Eastern District of New York

Earlier today, at the federal courthouse in Brooklyn, Nikolay Goltsev was sentenced by United States District Judge LaShann DeArcy Hall to 40 months’ imprisonment for conspiring to commit export control violations. Goltsev, a Canadian national, masterminded a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies.  The electronic components shipped by Goltsev were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.

Breon Peace, United States Attorney for the Eastern District of New York; Merrick B. Garland, United States Attorney General; Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division; William S. Walker, Special Agent in Charge, Homeland Security Investigations New York (HSI); James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Jonathan Carson,  Special Agent in Charge, U.S. Department of Commerce, Office of Export Enforcement,  New York Field Office (EEO), announced the sentencing.

“Simply put, Russia cannot effectively manufacture advanced weapons without U.S. technology.  Today’s sentence goes a long way in preventing Russia’s access to U.S. electronics for use in the unlawful war against Ukraine,” stated United States Attorney Peace.  “My Office is committed to stopping Russia’s illicit acquisition of U.S. technology.”

Mr. Peace also thanked U.S. Customs and Border Protection and the Department of Justice’s Office of International Affairs for their valuable assistance with the investigation. 

“Today, Nikolay Goltsev joins the growing list of defendants held accountable for unlawfully procuring and profiting from the sale of U.S. technology to further Russia’s brutal war in Ukraine,” stated Attorney General Garland.  “The Justice Department is sparing no effort to ensure that those who violate America’s export controls to feed Russia’s war machine answer for their crimes in American courtrooms.”

“Goltsev’s sentence sends a strong message that those who break our laws and contribute to Russia’s brutal war in Ukraine will be held accountable,” stated Assistant Attorney General Olsen of the Justice Department’s National Security Division. “The Department of Justice will vigorously pursue those who procure the component parts that make Russia’s war machine tick. This case demonstrates that these wrongdoers will be found and punished accordingly.”

“Nikolay Goltsev’s sentencing today sends a message to those seeking to bypass export control laws in support of the Kremlin’s inhumane attacks on Ukraine: HSI will do whatever it takes to prevent U.S. military technology from ending up on the Russian battlefield. HSI’s counter-proliferation investigators work tirelessly to combat the illegal export and proliferation of sensitive U.S. military and dual-purpose technology,” stated HSI New York Special Agent in Charge Walker.  “Standing alongside our law enforcement partners, we are committing to stopping the Russian war machine in its tracks.”

FBI Assistant Director in Charge Dennehy stated, “Nikolay Goltsev served as a vehicle to reinforce Russia’s militant efforts against Ukraine through the distribution of electronics to sanctioned entities. Goltsev selfishly prioritized profits from this multi-million-dollar scheme at the expense of safeguarding United States technology against adversarial nations. May today’s sentencing reinforce the FBI's commitment to confront foreign countries which steal our technology to advance their nefarious and warmongering goals.”

“Working with our law enforcement colleagues, the Office of Export Enforcement will continue to target networks that facilitate illicit shipments that support Russia’s war. Today’s sentencing is just the latest example of our resolute efforts to target, disrupt and dismantle these networks,” stated Department of Commerce EEO Special Agent in Charge Carson. 

Goltsev used two Brooklyn companies, SH Brothers Inc. and SN Electronics Inc., to unlawfully source, purchase and ship millions of dollars in dual-use electronics from U.S. manufacturers to sanctioned end users in Russia.  Some of the electronic components and integrated circuits shipped by the defendants through SH Brothers have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.  Some of these components were critical to Russia’s precision-guided weapons systems being used against Ukraine.  During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia.

To carry out the criminal scheme, Goltsev, along with co-defendant Salimdzhon Nasriddinov and others, purchased the electronic components from U.S. manufacturers and distributors under the auspices of SH Brothers and SN Electronics and arranged for the items to be shipped from those manufacturers and distributors to various locations in Brooklyn.  The co-conspirators then unlawfully shipped the items to a variety of intermediary front companies located in other countries, including Turkey, Hong Kong, India, China and the United Arab Emirates, where they were rerouted to Russia.  Goltsev’s wife, co-defendant Kristina Puzyreva, laundered the funds of the export control scheme.

Goltsev’s communications show that he had a sophisticated understanding of export control laws. For example, in a message in February 2023, Goltsev advised another co-defendant to “write something more substantial [to the U.S. company] so that there are no more questions.”  The co-defendant responded, “is it better to provide them with a Chinese end user,” to which Goltsev stated, “yes should be ok.”

Goltsev’s communications also show that he knew the electronic components were going to Russia for use in Ukraine and support of Russia.  In a May 30, 2023 text message conversation with Puzyreva, the defendants discussed a drone attack in Moscow and their support of Russia:

Puzyreva:        what is Putin waiting for.  He needs to destroy Ukraine.

Goltsev:           yeah they’re gonna get f---ed either way.

Puzyreva:        He needs to put fear into them.  Those losers.

Goltsev:           Well the way he is acting they have the right to do the same.

Puzyreva:        I hate [ethnic slur for Ukrainians] anyway.

The scheme involved millions of dollars and proved to be lucrative for the defendants.  In a text message exchange on or about January 13, 2023, Goltsev complained to Puzyreva that a subordinate of a co-conspirator “asked me to make 80 accounts . . . I am making accounts for 3 mln [i.e., million]. Fingers hurting already from the laptop.”  Puzyreva responded, “Lot of money?  We will get rich.”

The government seized $20,000 in cash from the New York hotel room in which Goltsev was arrested.  In total, the government has seized approximately $1.68 million in connection with this export scheme.

On July 24, 2024, co-defendant Kristina Puzyreva was sentenced to 24 months’ imprisonment for conspiracy to launder the proceeds of the export scheme.  Co-defendant Salimdzhon Nasriddinov is awaiting sentencing.

The case was coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States  Attorneys Artie McConnell and Ellen H. Sise are in charge of the prosecution, along with Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section, with the assistance of Paralegal Specialist Mary Clare McMahon.  Assistant United States Attorney Laura Mantell of the Office’s Asset Recovery Section is handling forfeiture matters.                    

The Defendant:

NIKOLAY GOLTSEV
AGE: 38
Montreal, Canada

Defendants Previously Sentenced:

SALIMDZHON NASRIDDINOV
AGE: 54
Brooklyn, NY

KRISTINA PUZYREVA
AGE: 33
Montreal, Canada

E.D.N.Y. Docket No. 23-CR-452 (LDH)

Nikolay Goltsev, 38, of Montreal, Canada, was sentenced today to 40 months in prison for conspiring to commit export control violations. Goltsev masterminded a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies. Some of the electronic components shipped by Goltsev were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine.

“Today, Nikolay Goltsev joins the growing list of defendants held accountable for unlawfully procuring and profiting from the sale of U.S. technology to further Russia’s brutal war in Ukraine,” said Attorney General Merrick B. Garland. “The Justice Department is sparing no effort to ensure that those who violate America’s export controls to feed Russia’s war machine answer for their crimes in American courtrooms.”

“When Russia, its supporters, and its military companies lie and scheme their way around sanctions, they do not just violate the law – they endanger our Ukrainian allies and the freedoms they are fighting to protect,” said Secretary of Homeland Security Alejandro N. Mayorkas. “We cannot allow crimes like those committed by Mr. Goltsev to be ignored; to do so would only increase the risk they will be repeated. I commend the extraordinary Special Agents of Homeland Security Investigations who, alongside their federal and international law enforcement partners, are working diligently and bravely to support the people of Ukraine and hold accountable the perpetrators of Russia’s unlawful, unjust, and unprovoked war of aggression.”

“Today’s sentencing brings accountability to Nikolay Goltsev for his conspiracy to ship millions of dollars of electronics to Russia in support of its unprovoked invasion of Ukraine,” said FBI Director Christopher Wray. “Goltsev and his co-conspirators circumvented U.S. export control laws, used intermediary front companies to hide their crimes, and sold sophisticated electronics to Russia for use in its weapons platforms and signals intelligence equipment. The FBI is committed to working with our partners to investigate, disrupt, and hold accountable those who violate U.S. laws and provide aid to our adversaries.”

“Goltsev’s sentence sends a strong message that those who break our laws and contribute to Russia’s brutal war in Ukraine will be held accountable,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department of Justice will vigorously pursue those who procure the component parts that make Russia’s war machine tick. This case demonstrates that these wrongdoers will be found and punished accordingly.”

“Goltsev and his wife thought they would ‘get rich’ by running an illicit global procurement scheme to supply sanctioned end users in Russia,” said Acting Assistant Secretary for Export Enforcement Kevin J. Kurland of the Department of Commerce. “Instead, they got jail time.”

“Simply put, Russia cannot effectively manufacture advanced weapons without U.S. technology,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s sentence goes a long way in preventing Russia’s access to U.S. electronics for use in the unlawful war against Ukraine. Today’s sentencing makes clear that the United States Attorney’s Office is committed to stopping Russia’s illicit acquisition of U.S. technology.”

Goltsev used two Brooklyn companies, SH Brothers Inc. and SN Electronics Inc., to unlawfully source, purchase and ship millions of dollars in dual-use electronics from U.S. manufacturers to sanctioned end users in Russia. Some of the electronic components and integrated circuits shipped by the defendants through SH Brothers have been found in seized Russian weapons platforms and signals intelligence equipment in Ukraine. Some of these components were critical to Russia’s precision-guided weapons systems being used against Ukraine. During the period charged in the indictment, SH Brothers made hundreds of shipments valued at over $7 million to Russia.

To carry out the defendants’ criminal scheme, Goltsev purchased the electronic components from U.S. manufacturers and distributors under the auspices of SH Brothers and SN Electronics and arranged for the items to be shipped from those manufacturers and distributors to various locations in Brooklyn. The co-conspirators then unlawfully shipped the items to a variety of intermediary front companies located in other countries, including Turkey, Hong Kong, India, China and the United Arab Emirates, where they were rerouted to Russia.

Goltsev’s communications show that he had a sophisticated understanding of export control laws. For example, in a message in February 2023, Goltsev advised another co-defendant to “write something more substantial [to the U.S. company] so that there are no more questions.” The co-defendant responded, “is it better to provide them with a Chinese end user,” to which Goltsev stated, “yes should be ok.”

Goltsev’s communications also show that he knew the electronic components were going to Russia for use in Ukraine and support of Russia. In a May 30, 2023 text message conversation between co-defendant Kristina Puzyreva, Goltsev’s wife, the defendants discussed a drone attack in Moscow and their support of Russia:

Puzyreva: what is Putin waiting for.  He needs to destroy Ukraine.

Goltsev: yeah they’re gonna get f---ed either way.

Puzyreva: He needs to put fear into them.  Those losers.

Goltsev: Well the way he is acting they have the right to do the same.

Puzyreva: I hate [ethnic slur for Ukrainians] anyway.

The scheme involved millions of dollars and proved to be lucrative for the defendants. In a text message exchange on or about Jan. 13, 2023, Goltsev complained to Puzyreva that a subordinate of a co-conspirator “asked me to make 80 accounts . . . I am making accounts for 3 mln [i.e., million]. Fingers hurting already from the laptop.” Puzyreva responded, “Lot of money? We will get rich.”

The government seized $20,000 in cash from the New York hotel room in which defendant Goltsev was arrested. In total, the government has seized approximately $1.68 million in connection with this export scheme.

On July 24, co-defendant Kristina Puzyreva was sentenced to 24 months in prison for conspiracy to launder the proceeds of the export scheme. Co-defendant Salimdzhon Nasriddinov is awaiting sentencing.

The BIS, HSI, and FBI are investigating the case. U.S. Customs and Border Protection and Justice Department’s Office of International Affairs provided valuable assistance to the investigation. 

Assistant U.S. Attorneys Artie McConnell, Ellen H. Sise, and Laura Mantell for the Eastern District of New York and Trial Attorney Christopher M. Cook of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

The case was coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that, beginning in 2014, the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.

Сегодня в федеральном суде Бруклина Марат Лернер, бывший президент компании по оказанию услуг по облегчению бремени задолженности, был приговорен Окружным судьей США Николасом Г. Гарауфисом [Nicholas G. Garaufis] к 135 месяцам тюремного заключения за сговор с целью совершения мошенничества с использованием электронных средств сообщения и за мошенничество с использованием электронных средств сообщения. Лернер также был осужден за продолжение деятельности по реализации своей преступной схемы в период досудебного освобождения. Лернер был приговорен к конфискации около 2 340 154 долларов в пользу государства. Размер возмещения убытков для жертв его преступлений будет определен позднее. Лернер признал себя виновным по этим обвинениям в феврале 2024 года.

                         Бреон Пис, Прокурор США Восточного округа  Нью-Йорка, ДжеймсE. Деннехи [James E. Dennehy], помощник Директора Федерального бюро расследований (FBI) в Региональном управлении Нью-Йорка, и Гарри Т. Чавис младший [Harry T. Chavis, Jr.], Специальный агент в Региональном управлении Нью-Йорка Отдела расследований по уголовным делам Налогового управления США (IRS-CI), объявили приговор.

«Сегодня ответчик узнал, что существуют серьезные последствия за кражу денег своих клиентов, даже после его ареста, и безжалостную трату похищенных средств на роскошный автомобиль для себя, онлайн знакомства и дорогие обеды и ужины», – заявил Прокурор США Пис. «Его жертвами стали трудолюбивые люди, многие из которых выходцы из стран Восточной Европы, обратившиеся к нему за помощью, чтобы спасти свои дома и средства к существованию. Вместо оказания им помощи Лернер воспользовался их доверием и уязвимостью для кражи их денег. Лернер продолжал совершать свои преступления, даже когда он знал, что его действия привели к утрате жертвами его преступлений своих домов или к вынужденным объявлениям о банкротстве. Прокуратура намерена защищать население от недобросовестных консультантов, подобных Лернеру».

«Марат Лернер украл 2,5 миллионов долларов у уязвимых в финансовом отношении клиентов и довел нескольких из них до банкротства после того, как он направил их деньги на финансирование своих личных роскошных покупок вместо обеспечения обещанного снижения платежей по ипотеке», – заявил специальный агент FBI Деннехи. «Лернер предал доверие жертв своих преступлений, безжалостно продолжая использовать эту мошенническую схему даже после его первоначального ареста. Благодаря постоянной поддержке со стороны Полицейского управления Нью-Йорка (NYPD) и Таможенно-пограничной службы США (CBP), FBI продолжает расследовать дела преступников, использующих пустые обещания, чтобы нажиться на представителях социально незащищенных групп населения ради удовлетворения собственной жадности».

«Лернер жил роскошной жизнью, присваивая деньги людей в своем собственном сообществе», – заявил специальный агент IRS-CI Чавис. «Его подпольная брокерская деятельность не была простой денежной аферой; она приводила к тому, что жертвы не выплачивали ипотечные кредиты, а некоторые оказывались в ситуации изъятия банком заложенного под ипотечный кредит имущества. Сегодняшний приговор должен стать напоминанием всем, кто наживается на других ради удовлетворения собственных алчных желаний: вас поймают, вас будут преследовать по закону, и вы отправитесь в тюрьму за свои преступные деяния».

Согласно судебным документам и фактам, представленным во время слушания по вынесению приговора Лернеру, ответчик был владельцем компании Lerner Group, которая заявляла, что она предоставляет услуги по облегчению бремени задолженности, включая изменение условий ипотечного кредита, в основном для лиц в восточноевропейской иммигрантской общине в Бруклине. Многие из жертв, обманутых Лернером, уже испытывали финансовые затруднения и специально обращались к Лернеру за помощью, чтобы снизить свои ежемесячные выплаты по ипотеке. Лернер, в свою очередь, обещал, что он поможет им снизить ежемесячные ипотечные платежи, работая с их ипотечными кредиторами, чтобы добиться изменения условий ипотечного кредита или получения федеральной помощи домовладельцам. Для осуществления мошенничества Лернер получал доступ к банковским счетам своих жертв, которые, как он утверждал, будут использоваться для выплат ипотечным банкам от имени клиентов.

Лернер использовал доступ к банковским счетам своих жертв для хищения около 2,5 миллиона долларов – деньги, которые, как полагали его 19 жертв, использовались для оплаты их ипотечных кредитов. Получив доступ к банковским счетам своих жертв, Лернер переводил средства с их счетов в подконтрольные ему компании и/или банковские счета. Лернер прикрывал  свое мошенничество, заявляя, что денежные средства находятся на условном депонировании или в филиалах ипотечных банков. На деле же Лернер оставлял себе большую часть денег и тратил их на личные и деловые расходы, включая автомобиль BMW, предметы роскоши и дорогие обеды и ужины. Лернер довел нескольких своих клиентов до вынужденной необходимости заявить о банкротстве во избежание изъятия банком заложенного под ипотечный кредит имущества, и в результате его преступной схемы несколько его жертв находятся в процессе изъятия банком заложенного под ипотечный кредит имущества.

В январе 2023 года Лернер был арестован в связи с мошенничеством  и освобожден под залог. Ему были даны указания не совершать  дополнительных преступлений. Однако Лернер незамедлительно открыл новые банковские счета и продолжил осуществление своей преступной схемы. После ареста по этому делу Лернер похитил у своих клиентов еще как минимум 50 000 долларов. В сентябре 2023 года постановление об освобождении Лернера под залог было отменено после того, как большое жюри предъявило Лернеру дополнительное обвинение в совершении дополнительных преступлений.

Государственное обвинение находится в ведении Отдела по борьбе с мошенничеством в сфере бизнеса и ценных бумаг Прокуратуры США. Помощник прокурора США Ник М. Аксельрод [Nick M. Axelrod] и бывший помощник прокурора США Дженни Нгаи [Genny Ngai] отвечали за ведение этого дела.

Ответчик:

МАРАТ ЛЕРНЕР
Возраст: 42
Бруклин, Нью-Йорк

Номер дела E.D.N.Y. 23-CR-15 (S-1) (NGG)

Earlier today, in federal court in Brooklyn, Marat Lerner, the former president of a debt relief services business, was sentenced by United States District Judge Nicholas G. Garaufis to 135 months in prison for conspiracy to commit wire fraud and wire fraud.  Lerner was also convicted of continuing his criminal scheme while on pre-trial release.  Lerner was ordered to forfeit approximately $2,340,154 to the government. Restitution to the victims will be determined at a later date. Lerner pleaded guilty to the charges in February 2024.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the sentence. 

“Today the defendant learned there are serious consequences for stealing his clients’ money, even after he was arrested, and ruthlessly spending it on a luxury car for himself, on-line dating and expensive meals,” stated United States Attorney Peace.  “His victims were hard-working people, many from the Eastern European community, who went to him for help saving their homes and livelihoods.  Instead of helping them, Lerner took advantage of their trust and vulnerability to steal their money.  Lerner continued his crimes even when he knew that his actions had directly caused his victims to lose their homes and-or to declare bankruptcy.  My Office is committed to protecting the public from unscrupulous advisors like Lerner.” 

“Marat Lerner stole $2.5 million from fiscally vulnerable clients and forced several into bankruptcy after funneling their money to fund his personal luxury purchases rather than providing the promised reduced mortgage payments," stated FBI Assistant Director in Charge Dennehy.  "Lerner betrayed his victims’ trust, remorselessly continuing to perpetuate this fraudulent scheme even after his initial arrest. With the continued support from NYPD and CBP, the FBI remains dedicated to investigating those who employ empty promises to prey upon disadvantaged communities to satisfy their own greed.

“Lerner lived a glamourous life by taking money out of the pockets of people in his own community.  His underground brokerage was not just a simple money scam; it led to victims defaulting on their mortgage payments and some falling into foreclosure,” stated IRS-CI Special Agent in Charge Chavis.  “Today’s sentencing should stand as a reminder to those preying on others to fulfill their own greedy desires—you will get caught; you will be prosecuted; and you will go to prison for your criminal acts.”

According to court documents and facts presented at Lerner’s sentencing, the defendant was the owner of the Lerner Group, a business that claimed to provide debt relief services, including mortgage modifications, principally to the Eastern European immigrant community in Brooklyn. Many of the victims Lerner defrauded were already experiencing financial hardship and had specifically sought Lerner’s assistance to help reduce their monthly mortgage payments.  Lerner, in turn, promised that he could help them lower their monthly mortgage payments by working with their mortgage lenders to secure a mortgage loan modification or federal homeowner assistance.  To carry out his fraud, Lerner obtained access to the victims’ bank accounts, which he claimed he would use to pay the mortgage banks on their behalf.       

Lerner used his access to his victims’ bank accounts to steal approximately $2.5 million – money that the 19 victims believed was being used to pay their mortgages.  Once Lerner gained access to the victims’ bank accounts, he transmitted funds from their accounts to companies and/or bank accounts that he controlled.  Lerner covered up his fraud by claiming the money was being held in escrow or by affiliates of the mortgage banks.  In truth, Lerner kept most of the victims’ money and spent it on personal and business expenses, including a BMW, luxury goods and expensive meals.  Lerner caused several of his clients to file bankruptcy petitions to stave off foreclosure to continue his fraud, and as a result of his scheme, several of his victims are facing foreclosure proceedings.

In January 2023, Lerner was arrested in connection with the fraud and released on bail.  He was instructed not to commit additional crimes.  However, Lerner promptly opened new bank accounts and continued his criminal scheme.  After his arrest in this case, Lerner stole at least an additional $50,000 from his clients.  In September 2023, Lerner’s bail was revoked after a grand jury returned a superseding indictment charging Lerner with additional crimes.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.   Assistant U.S.  Attorney Nick M. Axelrod and former Assistant U.S. Attorney Genny Ngai prosecuted the case.

The Defendant:

MARAT LERNER
Age: 42 
Brooklyn, New York 

E.D.N.Y. Docket No. 23-CR-15 (S-1) (NGG) 

Earlier today, in federal court in Brooklyn, Erlene King pleaded guilty to wire fraud in connection with her attempt to steal funds from New York City’s Campaign Finance Board (CFB).  Today’s proceeding was held before United States District Judge Carol Bagley Amon.  When sentenced, King faces up to 20 years in prison.

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.

“Instead of playing by the rules New York City established for free and fair elections, the defendant attempted to use the city’s matching funds program to give the campaign an unfair advantage,” stated United States Attorney Peace.  “My Office and our law enforcement partners are focused on rooting out corruption in our electoral system to ensure that all candidates are operating on a level playing field.”

