Eastern District of New York

Earlier today, Freddy Mauricio Tellez-Buitrago and Adriana Gonzalez-Marquez pled guilty before U.S. Magistrate Judge Cheryl M. Pollak at the federal courthouse in Brooklyn, New York, to obstruction of justice for stealing selling sensitive and confidential United States law enforcement information concerning prosecutions in the Eastern District of New York and selling that information to a narcotics trafficker in Colombia.  When sentenced, both defendants face a maximum of twenty years' imprisonment and a fine of up to $250,000.  Tellez-Buitrago has agreed to forfeit $30,000, and Gonzalez-Marquez has agreed to forfeit $50,000.

The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE),  Homeland Security Investigations (HSI), New York, and Brian R.  Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division.  The investigation was led by HSI in Bogota, Colombia, with assistance provided by HSI in New York, DEA in Bogota and New York, and local law enforcement authorities in Colombia.

“The defendants sought to undermine U.S. efforts to bring international narco-traffickers to justice, and traded on sensitive and confidential information on U.S. operations in exchange for money.  Their convictions signify our pursuit of individuals who attempt to compromise the judicial process by obstructing justice here and in Colombia,” stated United States Attorney Lynch.  “We will continue to rely on the success of the international cooperation between the United States and Colombia to pursue individuals who steal information that put the lives of law enforcement officers at risk.”  Ms. Lynch extended her grateful appreciation to the Colombian National Police and the Colombian Attorney General's Office for their assistance in this case.

The defendants' convictions resulted from an investigation that revealed that, through his employment at the Colombian Attorney General's Office, Tellez-Buitrago had specialized access to law enforcement materials, including requests from the United States government for the extradition of alleged Colombian drug traffickers.  The Colombian authorities treat such extradition requests as sensitive and confidential until the arrest of the individual whose extradition is sought.  Tellez-Buitrago accepted bribes from criminal defense attorney Gonzalez-Marquez, a former prosecutor at the Attorney General’s Office in Colombia, in exchange for leaking documents relating to EDNY extradition requests for narcotics traffickers.  Gonzalez-Marquez, in turn, sold the information to a narcotics trafficker in exchange for the equivalent of approximately $30,000 in U.S. dollars.   

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

The Defendants:

ADRIANA GONZALEZ-MARQUEZ
Age: 33          

FREDDY MARQUEZ TELLEZ-BUITRAGO
Age: 34

E.D.N.Y. Docket No. 12-687 (ERK)

WASHINGTON, D.C. and BROOKLYN, NEW YORK – The Civil Rights Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the Eastern District of New York today announced that they have tentatively agreed to a settlement with the Suffolk County Police Department which calls for SCPD to implement new and enhanced policies and procedures to ensure nondiscrimination in the provision of police services to Latino communities in Suffolk County.  The agreement, which the Department of Justice has agreed to, requires approval of the Suffolk County Legislature before it will be formally executed by the parties.

The United States commenced an investigation of SCPD in 2009 in the wake of the killing of Marcelo Lucero, an Ecuadorian national who was murdered by a group of teenagers in Patchogue, New York, as he was walking home on the evening November 8, 2008.  The United States’ investigation, pursuant to the Violent Crime and Law Enforcement Act of 1994, 42 U.S.C. ' 14141, and the Omnibus Crime Control and Safe Streets Act of 1968, 42 U.S.C. ' 3789d, focused on discriminatory policing allegations, including claims that SCPD discouraged Latino victims from filing complaints and cooperating with the police and failed to investigate crimes and hate-crime incidents involving Latinos.  The United States issued a Technical Assistance letter on September 13, 2011, which recommended a wide range of reforms to improve policing by the SCPD, focused particularly on promoting trust between SCPD and the Latino community.  The County cooperated with the United States’ investigation, and has already instituted a number of the recommendations from the Technical Assistance letter.   The agreement announced today memorializes those recommendations and commits SCPD to significant changes in how it engages the Latino community.

 Specifically, the agreement calls for SCPD to ensure that it polices equitably, respectfully, and free of unlawful bias.  Other highlights include enhanced training and investigation of allegations of hate crimes and bias incidents, meaningful access to police services for individuals with limited English proficiency (LEP), strengthening of SCPD’s outreach efforts in Latino communities, and developing and maintaining a true Community Oriented Policing Enforcement (COPE) program throughout the county.  The United States will monitor compliance with the agreement, which terminates only when SCPD has substantially complied with all of the requirements of the agreement for at least one year.

Loretta E. Lynch, United States Attorney for the Eastern District of New York stated, “All residents of Suffolk County deserve full and unbiased police protection, regardless of national origin, race, or citizenship status.  When people feel they cannot turn to the police for protection, they have lost one of our most basic rights – the right to feel safe in one’s community.  Law enforcement also suffers when it does not hear from everyone under its umbrella of protection.  I commend Suffolk County and SCPD for its cooperation with the United States’ investigation and its willingness to ensure fairness and equal treatment for all.”

The case was handled by AUSA Michael J. Goldberger, Chief of Civil Rights in the Civil Division of the U.S. Attorney’s Office; Laura Coon, Special Litigation Counsel in the Special Litigation Section of the Civil Rights Division; and Silvia Dominguez and Jack Morse, Trial Attorneys in the Special Litigation Section.

A three-count indictment was unsealed today in federal court in Brooklyn, New York charging Redinel Dervishaj, Besnik Llakatura, and Denis Nikolla with Hobbs Act extortion conspiracy, attempted Hobbs Act extortion, and brandishing a firearm in relation to the extortion.1   The charges arose from the defendants’ extortion of money from a Queens County restaurant owner.  Llakatura was at the time of the alleged offenses a police officer with the New York City Police Department (NYPD), assigned to the 120th Precinct in Staten Island, New York. He was suspended without pay upon his arrest.  The defendants are scheduled to be arraigned this afternoon at the United States District Court for the Eastern District of New York, before United States Magistrate Judge Joan Azrack.

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 Raymond W. Kelly, Commissioner, NYPD.

“The defendants told their victims they offered “protection,” but in reality they peddled fear and intimidation through the Albanian community – their community – of Queens,” stated United States Attorney Lynch.  “When one victim turned to law enforcement for help, he was betrayed again by a corrupt officer on the take, who turned his back on his badge, his oath and his friend in exchange for extortion money in his pocket.”  Ms. Lynch expressed her thanks to members of the Joint Organized Crime Task Force, which includes agents of the FBI and detectives of the NYPD, which led the investigation, as well as the NYPD’s Internal Affairs Division for its cooperation and assistance in the investigation.

“By creating a climate of fear, the defendants allegedly coerced an innocent restaurant owner into paying for so-called protective services.  The victim was further betrayed when seeking the assistance of Besnik Llakatura, an NYPD officer whose sinister intentions were shrouded by his badge of honor.  But Llakatura didn’t serve his community with honor; he, instead, abused his powers to the detriment of the public trust.  He remains an exception to those law enforcement officers who work selflessly to weed out crime and corruption in their communities,” stated FBI Assistant Director-in-Charge Venizelos.

“Llakatura is alleged to have exploited his friendship and shared heritage in order to help the defendants extort a restaurateur. Once it was reported, the NYPD Internal Affairs Bureau, and the Department’s Organized Crime Investigations Division thoroughly responded, resulting in the charges being announced today.” Commissioner Kelly said.

According to the indictment and court filings, Dervishaj, Llakatura, and Nikolla demanded monthly payments from a Queens restaurant owner in exchange for “protection,” repeatedly using threats and intimidation to ensure his compliance.  The scheme began shortly after the victim opened a restaurant in Astoria when he was visited by Dervishaj and told that he had opened a business in “our neighborhood” and, as a result, “you have to pay us.”  The restaurant owner, who understood that he was targeted because he, like the defendants, is of Albanian descent, sought help from his friend Llakatura.  Unbeknownst to him, Llakatura, an NYPD officer on Staten Island since 2006, was conspiring with Dervishaj in the extortion.  Llakatura discouraged the restaurant owner from going to the police and sought to leverage his position to persuade the victim that he had no choice but to make the demanded payments.  When the victim resisted, he was threatened with physical violence and chased at gunpoint down the street in Queens by Nikolla.

Court-authorized wiretaps of the defendants’ telephones uncovered detailed evidence of their efforts to maintain control over businesses in the neighborhood through fear, intimidation, and violence.  In one intercepted call, Llakatura joked about how he “taxes” local businesses.  In another, Nikolla described to Dervishaj how he had grabbed another victim “by the neck” because he had told Nikolla that he only had $2,000 and could not pay more.2

Over the course of five months, each of the three defendants took turns collecting monthly payments from the Astoria restaurant owner, ultimately collecting $24,000 in so-called protection money.

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

The Defendants

REDINEL DERVISHAJ, a/k/a “Redi”
Age: 37
Queens, New York

BESNIK LLAKATURA, a/k/a “Besi” and “Nick”
Age: 34
Staten Island, New York

DENIS NIKOLLA
Age: 33
Brooklyn, New York

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

_____________________________

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

2 The referenced language from the intercepted calls is based on draft translations from Albanian.
 

US Attorney Lynch's testimony before NY County Lawyers' Association

Earlier today, at the federal courthouse in Brooklyn, Yasser Lawani was sentenced to 5 years in prison following his March 13, 2013, guilty plea to two separate criminal schemes:  (1) conspiring to export to Africa luxury vehicles stolen from rental car companies and valued at more than $1 million, and (2) filing fraudulent federal tax returns that sought more than $200,000 from the federal government.  The defendant had testified at the October 2013 trial of his brother, Thierno Lawani, who was convicted by a jury in the Eastern District of New York for his participation in the scheme to export stolen motor vehicles.  Yasser Lawani’s sentence reflected the sentencing court’s judgment that he made false statements during his trial testimony.  The sentence also included a term of supervised release of three years and an order that Lawani make restitution in the amount of $72,985 to his victims.  

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service (IRS), Criminal Investigation, New Jersey.

“The defendant devised and executed two brazen schemes that defrauded rental car companies and the U.S. government out of more than a million dollars and resulted in the theft of dozens of individuals’ identities, for the sole purpose of personal gain,” stated United States Attorney Lynch.  “In addition, the defendant lied under oath at a federal trial.  The defendant’s fraud and deception have now earned him a new home in federal prison.  Today’s sentencing sends a message to others who seek to profit from similar schemes and underscores the seriousness with which our justice system views the commission of perjury.”  Ms. Lynch expressed her grateful appreciation to HSI and the IRS, and thanked the New York City Police Department, the Port Authority Police Department, and the Office of the Queens County District Attorney for their assistance.

Over a period of several months in 2012, the defendant and his brother used fraudulent Canadian driver’s licenses and fraudulent credit cards to rent and then steal luxury cars from a variety of rental car agencies, including the Hertz Corporation.  The defendant and his brother then drove the stolen cars to a warehouse in Newark, New Jersey, where the cars were loaded into shipping containers bound for Africa.  At least 35 cars were stolen during the course of the scheme.  The defendant’s brother, Thierno Lawani, was convicted in October 2013 of conspiracy to export motor vehicles, attempted exportation of motor vehicles, conspiracy to obstruct justice, and false statements.  He is scheduled to be sentenced on February 28, 2013.

Between 2010 and 2012, the defendant filed 53 fraudulent federal income tax returns, each of which claimed a refund of taxes.  In total, these fraudulent tax returns claimed in excess of $200,000 in refunds; the defendant actually received and stole $72,985 in connection with those returns.  In filing the fraudulent returns, the defendant utilized the identities of 43 individuals.

Today’s sentence was imposed by United States District Judge Margo K. Brodie.

The government’s case is being prosecuted by Assistant United States Attorney Alixandra E. Smith.

The Defendant

YASSER LAWANI
Age: 30
Lindenwold, New Jersey / Cotonou, Benin

EDNY Docket No. 13-CR-139 (MKB)

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

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.

“Ortega’s journey to federal prison began in El Salvador when he joined MS-13 and continued when he illegally entered the US and chose to maintain his allegiance to the gang.  Ortega committed heinous acts of violence in the name of MS-13, cutting a swath of murder from Brentwood to Far Rockaway, all within the span of a few weeks,” stated U.S. Attorney Lynch.  “From a suspected rival gang member, to an MS-13 gang member who was not violent enough, there was no room for mercy in the gang’s code of enforcing respect through murder.  Today’s life sentence is a fitting end to Ortega’s reign of terror.  He will now have the rest of his life to contemplate the just results of his allegiance to the killing machine known as MS-13.”  Ms. Lynch extended her grateful appreciation to each of the law enforcement agencies for their assistance in this case.

FBI Assistant Director-in-Charge Venizelos stated, “The victims were robbed of their futures by the defendant’s senseless killing spree.  His cowardly acts have earned him a life sentence.  The defendant’s imprisonment should be a reminder to all those who participate in gang activity that violence and victimization of the public will not be tolerated and will be met with the full force of the FBI.  The FBI’s Long Island Gang Task Force is committed to ridding the streets of these violent criminals.  Our resolve is strong, and we will not stop until every last gang member is brought to justice.”

At trial, the government proved that Ortega, along with his fellow MS-13 gang members, committed two murders and one attempted murder in February and March of 2010.  First, Ortega was convicted in connection with the murder of 21-year-old David Sandler and the attempted murder of 20-year-old Aaron Galan in Brentwood, New York, on February 17, 2010.  Ortega and his fellow MS-13 gang members lured Sandler, whom the MS-13 believed was a member of the rival Latin Kings street gang, to Timberline Drive in Brentwood under the pretext of buying marijuana from him.  Once Sandler arrived, Ortega shot him in the face at close range, killing him.  Ortega also shot Sandler’s close friend, Galan, who was with Sandler at the time, in the face.  Miraculously, Galan survived.

At trial, Ortega was also convicted of 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 a semi-automatic handgun, which had been used in several other murders committed by the MS-13, including the murders of a young woman and her two- year-old son.  However, the gun jammed.  Undeterred, Ortega and the other MS-13 members set upon Quijada with knifes and machetes and hacked him to death.

Ortega’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:

CARLOS ORTEGA, also known as “Silencio” and “Silent”
Brentwood, New York
Age: 24

Earlier today, in federal court in Brooklyn, New York, Hector Lopez, the former president of the Metal Polishers Union (Local 8A-28A) (the “Union”) and Chairman of the Board of Trustees of the Local 8A-28A welfare fund (the “Fund”), was sentenced to a term of imprisonment of 48 months following his convictions for conspiracy to commit mail and wire fraud, and tax evasion.  In addition, Lopez was ordered to pay $800,371 in restitution and forfeit an additional $371, 517 to the federal government.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Cheryl Garcia, Acting Special Agent-in-Charge, United States Department of Labor (DOL), Office of Inspector General; Andriana Vamvakas, District Director, Department of Labor, Office of Labor-Management Standards, New York; and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York.

“The hard-working members of Local 8A-28A trusted Hector Lopez to safeguard their welfare fund.  Instead of representing their best interests, Lopez corrupted his leadership position and abused his authority to the tune of over $1 million.  The defendant’s corruption and fraud have now earned him a new home in federal prison,” stated U.S. Attorney Lynch.  “Today’s sentencing sends a message to other union officials that they will be held accountable if they abuse their position of trust.”  Ms. Lynch expressed her appreciation to the New York Regional Office of the United States Department of Labor, Employee Benefits Security Administration, for its assistance on this case.

On April 9, 2013, Lopez pleaded guilty to conspiracy to commit mail and wire fraud, and tax evasion, both in connection with a scheme to defraud the Fund of over $1 million.  As detailed in the indictment, the defendant defrauded the Fund in multiple ways:

(1) accepting over $740,000 in kickbacks from the third-party administrator of the Fund in exchange for continuing to employ the administrator,

(2) accepting kickbacks from an employer trustee of the Fund (“the employer trustee”) in exchange for authorizing the Fund to pay fraudulent invoices for a union hall renovation performed by a company owned by the employer trustee, and  

(3) accepting a kickback from the employer trustee in exchange for rigging the bidding process to ensure that a sprinkler installation job was awarded to a company controlled by the employer trustee.          

Further, the defendant committed tax evasion by failing to report over $300,000 in income from his fraudulent schemes, resulting in a tax loss to the United States of over $100,000.  

Finally, as also charged in the indictment, the defendant criminally violated the Taft-Hartley Act by living rent-free with his family in a New Jersey home owned by the employer trustee, whose company had a collective bargaining agreement with the Union, and illegally structured over $82,000 in cash deposits at local banks to evade federal currency reporting requirements. 

The sentence was imposed by United States District Judge Allyne R. Ross.

The government’s case is being prosecuted by Assistant United States Attorneys Charles Kleinberg and Marisa Megur Seifan.

The Defendant:

HECTOR LOPEZ
Oakland, New Jersey
Age: 55

Rools Deslouches, a Brentwood, New York, nurse practitioner, pled guilty today in the United States District Court for the Eastern District of New York to illegally distributing the highly addictive painkiller oxycodone to customers, whom the defendant knew were drug dealers and addicts, without performing any meaningful medical examination. When sentenced, Deslouches faces up to 20 years in prison and a $1,000,000 fine. Deslouches also agreed to forfeit more than $150,000 in illegal proceeds from his criminal activity.

Defendant Owusu Sold Oxycodone Prescriptions
Written in the Names of Individuals Never Examined  

In a separate case, Stephen Owusu, a Brooklyn, New York, podiatrist, pled guilty today in the United States District Court for the Eastern District of New York to the illegal distribution of oxycodone to individuals who were not his patients in exchange for cash. When sentenced, Owusu faces up to 20 years in prison and a $1,000,000 fine. Owusu also agreed to surrender his DEA registration number, which had permitted him to issue controlled substance prescriptions.

The guilty pleas were announced by Loretta E. Lynch, the United States Attorney for the Eastern District of New York, and Brian R. Crowell, Special Agent in Charge of the United States Drug Enforcement Administration (DEA), New York Division.  

“Instead of providing needed medical services to their communities, Deslouches and Owusu fueled the prescription drug crisis that has swept across our district and our nation. On the defendants’ watch, drug dealers and drug addicts found easy access to oxycodone pills,” stated Ms. Lynch. “Today’s convictions should serve as a warning to those who would violate their oath as medical professionals to do no harm: if you illegally distribute prescription drugs, you will be held accountable.” Ms. Lynch extended her grateful appreciation to the DEA, Suffolk County Police Department, and the New York State Police for their assistance in this case.

“Medical professionals who traffic narcotics are significantly responsible for the pain pill and heroin addiction we see in NY. These traffickers are one of our top priorities,” stated DEA Special Agent in Charge Crowell. “Lines of individuals filled the waiting room outside of Deslouches’ office to pay between $200 to $400 per visit to leave with a prescription; while Owusu sold over 450 prescriptions for oxycodone for $300 per prescription. Neither Deslouches nor Owusu practiced medicine, but they did practice in drug dealing. Law enforcement continues to focus our resources on those who divert prescription medication for abuse and profit.” SAC Crowell commends the US Attorney’s Office Eastern District of New York, DEA Long Island District Office, and TDS, which includes agents and officers from the DEA, Nassau County Police Department, New York State Police, Rockville Centre PD, and Port Washington PD.

According to court filings, the investigation revealed that Deslouches ran a cash-only business, where his customers paid him between $200 and $400 for oxycodone prescriptions. Further, the investigation determined that between October 2011 and February 2012, Deslouches issued 4,349 oxycodone prescriptions for a total of 422,107 pills to over 288 individuals. Approximately one-third of those individuals had criminal records for narcotics-related offenses.

