Eastern District of New York to face the current charges, he repeatedly attempted to obstruct justice by sending threatening letters to one of the victims depicted in the child pornography that McGowan created.

On September 20, 2011, McGowan pleaded guilty to three counts of Sexual Exploitation of Children. Today’s sentence of 90 years’ imprisonment will be served consecutive to the remaining term of the 20 year sentence McGowan is currently serving. The sentencing proceeding was held before Judge Sandra J. Feuerstein at the federal courthouse in Central Islip, New York.

The government’s case was prosecuted by Assistant United States Attorney Allen Bode.

The Defendant:

MICHAEL J. MCGOWAN

Age: 41

Hicksville, New York

Corpus Christi, Texas

E.D.N.Y. Docket No. 09-653(SJF)

BROOKLYN, NY – Earlier today, Aubrey Lee Price was presented at the federal courthouse in Brunswick, Georgia, near where he was arrested. The defendant, who sent acquaintances a suicide note stating that he planned to kill himself by throwing himself off a high speed ferry boat in Florida, has been wanted since June 27, 2012, when the Honorable Viktor V. Pohorelsky, United States Magistrate Judge for the Eastern District of New York, issued a warrant for Price’s arrest based on a complaint filed by the United States Attorney for the Eastern District of New York. At the time, Price was charged with wire fraud in connection with his use of brokerage accounts in New York to misappropriate millions of dollars belonging to a bank in southern Georgia where Price was a director. A grand jury in Brooklyn later expanded the charges against Price to include securities fraud in connection with Price’s theft of funds from both the bank and other investors in investment funds controlled by Price. The defendant also faces a charge in the Southern District of Georgia.

The arrest was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

According to the indictment, Price managed investment funds PFG LLC (“PFG”) and the Montgomery Growth Fund (“Montgomery Growth”). Starting in or about June 2009, PFG raised approximately $40 million from approximately 115 investors from across the nation. Price unsuccessfully invested PFG funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price allegedly lied to his investors by posting fake account statements on a secure PFG web site that fraudulently reflected fictitious assets and fabricated investment returns.

The indictment further states that, starting in or about January 2011, Price became a director of Montgomery Bank & Trust (“MB&T”), a financial institution in Ailey, Georgia. After telling MB&T that he would invest the bank’s capital in U.S. Treasury securities, Price instead lost much of the bank’s money by investing in risky equity securities and options. Price also embezzled MB&T money to pay redemptions to some PFG investors. The indictment charges that Price covered up his embezzlement and losses of MB&T’s funds by giving the bank’s management fabricated documents falsely indicating that approximately $17 million was on deposit in the bank’s name at a large financial services firm in New York.

“Aubrey Lee price created a life and death out of whole cloth, telling hundreds of investors and a Georgia bank that their money was safe when he was flying high, and telling the world he was dead when his lies crashed down around him,” stated United States Attorney Lynch. “But Price proved as unsuccessful at faking his own death as he was at faking his victims’ investments. Every person who seeks to harm our financial markets through fraud should be on notice. With the help of our law enforcements partners, both federal and local, we will find you, and we will hold you accountable for your behavior in a court of law.” Ms. Lynch expressed her grateful appreciation to the Securities and Exchange Commission, Atlanta Regional Office, and the Lowndes County Georgia Sheriff’s Department for their cooperation and assistance in the investigation. She also thanked the Glynn County Georgia Sheriff’s Department, who arrested the defendant following a traffic stop.

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

The government’s case is being prosecuted by Assistant United States Attorneys David C. Woll, Jr. and Brian Morris.

This prosecution was the result of efforts by President Barack 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.

The Defendant:

AUBREY LEE PRICE

Age: 47

Valdosta, Georgia

E.D.N.Y. Docket No. 13-CR-058

BROOKLYN, NY – Earlier today, Howard Leventhal, 56, pleaded guilty to wire fraud for defrauding and attempting to defraud a number of individuals and entities of millions of dollars by falsely claiming that his company, Neovision USA, Inc. (“Neovision”), had a lucrative contract with Canada’s Department of Health (“Health Canada”).  Leventhal also pleaded guilty to aggravated identity theft, which carries a mandatory two-year term of imprisonment, for stealing the identity of Glenda Yeates, Health Canada’s former Deputy Minister of Health.  When sentenced on April 3, 2014, Leventhal faces up to 22 years in prison, $1,050,819.78 in forfeiture and restitution, and a fine of more than $2 million.