Mr. Peace expressed his appreciation to the CFB for its cooperation and assistance during the investigation. 

“Erlene King deprived New York City residents of a fair election by attempting to manipulate hundreds of thousands of dollars in donor contributions to unlawfully favor her candidate,” stated FBI Assistant Director in Charge Dennehy.  “King abused her position as a campaign treasurer and attempted to profit from exploiting a system designed to represent the voices of the city.  The FBI remains steadfast in its mission to eliminate any source of corruption polluting our city’s democratic processes.”

CFB Overview

The CFB oversees and administers a publicly funded campaign finance system in connection with municipal elections in New York City.  This includes a “matching funds program” that provides eligible candidates with public funds based on the number and amount of certain donor contributions. According to the CFB, the program “empowers New Yorkers in every neighborhood to make their voices heard in city elections.”  In addition, the CFB maintains that “by encouraging candidates to raise small-dollar contributions from average New Yorkers, the program increases engagement between voters and those who seek to represent them.”

Candidates running for the Office of the Brooklyn Borough President in the 2021 election cycle were eligible to participate in the CFB’s matching funds program if they met certain criteria.  Among other things, to be eligible to receive public funds, candidates were required to meet a two-part fundraising threshold. Specifically, a candidate had to collect a minimum number of donations and raise a minimum amount of money from New York City residents before the CFB paid any matching funds.

For candidates who ran for the Office of the Brooklyn Borough President during the 2021 election cycle, candidates received up to $8 in matching funds for each $1 of eligible contributions, up to $175 per contributor.  If a candidate received an eligible contribution of $175, then that candidate could collect up to $1,400 in matching funds.  In total, the matching funds program provided up to $1,457,777 in public matching funds to a candidate for the Office of the Brooklyn Borough President.  Because campaigns for Brooklyn Borough President during the 2021 election cycle needed to raise at least $50,000 in eligible contributions to receive any matching funds, any candidate who was eligible to receive matching funds necessarily received at least $400,000 in matching funds from the CFB.

The Scheme

King served as the campaign treasurer for a candidate who ran in a primary for the Office of the Brooklyn Borough President during the 2021 election cycle (Candidate #1).  King admitted that she obtained fraudulent donations for the purpose of inducing the CFB to provide matching funds to Candidate #1’s campaign. A number of those contributions, which were obtained at King’s direction, were fraudulent nominee contributions made in the names of individuals who either did not personally fund the contributions or were later reimbursed for their contributions (i.e., straw donors).  For example, King used CashApp to send money to intermediaries and instructed them to distribute the money to fund contributions from straw donors to Candidate #1.  Other fraudulent contributions were made in the names of individuals whose identities were stolen and who had not personally contributed to Candidate #1. The CFB ultimately determined that the campaign submitted fictitious records and did not pay any public matching funds to the campaign.

The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States  Attorneys Philip Pilmar and Eric Silverberg are in charge of the prosecution, with the assistance of Paralegal Specialist Rachel Friedman.

The Defendant:

ERLENE KING
Age: 71
Brooklyn, NY
E.D.N.Y. Docket No. 24-CR-374 (CBA)

BROOKLYN, NY - Earlier today, at the federal courthouse in Brooklyn, two indictments were unsealed charging India-based companies Raxuter Chemicals and Athos Chemicals Pvt. Ltd. (Athos Chemicals) and Bhavesh Lathiya, a founder and senior executive of Raxuter Chemicals, with criminal conspiracies to distribute and import fentanyl precursor chemicals to the United States.  Lathiya was arrested on January 4, 2025 in New York City and arraigned before United States Magistrate Judge Joseph A. Marutollo.  Lathiya was ordered detained pending trial.

Breon Peace, United States Attorney for the Eastern District of New York, Merrick B. Garland, United States Attorney General and Alejandro N. Mayorkas, Department of Homeland Security Secretary, announced the arrest and indictments.

“Our efforts to disrupt the global fentanyl supply chain are being fought on many fronts, and as alleged in these indictments, by charging two chemical companies based in India and a company executive with knowingly distributing the chemical building blocks of fentanyl,” stated United States Attorney Peace.  “My Office will vigorously prosecute those pushers of poison, here and abroad, who are responsible for fueling our nation’s opioid epidemic without any regard for the extreme harm they are causing.” 

Mr. Peace thanked the Justice Department’s Office of International Affairs, Homeland Security Investigations, New York and United States Customs and Border Protection, New York Field Office, for their invaluable assistance.

“The Justice Department is targeting every link in fentanyl trafficking supply chains that span countries and continents and too often end in tragedy in the United States,” stated Attorney General Garland.  “We allege these companies, and a company founder and senior executive who is now in custody, conspired to distribute and import fentanyl precursor chemicals from India to the United States and Mexico.  We made a promise that the Justice Department would never forget the victims of the fentanyl epidemic, and that we would never stop working to hold accountable those who bear responsibility for it — that is what we have done, and that is what we will continue to do.”

“Much of our nation’s illicit fentanyl crisis can be traced to bad actors overseas who knowingly and illegally traffic precursor chemicals to North America, where cartels refine them into deadly narcotics and wreak immeasurable heartbreak and destruction on so many American communities,” stated DHS Secretary Mayorkas.  “The Department of Homeland Security, alongside our federal partners, will continue to take the fight against fentanyl directly to alleged foreign precursor chemical exporters like the companies and the individual indicted today – because the best way to stop illicit fentanyl from killing Americans and devastating communities is by preventing it from being manufactured in the first place.”

Fentanyl, a Schedule II controlled substance, is the deadliest drug threat currently facing the United States.  It is a highly addictive synthetic opioid that is approximately 50 times more potent than heroin and 100 times more potent than morphine.  Fentanyl is designated as a Schedule II controlled substance while various precursors that can be used to produce fentanyl are included on the controlled substance schedules List I and List II.

Raxuter Chemicals and Lathiya are charged with conspiracy to distribute and import a listed chemical, distribution and importation of a listed chemical knowing it would be used to manufacture fentanyl, smuggling and other related offenses.  Athos Chemicals is charged with similar offenses, including conspiracy to distribute and import a listed chemical and distribution and importation of a listed chemical.

As alleged in the indictments and court filings, the defendants supplied precursor chemicals to the United States and Mexico, among other places, knowing they would be used to manufacture fentanyl.  They also sent their chemical products to the United States and Mexico using international mail and package carriers.  The chemicals distributed by the defendants included all the materials necessary to manufacture fentanyl via the most common methods or pathways.  To prevent detection and interception of chemical products at the borders, the defendants employed deceptive and fraudulent practices, such as mislabeling packages, falsifying customs forms, and making false declarations at border crossings.

For example, on or about June 29, 2024, a package shipped by Raxuter Chemicals was delivered to an address in the Eastern District of New York.  The package had a false manifest that listed its contents as Vitamin C. In truth, the contents were a List I chemical, 1-boc-4-piperidone, an unlawfully imported fentanyl precursor.

On or about October 2, 2024 and October 15, 2024, Lathiya appeared on a video call to discuss sale of fentanyl precursor chemicals with an HSI undercover officer.   After being told by the undercover officer that his “clients in Mexico were very happy with the quality of what you sent me” and with “the yield they got of the final product,” Lathiya agreed to sell 20 kilograms 1-boc-4-piperidone, which is a List I chemical used in fentanyl synthesis. Lathiya also proposed mislabeling the chemical as an antacid.  The undercover officer replied and asked if it would be easier to ship the product to Mexico, stating “This is a very controversial product … Because like you said it’s banned and in Mexico I think it could be easier but there’s so much pressure on them because of fentanyl.”  On or about November 23, 2024, Raxuter Chemicals and Lathiya shipped approximately 20 kilograms of 1-boc-4-piperidone to the Eastern District of New York.  The package was mislabeled as an antacid.

In addition, on or about February 20, 2024, Athos Chemicals agreed to sell 100 kilograms of 1-boc-4-piperidone to a known drug trafficker in Mexico who was making fentanyl in association with a drug trafficking organization.

Mexican drug trafficking organizations, including but not limited to the Sinaloa Cartel, have increasingly availed themselves of the fentanyl precursors developed and distributed by companies like the defendants. The chemicals provided by the defendant companies have enabled such cartels and other drug trafficking organizations to produce fentanyl in clandestine laboratories in Mexico on a massive scale for subsequent distribution in the United States and elsewhere. 

The charges in the indictments are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of all the charges, Lathiya faces up to 53 years in prison.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Adam Amir, William P. Campos and Chand Edwards-Balfour are in charge of the prosecution with the assistance of Paralegal Specialist Samuel Ronchetti.

The Defendants:

BHAVESH ranCHHODBHAI LATHIYA (also known as “Bhavesh Patel” and “Bhavesh Bhai”)
Age:  36
Surat, Gujarat, India

RAXUTER CHEMICALS
Surat, Gujarat, India

E.D.N.Y. Docket No. 24-CR-525 (PKC)

ATHOS CHEMICALS PVT. LTD.
Surat, Gujarat, India

E.D.N.Y. Docket No. 24-CR-526 (RPK)

Two indictments were unsealed today and Saturday charging India-based companies Raxuter Chemicals and Athos Chemicals Pvt. Ltd. (Athos Chemicals) and Bhavesh Lathiya, a founder and senior executive of Raxuter Chemicals, with criminal conspiracies to distribute and import fentanyl precursor chemicals to the United States. Lathiya was arrested on Jan. 4, in New York City and arraigned before U.S. Magistrate Judge Joseph A. Marutollo for the Eastern District of New York. Lathiya was ordered detained pending trial.

“The Justice Department is targeting every link in fentanyl trafficking supply chains that span countries and continents and too often end in tragedy in the United States,” said Attorney General Merrick B. Garland. “We allege these companies, and a company founder and senior executive who is now in custody, conspired to distribute and import fentanyl precursor chemicals from India to the United States and Mexico. We made a promise that the Justice Department would never forget the victims of the fentanyl epidemic, and that we would never stop working to hold accountable those who bear responsibility for it — that is what we have done, and that is what we will continue to do.”

“Much of our nation’s illicit fentanyl crisis can be traced to bad actors overseas who knowingly and illegally traffic precursor chemicals to North America, where cartels refine them into deadly narcotics and wreak immeasurable heartbreak and destruction on so many American communities,” said Secretary of Homeland Security Alejandro N. Mayorkas. “The Department of Homeland Security, alongside our federal partners, will continue to take the fight against fentanyl directly to alleged foreign precursor chemical exporters like the companies and the individual indicted today — because the best way to stop illicit fentanyl from killing Americans and devastating communities is by preventing it from being manufactured in the first place.”

“Our efforts to disrupt the global fentanyl supply chain are being fought on many fronts, and as alleged in these indictments, by charging two chemical companies based in India and a company executive with knowingly distributing the chemical building blocks of fentanyl,” stated U.S. Attorney Breon Peace for the Eastern District of New York. “My office will vigorously prosecute those pushers of poison, here and abroad, who are responsible for fueling our nation’s opioid epidemic without any regard for the extreme harm they are causing.”

Fentanyl, a Schedule II controlled substance, is the deadliest drug threat currently facing the United States. It is a highly addictive synthetic opioid that is approximately 50 times more potent than heroin and 100 times more potent than morphine. Fentanyl is designated as a Schedule II controlled substance while various precursors that can be used to produce fentanyl are included on the controlled substance schedules List I and List II.

Raxuter Chemicals and Lathiya are charged with conspiracy to distribute and import a listed chemical, distribution and importation of a listed chemical knowing it would be used to manufacture fentanyl, smuggling, and other related offenses. Athos Chemicals is charged with similar offenses, including conspiracy to distribute and import a listed chemical and distribution and importation of a listed chemical.

As alleged in the indictments and court filings, the defendants supplied precursor chemicals to the United States and Mexico, among other places, knowing they would be used to manufacture fentanyl. They also sent their chemical products to the United States and Mexico using international mail and package carriers. The chemicals distributed by the defendants included all the materials necessary to manufacture fentanyl via the most common methods or pathways. To prevent detection and interception of chemical products at the borders, the defendants employed deceptive and fraudulent practices, such as mislabeling packages, falsifying customs forms, and making false declarations at border crossings.

For example, on or about June 29, 2024, a package shipped by Raxuter Chemicals was delivered to an address in the Eastern District of New York. The package had a false manifest that listed its contents as Vitamin C. In truth, the contents were a List I chemical, 1-boc-4-piperidone, an unlawfully imported fentanyl precursor.

On or about Oct. 2, 2024, and Oct 15, 2024, Lathiya appeared on a video call to discuss sale of fentanyl precursor chemicals with an Homeland Security Investigations (HSI) undercover officer. After being told by the undercover officer that his “clients in Mexico were very happy with the quality of what you sent me” and with “the yield they got of the final product,” Lathiya agreed to sell 20 kilograms 1-boc-4-piperidone, which is a List I chemical used in fentanyl synthesis. Lathiya also proposed mislabeling the chemical as an antacid. The undercover officer replied and asked if it would be easier to ship the product to Mexico, stating “This is a very controversial product … Because like you said it’s banned and in Mexico I think it could be easier but there’s so much pressure on them because of fentanyl.” On or about Nov. 23, 2024, Raxuter Chemicals and Lathiya shipped approximately 20 kilograms of 1-boc-4-piperidone to the Eastern District of New York. The package was mislabeled as an antacid.

In addition, on or about Feb. 20, 2024, Athos Chemicals agreed to sell 100 kilograms of 1-boc-4-piperidone to a known drug trafficker in Mexico who was making fentanyl in association with a drug trafficking organization.

Mexican drug trafficking organizations, including but not limited to the Sinaloa Cartel, have increasingly availed themselves of the fentanyl precursors developed and distributed by companies like the defendants. The chemicals provided by the defendant companies have enabled such cartels and other drug trafficking organizations to produce fentanyl in clandestine laboratories in Mexico on a massive scale for subsequent distribution in the United States and elsewhere.

If convicted, Lathiya faces a maximum penalty of 53 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

HSI New York investigated the case. The Justice Department’s Office of International Affairs and U.S. Customs and Border Protection’s New York Field Office provided assistance.

HSI New York investigated the case. The Justice Department’s Office of International Affairs and U.S. Customs and Border Protection’s New York Field Office provided assistance.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Breon Peace, the United States Attorney for the Eastern District of New York, and Kristen Clarke, Assistant Attorney General for Civil Rights, announced today that the United States has entered into a Voluntary Technical Assistance Agreement with the Freeport, NY Police Department (FPD).  The agreement memorializes a cooperative effort between the Department of Justice (DOJ) and FPD to help FPD develop a language access program that will ensure its police services are accessible to individuals who are limited English proficient (LEP).  

This agreement is the first Voluntary Technical Assistance Agreement of its kind in the United States under DOJ’s Law Enforcement Language Access Initiative (LELAI).  It is the result of a mutual desire to improve FPD’s language access services and not the result of an investigation or complaint against FPD.  DOJ commends FPD for taking the initiative to build a complete and effective language access program for its LEP residents.

United States Attorney Peace stated, “It is critically important that law enforcement can communicate effectively with members of the community, regardless of the language that they speak.  Working collaboratively with FPD, we will improve public safety for all and hope to replicate this agreement with other law enforcement agencies throughout the Eastern District of New York.”

“The Law Enforcement Language Access Initiative was specifically designed for proactive police departments that recognize the need for accurate and timely communication and are willing to invest in the language access tools and training that ensure that crime victims and witnesses can report, the reliability of evidence, protect the public, and promote community trust,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Civil Rights Division will continue to work cooperatively with law enforcement agencies across the country that seek to remove language barriers in policing.”      

Launched in December 2022, LELAI is a nationwide effort to help law enforcement agencies address language barriers when they interact with the public.  The initiative builds on the Department’s longstanding efforts to enforce Title VI of the Civil Rights Act of 1964 (Title VI) and the Omnibus Crime Control and Safe Streets Act of 1968 (Safe Streets Act).

Under the two-year voluntary agreement, DOJ will help FPD build its language access program consistent with the parties’ shared goals of promoting officer safety and public safety, helping to further control crime, collecting reliable evidence for prosecution purposes, and fostering even greater community trust.  DOJ will also help FPD develop policies, procedures, interpretation and translation protocols, community partnerships, and training, among other things.

LELAI provides technical assistance resources and tools that can help state and local law enforcement provide meaningful language access to individuals with LEP.  By affirmatively engaging law enforcement agencies that want to review, update and/or strengthen their language access polices, plans and training, LELAI aims to support relationship-building efforts between law enforcement agencies, community stakeholders and populations with LEP.

Additional information about the EDNY U.S. Attorney’s Office Civil Rights work is available at its website at https://www.justice.gov/usao-edny/civil-rights.  The Civil Rights Division’s work is available on its website at www.justice.gov/crt and information about limited English proficiency and Title VI is available at www.lep.gov. More information on LELAI is available at www.lep.gov/law-enforcement. Members of the EDNY public may report possible civil rights violations at https://www.justice.gov/usao-edny/page/file/1396116/dl?inlineor%20civilrights.justice.gov/report/.

This matter is being handled by Eastern District of New York Assistant U.S. Attorneys Megan Freismuth, Michael Goldberger, and Dara Olds of the Civil Division’s Civil Rights Team.

Breon Peace, Fiscal General del Distrito Este de Nueva York, y Kristen Clarke, Fiscal General Adjunta de Derechos Civiles, han anunciado hoy que los Estados Unidos han firmado un Acuerdo Voluntario de Asistencia Técnica con el Departamento de Policía de Freeport, Nueva York (FPD).  El acuerdo formaliza un esfuerzo de cooperación entre el Departamento de Justicia (DOJ) y el FPD para ayudar al FPD a desarrollar un programa de acceso lingüístico que garantice que sus servicios policiales sean accesibles a las personas con dominio limitado del inglés (LEP).   

Este es el primer Acuerdo Voluntario de Asistencia Técnica de este tipo en los Estados Unidos en el marco de la Iniciativa de Acceso Lingüístico de las Fuerzas y Cuerpos de Seguridad (LELAI) del DOJ.  Es el resultado de un deseo mutuo de mejorar los servicios de acceso lingüístico del FPD y no el producto de una investigación o queja contra el FPD.  El DOJ elogia al FPD por tomar la iniciativa de crear un programa de acceso lingüístico completo y eficaz para sus residentes LEP.

El fiscal Peace declaró: «Es de vital importancia que las fuerzas del orden puedan comunicarse eficazmente con los miembros de la comunidad, independientemente de la lengua que estos hablen. Trabajando en colaboración con el FPD, mejoraremos la seguridad pública para todos y esperamos replicar este acuerdo con otras agencias de seguridad en todo el Distrito Este de Nueva York.»

«La Iniciativa de Acceso Lingüístico de las Fuerzas y Cuerpos de Seguridad se diseñó específicamente para los departamentos de policía proactivos que reconocen la necesidad de una comunicación pronta y precisa y están dispuestos a invertir en las herramientas de acceso lingüístico y el entrenamiento que garanticen que las víctimas y los testigos de delitos puedan informar, la fiabilidad de las pruebas, proteger al público y promover la confianza de la comunidad», dijo la Fiscal General Adjunta Kristen Clarke de la División de Derechos Civiles del Departamento de Justicia. «La División de Derechos Civiles continuará trabajando en cooperación con las agencias policiales de todo el país que buscan eliminar las barreras lingüísticas en la actuación policial».     

Lanzado en diciembre de 2022, LELAI es un esfuerzo a nivel nacional para ayudar a las agencias policiales a abordar las barreras lingüísticas cuando interactúan con el público. La iniciativa se basa en los esfuerzos de larga data del Departamento para hacer cumplir el Título VI de la Ley de Derechos Civiles de 1964 (Título VI) y la Ley Ómnibus de Control del Crimen y Calles Seguras de 1968 (Ley de Calles Seguras).

En virtud del acuerdo voluntario de dos años, el DOJ ayudará al FPD a desarrollar su programa de acceso lingüístico de acuerdo con los objetivos compartidos por las partes de promover la seguridad de los agentes y la seguridad pública, contribuir a un mayor control de la delincuencia, recopilar pruebas fiables a efectos de enjuiciamiento y fomentar aún más la confianza de la comunidad.  El DOJ también ayudará al FPD a desarrollar políticas, procedimientos, protocolos de interpretación y traducción, asociaciones comunitarias y formación, entre otras cosas.

LELAI proporciona recursos y herramientas de asistencia técnica que pueden ayudar a las fuerzas del orden estatales y locales a proporcionar un acceso lingüístico significativo a las personas con LEP.  Mediante la participación activa de los organismos policiales que desean revisar, actualizar o reforzar sus políticas, planes y formación en materia de acceso lingüístico, LELAI pretende apoyar los esfuerzos de creación de relaciones entre los organismos policiales, las partes interesadas de la comunidad y las poblaciones con LEP.

Puede obtenerse información adicional sobre el trabajo de la Oficina de Derechos Civiles de la Fiscalía de los EE.UU. de EDNY en su sitio web https://www.justice.gov/usao-edny/civil-rights. El trabajo de la División de Derechos Civiles está disponible en su sitio web en www.justice.gov/crt y la información sobre el dominio limitado del inglés y el Título VI está disponible en www.lep.gov.

Más información sobre LELAI en www.lep.gov/law-enforcement. El público de EDNY puede denunciar posibles violaciones de los derechos civiles en https://www.justice.gov/usao-edny/page/file/1396116/dl?inlineor%20civilrights.justice.gov/report/.

Encargados: Megan Freismuth, Michael Goldberger y Dara Olds, fiscales adjuntos de la División de Derechos Civiles del Distrito Este de Nueva York.

Breon Peace is resigning as United States Attorney for the Eastern District of New York on January 10, 2025.  Mr. Peace has served in the position since October 15, 2021.

First Assistant United States Attorney Carolyn Pokorny will become Acting United States Attorney for the Eastern District of New York upon Mr. Peace’s departure.

Statement from United States Attorney Peace:

“It has been the honor of a lifetime to serve as United States Attorney, to be at the forefront in protecting the over eight million residents of this great district from harm, in upholding the rule of law and promoting civil rights and dignity for all people.  As United States Attorney, I have had the singularly rewarding experience of being called to public service and leadership in a district that is filled with people of different backgrounds and life experiences – yet share a common bond of humanity.  Throughout my tenure I have also had the good fortune to work with some of the most talented prosecutors and staff to be found anywhere in the country and this district and our nation are the better for their skill, sacrifice and service.  As I leave the Office, I will always be grateful for the extraordinary work we have done together in furthering our mission, doing the right thing always and in achieving justice with honor and integrity.  And, I look forward to the Office’s continued courageous commitment to pursuing justice, fairly and ethically, without bias, without fear or favor, and with compassion and empathy for our fellow human beings.” 