According to court filings, the investigation revealed that between March 2009 and July 2011, Owusu sold over 450 prescriptions for oxycodone to individuals who were not his patients, for $300 a prescription. Those pills were then later sold to narcotics users in street level narcotics transactions.

Deslouches and Owusu’s convictions resulted from the Eastern District of New York’s Prescription Drug Initiative (Initiative), which is a joint effort led by the United States Attorney’s Office for the Eastern District of New York, the DEA, and the five District Attorneys in Kings, Nassau, Queens, Richmond, and Suffolk Counties, working in conjunction with the New York City Police Department and the Nassau and Suffolk County Police Departments, as well as the Department of Health and Human Services, the Internal Revenue Service, New York/New Jersey HIDTA, the New York State Department of Health, and the New York State Medicaid Inspector General. The Initiative is a broad and comprehensive approach to the epidemic of prescription drug trafficking and abuse, involving not only criminal investigation and prosecution at the federal, state, and local level, but also the targeted use of civil law enforcement, regulatory action, and community outreach. The Initiative has expanded information-sharing among federal and state enforcement agencies to better identify and target suspected traffickers, and ensure greater use of criminal, civil, forfeiture, injunctive, and other tools. Since the inception of the Initiative, the United States Attorney’s Office for the Eastern District of New York has prosecuted approximately 68 defendants on charges relating to the distribution of oxycodone and other prescription drugs. Among the defendants prosecuted, are 12 health care professionals, including medical doctors, pharmacists, a nurse practitioner, and a podiatrist, and seven of these defendants have pled guilty or been convicted after trial and the others are pending trial.

Deslouches’s plea was entered before United States District Judge Sandra J. Feuerstein, and Owusu’s plea was entered before United States Magistrate Judge William D. Wall, at the United States Courthouse in Central Islip, New York.

Deslouches’s case is being prosecuted by Assistant United States Attorney Michael P. Canty, and Owusu’s case is being prosecuted by Assistant United States Attorney Lara Treinis Gatz.

The Defendants:

ROOLS DESLOUCHES
Brentwood, New York
Age: 42

STEPHEN OWUSU
Valley Stream, New York
Age: 57

Earlier today, at the federal courthouse in Brooklyn, Derrick Diaz, the former leader of a crew of robbers who targeted innocent civilians in their homes, was sentenced to 20 years in prison following his February 10, 2012, guilty plea to Hobbs Act robbery conspiracy. The sentence also included a term of supervised release of 3 years and an order that Diaz make restitution payments in the amount of $296,300 to his victims.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Brian Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division.

“As the leader of a vicious crew of robbers, Derrick Diaz violated the sanctity of the homes of innocent residents of Brooklyn and terrorized his victims with guns and knives,” stated United States Attorney Lynch. “Today, his life as a career criminal has earned him a home in federal prison for the next 20 years of his life.” Ms. Lynch expressed her grateful appreciation to the DEA, and thanked the New York City Police Department and the Office of the Kings County District Attorney for their assistance.

DEA Special Agent-in-Charge Crowell stated, “Nearly four years ago, the DEA and the NYPD tracked down and arrested this ruthless criminal, along with four of his gang members, who terrorized residents in and around the 61st Precinct in Brooklyn, NY. This organization was violent and a community’s worst nightmare, to include breaking into occupied homes and forcibly restraining children during robberies. This crew stole valuables worth hundreds of thousands of dollars with no concern for the children they terrorized. As part of this joint investigation, additional victims were identified resulting in dozens of home invasions linked to this armed robbery crew.” Mr. Crowell commended the men and women of the U.S. Attorney’s Office for the Eastern District of New York, the DEA and the New York City Police Department for their tenacious work.

Over the course of several robberies, Diaz and members of his crew broke into Brooklyn homes armed with, among other weapons, firearms and knives. They threatened their victims, including senior citizens and children, at gunpoint and knifepoint, pistol whipped victims, stabbed one victim, and bound and gagged multiple victims.

From the age of 16, Diaz has never gone longer than three years between arrests, other than time when he was already in custody of law enforcement. He has been convicted of burglary or related crimes five times, narcotics crimes twice, and various other offenses. Of Diaz’s burglary convictions, three involved his breaking into, or attempting to break into, a private residence. Today’s sentence was the culmination of Diaz’s first conviction in federal court.

Four members of the Diaz crew previously were convicted of federal felony charges in the Eastern District of New York.

The sentencing proceedings were held before United States District Judge Kiyo A. Matsumoto.

The government’s case is being prosecuted by Assistant United States Attorney Justin D. Lerer.

The Defendant

DERRICK DIAZ
Age: 40
Roselle Park, New Jersey

EDNY Docket No. 10-CR-277 (S-4) (KAM)

BROOKLYN, NY – Earlier today, five defendants were arrested in connection with their participation in the massive cyberheist campaign that inflicted $45 million in losses on the global financial system in a matter of hours in early 2013.  Defendants Anthony Diaz, Saul Franjul, Saul Genao, Jaindhi Polanco and Jose Angeley Valerio were members of the New York-based cell of the international cybercrime organization, which used sophisticated intrusion techniques to hack into the systems of financial institutions, steal prepaid debit card data, and make fraudulent ATM withdrawals on a global scale.  Newly seized photographic evidence reveals that the defendants sent the lion’s share of the proceeds to the organization’s leaders – including $800,000 of criminal cash proceeds sent in luggage and transported to Florida by bus for delivery to a cyberheist organizer.

The superseding indictment unsealed today charges the five arrested defendants with conspiracy to commit access device fraud.  They will be arraigned at 2 p.m. today before United States Magistrate Judge Robert M. Levy at the U.S. District Court in the Eastern District of New York.1   Three of the original defendants, Jael Collado, Jose Familia Reyes and Chung Yu-Holguin, are also charged in the superseding indictment unsealed today.  Four other defendants, Joan Luis Minier Lara, Evan Jose Peña, Elvis Rodriguez and Emir Yasser Yeje have pleaded guilty to charges resulting from the cyberheist.  The eighth original defendant, Alberto Yusi Lajud-Peña, is deceased.

The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Steven G. Hughes, Special Agent in Charge, United States Secret Service, New York Field Office.

“As alleged, just a few months ago, after exploiting cyber-weaknesses in the financial system to steal millions from ATMs, these defendants were packing bags to the brim with stolen cash, destined for the cybercriminal organizers of these attacks,” stated United States Attorney Lynch.  “Today, we have sent them packing once again – but this time, to jail.  We will not relent until all those responsible for these financially devastating cybercrimes are brought to justice.”

“This case is another example of the ability of cybercriminals to inflict significant damage to world financial systems.  This investigation and the resulting indictments should serve as a reminder to cybercriminals that law enforcement will continue to utilize cutting-edge investigative techniques, traditional tactics and hard work to thwart complex transnational cybercriminal activity.  We are grateful to our many law enforcement partners for their assistance in this investigation, in particular the U.S. Attorney’s Office in the Eastern District of New York, DHS Homeland Security Investigations, and our foreign law enforcement partners,” stated Secret Service Special Agent in Charge Hughes.

As alleged in the superseding indictment and other court filings, the defendants arrested today and their co-conspirators in this case engaged in cyberattacks known in the cyber underworld as “Unlimited Operations” – through its hacking “operation,” the cybercrime organization can access virtually “unlimited” criminal proceeds.

Defendants Anthony Diaz, Saul Franjul, Saul Genao, Jaindhi Polanco and Jose Angeley Valerio allegedly participated in two recent “Unlimited Operations” of staggering size.  During the first operation, on December 22, 2012, hackers penetrated a credit card processor’s computer network, compromised prepaid debit card accounts of the National Bank of Ras Al-Khaimah PSC, also known as RAKBANK, and operated a coordinated ATM withdrawal campaign.  In total, more than 4,500 ATM transactions were conducted in approximately 20 countries around the world, resulting in approximately $5 million in losses.  In the second and even more damaging Unlimited Operation, which occurred on February 19-20, 2013, the hackers compromised prepaid debit card accounts associated with Bank Muscat, and operated a coordinated ATM withdrawal campaign. Over the course of approximately 10 hours, cybercells in 24 countries withdrew about $40 million from ATMs.

As alleged, as part of the RAKBANK and Bank Muscat campaigns, Diaz, Franjul, Genao, Polanco and Valerio operated the New York cell of “cashers,” who fanned out across the New York area to make thousands of withdrawals from ATMs.   During the two operations, over the course of a few hours, the defendants and their co-conspirators withdrew approximately $2.8 million at over 140 different ATM locations in New York City.  The defendants sent the bulk of the cash proceeds back to the organizers of the attacks.

As alleged in court filings and captured in a photograph seized from a conspirator’s iPhone, on March 2, 2013, just days after the Bank Muscat Unlimited Operation, defendant Franjul packed approximately $800,000 in cash into luggage destined for the late Alberto Yusi Lajud-Peña, who was then in Miami.  Franjul’s co-conspirators took the cash-filled luggage on a bus to Florida, where they gave the cash to Lajud-Peña, who later fled to the Dominican Republic.  New York cell members also used the funds to celebrate at high-priced nightclubs and go on shopping sprees for luxury goods, such as expensive watches and cars, many of which have been seized in the course of this investigation.

In announcing the arrests and charges, United States Attorney Lynch praised the extraordinary efforts of the Secret Service in responding to these attacks and investigating both the complex network intrusions that occurred overseas and the criminal activity occurring locally, and also expressed gratitude to U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) in New York, and the Yonkers Police Department for their assistance in this investigation.  Ms. Lynch also thanked MasterCard, RAKBANK and Bank Muscat for their cooperation with this investigation.

Diaz, Franjul, Genao, Polanco and Valerio face up to 7.5 years in prison on the charge of access device fraud conspiracy, as well as forfeiture and a fine of up to $250,000.

The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Hilary Jager, David Sarratt, and Brian Morris.

The Defendants:                                           

ANTHONY DIAZ
Age: 24
Residence: Yonkers, New York

SAUL FRANJUL, also known as “Conejo”
Age: 23
Residence: Yonkers, New York

SAUL GENAO, also known as “Cocolito” and “Ely Genao”
Age: 24
Residence: Yonkers, New York

JAINDHI POLANCO
Age: 29
Residence: Yonkers, New York

JOSE ANGELEY VALERIO, also known as “Zikkytakki”
Age: 25
Residence: Yonkers, New York

_____________________________

1 A sixth defendant, Franklyn Ferreira, is a fugitive from justice.  The charges contained in the indictment are merely allegations, and the defendants, including those charged today, are presumed innocent unless and until proven guilty.

Cyberheist Indictment

Earlier today, Wendell Alomar-Cabrera, a citizen of the Dominican Republic, pled guilty at the federal courthouse in Brooklyn, New York, to the October 16, 2006, murder of Luis Sifuentes in Durham, North Carolina.  The proceeding took place before United States District Judge Nicholas G. Garaufis.  When sentenced, Alomar-Cabrera faces up to life imprisonment.

The plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Robert T. Johnson, District Attorney, Bronx County, New York, Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division, and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).

“Alomar-Cabrera was part of a vicious robbery crew that viewed the East Coast of the United States as their hunting ground.  They traveled the highways impersonating police officers, and showed their victims no mercy.  Today a sixth perpetrator of the murder of Luis Sifuentes has been brought to justice,” stated United States Attorney Lynch.  “We pursued these defendants to North Carolina to show the extent of our commitment to protecting communities, in New York and elsewhere, from the violence posed by violent robbers and drug traffickers.”  Ms. Lynch congratulated the Bronx County District Attorney’s Office and the members of law enforcement who led the investigation, and thanked the New York State Police; the Durham County District Attorney’s Office; and the Durham, North Carolina Police, Special Operations Division, Major Crimes Unit for their assistance in the investigation. 

According to court filings and facts presented in court, Alomar-Cabrera was a member of a violent robbery crew responsible for more than 100 armed robberies of narcotics traffickers along the east coast of the United States that netted more than 750 kilograms of cocaine and $4 million in drug proceeds.  Crew members posed as police officers in order to subdue narcotics traffickers and their families, and then kidnaped, tortured, and robbed their victims.  In 2006, members of the crew traveled to North Carolina from New York to engage in a series of robberies.  On October 16, 2006, near Durham, North Carolina, the defendants kidnaped Luis Sifuentes by executing a police-style car stop of Sifuentes’ pickup truck using lights and sirens.  The robbery crew then drove Sifuentes to a rented house where they beat and tortured him for several hours, demanding that he provide information regarding the location of narcotics and cash.  Crew members then carried Sifuentes outside, placed him in his pickup truck, shot him twice killing him, and set the truck on fire.

Alomar-Cabrera’s guilty plea is the most recent of 51 convictions in a group of interlocking cases brought in the Eastern District of New York against members of violent drug robbery crews who impersonated police officers and frequently committed robberies with real officers.  Of the 51 convictions, nine defendants have been convicted for their roles in murders, including six for the Sifuentes murder. 

The government’s case is being prosecuted by Assistant United States Attorneys Justin D. Lerer, Shreve Ariail, Gina M. Parlovecchio, and Douglas M. Pravda and Special Assistant United States Attorney Jeremy Shockett, an Assistant District Attorney from the Bronx County District Attorney’s Office.

The Defendant

WENDELL ALOMAR-CABRERA, aka “gregorio”
Age:  35

E.D.N.Y. Docket No. 08 CR 115 (S-4) (NGG)

Earlier today, at the federal courthouse in Brooklyn, New York, Zhifu Lin, a Chinese national and resident of West Virginia, was sentenced to 108 months’ imprisonment for violating the Arms Export Control Act and engaging in illegal weapons trafficking. From 2010 to 2012, Lin and others, including a former member of the United States Marine Corps and National Guard, exported multiple shipments of high-powered firearms from the United States to China.  Lin and his accomplices secreted the weapons in packages and transported them to shipping companies in Queens, New York, and elsewhere, to be sent to Shanghai, China’s largest city.  The weapons included dozens of semi-automatic handguns, rifles, shotguns, and military-style assault weapons.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York,  John P. Carlin, Acting Assistant Attorney General for National Security, James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York; Joseph Anarumo, Jr., Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Division; Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service, New York Field Office; and Sidney Simon, Special Agent-in-Charge, Department of Commerce, Office of Export Enforcement, New York Field Office. 

Authorities uncovered the weapons trafficking ring after police in China seized a package containing firearms with defaced serial numbers, which had been shipped from Queens, New York.  Upon learning of the seizure, American law enforcement officials traveled to China to examine the evidence.  The types of weapons seized by the Chinese authorities have been designated by the President of the United States on the United States Munitions List, and may not be exported without a license from the U.S. State Department.  With the aid of forensic techniques, agents determined that one of the weapons seized in China had originally been purchased by a former United States Marine in North Carolina.  Agents then traced the shipments back to Lin and his accomplices.  Agents arrested Lin in West Virginia in April 2012, and he has been in federal custody ever since.  Lin, who originally entered the United States in 2009 on a student visa and briefly attended an American university, faces deportation upon the conclusion of his prison term.

“ The defendant traded the promise of the American dream for a jail cell and deportation by flagrantly violating federal gun laws and export regulations.  All those who seek profits through the black market for illegal weapons – whether a former U.S. Marine who traded his honor for easy money, or a foreign national who took advantage of our country’s freedoms – will face the full force of the law.  We will not cease in our efforts to stem the flow of illegal weapons that threaten the safety of our communities and our national security,” stated United States Attorney Lynch.  Ms. Lynch expressed her grateful appreciation to the federal agencies that worked closely together to investigate the case.

The sentence was imposed by United States District Judge Eric N. Vitaliano.  To date, four individuals have been convicted of weapons trafficking and export offenses in connection with this case.

The government's case was prosecuted by Assistant United States Attorney Seth DuCharme, with assistance from Trial Attorney David Recker of the Department of Justice Counterespionage Section.  Assistance also was provided by the U.S. Attorneys= Offices in the Northern District of West Virginia and the Eastern District of North Carolina and Trial Attorney Dan Stigall of the Department of Justice Office of International Affairs.

The Defendant

ZHIFU LIN
Age: 27

A civil complaint was docketed today in federal court in the Eastern District of New York to forfeit a triangular Italian fresco fragment (the “Fresco”) that was falsely described as Macedonian when it was shipped from Switzerland to the United States in April 2011.  The complaint alleges that the Fresco is the property of Italy and is protected under that country’s laws.  Upon its arrival in the United States, the Fresco was seized by U.S. Customs and Border Protection (“CBP”) with the assistance of Homeland Security Investigations (“HSI”).  The government also filed a stipulation of settlement with the shipper, in which the shipper abandoned its interest in the Fresco and consented to its forfeiture.

The complaint and settlement 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. Department of Homeland Security, HSI, New York.

“Returning looted cultural property to its country of origin remains a priority of this office,” stated United States Attorney Lynch.  “This artifact belongs to the people of Italy.  It is a part of their history and heritage.  By filing this action, we are using the legal tools available to us to return it to its rightful owners.”  Ms. Lynch thanked the Italian Ministry of Cultural Heritage and the Italian Carabinieri Protection of Cultural Heritage Command for their assistance.

“The unlawful theft, transportation, smuggling and sale of precious cultural property – like the ancient tomb painting being forfeited today – has become increasingly difficult as a result of increased collaboration amongst law enforcement around the globe," said James T. Hayes Jr., special agent in charge of HSI New York. “HSI and our partners at CBP work more closely than ever to ensure the legitimacy of cultural property and antiquities that are brought into the United States”.

Italian authorities have identified the Fresco as the pediment of a painted tomb that originated near the ancient city of Paestum, Italy.  The Paestum archeological site, which has been designated as a UNESCO World Heritage site, has suffered from thefts and illegal excavations.  The painted tombs of Paestum were first excavated in 1969 and typically had four walls with pitched roofs, like small houses.  Thus, as the pediment of one end of a painted tomb, the Fresco would have stood opposite a wall with a similarly painted pediment.  Indeed, an exact match – a single wall whose pediment is identical to the Fresco in both dimensions and decoration – stands in the National Archeological Museum of Paestum in Italy.

When the Fresco was shipped to the United States, the shipper declared that the Fresco’s country of origin was Macedonia.  CBP detained the Fresco on arrival and requested additional information on the Fresco’s history of ownership, or provenance.  The shipper then supplied an affidavit repeating that the Fresco was Macedonian.  The affidavit further stated that the Fresco had been purchased from a Swiss art gallery in 1959 – ten years prior to the excavation of the painted tombs at Paestum.  An expert in ancient paintings advised HSI that the piece originated in Italy, not Macedonia, leading HSI to inquire with Italian authorities.

Upon being presented with evidence that the Fresco originated in Italy, not Macedonia, the shipper entered into a stipulation with the United States agreeing to forfeit the piece so that it can be repatriated to Italy.

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

E.D.N.Y. Docket No. 13-CV-6286 (CBA)

Fresco Stipulation of Settlement
Fresco Complaint

Earlier today, an indictment was unsealed charging Victor Arias, Rafael Astacio, Michael Figueroa, Nikitas Margiellos, and Leonard Repka with conspiracy and the interstate transportation of stolen property.1   Astacio, who was a detective with the New York City Police Department at the time of the burglaries, was also charged with unlawfully accessing a database that was maintained by the Federal Bureau of Investigation.  The defendants= initial appearances are scheduled for this afternoon before United States District Judge Joseph F. Bianco 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, Kathleen M. Rice, Nassau County District Attorney, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Thomas V. Dale, Commissioner, Nassau County Police Department, Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS), and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).