The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“In Leventhal’s world, the truth was cloaked by his web of lies and impersonation.  Within this alternate reality, Leventhal marketed nonexistent technology, fabricated an on-line presence, and impersonated a government official, all to defraud investors out of very real money.  His actions were the stuff of fantasy and science fiction, valid only in another dimension.  Today’s guilty plea marks the end of Leventhal’s elaborate scheme and demonstrates this Office’s steadfast commitment to protect investors from fraud,” stated United States Attorney Lynch.  Ms. Lynch expressed her grateful appreciation to the FBI, the lead agency responsible for the investigation, and the Royal Canadian Mounted Police (RCMP) and Health Canada for their significant cooperation and assistance in the investigation.

According to court filings and facts presented at the plea hearing, Leventhal told potential investors that Neovision had written agreements with Health Canada, whereby Neovision would provide Health Canada with “Heltheo’s McCoy Home Health Tablet,” a device ostensibly named after the fictional Dr. Leonard McCoy of TV’s Star Trek series.1 The written agreement provided by Leventhal to potential investors was purportedly signed by Glenda Yeates, Canada’s former Deputy Health Minister, on behalf of the government of Canada.  For example, in May 2012, Leventhal used this agreement and entered into a factoring agreement with Paragon Financial Group, Inc. (“Paragon”), a Florida company, whereby Paragon advanced Neovision $800,000 in exchange for Paragon’s right to collect a larger sum of money purportedly owed to Neovision by Health Canada.  Leventhal also used the purported agreement with Health Canada to solicit more than $25 million from other potential investors, including an undercover law enforcement agent posing as a high net worth individual.

Contrary to Leventhal’s representations, (1) there was no agreement between Health Canada and Neovision, (2) Health Canada did not owe Neovision any money, and (3) Deputy Health Minister Glenda Yeates’ signature on the agreement was a forgery.  To conceal his scheme, Leventhal assumed the identities of Health Canada representatives, including that of former Deputy Health Minister Glenda Yeates.  Further, Leventhal created and used domain names, telephone numbers, and email addresses that closely resembled those actually used by Health Canada.  For example, Leventhal created and used healthcanada.com.co and hc-sg-gc.ca in place of Health Canada’s true domain name hc-sc.gc.ca.

Today’s guilty plea took place before United States District Judge Brian M. Cogan.

The government’s case is being prosecuted by Assistant United States Attorney Winston M. Paes.

Today’s announcement is part of efforts underway 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 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.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

The Defendant

HOWARD LEVENTHAL
Age: 56
Long Grove, Illinois

E.D.N.Y. Docket No. 13-CR-695

_____________________________

1 Leventhal claimed that Heltheo’s McCoy Home Health Tablet can instantaneously and effectively deliver detailed patient data to physicians and other licensed medical care providers.
 

Earlier today, John Murphy, the former Chief Executive Officer of Oak Rock Financial, LLC (“Oak Rock”), pled guilty to bank fraud before United States Magistrate Judge Gary R. Brown at the United States courthouse in Central Islip, New York.  The charge arose out of Murphy’s scheme to defraud various financial institutions including Israel Discount Bank (“IDB”), the primary lender to Oak Rock.  The losses to these financial institutions and Oak Rock investors are in excess of $100 million.  When sentenced by United States District Judge Leonard D. Wexler, the defendant faces a maximum  of 30 years’ imprisonment.

The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“Murphy abused his position as CEO and defrauded banks out of millions of dollars by lying about his company’s financial health,” stated United States Attorney Lynch.  “Today’s conviction should act as warning to executives, if you lie to lenders and investors, you will be investigated and prosecuted to the full extent of the law.”  Ms. Lynch expressed her grateful appreciation to the New York State Department of Financial Services for its assistance in this investigation.

“Mr. Murphy, instead of being a steward of Oak Rock Financial, spent his time cooking the books.  Let this serve as a reminder to executives everywhere that honesty and integrity are more important than the bottom line,” stated FBI Assistant Director-in-Charge Venizelos.