Chen Jinping, 60, of New York, New York, pleaded guilty today to conspiring to act as an illegal agent of the government of the People’s Republic of China (PRC), in connection with opening and operating an undeclared overseas police station, located in lower Manhattan, for the PRC’s Ministry of Public Security (MPS).

“Today’s guilty plea holds the defendant accountable for his brazen efforts to operate an undeclared overseas police station on behalf of the PRC’s national police force — a clear affront to American sovereignty and danger to our community that will not be tolerated,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department of Justice will continue to pursue anyone who attempts to aid the PRC’s efforts to extend their repressive reach into the United States.”

“Today's acknowledgment of guilt is a stark reminder of the insidious efforts taken by the PRC government to threaten, harass, and intimidate those who speak against their Communist Party,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “These blatant violations will not be tolerated on U.S. soil. The FBI remains committed to preserving the rights and freedoms of all people in our country and will defend against transnational repression at every front.”

“A priority of my office has been to counteract the malign activities of foreign governments that violate our nation’s sovereignty by targeting local diaspora communities in the United States,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today, a participant in a transnational repression scheme who worked to establish a secret police station in the middle of New York City on behalf of the national police force of the People’s Republic of China has pleaded guilty to conspiracy to act as an illegal agent. We will continue our efforts to protect the rights of vulnerable persons who come to this country to escape the repressive activities of authoritarian regimes.”

As alleged, Chen Jinping and co-defendant “Harry” Lu Jianwang conspired to act as illegal agents of the PRC government and also obstructed justice by destroying evidence of their communications with an MPS official. While acting under the direction and control of the MPS official, the defendants worked together to establish the first known overseas police station in the United States on behalf of the Fuzhou branch of the MPS. The police station — which closed in the fall of 2022 — occupied an entire floor in an office building in Manhattan’s Chinatown. Lu and Chen helped open and operate the clandestine police station. None of the participants in the scheme informed the U.S. government that they were helping the PRC government surreptitiously open and operate an undeclared MPS police station on U.S. soil.

In October 2022, the FBI conducted a judicially authorized search of the illegal police station. In connection with the search, FBI agents interviewed both defendants and seized their phones. In reviewing the contents of these phones, FBI agents observed that communications between the defendants and an MPS official appeared to have been deleted. In subsequent consensual interviews, the defendants admitted to the FBI that they had deleted their communications with the MPS official after learning about the ongoing FBI investigation, thus preventing the FBI from learning the full extent of the MPS’s directions for the overseas police station.

Chen faces a maximum penalty of five years in prison. Per Chen’s plea agreement, the government has agreed to dismiss the obstruction of justice charge against him. Lu has pleaded not guilty to both of the charges against him and is awaiting trial.

The FBI is investigating the case.

Assistant U.S. Attorneys Alexander A. Solomon and Antoinette N. Rangel for the Eastern District of New York and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

The FBI has created a website for victims to report efforts by foreign governments to stalk, intimidate, or assault people in the United States. If you believe that you are or have been a victim of transnational repression, please visit www.fbi.gov/investigate/counterintelligence/transnational-repression.

BROOKLYN, NY – Today in federal court in Brooklyn, Manhattan resident Chen Jinping pleaded guilty to conspiring to act as an agent of the government of the People’s Republic of China (PRC), in connection with opening and operating an undeclared overseas police station in lower Manhattan for the PRC’s Ministry of Public Security (MPS).  Today’s proceeding was held before United States District Judge Nina R. Morrison. When sentenced, the defendant faces up to five years in prison.

Breon Peace, United States Attorney for the Eastern District of New York; Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division; and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.

“A priority of my Office has been to counteract the malign activities of foreign governments that violate our nation’s sovereignty by targeting local diaspora communities in the United States,” stated United States Attorney Peace.  “Today, a participant in a transnational repression scheme who worked to establish a secret police station in the middle of New York City on behalf of the national police force of the People’s Republic of China has pleaded guilty to conspiracy to act as an illegal agent.  We will continue our efforts to protect the rights of vulnerable persons who come to this country to escape the repressive activities of authoritarian regimes.”

“Today’s guilty plea holds the defendant accountable for his brazen efforts to operate an undeclared overseas police station on behalf of the PRC’s national police force — a clear affront to American sovereignty and danger to our community that will not be tolerated,” stated Assistant Attorney General Olsen.  “The Department of Justice will continue to pursue anyone who attempts to aid the PRC’s efforts to extend their repressive reach into the United States.”

“Today, Chen Jinping admitted to his role in audaciously establishing an undeclared police station in the heart of New York City and attempting to conceal the effort when approached by FBI New York,” stated FBI Assistant Director in Charge Dennehy. “This illegal police station was not opened in the interest of public safety, but to further the nefarious and repressive aims of the PRC in direct violation of American sovereignty. The FBI is unwavering in our duty to protect both the freedoms enshrined in the Constitution and the security of our nation from oppressive hostile governments.”

As alleged in court filings and facts presented at the plea proceeding, Chen Jinping and co-defendant Lu Jianwang conspired to act as illegal agents of the PRC government and also obstructed justice by destroying evidence of their communications with an MPS official (the MPS Official).  While acting under the direction and control of the MPS Official, the defendants worked together to establish the first known overseas police station in the United States on behalf of the Fuzhou branch of the MPS.  The police station—which closed in the fall of 2022—occupied an entire floor in an office building in Manhattan’s Chinatown.  Chen and Lu  helped open and operate the clandestine police station.  None of the participants in the scheme informed the U.S. government that they were helping the PRC government open and operate an undeclared MPS police station on U.S. soil.

In October 2022, the FBI conducted a judicially authorized search of the illegal police station.  In connection with the search, FBI agents interviewed both defendants and seized their phones.  In reviewing the contents of these phones, FBI agents observed that communications between the defendants, on the one hand, and the MPS Official, on the other, appeared to have been deleted.

Lu Jianwang has pleaded not guilty to the charges and is awaiting trial.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States  Attorneys Alexander A. Solomon and Antoinette N. Rangel are in charge of the prosecution, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

The FBI has created a website for victims to report efforts by foreign governments to stalk, intimidate, or assault people in the United States.  If you believe that you are or have been a victim of transnational repression, please visit https://www.fbi.gov/investigate/counterintelligence/transnational-repression.

The Defendant:

CHEN JINPING
Age: 60
Manhattan, New York

E.D.N.Y. Docket No. 23-CR-316 (NRM)

Earlier today, a two-count indictment was unsealed in federal court in Brooklyn charging Jason Soto, also known as “Twin,” a member of the Cypress Gangsta Crips (CGC), a subgroup of the Eight Trey Crips based in the Cypress Hills Houses of East New York, Brooklyn, with the February 2015 murder of Shakim Rivera, the leader of the CGC.   The defendant was arrested this morning and will be arraigned before United States Magistrate Judge Sanket J. Bulsara.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Jessica S. Tisch, Commissioner, New York City Police Department (NYPD), announced the arrest and indictment.

“This indictment makes clear that my Office and our law enforcement partners are relentless in our pursuit of violent gang members who have committed murders and harmed communities like the Cypress Hills Houses for far too long,” stated United States Attorney Peace.  “We are reducing gang and gun-related violence and saving lives through a coordinated effort to target the most violent offenders, like this defendant.”

“Jason Soto, a Crips gang member, allegedly appointed himself as judge, jury, and executioner to murder his own leader as twisted justice for the death of a fellow member. Soto’s alleged actions contributed to the infestation of gang violence plaguing a Brooklyn housing complex and endangered the lives of thousands of its residents. With the assistance of our law enforcement partners, the FBI will continue to apprehend any gang member wreaking havoc in our communities,” stated FBI Assistant Director in Charge Dennehy.

“The residents of the Cypress Hills Houses, along with all New Yorkers in every neighborhood, deserve to live their lives without fear,” stated NYPD Commissioner Tisch.  “The NYPD and our law enforcement partners are dedicated to systematically dismantling the gangs and crews responsible for crime and violence in New York City. I commend the collaborative efforts of our NYPD investigators, the FBI, and the U.S. Attorney’s Office for the Eastern District of New York in identifying and holding accountable those who terrorize our communities.”

As detailed in the indictment and other court documents, since at least February of 2015, Soto was a member of the CGC, which operated in the Cypress Hills Houses and elsewhere.  CGC members committed acts of violence to promote the gang, enforce the rules of the gang, keep rivals in fear of CGC and earn money for the gang through firearm and narcotics trafficking and robberies.

The investigation revealed a deadly gang turf war fought in the Cypress Hill Houses—in the midst of residential buildings, stores and a playground—between gangs that have aligned themselves by where their members live within the housing complex.  The Bloods gang associated with the “Frontside” section of Cypress feuded with the CGC members of the “Backside” and “Teamside” sections of Cypress.  An internal war broke out in 2015 within the CGC when high-ranking member Demetrius Graham, also known as “Duke,” was murdered on February 19, 2015. Believing that CGC leader Shakim Rivera was responsible for Graham’s murder, members of CGC planned retaliation.

On February 19, 2015, Soto traveled from Pennsylvania to Brooklyn to carry out Rivera’s murder.  On February 22, 2015, Soto lured Rivera to the vicinity of 9011 Bayview Place in the Canarsie neighborhood of Brooklyn.  As alleged, Soto and another member of the CGC shot and killed Rivera, the leader of CGC, in retaliation for Graham’s murder.

The indictment is the result of a long-term investigation initiated by the FBI, the NYPD and the Office in 2015 in response to gang-related violence in and around the Cypress Hills Houses.  The investigation has resulted in charges against over 20 defendants for drug trafficking, illegal weapons possession, robbery and murder.

If convicted, the defendant faces a mandatory sentence of life in prison, or possibly the death penalty.

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

The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States  Attorneys Emily J. Dean and Andy Palacio are in charge of the prosecution, with the assistance of Paralegal Specialist Theodore Rader.

The Defendant:

JASON SOTO
Age:  36
Queens, New York

E.D.N.Y. Docket No. 24-CR-511 (RER)

Today, in federal court in Central Islip, Klaus Pflugbeil was sentenced by Judge Joan M. Azrack to 24 months’ imprisonment for conspiring to send trade secrets that belong to a leading U.S.-based electric vehicle company (Victim Company-1).  Pflugbeil, a resident of the People’s Republic of China (the “PRC” or “China”) and a Canadian and German national, and his co-defendant, Yilong Shao, who remains at large, are owners of a PRC-based business (Business-1) that sold technology used to make batteries, including batteries used in electric vehicles.  Pflugbeil and Shao, former employees of a company that was purchased by Victim Company-1, took trade secrets from their employer, and later used the trade secrets to build a business that they marketed as a replacement for Victim Company-1’s products.  Pflugbeil pleaded guilty in June 2024.

Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General of the Justice Department’s National Security Division, and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

“The defendant built a business in China to sell sensitive technology that belongs to a U.S. company.  His actions were bold—he even advertised that he was selling the victim’s products—because he thought, incorrectly, that he was outside the reach of U.S. prosecutors,” stated United States Attorney Peace.  “Today’s sentencing sends a clear message to would-be offenders: my Office will do everything it can to protect American innovation and national security no matter where you try to hide.”

Mr. Peace expressed his appreciation to the Justice Department’s Computer Crime and Intellectual Property Section (CCIPS) and the Japanese authorities for their assistance on this case.

“In stealing trade secrets from an American electric vehicle manufacturer to use in his own China-based company, Pflugbeil’s actions stood to benefit the PRC in a critical industry with national security implications,” said Assistant Attorney General for National Security Matthew G. Olsen. “The Justice Department will mobilize every available resource to prevent our adversaries from advancing their global ambitions at the expense of U.S. national security.”

“Klaus Pflugbeil attempted to benefit a foreign economy through an unauthorized monopoly fueled by technology stolen from the United States. His actions blatantly violated the trust of his employer and the integrity of our country’s innovative technology. May today’s sentencing reiterate the FBI’s commitment to disrupting any conspiracy which threatens our national security and the balance of the global economic market,” stated FBI Assistant Director in Charge Dennehy.

Victim Company-1 is a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems.  In 2019, Victim Company-1 acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly lines (the “Canadian Manufacturer”).  Prior to its purchase by Victim Company-1, the Canadian Manufacturer sold battery assembly lines to customers who manufactured alkaline and lithium‑ion batteries for consumer use.  The battery assembly lines contained or utilized a proprietary technology now owned by Victim Company-1: continuous motion battery assembly (the “Battery Assembly Trade Secret”).  The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the lithium-ion battery manufacturing process.

Both Pflugbeil and his co-defendant Shao are former employees of the Canadian Manufacturer, and Shao also worked for Victim Company-1.  As detailed in court documents, by no later than 2019, Pflugbeil and Shao planned to use Victim Company-1’s trade secrets for their own business activities.  Pflugbeil told Shao that he had “a lot of original documents” related to the technology and sought out more “original drawings” of the trade secrets.  Shao confirmed, among other things, that, “we have all of original assembly drawings by PDF.”

The conspirators took measures to obfuscate that they had stolen trade secrets. For example, Pflugbeil wrote to Shao about a document he created based on one that Shao had stolen from Victim Company-1, “[its] in a different format, so it looks very original and not like a copy.”

In or about July 2020, Pflugbeil joined Business-1, a company previously established by Shao, which has since expanded to locations in China, Canada, Germany and Brazil.  Business‑1 makes the same precision dispensing pumps and battery assembly lines that the Canadian Manufacturer developed.  The battery assembly technology is related to the development of electric vehicles that can compete with U.S.-made vehicles.  The potential for Chinese automakers to swamp the U.S. and global market with vehicles like those that can be built using this stolen technology presents a potential national security risk.

Business-1 was marketed by Pflugbeil as an alternative source for the sale of products that relied upon Victim Company-1’s trade secrets, publishing online advertisements on Google, YouTube and LinkedIn.  Pflugbeil repeatedly sent LinkedIn messages that named Victim Company-1 and said Business-1 was not infringing on any intellectual property:

Hello [name], I hope to get some of your busy time.  As I like to introduce our company to you.  We already have supplied companies such [a]s [list of U.S. Fortune 500 Companies by name] . . . We engineer and manufacture all of our products in-house, and we warrant that none of our products infringe any patents, copyrights, or other intellectual property rights of any third party.

(Emphasis added.)  The above reflects a blatant lie, told over and over—that Business-1’s products did not infringe on intellectual property rights of a third party.  Pflugbeil also advertised products based on stolen trade secrets on Google.  These ads were shown tens of thousands of times per week.

On or about September 11, 2023, undercover agents attended a trade show for the packaging and processing industries (the “Trade Show”) in Las Vegas, Nevada.  The undercover agents posed as businesspeople who were interested in purchasing a battery assembly line from Business-1 to manufacture batteries at a facility in Long Island, New York.  The undercover agents were introduced to Shao at the trade show and later to Pflugbeil via email.

Subsequently, on or about November 17, 2023, Pflugbeil sent, via email, a detailed 66-page technical documentation proposal (the “Proposal”) to an undercover agent (UC-1).  The Proposal noted, “this technical documentation package contains [Business-1] proprietary information which must be kept confidential.”  In reality, the Proposal contained Battery Assembly Trade Secret information belonging to Victim Company-1:  at least half a dozen drawings Pflugbeil used in the Proposal and sent to UC-1 were, in fact, Victim Company-1’s information related to the Battery Assembly Trade Secret.  The business proposal quoted the battery assembly line at costing over $15 million to purchase.

The investigation and prosecution were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force.  The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

The government’s case is being handled by the Office’s National Security and Cybercrime Section and the Long Island Criminal Division.  Assistant United States  Attorneys Ellen H. Sise and Samantha Alessi are in charge of the prosecution, along with Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section with assistance from Paralegal Specialist Rebecca Roth.

The Defendant

KLAUS PFLUGBEIL
AGE: 59
NINGBO, CHINA

E.D.N.Y. Docket No. 24-CR-238

Klaus Pflugbeil, 59, of Ningbo, China, was sentenced today to 24 months in prison for conspiring to send trade secrets that belong to a leading U.S.-based electric vehicle company (Victim Company-1). Pflugbeil, a resident of the People’s Republic of China (the PRC or China) and a Canadian and German national, and his co-defendant, Yilong Shao, who remains at large, are owners of a PRC-based business (Business-1) that sold technology used to make batteries, including batteries used in electric vehicles. Pflugbeil and Shao, former employees of a company that was purchased by Victim Company-1, took trade secrets from their employer, and later used the trade secrets to build a business that they marketed as a replacement for Victim Company-1’s products.

“In stealing trade secrets from an American electric vehicle manufacturer to use in his own China-based company, Pflugbeil’s actions stood to benefit the PRC in a critical industry with national security implications,” said Assistant Attorney General for National Security Matthew G. Olsen. “The Justice Department will mobilize every available resource to prevent our adversaries from advancing their global ambitions at the expense of U.S. national security.”

“The defendant built a business in China to sell sensitive technology that belongs to a U.S. company.  His actions were bold — he even advertised that he was selling the victim’s products — because he thought, incorrectly, that he was outside the reach of U.S. prosecutors,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today’s sentencing sends a clear message to would-be offenders: my Office will do everything it can to protect American innovation and national security no matter where you try to hide.”

Victim Company-1 is a U.S.-based leading manufacturer of battery-powered electric vehicles and battery energy systems. In 2019, Victim Company-1 acquired a Canada-based manufacturer of automated, precision dispensing pumps and battery assembly. Prior to its purchase by Victim Company-1, the Canadian manufacturer sold battery assembly lines to customers who manufactured alkaline and lithium‑ion batteries for consumer use. The battery assembly lines contained or utilized a proprietary technology now owned by Victim Company-1: continuous motion battery assembly. The proprietary technology provided a substantial competitive advantage to Victim Company-1 in the lithium-ion battery manufacturing process.

Both Pflugbeil and his co-defendant Shao are former employees of the Canadian manufacturer, and Shao also worked for Victim Company-1. As detailed in court documents, by no later than 2019, Pflugbeil and Shao planned to use Victim Company-1’s trade secrets for their own business activities. Pflugbeil told Shao that he had “a lot of original documents” related to the technology and sought out more “original drawings” of the trade secrets. Shao confirmed, among other things, that, “we have all of original assembly drawings by PDF.”

The conspirators took measures to obfuscate that they had stolen trade secrets. For example, Pflugbeil wrote to Shao about a document he created based on one that Shao had stolen from Victim Company-1, “[its] in a different format, so it looks very original and not like a copy.”

In or about July 2020, Pflugbeil joined Business-1, a company previously established by Shao, which has since expanded to locations in China, Canada, Germany, and Brazil. Business‑1 makes the same precision dispensing pumps and battery assembly lines that the Canadian manufacturer developed. The battery assembly technology is related to the development of electric vehicles that can compete with U.S.-made vehicles. The potential for Chinese automakers to swamp the U.S. and global market with vehicles like those that can be built using this stolen technology presents a potential national security risk.

Business-1 was marketed by Pflugbeil as an alternative source for the sale of products that relied upon Victim Company-1’s trade secrets, publishing online advertisements on Google, YouTube, and LinkedIn. Pflugbeil repeatedly sent LinkedIn messages that named Victim Company-1 and said Business-1 was not infringing on any intellectual property:

Hello [name], I hope to get some of your busy time. As I like to introduce our company to you. We already have supplied companies such [a]s [list of U.S. Fortune 500 Companies by name] . . . We engineer and manufacture all of our products in-house, and we warrant that none of our products infringe any patents, copyrights, or other intellectual property rights of any third party.

The above reflects a blatant lie, told over and over—that Business-1’s products did not infringe on intellectual property rights of a third party. Pflugbeil also advertised products based on stolen trade secrets on Google. These ads were shown tens of thousands of times per week.

On or about September 11, 2023, undercover agents attended a trade show for the packaging and processing industries in Las Vegas, Nevada. The undercover agents posed as businesspeople who were interested in purchasing a battery assembly line from Business-1 to manufacture batteries at a facility in Long Island, New York. The undercover agents were introduced to Shao at the trade show and later to Pflugbeil via email.

Subsequently, on or about November 17, 2023, Pflugbeil sent, via email, a detailed 66-page technical documentation proposal to an undercover agent (UC-1). The proposal notes, “this technical documentation package contains [Business-1] proprietary information which must be kept confidential.”  In reality, the proposal contained battery assembly trade secret information belonging to Victim Company-1:  at least half a dozen drawings Pflugbeil used in the proposal and sent to UC-1 were, in fact, Victim Company-1’s information related to the battery assembly trade secret. The business proposal quoted the battery assembly line at over $15 million.

Assistant U.S. Attorneys Ellen H. Sise and Samantha Alessi for the Eastern District of New York and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section prosecuted the case.

The investigation and prosecution were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

Earlier today, in federal court in Brooklyn, Carlos Watson, the founder and former Chief Executive Officer of Ozy Media, Inc. (Ozy), was sentenced by United States District Judge Eric R. Komitee to 116 months in prison for conspiracy to commit securities fraud, conspiracy to commit wire fraud and aggravated identity theft.  Watson was convicted in July 2024 following an eight-week trial.  Ozy, which was also convicted at trial, was sentenced to one year probation. Additional penalties of forfeiture and restitution will be imposed at a later date.

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentences.

“Carlos Watson orchestrated a years-long, audacious scheme to defraud investors and lenders to his company, Ozy Media, out of tens of millions of dollars,” stated United States Attorney Peace.  “His incessant and deliberate lies demonstrated not only a brazen disregard for the rule of law, but also a contempt for the values of honesty and fairness that should underlie American entrepreneurship.  On far too many occasions, Watson chose deceit over candor, grasping for the illusion of business success and personal acclaim at any cost. Today’s sentence should serve as a warning to those who would engage in fraud that justice will be swift and certain.”

“Carlos Watson masqueraded his former company’s composition and purported success to entice investors, but ultimately cost them millions when the curated façade collapsed,” stated FBI Assistant Director in Charge Dennehy. “Watson abused his official capacity to ensnare subordinates to serve as lackies and perpetuate these fraudulent actions. May today’s sentencing deter any individual from implementing deceptive business practices to avoid a similar fate.”