“The defendants were part of a sophisticated burglary crew that victimized Long Island businesses and residents for more than three years.  Each defendant had a role to play in this band of criminals.  The crew relied upon weapons of force as well as modern technology to steal millions from both homes and businesses alike.  The defendant Astacio’s actions make clear that he was a police officer in name only, having sold his badge and his honor in exchange for his share of their ill-gotten gains,” stated United States Attorney Lynch.  Ms. Lynch expressed her grateful appreciation to the Nassau County Police Department for its work in the investigation, and to the Suffolk County Police Department for its cooperation and assistance in the investigation.

“When a police officer or any public servant breaks the law it casts a pall on all men and women who risk their lives and work hard to serve their communities.  Detective Astacio and his fellow defendants betrayed the public trust by using Long Island homes and businesses as personal piggybanks, and we will prosecute to the fullest extent of the law,” stated Nassau County District Attorney Rice.

“The defendants did not discriminate when choosing their victims: businesses and private residences were equal targets of their thievery.  To facilitate their alleged illegal activity, the defendants used a combination of physical labor and modern technology, to include the unlawful access by Astacio of protected FBI information.  As charged, Astacio not only turned his back on the community he promised to protect, he also betrayed his fellow law enforcement officers for a chance to line his pockets with his victims’ hard-earned money. As the arrest of these defendants demonstrates, no one is above the law.  We will continue to work with our law enforcement partners to ensure that those who steal and violate the public’s trust will be brought to justice,” stated FBI Assistant Director-in-Charge Venizelos.

“It is always a sad day when a member of the law enforcement community aligns himself with those who will hurt the public, choosing to abandon those he swore to protect,” stated IRS Special Agent-in-Charge Weirauch.  The public should be secure in knowing, however, that the strong partnership between federal and local law enforcement authorities will work tirelessly to protect the public from harm and will strive to make the public whole when it is wronged.”

“The Internal Affairs Bureau thoroughly investigates allegations of members of the service, and their dedication to this Long Island-based case resulted in the indictment being announced today. The Department subsequently removed Astacio of his post and terminated his employment, and any of the members of the service considering criminal association faces the same,” stated NYPD Police Commissioner Kelly.

According to the indictment and court filings, between 2009 and 2012, the sophisticated burglary crew led by Nikitas Margiellos committed approximately three dozen commercial burglaries and ten residential burglaries in the Eastern District of New York stealing approximately $10,000,000 in cash and property.  To carry out the burglaries, the crew used both traditional burglary tools, such as blow torches, crowbars, wire cutters, and sledge hammers, as well as modern technology, including cell phone jammers and police scanners.  In addition, they often conducted surveillance of their burglary victims to determine when the victims would be out of their homes and businesses.  On at least one occasion, the crew even installed a tracking device on a victim’s car to assist in that endeavor.

Additionally, as set forth in the indictment and court filings, in one instance, the defendants Arias, Figueroa, Margiellos, and Repka burglarized a business in Plainview, New York, entering that commercial establishment, while Astacio and another coconspirator monitored a police scanner and acted as lookouts.  Arias, Figueroa, Margiellos, and Repka spent approximately three and a half hours in the business and stole more than 45,000 pairs of Under Armour, Hobie, and other sunglasses that were worth approximately $3,000,000.  After the burglary, the defendants and their coconspirators transported the stolen property across state lines and sold some of the sunglasses on the Internet.  During another burglary, members of the crew stole approximately $2,000,000 in cash from a plastic surgeon’s office located in Nassau County.

If convicted, Arias, Figueroa, Margiellos, and Repka each face a maximum sentence of 15 years’ imprisonment, and Astacio faces 17 years’ imprisonment. 

The government’s case is being prosecuted by Assistant United States Attorney Christopher C. Caffarone and Nassau County District Attorney’s Office Rackets Bureau Chief Rick Whelan, who will be cross-designated for this case as a Special Assistant United States Attorney.

The Defendants

VICTOR ARIAS
Age: 37
Copiague, New York

RAFAEL ASTACIO
Age: 41
Copiague, New York

MICHAEL FIGUEROA
Age: 52
Mount Vernon, New York

NIKITAS MARGIELLOS
Age: 40
West Babylon, New York

LEONARD REPKA
Age: 50 
Lindenhurst, New York

E.D.N.Y. Docket No. 13-CR-640

_____________________________

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

An indictment was unsealed this morning in federal court in Brooklyn charging Phillip A. Kenner, a former financial advisor to several former and current National Hockey League (“NHL”) players, and Tommy C. Constantine, also known as “Tommy C. Hormovitis,” a former professional race car driver, with wire fraud and wire fraud and money laundering conspiracies in connection with schemes involving fraudulent real estate and business investments. Kenner is also charged with wire fraud involving a separate scheme to buy real estate in Sag Harbor, New York.

The defendants were arrested earlier today in Scottsdale, Arizona, by agents of the Federal Bureau of Investigation and Internal Revenue Service and officers of the Scottsdale Police Department, and a search warrant was executed at Kenner’s residence. The defendants are scheduled to appear later today before United States Magistrate Judge Bridget S. Bade at the federal courthouse in Phoenix, Arizona, for removal proceedings to the Eastern District of New York.

The charges and arrests 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, and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Criminal Investigation, New York.

During his college years at Rensselaer Polytechnic Institute (“RPI”) in Troy, New York, Kenner became acquainted with one of the schemes’ victims, who played hockey at RPI before being drafted by an NHL professional team. In approximately 1994, Kenner was licensed as a financial advisor and, early in his career, worked at a firm in Boston, Massachusetts, where he built a client list of several NHL players, before starting his own firm in 2003. Between 2002 and 2013, Kenner advised numerous hockey players on investments in a series of allegedly fraudulent schemes that he represented would earn significant profits for the players; however, the victimized players instead suffered losses exceeding $15 million.

The Hawaii Real Estate Investment Scheme

As alleged in the indictment and other court filings by the government, Kenner fraudulently solicited at least 13 players to invest $100,000 each in a real estate development project on the Big Island of Hawaii. In connection with this scheme, Kenner also convinced several NHL players to open lines of credit, to which Kenner was given access. Unbeknownst to the players, Kenner allegedly used their investments for purposes unrelated to the development of the Hawaii real estate project. Rather than investing the money as promised, Kenner and Constantine used it to fund personal real estate purchases, pay personal expenses, and pay down other debts necessary to conceal the scheme. Beyond the NHL players, in August 2006, Kenner and Constantine also allegedly defrauded Lehman Brothers Holdings, Inc. of $2 million based on Kenner’s misrepresentations concerning the use of a real estate loan. In total, the victims of this scheme lost more than $13 million.  

The Eufora LLC Scheme

Constantine operated Eufora, LLC, a prepaid debit card business, which he founded in 2002. Kenner informed the NHL players that Eufora was an up-and-coming company with great potential for growth. Between February 2008 and May 2009, players invested, at Kenner’s urging, approximately $1.4 million into Eufora. However, none of that $1.4 million was actually invested in Eufora; rather, the investment money was diverted to bank accounts that Kenner and Constantine controlled, and was used to cover the costs of Kenner and Constantine’s personal mortgages, credit card bills, travel costs, jewelry, and other expenses. In December 2009, Kenner and Constantine fraudulently convinced an Eastern District of New York resident to invest another $200,000 in Eufora, the vast majority of which was later diverted to a Constantine-controlled account unrelated to Eufora. In total, investors lost more than $1.5 million as a result of the Eufora scheme.

The Global Settlement Fund Scheme

In May 2009 through February 2010, Kenner and Constantine persuaded NHL players to give approximately $4.1 million to fund an attorney’s escrow account, termed the Global Settlement Fund, or “GSF,” which was to be used to finance litigation related to Mexican land deals. However, only a small fraction of the players’ contributions to the GSF were used for litigation; rather, the vast majority of the money was allegedly transferred into bank accounts controlled by Constantine, and significant portions of the money were used by Kenner and Constantine for purposes unrelated to the GSF, including funding Kenner’s personal investment in a tequila company in Mexico, funding litigation in Florida related to a race car company owned by Constantine, and funding the transfer of Constantine’s Arizona home. The players lost more than $1 million as a result of this scheme.

The Sag Harbor Scheme

In a separate scheme, Kenner acquired a 25% interest in real property in Sag Harbor, New York, without using any of his own money. To achieve this result, Kenner took $395,000 from a player’s line of credit, without that player’s knowledge or permission. Kenner also convinced another player to pay $375,000 for a 50% interest, when Kenner only gave him a 25% interest and pocketed the other half of the money. In early 2010, the investors realized Kenner had not contributed any of his own money, and they sold the property at a loss. Kenner has filed a civil lawsuit in Arizona against one of the investors in connection with the Sag Harbor property.

“As alleged, Phillip Kenner spun a web of lies, deceit and broken promises that stretched from Hawaii to Mexico to the East End of Long Island. Kenner used his school connections to build a client list of NHL players. Once he gained their trust he promptly betrayed it by steering them to fraudulent investment schemes that enriched himself and Constantine to the tune of millions at the players’ expense,” stated United States Attorney Lynch. “We and our law enforcement partners will vigorously pursue and prosecute to the fullest extent those who seek to profit by such fraud.” Ms. Lynch expressed her grateful appreciation to the FBI and IRS for their work on the investigation, and thanked the Scottsdale, Arizona, Police Department for their assistances.

Assistant Director in Charge George Venizelos: “As alleged, Kenner exploited his personal relationship with these players in pursuit of his own lucre. Player after player, time after time he and his partner, Constantine, stole from anyone they could find. This was an elaborate scheme of deception, trickery, and lies that victimized many. The FBI will continue to pursue anyone who believes using others’ savings as their personal piggy bank is acceptable behavior.

“It is not uncommon for investment fraudsters to target a specific group of victims and that group may even include the perpetrator’s own friends and acquaintances,” stated IRS Special Agent-in-Charge Weirauch.  “The cooperation between IRS-Criminal Investigation, the U.S. Attorney’s Office, and the FBI should give the investing public confidence that investment fraud schemes will ultimately be uncovered and thoroughly investigated, and that the scammers will be prosecuted.  Nevertheless, always take care when entrusting money to others, including to investment professionals whom you already know.”

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted the defendants face maximum sentences of 20 years.

The criminal case has been assigned to the Honorable Joseph F. Bianco, United States District Judge for the Eastern District of New York, in Central Islip, New York.  The government's case is being prosecuted by Assistant United States Attorneys Carrie Capwell, Demetri Jones and Diane Leonardo.

The Defendants

Name: PHILLIP A. KENNER
Age:  43
Residence: Scottsdale, Arizona

Name:  TOMMY C. CONSTANTINE, a/k/a “Tommy C. Hormovitis”
Age:  47
Residence: Scottsdale, Arizona

E.D.N.Y. Docket No. 13-CR-607(JFB)

Juan Juarez Orosco, also known as “El Abuelo,” the alleged leader of a Mexican narcotics trafficking organization responsible for trafficking multi-ton quantities of cocaine, was extradited to the United States from Panama on November 8, 2013, and was arraigned on November 10, 2013, before United States Magistrate Judge Lois Bloom at the federal courthouse in Brooklyn, New York.

The extradition was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Mythili Raman, Acting Assistant Attorney General of the Criminal Division of the U.S. Department of Justice; New York Division; and James T. Hayes, Jr., Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations (HSI); Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA).

According to charges in an indictment returned in the Eastern District of New York, from the early 1990’s until his arrest in March 2012, Juarez led a large-scale maritime and land transportation operation responsible for trafficking multi-ton quantities of cocaine from Central America, through the waters of the Atlantic Ocean to the coast of Mexico.  Once the cocaine arrived in Mexico, Juarez and his co-conspirators transported the tons of cocaine from the coast of Mexico to Mexico City, where they were shipped to the United States for distribution.  Throughout the 2000s, Juarez worked with major narcotics traffickers based in Colombia and Mexico, including the Norte Valle Cartel, the Beltran-Leyva Cartel, and the Sinaloa Cartel.  According to court filings, through the mid-2000’s, Juarez’s organization was responsible for transporting over 35,000 kilograms of cocaine for the Beltran-Leyva organization alone.  At the height of its activity, Juarez’s organization was allegedly responsible for transporting approximately eight tons of cocaine a month in conjunction with the Sinaloa Cartel.

“There is no escape from the reach of the law, no matter where drug kingpins operate their poisonous trade.  Juan Juarez Orosco may have operated an international drug trafficking network that stretched across the Western Hemisphere, but today he faces justice in a courtroom in Brooklyn,” stated United States Attorney Lynch.  “Thanks to our law enforcement partners in Panama, today’s extradition also shows that there is no safe haven for drug traffickers on the run.”  Ms. Lynch extended her appreciation to the DEA, HSI, and the Office of International Affairs of the U.S. Department of Justice.

“As alleged in the indictment, Juarez’s trafficking organization was responsible for the importation of massive quantities of cocaine, across oceans and continents, into the United States,” said Acting Assistant Attorney General Raman.  “Juarez’s arrest and extradition are a testament to the tenacity of law enforcement officers across the world, and show that what we can accomplish when we work together with our partners around the globe to capture major drug traffickers and bring them to justice.”

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

The government’s case is being prosecuted by Assistant United States Attorneys Gina M. Parlovecchio and Tiana Demas, and Trial Attorney Adrian Rosales of the Narcotics and Dangerous Drugs Section of the U.S. Department of Justice.

The Defendant

JUAN JUAREZ OROSCO
Age:  64
Mexico City, Mexico

E.D.N.Y. Docket No. 12-CR-197

Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced the settlement of claims that CA, Inc. (CA), an Islandia, New York-based software and information technology company, defrauded the federal government in connection with contracts administered by the General Services Administration (GSA) and the Department of Defense (DOD).  Pursuant to the settlement, which has been approved by United States District Judge Leonard D. Wexler, CA has paid the United States eight million dollars ($8,000,000.00).

The settlement announced today is the result of a joint investigation conducted by the GSA Office of the Inspector General, and, on behalf of DOD, the Defense Criminal Investigative Service (DCIS).

Between 2001 and 2010, federal government agencies purchased software maintenance services from CA, including upgrades and technical assistance, in accordance with contracts between CA and the GSA.  The government’s investigation established that CA knowingly double-billed federal agencies by charging for periods of software maintenance for which the agencies had already paid.  Specifically, when federal customers entered into software maintenance renewal agreements with CA, the company began the renewal periods on the day CA processed the order, rather than the day after the expiration of the customer’s then-existing maintenance period. 

The government’s investigation also encompassed claims that CA prevented DOD buying commands, including military bases, from taking advantage of pre-paid software inventory and discounts available under several contracts known as Blanket Purchase Agreements (BPAs).  The investigation established that CA fraudulently administered the BPAs by steering DOD customers away from BPA purchases and toward purchases under more costly contracts.

The settlement resolves claims filed under seal by Ann-Marie Shaw pursuant to the False Claims Act (FCA) in the action United States of America, et al., ex rel. Shaw v. CA, Inc.  The FCA provides that a person with information that false claims for payment have been presented to the United States may bring a lawsuit for the United States and may share in any recovery.  The Shaw suit also alleged fraud claims on behalf of California, Florida, Hawaii, Illinois, Massachusetts, Nevada, Virginia, New York, the District of Columbia, and the City of New York.  The state claims are being settled pursuant to a separate agreement. The seal in the Shaw case was lifted on November 5, 2013. 

CA has denied the government’s claims.

“The United States is not a deep pocket of taxpayer dollars to be exploited by private industry. We expect those who conduct business with the United States to honor their obligations accurately and honestly,” stated United States Attorney Loretta E. Lynch.  “We will continue to vigorously enforce the False Claims Act for the protection of taxpayers and the United States government.”  Ms. Lynch praised the successful partnership between the United States Attorney’s Office and the investigative agencies to carry out the mission to detect and prevent fraud.

“The federal government cannot afford to be overcharged,” said GSA Inspector General Brian D. Miller.  “We need to save every taxpayer dollar we can.”

“By steering DOD customers away from the value-saving contract instruments, CA, Inc. took advantage of their federal customers and the U.S. taxpayers through their disregard for appropriate corporate governance.  CA’s actions resulted in DOD paying again for software maintenance already paid for,” commented Special Agent in Charge Craig W. Rupert, DCIS Northeast Field Office.  “The Defense Criminal Investigative Service, with our partner agencies, continues to aggressively pursue defense contractors who disregard the rules of commerce and law that disadvantage their customers.”

The United States’ claims were litigated by Assistant United States Attorney Robert W. Schumacher.

BROOKLYN, NY – Earlier today, Evan Jose Peña pleaded guilty to participating in two worldwide cyberattacks that inflicted $45 million in losses on the global financial system in a matter of hours.  Peña’s plea followed two other guilty pleas in this case entered by defendants Emir Yasser Yeje and Elvis Rafael Rodriguez in October 2013.  These three defendants were members of the New York-based cell of an international cybercrime organization that used sophisticated intrusion techniques to hack into the systems of global financial institutions, steal prepaid debit card data, and eliminate withdrawal limits.  The stolen card data was then instantly disseminated worldwide and used in making fraudulent ATM withdrawals on a massive scale across the globe.  The New York cell in which Pena, Yeje, and Rodriguez participated withdrew almost $2.8 million in a matter of hours. 

The pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Steven Hughes, Special Agent in Charge, United States Secret Service, New York Field Office.

“These three defendants participated in a criminal flash mob, using data stolen through the most sophisticated hacking techniques to withdraw millions of dollars in mere hours in an unprecedented cyber heist,” stated United States Attorney Lynch. “Their pleas demonstrate that the United States government will not relent in its efforts to investigate and prosecute the perpetrators of these financially devastating cyberattacks.” Ms. Lynch expressed her grateful appreciation to the United States Secret Service, New York Field Office for their work on the investigation.

The “Unlimited Operation”

As alleged in the indictment and other court filings, the cyberattacks employed by the defendants and their co-conspirators in this case are known in the cyber underworld as “Unlimited Operations” — through its hacking “operation,” the cybercrime organization can access virtually “unlimited” criminal proceeds. 

The “Unlimited Operation” begins when the cybercrime organization hacks into the computer systems of a payment card processor, compromises prepaid debit card accounts, and essentially eliminates the withdrawal limits and account balances of those accounts and also manipulates the security protocols that would alert the victim to the attack.  The compromised card data is then distributed to cells worldwide who use the data to encode magnetic stripe cards to use at ATMs.  These sophisticated techniques enable the participants to withdraw literally unlimited amounts of cash until the operation is finally detected and shut down.  “Unlimited Operations” are marked by three key characteristics: (1) the surgical precision of the hackers carrying out the cyberattack, (2) the global nature of the cybercrime organization, and (3) the speed and coordination with which the organization executes its operations on the ground.  These attacks rely upon both highly sophisticated hackers and organized criminal cells whose role is to withdraw the cash as quickly as possible.