Oak Rock is a financial lending company located in Suffolk County, New York, that is in the business of securing lines of credit for businesses throughout the United States.  Until April 2013, Murphy was the Chief Executive Officer and President of Oak Rock.  During his guilty plea, Murphy admitted to lying to IDB, other financial institutions, and Oak Rock investors regarding the accounts receivable for Oak Rock.  Specifically, Murphy admitted, since January 2009, he had been committing fraud by changing delinquency dates to keep collateral and loans current; booking fictitious payments, thereby creating fictitious accounts receivable; and re-aging delinquent accounts receivable by copying data from timely paid accounts so that the loans appeared to have been stable.   By relying on Murphy’s misrepresentations IDB, other financial institutions and Oak Rock investors sustained losses in excess of $100 million.

The government’s case is being prosecuted by Assistant United States Attorney  Michael P. Canty    

The Defendant:

JOHN MURPHY
Age: 63
Nesconset, New York

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

Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Judith A. Enck, Regional Administrator, United States Environmental Protection Agency (EPA) Region 2, today announced the settlement with Suffolk County (Suffolk) in a federal civil environmental lawsuit alleging that Suffolk violated the federal leak prevention requirements for underground storage tanks at 35 facilities that the County has owned or operated.  The violations involve 68 underground storage tanks, which contain gasoline or waste oil in generally large quantities and can cause serious environmental damage if allowed to leak.  

All of the facilities at which Suffolk has owned or operated underground storage tanks are located within the boundaries of a federally-designated Sole Source Aquifer, which, among other criteria, is an aquifer that supplies at least 50% of the drinking water consumed within the Sole Source Aquifer boundaries.  The Sole Source Aquifer designation is a tool to protect drinking water supplies in areas with few or no alternative sources to the groundwater resources, and where, if contamination occurred, using an alternative source would be extremely expensive.  The violations alleged in the complaint do not pose an immediate threat to the drinking water of Suffolk’s residents.  However, Suffolk’s compliance with the federal leak prevention requirements of the Resource Conservation and Recovery Act (RCRA) is vital to ensure the integrity of tanks and to prevent the release of petroleum product to soil and groundwater. 

The lawsuit also alleges that Suffolk violated RCRA’s hazardous waste management requirements by improper handling of used fluorescent lamps at its facilities.  Compliance with these requirements is essential to minimize the present and future threat to human health and the environment of hazardous waste.

Under the Consent Judgment, lodged today in U.S. District Court for the Eastern District of New York, Suffolk County will pay a civil monetary penalty of $500,000 to the United States.  Suffolk will also fund a Supplemental Environmental Project in the amount of $1,500,000 to acquire an interest in land, and to manage such land and any associated ecological resources, into perpetuity, to protect or enhance groundwater.  This project will secure significant environmental and public health benefits for Suffolk’s residents, including protecting Suffolk County’s sole source aquifer, and enhancing the condition of the ecosystem.  

While the settlement was being negotiated, Suffolk undertook measures to achieve compliance with RCRA that the EPA has valued at approximately $2,900,000.  This included replacement and upgrade of automated release detection systems, removal and closure of obsolete tanks, upgrade and renovation of fueling stations, adding inventory control equipment at fueling sites, conducting training and inspections, and cleanup and restoration of a fuel spill at one of Suffolk’s facilities.  Under the Consent Judgment, Suffolk has committed to remain in compliance with RCRA requirements for all of its underground storage tanks and in its handling of used fluorescent lamps, and to submit regular reports to the EPA to demonstrate that it is in compliance.  The EPA has estimated the value of these future compliance measures at approximately $1,115,000.   

“Suffolk County’s residents are entitled to full protection of the laws and regulations designed to protect our water, our environment, and our citizens from risk of contamination from gasoline.  Suffolk’s commitment to maintain compliance with those laws and to fund the acquisition of an interest in land that will be perpetually managed to protect and enhance groundwater provides a significant benefit to Suffolk’s residents,” stated United States Attorney Lynch.  “This Consent Judgment will ensure that Suffolk County’s groundwater, the sole source aquifer for Suffolk County, is protected from releases from Suffolk’s underground storage tanks.”

“As a result of this settlement, the health of people living in communities throughout Suffolk County will be better protected from the threat of petroleum contamination to ground water," said EPA Regional Administrator Judith A. Enck. "Under this agreement, the county will come into compliance with Federal Hazardous Waste Laws, including those laws aimed at preventing leaks of underground petroleum storage tanks, and will undertake a $1.5 million land conservation program to preserve and protect a major source of Long Island's drinking water."

The proposed settlement will be published in the Federal Register for a 30-day public comment period, and to be become effective, it must be approved by the United States District Court for the Eastern District of New York.