According to court filings and as proven at trial, between 2018 and 2021, Watson and his co-conspirators orchestrated a scheme to defraud investors out of tens of millions of dollars through fraudulent misrepresentations and omissions about Ozy’s financial performance, including revenue, cash on hand and profit, ongoing business relationships with celebrities, acquisition prospects from high- profile technology and media corporations, contract negotiations and other corporate metrics.  For example, Watson and his co-conspirators lied to prospective investors about who else might be investing in Ozy, the existence and size of acquisition offers received by Ozy, the existence and timing of financing rounds, and the existence and terms of Ozy’s business contracts — going so far as to direct Ozy employees to create fake contracts with forged signatures to provide in due diligence.  On multiple occasions, when faced with questions from lenders or potential investors, Watson and his co-conspirators assumed the identities of and impersonated actual media company executives to cover up their prior fraudulent misrepresentations.  Watson’s scheme caused actual investor losses in excess of $60 million and intended to deprive potential investors of hundreds of millions more on the basis of his and his co-conspirators’ lies and misrepresentations. 

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including securities fraud, wire fraud and identity theft.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States  Attorneys Jonathan Siegel, Gillian Kassner and Dylan A. Stern are in charge of the prosecution.  Assistant United States Attorney Laura Mantell of the Asset Recovery Section is assisting with forfeiture matters.

The Defendants:

Carlos Watson
Age:  55
Mountain View, California

Ozy Media, Inc.
Mountain View, California

E.D.N.Y. Docket No. 23-CR-82 (EK)

Today, at the federal courthouse in Brooklyn, Carmelo Polito, also known as “Carmine Polito,” a former acting captain and soldier in the Genovese organized crime family, was sentenced to 30 months in prison by United States District Judge Eric N. Vitaliano for racketeering in connection with operating an illegal gambling business at the Gran Caffé in Lynbrook, Long Island, and attempting to extort an individual who owed him money stemming from a separate online sports betting business.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Anne T. Donnelly, Nassau County District Attorney, announced the sentence.

“Today’s sentence makes clear to the defendant that the outcome for participating in illegal gambling and making extortionate threats is the loss of something very valuable — your freedom,” stated United States Attorney Peace.  “Thanks to the outstanding work of prosecutors in my Office and law enforcement, the alliance of the Genovese and Bonanno organized crime families’ rackets was a bust.”

Mr. Peace expressed his appreciation to the New York City Police Department and the Nassau County Police Department for their invaluable assistance in the investigation.        

“The cards did not favor Carmelo Polito's illicit gambling parlor or his extortionate methods,” stated FBI Assistant Director in Charge Dennehy.  “His illegitimate business and death threats financed the operations of two crime families.  May today’s sentencing reaffirm the FBI’s commitment to doubling down on all organized crime activity plaguing our communities.

“This defendant, along with other associates of the Genovese family, operated illegal gambling businesses in Nassau County that funneled money straight into organized crime,” stated District Attorney Donnelly.  “Extortion, threats, and violence have no place in Nassau County. I thank our partners at the U.S. Attorney’s Office and the FBI for their collaboration in dismantling this illicit operation and working to rid organized crime from our communities.”

Polito is a longtime, inducted member of the Genovese organized crime family. As detailed in earlier court filings, for years, numerous members and associates of the Genovese and Bonanno organized crime families operated several illegal gambling operations in the Eastern District of New York.  Beginning in at least May 2012, the Genovese and Bonanno families jointly operated a lucrative illegal gambling parlor concealed inside a coffee shop called the Gran Caffé in Lynbrook.  Polito and co-defendant Joseph Macario, also known as “Joe Fish,” on behalf of the Genovese crime family, and Anthony Pipitone, also known as “Little Anthony,” on behalf of Bonanno crime family, successfully negotiated a profit split for the gambling location, which ensured that each crime family benefited from the illegal gambling operation.  In addition to the Gran Caffé, the Genovese crime family—through Polito, Macario, Joseph Rutigliano, also known as “Joe Box,” Salvatore Rubino, also known as “Sal the Shoemaker,” and others—operated illegal gambling parlors at establishments called Sal’s Shoe Repair and the Centro Calcio Italiano Club.  Rutigliano and Rubino collected the proceeds for the Genovese crime family and distributed them up to higher ranking members, including Polito and Macario. Polito was surveilled distributing proceeds to higher ranking members on numerous occasions.

Polito and co-defendant Mark Feuer also operated an illegal online gambling scheme in which bets were placed on sporting events through a website called “PGWLines.”  In connection with his operation of PGWLines, Polito attempted to extort an individual who lost several thousand dollars in bets using death threats and other threats of violence.  For example, during a September 2019 call concerning the debtor, Polito instructed another individual to tell the debtor that Polito would “break” the debtor’s “face.” When the debtor still did not pay Polito, Polito instructed the same individual to relay a new message to the debtor: “Tell him I’m going to put him under the f------g bridge.”

Polito is the first defendant sentenced in this case and a related case against four members and associates of the Bonanno organized crime family of La Cosa Nostra.  Macario, Rutigliano, Rubino and Feuer are awaiting sentencing.   

The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Tanya Hajjar, Drew Rolle, Anna Karamigios and Sean M. Sherman are in charge of the prosecution, with the assistance of Paralegal Specialist Eleanor Jaffe-Pachuilo.

The Defendants:

CARMELO POLITO (also known as “Carmine Polito”)
Age:  64
Whitestone, Queens

Defendants Awaiting Sentencing:

JOSEPH MACARIO (also known as “Joe Fish”)
Age:  69
West Islip, Long Island

SALVATORE RUBINO (“Sal the Shoemaker”)
Age:  60
Bethpage, Long Island

JOSEPH RUTIGLIANO (also known as “Joe Box”)
Age:  65
Commack, Long Island

MARK FEUER
Age:  61
Oceanside, Long Island

E.D.N.Y. Docket No. 22-CR-356 (ENV)

Earlier today, a federal jury in Brooklyn convicted Quadri Garnes of transmission of threats to injure. The verdict followed a five-day trial before United States District Judge Nina R. Morrison.  When sentenced, Garnes faces up to five years in prison.

Breon Peace, United States Attorney for the Eastern District of New York and Daniel B. Brubaker, Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS), announced the verdict.

“The defendant used threats of violence as a weapon to terrorize government employees because he couldn’t get what he wanted and today, the jury’s verdict spoke loudly that such conduct will not be tolerated,” stated United States Attorney Peace.  “My Office is committed to protecting civil servants who are subjected to work-related threats, and we will do so by vigorously prosecuting offenders like the defendant and demonstrating that there are consequences for such conduct.”

“Today’s guilty verdict should signal to anyone who makes threats of violence against federal employees, or through creating an environment of fear, attempts to impede or obstruct the services these employees provide to the American people, that your actions will absolutely not be tolerated on any level. Postal Inspectors and our law enforcement partners in the U.S. Attorney’s Office, Eastern District of New York, will bring anyone who attempts or threatens to harm these dedicated employees to justice,” stated USPIS Inspector in Charge Brubaker.

As proven at trial, Garnes was employed as a mail carrier for the United States Postal Service (USPS) at the Homecrest post office in Brooklyn from March 26, 2022 to May 29, 2022. After crashing his postal truck into two vehicles, Garnes was terminated on May 31, 2022. Garnes subsequently applied for unemployment benefits but was denied because he had worked for the USPS for fewer than 60 days and was thus ineligible to receive benefits.  On the morning of September 29, 2022, Garnes called the New York State Department of Labor (DOL) and was advised that he had worked for the USPS for too short a period to be eligible to receive benefits. In response, he threatened to shoot and kill employees of the USPS and DOL. During the 45-minute recorded call with two DOL employees, Garnes’s statements included:

• If I go back to the post office, I’m gonna shoot somebody.
• Y’all gonna make me go to jail for killing somebody.
• Do the city want me to kill five or six different people?
• I got 18 and a half years in jail. It don’t bother me to be in jail. I made myself, meaning like I’m made, as long as I’m in the New York City jail, I’m good.
• You might see this s--t on TV. Just remember my name. You might see it on TV tonight. You, just remember my name!
• Somebody might get shot today coming out of Department of Labor.
• Believe me, I’ll be at the New York State Department of Labor down on Schermerhorn or Livingston Street and I will make a big f----ng deal out of it.

Garnes’s threats triggered an immediate response by the DOL, the New York State Police and by Postal Inspectors, who took precautions against Garnes’s return to the postal facility where he had briefly worked and the DOL office he named.  Garnes was arrested approximately two weeks after making his threats.

Assistant United States Attorneys Antoinette N. Rangel and Alexander Mindlin are in charge of the prosecution, with the assistance of Paralegal Specialist Rebecca Roth.

The Defendant:

QUADRI GARNES
Age:  48
Brooklyn, New York

E.D.N.Y. Docket No. 22-CR-487 (NRM)

A 12-count indictment was unsealed yesterday charging Natalya Ivanovna Mazulina, of Federal Way, Washington, also known as “Natasha Mazulina,” for her alleged involvement in a scheme to circumvent U.S. export laws and sanctions on Russia. Mazulina, the Western regional manager of a freight forwarding company based in Jamaica, New York, which operated out of John F. Kennedy International Airport (JFK airport) in Queens, New York, and Seattle-Tacoma International Airport in Washington State, was arrested yesterday in Seattle and will be arraigned in the Eastern District of New York at a later date.

“The defendant exploited her knowledge of the export business to falsify documents and circumvent U.S. sanctions by illegally shipping oil and gas products to Russian customers,” said Assistant Attorney General Matthew G. Olsen of the National Security Division. “American companies like the freight forwarder where Mazulina worked play a critical role in the global supply chain and movement of goods. The National Security Division will not tolerate individuals who seek to abuse their positions in these companies for financial gain at the expense of national security.”

“We’ve been clear and consistent that we want to help freight forwarders comply with our rules,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod of the Department of Commerce’s Bureau of Industry and Security (BIS). “But, as today’s arrest underscores, we’ve also been clear and consistent about what happens when they don’t.”

“As alleged, Mazulina used her position as a manager of a freight forwarding company to facilitate unlawful exports to Russia through JFK airport,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Evading U.S export regulations presents a danger to our national security, and we will continue to use all of our law enforcement and national security tools make sure these enablers, both individuals and corporations, cannot operate in our district.”

“The defendant in this case allegedly helped Russia obtain such valuable items as industrial oil and gas equipment in violation of export laws and sanctions,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “The FBI will continue to work closely with our partners to detect and stop such illegal transfers and hold accountable those who engage in activities detrimental to U.S. national security interests.”

As alleged in the indictment, from at least December 2022 through December 2024, Mazulina conspired with Russian freight forwarding companies and others to unlawfully ship controlled items, including industrial oil and gas equipment from the United States to Russia, through intermediary countries. At one point, in June 2023, Mazulina told colleagues that her clients were paying through bank accounts in third party countries because “[m]ost of [her] clients [were] currently sanctioned with USA.”  Mazulina attempted to conceal the unlawful scheme by submitting and causing the submission of false export documents to the U.S. government, documents which should have revealed that the exported goods were destined for Russia.

Mazulina is charged with conspiracy to export controlled goods to Russia without a license, conspiracy to defraud the U.S., conspiracy to commit money laundering, exporting controlled goods to Russia without a license, filing false export documents with the U.S. government, and smuggling goods contrary to U.S. law. If convicted, she faces a maximum penalty of 20 years in prison for each count of conspiring to export or exporting controlled goods to Russia without a license; a maximum penalty of 20 years in prison for conspiring to commit money laundering; up to 10 years in prison for each count of smuggling; and a maximum penalty of five years in prison for each count of conspiracy and filing false export documents with the U.S. government. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The BIS and FBI are investigating the case. The U.S. Attorney’s Office for the Western District of Washington, FBI Seattle Field Office, and BIS Boston Field Office assisted the investigation.

Assistant U.S. Attorneys Artie McConnell and Matthew Skurnik for the Eastern District of New York and Trial Attorneys Christopher M. Rigali and Adam Barry of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case. The Justice Department's Money Laundering and Asset Recovery Section assisted with this investigation.

The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that, beginning in 2014, the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty.

A federal jury in Central Islip returned a guilty verdict today against Roya Jafari-Hassad, a medical doctor with a practice in Great Neck, Long Island, on eight counts of a second superseding indictment charging her with prescribing oxycodone pills without a legitimate medical purpose.  The verdict followed a 10-day trial before United States District Judge Gary R. Brown.  When sentenced, Dr. Jafari-Hassad faces up to 20 years in prison on each count. The defendant was acquitted of witness tampering charges.

Breon Peace, United States Attorney for the Eastern District of New York, Frank A Tarentino III, Special Agent in Charge, Drug Enforcement Administration, New York Division (DEA) and Naomi Gruchacz, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General’s Office of Investigations, New York Region (HHS-OIG), announced the verdict.

“As proven, Dr. Hassad was a drug dealer who disgracefully dispensed highly addictive oxycodone pills without any regard for the well-being of the patient but with plenty of interest in their cash,” stated United States Attorney Peace. “Corrupt doctors like this defendant, who value greed over their oath to do no harm, fuel the opioid epidemic and my Office is committed to holding them accountable for the incalculable harm they have caused.”

“Dr. Roya Jafari-Hassad knowingly  prescribed opioids without cause, and with a possible life of addiction. Dr Jafari-Hassad knew the harmful effects opioids could have on and not only jeopardized their health, but the patient’s future as well.” stated DEA New York Special Agent in Charge Tarentino.  “Today, the jury recognized her actions of putting profit and greed over her oath to protect the health and safety of her patients, all while exacerbating the opioid crisis.”

“The defendant convicted in this case is a physician who knowingly prescribed controlled substances illegally, which is especially egregious given the ongoing opioid epidemic,” stated HHS-OIG Special Agent in Charge Gruchacz.  “HHS-OIG will continue to work with our law enforcement partners to ensure individuals involved in schemes that threaten patient safety are held accountable.”

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 frequently abused because of its potency when crushed into a powder and ingested, leading to a heroin-like euphoria.

As proven at trial, Dr. Hassad charged hundreds of dollars in cash in exchange for a monthly oxycodone prescription which had no legitimate medical purpose.  In the spring of 2021, law enforcement opened an investigation into Dr. Hassad’s conduct.  Over nine months and 10 appointments that were tape-recorded, Dr. Hassad gave an undercover detective, who claimed he had pain, ten prescriptions for oxycodone totaling hundreds of oxycodone pills for which he paid thousands of dollars in cash.  Dr. Hassad typically charged about $350 for a 15-day supply of oxycodone and about $700 for a 30-day supply of oxycodone.

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.  Assistant U.S. Attorneys Charles P. Kelly and Katherine Onyshko are in charge of the prosecution, with the assistance of Paralegal Specialist Samantha Schroder.

The Defendant:

ROYA JAFARI-HASSAD
Age:  58
Bayside, Queens

E.D.N.Y. Docket No. 22-CR-545(S-2) (GRB)

Earlier today, at the federal courthouse in Central Islip, an indictment was unsealed charging Ken Peterman, the former Chief Executive Officer (CEO) of Comtech Telecommunications Corp. (Comtech), a publicly traded company based in Melville, New York, with insider trading and securities fraud.  Peterman was arrested this morning in San Diego and is scheduled to make his initial appearance tomorrow in federal court in the Southern District of California. He will be arraigned in the Eastern District of New York at a later date.

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charges.

“As alleged, the defendant exploited for his own personal benefit confidential information, including derogatory news of his own impending termination, that was meant to be available only for corporate purposes,” stated United States Attorney Peace.  “In doing so before he was shown the door, Peterman breached the trust and confidence placed in him by his former employer and its shareholders.  My Office will vigorously prosecute those, like Peterman, who would seek to enrich themselves at the expense of ordinary investors and the integrity of the securities markets.”

Mr. Peace also expressed his appreciation to the U.S. Securities and Exchange Commission, New York Regional Office for its work on the case.

“Ken Peterman allegedly acted on non-public information of the company’s confidential fiscal reporting and his pending termination to avoid financial repercussions. This alleged attempt at self-preservation exploited a respected position and disrupted public confidence in future financial leadership. The FBI remains committed to apprehending those who fraudulently prioritize personal wealth over adherence to the regulations of our economic system,” stated FBI Assistant Director in Charge Dennehy.

As alleged, Peterman was the CEO and Chairman of the Board of Directors for Comtech.  In his capacity as an officer and director of the company, Peterman obtained material, non-public information concerning the company’s financial performance and internal decision-making.  For example, in early March 2024, Peterman received a confidential briefing from Comtech’s Chief Financial Officer, during which Peterman was informed of an upcoming negative earnings release.  In addition, around the same time, Peterman was informed that, based on an alleged improper relationship with a subordinate employee, Comtech’s Board had resolved to terminate Peterman for cause.  The indictment alleges that on March 12, 2024, shortly after learning of the negative earnings report and his impending ouster, and prior to the public release of such information, Peterman hurriedly sold and/or attempted to sell tens of thousands of shares of Comtech’s stock, which he held in two brokerage accounts. 

The charges in the indictment are allegations and the defendant is presumed innocent unless and until proven guilty.  Peterman faces up to 25 years in prison if convicted of securities fraud, and up to 20 years in prison if convicted of wire fraud.

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes, including frauds affecting the integrity of the markets, such as those Peterman is alleged to have committed.

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

The Defendant:

KEN A. PETERMAN
Age:  67
Encinitas, California

E.D.N.Y. Docket No. 24-CR-489 (JMA)

BROOKLYN, NY – A 12-count indictment was unsealed today in federal court in Brooklyn charging Natalya Ivanovna Mazulina, also known as “Natasha Mazulina,” for her alleged involvement in a scheme to circumvent U.S. export laws and sanctions on Russia.  Mazulina, the Western regional manager of a freight forwarding company based in Jamaica, New York, which operated out of John F. Kennedy International Airport (JFK airport) in Queens, New York, and Seattle-Tacoma International Airport in Washington State, was arrested earlier today in Seattle and will be arraigned in the Eastern District of New York at a later date.

Breon Peace, United States Attorney for the Eastern District of New York; Matthew G. Olsen, Assistant Attorney General for the Justice Department’s National Security Division; James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and James Guanci, Special Agent in Charge, U.S. Department of Commerce (DOC), Office of Export Enforcement, Boston, announced the arrest and charges.

“As alleged, Mazulina used her position as a manager of a freight forwarding company to facilitate unlawful exports to Russia through JFK airport,” stated United States Attorney Peace. “Evading U.S export regulations presents a danger to our national security, and we will continue to use all of our law enforcement and national security tools make sure these enablers, both individuals and corporations, cannot operate in our district.”

Mr. Peace extended his appreciation to the U.S. Attorney’s Office for the Western District of Washington, the FBI’s Seattle Field Office, and the DOC’s Boston Field Office for their assistance in this case.

“The defendant exploited her knowledge of the export business to falsify documents and circumvent U.S. sanctions by illegally shipping oil and gas products to Russian customers,” stated Assistant Attorney General Olsen.  “American companies like the freight forwarder where Mazulina worked play a critical role in the global supply chain and movement of goods. The National Security Division will not tolerate individuals who seek to abuse their positions in these companies for financial gain at the expense of national security.”

“Collaborating with foreign actors to evade U.S. export controls is a serious national security violation,” said DOC Special Agent in Charge Guanci.  “The Office of Export Enforcement, alongside its law enforcement partners, will continue to aggressively investigate efforts to illicitly fuel Russia’s wartime economy.”

As alleged in the indictment, from at least December 2022 through December 2024, Mazulina conspired with Russian freight forwarding companies and others to unlawfully ship controlled items, including industrial oil and gas equipment from the United States to Russia, through intermediary countries.  At one point, in June 2023, Mazulina told colleagues that her clients were paying through bank accounts in third party countries because “[m]ost of [her] clients [were] currently sanctioned with USA.” Mazulina attempted to conceal the unlawful scheme by submitting and causing the submission of false export documents to the U.S. government, documents which should have revealed that the exported goods were destined for Russia.   

Mazulina is charged with conspiracy to export controlled goods to Russia without a license, conspiracy to defraud the U.S., conspiracy to commit money laundering, exporting controlled goods to Russia without a license, filing false export documents with the U.S. government, and smuggling goods contrary to U.S. law.  If convicted, she faces a maximum penalty of 20 years in prison for each count of conspiring to export or exporting controlled goods to Russia without a license; up to 20 years in prison for conspiring to commit money laundering; up to 10 years in prison for each count of smuggling; and up to five years in prison for each count of conspiracy and filing false export documents with the U.S. government.

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

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Artie McConnell and Matthew Skurnik are in charge of the prosecution, along with Trial Attorneys Christopher M. Rigali and Adam Barry of the National Security Division’s Counterintelligence and Export Control Section, and with the assistance of Litigation Analyst Emma Tavangari. The Department of Justice’s Money Laundering and Asset Recovery Section assisted with this investigation.

The investigation was coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export controls and economic countermeasures that, beginning in 2014, the United States, along with its foreign allies and partners, has imposed in response to Russia’s unprovoked military invasion of Ukraine. Announced by the Attorney General on March 2, 2022, and under the leadership of the Office of the Deputy Attorney General, the task force will continue to leverage all of the department’s tools and authorities to combat efforts to evade or undermine the collective actions taken by the U.S. government in response to Russian military aggression.

The Defendant:

NATALYA IVANOVNA MAZULINA (also known as “Natasha Mazulina”)
Age: 41
Federal Way, Washington

E.D.N.Y. Docket No. 24-CR-493 (EK)

Earlier today, Junior Zelaya Canales, also known as “Terco,” a Queens-based regional leader of the 18th Street gang, pleaded guilty to racketeering conspiracy charges in connection with his participation in the September 12, 2016 murder of 15-year-old Joshua Guzman in Hempstead, New York. The guilty plea proceeding was held in federal court in Brooklyn before United States District Judge Hector Gonzalez.

Zelaya Canales is the ninth and final defendant to plead guilty under a seventh superseding indictment in connection with a sprawling racketeering conspiracy that also involved the October 25, 2017 murder of 20-year-old Jonathan Figueroa in Saugerties, New York; the February 2, 2018 murder of 20-year-old Oscar Antonio Blanco Hernandez in Queens; and multiple shootings and other gang activity.  Zelaya Canales’ co-defendants Walter Fernando Alfaro Pineda, Jose Douglas Castellano, Yanki Misael Cruz Mateo, Israel Mendiola Flores, Yoni Alexander Sierra, Jose Jimenez Chacon, Carolina Cruz and Eric Chavez previously pled guilty.  Flores and Chacon were previously sentenced to 425 months’ imprisonment and 269 months’ imprisonment, respectively.  At sentencing, each remaining defendant faces up to life imprisonment.