The Defendants’ Roles in the Charged Cyberattacks

Evan Peña, Elvis Rafael Rodriguez, and Emir Yasser Yeje participated in two recent “Unlimited Operations” of staggering size.  The first operation, on December 22, 2012, targeted a payment card processor that processed transactions for prepaid MasterCard debit cards issued by the National Bank of Ras Al-Khaimah PSC, also known as RAKBANK, in the United Arab Emirates.  After the hackers penetrated the credit card processor’s computer network, compromised the RAKBANK prepaid card accounts, and manipulated the balances and withdrawal limits, casher cells across the globe operated a coordinated ATM withdrawal campaign.  In total, more than 4,500 ATM transactions were conducted in approximately 20 countries around the world using the compromised RAKBANK account data, resulting in approximately $5 million in losses to the credit card processor and RAKBANK. 

The second, and even more damaging, of these Unlimited Operations occurred on the afternoon of February 19 and lasted into the early morning of February 20, 2013.  This operation again breached the network of a payment card processor that serviced MasterCard prepaid debit cards, this time issued by Bank Muscat, located in Oman.  Again, after the cybercrime organization’s hackers compromised Bank of Muscat prepaid debit card accounts and distributed the data, the organization’s casher cells engaged in a worldwide ATM withdrawal campaign.  Over the course of approximately 10 hours, cyber cells in 24 countries executed approximately 36,000 transactions worldwide and withdrew about $40 million from ATMs. 

Peña, Rodriguez, and Yeje operated the New York cell of “cashers,” who encoded magnetic stripe cards, such as gift cards, with the compromised card data.  After receiving the compromised account information and personal identification numbers (PINs) for the hacked accounts, the defendants’ cells sprang into action, immediately fanning out across the New York area making thousands of withdrawals from ATMs.   During the RAKBANK Unlimited Operation, over the course of just two hours and 25 minutes, the defendants and their co-conspirators conducted approximately 750 fraudulent transactions, totaling nearly $400,000, at over 140 different ATM locations in New York City.  The Bank Muscat Unlimited Operation was even more devastating.  From 3 p.m. on February 19 through 1:26 a.m. on February 20, the defendants and their co-conspirators withdrew approximately $2.4 million in nearly 3,000 ATM withdrawals in the New York City area.

The defendants then passed portions of the proceeds back to the hackers organizing the attack and kept the rest for themselves.  Notably, defendants Rodriguez and Yeje laundered hundreds of thousands of dollars in illicit cash proceeds.  In one transaction alone, nearly $150,000 in the form of 7,491 $20 bills, was deposited at a bank branch in Miami, Florida, into an account controlled by defendant Alberto Yusi Lajud-Peña, who is now deceased.  New York cell members also invested the criminal proceeds in portable luxury goods, such as expensive watches and cars.  To date, the United States has seized hundreds of thousands of dollars in cash, bank accounts, and luxury merchandise, including two Rolex watches and a Mercedes SUV, and is in the process of forfeiting a Porsche Panamera.  The Mercedes and Porsche were purchased with $250,000 in proceeds of this scheme.

In announcing the pleas, United States Attorney Lynch praised the extraordinary efforts of the Secret Service in responding to these attacks and investigating both the complex network intrusions that occurred overseas and the criminal activity occurring locally, and also expressed gratitude to U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) in New York for their assistance in this investigation.  Ms. Lynch also thanked MasterCard, RAKBANK, and Bank Muscat for their cooperation with this investigation. 

Today’s plea took place before United States District Judge Kiyo A. Matsumoto.  When sentenced, the defendants face up to 7.5 years in prison, as well as forfeiture and a fine of up to $250,000.

The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Hilary Jager, David Sarratt, and Brian Morris.

EVAN JOSE PEÑA
Age: 35

ELVIS RAFAEL RODRIGUEZ
Age: 24                                                                                  

EMIR YASSER YEJE
Age: 24

BROOKLYN, NY – Earlier today, Irina Shelikhova, 50, of Brooklyn, New York, was sentenced to 15 years in prison for her leadership role in a $77 million Medicare fraud scheme.  In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Shelikhova to 3 years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered her to forfeit $36,241,545, and ordered her to pay restitution in the amount of $50,943,386.   Shelikhova has been in custody since June 15, 2012, when she was arrested at JFK Airport after living as a fugitive in the Ukraine for almost two years.  After serving her sentence, she faces deportation from the United States.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Special Agent-in-Charge Thomas O’Donnell of the HHS Office of Inspector General (HHS-OIG).

Shelikhova pleaded guilty on December 18, 2012 to conspiracy to commit money laundering.  Including Shelikhova, 13 individuals have been convicted of the massive fraud scheme, either through guilty plea or trial conviction.

“Irina Shelikova used fake doctors and forged documents to defraud Medicare out of millions of dollars of very real money.  As the owner and operator of three medical clinics, Shelikova engaged in a brazen scheme of fraudulent billing and kickbacks, going so far as to pay kickbacks to elderly patients in exchange for their Medicare numbers and their silence.  She relied upon her web of payoffs, kickbacks, and Russian propaganda to support her criminal scheme, but the truth caught up with her and justice has now been served,” stated United States Attorney Lynch.  “Protecting taxpayer funded programs like 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 Medicare that they will be held accountable for their crimes.”

According to court documents, from 2005 to 2010, Shelikhova owned and operated a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (Bay Medical clinic).  Shelikhova and her employees at the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary or never provided.  The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.

According to testimony at the trial of her co-defendants, Shelikhova masterminded the health care fraud at the Bay Medical clinic, which included hiring a medically unlicensed co-defendant to impersonate the clinic’s “no-show” doctor and render phony medical “care” to such patients.  Shelikhova also directed employees to create fake medical notes in an attempt to back up the false billing and to forge doctors’ names on prescriptions and charts.

The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.

To generate the large amounts of cash needed to pay the patients, Shelikhova directed the recruitment and operation of a network of external money launderers who cashed checks for the clinic.  Shelikhova wrote clinic checks payable to various shell companies controlled by the money launderers.  These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds.  The money launderers cashed these checks and provided the cash back to the clinic.   Shelikhova used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.

This case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York. The case was investigated by the FBI and HHS.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

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.

Angel Gregorio Liriano Cruz will be arraigned this afternoon before United States Magistrate Judge Roanne L. Mann, at the federal courthouse in Brooklyn, New York, on heroin and cocaine trafficking charges.  Liriano Cruz is alleged to be the leader of an international drug organization responsible for shipping more than 200 kilograms of heroin and 35 kilograms of cocaine to the United States between 2002 and 2007.  Liriano Cruz was arrested on an extradition request issued from the Eastern District of New York and extradited from Spain to the United States on November 8, 2013.

The extradition and charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Brian Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York.  The investigation was conducted by the DEA, with assistance provided by law enforcement authorities in Spain and the Dominican Republic.

As detailed in the indictment and other court filings by the government, Liriano Cruz’s regular heroin and cocaine supply route during part of the course of the conspiracy originated in the Dominican Republic, continued to Puerto Rico, and concluded in the New York City metropolitan area.

“As alleged, Angel Liriano Cruz ran a pipeline of poison, flooding the U.S. with millions of dollars’ worth of heroin and cocaine sent through Caribbean locales.  His alleged drug distribution organization was not limited by international boundaries, but neither is the reach of U.S. law enforcement with the assistance of its partners abroad,” stated United States Attorney Lynch.  “We are steadfast in our commitment to bringing drug sources to justice and stemming the flow of illegal narcotics into this country and the streets of our communities.”  Ms. Lynch extended her grateful appreciation to the agencies that conducted the government’s investigation, including the DEA JFK Airport Office, comprising the New York City Police Department, Port Authority of New York and New Jersey, and Nassau County Sheriff’s Office, and thanked the Department of Justice, Office of International Affairs, for its significant assistance in this case.

“ Liriano Cruz, is the alleged leader of a drug distribution organization responsible for shipping more than 200 kilograms of heroin and 35 kilograms of cocaine into our neighborhoods.  This organization fueled the ongoing heroin threat our communities face, and we estimate this international drug network earned $13 million selling this poison.  On Friday, November 8th, Liriano Cruz arrived in New York to face federal narcotics charges based on the diligent work of the DEA, NYPD investigators, and the U.S. Attorney’s Office Eastern District of New York.  I commend their dogged pursuit of this key heroin trafficker,” stated DEA Special Agent-in-Charge Crowell.  

As part of the investigation, in May 2007, DEA agents seized approximately 36 kilograms of heroin hidden in furniture that was allegedly modified for the organization to transport the narcotics.  That furniture was en route to be forwarded by common carrier to the Bronx, New York, with a return address in Puerto Rico.  Several days later, law enforcement agents, disguised as shipping company personnel, delivered in New York the furniture that had contained the heroin and arrested three members of the organization.  Further investigation revealed that the seized shipment was the last of approximately 10 narcotics shipments that were sent in a similar fashion.  The narcotics from this and other sources were allegedly distributed in the New York City area by members of the defendant’s organization and are valued by the DEA at more than 13 million dollars.  Liriano Cruz also allegedly supplied heroin for internal couriers to bring kilo-quantities from the Dominican Republic to the United States.  The couriers often smuggled the narcotics through JFK International Airport.

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

The government’s case is being prosecuted by Assistant United States Attorneys Sylvia Shweder and Douglas Pravda.

The Defendant

ANGEL GREGORIO LIRIANO CRUZ
Age:  53
Dominican Republic

E.D.N.Y. Docket No. O9-CR-057 (SJ)

Romanian national Aurel Cojocaru has been extradited to the United States from the Czech Republic to face charges related to his participation in a sophisticated multimillion dollar cyber fraud scheme that targeted consumers on U.S.-based Internet marketplace websites such as eBay.com.  Cojocaru specialized in making high-quality fraudulent passports to open U.S. bank accounts used to launder the stolen funds.  His extradition followed a coordinated international takedown in December 2012 during which law enforcement officials in Romania, the Czech Republic, the United Kingdom, and Canada, acting at the request of the United States, arrested six Romanian nationals, including Cojocaru.  The Czech Republic’s Ministry of Justice granted the extradition request on August 9, 2013.  Cojocaru was transported to the Eastern District of New York on November 6, 2013, and was arraigned today before U.S. Magistrate Judge Roanne L. Mann.

In addition to Cojocaru’s extradition, three other defendants – Cristea Mircea, Ion Pieptea, and Nicolae Simion – have been extradited to the United States from Romania, and one defendant, Emil Butoi, was extradited from the United Kingdom.  Earlier today, Mircea pleaded guilty to committing wire fraud.  Butoi pleaded guilty to committing passport fraud on November 5, 2013.  Defendant Nicolae Ghebosila is still engaged in extradition proceedings in Canada.  Seven defendants, including Romanian national Nicolae Popescu, are currently fugitives from justice.1

The extradition and the guilty plea 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).

As alleged in the complaint and subsequent indictment,2 defendants Cojocaru, Mircea and their co-conspirators saturated Internet marketplace websites, such as eBay, Cars.com, AutoTrader.com, and CycleTrader.com, with detailed advertisements for cars, motorcycles, boats, and other high‑value items generally priced in the $10,000 to $45,000 range.  Unbeknownst to the buyers, however, the merchandise did not exist.  The so-called sellers corresponded with the victim buyers by email, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money.  Sometimes, they pretended to sell cars from nonexistent auto dealerships in the United States and even created phony websites for these fictitious dealerships.

The complaint and indictment further describe how, after the purported Asellers@ reached an agreement with the victim buyers, they would often email them fraudulent invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with wire transfer instructions directing the buyers to send money to American bank accounts.  Foreign nationals in the United States, known as Aarrows,@ used fraudulent passports manufactured and supplied by Cojocaru and others as identification to open the bank accounts.  Finally, the Aarrows@ would collect the illicit proceeds and send them to co-conspirators in Europe by wire transfer and other methods.  Cojocaru produced high-quality fake passports purportedly issued by various European countries as part of this scheme.  During one recorded video chat, Cojocaru displayed the tools of his trade – new holograms he had acquired in order to create more authentic-looking passports.  In another recorded call, he boasted about his supposed ability to evade the Czech authorities.  On December 6, 2012, however, Czech law enforcement officers arrested Cojocaru, and during their search of Cojocaru’s residence outside Prague, the Czech officers and FBI agents found over 180 stolen and fraudulent passports and dozens of identification cards.

According to court filings, the government alleges that the defendant and his coconspirators defrauded their victims of at least $3 million during the course of the conspiracy.

Defendant Cojocaru is charged with conspiracy to commit substantive offenses against the United States, passport fraud, wire fraud, and money laundering.  If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment on each of the conspiracy, wire fraud, and money laundering counts, and a maximum sentence of 10 years’ imprisonment on the passport fraud count.

Defendant Mircea faces up to 20 years in prison as the result of his guilty plea to wire fraud.  Defendant Butoi faces up to 10 years in prison as the result of his guilty plea to passport fraud.

“Cojocaru’s fraudulent passports were a key part of the criminal infrastructure supporting this sophisticated and global cyber scheme,” stated United States Attorney Lynch.  “He operated his fake passport factory with what he thought was impunity.  But unlike his passports, our efforts to protect American consumers are genuine and, as demonstrated by Cojocaru’s arrest and extradition and Mircea’s guilty plea today, extend beyond national borders.”

FBI Special Agent in Charge Venizelos stated, “Cojocaru’s extradition means he will finally have to face the American justice system. As alleged, Cojocaru played an integral part in a multi-million dollar cyber scam as the principal passport forger. Using the fake documents Cojocaru created, foreign nationals in the United States could open bank accounts under phony names and launder payments to foreign accounts from duped American buyers. Working with our law enforcement partners abroad, the FBI was able to stop this complex global scam.”

The government of the Czech Republic, particularly the Ministry of Justice, and Interpol provided significant assistance and support during the investigation, arrest, and extradition of the defendant.  The Department of Justice’s Office of International Affairs worked with its counterparts in the Czech Republic to effect the extradition, and the U.S. Marshals Service coordinated and transported the defendant to the United States.

The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Nadia Shihata, and Claire Kedeshian of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorney Carol Sipperly of the Criminal Division’s Fraud Section.

The Defendants

AUREL COJOCARU
Age:  44
Romanian

CRISTEA MIRCEA
Age: 31
Romanian

E.D.N.Y. Docket No. 12-CR-0785 (ERK)

_____________________________

1 The FBI’s Wanted Posters for the fugitive defendants are available at http://www.fbi.gov/wanted/cei.

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

Earlier today, in federal court in Brooklyn, New York, Placido Rodriguez, a real estate developer who engaged in a $300,000 kickback scheme while developing the Alexander Avenue Cluster affordable housing project in the Bronx for the New York City Department of Housing Preservation and Development (HPD), was sentenced to a term of imprisonment of 6 months following his conviction for wire fraud conspiracy.  In addition, Rodriguez was ordered to pay $98,333 in restitution to the City of New York and pay an additional $98,333 to the federal government as forfeiture.

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); Cheryl Garcia, Acting Special Agent in Charge, United States Department of Labor (DOL) Office of Inspector General; and Rose Gill Hearn, Commissioner, New York City Department of Investigation (DOI). 

Previously, Rodriguez pleaded guilty to a one-count information charging him with wire fraud conspiracy in connection with a scheme to defraud HPD by collecting kickbacks from a general contractor on HPD affordable housing projects and making HPD pay for the kickbacks by disguising them as construction costs.  As detailed in the information and complaint, after Rodriguez and two business partners won the HPD contract to develop the Alexander Avenue Cluster project, they hosted a “pre-bid” meeting with a prospective general contractor who was planning to bid on the project.  During that meeting, Rodriguez, in agreement with his business partners, demanded $300,000 from the general contractor in return for their support of his bid.  After the general contractor won the bid, he would direct some of the money that he was paid by HPD for his work as a general contractor to Rodriguez and his partners as payments toward the $300,000 kickback.  In order to conceal the criminal nature of these payments, Rodriguez and his partners gave the general contractor false invoices from a company they controlled, PRA Building Materials, that were tailored to match the kickback payments.  Until the government discovered this corrupt scheme, the general contractor had paid approximately $267,000 in kickbacks, fraudulently billed to HPD, to Rodriguez, and his partners.

“Thousands of New Yorkers turn to HPD for assistance in literally putting a roof over their heads.  This defendant lined his pockets with federal housing funds intended to help those families.  We will not stop in our pursuit of those who profit by corrupting this vital resource for some of this city’s most vulnerable families.  Our ongoing investigation of the New York City affordable housing development sector will continue,” stated United States Attorney Lynch.  Ms. Lynch expressed her grateful appreciation to the United States Department of Labor, Office of the Inspector General, for their assistance in this case.

FBI Assistant Director-in-Charge Venizelos stated, “Motivated by greed, the defendant real estate developer constructed a scheme to defraud HPD and took advantage of an opportunity to help the less fortunate in our community.  His sentence reinforces the federal government’s unyielding stance that corruption on any level will not be tolerated.  The FBI and our law enforcement partners remain vigilant in bringing to justice those who misuse their positions of trust for personal gain.”

DOI Commissioner Rose Gill Hearn said, “This individual and his co-conspirators collected bribes and passed the cost to the taxpayers, in effect stealing money from the City’s affordable housing program.  Their corruption was exposed in a joint federal and City investigation.  Now as they go to prison, stripped of their stolen money, their scheme looks much less clever than they imagined.”

United States Attorney Lynch thanked the Internal Revenue Service, Criminal Investigation, New York (IRS); the United States Department of Housing and Urban Development (HUD); and the New York City Police Department (NYPD) for their cooperation in this case.

The sentencing proceeding was held before United States District Judge Nina Gershon at the U.S. Courthouse in Brooklyn, New York. 

To date, three supervisory officials of HPD, including former HPD Assistant Commissioner Wendell Walters, and six real estate developers and general contractors have pleaded guilty to charges including racketeering conspiracy, bribery, and wire fraud conspiracy in connection with the government’s ongoing investigation of widespread corruption involving affordable housing contracts at HPD.  HPD inspection supervisors Michael Provenzano and Luis Adorno were each sentenced to 18 months in prison, and developer Sergio Benitez was sentenced to 22 months.  On October 10, 2013, Rodriguez’s partner, Angel Villalona, was sentenced to six months’ imprisonment and ordered to pay $100,000 restitution to the City of New York, and also ordered to forfeit $100,000 to the government.  Rodriguez is the fourth defendant sentenced in this ongoing investigation of corruption within the New York City affordable housing development sector.    

The government’s case is being prosecuted by Assistant United States Attorneys Cristina M. Posa, Anthony Capozzolo, and Claire Kedeshian.

The Defendant:

PLACIDO RODRIGUEZ
Fort Lee, New Jersey
Age: 66

BROOKLYN, NY – Earlier today, Belair Payroll Services, Inc. (“Belair”), a now defunct, multi-branch check cashing company based in Flushing, New York, and its owner, Craig Panzera, 47, pled guilty to failing to follow reporting and anti-money laundering requirements for over $19 million in transactions, in violation of the Bank Secrecy Act (BSA).   Panzera also pled guilty to conspiring to defraud the United States by willfully failing to pay income and payroll taxes.  As part of the guilty plea, Belair will forfeit $3,267,252.10, and Panzera will pay restitution in the amount of $946,841.17 to the IRS. 

The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Department of Homeland Security, Immigration and Customs Enforcement (ICE) Acting Director John Sandweg; and Chief of the Internal Revenue Service Criminal Investigation (IRS-CI) Richard Weber.  The pleas were accepted by United States District Judge Frederic Block.