The government’s case is being prosecuted by Assistant United States Attorney Sandra L. Levy.  EPA is represented by Assistant Regional Counsel Stuart Keith.

Earlier today, a 21-count superseding indictment was unsealed charging Bryan Arias, Anthony Ciccone, Diane Kaylor, Jason Keryc and Shamika Luciano, former employees of Hauppauge-based Agape World, Inc. (“Agape”) and Agape Merchant Advance (“AMA”), for their participation in a large-scale Ponzi scheme.1   The superseding indictment adds two new defendants, Arias and Luciano, a securities fraud charge, a mail fraud count and two additional wire fraud counts.  The defendants are scheduled to be arraigned on the superseding indictment this afternoon before United States Magistrate Judge A. Kathleen Tomlinson at the United States Courthouse in Central Islip, New York.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York (USPIS).

“Today’s superseding indictment is but the latest step in this Office’s dismantling of the fraudulent business empire of Nicholas Cosmo,” stated United States Attorney Lynch.  “The defendants charged were an integral part of Cosmo’s Ponzi scheme that defrauded thousands of people of hundreds of millions of dollars.  The defendants actively promoted the Ponzi scheme, promising safe investments in low risk business ventures.  Even when the business ventures began to fail, the defendants continued to peddle lies and deceit to the investors in order to keep money flowing into the scheme.” Ms. Lynch added that the government’s investigation is continuing.

“As alleged in the indictment, the defendants’ foundation for success was built on deception and sham investments using the victims’ money.  Over time, as with all Ponzi schemes, the defendants’ lies began to unravel leaving the collective investors millions of dollars out of pocket.  Unfortunately, the public should be reminded that sometimes investment opportunities that are too good to be true are merely schemes designed to steal your money.  The FBI, along with our law enforcement partners, will continue to aggressively investigate those who prey upon the public with illegal get-rich-quick plans,” stated FBI Assistant Director-in-Charge Venizelos.

“Today’s arrests should serve notice to criminals that Postal Inspectors will leave no stone unturned to bring to justice all parties involved in any crime that utilizes the U.S. Mail to steal the hard earned money of consumers,” said Inspector-in-Charge Bartlett.

Nicholas Cosmo founded Agape and AMA in August 2000.  According to the superseding indictment and court filings, between October 2003 and January 2009, Arias, Ciccone, Kaylor, Keryc and Luciano, who worked as account representatives or brokers for Cosmo, played critical roles in the operation of a Ponzi scheme by soliciting and obtaining hundreds of millions of dollars from investors.  To induce investments and discourage withdrawals, the defendants misled the investors by, among other things, (1) assuring investors that their investments would only be used to fund specific, short-term secured bridge loans to commercial borrowers or to make short-term loans to small businesses, (2) promising to pay investors unusually high rates of returns, and (3) representing that investing in Agape and AMA carried little or no risk of loss.  The defendants allegedly raised significantly more money than was needed for the loans, and lied to the investors when they assured them that their money would specifically be used to fund only a particular loan.  For their efforts, Arias, Ciccone, Kaylor, Keryc and Luciano received approximately $1.7 million, $10.7 million, $4.75 million, $16 million and $275,000, respectively.

As alleged in the superseding indictment, Cosmo and the defendants actually ran a Ponzi scheme, paying returns to Agape and AMA investors not from any profits earned on investments, but rather from existing investors’ deposits or money paid by new investors.  In addition, unbeknownst to the investors, approximately $100 million of their money was used to trade high risk futures and commodities.  Despite the fact that the defendants knew that Agape and AMA did not produce or earn rates of return that could support the exorbitant returns promised to investors, they allegedly continued to solicit money from investors.

As the fraudulent scheme began to unravel, the defendants allegedly lied to investors about the status of various Agape bridge loans.  For example, on November 3, 2008, the defendants learned that all of Agape’s 2007 bridge loans were in default or on extension but allegedly failed to disclose that information to existing or new investors.  Instead, the defendants actively continued to solicit money from investors, obtaining an additional $25.6 million.

During the course of the Ponzi scheme, approximately 5,000 individuals invested a total of more than $400 million in Agape and AMA.  Although some investors succeeded over the years in making full or partial withdrawals, particularly before the Ponzi scheme began to unravel, approximately 4,100 investors sustained actual losses totaling approximately $179 million.