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the guilty pleas.

“Today’s guilty plea marks the end of a sweeping investigation into the violent and disturbing affairs of the 18th Street gang that removed some of the most influential, powerful and ruthless gang leaders and members from city streets across the country,” stated United States Attorney Peace.  “Together with our law enforcement partners around the nation and the world, my Office will not rest until the scourge of gang violence and senseless loss of life is put to an end.  While these guilty pleas cannot undo the grave harm this gang has caused, we hope that it will bring a measure of closure to the victims and their families.”

Mr. Peace expressed his appreciation to the United States Attorney’s Office for the Northern District of New York, the Ulster County District Attorney’s Office, the Queens County District Attorney’s Office, the Nassau County District Attorney’s Office, the United States Department of Homeland Security, Homeland Security Investigations Dallas, the New York State Police, the Kingston Police Department, the New York City Police Department (NYPD), the Nassau County Police Department, the Hempstead Police Department, and the Justice Department’s Office of International Affairs for their assistance during the investigation.

Today’s conviction is the latest in a series of recent convictions in this case of leaders, members and associates of 18th Street. According to court filings and proceedings, 18th Street is a well-known and well-established international criminal organization and violent street gang with members and associates residing throughout New York State including Queens and Long Island, and elsewhere throughout the United States including Houston, Texas.  18th Street members regularly engage in murder, attempted murder, assault, extortion, illegal drug and firearms trafficking, false identification document production, witness tampering and money laundering.  The defendants occupied various positions within the gang:

• Alfaro Pineda was a national 18th Street gang leader based in Houston, Texas, whose power and control extended across the United States.  For example, he collected illicit funds raised by gang members in New York from fees extorted from prostitution brothels and illegal drug trafficking to further promote gang activity, including by providing the money to incarcerated 18th Street members in the United States and in El Salvador.  Alfaro Pineda also supplied and trafficked illegal firearms to the gang’s New York-based members.
• Zelaya Canales was a regional 18th Street gang leader based in Queens, New York, whose power and control extended across the New York City metropolitan area.
• Castellano was a senior 18th Street gang member based in Brooklyn, New York, whose influence extended to upstate New York.
• Cruz Mateo was a Queens-based 18th Street gang member.
• Flores was a Kingston, New York-based 18th Street gang associate.
• Sierra was a Queens-based 18th Street gang associate.
• Chacon was a New Jersey-based 18th Street gang member.
• Cruz was a New Jersey-based 18th Street gang associate.
• Chavez was a Queens-based 18th Street gang member.

The defendants committed multiple acts of violence in order to promote and enhance the prestige and reputation of the gang, and to maintain and increase their own membership and status in the gang, including:

September 12, 2016 Murder of Joshua Guzman

In September 2016, Zelaya Canales, then the regional leader of the Shatto Park Locos Sureños (SPLS) sect of 18th Street, ordered that Guzman be killed, in part, because the gang perceived Guzman to have been disrespectful towards 18th Street gang members.  In the evening of September 11, 2016, Zelaya Canales dispatched two lower-level gang members to Long Island to lure Guzman out and murder him as part of a demonstration of their allegiance to 18th Street.  On September 12, 2016 at approximately 1:03 a.m., the Hempstead Police Department received a ShotSpotter notification of gunshots fired near the intersection of Linden Avenue and Laurel Avenue in Hempstead, New York.  A Hempstead Police Department officer and members of Nassau Police Department responded to the location and discovered the body of 15-year-old Guzman near the curb. Guzman was shot once in the back of the head and pronounced dead at the crime scene.

July 9, 2017 Attempted Murder of Rival Gang Members

On July 9, 2017, Zelaya Canales led a shootout in Woodside, Queens, with assistance from at least two additional 18th Street gang members, over a territorial dispute with a rival gang.  At approximately 10:35 p.m., NYPD officers responded to  the area after numerous calls were made to 9-1-1 concerning multiple gunshots. Multiple witnesses reported hearing gunshots and seeing approximately three to four men run towards Woodhaven Boulevard.  After a canvas of the area, police officers recovered nine 9-millimeter shell casings among other evidence.

NYPD subsequently went to Zelaya Canales’s apartment in Queens to execute two arrest warrants unrelated to the shooting. During the execution of the warrants, NYPD recovered a 9-millimeter Ruger with a defaced serial number, 4 rounds of 9-millimeter ammunition, 56 rounds of .357 magnum ammunition, 34 rounds of .380 caliber ammunition and 23 rounds of .38 ammunition.  Subsequent forensic ballistics examination revealed that the Zelaya Canales’s 9-mm Ruger was the same weapon that fired the 9-millimeter shell casings found at the crime scene of the July 9, 2017 shootout in Woodhaven.

September 20, 2017 Assault of John Doe

On September 20, 2017, Chavez, together with another 18th Street gang member, approached an individual (John Doe) on the street and shot him because they believed he was a member of the rival gang Mara Salvatrucha (MS-13).  John Doe survived and was treated for a gunshot wound at a local hospital.

October 25, 2017 Murder of Jonathan Figueroa

By October 2017, gang members in New York suspected Jonathan Figueroa, a fellow 18th Street gang member, of cooperating with law enforcement in connection with the investigation of the murder of Guzman. Senior gang members, including Castellano, sought Alfaro Pineda’s authorization to murder Figueroa.  Alfaro Pineda’s authorization was sought because Alfaro Pineda had initiated Figueroa into 18th Street in Houston, Texas, and because murdering a fellow gang member required approval from a senior member of the gang, such as Alfaro Pineda.  With Alfaro Pineda’s authorization, Castellano activated gang members based in Kingston, New York, and directed them to coordinate with Queens-based gang members to see to Figueroa’s execution.  Gang members in Kingston then began digging a grave in Turkey Point State Forest in anticipation of Figueroa’s arrival.

In the late-night hours of October 24, 2017, Cruz Mateo lured and travelled with Figueroa from Queens to Kingston, New York. Upon their arrival in Kingston, they were met by Flores and other 18th Street members and associates who, into the early morning hours of October 25, 2017, brought Figueroa to Turkey Point State Forest, brutally stabbed him to death and buried him in the makeshift grave. Cruz Mateo ordered the murder to be video-recorded—capturing multiple 18th Street members and associates repeatedly stabbing Figueroa, slashing his throat, amputating his ear and dragging his body.  In the video, Cruz Mateo stated that Figueroa was being murdered for “being a rat.”  Cruz Mateo then sent the video to other 18th Street members as a warning to other gang members who might disrespect the gang or cooperate with law enforcement.  Figueroa’s body was discovered in February 2018 by the FBI, along with state and local law enforcement authorities, in a five-foot deep grave in Turkey Point.  He sustained more than 100 stab wounds including at least one stab wound to the head that appears to have fractured his skull, and a slash to his throat that ruptured his trachea.

February 2, 2018 Murder of Oscar Antonio Blanco Hernandez

On February 2, 2018, several gang members killed Blanco Hernandez because they believed he was a member of the rival MS-13 gang.  Chacon had met Blanco Hernandez weeks earlier through their mutual employer, a New Jersey-based house painting company.  On the morning of the murder, Cruz and Chacon picked up Blanco Hernandez at his home in New Jersey under the guise of going to smoke marijuana as friends.  Cruz and Chacon drove Blanco Hernandez to Queens where they met 18th Street gang members including Cruz Mateo and Sierra who entered the rear passenger seat of Cruz’s car on opposite sides, sandwiching Blanco Hernandez between them.  Cruz drove Chacon, Cruz-Mateo, Sierra and Blanco Hernandez a short distance to a quiet residential neighborhood.  Cruz-Mateo, Sierra and Blanco-Hernandez got out of the car and started walking, while Cruz and Chacon stayed behind with the car.  After walking for a few minutes, Cruz-Mateo drew a .380 caliber semiautomatic handgun and shot Blanco-Hernandez in the back of the head, killing him instantly.  Blanco Hernandez’s body was discovered on a residential street in the Jamaica Hills section of Queens.  He sustained three gunshot wounds: two gunshots to the torso and one to the head.

* * * * *

This case is part of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the United States Attorney’s Office for the Eastern District of New York and the FBI.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.  OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States  Attorneys Jonathan P. Lax, Erin Reid, Margaret Schierberl, Adam Amir and Rebecca Urquiola are in charge of the prosecution, with the assistance of Paralegal Specialists Tareva Torres and Samuel Ronchetti.

The Defendant:

JUNIOR ZELAYA-CANALES, also known as “Terco”
Age: 28
Jamaica, New York

Co-Defendants Previously Convicted:

WALTER FERNANDO ALFARO PINEDA, also known as “Clever”
Age: 45
Houston, Texas

YANKI MISAEL CRUZ MATEO, also known as “Yenki Misael Cruz Mateo,” “Yankee Mateo,” “Doggy” and “Wino”
Age: 25
Jamaica, New York

ISRAEL MEDIOLA FLORES, also known as “Chapito” and “Sinaloa”
Age: 29
Kingston, New York

YONI ALEXANDER SIERRA, also known as “Arca,” “Arc Angel” and “Wasson”
Age: 26
Jamaica, New York

JOSE JIMENEZ CHACON, also known as “Little One”
Age: 26
New Brunswick, New Jersey

CAROLINA CRUZ, also known as “La Fiera”
Age: 31
Elizabeth, New Jersey

JOSE DOUGLAS CASTELLANO, also known as “Chino”
Age: 26
Brooklyn, New York

ERIC CHAVEZ, also known as “Lunatico”
Age: 25
Jamaica, New York

E.D.N.Y. Docket No. 18-CR-139 (S-7) (HG)

Seven Assistant United States Attorneys (AUSAs), a Public Affairs Officer, a Victim Witness Specialist, and a former AUSA from the Eastern District of New York, were among those recognized by the Director of the Executive Office for U.S. Attorneys (EOUSA) as recipients of the 39th Annual Director’s Awards.

Breon Peace, United States Attorney for the Eastern District of New York, stated: “I am filled with pride and admiration for the honorees whose outstanding work has furthered the mission of our Office and the Department of Justice through aggressive, fair, and compassionate enforcement of the law, and dedication to crime prevention and reentry initiatives.”

EOUSA Director Stephanie Hinds stated: “I extend my heartfelt congratulations and appreciation to all the award recipients. This recognition is a testament to your hard work, tireless dedication, and unwavering commitment for advancing the Department of Justice’s mission.”

Superior Performance as an Assistant United States Attorney – Civil Division

AUSAs David Cooper and Dara Olds are recognized for their exceptional work defending the government’s interest in Campos, et al. v. Kijikazi. The case involved the Social Security Administration’s response to the global pandemic and the continuation of benefits for those in the Supplemental Security Income program.

Superior Performance by a Litigative Team – U.S. v. UBS Securities LLC et al.

AUSAs Michael Castiglione, Richard Hayes, Edward Newman, Bonni Perlin and former AUSA Melanie Speight, together with AUSAs Austin Hall and Andres Sandoval from the Northern District of Georgia and Special Agents Joseph Della Penna and Ines Cabral with the Federal Housing Finance Agency—Office of Inspector General, are recognized for reaching a $1.435 billion settlement to resolve claims that UBS made misrepresentations to investors in the sale of residential mortgage-backed securities. The settlement redressed UBS’s fraudulent conduct and serves to deter similar conduct in the future.

Superior Performance in Prevention and Reentry Activities

In support of the Office’s commitment to rehabilitation, community reintegration and reducing recidivism, the Reentry Team of AUSA Nomi Berenson, Public Affairs Officer Danielle Blustein Hass and Victim Witness Specialist Gladian Rivera guided the 2023 launch of the Eastern District’s Reentry Initiative. The groundbreaking initiative includes establishing the RAISE court, which is short for Reentry Assistance and Initiatives Supporting Everyone. Presided over by the Honorable LaShann DeArcy Hall, this court helps to provide resources to formerly incarcerated federal inmates identified as being at the highest risk of violence and recidivating. The team also conducts quarterly forums at Brooklyn House, the local federal Residential Reentry Center, in which returning citizens share their post-prison reentry experiences and service providers advise of available reentry services. In addition, the team has hosted reentry simulations for the Office and outside organizations to improve community understanding of the challenges encountered by individuals returning to society after incarceration.

EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorney’s offices around the country.  For more information on EOUSA and its mission, visit http://www.justice.gov/usao.  For more information about the United States Attorney’s Office for the Eastern District of New York, visit https://www.justice.gov/usao-edny.

Earlier today, in federal court in Brooklyn, Charles O. Parks III, also known as “CP3O,” pleaded guilty to wire fraud for operating a large-scale illegal “cryptojacking” operation.  As part of the scheme, Parks defrauded two well-known providers of cloud computing services out of more than $3.5 million worth of computing resources in order to mine cryptocurrency worth nearly $1 million.  The proceeding was held before United States Magistrate Judge Cheryl L. Pollak.  When sentenced, Parks faces up to 20 years in prison. 

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jessica S. Tisch, Commissioner, New York City Police Department (NYPD), announced the guilty plea.

“Through fraud and deceit, Parks acquired powerful computing resources worth millions of dollars to fuel his illegal cryptomining operation,” stated United States Attorney Peace.  “Today’s guilty plea underscores our strong commitment to prosecuting criminal actors who enrich themselves through sophisticated cryptocurrency frauds and other complex cyber schemes.”

Mr. Peace also thanked the FBI’s New York Cyber Crimes Task Force for their assistance on this case.

“This guilty plea serves as a reminder to potential cybercriminals that experienced law enforcement officers are well-equipped to detect, investigate, and put an end to financial exploitation schemes carried out in the digital world,” stated NYPD Commissioner Tisch.  “I commend our NYPD detective who worked this case, as well as our partners at the FBI and the office of the U.S. Attorney for the Eastern District of New York, for their skill and unwavering dedication to their work, as evidenced by today’s outcome.”

“Cryptojacking,” also referred to as malicious cryptomining, is the unauthorized use or hijacking of another party’s resources, such as electricity, hardware or computing power to mine cryptocurrency.  According to court filings and facts presented at today’s plea hearing, from in or about January 2021 through August 2021, Parks created and used a variety of names, corporate affiliations and email addresses, including emails with domains from corporate entities he operated called “MultiMillionaire LLC” and “CP3O LLC,” to register numerous accounts with the cloud providers and to gain access to massive amounts of computing processing power and storage that he did not pay for.  Parks used those fraudulently obtained resources to mine various cryptocurrencies including Ether, Litecoin and Monero.  Parks tricked the providers into approving heightened privileges and benefits, including elevated levels of cloud computing services and deferred billing accommodations, and deflected inquiries from the providers regarding questionable data usage and mounting unpaid subscription balances.

Parks converted and laundered the cryptocurrency proceeds through cryptocurrency exchanges, a non-fungible token marketplace, an online payment provider and traditional bank accounts in order to disguise the audit trail and disassociate the funds from the fraud.  Parks also structured various money movements to avoid transaction reporting requirements under federal law.  After converting the ill-gotten cryptocurrency into dollars, Parks used the proceeds of the scheme to make extravagant purchases, including a Mercedes Benz luxury car, jewelry and first-class hotel and travel expenses.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Andrew Reich and Artie McConnell are in charge of the prosecution.

The Defendant:

CHARLES O. PARKS III (also known as “CP3O”)
Age: 45
Omaha, Nebraska

E.D.N.Y. Docket No. 24-CR-105 (EK)

Earlier today, in federal court in Brooklyn, Atahualpa Rodriguez pleaded guilty to committing arson of an apartment building in Flushing, Queens.  The proceeding was held before United States District Judge Allyne R. Ross.  When sentenced, Rodriguez faces a mandatory minimum sentence of five years in prison and a maximum of 20 years.

Breon Peace, United States Attorney for the Eastern District of New York, Robert S. Tucker, Commissioner New York City Fire Department (FDNY), and Jessica S. Tisch, Commissioner, New York City Police Department (NYPD), announced the guilty plea.

“Today, the defendant admitted that he deliberately set fire to an apartment building in the pre-dawn darkness while many tenants slept, causing the destruction of one apartment unit, damage to surrounding units and injuries to the brave first responders who battled the blaze,” stated United States Attorney Peace.  “His actions showed complete disregard for human life and placed hundreds of people in grave danger over a personal dispute. Rodriguez will now face just punishment for his actions.”

“Deliberately setting a fire is an egregious crime that deserves severe punishment,” said FDNY Commissioner Tucker.  “In this case, three of our firefighters were injured due to this unspeakable crime. We want to thank the NYPD’s Arson and Explosion Squad along with FDNY fire marshals and ATF agents for their diligent and swift work in this case. We are relieved Atahualpa Rodriguez will no longer be on our city’s streets.”

“Deliberate criminal activity, such as the type Mr. Rodriguez pleaded guilty to today, poses a significant threat to both first responders and private citizens and goes against everything that New York City stands for,” stated NYPD Commissioner Tisch. “I am grateful that the injuries sustained by our FDNY colleagues were not more severe, and I commend them for their dedication in maintaining the safety of all New Yorkers. I also thank our partners at the office of the U.S. Attorney for the Eastern District of New York for their diligent efforts in ensuring that criminal actions are met with appropriate consequences.”

According to court filings and facts presented during the plea proceeding, on January 11, 2022, Rodriguez was in a dispute with the tenants of one unit in the building. On January 12, 2022, Rodriguez firebombed the multi-story building on Parsons Boulevard in Flushing, Queens, which contained approximately 175 units and hundreds of tenants. At approximately 4:40 a.m. on January, a resident of the targeted apartment unit awoke to the sound of breaking glass and heard a voice state: “F—k you all.”  The resident walked out of the bedroom and saw the fire ignited by the defendant. One firefighter was injured when a section of ceiling collapsed on him, another suffered first-degree burns and a third was hospitalized after breathing contaminated air.  The fire caused approximately $1 million in damages and completely destroyed the targeted apartment unit, as depicted below.

Assistant United States Attorney Adam Amir is in charge of the prosecution.

The Defendant:

ATAHUALPA RODRIGUEZ 
Age:  50
Flushing, New York

E.D.N.Y. Docket No. 23-CR-266 (ARR)

Earlier today, in federal court in Central Islip, Cory Zeidman pleaded guilty to conspiring to commit mail and wire fraud in connection with a yearslong scheme to defraud prospective sports bettors in New York and Florida by claiming to have inside information on sporting events.  The proceeding was held before United States Magistrate Judge Lee G. Dunst.  When sentenced, Zeidman faces a maximum sentence of 20 years’ imprisonment, as well as forfeiture and restitution of approximately $3.6 million.

Breon Peace, United States Attorney for the Eastern District of New York, William S. Walker, Special Agent in Charge, Homeland Security Investigations, New York (HSI), Daniel B. Brubaker, Inspector in Charge, United States Postal Inspection Service, New York (USPIS) and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD), announced the guilty plea.

“Zeidman and his partners baited unsuspecting victims with false claims of an edge in sports betting only to feed them lies and pocket millions of dollars from their savings and retirement accounts,” stated United States Attorney Peace.  “Today’s guilty plea sends a message to all those who would prey upon the public by falsely advertising gambling as an ‘investment opportunity’: the only sure bet here is that this Office will work tirelessly to root out sources of disinformation and fraud and prosecute them to the fullest extent of the law.”

“Sports bettors sought Corey Zeidman’s advice before gambling their money— but it was Zeidman himself who was scoring big through his deceptive practices, outright lies, and high-pressure tactics that exploited unsuspecting clients,” stated HSI New York Special Agent in Charge Walker. “Today, HSI New York and our law enforcement partners brought Zeidman’s racket to an end. The public deserves to know the truth concerning where their money is going, and HSI is committed to working with our partners to protect the community wherever and whenever possible from illicit schemes.”

“Today’s guilty plea is proof that this individual gambled and lost when he thought his illegal activities would fly under the radar,” stated USPIS Inspector in Charge Brubaker. “Illegal gambling is not a victimless crime, Zeidman and his partners were able defraud so many individuals with their lies and had them pay these exorbitant fees for nothing. USPIS will continue to investigate individuals who are intentionally skirting federal regulations for their own selfish desires. I would like to thank Homeland Security Investigations, Nassau County Police Department, and the United States District Court for the Eastern District of New York for their collaborative effort on this massive investigation,” stated USPIS Inspector in Charge Brubaker.

“The guilty plea of defendant Cory Zeidman is a reminder that crimes against our residents will not go unpunished. Numerous victims lost millions of dollars after being given fraudulent and misleading information regarding online betting.  We need to set an example and continue to investigate and arrest offenders who commit fraud and any other crimes against our residents.  I would like to thank the United States Attorney for the Eastern District of New York and Homeland Security Investigations for their assistance in this case,” stated NCPD Commissioner Ryder.

As alleged in court documents, Zeidman helped run an organization that placed national radio advertisements to lure prospective bettors to retain the organization for sports betting advice. Using fake names and high-pressure sales tactics, Zeidman and his partners falsely led the bettors to believe that their organization had access to non-public information—bettors were often told, for example, that Zeidman’s organization had access to non-public player injury information, “dirty” referees, or that professional sporting events were “fixed” and that media executives’ shares predetermined outcomes with Zeidman’s organization.  This information, the bettors were told, made gambling on sporting events a low or no-risk proposition.  Victims were required to pay exorbitant fees to obtain this supposedly privileged information which, unbeknownst to them, was fictitious or based on the conspirators’ open-source internet research.  Over the course of several years, Zeidman and his partners reaped millions in fees from victims.

Any individuals who believe they may have been the victim of the alleged crimes perpetrated in connection with this release can contact HSI at 1-866-347-2423.

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including the sort of predatory fraud perpetrated by Zeidman and his partners.

The government’s case is being handled by the Office’s Long Island Criminal Section.  Assistant United States  Attorneys Charles P. Kelly and Anthony Bagnuola are in charge of the prosecution, with assistance from Paralegal Specialist Samantha Schroder and FSA Supervisory Paralegal Melissa Thorpe. 