“As today’s guilty pleas make clear, Panzera used the hard working residential community of Queens as a cover for his illegal schemes.  Under the guise of offering much needed financial services to the community, Panzera instead operated Belair as a crooked enterprise, hiding illicit transactions, lining his own pockets and evading taxes,” stated United States Attorney Lynch.  “We are committed to working with our law enforcement partners to expose and eradicate money laundering and tax fraud from our communities.”  Ms. Lynch thanked the Department of Justice, Criminal Division, Fraud Section, ICE and IRS-CI for their work on the investigation. 

According to court filings, from June 2009 through June 2011, numerous checks drawn on bank accounts of shell corporations were presented to Belair employees to be cashed at Belair.  The checks appeared to be related to health care services, but in fact, the corporations did no legitimate business. The shell corporations and the corresponding bank accounts on which the checks were written were established in the names of foreign nationals, many of whom were located overseas.  Belair accepted the checks and, in return, provided cash in excess of $10,000 per check.  Panzera and others at Belair intentionally failed to require or obtain identification documents or information from the individuals presenting the checks.  Belair filed CTRs falsely stating that the checks were cashed by the foreign nationals who set up the shell corporations, and with respect to certain CTRs, failed to indicate the full amount of cash provided to the individuals.  More than $19 million in checks were cashed through Belair during the course of the scheme.  By systematically cashing checks in this manner, Panzera and Belair willfully failed to maintain an effective anti-money laundering program.  Prior to the indictment, Belair had operated five check cashing stores in Queens.

The charges in the indictment against Panzera and Belair’s co-defendants remain pending and are merely accusations.  Those defendants are presumed innocent unless and until proven guilty.

The case is being prosecuted by Assistant United States Attorney Patricia E. Notopoulos and Trial Attorneys Claiborne W. Porter, Kevin G. Mosley and Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS).

The Defendants:

BELAIR PAYROLL SERVICES, INC.
Flushing, New York

CRAIG PANZERA
Age: 47
Naples, Florida

E.D.N.Y. Docket No. 11-CR-591 (S-1)

WASHINGTON – Michael Slattery Jr., 25, an Irish national, pleaded guilty today in federal court in Brooklyn, N.Y., to conspiracy to violate the Lacey Act in relation to illegal rhinoceros horn trafficking, announced Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, and Loretta E. Lynch, U.S. Attorney for the Eastern District of New York.

Slattery pleaded guilty to one count of conspiracy to violate the Lacey Act, which carries a maximum penalty of five years in prison.  Under the terms of the plea agreement, any proceeds from the illegal trafficking that remain in the United States will be forfeited or put toward the criminal fine.  Slattery is scheduled to be sentenced by U.S. District Judge John Gleeson in the Eastern District of New York on Jan. 10, 2014.

In the plea agreement, Slattery admitted that he, along with others, traveled throughout the United States to illegally purchase and sell endangered rhinoceros horns.  Slattery was arrested in September as part of “Operation Crash,” a nationwide, multi-agency crackdown on those involved in the black market trade of endangered rhinoceros horn. 

“Slattery and his co-conspirators traveled to the United States to profit from the illegal trade in black rhinoceros horns,” said Acting Assistant Attorney General Dreher.  “The black rhino is a species that, without our protection, could be headed for extinction in our own time. Rhino horn trafficking is a violation of the laws enacted by Congress to protect endangered species from extinction and the Justice Department will aggressively prosecute those who engage in this egregious market.”

“Today’s guilty plea highlights our commitment to protect endangered species, like the black rhinoceros, by prosecuting those who would profit from the rhinos’ extinction,” said U.S. Attorney Lynch.  “Michael Slattery traveled the world in pursuit of illicit profit from the sale of black rhino horns.  But instead of gaining a windfall by contributing to the demise of an age-old species, Slattery now faces up to five years in prison for his illegal conduct.” 

“The involvement of an alleged member of an organized criminal group in rhino horn trafficking speaks to the scope, scale, and lawlessness of this problem,” said U.S. Fish and Wildlife Service Director Dan Ashe. “We will continue to work closely with the Department of Justice to crack down on profiteers whose crimes are pushing rhinos to the brink of extinction.”

“The black rhinoceros has been driven to the brink of extinction by this illicit trade,” said Special Agent in Charge James T. Hayes of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in New York. “HSI, along with our partners at the U.S. Fish and Wildlife Service and the Department of Justice, stand ready to protect these beautiful creatures from the villains who would trade the rhino’s continued existence on this planet for a quick buck.”

Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth.  They have no known predators other than humans.  All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. 

Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.  Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. 

Operation Crash is a continuing investigation being conducted by the Department of the Interior’s U.S. Fish and Wildlife Service in coordination with other federal and local law enforcement agencies including U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  A “crash” is the term for a herd of rhinoceros.  Operation Crash is an ongoing effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns.  The investigation is being led by the Special Investigations Unit of the FWS Office of Law Enforcement and involves a nationwide task force of agents focused on rhino trafficking. 

According to the information, plea agreement and statements made during court proceedings: 

 Beginning in May 2010 and continuing until April 2011, Slattery, along with others, traveled within the United States to purchase rhinoceros horns, which he, along with others, then resold to private individuals or consigned to auction houses in the United States.  The profits from the sale of the rhinoceros horns were distributed via cashier’s checks made out to Slattery and others.  Slattery used a fictitious “Endangered Species Bill of Sale” in connection with the purchase and sale of rhinoceros horns.

In September 2010, Slattery, along with others, traveled from London to Houston, where they attempted to purchase a taxidermied black rhinoceros mount with two horns from a business in Austin, Texas.  The manager of the business refused to sell the mount to the defendant because Slattery and the others did not have proof that they resided in the State of Texas.  Within days of being refused, Slattery returned to the establishment in Austin, where, with the assistance of a “straw buyer” that Slattery and his co-conspirators hired, the group purchased the mount for $18,000.  At the time of the sale, the purchasers were given an “Endangered Species Bill of Sale” that stated “[s]eller expressly states that the described taxidermy is an endangered species and that interstate or foreign sales, barter and trade are strictly prohibited …. [p]ursuant to [the Endangered Species Act].  Buyer has expressly stated that he/she is a current resident of the State of Texas and has no intention of participating in any form of interstate commerce involving the described taxidermy.”   

Following the purchase of the mount, Slattery and his co-conspirators traveled to Flushing, N.Y., where they sold the horns from the mount and other horns they had acquired to an individual for $50,000.  At the time of the sale, Slattery and his co-conspirators provided the purchaser with a false and fictitious “Endangered Species Bill of Sale.”  The “Endangered Species Bill of Sale” stated that the two pair of black rhinoceros horns were purchased in August 2010.  The falsified document also included a false and fictitious FWS emblem, which it did not have at the time of purchase from the establishment in Texas.  Pursuant to instructions from Slattery and his co-conspirators, the purchaser paid for the horns with cashier’s checks.  One check in the amount of $12,500 was made payable to Michael Slattery Jr.

U.S. Attorney Lynch and Acting Assistant Attorney General Dreher commended FWS and ICE-HSI for their outstanding work in this investigation.

The case is being handled by the U.S. Attorney’s Office for the Eastern District of New York and the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division.  Assistant U.S. Attorney Julia Nestor and Trial Attorney Gary N. Donner of the Justice Department’s Environmental Crimes Section are in charge of the prosecution.

BROOKLYN, NY – Earlier today, Dr. Mikhail L. Presman, a licensed psychiatrist employed by the Department of Veterans Affairs (VA), pleaded guilty to health care fraud in federal court in Brooklyn.  For over seven years, Dr. Presman lied about providing home medical treatment to Medicare beneficiaries and falsely billed Medicare for more than $1.2 million through the submission of fraudulent claims.  As part of the guilty plea, Dr. Presman agreed not to contest the forfeiture of his ill-gotten gains, amounting to over $1.2 million.

The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Special Agent-in-Charge Thomas O’Donnell of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  The plea was accepted by United States District Judge I. Leo Glasser.

“Dr. Presman was hired and paid by the taxpayers to treat those who sacrifice so much for our country – our injured veterans.  As alleged, by defrauding the Medicare program, he betrayed the trust placed in him and stole from the very taxpayers who paid his salary.  Far from honoring their sacrifice, Dr. Presman used our veterans as a cover for deceit and fraud,” stated United States Attorney Lynch.  “We will root out Medicare fraud in our community wherever we find it.”  Ms. Lynch thanked the Department of Justice, Criminal Division, Fraud Section and HHS-OIG for their work on the investigation. 

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 false representations, Dr. Presman did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated.  For example, on a number of occasions, 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.

Dr. Presman is scheduled to be sentenced on February 13, 2014. At sentencing, he faces a maximum sentence of 10 years’ imprisonment, over $1.2 million in mandatory restitution, and a fine of up to $2.4 million.

The case was investigated by HHS-OIG, brought as part of the Medicare Fraud Strike Force, and supervised by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section.  The case is being 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.

The Defendant:

MIKHAIL L. PRESMAN, M.D.
Age: 56
Brooklyn, New York

E.D.N.Y. Docket No. 13-CR-576

Earlier today, a federal jury returned a guilty verdict against Brian Jones, a former Hempstead Village police officer, on charges of Hobbs Act robbery conspiracy and brandishing a firearm during the robbery conspiracy.  The charges arose from an April 6, 2008 incident in which the defendant and two accomplices attempted to rob a cocaine dealer in Far Rockaway, New York.  At the time of the attempted robbery, the defendant was employed as a police officer in Hempstead Village.

The verdict followed a two-week trial at the federal courthouse in Central Islip, New York.  The defendant’s sentencing is scheduled for February 26, 2014, at which time he faces a maximum sentence of 20 years’ imprisonment for the robbery conspiracy and a mandatory consecutive sentence of seven years to life for the firearms charge, as well as a criminal fine.

The verdict was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Raymond W. Kelly, Commissioner, New York City Police Department (NYPD), and Joseph Anarumo, Jr., Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

“We trust our hard-working and dedicated law enforcement officers to protect our community.  In violation of his sworn duty, Brian Jones betrayed his badge and disgraced his profession in an attempt to enrich himself at the expense of innocent victims.  Jones crossed the line and became that which he had sworn to guard against,” stated United States Attorney Lynch.  “The people of this district will not tolerate law enforcement officers who abuse their authority and violate the law.”  Ms. Lynch expressed her thanks to the ATF and the NYPD’s Internal Affairs Division, Police Impersonation Investigation Unit, which led the investigation.

The evidence at trial established that in early 2008, the defendant and two accomplices plotted to rob a cocaine dealer, who they believed kept large quantities of drugs and cash at his apartment in Far Rockaway, New York.  Prior to the robbery, the defendant abused his authority as a Hempstead Village police officer to identify the victim’s home address by running a search in a law enforcement database.  On April 6, 2008, the defendant and his accomplices carried out the attempted robbery at an apartment building in Far Rockaway, armed with guns, the defendant’s police badge, and handcuffs.  After using a ruse to enter an apartment by pretending to sell chocolate to raise money for the defendant’s daughter’s school, the defendant and his accomplices handcuffed a woman and her husband, while the couple’s two young children watched in horror, and then ransacked the apartment.  After finding no cocaine or money, the defendant and his accomplices realized they were in the wrong apartment.  Undeterred, they entered a second apartment, occupied by another woman and her two young children.  They attempted to handcuff that woman as well, but she was able to flee into a bedroom with her children and call 9-1-1.  The defendant and his accomplices then fled. 

The trial was held before United States District Judge Joseph F. Bianco.  All three individuals involved in the attempted robbery have now been convicted of crimes relating to that robbery. 

The government’s case is being prosecuted by Assistant United States Attorney Lara Treinis Gatz.

The Defendant

BRIAN JONES
Age: 41
Hempstead, New York

E.D.N.Y. Docket No. 13-CR-207 (JFB)

Complaint 1: FEMA fraud charges for Hurricane Sandy disaster relief
Complaint 2: FEMA fraud charges for Hurricane Sandy disaster relief
Complaint 3: FEMA fraud charges for Hurricane Sandy disaster relief

Earlier today, James Rosemond, also known as “Jimmy Henchman,” was sentenced to mandatory life imprisonment in federal court in Brooklyn, New York, for leading a continuing criminal enterprise (the “Rosemond Organization”) that distributed thousands of pounds of cocaine, the majority of which was sold on the streets of Brooklyn and Queens.   Rosemond was also sentenced for numerous narcotics conspiracy offenses, firearms possession, money laundering, structuring, and obstruction of justice.  Rosemond was convicted of all thirteen counts in his indictment, following a three-week jury trial in May 2012.  As part of the sentence, Rosemond forfeited $10 million, along with property worth approximately $4 million.  

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Brian Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York, and Tony Weirauch, Special Agent-in-Charge, Internal Revenue Service (IRS), Criminal Investigation, New York.  The sentence was imposed by United States District Judge John Gleeson.   

ARosemond styled himself a hip hop mogul, bringing the music of the streets to a wider audience and expanding opportunities of artists.  In reality, his image as a music impresario was a cover for the real Jimmy Rosemond – a thug in a suit who flooded those same streets with cocaine, and shuttled drugs and money from coast to coast.  Today’s life sentence is a fitting end to the Henchman’s two-faced machinations,” stated United States Attorney Lynch.  “Along with our partners in law enforcement, this Office is committed to ridding our communities of the scourge of drugs and guns.@  Ms. Lynch extended her grateful appreciation to the DEA, the IRS, the U.S. Postal Inspection Service, the United States Marshals Service, and the Department of Justice, Office of Inspector General, for their work on the case.

DEA Special Agent-in-Charge Crowell stated, “A life of luxury as an  entertainment CEO built on a foundation of drug trafficking has resulted in a lifetime prison sentence.  Drug trafficking does not pay off at the end of the day.  As the head of this organization, Rosemond was overseeing the distribution of 50 to 100 kilos of cocaine per month into our communities while utilizing his position in the music industry to evade law enforcement.  He oversaw an $11 million a year cocaine trafficking enterprise that transported cocaine in exchange for cash which was hidden in music equipment across the country.  I commend the men and women of the DEA New York, Los Angeles, and Atlanta Divisions, as well as the IRS, USMS, USPS, DOJ OIG, and the United States Attorney’s Office, Eastern District of New York, whose diligence uncovered and completely dismantled this organization.”

IRS Special Agent-in-Charge Weirauch stated, “It is a good day for the American public whenever a narcotics trafficking organization is dismantled.  As is typical in these investigations, the government has not only taken a supplier of  illegal drugs off the streets, but has seized the assets that can be used in the fight against other such enterprises.  IRS-Criminal Investigation proudly stands with our law enforcement partners in recognizing this accomplishment and looks forward to sharing our financial investigative expertise in the investigation and prosecution of other narcotics organizations.”

At trial, the evidence established that Rosemond was the leader of a large-scale, bi-coastal narcotics-trafficking organization that shipped cocaine from Los Angeles, California, to the New York City metropolitan area and that, in turn, shipped cash proceeds from narcotics sales back to Los Angeles.  The organization used a variety of shipping methods as part of its operation, including Federal Express and UPS to ship boxes of mustard-covered cocaine and drug money, as well as a music equipment shipping company to transport cocaine and drug money concealed in music equipment cases.

During the investigation, federal law enforcement agents made multiple seizures of drugs, money, firearms, and tools of the narcotics distribution trade belonging to the Rosemond Organization.  For example, in April 2010, law enforcement seized 27 kilograms of cocaine.  As part of the seizure, law enforcement conducted a search of one of Rosemond’s stash houses in Queens, which yielded 12 kilograms of cocaine, a machine gun, ammunition, and a variety of drug trafficking paraphernalia, including kilo presses, scales, and vacuum sealed bags used to package drugs and money.  On that same day, law enforcement also seized a vehicle containing a trap designed to conceal contraband.  In December 2010, law enforcement seized over $785,000 in cash proceeds from narcotics trafficking, stored in a music equipment case at a rehearsal studio in Manhattan.  In total, between 2008 and 2010, law enforcement in New York and California seized over $2.8 million of the Rosemond Organization=s drug proceeds.

Trial testimony also established that on May 11, 2011, Rosemond sold a kilogram of cocaine to a cooperating witness.  After a warrant was issued for his arrest later that day, Rosemond fled, resulting in a manhunt lasting nearly two months that ended when he was apprehended in late June 2011.

To date as a result of this investigation, 19 members and associates of the Rosemond Organization have been convicted. 

The government’s case was prosecuted by Assistant United States Attorneys Todd Kaminsky, Soumya Dayananda, Lan Nguyen, Una A. Dean, Carolyn Pokorny, and Karin Orenstein.

The Defendant

JAMES ROSEMOND  
Brooklyn, NY
Age: 48

EDNY Docket No. CR-11-424 (JG)

Earlier today, charges were unsealed against Romanian fugitive Nicolae Popescu, the leader of an international organized crime syndicate that ran a multimillion dollar cyber fraud scheme, and six other fugitives charged with participating in the same scheme.  Interpol has issued red notices to foreign law enforcement partners seeking assistance in the apprehension of these fugitives, and the FBI has also released “Wanted” posters to facilitate their arrests.

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 (FBI), New York Office; and Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division.

Popescu, Romanian nationals Daniel Alexe,1 Dmitru Daniel Bosogioiu, Ovidiu Cristea, and Dragomir Razvan, and a defendant who goes by the names “George Skyper” and “Tudor Barbu Lautaru,” as well as Albanian national Fabjan Meme, were originally charged in a criminal complaint with six other defendants for their participation in a cyber fraud conspiracy that targeted primarily American consumers on such U.S.-based websites as Cars.com and AutoTrader.com.  Their six co-defendants were arrested in a coordinated international takedown on December 5, 2012,2 but Popescu, Alexe, Bosogioiu, Cristea, Razvan, and Meme have remained at large.

As alleged in the complaint and subsequent indictment, the defendants participated in a long-term conspiracy to saturate Internet marketplace websites including eBay, Cars.com, AutoTrader.com, and CycleTrader.com with detailed advertisements for cars, motorcycles, boats, and other high-value items – generally priced in the $10,000 to $45,000 range – that did not actually exist.  The defendants employed co-conspirators who corresponded with the victim buyers by email, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money.  The defendants allegedly even pretended to sell cars from nonexistent auto dealerships in the United States and created phony websites for these fictitious dealerships.  As part of the scheme, the defendants produced and used high-quality fake passports to be used as identification by co-conspirators in the United States, including Razvan (who previously resided in California), to open American bank accounts.  After the “sellers” reached an agreement with the victim buyers, they would often email them invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with instructions to transfer the money to the American bank accounts used by the defendants.  The defendants and their co-conspirators allegedly used counterfeit service marks in designing the invoices so that they would appear identical to communications from legitimate payment services.  The illicit proceeds were then withdrawn from the U.S. bank accounts and sent to the defendants in Europe by wire transfer and other methods.

The complaint and indictment describe the extent to which Popescu, in particular, led the conspiracy.  Among other things, Popescu coordinated the roles of the various participants in the scheme – he hired and fired passport makers based on the quality of the fake passports they produced, supervised co-conspirators who were responsible for placing the fraudulent ads and corresponding with the victims, and ensured that the illicit proceeds transferred to the U.S. bank accounts were quickly collected and transferred to himself and others acting on his behalf in Europe.  Popescu also allegedly directed Cristea to obtain and transfer luxury watches purchased using the illegal proceeds of the scheme, including three Audemars Piguet watches with a combined retail value of over $140,000, to his associates in Europe.  It is estimated that the defendants earned over $3 million from the fraudulent scheme.