On October 14, 2011, Cosmo was sentenced to a term of imprisonment of 25 years in United States v. Nicholas Cosmo, 09 CR 255 (DRH), for his role in the scheme.

If convicted, the defendants face a maximum sentence of 20 years’ imprisonment on each count.

The government’s case is being prosecuted by Assistant United States Attorneys Christopher C. Caffarone, Grace M. Cucchissi and Vincent Lipari.

The Defendants

BRYAN ARIAS
Age: 40
Maspeth, New York

ANTHONY CICCONE
Age: 41
Locust Valley, New York

DIane kaylor
Age: 37
Bethpage, New York

JASON KERYC
Age: 36
Wantagh, New York

SHAMIKA luciano
Age: 31
Coram, New York

E.D.N.Y. Docket No. 12-CR-357 (S-1)(DRH)

_____________________________

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

BROOKLYN, NY – Earlier today, at the federal courthouse in Brooklyn, New York, Roman Vega, one of the world’s most prolific cybercriminals, was sentenced to 18 years in prison.  Vega, a Ukrainian national who co-founded the notorious Internet website CarderPlanet, pled guilty in 2009 to conspiracies to commit money laundering and access device fraud.  At the time of his arrest, Vega possessed over half a million stolen credit card numbers.

The sentence was announced today by Loretta E. Lynch, the United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mythili Raman of the Criminal Division of the Department of Justice; and Steven G. Hughes, Special Agent in Charge, United States Secret Service, New York Field Office. 

“Roman Vega and his cybercriminal associates emulated the mafia in organizing their criminal operations,” stated United States Attorney Lynch.  “Now, he shares the same fate as so many mafia bosses – a long term of imprisonment.  This investigation spanned the globe and sends the unmistakable warning that when it comes to dismantling global cybercrime organizations, neither distance nor complexity will deter us and our partners in law enforcement.”  Ms. Lynch expressed her grateful appreciation to the United States Postal Inspection Service for its assistance.

“Today’s sentence is a significant milestone in our ongoing effort to aggressively target and dismantle global cybercrime organizations that operate from every corner of the world,” said Acting Assistant Attorney General Raman.  “Vega helped create one of the largest and most sophisticated credit card fraud sites in the cybercrime underworld – a distinction that has earned him the substantial sentence he received today.”

“The Secret Service is pleased to have participated in this multi-agency criminal investigation that lead to the arrest of Roman Vega also known as ‘Boa’,” said Secret Service Special Agent in Charge Hughes.  “This case demonstrates by constricting this criminal enterprise, there is no such thing as anonymity in the cyber world.  The Secret Service continues to seek new and innovative ways to combat emerging cyber threats.  Our success in this case and other similar investigations is a result of our close work with our network law enforcement partners.”

Vega, who at various times was also known as “Boa,” “Roman Stepanenko,” “Randy Riolta,” and “RioRita,” formed two online marketplaces for stolen credit card information.  In the late 1990s, he founded the Boa Factory, one of the earliest websites on the Internet to provide a forum for buyers and sellers of stolen credit card information.  In the early 2000s, he co-founded and became a high-ranking administrator of a second criminal website, CarderPlanet, which became one of the first and busiest online marketplaces for the sale of stolen financial information, computer hacking services, and money laundering.

At its height, CarderPlanet had more than 6,000 members and had a hierarchical leadership structure that borrowed its leadership titles from La Cosa Nostra.  For example, CarderPlanet was headed by a “Godfather.”  Immediately below the Godfather were a number of “Dons,” including Vega, who used the name “Boa” when serving in this role.  Two levels below the Dons was the “Consigliere,” who was an advisor.  Vega, using the name “RioRita,” also served as the Consigliere.

CarderPlanet quickly became a premier online criminal bazaar in significant part as a result of Vega’s leadership.  Most notably, he helped institute a quality control system for sales.  If a cyberthief wanted to sell stolen credit card information on CarderPlanet, the information was subjected to a vetting process overseen by a manager to ensure that buyers obtained usable stolen data.  In addition, the website used e-currencies, such as WebMoney, to provide the participants with security and the cloak of anonymity.  As a result, Vega and his co-conspirators created an efficient and reliable online marketplace for the buyers and sellers of stolen financial information not unlike legitimate e-commerce sites.