The Defendant:

CORY ZEIDMAN
Age:  63
Boca Raton, Florida

E.D.N.Y. Docket No. 22-CR-228 (JS)

Breon Peace, United States Attorney for the Eastern District of New York, announced today a settlement with Advanced Dermatology, P.C. (Advanced Dermatology), a New York-based practice with dermatology offices located throughout the metropolitan area and other states, resolving allegations that one of its medical doctors violated Title III of the Americans with Disabilities Act (the ADA), by refusing to perform a scheduled procedure on an individual with human immunodeficiency virus (HIV) until the end of the day after all other patients had been treated or reschedule his appointment for another day when no other patients were being treated. Title III of the ADA prohibits discrimination against individuals with disabilities in places of public accommodation such as medical facilities.  HIV is a disability that falls within the protection of the ADA. Advance Dermatology cooperated with the United States’ investigation and in resolving the matter.

“This settlement reflects this Office’s commitment to robust enforcement of the ADA and ensuring that patients with HIV have access to medical care,” stated United States Attorney Peace. 

This matter was initiated after the U.S. Department of Justice received a complaint from John Doe,[1] an individual who is HIV-positive.  John Doe alleged that a dermatologist employed by Advanced Dermatology at its Fresh Meadows, New York office refused to perform a Mohs micrographic surgery on a scheduled date and time. The surgical procedure had been scheduled to treat John Doe’s basal cell carcinoma.

The United States’ investigation determined that the dermatologist refused to perform the scheduled surgery, and that the dermatologist told John Doe that the reason for his refusal was John Doe’s HIV-positive status and concern for the safety of a technician working with the doctor. The dermatologist told John Doe that he would need to wait until the end of the day after all other patients had been treated or reschedule his appointment for another day when no other patients were being treated. John Doe left Advanced Dermatology that day without being treated. The United States determined that Advanced Dermatology discriminated against John Doe on the basis of his HIV status in violation of Title III of the ADA. 

Under the terms of the settlement, Advanced Dermatology will ensure that its policies and practices are brought into compliance with Title III of the ADA, adopt a non-discrimination policy establishing that Advanced Dermatology does not discriminate in providing services to those with disabilities, and train its staff annually about HIV/AIDS and discrimination. Advanced Dermatology will also pay a civil penalty of $15,000 to the United States.

The claims resolved by this settlement are allegations only and there has been no admission or determination of liability.  

This matter was handled by the Office’s Civil Division. Assistant U.S. Attorney David Cooper is in charge of the prosecution.

[1] John Doe is identified by a pseudonym to protect his privacy.

Earlier today, at the federal courthouse in Brooklyn, Gerald DeRosse was sentenced by United States District Judge William F. Kuntz II to 180 months in prison for committing a violent robbery of a Ridgewood Savings Bank in Queens, New York.  He is also required to pay $205 in restitution and $205 in forfeiture. DeRosse pleaded guilty to the charge in May 2024. 

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation (FBI), New York Field Office, announced the sentence.

“The defendant, a serial bank robber, chose to terrorize hard-working bank tellers and customers, for his own selfish purposes.  The victims, including an elderly woman the defendant locked in a chokehold, will never forget that day,” stated United States Attorney Peace.  “It is a vital part of our mission to protect our community, and my Office will continue to tirelessly prosecute repeat offenders who show no respect for the law.”

“While on parole for a prior bank robbery, Gerald DeRosse once again terrorized our city by committing the same crime in which he utilized an innocent bystander as collateral to ensure his demands were met,” stated FBI Assistant Director in Charge Dennehy.  “DeRosse's actions carelessly endangered the lives of others out of personal greed. The FBI will not tolerate repeat offenders who consistently threaten the safety of our city and its citizens.”

As described in the government’s sentencing memorandum and other court documents, on April 6, 2023, DeRosse entered a branch of Ridgewood Savings Bank on Myrtle Avenue in Glendale, Queens, grabbed an elderly bank customer around the neck, and yelled that he was going to “blow her f-----g brains out” if the bank teller did not give him money.  Another customer hid under a desk during the robbery. A screenshot from the bank’s video surveillance system, showing this harrowing moment, appears below.

The bank teller obeyed DeRosse’s demand and gave him $205 in cash.  DeRosse then fled, but he was identified and arrested by the FBI a few weeks later. DeRosse previously had been convicted of robbery-related crimes on at least seven occasions and was on parole, having served a 13-year sentence for bank robbery at the time he committed this bank robbery.  He had been released from state prison less than a month earlier.

Assistant United States Attorney Rebecca M. Schuman is in charge of the prosecution.

The Defendant:

Gerald DeRosse
Age:  55
Broad Channel, New York

E.D.N.Y. Docket No. 23-CR-221 (WFK)

Christopher Terranova, a former New York City Police Department (NYPD) officer, was found guilty today by a federal jury in Brooklyn on all six counts of a superseding indictment charging him with sexually exploiting, attempting to sexually exploit and enticing and coercing three 15-year-old boys and a 12-year-old boy.  The verdict followed a five-day trial before United States District Judge Kiyo A. Matsumoto. Terranova filed for retirement in September 2023 while under suspension from NYPD.  When sentenced, Terranova faces a mandatory minimum of 15 years’ imprisonment and up to life in prison.

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the verdict.

“As proven at trial, the defendant preyed on vulnerable minors through social media and on Staten Island where he abused his position as a police officer to gain the trust of his victims in a despicable strategy to gratify his sexual desires,” stated United States Attorney Peace. “Today’s verdict hopefully will help victims on their path to healing with the knowledge that the defendant has been brought to justice for his crimes.  Parents and caregivers should have conversations with their children about the dangers of communicating online with strangers and as well as individuals they know, and report inappropriate contacts to law enforcement.”

Mr. Peace expressed his appreciation to the NYPD Internal Affairs Bureau for their assistance during the investigation.

“Christopher Terranova, a former NYPD officer, violated his sworn oath to protect and serve by preying upon four minor boys for personal gratification,” stated FBI Assistant Director in Charge Dennehy. “Terranova strategically exploited his position to establish an inappropriate relationship with his victims and impose undue sexual influence. While the majority of law enforcement conduct themselves accordingly, the FBI will continue to partner with the NYPD’s Internal Affairs Bureau to investigate any officer abusing their badge for twisted desires.”

Between approximately December 2019 and May 2023, Terranova used social media to engage in sexually explicit conversations with underage boys and attempt to entice them into taking sexually explicit photographs of themselves and sharing them with the defendant.  Terranova used popular social media applications to message and gain the trust of underage boys whom he encountered socially, online or through his job as a police officer. 

For example, between March 2023 and May 2023, Terranova targeted a boy who was the victim of a robbery and encountered the defendant at the 121st Precinct on Staten Island when he reported the crime.  Terranova obtained the boy’s cellphone number from the robbery complaint in an NYPD database and messaged him: “Hey…it’s Chris Terranova the cop you met at the 121 that day with mom, i just wanted to reach out to see if you were doing ok after the incident, I hate seeing these things happen to good Guys like yourself.”  In subsequent messages, Terranova inquired about the investigation, referred to his role as a police officer and asked the boy if he had any interest in the police department or its youth programs.  Terranova also suggested, “If [sic] here too if you ever want to talk[.] I been through a lot myself over the years so just know that little bro.”  The defendant then asked the boy to add him on “snap” or “the gram,” referring to Snapchat and Instagram.  On Snapchat, Terranova began asking the boy sexually explicit questions, sent the boy a photograph of Terranova’s genitals and asked for a sexually explicit photograph of the boy.  The boy informed his mother about the inappropriate messages and she reported the matter to police.

Terranova also engaged in hands-on sex acts with two of his minor victims.  While giving an acquaintance’s son a ride home from a birthday party, Terranova brought the boy to a secluded location where he directed the victim to engage in sex acts with him.

The defendant met another victim, who lived in Texas, on social media. Terranova traveled to Texas at least 16 times to visit the boy and purchased a house in the boy’s neighborhood.  In one message, Terranova stated: “You being with me. . . and making love to me is more than a sign of everything happens for a reason.”   One reason the boy trusted Terranova was because the defendant had told him he was a police officer.     

Terranova also met a 12-year-old victim locally while the defendant was on-duty.   Terranova messaged the boy later on Snapchat and began asking him sexually explicit questions and solicited sexually explicit photos. 

The government’s case is being handled by the Office’s Civil Rights Section. Assistant United States Attorneys Rachel A. Bennek and Lauren A. Bowman are in charge of the prosecution, with the assistance of Paralegal Specialist Chelsea Guzman.

The Defendant:

CHRISTOPHER TERRANOVA
Age: 34
Staten Island, New York

E.D.N.Y. Docket No. 21-CR-516 (KAM)

A federal jury in  Brooklyn returned a guilty verdict  yesterday against Avraham Tarshish for conspiracy to commit wire fraud and bank fraud, and related wire fraud counts, in connection with a scheme to defraud mortgage loan holders, including the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and other mortgage lending businesses.  The verdict followed a 12-day trial before Chief United States District Judge Margo K. Brodie.  When sentenced, the defendant faces up to 30 years in prison.

Breon Peace, United States Attorney for the Eastern District of New York, Robert Manchak, Special Agent in Charge, Federal Housing Finance Agency, Office of Inspector General, Northeast Region (FHFA-OIG), Vicky Vazquez, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Region (HUD-OIG) and Thomas M. Fattorusso, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI) announced the verdict.

“The defendant defrauded taxpayer-funded mortgage loan holders out of millions of dollars and took advantage of programs designed to help distressed property owners in need,” stated United States Attorney Peace.  “Short sale mortgage fraud not only harms lending intuitions, it also depresses real estate values throughout our neighborhoods and prevents community members from gaining fair access to housing.  Today’s guilty verdict should serve as a reminder that my Office, together with our law enforcement partners, will continue to vigorously prosecute those who corruptly line their pockets at the expense of mortgage lenders and borrowers.”

Mr. Peace expressed his appreciation to the United States Department of Homeland Security, Homeland Security Investigations, New York Field Office (HSI), and the HSI El Dorado Financial Crimes Task Force for their work on the case.

“The defendant and his co-conspirators corrupted a process meant to assist homeowners facing foreclosure. By undermining the integrity of this process, Fannie Mae, Freddie Mac, and other lenders were deprived of millions of dollars,” said Robert Manchak, Special Agent-in-Charge of FHFA-OIG’s Northeast Region. “Today's verdict demonstrates the resolve of the Federal Housing Finance Agency Office of Inspector General and its law enforcement partners to pursue those who defraud the government-sponsored enterprises.”

“Tarshish and other co-conspirators engaged in a $2.4 million scheme to cause FHA-insured mortgage lenders to approve short sale transactions at fraudulently depressed prices by misrepresenting material information for his own enrichment,” said Special Agent-in-Charge Vicky Vazquez with the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG). “No one is above the law. HUD OIG will continue to work with the U.S. Attorney’s Office and our law enforcement partners to investigate individuals who jeopardize the integrity of FHA mortgage programs.”

“In this elaborate scheme to prey on people facing foreclosure and manipulating the mortgage loan system, Tarshish’s fraud resulted in a multi-million dollar loss to his victims.  With this conviction, Tarshish now faces time behind bars where he can longer line his pockets at the expense of his community and their lenders,” said Thomas M. Fattorusso, Special Agent in Charge of IRS-CI New York.

The defendant was an employee of My Ideal Property Inc. and an owner of Exclusive Homes Realty Group, Inc., Exclusive Homes NY, LLC and Homeowners Solutions Group LTD, Queens- and Brooklyn-based companies formed to buy and sell real property.  As proven at trial, between March 2013 and November 2018, the defendant and others conspired to defraud mortgage lenders, misleading them into approving short sale transactions at fraudulently depressed prices.  In a short sale, with the approval of the mortgage lender or servicer, a mortgage loan borrower sells his or her property for less than the outstanding balance of the mortgage loan.  The proceeds from the short sale, less approved closing costs, are applied to the outstanding mortgage loan balance owed to the lender, who typically agrees to forgive the borrower’s remaining mortgage loan balance.  Here, the defendant fraudulently manipulated the short sale process and immediately flipped properties for prices well above the short sale prices. 

Among other things, the defendant and his co-conspirators paid homeowners in foreclosure to lock them in to conducting short sales with them; took steps to preclude other prospective purchasers from making higher offers for properties by failing to market properties as required by the lenders; placed fraudulent liens on properties; and further depressed the properties’ values by removing toilets and plumbing, and causing other forms of property damage—a process that the defendant and his co-conspirators referred to as making the homes “pretty.”  In furtherance of the scheme, the defendant and his co-conspirators also provided the mortgage lenders and servicers with false and misleading information in transaction documents and failed to disclose either payments made to the borrower and others related to short sale or contemporaneous agreements to transfer the properties at inflated prices.  Many of the affected mortgage loans were insured by the Federal Housing Administration, or owned or guaranteed by Fannie Mae or Freddie Mac.

At trial, the government introduced evidence that the defendant participated in a conspiracy spanning years that involved dozens of fraudulent short sale transactions.  From among those dozens of transactions, the government introduced specific evidence relating to eleven examples of Brooklyn short sales through which the defendant and his co-conspirators defrauded lenders and servicers of more than $2.4 million.

When sentenced, Aronov, Konstantinovskiy and Dafna face up to a 30-year max sentence. Herskowitz faces up to a 5-year sentence.

Anyone with information concerning similar mortgage-related fraud can report it by contacting the Federal Housing Finance Agency Office of Inspector General Hotline at 800-793-7724 or via the web at: https://www.fhfaoig.gov/ReportFraud#hotlineform.

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including bank fraud and wire fraud.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States  Attorneys Shannon C. Jones, John Vagelatos, Joshua B. Dugan and Russell Noble are in charge of the prosecution, with the assistance of Paralegal Specialist Liam McNett.  Assistant United States Attorney Tanisha Payne of the Office’s Asset Recovery Section is handling forfeiture matters.

The Defendant:

AVRAHAM TARSHISH (also known as “Avi Tarshish”)
Age: 45
Queens Village, New York

Co-Defendants Who Previously Pleaded Guilty:

ISKYO ARONOV (also known as “Isaac Aronov”)
Age:  37
Miami, Florida

MICHAEL KONSTANTINOVSKIY (also known as “Michael Kay”)
Age:  38
Rego Park, Queens

TOMER DAFNA
Age:  53
Great Neck, New York

MICHAEL HERSKOWITZ
Age:  45
Brooklyn, New York

E.D.N.Y. Docket No. 19-CR-408 (MKB)

Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Gary DSilva, also known as “Pankaj DSilva,” Jonathan Velazquez and Luis A. Camarena with conspiracy to commit wire fraud, bribery and money laundering, as well as substantive counts of wire fraud and federal-program bribery, for their roles in a yearslong kickback scheme.  The defendants were arraigned this afternoon before United States Magistrate Judge Vera M. Scanlon.

Breon Peace, United States Attorney for the Eastern District of New York, Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI) and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

“These defendants misappropriated public funds through a brazen kickback scheme,” stated United States Attorney Peace.  “When corrupt employees siphon public funds to line their own pockets, the neediest New Yorkers bear the brunt.  My Office will relentlessly pursue those who try to compromise the integrity of our community organizations.”

DOI Commissioner Jocelyn E. Strauber said, “These employees of a City-funded nonprofit participated in an illegal kickback scheme, enriching themselves by stealing from their employer, an entity providing critical services to New Yorkers in need, as alleged in the indictment.  Theft of precious public funds deprives deserving members of our community of resources and I am thankful to the U.S. Attorney’s Office for the Eastern District of New York and the FBI for their shared commitment to protect those funds for the benefit of their intended recipients.”

“Gary DSilva and Jonathan Velazquez, two non-profit organization workers, allegedly received more than $500,000 in illicit kickback payments from Luis Camarena, a contractor hired to install security services in some of the city’s homeless shelters. This alleged quid pro quo agreement only enriched the involved parties and deprived the city of vital infrastructural improvements. The FBI will never tolerate corrupt individuals who selfishly steal public funds intended to support our city’s vulnerable populations,” stated FBI Assistant Director in Charge Dennehy.

As alleged in the indictment, DSilva and Velazquez were employed in the Management Information Systems department of a Brooklyn-based non-profit entity (the Organization) that supplied a number of services to indigent New Yorkers, including administering multiple homeless shelters.  DSilva and Velazquez, as part of their work for the Organization, were responsible for soliciting vendors to complete various projects involving information technology.  DSilva solicited bids from one such vendor (the Vendor) for multiple projects involving the installation or replacement of security cameras at the Organization’s homeless shelters.  Camarena was the principal of the Vendor.  The Vendor ultimately received approximately $1.6 million in payments from the Organization for work related to these security-camera projects from approximately 2017 to 2021.  During that same period, the Vendor paid a total of over $500,000 in kickbacks to DSilva and Velazquez.  These illegal payments took the form of payments to credit cards in the names of DSilva and Velazquez and their spouses and payments to shell companies registered to DSilva’s spouse.  In one email obtained during the investigation, Camarena, DSilva, and Velazquez discussed how they would divide the “profit” from the business the Vendor received from the Organization among themselves.      

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

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes.

The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Laura Zuckerwise and Turner Buford are in charge of the prosecution, with assistance from Paralegal Specialist Kavya Kannan.

The Defendants:

Gary DSilva (also known as “Pankaj DSilva”)
Age: 46
Manalapan, New Jersey

Jonathan Velazquez
Age: 54
Massapequa Park, New York

Luis A. Camerena
Age: 57
Jackson Township, New Jersey

E.D.N.Y. Docket No. 24-CR-471 (HG)

Earlier today, at the federal courthouse in Brooklyn, Martin Leonel Perez Castro, a senior leader within the Revolutionary Armed Forces of Colombia (the FARC), was sentenced by United States District Judge Brian M. Cogan to 252 months in prison for conspiring to distribute cocaine internationally, intending and knowing that the cocaine would be illegally imported into the United States.  Perez Castro pleaded guilty to the charge in August 2023.  The defendant was also ordered to forfeit $1 million in drug proceeds.

Breon Peace, United States Attorney for the Eastern District of New York, Frank A. Tarentino III, Special Agent in Charge, Drug Enforcement Administration, New York Division (DEA), and Thomas M. Fattorusso, Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York Field Office (IRS-CI), announced the sentence.

“The defendant extracted millions of dollars from drug traffickers at the point of a gun, funding the FARC’s acts of terrorism and facilitating the global cocaine trade,” stated United States Attorney Peace. “Today’s sentence handed down in a U.S. courtroom is fitting justice for Perez Castro, who granted drug traffickers his permission and protection to produce massive quantities of cocaine that was distributed in our country and elsewhere, causing incalculable harm.  The dismantling of international drug trafficking organizations and narcoterrorism groups will always be a priority of the Department of Justice.” 

Mr. Peace extended his appreciation to the DEA’s office in Bogota, Colombia, the United States Department of State, the Justice Department’s Office of International Affairs and the Narcotic and Dangerous Drug Section’s Office of the Judicial Attaché at the U.S. Embassy in Bogota provided critical assistance in securing the arrest and extradition of Perez Castro, the Colombian National Police and the Government of Colombia.

“Today, justice has been delivered. Martin Leonel Perez Castro, who served as a former senior member and one of the highest-level drug trafficking members of the FARC, used violent tactics, which included terrorism, to help distribute shipments of cocaine from Columbia to New York City and the United States” stated Special Agent in Charge Frank Tarentino.  “While this sentencing closes the door to Mr. Castro’s activities, the DEA and our law enforcement partners, both globally and here in the United States, remain committed to making sure those who use violent and terrorist acts as a measure for illicit drug trade face the justice they deserve.”

“As a FARC senior official, Perez Castro was responsible for the distribution of more than 165,000 pounds of cocaine.  He helped create a revenue stream that funded the FARC’s decades-long campaign to overthrow the Government of Colombia, a conflict that resulted in far too many casualties.  Today’s sentencing is the result of the incredible investigative work of DEA and IRS-CI Special Agents and committed law enforcement partnerships globally,” stated IRS-CI New York Special Agent in Charge Fattorusso.

The FARC was founded in 1964 as a left-wing paramilitary group dedicated to the violent overthrow of the Government of Colombia.  Over decades of conflict, the FARC attacked Colombian government forces and used targeted killings, kidnapping and other terrorist tactics to achieve its ends.  In October 1997, the U.S. Secretary of State designated the FARC as a foreign terrorist organization (FTO).  After the Government of Colombia and the FARC entered into a peace accord in 2016, the FARC formally dissolved.  On November 30, 2021, the U.S. Secretary of State revoked the designation of the FARC as an FTO.  The defendant’s conduct occurred prior to the 2016 peace accord.

Perez Castro was the Head of Finances for the FARC’s 30th Front, a group that operated in southwestern Colombia.  The 30th Front extorted drug traffickers by forcing them to pay “taxes” for every kilogram of cocaine trafficked through the 30th Front’s territory. The 30th Front also sometimes produced its own cocaine or held ownership stakes in cocaine shipments produced by local traffickers.  Cocaine revenues funded the FARC’s decades-long campaign to overthrow the Government of Colombia, a conflict that resulted in hundreds of thousands of casualties.  Perez Castro was responsible for the distribution of at least 75,000 kilograms of cocaine.  He was extradited to the Eastern District of New York in June 2022.

The conviction and sentencing of Perez Castro are the result of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the Office and the DEA.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.  OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States  Attorney Andrew D. Wang is in charge of the prosecution.

The Defendant:

MARTIN LEONEL PEREZ CASTRO
Age: 53
Colombia

E.D.N.Y. Docket No. 14-CR-465 (S-2) (BMC) 

Yesterday, in federal court in Brooklyn, former New York Police Department (NYPD) officer Jason Rodriguez pleaded guilty to conspiracy to commit wire fraud related to his role as the Chief Operating Officer of Technical Trading Team, LLC (Technical Trading Team).  The proceeding was held before United States District Judge Ramon E. Reyes, Jr.

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.

“With this guilty plea, the defendant has accepted responsibility for taking advantage of close friends and family members and defrauding them out of millions of dollars,” stated United States Attorney Peace.  “The defendant deceived retail investors into investing with his company based on false promises that he would invest their money in accordance with clear guardrails and that he had left the NYPD because of his success as a trader.  In reality, there were no guardrails, he resigned from the NYPD in disgrace, and he lost most of the money, inflicting substantial harm on his victims.”