According to the charging documents, Popescu and his close associate Bosogioiu demonstrated that they were aware of the risks of prosecution in the United States.  In a recorded conversation on October 23, 2011, Bosogioiu asked about the difference between federal and state law in the United States and vowed to avoid the FBI.  Popescu, meanwhile, predicted on July 28, 2011, that “criminals will not be extradited from Romania to U.S.A.  . . . [I]t will never happen.”

“Using forged documents and phony websites, for years Popescu and his criminal syndicate reached across the ocean to pick the pockets of hard working Americans looking to purchase cars.  They thought their distance would insulate them from law enforcement scrutiny.  They were wrong.  By now, Popescu and his band of fugitives have seen their co-conspirators brought here to account for their crimes.  Today’s actions place them squarely in the sights of our partners in international law enforcement,” said United States Attorney Lynch.  “We will not stop in our efforts to find these fugitives and bring them to justice for the crimes they have allegedly committed against our citizens.”

“As alleged, the defendants infiltrated the cyber marketplace with advertisements for high-value items that didn’t exist.  They siphoned funds from victims to fuel their greedy desires and created false identities, fake websites and counterfeit certificates of title in order to make the scheme more convincing.  Popescu and his co-conspirators were masters of illusion, but they can’t escape their ultimate reality.  With the help of our law enforcement partners at home and abroad, we will bring them to justice,” said FBI Assistant Director-in-Charge Venizelos.

“Today, we have unsealed charges – and issued “wanted” posters and Interpol red notices – for a band of dangerous cybercriminals who are alleged to have stolen millions of dollars from unsuspecting consumers around the globe,” said Acting Assistant Attorney General Raman.  “As described in the indictment, the leader of this band of thieves openly proclaimed that he is beyond the reach of the U.S. criminal justice system.  But with the help of our international partners, we will track down and capture every alleged member of this criminal syndicate, no matter where they are hiding.”

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

The government’s case is being prosecuted by Assistant U.S. Attorneys Cristina Posa, Nadia Shihata, and Claire Kedeshian of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorney Carol Sipperly of the Criminal Division’s Fraud Section.

The offices of the FBI Legal Attachés in Romania, the Czech Republic, the United Kingdom, Canada, and Hungary were instrumental in coordinating efforts with the United States’ international partners, and the U.S. government thanks its partners in Romania, the Czech Republic, Hungary, the United Kingdom, Canada, and Germany for their close cooperation throughout this investigation.  The Criminal Division’s Computer Crime and Intellectual Property Section, Office of International Affairs, and Asset Forfeiture and Money Laundering Section, as well as the International Organized Crime Intelligence and Operations Center; the Internet Crime Complaint Center; the Costa Mesa, Calif., Police Department; the Orange County, Calif., District Attorney’s Office; and the New York City Police Department also provided assistance in the investigation.

_____________________________

1 Daniel Alexe may also go by the name “Alexe Daniel.”
 

2 Three defendants, Cristea Mircea, Ion Pieptea, and Nicolae Simion, were arrested in Romania and extradited to the United States in March 2013.  Defendant Emil Butoi was arrested in the United Kingdom and also recently extradited to the United States.  The Czech Republic has ordered defendant Aurel Cojocaru’s extradition and defendant Nicolae Ghebosila is still engaged in extradition proceedings in Canada.

Popescu Indictment
Popescu Complaint
 

BROOKLYN, NY – Howard Leventhal, 56, was arrested this morning for defrauding a Florida company of $800,000 and attempting to defraud an undercover law enforcement agent in Brooklyn of more than $2.5 million, by falsely claiming that his company, Neovision USA, Inc. (“Neovision”), had a lucrative contract with Canada’s Department of Health (“Health Canada”).  The defendant’s initial appearance for removal proceedings to the Eastern District of New York is scheduled this afternoon before United States Magistrate Judge Michael T. Mason, at the Everett McKinley Dirksen United States Courthouse in Chicago, Illinois.

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).

According to the complaint unsealed this morning in Brooklyn federal court, in May 2012, Leventhal entered into a factoring agreement with Paragon Financial Group, Inc. (“Paragon”), a Florida company, whereby Paragon would advance Neovision $800,000 in exchange for Paragon’s right to collect a larger sum of money purportedly owed to Neovision by Health Canada.  Health Canada’s indebtedness to Neovision was purportedly based on an agreement between Neovision and 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   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.

Contrary to Leventhal’s representations to Paragon, (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.  Believing his misrepresentations, Paragon advanced Leventhal $800,000.  To date, Paragon has neither received a payment from Health Canada nor received a refund from Leventhal.

As alleged in the complaint, Leventhal also attempted to defraud a potential investor, who in reality was an undercover law enforcement agent posing as a high net worth individual, in Brooklyn, New York, of more than $2.5 million.  In recorded conversations, Leventhal falsely represented that his company had a series of contracts with Health Canada for Heltheo’s McCoy Home Health Tablet and that his company had more than $18 million in sales for 2012.  Leventhal emailed the undercover agent the same fraudulent agreement he used to deceive Paragon.  To further induce the undercover agent to invest in his company, Leventhal sent him six months of phony Bank of America statements for Neovision that falsely showed more than $10 million in payments from Health Canada to Neovision from March 2013 through July 2013.  Neovision’s actual bank statements for the same account and time period do not show any payments from Health Canada.

“As alleged, Leventhal claimed to have lucrative connections within the Canadian government and cutting edge technology that could help save lives.  In reality, his scheme was pure science fiction, complete with phony documents and a fictional medical device.  As part of his alternate reality, Leventhal impersonated Canadian government officials by creating phony government contracts, telephone numbers, and email addresses.  Investors thought they were advancing scientific technology; instead they were merely financing Leventhal’s fraudulent scheme.  Leventhal’s scheme was foiled due to the swift and effective actions of law enforcement both here and in Canada,” stated United States Attorney Lynch.  Ms. Lynch expressed her grateful appreciation to the Royal Canadian Mounted Police (RCMP) and Health Canada for their significant cooperation and assistance in the investigation.

FBI Assistant Director-in-Charge Venizelos stated, “As alleged in the complaint, Leventhal concocted a scheme to defraud potential investors of their money based upon misrepresentations, forgeries, and lies.  After stealing money from Paragon, Leventhal aggressively pursued his next victim-investor who, unbeknownst to him, was an undercover law enforcement agent.  The FBI will use all investigative resources at its disposal to combat cases of fraud and will continue to work with its law enforcement partners to ensure that individuals who line their pockets by defrauding investors are brought to justice.”

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

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

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

HOWARD LEVENTHAL
Age: 56
Long Grove, Illinois

_____________________________

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.
 

A five-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Marcos Alonso Zea, also known as “Ali Zea,” an American citizen and resident of Brentwood, New York, with conspiracy to commit murder in a foreign country, attempting to provide material support to terrorists, attempting to provide material support to al-Qaeda in the Arabian Peninsula, also known as Ansar al-Sharia (AQAP/AAS), and obstruction and attempted obstruction of justice.1  Zea was arrested earlier this morning at his home on Long Island and is scheduled to be arraigned later today before United States Magistrate Judge Arlene Lindsay at the federal courthouse in Central Islip, New York.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General, National Security Division; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).

As set forth in the indictment and other court filings, beginning in the fall of 2011, Zea conspired with others to travel overseas in order to wage violent jihad on the perceived enemies of Islam, which included the secular government in Yemen.  In furtherance of the conspiracy, on January 4, 2012, Zea flew from John F. Kennedy Airport (JFK) in Queens, New York, to London, England, en route to Yemen in an attempt to join and fight alongside members of AQAP/AAS, a designated Foreign Terrorist Organization that has claimed responsibility for several terrorist attacks against the United States, including the attempted Christmas Day 2009 bombing of a Detroit-bound passenger plane.

As set forth in the indictment and other court filings, Zea was intercepted by customs officials in the United Kingdom (UK) in transit to Yemen and returned to the United States.  Despite being prevented from traveling to Yemen, Zea continued his participation in the terrorist conspiracy.  Specifically, Zea encouraged and supported his co-conspirator, Justin Kaliebe, who also was plotting to travel to Yemen to fight jihad.  In August 2012, in a covertly recorded conversation between Zea and Kaliebe, Zea bragged about his lies to UK authorities when he was detained, instructed Kaliebe regarding methods to evade electronic surveillance by law enforcement authorities, and discussed Kaliebe’s plans to fight jihad.  On January 21, 2013, Kaliebe attempted to travel from New York to Yemen for the purpose of joining AQAP/AAS, but was arrested at JFK by members of the FBI’s Joint Terrorism Task Force (JTTF) and the NYPD’s Intelligence Division.2   Several days before Kaliebe attempted to travel to Yemen to join AQAQ/AAS, Zea gave Kaliebe money to support his trip.  During this meeting, which was covertly recorded, Zea stated “I just hope, my story, my, the event that happened to me will help you guys move forward, inspire you.”

            In April 2013, after learning that he was under investigation by the JTTF, Zea directed an associate to erase the hard drive on Zea’s home computer, and provided the associate two additional hard drives that Zea had used previously, which he also requested be destroyed.  Despite Zea’s efforts to thwart the investigation, the JTTF obtained the hard drives and conducted a forensic examination, which revealed an assortment of violent Islamic extremist materials.  For example, the drives contained issues of Inspire magazine, an AQAP/AAS publication that promotes violent jihad, containing articles such as “Which is Better: Martyrdom or Victory?” “Why did I choose al Qaeda?” “What to Expect in Jihad?” and an interview with “Shaykh Abu Hurairah, The Military Commander of al-Qaeda in the Arabian Peninsula.”  The electronic media also included a video, disseminated by the propaganda wing of al-Qaeda in Iraq, depicting the detonation of an explosive device on a vehicle carrying western military personnel.  In addition, investigators recovered a semi-automatic rifle that Zea had given to an acquaintance shortly before he departed for Yemen.   

“Despite being born and raised in the United States, Zea allegedly betrayed his country and attempted to travel to Yemen in order to join a terrorist organization and commit murder,” stated U.S. Attorney Lynch.  “When that plan was thwarted, Zea continued to support terrorism by assisting his co-conspirator’s efforts to travel to Yemen to fight violent jihad.  When the defendant sensed investigators from the JTTF closing in, he engaged in a desperate effort to cover his tracks by attempting to destroy evidence – a tactic that only confirmed his violent aims.  This case clearly demonstrates how the FBI and the NYPD, along with their partners on the JTTF and overseas, work diligently and effectively to counter the efforts of al-Qaeda’s affiliates and their supporters.”  Ms. Lynch also expressed her grateful appreciation to the FBI, NYPD, Immigration and Customs Enforcement/Homeland Security Investigations (HSI), the Nassau County Police Department, the Suffolk County Police Department, the New York State Police, and the Port Authority of New York & New Jersey Police Department for their work on the investigation.

FBI Assistant Director-in-Charge Venizelos stated, “Inspired by terrorist propaganda, Mr. Zea allegedly traveled abroad in 2012 in a vain attempt to reach Yemen, join Al-Qaeda in the Arabian Peninsula, and fight violent jihad. When his attempt failed, Zea turned to financing and inspiring another Long Island man’s commitment to global terror.  And when Zea learned he was under investigation, he feverishly attempted to destroy the incriminating evidence.”

NYPD Commissioner Kelly stated, “Aspirants with lethal intent who seek terror training abroad are of paramount concern. Fortunately, like Kaliebe before him, Zea was stopped due to the close cooperation between the NYPD and FBI.”

The government’s case is being prosecuted by Assistant United States Attorneys Seth D. DuCharme, John J. Durham, and Michael P. Canty, with assistance provided by Trial Attorney Kelli Andrews of the Counterterrorism Section of the Department of Justice.

The Defendant

MARCOS ALONSO ZEA (a/k/a “Ali Zea”)
Age:  25
Brentwood, New York

_____________________________

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

2Kaliebe subsequently pled guilty to one count of attempting to provide material support to terrorists, and one count of attempting to provide material support to AQAP/AAS. Kaliebe is scheduled to be sentenced on December 6, 2013, by United States District Judge Arthur D. Spatt in United States District Court in Central Islip.
 

Today, following three weeks of trial, a jury in federal court in Central Islip, New York, returned a verdict convicting Long Island doctor Leonard I. Stambler of Baldwin Harbor, New York, of conspiracy to distribute oxycodone and distribution of oxycodone, in connection with prescriptions that he provided to patients without a legitimate medical purpose.  The defendant faces imprisonment of up to 20 years at sentencing.  Sentencing is scheduled for February 14, 2014, before United States District Judge Joseph F. Bianco.  After the verdict, the defendant’s bail was revoked, and he was ordered detained pending sentencing 

The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York; Thomas V. Dale, Commissioner, Nassau County Police Department; Joseph A. D’Amico, Superintendent, New York State Police; and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York.           

At trial, the government’s evidence established that Stambler provided prescriptions for hundreds of oxycodone pills to two of his patients without a legitimate medical purpose and outside the course of a professional medical practice, and also conspired with those patients and assisted them in the sale of pills that he prescribed.  On November 21, 2011, investigators with the DEA Task Force observed Stambler driving his patient, Christopher Adams, to a pharmacy in East Rockaway, New York, where Stambler and Adams filled a prescription that Stambler had written in the name of Adams’s girlfriend, Nancy Cook.  As investigators watched, Stambler then drove Adams to a nearby location to meet with a third individual where some of the oxycodone pills were exchanged for cash.  Investigators stopped Stambler’s vehicle shortly after the drug deal.  The government’s evidence also established that on a separate occasion, Stambler drove Cook, who was also Stambler’s patient, to a home in East Rockaway where she sold oxycodone pills to the same individual involved in the November 21, 2011, drug deal.  Both Adams and Cook testified at trial about Stambler’s participation in the drug transactions as well as their own destructive addiction to oxycodone.   

Oxycodone is a scheduled controlled substance that may be dispensed by medical professionals only for a legitimate medical purpose in the usual course of a doctor’s professional practice.  It is a powerful and highly addictive drug, and is increasingly abused because of its potency when crushed into a powder and ingested, leading to a heroin like euphoria.

“Instead of living up to his responsibilities as a trusted physician, Stambler assumed the role of a drug dealer, acting to put hundreds of oxycodone pills onto the streets of  Long Island for no valid medical reason, but simply to make money,” stated United States Attorney Lynch.  “This conviction should serve as a warning to any physicians engaged in such conduct that in addition to losing his or her license to practice medicine, they will face the prospect of a felony conviction.”  Ms. Lynch extended her grateful appreciation to each of the law enforcement agencies for their assistance in this case.

Stambler’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative.  In January 2012, the United States Attorney’s Office and the DEA, in conjunction with the five District Attorneys in this jurisdiction, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Prescription Drug Initiative to mount a comprehensive response to what the U.S. Department of Health and Human Services’ Centers for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics.  So far, the Prescription Drug Initiative has brought over 120 federal and local criminal prosecutions, taken civil enforcement action against a pharmacy, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers.  The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.

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

The Defendant

Name: LEONARD I. STAMBLER
Age: 62

Jessie Bell, the former pension fund administrator of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, Local 431 (“Local 431”) Pension Fund (“Pension Fund”) pleaded guilty today at the federal courthouse in Brooklyn, New York, before United States Magistrate Judge Marilyn D. Go to embezzling from the Pension Fund. On May 7, 2013, Frederick Meyers, Bell’s father and the former president of Local 431, also pleaded guilty to embezzling from the Pension Fund.

The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Jonathan Kay, Regional Director for the New York Regional Office of the United States Department of Labor, Employee Benefits Security Administration (“DOL-EBSA”), and Cheryl Garcia, Acting Special Agent in Charge, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region (“DOL-OIG”).

During their respective plea allocutions, both defendants admitted that from approximately January 2005 to October 2008, they embezzled $85,000 by using a Pension Fund American Express credit card for their personal expenses, including travel, gasoline, parking, meals and cellular telephone bills, and also used Pension Fund bank checks to pay personal expenses such as parking tickets and parking expenses. In addition, from approximately January 2005 to July 2008, Bell received over $100,000 in compensation from the Pension Fund that was not approved by the Pension Fund Board of Trustees.

“Members of Local 431 entrusted their hard-earned dollars, made by the sweat of their brow, to Bell and her father, relying on them to safeguard those funds until the day they had to put down their tools. Instead of watching over the workers’ future, Bell and her father stole those funds and squandered them on their own daily expenses,” stated United States Attorney Lynch. “Union executives who take pension contributions from hardworking union members to fund their own personal spending sprees will be held accountable.” Ms. Lynch expressed her grateful appreciation to DOL-EBSA Regional Director Kay and DOL-OIG Acting Special Agent in Charge Garcia, whose offices led the government’s investigation.

When sentenced, each defendant faces a maximum of five years’ imprisonment.

The government’s case is being prosecuted by Assistant United States Attorney Anthony M. Capozzolo.

The Defendants:

FREDERICK MEYERS
Jersey City, New Jersey
Age: 74

JESSIE BELL
Newark, New Jersey
Age: 52

Lawal Olaniyi Babafemi, a Nigerian citizen charged with providing material support to al-Qaeda in the Arabian Peninsula (“AQAP”), a designated foreign terrorist organization, and using firearms in furtherance of that crime, was arraigned today before United States District Judge John Gleeson at the federal courthouse in Brooklyn, New York.  At this initial appearance in court in the United States after his extradition from Nigeria, Babafemi was ordered held without bail.

The charges and arraignment were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General for the National Security Division; and George Venizelos, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation.

“As alleged in the indictment, the defendant was a member of a violent terrorist organization bent on doing harm to the United States and its allies.  The defendant threw his efforts behind al-Qaeda in the Arabian Peninsula’s media, recruitment, and weapons training campaigns in an effort to strengthen the terrorist group’s grip on the region and extend its reach throughout the world.  We will use every tool at our disposal to combat al-Qaeda and other terrorist groups in a manner consistent with our laws,” stated United States Attorney Lynch.  Ms. Lynch also expressed her grateful appreciation to the government of Nigeria for its assistance and cooperation in this extradition.

“As alleged, the defendant trained with al-Qaeda, assisted in its propaganda efforts, and actively recruited others to join its demented cause.  We will continue to work with our international partners to mitigate the global terrorist threat,” stated FBI Assistant Director-in-Charge Venizelos.

According to court documents and the record of today’s proceeding, between approximately January 2010 and August 2011, the defendant traveled twice from Nigeria to Yemen to meet and train with leaders of AQAP, the Yemen-based branch of al-Qaeda.  Babafemi assisted in AQAP’s English-language media operations, which include the publication of the magazine “Inspire.”  At the direction of the now-deceased senior AQAP commander Anwar al-Aulaqi, Babafemi was provided by AQAP leadership with the equivalent of almost $9,000 in cash to recruit other English-speakers from Nigeria to join that group.  While in Yemen, Babafemi also received weapons training from AQAP.

On February 21, 2013, a grand jury in the Eastern District of New York returned a sealed indictment charging the defendant with one count of conspiracy to provide material support to AQAP, in violation of Title 18, United States Code, Section 2339B; one count of providing and attempting to provide material support to AQAP, in violation of Title 18, United States Code, Section 2339B; one count of unlawful use of machineguns, in violation of Title 18, United States Code, Section 924(c); and one count of conspiracy to unlawfully use machineguns, in violation of Title 18, United States Code, Section 924(o).  At the request of the United States, the Nigerian government thereafter commenced extradition proceedings against the defendant in July 2013, and he was ordered extradited in September 2013.