Vega also sold stolen data on the marketplaces he founded and managed.  He directed cells of cybercriminals around the globe who hacked into financial institutions to steal credit card and other financial information that would in turn be sold on online marketplaces, including CarderPlanet. 

Vega was arrested in Cyprus in February 2003 and extradited to the Northern District of California for prosecution.  In November 2007, Vega was transferred to the Eastern District of New York following his indictment on the instant charges.  Vega has been incarcerated continuously since 2003.

The sentencing proceeding was held before Senior United States District Judge Allyne R. Ross.

The case was prosecuted by Assistant U.S. Attorney William P. Campos of the Eastern District of New York and Senior Counsel Thomas Dukes of the Criminal Division’s Computer Crime & Intellectual Property Section.

The Defendant:

ROMAN VEGA
Age: 49
Ukraine

E.D.N.Y. Docket No. CR-07-707 (ARR)

New Arrest: Carmine Mandarano MD- Complaint for Distribution of Controlled Substance

A fourteen-count indictment was unsealed today in the United States District Court for the Eastern District of New York located in Central Islip, charging Robert Rocco with wire and mail fraud in connection with a series of business ventures that  he created. 1   Rocco was arrested earlier today and will be arraigned before the Honorable Leonard D. Wexler in the federal courthouse in Central Islip.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

The indictment alleges that Rocco, while acting as the president of the Dix Hills Soccer Club, solicited club members and volunteers, friends and neighbors, to invest money in a series of businesses that he formed including, Limestone Capital Services (“Limestone”), Advent Merchant Services, LLC and Advent Equity Partners, LLC, that Rocco claimed would earn high rates of return on investments.  Rocco allegedly told investors that they would receive returns of up to 18% of their principal investment annually through the companies’ investments in ventures that purportedly included providing loans to finance wholesale cigarette purchases on behalf of the Shinnecock Nation tobacco shop and a credit card processing venture.  The indictment charges that Rocco solicited and received approximately $5 million in investor money between 2006 and 2013, which was not invested as promised.  Instead Rocco allegedly misappropriated the money and additionally, solicited money from new investors which he used to pay purported profits to earlier investors, thus concealing the earlier misappropriation.  Rocco also is alleged to have sent fraudulent account statements to investors that falsely showed that investors’ accounts had earned high rates of return.  The indictment further alleges that Rocco controlled the bank accounts and records of the Dix Hills Soccer Club and did not permit others to have access to them.  Between January and March 2010, Rocco allegedly deposited $66,915 in checks from the soccer club into Limestone and later distributed the proceeds of the checks to early investors in Limestone, leaving the soccer club with no funds to operate.  In April 2010, Rocco allegedly sought and received donations to allow the club to continue operations.

“As alleged in the indictment, Rocco employed fraud and deceit to victimize friends and neighbors and even used his local soccer club to further his schemes.  His promises of high returns were illusory, propped up by false account statements,” stated United States Attorney Lynch.  “Today’s arrest demonstrates our continuing commitment to investigate and prosecute those who commit financial crimes, particularly those who haven’t gotten the message that we will actively and aggressively pursue those who inflict financial harm on our citizens.”  Ms. Lynch thanked the Federal Bureau of Investigation for its work on the investigation.

“As alleged in the indictment, Rocco mastered the role of con artist when he traded upon his relationship with friends and colleagues with empty promises of high financial returns in exchange for their investments.  While not physically violent, Rocco’s alleged actions had a significant impact on the lives of his victims who lost their hard earned money to someone they trusted. The FBI will continue to vigorously investigate those who prey upon and defraud members of our community for their own personal gain,” stated Assistant Director-in-Charge Venizelos.

The government’s case is being prosecuted by Assistant United States Attorney Allen Bode.

The Defendant

ROBERT ROCCO
Age:  48
Dix Hills, New York

E.D.N.Y. Docket No. 13-CR-664 (LDW)

_____________________________

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

New Arrest in $5 Million Dollar Ponzi Scheme- Indictment
 

Earlier today at the federal courthouse in Brooklyn, New York, Ming Suan Zhang, a citizen of the People’s Republic of China, was sentenced today to 57 months’ incarceration for violating the International Emergency Economic Powers Act by attempting to export high-grade carbon fiber from the United States to China.  Zhang attempted to negotiate a long-term contract for massive quantities of the controlled commodity, which he asserted was to be provided to a Chinese company involved in the development of a military aircraft.  Zhang was arrested after traveling to the United States to meet with an undercover agent (“UC”) in an effort to obtain a sample of the specialized fiber, which has applications in the defense and aerospace industries and is therefore closely regulated by the United States Department of Commerce.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General for National Security; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and Sidney Simon, Special Agent-in-Charge, U.S. Department of Commerce (DOC), Office of Export Enforcement, New York Field Office.