According to the indictment, Rodriguez founded Technical Trading Team in April 2020.  Rodriguez, who served as Chief Operating Officer, pitched the fund as focused on foreign exchange (forex) investment, and represented that he was in charge of all trading.  Rodriguez promised investors that Technical Trading Team would have a “loss reserve account” that could be used to repay investors if the company lost money trading; that Rodriguez would never risk more than 1% of assets under management on any single trade; and that he would not hold positions open overnight.  Each of these promises was meant to assure investors that their investments would be safe.  However, Rodriguez and Technical Trading Team broke all of these promises, and as Rodriguez lost more and more money in the forex markets, he used new investor money to pay older investors the promised investment returns.  In total, between April 2020 and September 2022, Rodriguez solicited approximately $4.8 million in investor funds that were wired to accounts he controlled; to date, approximately $3.5 million of those funds have not been paid back to the investors.

Prior to founding Technical Trading Team, Rodriguez served as an NYPD officer for approximately seven years.  During the solicitation process, Rodriguez told prospective Technical Trading Team investors that he had quit the NYPD because he had become so successful at forex trading.  The Technical Trading Team presentation similarly represented that Rodriguez’s “zealous ambition for trading took precedence resulting in the end of his law enforcement career.”  However, Rodriguez failed to disclose that he resigned from the NYPD after pleading guilty to a misdemeanor crime and incurring several disciplinary infractions.

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including securities fraud, wire fraud and money laundering, as charged here.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Benjamin Weintraub is in charge of the prosecution, with the assistance of Paralegal Special Liam McNett.

The Defendant:

JASON RODRIGUEZ
Age:  38
Bellerose, Queens

E.D.N.Y. Docket No. 24-CR-079 (RER)

Earlier today, at the federal courthouse in Brooklyn, Tito Aldemar Ruano Yandun, also known as “Don T,” “Don Ti,” “Don Tito,” “Pedro Linares,” “Pedro AK2,” “Santos,” “Don Tuma,” “Viejo” and “Viejo Loco,” was sentenced by United States District Court Judge William F. Kuntz, II to 20 years in prison for leading an international cocaine distribution conspiracy.  Ruano Yandun pleaded guilty to the charge in March 2024.  The defendant was also ordered to forfeit $1.5 million in drug proceeds.

Breon Peace, United States Attorney for the Eastern District of New York, and Frank A. Tarentino III, Special Agent in Charge, Drug Enforcement Administration, New York Division (DEA), announced the sentence.

“Today’s sentence significantly punishes the defendant for leading a prolific drug trafficking organization that exported thousands of kilograms of cocaine destined for our streets,” stated United States Attorney Peace.  “International drug kingpins must face American justice for the misery they have caused in our district and country.” 

Mr. Peace extended his appreciation to the DEA’s office in Bogota, Colombia, the United States Department of State, the Department of Justice’s Office of International Affairs, the Colombian National Police and the Government of Colombia.

As detailed in court documents, the defendant led a sophisticated drug trafficking organization that operated in southwestern Colombia and Ecuador. His organization regularly exported multi-ton quantities of cocaine to Central America and Mexico so that it could eventually be smuggled into the United States.  The defendant’s drug trafficking organization trafficked cocaine on behalf of the Revolutionary Armed Forces of Colombia (i.e., the FARC), helping to fund the FARC’s long-running campaign to overthrow the Government of Colombia. 

During the investigation, foreign and U.S. authorities seized thousands of kilograms of cocaine that were being transported by members of the defendant’s organization.           

In November 2017, pursuant to the Foreign Narcotics Kingpin Designation Act, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Ruano Yandun and his organization as Specially Designated Narcotics Traffickers for their significant role in international narcotics trafficking.  At the time of the designation, OFAC stated that Ruano Yandun’s organization was “a key contributor to the increased cocaine production in the Nariño department of Colombia in recent years.”  Ruano Yandun was extradited to the Eastern District of New York in October 2023.

The conviction and sentencing of Ruano Yandun are the result of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by the Office and the DEA.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.  OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States  Attorney Andrew D. Wang is in charge of the prosecution.

The Defendant:

TITO ALDEMAR RUANO YANDUN (also known as “Don T,” “Don Ti,” “Don Tito,” “Pedro Linares,” “Pedro AK2,” “Santos,” “Don Tuma,” “Viejo” and “Viejo Loco”)
Age: 49
Colombia

E.D.N.Y. Docket No. 17-CR-27 (WFK) 

A five-count criminal indictment was unsealed today in federal court in Brooklyn charging Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, executives of an Indian renewable-energy company (the Indian Energy Company), with conspiracies to commit securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from U.S. investors and global financial institutions on the basis of false and misleading statements.  The indictment also charges Ranjit Gupta and Rupesh Agarwal, former executives of a renewable-energy company with securities that had traded on the New York Stock Exchange (the U.S. Issuer), and Cyril Cabanes, Saurabh Agarwal and Deepak Malhotra, former employees of a Canadian institutional investor, with conspiracy to violate the Foreign Corrupt Practices Act in connection with a bribery scheme also perpetrated by Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, involving one of the world’s largest solar energy projects.

Breon Peace, United States Attorney for the Eastern District of New York, Lisa H. Miller, Deputy Assistant Attorney General for the Justice Department’s Criminal Division and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the charges.

“As alleged, the defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars and Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain lied about the bribery scheme as they sought to raise capital from U.S. and international investors,” stated United States Attorney Peace.  “My Office is committed to rooting out corruption in the international marketplace and protecting investors from those who seek to enrich themselves at the expense of the integrity of our financial markets.”

“This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice,” stated Deputy Assistant Attorney General Miller.  “These offenses were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of U.S. investors.  The Criminal Division will continue to aggressively prosecute corrupt, deceptive, and obstructive conduct that violates U.S. law, no matter where in the world it occurs.” 

“Gautam S. Adani and seven other business executives allegedly bribed the Indian government to finance lucrative contracts designed to benefit their businesses. Adani and other defendants also defrauded investors by raising capital on the basis of false statements about bribery and corruption, while still other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government’s investigation,” stated FBI Assistant Director in Charge Dennehy.  “The FBI maintains its steadfast mission to expose all corrupt agreements, especially with international governments, and protect investors from related harm.”

As alleged in the indictment, between approximately 2020 and 2024, the defendants agreed to pay more than $250 million in bribes to Indian government officials to obtain lucrative solar energy supply contracts with the Indian government, which were projected to generate more than $2 billion in profits after tax over an approximately 20-year period (the Bribery Scheme).  On several occasions, Gautam S. Adani personally met with an Indian government official to advance the Bribery Scheme, and the defendants held in-person meetings with each other to discuss aspects of its execution.  The defendants frequently discussed their efforts in furtherance of the Bribery Scheme, including through an electronic messaging application.  The defendants also extensively documented their corrupt efforts:  for example, Sagar R. Adani used his cellular phone to track specific details of the bribes offered and promised to government officials; Vneet S. Jaain used his cellular phone to photograph a document summarizing various bribe amounts the U.S. Issuer owed the Indian Energy Company for its respective portion of the bribes; and Rupesh Agarwal prepared and distributed to other defendants multiple analyses using PowerPoint and Excel that summarized various options for paying and concealing bribe payments (Bribery Analyses).

During this same period, Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain allegedly conspired to misrepresent the Indian Energy Company’s anti-bribery and corruption practices and conceal the Bribery Scheme from U.S. investors and international financial institutions in order to obtain financing, including to fund those solar energy supply contracts procured through bribery.  As alleged, Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain caused the Indian Energy Company and certain of its subsidiaries to raise capital on the basis of false and misleading statements in connection with (i) two U.S. dollar-denominated syndicate loans totaling more than $2 billion from lender groups comprised of international financial institutions and U.S.-based investors; and (ii) two Rule 144A bond offerings for more than $1 billion underwritten by international financial institutions, which were marketed and sold to investors in the U.S., among other places.  In addition, Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain caused the Indian Energy Company to make false statements in their consolidated financial statements and to the market and investors regarding the Bribery Scheme.

The indictment further alleges that Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra and Rupesh Agarwal conspired to obstruct the grand jury, FBI and U.S. Securities and Exchange Commission (SEC) investigations into the Bribery Scheme.  Among other things, those four defendants agreed to delete electronic materials related to the Bribery Scheme, including emails, electronic messages and Bribery Analyses; caused the U.S. Issuer’s Board of Directors to initiate an internal investigation into the Bribery Scheme and then withheld material information from that investigation; and falsely denied their participation in the Bribery Scheme to representatives of the FBI, DOJ and SEC at meetings in Brooklyn, New York.  For this conduct, Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra and Rupesh Agarwal are charged with conspiracy to obstruct justice.

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

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including bribery and fraud.

The investigation was conducted by the FBI New York’s Corporate, Securities and Commodities Fraud and International Corruption Units.  The government’s case is being handled by the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section.  Assistant U.S. Attorneys Sarah M. Evans, Matthew R. Galeotti and Jessica K. Weigel of the Eastern District of New York, Shy Jackson of the Criminal Division, Fraud Section’s FCPA Unit and Andrew Tyler of the Fraud Section’s Market Integrity and Major Frauds Unit are prosecuting the case with assistance from Paralegal Specialists Liam McNett, Angelina Tyler and Nadiya Singh.  

The Fraud Section is responsible for investigating and prosecuting FCPA and Foreign Extortion Prevention Act (FEPA) matters.  Additional information about the Justice Department’s FCPA and FEPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.

The Department of Justice’s Office of International Affairs and the SEC’s New York Regional and Boston Regional offices provided valuable assistance during the investigation.

The Defendants:

GAUTAM S. ADANI
Age: 62
India

SAGAR S. ADANI
Age: 30
India

VNEET S. JAAIN
Age: 53
India

RANJIT GUPTA
Age: 54
India

CYRIL CABANES
Age: 50
France / Australia

SAURABH AGARWAL
Age: 48
India

DEEPAK MALHOTRA
Age: 45
India

RUPESH AGARWAL
Age: 50
India

E.D.N.Y. Docket No. 24-CR-433 (NGG)

Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Noor Nabi Chowdhury and his brother, Mohammad Mahmudur Rahman, with conspiracy to provide to the public an illicit digital transmission service; providing an illicit digital transmission service; conspiracy to commit wire fraud; and aggravated identity theft.  The charges stem from the defendants’ operation of 247TVStream, an online subscription-based service that permitted users to stream copyrighted content, such as live sports programming and television shows, without the permission of the relevant copyright owners.  Chowdhury was arrested this morning and is scheduled to be arraigned this afternoon in the U.S. District Court for the Western District of New York.  Rahman remains at large.

Breon Peace, United States Attorney for the Eastern District of New York, Nicole M. Argentieri, Principal Deputy Assistant Attorney General and head of the Criminal Division and William S. Walker, Special Agent in Charge, Homeland Security Investigations (HSI), New York, announced the arrest and indictment.

“As alleged, the defendants operated a bootleg online streaming service that distributed copyrighted television programs that they stole for their personal enrichment,” stated United States Attorney Peace.  “My Office and the Department of Justice are committed to protecting the rights of intellectual property holders from digital pirates like these defendants.”

Mr. Peace expressed his thanks to the Justice Department’s Office of International Affairs, the Surrey and City of London Police, United Kingdom, Royal Canadian Mounted Police and Fiscale Inlichtingen- en Opsporingsdienst, Netherlands, and the United States Postal Inspection Service for their assistance.

“According to the indictment, Chowdhury and Rahman ran an illicit digital streaming site that infringed upon more than a hundred million dollars of intellectual property owned by legitimate copyright owners,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Thanks to the work of our prosecutors, along with our domestic and international law enforcement partners, the illicit digital streaming site no longer exists, and Chowdhury is in custody. These actions demonstrate the Criminal Division’s commitment to protecting intellectual property rights by vigorously enforcing the laws against illicit digital transmission services.”

“Noor Nabi Chowdhury and Mohammad Rahman are accused of committing copyright infringement to the tune of over $100 million. As alleged and in furtherance of their criminal scheme, the defendants stole an unsuspecting victim’s identity to exploit major American businesses, in pursuit of illicit wealth,” stated HSI New York Special Agent in Charge Walker.  “HSI New York proudly stands alongside our law enforcement and private sector partners, both domestic and abroad, to thwart criminal organizations who seek to financially capitalize on their wrongdoing.”

As alleged, between approximately May 2017 and November 2024, the defendants operated 247TVStream, a service that provided online video and sports streaming services.  For a subscription fee of as little as $10 per month, 247TVStream enabled its subscribers to view live television and sports programming on their internet-connected devices.  However, unlike legitimate streaming services, 247TVStream had not licensed the right to access those programs from the platforms on which they were legitimately offered.

The estimated economic harm caused by 247TVStream to television program copyright owners, as well as licensed streaming services, is more than $100 million.

In connection with this case, a seizure order was executed against website domain names used by Chowdhury and Rahman to operate 247TVStream.  The seizure of these domains by the government will prevent the use of these sites to operate 247TVStream. 

Individuals, including subscribers, visiting those sites will now see messages indicating that the sites have been seized by the federal government.  In addition, in coordination with international law enforcement partners to enforce criminal copyright laws, Dutch and U.K. partners have seized the servers hosting a portion of the 247TVStream infrastructure.

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

If convicted, Chowdhury and Rahman each face a maximum penalty of five years in prison on the conspiracy to provide the digital transmission service; three years in prison on providing the digital transmission service; 20 years in prison for the conspiracy to commit wire fraud; and a mandatory term of two years in prison for aggravated identity theft, to run consecutive to the other sentences.

The HSI New York Field Office is investigating the case, with assistance from the HSI Buffalo Field Office and their Attaché Offices in Ottawa, The Hague and London.

Assistant United States Attorney Rebecca Schuman is prosecuting the case with Trial Attorneys Vasantha Rao and Jeff Pearlman of the Criminal Division’s Computer Crime and Intellectual Property Section.

The Defendants:

NOOR NABI CHOWDHURY
Age:  56
Cheektowaga, New York

MOHAMMAD MAHMUDUR RAHMAN
Age:  36
Dhaka, Bangladesh

E.D.N.Y. Docket No.: 24-CR-466 (MKB)

A federal jury in Brooklyn yesterday returned guilty verdicts on all counts against Siyang Chen and Yichu Chen in connection with their roles in a Queens-based sex trafficking and prostitution ring.  The jury convicted Siyang Chen of sex trafficking conspiracy, several assaults in-aid-of racketeering and Hobbs Act robbery conspiracy.  The jury convicted Yichu Chen of the robbery and assault of a sex worker in Centreville, Virginia on September 15, 2020.  The verdict followed a month-long trial before United States District Judge Eric N. Vitaliano.  Prior to the trial, on September 27, 2024, Siyang Chen pleaded guilty to nine counts in the superseding indictment, including racketeering conspiracy and assaults in-aid-of racketeering, and, during trial, on October 22, 2024, to an additional count of assault in-aid-of racketeering.  With this verdict Siyang Chen has now been convicted on all counts in the superseding indictment with which he was charged.  When sentenced, Siyang Chen faces up to life in prison and Yichu Chen faces up to 20 years in prison.

Breon Peace, United States Attorney for the Eastern District of New York; James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), announced the verdict.

“The trial evidence provided a behind-the-scenes view of the horrific machinations of a sex trafficking organization in all its inhumanity and violence motivated by greed,” stated United States Attorney Peace. “This verdict is a victory for justice and for the victims who were subjected to brutal beatings and degrading treatment at the hands of the defendants.  My Office will stand by the brave victims who assisted prosecutors and law enforcement in holding the perpetrators accountable.”

Mr. Peace expressed his thanks to the United States Attorney’s Office for the District of Nebraska, the Oklahoma City and Manchester field offices of the Department of Homeland Security, Homeland Security Investigations, and United States Immigration and Customs Enforcement.  In addition, local police departments across the United States provided invaluable assistance, including the Beaverton (Oregon) Police Department, the Michigan State Police, the Missouri Highway Patrol, the Oklahoma City (Oklahoma) Police Department, the Omaha (Nebraska) Police Department, the Overland Park (Kansas) Police Department, the Portland (Oregon) Police Department, the Southfield (Michigan) Police Department and the Troy (Michigan) Police Department.

“For three years, Siyang Chen managed a national sex trafficking operation designed to establish a monopoly over their victimized workers through organized attacks, effected by Yichu Chen, among others, to terrorize potential defectors and competitors. This ruthless enterprise ordered brutal assaults with physical restraints and various blunt instruments to maintain its tyrannical control.  May this conviction emphasize the FBI’s intolerance of the systemic use of violence and serve as a deterrent to those who employ such horrific measures to increase profits,” stated FBI Assistant Director in Charge Dennehy.
                        
“This verdict delivers a modicum of justice to the courageous survivors who endured unconscionable treatment at the hands of these men, who have now been convicted of operating a brutal interstate sex trafficking and prostitution enterprise,” stated NYPD Interim Commissioner Donlon. “The NYPD, along with our federal, state, and local law enforcement partners, will continue to hold accountable those who seek to profit from the abuse and exploitation of others.”

As proven at trial, between April 2019 and September 2021, defendant Siyang Chen helped lead a nationwide prostitution business that trafficked women.  Members of the organization directed and carried out violent attacks on commercial sex workers to protect the enterprise’s turf and deter the victims from working for rival organizations or independently.  Siyang Chen was a manager of the criminal enterprise, who advised the organization on strategies to improve profits, including by using violence—and specifically, by targeting and attacking sex workers.  The victims of the organization were subjected to extreme brutality.  Evidence admitted at trial demonstrated that members of the organization zip-tied the victims’ hands and viciously beat them with breaker bars, hammers, wrenches, and other blunt objects, leaving the victims bloody, terrified, and, in many cases, seriously injured.

Siyang Chen planned and participated in robberies and assaults across several states.  WeChat messages shared among members of the ring graphically depicted violence that occurred during the assaults.  Videos of the assaults were circulated to senior members of the enterprise to show that the beatings were sufficiently severe and to sex workers to cultivate an atmosphere of fear.  The videos showed victims screaming, struggling while they were bound, bleeding and being beaten with hammers and other blunt weapons.  Siyang Chen commented in a message about a planned attack: “beat to the death [] at least 4 fractures ... Tell the girl not allowed back will hit again coming back.”  He made clear that his message to sex workers was, “Fuck off if you don’t want to die.”

Yichu Chen was part of the organization’s “hit team.” Specifically, acting at Siyan Chen’s direction, Yichu Chen was recruited to beat a woman who was engaging in commercial sex work for a rival prostitution business at a location in Centreville, Virginia. Siyang Chen instructed Yichu Chen how to zip-tie the woman’s wrists behind her back and, subsequently, Yichu Chen beat her with a metal breaker bar.  Yichu Chen robbed the victim of money and a cell phone.  Members of the organization paid Yichu Chen an additional $400 for carrying out the attack, which a member of the organization contemporaneously described as a “super severe” beating.   

Ten co-defendants charged in the superseding indictment have pleaded guilty to various charges for their roles in the organization, including its boss and Siyang Chen’s wife, Rong Rong Xu, and are currently awaiting sentencing.  Four others that committed crimes at the enterprise’s direction have been convicted in related cases and are awaiting sentencing.

The government’s case is being prosecuted by the Office’s Organized Crime and Gangs and Civil Rights Sections.  Assistant United States Attorneys Matthew R. Galeotti, Sophia M. Suarez and Stephanie Pak are in charge of the prosecution, with the assistance of Paralegal Specialist Anna November.

The Defendants: 

SIYANG CHEN
Age: 35
Queens, New York 

YICHU CHEN (also known as “Ban Ban”)
Age: 22
Queens, New York 

Defendants Who Previously Pleaded Guilty:

RONG RONG XU (also known as “Eleanor”)
Age: 31
Queens, New York

YUAN YUAN CHEN
Age: 31
Queens, New York

BO JIANG
Age: 29
Queens, New York 

MEIZHEN SONG (also known as “Die Die”)
Age: 25
Dallas, Texas 

JIARUN YAN (also known as “Raymond Yan” and “Mike”)
Age: 31
Queens, New York 

JILONG YU
Age: 26
Dallas, Texas 

CARLOS CURY
Age: 43
Queens, New York 

ZERONG TANG
Age: 26
Queens, New York

E.D.N.Y. Docket No.: 22-CR-158 (S-1) (ENV)

On Nov. 15, a federal grand jury in the Eastern District of New York returned an indictment charging Noor Nabi Chowdhury, 56, of Cheektowaga, New York, and his brother, Mohammad Rahman, 36, of Dhaka, Bangladesh, with conspiracy to provide to the public an illicit digital transmission service; providing an illicit digital transmission service; conspiracy to commit wire fraud; and aggravated identity theft. The charges stem from their operation of 247TVStream, an online subscription-based service that permitted users to stream copyrighted content, such as live sports programming and television shows, without the permission of the relevant copyright owners.

According to court documents, Chowdhury and Rahman allegedly ran the illegal scheme for years and collected more than $7 million in subscriber fees from 247TVStream subscribers. The estimated harm to legitimate copyright owners caused by 247TVStream is more than $100 million. Chowdhury and Rahman also allegedly used a victim’s identification to facilitate the infrastructure for the scheme.

The indictment was unsealed earlier today, following Chowdhury’s arrest, and he appeared for his arraignment in the U.S. District Court for the Western District of New York this afternoon. An arrest warrant was issued for Rahman, who remains at large.

“According to the indictment, Chowdhury and Rahman ran an illicit digital streaming site that infringed upon more than a hundred million dollars of intellectual property owned by legitimate copyright owners,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Thanks to the work of our prosecutors, along with our domestic and international law enforcement partners, the illicit digital streaming site no longer exists, and Chowdhury is in custody. These actions demonstrate the Criminal Division’s commitment to protecting intellectual property rights by vigorously enforcing the laws against illicit digital transmission services.”

“As alleged, the defendants operated a bootleg online streaming service that distributed copyrighted television programs that they stole for their personal enrichment,” said U.S. Attorney Breon Peace for the Eastern District of New York. “My office and the Justice Department are committed to protecting the rights of intellectual property holders from digital pirates like these defendants.”

“Noor Nabi Chowdhury and Mohammad Rahman are accused of committing copyright infringement to the tune of over $100 million,” said Special Agent in Charge William S. Walker of the Homeland Security Investigations (HSI) New York Field Office. “As alleged and in furtherance of their criminal scheme, the defendants stole an unsuspecting victim’s identity to exploit major American businesses, in pursuit of illicit wealth. HSI New York proudly stands alongside our law enforcement and private sector partners, both domestic and abroad, to thwart criminal organizations who seek to financially capitalize on their wrongdoing.”