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

If convicted, the defendant faces up to 15 years in prison on each of the material support charges and up to life on each of the firearms charges.

The government’s case is being prosecuted by Assistant United States Attorneys Zainab Ahmad and Hilary Jager, with assistance from Trial Attorney William M. Narus of the Justice Department’s Counterterrorism Section and the Justice Department’s Office of International Affairs.

The Defendant:

LAWAL OLANIYI BABAFEMI
Age: 33

A complaint was unsealed yesterday in federal court in Brooklyn, New York, charging eleven individuals with conspiracy to commit mail fraud as part of an extensive scheme to enable applicants for New York State commercial driver’s licenses to cheat on required tests.  The defendants were arraigned before United States Magistrate Judge Ramon E. Reyes, Jr. at the United States Courthouse in Brooklyn, New York on September 25, 2013 and five defendants were detained.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Douglas Shoemaker, Regional Special Agent-in-Charge, U.S. Department of Transportation-Office of Inspector General (DOT-OIG), and Catherine Leahy Scott, New York State Inspector General (NYS-OIG).

As set forth in the complaint, drivers of certain commercial vehicles, such as large buses and heavy transportation trucks, must possess a New York State commercial driver’s license (CDL), which is issued by the DMV pursuant to the regulations set forth by the United States Department of Transportation.  Before obtaining a CDL, all applicants must pass tests covering various subjects related to safely driving large vehicles.  The DMV offers CDL exams in a written format containing multiple choice questions, or an audio format comprised of true or false questions.  Both versions require applicants to fill out a paper answer sheet.

One cheating method that the defendants allegedly used was to provide applicants with a coded pencil that contained a series of dots and dashes inscribed on the sides of the pencil.  These symbols reflected the correct true or false answers to the audio version of the CDL exam.  Another cheating method that the defendants allegedly orchestrated enabled applicants to cheat on written CDL tests at various DMV offices in Queens, Long Island and Manhattan.  Defendants employed as DMV security guards surreptitiously signaled applicants to leave the DMV offices with their uncompleted tests in hand.  Other defendants then met the applicants outside the DMV offices and arranged for another defendant to complete the exams.  Applicants then re-entered the DMV with the completed exams and submitted them for grading.  The security guards received cash bribes for their role in the scheme.

As alleged in the complaint, the defendants charged each applicant approximately $1,500 to $2,500 for assistance in cheating on the CDL exam.  Between April 2013 and September 2013, the defendants enabled over 60 people to fraudulently obtain or attempt to obtain CDLs.

“Today’s arrests demonstrate the Office’s commitment to aggressively prosecute and investigate those who compromise the public safety on our roads,” stated Ms. Lynch.  “As alleged in the complaint, with their wide-spread cheating scheme the defendants enabled unqualified drivers to take to our roads and highways behind the wheel of large buses and heavy trucks.  In doing so, they jeopardized the safety of other drivers, their passengers and even pedestrians.  Together with our law enforcement partners, we will seek to punish those individuals who endanger the public by committing such crimes.”  Ms. Lynch expressed her grateful appreciation to the New York State Attorney General’s Office; the New York City Police Department, Internal Affairs Bureau; New York County District Attorney’s Office; and the New York State Department of Motor Vehicles for their cooperation and assistance in the investigation.

“The alleged fraudulent scheme of issuing commercial driver’s licenses’ to unworthy drivers puts all of us at risk,” said HSI New York Special Agent-in-Charge Hayes. “These arrests today make our roads safer but also show the great lengths that people will go to circumvent the process of obtaining a commercial driver’s license by breaking the law.”

“This investigation demonstrates our commitment to ensuring that U.S. DOT’s CDL regulations fulfill their purpose of advancing safety on the roads by requiring that only qualified individuals obtain CDLs,” stated U.S. DOT-OIG Regional Special Agent-in-Charge Shoemaker.  “Working with our law enforcement and prosecutorial colleagues, we will continue our vigorous efforts to prevent, detect and prosecute to the fullest extent of the law fraud schemes which adversely affect the public trust throughout New York and elsewhere.”

New York State Inspector General Scott said: “Truck drivers – many of whom are charged with transporting hazardous chemicals – are trained to drive several tons of cargo often through busy streets and highways.  Bus drivers take our children to school every day.  These are among the serious responsibilities of anyone who acquires a commercial driver’s license.  Our investigation uncovered numerous people who paid others thousands of dollars for answers to a test they could not answer without cheating, a scheme which undermined the system designed to ensure the security of our roads and communities.  I am very pleased to report today that my office along with our federal partners, the Department of Motor Vehicles and the District Attorney’s Office have shut down this operation, and we will take all steps to ensure that everyone who has gamed the system will be off the road.”

The charges contained in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants each face a maximum sentence of twenty years’ imprisonment.  Additionally, if convicted, the defendants may be fined up to $250,000.

The government’s case is being prosecuted by Assistant United States Attorneys Michael Warren and Soumya Dayananda. 

The Defendants:

AKMAL NARZIKULOV
Age: 28
Residence: Brooklyn, New York

FIRDAVS MAMADALIEV
Age: 22
Residence: Brooklyn, New York

DALE HARPER
Age: 48
Residence: Bronx, New York

JOACHIM PIERRE LOUIS
Age: 32                                                                                                                       
Residence: Brooklyn, New York

LATOYA BOURNE
Age:  32
Residence: Brooklyn, New York

MARIE DANIEL
Age: 47
Residence: Queens Village, New York

LUC DESMANGLES
Age: 27
Residence: Brooklyn, New York

BEAYEAH KARMARA
Age: 25
Residence: Staten Island, New York

JOSE PAYANO
Age: 44
Residence: Brooklyn, New York

TANAEL DANIEL
Age: 36
Residence: Brooklyn, New York

INOCENTE RENE GONZALEZ-MARTINEZ
Age: 57
Residence:  Bronx, New York

Mohammad Ajmal Choudhry was arraigned earlier today on a superseding indictment charging him with conspiring to commit murder in a foreign county, transmitting threats via interstate communications, and visa fraud.  He is next scheduled to appear in court before United States District Judge William F. Kuntz II tomorrow at 11:00 a.m. at the United States Courthouse in Brooklyn, New York.1

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and Michael R. Fogarty, Acting Special Agent-in-Charge, New York Field Office, U.S. Department of State’s Diplomatic Security Service.

According to the superseding indictment and other court filings submitted by the government, Choudhry’s daughter, Amina Ajmal, was held against her will in Pakistan for more than three years by relatives at her father’s direction.  During that time, Ajmal, a U.S. citizen, was forced into an arranged marriage with a Pakistani national for the purpose of obtaining a U.S. visa for that individual.  Ajmal eventually escaped Pakistan and returned to the United States with the assistance of a cousin and U.S. State Department officials.  During subsequent recorded telephone calls between Ajmal and Choudhry, the defendant threatened to orchestrate the murder of Ajmal’s cousin if Ajmal, whose whereabouts remained unknown to the defendant, did not return immediately to the family home in Brooklyn.  On February 25, 2013, after Ajmal refused to return home, Ajmal’s cousin’s father and sister were shot and killed in Pakistan.  According to an eyewitness, Choudhry’s brother was observed standing over the victims, holding a gun and desecrating the bodies.  Agents from HSI and the Diplomatic Security Service placed Choudhry under arrest in Brooklyn later that same day.

“As alleged, the defendant viewed his daughter as a commodity to be bartered. When she escaped those holding her overseas and fled to safety in the U.S., the defendant enlisted his confederates to retaliate against those who had helped her to freedom.  As a result of his plot, two innocent people were murdered in Pakistan,” stated United States Attorney Lynch.  “We are committed to ensuring that people in the United States who export murder abroad will be brought to justice.”  Ms. Lynch expressed her grateful appreciation to HSI and the State Department, which have worked closely together to investigate the case, and added that the government’s investigation is ongoing.

“There is nothing less honorable than the murder of innocent people,” said HSI New York Special Agent-in-Charge Hayes.  “HSI and our global law enforcement partners work diligently crimes like these and serve justice on the predators who commit them.”

“The Diplomatic Security Service is firmly committed to working with the U.S. Attorney’s Office and Homeland Security Investigations to bring those who commit crimes to justice,” said Gregory B. Starr, Principal Deputy Assistant Secretary and Director, U.S. Department of State’s Diplomatic Security Service.  “The Diplomatic Security Service’s strong relationship with our law enforcement partners continues to be essential in the pursuit of justice.”

The government’s case is being prosecuted by Assistant United States Attorneys Amanda Hector, Richard M. Tucker and Margaret E. Gandy.

The Defendant

MOHAMMAD AJMAL CHOUDHRY
Age: 60

_____________________________

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

Earlier today, Joseph Yannai, author of The International Who’s Who of Cooks (2004-2005), was sentenced to a term of imprisonment of 11 years following his conviction after trial for enticing women to travel to the United States from abroad so that he could commit sex crimes against them, forced labor, and several immigration crimes.  The proceeding was held before Senior United States District Judge Edward R. Korman at the United States Courthouse in Brooklyn, New York.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, and Janet DiFiore, Westchester County District Attorney.  The case was jointly investigated with the New York State Police Department and Pound Ridge Police Department.

The government’s evidence at trial established that between January 2003 and March 2009, Yannai searched au pair websites for young women from around the world to recruit to work in his home, which he shared with his wife.  Yannai told the women that the work involved domestic services and clerical assistance.  Yannai, however, used deception and fraud in recruiting the victims, even posing as two different women, “Joanna” and “Sylvia,” who had supposedly worked for Yannai before and who extolled Yannai’s virtues in email exchanges with the victims.  In these fake emails, which were intended to allay the victims’ reservations about working for the defendant, “Joanna” and “Sylvia,” among other things, reassured the victims that Yannai had no intention of having sex with them.

As the evidence at trial showed, however, once the victims, five of whom testified at trial, arrived at Yannai’s Pound Ridge home, he subjected them to near-constant sexual abuse, which included groping the victims’ breasts and buttocks, digitally penetrating them, and attempting to force them to perform oral sex on him.  Yannai sought to ensure the victims’ compliance with his increasingly more sexually abusive demands through fear, isolation, psychological coercion, and other means.  Some of the victims were able to escape shortly after they arrived; others could not escape for months.  Yannai was arrested after one of the victims escaped and went to a local police precinct.  In addition to the five victims who testified at trial, the government’s investigation revealed that Yannai had victimized six other women, and, during the course of his scheme, had attempted to contact approximately 1,500 women worldwide.

“Yannai used the Internet to lure young women from around the world into his home to sexually abuse them, even using alter egos to manipulate them into coming to the U.S.  Once they were in this country, alone and without friends and family, he exploited their fears to keep them trapped in his home.  Yannai’s other personas were no help to him today, as he stands revealed for what he is, a predator who used and abused defenseless young women.  Today the defendant has been held to account for his victimization of numerous women throughout the world,” stated United States Attorney Lynch.  “This office will continue to aggressively investigate and prosecute these crimes to the full extent of the law.”

“Today’s sentencing begins the healing process for these victims that were so unjustly targeted for sex crimes and forced labor through fraud and false promises,” said HSI Special Agent-in-Charge Hayes.  “The sentencing of this man is a stern warning to individuals who target innocent women for sexual abuse: You will be found and brought to justice.”

Westchester County District Attorney DiFiore stated, “This defendant used the Internet to engage in a long running coercive campaign to lure numerous young European and South American women for a purported job as a personal assistant.  In reality, he was like the proverbial fox entering the chicken coop where he controlled, psychologically manipulated and sexually abused these women, leaving them trapped and victimized.”

The government’s case is being prosecuted by Assistant United States Attorneys Daniel Spector and Hilary Jager, and Special Assistant United States Attorney Audrey Stone, Second Deputy District Attorney and Chief of the Special Prosecutions Division, Westchester County District Attorney’s Office.

The Defendant

JOSEPH YANNAI
Age: 66

Earlier today, Francis “BF” Guerra, a long-time associate of the Colombo organized crime family of La Cosa Nostra (the “Colombo crime family”), was sentenced to 14 years’ imprisonment for his role in a scheme to fraudulently obtain and distribute prescription drugs. The sentence was imposed by the Honorable Sandra L. Townes, United States District Judge for the Eastern District of New York, at the United States Courthouse in Brooklyn, New York.

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

Today’s proceeding marks the culmination of a lengthy investigation and prosecution by the U.S. Attorney’s Office and the FBI. Following a jury trial conducted in June and July of 2011, Guerra was convicted of one count of conspiracy to distribute oxycodone and Oxycontin, and one count of actually distributing those drugs, in 2010 and 2011. In addition, he was convicted of four counts of wire fraud based on his fraudulently obtaining reimbursement for those drugs from his insurance provider.

During the sentencing proceeding, United States District Judge Sandra L. Townes found that, in addition to the crimes of conviction, the government proved by a preponderance of the evidence that the defendant had committed numerous additional crimes, including the 1992 murder of Michael Devine and the 1993 murder of Joseph Scopo. Devine was murdered because he had a relationship with the wife of Alphonse Persico, then the acting boss of the Colombo crime family and son of the official boss, Carmine Persico, Jr. Scopo was murdered because he was the underboss of a faction of the Colombo crime family that sought to take control from the Persicos. By murdering Scopo, Guerra and his co-conspirators won the “Colombo family war” -- one of the most violent feuds in mafia history -- for the Persico faction.

“Years ago, the defendant Guerra chose a life of crime, with murder as his criminal stock in trade. Organized crime has always been about money rather than honor, and recent years saw Guerra move into the equally deadly business of illegal trafficking in prescription drugs,” stated United States Attorney Lynch. “This sentence is a harsh warning to anyone considering introducing these addictive, deadly drugs into our community. This sentence also sends an important message to members and associates of organized crime. We will never stop investigating and prosecuting the murders and other violent crimes they commit, no matter how long ago they occurred, and we will hold those who commit such crimes accountable, regardless of how long they have avoided justice.” Ms. Lynch extended her grateful appreciation to the FBI and the New York City Police Department for their assistance.

FBI Assistant Director-in-Charge Venizelos stated, “The illegal traffic in prescription drugs poses as grave a danger to society as trafficking in illicit drugs. Today’s sentence reflects the seriousness of the offense. The sentence also closes a chapter in the bloody Colombo war from 20 years ago. Responsibility for two murders has been laid at the feet of this defendant. There is no statute of limitations on the resolve of the FBI to see justice done.”

The government’s case was prosecuted by Assistant United States Attorneys Nicole M. Argentieri and Allon Lifshitz.

The Defendant:

FRANCIS GUERRA
Age: 47

Abdel Hameed Shehadeh, a United States citizen and resident of Staten Island, New York, was sentenced to 13 years in prison today in federal court in Brooklyn, New York.  In March 2013, Shehadah was convicted at trial of making false statements in a matter involving international terrorism.  In addition to the prison term, Shehadeh was sentenced to 3 years of supervised release. 

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 (FBI), New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD). 

According to court filings and the evidence introduced at trial, in early 2008, Shehadeh devised a plan to travel to the Federally Administered Tribal Areas of Pakistan in order to join al Qaeda or the Taliban.  In furtherance of his plan, on June 13, 2008, Shehadeh flew on a one-way airline ticket from John F. Kennedy International Airport to Islamabad, Pakistan.  After he was denied entry by Pakistani officials, Shehadeh told investigators from the FBI’s Joint Terrorism Task Force (“JTTF”) that he had traveled to Pakistan in order to visit a university.  However, as established by the evidence at trial, the true purpose of Shehadeh’s trip was to wage violent jihad against United States military forces.

Several weeks after he was denied entry to Pakistan, Shehadeh attempted to enlist in the United States Army at the Times Square recruiting station in Manhattan.  Shehadeh’s application was denied when it was discovered that he had concealed his prior trip to Pakistan.  Though Shehadeh claimed that he had tried to enlist for career opportunities and benefits, as established at trial, his true motive was to commit treason by defecting and fighting alongside insurgent forces overseas. 

Over the next several months, in subsequent interviews with members of the JTTF, Shehadah continued to conceal the true purpose of his travel.  However, in 2010, Shehadah confessed to FBI agents that he had sought to join a jihadist fighting group.  Shehadah was arrested in Honolulu, Hawaii, in October 2010.

“Shehadah was ardently committed to becoming a terrorist and waging violent jihad.  He repeatedly attempted to travel overseas to turn against his native country, going so far as to try to join the U.S. military in a treasonous ruse,” stated United States Attorney Lynch.  “Due to the tireless work of the FBI and the NYPD, the defendant’s jihadist efforts were detected and foiled.  Now, he will spend 13 years in a federal prison.”  United States Attorney Lynch thanked the FBI’s New York and Honolulu Field Offices, as well as the New York City Police Department, for their substantial contributions to the multi-year investigation that led to the defendant’s arrest and conviction. 

The sentence was imposed by United States District Judge Eric N. Vitaliano.

The government’s case was prosecuted by Assistant United States Attorneys Alexander Solomon, David Sarratt and James Loonam, with the assistance of Trial Attorney Mara Kohn of the Counterterrorism Section of the Department of Justice.

The Defendant

Abdel Hameed Shehadeh
Age: 23
Staten Island, New York

Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced the filing and settlement of a civil action by the United States against New York Methodist Hospital (“NY Methodist”).  Under a Consent Judgment, NY Methodist has agreed to implement measures designed to prevent the issuance of NY Methodist prescriptions in violation of the Controlled Substances Act and paid a civil penalty in the amount of $70,000. 

In the civil action, the United States alleges that between May 2008 and July 2010, medical residents employed by NY Methodist issued a total of 194 prescriptions for Adderall without a legitimate medical purpose. The medical residents employed by NY Methodist issued the prescriptions on prescription forms bearing the name of NY Methodist.   The residents, acting with other individuals, then filled the prescriptions at local pharmacies.  The residents themselves consumed some of the Adderall obtained by filling the prescriptions.  The remainder of the Adderall was sold, either on Craigslist or in hand to hand transactions.  In 2012, in a related criminal prosecution in this district, a former NY Methodist medical resident was convicted for conspiracy to distribute and possess with intent to distribute Adderall.

Adderall, a stimulant that contains amphetamine salts, is classified as a Schedule II controlled substance, because it has a high potential for abuse and, when abused, may lead to severe psychological or physical dependence.  Adderall abuse has become a growing problem, particularly among high school and college students.  According to figures compiled by the Substance Abuse and Mental Health Services Administration, emergency room visits involving Adderall and similar stimulants nearly tripled from 2005 to 2010.  Abuse of Adderall can lead to heart attack, stroke, seizures, hallucinations and paranoia, among other things.

Under the Consent Judgment, NY Methodist will establish a computer database that will contain information concerning each prescription written on NY Methodist prescription paper.  This database will make it easier to identify any NY Methodist prescriptions that are issued in violation of the Controlled Substances Act.  NY Methodist will also implement a compliance program designed to ensure that NY Methodist complies with the requirements of the Controlled Substances Act regarding the issuance of prescriptions and the prevention of theft and loss of controlled substances and blank prescription forms.  In settling the action, NY Methodist did not admit wrongdoing.