"The defendant brazenly disregarded U.S. law in an attempt to procure a highly sought after commodity and provide it to a foreign power," stated United States Attorney Lynch.  "Foreign governments are willing to go to great lengths to acquire potentially dangerous materials such as specialized carbon fiber composites, which are of high value in the development of advanced weapons programs.  We and our law enforcement partners will continue to use all of the tools in our arsenal to protect our technology and maintain the national security of the United States and its allies."  Ms. Lynch expressed her grateful appreciation to the U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York, and the U.S. Department of Commerce, Office of Export Enforcement, New York Field Office, for their outstanding work in this investigation. 

Zhang came to the attention of federal authorities last year after two Taiwanese buyers, acting on his behalf, attempted to procure several tons of specialized carbon fiber, including Toray type M60-JB-3000-50B (“M60”), via Internet marketplace forums.  Zhang met with one of the buyers in mainland China and directed him to purchase a large quantity of high-grade carbon fiber, which Zhang intended to provide to a customer in China.  The buyers searched for a source of the commodity and contacted the UC.  The UC informed the buyers that he was willing to negotiate a deal, but that a license from the U.S. government was required to export the M60 from the United States. 

When Zhang’s agents failed to obtain and deliver a sample of the carbon fiber, Zhang became personally involved in the scheme.  He ultimately contacted the UC and stated that he had an urgent need for the carbon fiber.  Zhang indicated that his customer, an executive at a prominent Chinese military company, was involved in the test flight of a “jet fighter plane.”  In an email to the UC in August 2012, Zhang explained:

Hello! Please find time to send me an email or call me to explain the situation, because the customer over here is rushing me. . . .  On the 5th,  [he] is handling the site of a new fighter aircraft test flight.  He will return between the 10th and the 20th of next month.  That’s why he requested that be done this month. . . .  Thank you for your cooperation!

Zhang then obtained a passport to travel to the United States for a meeting with the UC and take possession of a sample of M60 carbon fiber, which would be shipped to China and analyzed to verify its authenticity.  Zhang’s plan was obtain a steady supply of the high-grade fiber for export to China, totaling thousands of pounds.  However, Zhang was placed under arrest after he arrived at the meeting with the UC. 

Certain types of carbon fiber, such as the type that the defendant sought to acquire in this case, are closely controlled for nuclear non-proliferation and anti-terrorism reasons because they can be used to make ballistic missiles, aircraft, and nuclear centrifuges, among other things.  The regulation of carbon fiber falls under the jurisdiction of the Department of Commerce, which reviews and controls the export of certain goods and technology from the United States to foreign countries.  In particular, the Commerce Department has placed restrictions on the export of goods and technology that it has determined could make a significant contribution to the military potential or nuclear proliferation of other nations, or that could be detrimental to the foreign policy or national security of the United States.  High grade carbon fiber has applications in specialized technology, including aerospace and nuclear engineering.  In addition, certain carbon fiber-based composites, such as the material sought by the defendant, can be used in military aircraft.

The sentencing proceeding was held before by the Hon. Nicholas G. Garaufis at the United States District Court in Brooklyn, New York.  The government's case was prosecuted by Assistant United States Attorneys Seth DuCharme and David Sarratt, with assistance from Trial Attorney David Recker of the Department of Justice Counterespionage Section.  Assistance was also provided by Trial Attorney Dan E. Stigall of the Department of Justice Office of International Affairs.

The Defendant:

MING SUAN ZHANG
Age: 42

Earlier today at the federal courthouse in Central Islip, New York, Heriberto Martinez, also known as “Boxer,” the former leader of the Coronados clique of La Mara Salvatrucha, also known as the MS-13 street gang, was sentenced to life in prison.  Martinez and co-defendant Carlos Ortega, also known as “Silencio,” were convicted, on March 21, 2013, following a six-week trial, on all 21 counts of the trial indictment, including racketeering, racketeering conspiracy, murder, assault with dangerous weapons, and related firearms and conspiracy offenses.  Ortega was sentenced to life in prison on November 21, 2013.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Thomas V. Dale, Commissioner of the Nassau County Police Department.