“This settlement serves as a wake-up call to hospitals, especially hospitals that employ medical residents,” said United States Attorney Lynch.  “Federal law requires that hospitals ensure that their residents and other medical personnel follow all requirements of the Controlled Substances Act, including the requirement that a prescription for a controlled substance such as Adderall be issued only for a legitimate medical purpose. New York Methodist Hospital failed to live up to its obligations and is being held accountable for its conduct.  This settlement also serves as a reminder to the community as a whole of the destructive effects of the abuse of Adderall and of the need to make sure that Adderall is used only when there is a legitimate medical need for it, and only under the supervision of a physician.” United States Attorney Lynch thanked the Drug Enforcement Administration’s New York City Tactical Diversion Squad for its assistance.  The Tactical Diversion Squad comprises agents and officers from the Drug Enforcement Administration, The New York City Police Department, Town of Orangetown Police Department and Westchester County Police Department. 

In January 2012, the United States Attorney’s Office for the Eastern District of New York and the Drug Enforcement Administration, in conjunction with the five district attorneys in this jurisdiction, the Nassau and Suffolk County Police Departments, the New York City Police Department and New York State Police, along with other key federal, state and local government partners, launched the Prescription Drug Initiative to mount a comprehensive response to what the U.S. Department of Health and Human Services’ Centers for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics.  To date, the Prescription Drug Initiative has brought over 120 federal and local criminal prosecutions, taken civil enforcement actions against a pharmacy and a pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.

The United States’ case was handled by Assistant United States Attorney Elliot M. Schachner.  

New Arrest: Rhamaad Spann, 30, Of Brentwood Arrested Yesterday Evening. Attached Indictment Alleges Spann As Shooter In Murder Of Innocent Home Owner Killed During A Home Invasion In December, 2009 In Bohemia, NY.

Federal Grand Jury In Brooklyn Hands Down Indictment In Maralit Gun Trafficking Case

Earlier today, Angel Cortez-Granados was sentenced in federal court in Brooklyn, New York, to 15 years’ imprisonment, to be followed by five years of supervised release, for the sex trafficking of two victims.  In addition, the defendant was ordered to pay $145,815 in restitution to the two victims.  On September 20, 2011, Homeland Security Investigations arrested Cortez-Granados as part of an ongoing investigation into the Granados Sex Trafficking organization.  The investigation has resulted in the successful prosecution of five Granados family members including Cortez-Granados’s cousins, Eleuterio Granados-Hernandez and Samuel Granados-Hernandez.

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.  The sentence was imposed by United States District Judge Sandra L. Townes.   

“Angel Cortez-Granados ruthlessly exploited his victims, using threats of violence to force them into a form of sexual slavery.  The significant sentence imposed today is an important step in restoring dignity to the defendant’s victims,” stated United States Attorney Lynch.  “This sentence reflects our ongoing commitment to eradicate the sex trafficking of young girls.”  Ms. Lynch thanked the HSI agents who investigated the case and extended her grateful appreciation to the organizations that provided services and advocacy to the victims in this case, including Sanctuary for Families, Polaris Project, and the law firms of Cleary, Gottlieb, Steen & Hamilton LLP and Steptoe & Johnson LLP. 

On March 2, 2012, Cortez-Granados pled guilty to engaging in sex trafficking between April 2011 and August 2011, by smuggling an individual identified in court filings as Jane Doe 1 from Mexico illegally into the United States and forcing her to engage in prostitution.

According to court filings, Cortez-Granados smuggled 21-year-old Jane Doe 1 and another individual identified as 21-year-old Jane Doe 2 from Mexico into the United States for the purpose of trafficking them as prostitutes.   When Jane Doe 1 refused to engage in commercial sex acts, Cortez-Granados placed a knife to her throat and threatened that she would never see her children again.   Ultimately, Cortez-Granados forced both Jane Doe 1 and Jane Doe 2 to work as prostitutes and provide all of their earnings to him.  Jane Doe 1 worked for the defendant in the New York area, Massachusetts, Maryland, Virginia, and North Carolina from 2006 to 2011, and Jane Doe 2 worked for the defendant in North Carolina from April 2010 until September 2011.  

At the sentencing proceeding, Jane Doe 2 stated that Cortez-Granados “forced me to prostitute to myself to 100 clients per week to reach a quota of $1,500 dollars.”  Jane Doe 2 stated throughout her time with Cortez-Granados, she “felt like a prisoner.”  Finally, Jane Doe 2 asked the Court for “justice to be done for myself and my family.”

As set forth in court filings, Cortez-Granados’s cousins, Eleuterio Granados-Hernandez and Samuel Granados-Hernandez, 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.  Both have pleaded guilty to sex trafficking in a separate case, and each faces a mandatory minimum sentence of 15 years in prison.

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

The Defendant

ANGEL CORTEZ-GRANADOS  
Age: 26
Mexico

E.D.N.Y. Docket No. CR-11-657 (SLT)

In federal court in Brooklyn, New York, Abraham Iraheta, a member of the Flushing, Queens, chapter of the violent international gang La Mara Salvatrucha, also known as “MS-13,” pleaded guilty on Monday to racketeering and murder conspiracy charges.  Jose Barrera, a member of the same MS-13 chapter, pleaded guilty earlier today to assault with a dangerous weapon.  When sentenced, Iraheta and Barrera each face up to 20 years’ imprisonment.  On Tuesday, Jose Celestino Guillen-Rivas, a member of a Fairfax County, Virginia, chapter of MS-13, pleaded guilty to conspiracy to tampering with a witness, and faces a sentence of up to life imprisonment.  The defendants entered their pleas before United States District Judge William F. Kuntz at the federal courthouse in Brooklyn.

The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York Field Office; and Edmund Hartnett, Commissioner, City of Yonkers Police Department.

“This Office will match MS-13’s dedication to violence with our own unwavering commitment to justice.  We have now convicted over 200 MS-13 soldiers and leaders in the Eastern District of New York, and we will work tirelessly until this violent gang is eradicated from the district and elsewhere,” stated United States Attorney Lynch.  “This week’s convictions are another important step toward ending the gang’s influence in our communities and bringing a measure of justice to the victims and their families.”  Ms. Lynch expressed her grateful appreciation to HSI and the City of Yonkers Police Department for their assistance in the investigation and prosecutions.

According to the indictment and other court filings, Iraheta, known in the gang as “Lobo,” was a member of a chapter of the gang that committed a series of violent crimes, including murder, murder conspiracy and attempted murder, in Flushing, Queens, and elsewhere.  Among other crimes, Iraheta was charged with attacking the father of a rival gang member with a machete.  As part of his plea, Iraheta admitted to being a member of MS-13, conspiring to kill members of a rival gang, and plotting to kill a disfavored associate of the gang.  As part of his plea, Barrera, known in the gang as “Travieso,” admitted to the violent stabbing of a young associate of rival gang.

Guillen-Rivas, known in the gang as “Pirata,” pled guilty to conspiring with members of the Flushing chapter to tamper with a witness for the government in the Virginia homicide trial of an MS-13 member by using violence in order to prevent the witness from testifying again.

The defendants were charged along with seven other MS-13 members in an indictment unsealed on January 5, 2012, and are the last to plead guilty.  Their convictions are the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang comprised primarily of immigrants from El Salvador, Honduras and Guatemala.  With numerous chapters, or “cliques,” the MS-13 is the largest street gang in the Eastern District of New York, with a strong presence in immigrant communities in Queens and 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. 

The government’s case is being prosecuted by Assistant United States Attorneys Darren A. LaVerne, Tali Farhadian, and Kevin Trowel.

The Defendants

ABRAHAM IRAHETA, also known as “Lobo”
Age: 22
Queens, New York

JOSE BARRERA, also known as “Travieso”
Age: 24
Queens, New York

JOSE CELESTINO GUILLEN-RIVAS, also known as “Pirata”
Age: 33
Fairfax, Virginia

Earlier today, a federal magistrate judge in Brooklyn detained an Irish national who was arrested on Saturday and charged in a complaint for false labeling in connection with his alleged role in international rhinoceros horn smuggling in violation of the Lacey Act.  The arrest and charge is a result of “Operation Crash,” a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.

The Department of Justice filed a complaint in federal court in the Eastern District of New York alleging that Michael Slattery, Jr., a 25-year-old Irish national, fraudulently purchased a set of black rhinoceros horns in Texas and then travelled to New York and used a falsified document to sell the horns for $50,000. 

The charge and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division.

“The illicit trafficking in black rhino horns encourages the wholesale destruction of these protected animals.  Slattery showed no regard for the black rhino’s tenuous hold on survival, as he allegedly used a straw buyer and fraudulent documents to convert the protected animal parts into cash.  This arrest is the culmination of the dogged efforts of committed law enforcement agents to track down and root out illegal trafficking in protected wildlife,” said U.S. Attorney Lynch.  “The majestic black rhinoceros is protected under the laws of this country and the international community – we stand by our obligations to defend these precious animals.”  Ms. Lynch extended her grateful appreciation to the U.S. Fish and Wildlife Service Special Operations and the Department of Homeland Security for their assistance. 

According to the complaint filed in on September 14, 2013, in 2010 Slattery traveled from England to Texas to acquire black rhinoceros horns.  Slattery and others then used a day laborer with a Texas driver’s license as a straw buyer to purchase two horns from an auction house in Austin.  The complaint charges that Slattery and his group then traveled to New York where they presented a fraudulent Endangered Species Bill of Sale and sold those two and two other horns to an individual for $50,000.        

According to court records and government statements made in court, Slattery is a member of The Rathkeale Rovers (also known as the “Irish Travelers”), which are tight-knit extended family groups that live a nomadic lifestyle.  The group leverages the rising price for rhinoceros horns in the black market to be used for traditional medicines and carving.  According to information made public by Europol, the Rathkeale Rovers have been involved in an epidemic of raids on museums in Europe in which rhinoceros horns have been stolen.

Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans.  All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered.  Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population.  In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups.  Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. As a result of this demand, rhino populations have declined by more than 90 percent since 1970.  South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.   

The charge in the complaint is merely and allegation, and the defendant is presumed innocent unless and until proven guilty.  The government’s case is being prosecuted by Assistant U.S. Attorney Julia Nestor and Trial Attorney Gary N. Donner of the Justice Department’s Environmental and Natural Resources Division.

The Defendant

Michael Slattery, Jr.
Citizenship: Irish
Age: 25

An indictment was unsealed today in federal court in Brooklyn, New York, charging Alhassane Ould Mohamed, also known as “Cheibani,” a Malian citizen, with the murder and attempted murder of United States Embassy personnel stationed in Niamey, Niger in December 2000.   In addition, a reward of $20,000 was announced for information that leads to the defendant’s capture.

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 (FBI), New York Field Office; Lieutenant General Michael T. Flynn, Director of the Defense Intelligence Agency; and Greg Starr, Principal Deputy Assistant Secretary for Diplomatic Security, U.S. Department of State.

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 used the pistol to shoot Mr. Bultemeier.  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).  The indictment was unsealed earlier today.

“U.S. diplomat William Bultemeier lost his life while representing his country overseas, and U.S. Marine Christopher McNeely was gravely wounded trying to protect him, all during the brazen armed carjacking allegedly perpetrated by the defendant and his confederate.  The sacrifice of Mr. Bultemeier and the courage of Staff Sergeant McNeely in service to their country will not be forgotten.  The United States will work ceaselessly to bring those who harm our diplomats and military personnel to justice,” stated United States Attorney Lynch.  Ms. Lynch expressed her grateful appreciation to the governments of Niger, Mali and Algeria for their substantial assistance and cooperation in connection with this investigation.  The FBI and the State Department’s Bureau of Diplomatic Security are currently coordinating with foreign partners to apprehend the defendant.

“As alleged in the indictment, Mr. Bultemeier was representing the United States Government in Niger when he was callously murdered by the defendant.  U.S. Marine Staff Sergeant McNeely, who courageously attempted to come to Mr. Bultemeier’s aid, was seriously injured in the ambush.  An attack on U.S. Government personnel, whether domestically or abroad, is an attack on the United States. The perpetrator of these crimes should always be looking over his shoulders; it is only a matter of time before he is apprehended.  The FBI will continue working with its partners overseas to ensure that the defendant is captured and brought to justice,” stated FBI Assistant Director-in-Charge Venizelos.

Lieutenant General Flynn expressed his deep gratitude for the long and dedicated service of the FBI, Department of Justice, and Department of State personnel involved in the effort to bring Mr. Bultemeier’s alleged murderers to justice.

“The Bureau of Diplomatic Security has been working with our domestic and international law enforcement partners to locate, pursue, and apprehend Mohamed since his prison escape.  With agents in more than 270 U.S. diplomatic missions around the world, Diplomatic Security is uniquely positioned for this effort,” stated Principal Deputy Assistant Secretary Starr.

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 Attorney Zainab Ahmad, with assistance from Trial Attorney Jennifer Levy of the Justice Department’s Counterterrorism Section and Trial Attorney Dan Stigall of the Justice Department’s Office of International Affairs.

The Defendant:

ALHASSANE OULD MOHAMED
Age: 42

Unseald Indictiment Alhassane Mohamed
Photograph of Victim-William Bultemeier
DOJ/FBI Wanted Poster

US Attorney Lynch Testimony at Moreland Act Commission

BROOKLYN, NY – Earlier today, Gustave Drivas, M.D., 58, of Staten Island, New York, was sentenced to 151 months in prison for his role as a “no-show” doctor in a $77 million Medicare fraud scheme.  In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Drivas to three years of supervised release with a concurrent exclusion from employment with any federally funded medical treatment program, ordered him to forfeit $511,000, and ordered him to pay restitution in the amount of $50,943,386.  The State of New York revoked Dr. Drivas’s medical license earlier this year.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Special Agent-in-Charge Thomas O’Donnell of the HHS Office of Inspector General (HHS-OIG).

Drivas was convicted by a jury of health care fraud conspiracy and health care fraud on April 8, 2013, after a seven-week trial.  Including Drivas, 13 individuals have been convicted of the massive fraud scheme, either through guilty plea or trial conviction.

“Abandoning the mandate to ‘do no harm,’ Dr. Drivas was instead up to no good.  Drivas put personal greed before patient care, and was willing to sell his Medicare billing number for cash in his pocket,” stated United States Attorney Lynch.  “This Office and the Department of Justice will aggressively investigate and prosecute health care fraud.  Corrupt doctors like Dr. Drivas are not above the law and will be held accountable for their crimes.”

According to court documents and the evidence at trial, from 2005 to 2010, Drivas was the medical director or a rendering physician of a clinic in Bath Beach, Brooklyn, that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC, and SZS Medical Care PLLC (Bay Medical clinic).  Drivas knowingly authorized his co-conspirators at the clinic to use his Medicare billing number to fraudulently charge Medicare more than $20 million for medical procedures and services that were never performed.  In return, he received more than $500,000 for his role in the scheme.  The evidence proved that Drivas was a “no show” doctor, who almost never visited the clinic except to pick up his check.  The evidence also showed that the clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary and never provided.

The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries.  The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010.  This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian.  The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.

To generate the large amounts of cash needed to pay the patients, Drivas’s business partners and co-conspirators recruited a network of external money launderers who cashed checks for the clinic.  Clinic owners wrote clinic checks payable to various shell companies controlled by the money launderers.  These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds.  The money launderers cashed these checks and provided the cash back to the clinic.  Clinic employees used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.

This case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys William P. Campos and Shannon C. Jones of the Eastern District of New York.  The case was investigated by the FBI and HHS.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  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.

The Defendant:

GUSTAVE DRIVAS, M.D.
Staten Island, New York
Age: 58

BROOKLYN, NY – Fredrick Douglas Scott, 29, waived indictment and pleaded guilty earlier today to a two-count information which charged him with engaging in a wire fraud conspiracy to steal over $1 million from investors, and lying to officials from the Securities and Exchange Commission (“SEC”) who were conducting a regulatory examination of ACI Capital Group LLC (“ACI”).  Scott was the Chief Executive Officer of ACI, an investment advisor registered with the SEC since July 2011.  As set forth in court filings, to implement his scheme, Scott lied to potential investors to induce them to wire funds to one of ACI’s bank accounts, which funds Scott then stole.  To date, investigators have identified over $1 million in investor losses caused by Scott.  Scott faces up to 20 years’ imprisonment on the fraud charge and five years’ imprisonment on the false statement charge.  Scott also faces a fine equal to double the investors’ losses, mandatory restitution of $1,338,770 to the victims, and forfeiture of assets. 

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.

“Today, Fredrick Douglas Scott admitted that he used ACI Capital to steal his clients’ investments and fund his own lavish lifestyle.  Rather than the historic figure he presented to the media, Scott stands revealed as a common thief, who lied his way into his investors’ pockets and then continued his web of lies when confronted by the SEC.  Scott has now been brought to justice for lying, cheating and stealing for his own personal financial gain,” stated United States Attorney Lynch.  “We remain committed to protecting the public by rooting out fraud in the investment industry.  I would like to thank the Securities and Exchange Commission, Division of Enforcement in New York, for its assistance in this case.  I would also like to recognize the hard work and dedication of our partners at the FBI for their swift action and effective work on this important investigation.”

According to documents filed in this case, ACI was founded by Scott in 2009, and purported to be an investment banking and advisory firm with an office located at 477 Madison Avenue, New York, New York.  ACI registered as an investment advisor with the SEC in July
2011 and, according to its most recent regulatory filing, claimed to manage $3.7 billion in assets.  While Scott touted his bona fides as an investor to potential clients, including distributing the May 2010 issue of Ebony magazine, which described him as “the youngest African American hedge fund founder in history,” in reality, Scott used ACI to execute his fraudulent scheme, causing over a million dollars in losses. 

In connection with his scheme, Scott worked with intermediaries or finders to locate potential victims.  Once potential victims were identified, Scott promised those victims a high rate of return for providing short-term financing to businesses purportedly associated with ACI.  Once victims wired money to ACI, Scott stole the funds for his personal use.  Bank records show that Scott used client funds to finance his personal lifestyle, purchasing personal items at establishments including Louis Vuitton, the Apple Store, Starbucks, Fair Bail Bonds, True Religion Jeans, Tao Restaurant, the Hampton Inn SoHo, and Dizzy's Coca-Cola Club, among others.  Bank records also show that Scott wired stolen client funds directly into his personal checking account.        

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 government’s case is being prosecuted by Assistant United States Attorney James P. Loonam.

The Defendant:

FREDRICK DOUGLAS SCOTT
Age: 29

Earlier today, at the federal courthouse in Brooklyn, New York, United States District Judge Nicholas G. Garaufis sentenced Ronell Wilson to death for the murders of two New York City Police Department Detectives, Rodney J. Andrews and James V. Nemorin.

Today’s sentencing followed a five-week evidentiary hearing that culminated on July 24, 2013, with a federal jury verdict unanimously recommending that the court impose the death penalty on Wilson.

“Wilson’s death sentence marks the end of a ten-year odyssey in the relentless pursuit of justice,” stated United States Attorney Loretta E. Lynch. “This sentence follows the recommendation of a jury of Wilson’s peers that justice requires the imposition of the ultimate punishment for the vicious and senseless murder of two husbands, two fathers and two protectors of the City of New York. With this sentence, we can only hope that the families of New York City Police Detectives Andrews and Nemorin will take some comfort in its finality.”