“Heriberto Martinez placed less value on human lives than he did on enforcing the barbaric rules of the MS-13, and, as a leader of the MS-13, making sure other gang members were doing the same.  In keeping with those twisted rules, during a six-week period in early 2010, Martinez authorized the execution of a young mother, whom he believed had disrespected the gang, ordered the execution of a security guard for doing his job, and both advocated for and carried out the execution of a fellow MS-13 member who refused to commit senseless, violent crimes,” stated U.S. Attorney Lynch.  “The jury’s verdict earlier this year and today’s sentence demonstrate that the brutal and senseless violence committed by Martinez and his fellow MS-13 members will not be tolerated and will be prosecuted tenaciously.”  Ms. Lynch extended her grateful appreciation to the members of the FBI’s Long Island Gang Task Force and the New York City Police Department for their assistance in this case.

FBI Assistant Director-in-Charge Venizelos stated, “Martinez terrorized, victimized, and murdered members of our community in the name of MS-13.  His violence and criminal activity knew no limits.  Consistent with the recent sentences of other MS-13 gang members, today’s sentence of Martinez should send a clear message to all members of these violent enterprises: your actions will not be tolerated, no matter what group you hide behind.  The FBI, along with our law enforcement partners, will continue efforts to rid the streets of these violent criminals and bring them to justice.”

At trial, the government proved that Martinez, along with his fellow MS-13 gang members, killed multiple victims between February and March of 2010:

(1)  Martinez was convicted in connection with the execution-style murder of Vanessa Argueta, a 19-year-old woman, in Central Islip, New York, on February 5, 2010.  Martinez also was convicted of being an accessory after-the-fact in the murder of Argueta and her 2-year-old son, Diego Torres, who was shot and killed during the same criminal incident.  Martinez helped three of his co-conspirators evade arrest in New York and flee to El Salvador after the commission of the murders.  The bodies of Argueta and Torres were found in a secluded wooded area in Central Islip.  Argueta had been shot in the head and chest, and Torres had been shot twice in the head.

(2)  Martinez also was convicted in connection with the execution-style murder of 23-year-old Nestor Moreno, a security guard at El Rancho Bar and Grill in Hempstead, New York, on March 6, 2010.  In late February 2010, Heriberto Martinez and several other members of the MS-13 were involved in a dispute with El Rancho employees over an unpaid bar tab.  The dispute escalated into a physical altercation during which Martinez was sprayed with pepper spray.  Prior to leaving El Rancho, Martinez identified himself as an MS-13 member to the victim and told him, “It’s not going to end like this.”  On March 6, 2010, Martinez, along with four co-conspirators, returned to El Rancho and carried out that threat, shooting Moreno in the head at point-blank range.  The gun used to kill Moreno was the same semi-automatic handgun used to kill Argueta and her son one month earlier. 

(3)  Both Martinez and Ortega were convicted for the March 17, 2010, murder of Mario Alberto Canton Quijada in Far Rockaway, New York.  Quijada, who was a fellow member of the MS-13, was killed because of his reluctance to “put in work,” or attack rival gang members on behalf of the MS-13.  On March 17, 2010, Quijada was lured to the beach in Far Rockaway under the guise of attacking rival gang members.  Once alone on the beach, the MS-13 gang members tried to shoot Quijada in the head with the same semi-automatic handgun used in the murders of Moreno, Argueta, and Argueta’s son.  However, the gun jammed.  Undeterred, Martinez, Ortega, and the other MS-13 members set upon Quijada with knifes and machetes and hacked him to death.     

Martinez’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang comprised primarily of immigrants from El Salvador, Honduras, and Guatemala.  With numerous branches, or “cliques,” the MS-13 is the largest street gang on Long Island.  Since 2002, more than 200 MS-13 members, including more than two dozen clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  More than 100 of those MS-13 members have been convicted on federal racketeering charges.  Since 2010 alone, this Office has convicted more than 30 members of the MS-13 on charges relating to their participation in one or more 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 life sentence was imposed by United States District Judge Joseph F. Bianco.

The government’s case was prosecuted by Assistant United States Attorneys John J. Durham, Raymond A. Tierney, and Carrie N. Capwell.

The Defendant:

HERIBERTO MARTINEZ, also known as “Boxer”
Far Rockaway, New York
Age: 26