Also today, HSI executed a seizure order from the Eastern District of New York against website domain names used by Chowdhury and Rahman to operate 247TVStream. The seizure of these domains by the government will prevent the owners and third parties from using the sites to operate 247TVStream. Individuals, including subscribers, visiting those sites now will see a message indicating that the site has been seized by the federal government. In addition, in coordination with international law enforcement partners to enforce criminal copyright laws, Dutch and United Kingdom authorities have seized the servers hosting a portion of the 247TVStream infrastructure.

If convicted, Chowdhury and Rahman each face a maximum penalty of five years in prison on the conspiracy to provide the illicit digital transmission service charge; three years in prison on the providing the illicit digital transmission service charge; 20 years in prison for the conspiracy to commit wire fraud charge; and a mandatory penalty of two years in prison for aggravated identity theft, to run consecutive to the other sentences.

The HSI New York Field Office is investigating the case, with assistance from the HSI Buffalo Field Office and their Attaché Offices in Ottawa, The Hague, and London.

The Justice Department’s Office of International Affairs also assisted. The Justice Department appreciates the additional assistance provided by the Surrey and City of London Police of the United Kingdom, Royal Canadian Mounted Police, and Fiscale inlichtingen- en opsporingsdienst of the Netherlands.

Trial Attorneys Vasantha Rao and Jeff Pearlman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Rebecca Schuman for the Eastern District of New York are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Earlier today, in federal court in Brooklyn, Justin Dixon pleaded guilty to coercion and enticement of a minor and to being a felon in possession of a firearm.  The proceeding was held before United States District Judge William F. Kuntz II.  When sentenced, Dixon faces a mandatory minimum term of 10 years in prison and a maximum of life in prison.

Breon Peace, United States Attorney for the Eastern District of New York; James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), announced the guilty plea.

“With today’s guilty plea, the defendant has added directing the prostitution of a minor and being a felon in possession of a firearm to his criminal history, and he will face the consequences for his lack of respect for the law,” stated United States Attorney Peace.  “The Penn Track is a blight on our district, and predators like the defendant who operate there are going to be held accountable by my Office and our law enforcement partners for their ruthless exploitation of women and minors.”

Mr. Peace expressed his appreciation to the Richmond County District Attorney’s Office for their assistance during the investigation.

“Justin Dixon trafficked a 14-year-old girl, along with several other women, for commercial sex and issued violent punishments to ensure adherence to his demeaning rules. Dixon’s twisted ruse allowed him to groom victims before forcing them into sexual servitude on the infamous Penn Track where profits are valued over bodily autonomy. The FBI will continue its mission apprehending predators who prey upon innocent populations out of financial greed,” stated FBI Assistant Director in Charge Dennehy. 

“Today’s guilty plea sends a powerful message that crimes against our most vulnerable population, our children, will not be tolerated in our city,” stated NYPD Interim Commissioner Donlon. “It also reaffirms the unwavering dedication of law enforcement to ensure public safety for all New Yorkers. I commend our investigators, as well as our partners at the FBI and the office of the U.S. Attorney for the Eastern District of New York, for their relentless efforts in combating the scourge of sex trafficking. Their determination to hold Mr. Dixon accountable for his actions and to obtain justice for the survivors of these horrific crimes is truly commendable.”

As set forth in court filings, in January 2023, Dixon used violence and threats of violence to compel a 14-year-old minor (Jane Doe) to engage in commercial sex for the defendant’s financial benefit.  Dixon transported the minor victim—as well as other women—to an area in East New York, Brooklyn near Pennsylvania Avenue, which is known as the “Penn Track” or the “Blade.”  Dixon forced Jane Doe and other women to engage in prostitution and demanded that the proceeds of their sex work be turned over to him.  Any resistance from the victims was met with violence.  During this time period, the defendant was affiliated with the Crips street gang.

Dixon used social media and other internet applications to establish relationships with potential victims, groom them and manipulate them into working for him as prostitutes.  Jane Doe was forced to live in a Staten Island house, along with Dixon and other women.   Dixon required that Jane Doe and the other women clean the house, cook for him and bathe him.  Dixon would not allow the women to be clothed inside the house and would physically punish the women if they disobeyed any of these rules.

Dixon called Jane Doe “tiny,” and told her that she needed to eat more food in order to look older than her age.  The defendant also told Jane Doe that he was arranging a trip to Florida for her to have plastic surgery, including breast implants, to make her appear older.

Prior to his arrest, Dixon brandished firearms in the presence of Jane Doe and other victims.  In January 2023, law enforcement officers executed a search warrant in connection with the investigation and recovered a defaced Ruger LCP .380 caliber handgun inside a vehicle used by Dixon to transport Jane Doe and other women to the Penn Track.  Prior to possessing this firearm, Dixon had a felony conviction.

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

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

The Defendant:

JUSTIN DIXON
Age:  33
Staten Island, New York

E.D.N.Y. Docket No. 23-CR-090 (WFK)

Earlier today, at the federal court in Brooklyn, an indictment was unsealed charging Kanen Flowers with securities fraud, wire fraud and money laundering.  He was arrested this morning in Tucson, Arizona and will be removed to the Eastern District of New York, at which time he will be arraigned on the indictment.

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the charges.

“Flowers is charged with shamelessly lying to investors to get their money and capitalizing on disruptions in the cryptocurrency market to hide the fact that he had pilfered investor funds for his own benefit,” stated United States Attorney Peace.  “Be it through crypto or traditional banking, my Office is committed to rooting out fraud and protecting our investing public.”

“As alleged, Kanen Flowers masqueraded the true composition of his fund to deceive and steal from his investors before diverting the misappropriated assets for personal use. The alleged scheme Flowers engaged in manipulated the good faith placed upon him to selfishly pocket substantial amounts of investments. The FBI will continue to dismantle all fraudulent conspiracies to ensure invested monies are duly managed,” stated FBI Assistant Director in Charge Dennehy.

As alleged in the indictment, from 2020 to 2023, Flowers was the Portfolio Manager of an “A.I.” fund that used “proprietary algorithms to actively trade long and short positions” (the “Fund”).  He lied to investors and potential investors about the size of the Fund—claiming it was worth billions of dollars when it never had more than approximately $3.5 million in assets under management.  He lied to investors and potential investors about the Fund’s diversification efforts—claiming it was trading in equal parts futures, equities and cryptocurrency, when just months after its formation it was trading more than 50% cryptocurrency and, later, entirely cryptocurrency.  And he lied to investors about his alleged inability to liquidate the Fund when it ultimately shuttered—claiming cryptocurrency lenders and exchanges were capping withdrawals or had even confiscated Fund assets, when in fact Flowers had largely emptied the Fund’s accounts at those cryptocurrency lenders and exchanges months prior.

As further alleged in the indictment, Flowers stole Fund assets.  Among other things, in October 2021, he used $70,000 worth of cryptocurrency from a Fund account to pay off a personal loan.  Between December 2021 and January 2022, he transferred more than $200,000 worth of the Fund’s cryptocurrency to himself.  And in January 2022, he caused the Fund to purchase a non-fungible token or NFT for over $100,000, which he then kept.

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including securities fraud, wire fraud and money laundering, as charged here.

The charges in the indictment are merely allegations and the defendant is presumed innocent unless and until proven guilty. If convicted of securities fraud and wire fraud, Flowers faces a 20-year statutory maximum sentence. If convicted of money laundering, Flowers faces a 10-year statutory maximum sentence.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Tara McGrath is in charge of the prosecution, with the assistance of Paralegal Specialist Liam McNett.

The Defendant:

KANEN FLOWERS
Age:  54
Atlanta, Georgia

E.D.N.Y. Docket No. 24-CR-458

Earlier today, Roger Morales, also known as “Crazy,” “Ciclon” and “Cyclone,” was arrested in connection with an indictment charging him with the June 5, 2011 murder in-aid-of racketeering of Norman Mizzell. Morales was arrested this morning and was arraigned this afternoon this afternoon before United States Magistrate Judge Robert M. Levy. Morales was ordered detained pending trial.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), announced the arrest and charges.

“As alleged, the defendant and his co-conspirators killed the victim for the twisted purpose of maintaining and increasing their positions in the MS-13 gang,” stated United States Attorney Peace. “This prosecution reflects the resolve by my Office and our law enforcement partners to bring gang members to justice for their violent crimes and that we will not be deterred by the passage of time.”

“In 2011, Roger Morales, a MS-13 member, allegedly determined murder as fitting retribution for Norman Mizzell advocating for himself after being previously burglarized by the same crew. This alleged cold-blooded execution highlights MS-13’s violent and mercurial intolerance for disrespect that threatens our community’s safety. With the assistance of our law enforcement partners, the FBI maintains its unwavering posture to eliminate all gang violence regardless of when that crime occurred.,” stated FBI Assistant Director in Charge Dennehy.

“The senseless violence described in the charges announced today has no place in New York City,” stated NYPD Interim Commissioner Donlon.  “Our team of NYPD investigators, along with our partners at the FBI and the office of the U.S. Attorney for the Eastern District of New York, will continue to use all available resources to identify and dismantle street gangs, particularly the notoriously brutal MS-13, wherever they may be operating. This crucial effort will remain a top priority until every neighborhood in New York City is as safe as our safest community.”

As alleged in the government’s detention letter filed earlier today, Morales was a member of the Centrales Locos Salvatruchas clique of La Mara Salvatrucha, also known as the MS-13, in Queens, New York. In the spring of 2011, Morales and other members of MS-13 committed a burglary at the victim’s home where they had gone to purchase marijuana.  They found that he was away, broke into the house and took his belongings. Later, the victim confronted Morales and his co-conspirators about the burglary, and they decided to kill him.  The defendant and his co-conspirators obtained a firearm from another MS-3 clique and enlisted the help of another MS-13 member who needed to commit a murder to regain standing in the gang. Then, on the night of June 5, 2011, Morales and his co-conspirators traveled to the victim’s home, where they shot him several times through a window into his bedroom during a feigned late-night marijuana purchase. The victim’s body was found the next day.

The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted of murder in-aid-of racketeering, Morales faces up to life in prison.

Today’s charges 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.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2009, this Office has obtained indictments charging MS-13 members with carrying out more than 70 murders in the district and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by our law enforcement partners.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States  Attorneys Kamil R. Ammari, Anna L. Karamigios, Jonathan Siegel and Michael W. Gibaldi are in charge of the prosecution.

The Defendant:

ROGER MORALES (also known as “Crazy,” “Ciclon” and “Cyclone”)
Age:  31
Ozone Park, Queens

E.D.N.Y. Docket No.: 24-CR-453 (BMC)

Earlier today, Abdoul Azika and Jaquell Blackwell were arrested in connection with a complaint charging them with armed carjacking.  The defendants were arraigned this afternoon at the federal courthouse in Brooklyn before United States Magistrate Judge Taryn A. Merkl on the complaint and ordered detained.

Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the charges.

“For more than a year, Azika and Blackwell terrorized and traumatized innocent members of our community through a pattern of violent, armed carjackings,” stated United States Attorney Peace.  “My Office, together with our law enforcement partners, will continue to work diligently to protect our communities from such violence.”

Mr. Peace thanked the Garden City Police Department, the Nassau County Police Department and the New York City Police Department for their assistance in the investigation.

“Abdoul Azika and Jaquell Blackwell, two Blood Hounds Brims gang members, allegedly demonstrated a pattern of violence and intimidation by forcing residents to surrender their vehicles at weapon-point. This alleged series of armed robberies incites fear and jeopardizes public safety. The FBI will continue to apprehend gang members who utilize violence to embolden their criminal activities and terrorize our communities,” stated FBI Assistant Director in Charge Dennehy.

As alleged in court filings, Azika and Blackwell were members of the violent “5zzly” crew of the Bronx-based Blood Hounds Brims gang that has engaged in a string of armed carjackings and robberies across New York City and Long Island.  One such incident, as charged in the complaint, took place in the early morning hours of March 19, 2023, when Azika and Blackwell snuck up on and opened the doors of a vehicle parked in a residential neighborhood in Garden City, pointed a knife and a gun at the driver’s face, and told him to “get the f*** out of the car,” before driving off with the vehicle.

The charges in the complaint are allegations, and the defendants are presumed innocent until proven guilty.  If convicted, the defendants face a maximum of 15 years’ imprisonment.

Assistant United States Attorneys Rebecca M. Schuman and Kamil R. Ammari are in charge of the prosecution with assistance from Paralegal Specialist Rachel Friedman.

The Defendants:

ABDOUL AZIKA
Age: 20
Bronx, New York

JAQUELL BLACKWELL
Age: 19
Bronx, New York

E.D.N.Y. Docket No. 24-MJ-598

A federal jury in Central Islip today convicted Michail McKen of two counts of sex trafficking by force and two counts of interstate prostitution in connection with a sex trafficking business he operated in Suffolk and Nassau Counties, New York, Virginia, Arizona, Massachusetts and elsewhere.  The verdict followed a six-day trial before United States District Judge Joan M. Azrack. When he is sentenced, McKen faces a mandatory minimum term of 15 years in prison and up to life in prison.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Robert Waring, Acting Commissioner, Suffolk County Police Department (SCPD), announced the verdict.

“The defendant stands convicted today of luring vulnerable women into his web of deceit and coercing them to have commercial sex with men all over the country, including on Long Island,” stated United States Attorney Peace.  “He falsely promised his victims a better life, but instead controlled their lives with threats of violence and manipulation to enrich himself. Prosecuting sex traffickers like McKen is a priority of my Office and it is also my hope that today’s verdict brings some measure of consolation to survivors of this awful, exploitative crime.”  

Mr. Peace expressed his appreciation to the Arizona Desert Hawk Violent Crime Task Force, the FBI’s Baltimore and Richmond Field Offices and the Henrico County, Virginia, Police Division for their assistance on the case. 

FBI Assistant Director in Charge Dennehy stated, “For three years, Michail McKen established a national trafficking route to ensnare and force countless women into sexual slavery. False promises and deceit progressed into physical violence and degradation to ensure his victims remained captive. May today's conviction demonstrate the FBI's commitment to apprehending all individuals who implement perverted tactics to profit off another's body.”

As proven at trial, between 2019 and 2022, McKen was a pimp who used violence and threats of violence to coerce multiple women to engage in commercial sex acts for his own profit.  McKen often recruited sex workers through social media and then caused them to travel to Long Island, where McKen is originally from, to engage in commercial sex acts in hotels and other locations.  As part of his sex trafficking business, McKen sent his victims all over the country to engage in commercial sex acts, including Virginia, Massachusetts, Pennsylvania, Arizona, Kentucky, Alabama and Oregon.  McKen enticed the victims with false promises of a better life and a lucrative partnership based on sharing illicit proceeds.  He also choked, beat and threatened the victims at gunpoint to control them.  Some of McKen’s victims suffered from drug addiction and he would maintain leverage over those victims by forcing them to engage in commercial sex acts in exchange for a rationed supply of opioids that would prevent them from going through complete withdrawal. 

McKen forced his victims to abide by strict rules, such as forbidding them from talking to other pimps or even making eye contact with other men in public and wearing lingerie under their street clothes, so they were always prepared for sex work.  McKen also took identification documents from victims, which he held as ransom to prevent them from acting independently of him.  One victim who testified at trial had the word “Cavalli,” the defendant’s street name which he adopted from the name of a famous fashion designer, tattooed across her ribcage.

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.  Assistant United States Attorneys Megan E. Farrell and Samantha Alessi are in charge of the prosecution with the assistance of Paralegal Specialist Adam Bernard, Legal Assistant Hannah Valoy, and Victim Witness Specialist Stephanie Marroquin.

The Defendant:

MICHAIL MCKEN (also known as “Kells” and “Cavalli”)
Age:  36
Baldwin, New York and Phoenix, Arizona

E.D.N.Y. Docket No. 23-CR-377 (JMA)

Earlier today, at the federal courthouse in Brooklyn, Isaiah Dukes, also known as “Lil Zay Osama,” was sentenced by United States District Judge Nina R. Morrison to 14 months in prison and a $10,000 fine.  Dukes was indicted in January 2024 for possession of a machinegun, and pleaded guilty in May 2024.

Breon Peace, United States Attorney for the Eastern District of New York, Bryan Miller, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, New York Field Office (ATF), and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD) announced the sentence.

“The defendant knowingly carried a fully automatic weapon, a pistol with a switch device whose only purpose is to make a dangerous weapon all the more deadly – and then carelessly left that gun in the back of a rideshare,” stated United States Attorney Peace.  “Today’s sentence serves as a warning that those who possess illegal guns, particularly with switches that convert those guns into machineguns, will be held accountable for their actions and for the danger they pose to our community.”

“This sentencing highlights a crucial point: possessing a machine gun conversion device is illegal under federal law. Machine gun conversion devices exponentially increase the lethality of firearms and put our communities in serious danger. Every device removed from our streets represents lives saved and tragedies prevented. The ATF's primary goal is safeguarding the public from violent crimes, and the removal of these devices significantly contributes to achieving this mission. We are grateful to the ATF NY Joint Firearms Task Force, NYPD, and EDNY for their dedicated efforts in this endeavor. ATF proudly collaborates with our law enforcement partners to eliminate these dangerous devices from our streets and ensure public safety,” stated ATF Special Agent in Charge Bryan Miller.

“Today’s sentence serves as a reminder to anyone who may bring an illegal firearm, especially one that has been modified to increase its lethality, into New York City: There are serious consequences for your reckless actions,” stated NYPD Interim Commissioner Donlon. “The NYPD and our law enforcement partners are fully committed to holding criminals accountable and ensuring the safety of our streets and communities for all New Yorkers.”

As set forth in the government’s sentencing memorandum and other court documents, on September 29, 2022, Dukes carried a loaded Glock pistol affixed with a switch — a device that when attached to the back of a handgun like a Glock converts the firearm into a fully automatic weapon.  Dukes was arrested after leaving the firearm in a rideshare vehicle that brought him from a luxury hotel in Manhattan to a recording studio in Queens.  Law enforcement subsequently determined that the firearm could automatically fire more than one round with a single function of the trigger, rendering it a machinegun.

Assistant United States Attorneys Gilbert M. Rein and Rebecca M. Schuman are in charge of the prosecution, with assistance from Paralegal Specialist Rachel Friedman.

The Defendant:

ISAIAH DUKES
Age:  27
Calumet City, Illinois

E.D.N.Y. Docket No. 24-CR-28 (NRM)

Earlier today, in federal court in Brooklyn, Ilya Kahn, a national of the United States, Israel and Russia, pleaded guilty to conspiracy to violate the Export Control Reform Act for his role in a transnational, multi-million-dollar scheme to secure and illegally export dual-use semiconductors and other sensitive technology to Joint Stock Company Research and Development Center ELVEES (Elvees) and other entities in Russia.  Elvees, one of the leading Russian developers of microchips, was sanctioned by the U.S. government in 2022 for contributing to Russia’s security services, military and defense sectors.  Kahn also pleaded guilty to attempted tax evasion for failing to pay taxes on the illicit income he earned from the scheme.  Kahn was arrested in January 2024.

The guilty pleas took place before United States District Judge Ann M. Donnelly. When sentenced, Khan faces up to 20 years in prison.

Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General for the Justice Department’s National Security Division, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), Jonathan Carson, Special Agent in Charge, U.S. Department of Commerce, Office of Export Enforcement, Bureau of Industry and Security, New York Field Office, and Thomas M. Fattorusso, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the plea.

“Semiconductors and other advanced electronics are the lifeblood of Russia’s war machine, and Kahn’s circumvention of U.S. export controls was critical to Russia’s chip design and manufacturing capacity,” stated United States Attorney Peace.  “Today’s plea marks a significant step in protecting the national security of the U.S. and our allies and partners abroad.  We will continue to use all our law enforcement and national security tools to hold individuals and corporations accountable for flouting the law to aid sanctioned entities in Russia and elsewhere.”   

Mr. Peace extended his appreciation to the U.S. Attorney’s Office for the Central District of California and the FBI’s Los Angeles Field Office for their assistance in this case.

“Today’s guilty plea is another step towards stopping the illicit flow of technology to support the Russian war machine,” said Assistant Attorney General Matthew G. Olsen of the National Security Division. “The Department will continue to do all that we can to disrupt the illegal export of sensitive dual-use electronics to our adversaries and protect our national security.”

“By operating front companies to illegally export dual-use semiconductors and other sensitive technology, Illya Kahn aided a hostile nation at the expense of the security of our nation.  The FBI and our partners will continue to ensure individuals attempting to evade national security sanctions are held accountable in the criminal justice system,” stated FBI Assistant Director in Charge Dennehy.

“Working with our law enforcement colleagues, the Office of Export Enforcement will continue to investigate and dismantle sophisticated illegal procurement schemes that supply Russia’s war effort,’ said Special Agent in Charge Jonathan Carson. “Today’s guilty plea should serve as another reminder that we will not tolerate violations of the sanctions imposed on Russia since the invasion of Ukraine.”

“Khan aided Russian military and intelligence agencies by conspiring to unlawfully transfer sensitive technology to Russia, even after the 2022 invasion of Ukraine.  Further, he pocketed millions in this scheme, but just like Al Capone, Kahn needed to pay tax to the U.S. government on his ill-gotten gains.  This guilty plea means Kahn can no longer aid a foreign government for profit, and he is sure to give much of that money back in forfeiture and what he owes in taxes.  Yes, criminals must pay taxes, even on dirty money,” said Thomas M. Fattorusso, Special Agent in Charge of IRS-CI New York.

Kahn is the owner of Senesys Incorporated and Sensor Design Association, which operated in California and Brooklyn, New York.  Kahn operated these businesses — ostensibly involved in “security software development” and the testing of silicon wafers for military, avionics and space users — as fronts for a years’ long conspiracy to acquire and export sensitive and sophisticated dual-use electronics from the United States to Elvees in Russia.  Many of these items required an export license for national security and anti-terrorism reasons, which Kahn did not obtain.

Kahn also arranged for Elvees to continue to fabricate and import semiconductors after Russia’s February 2022 invasion of Ukraine.  These semiconductors can be used for, among other things, communications systems, GPS receivers and equipment for military unmanned aerial vehicles, also known as drones.  In doing so, Kahn utilized a transnational network of front companies and bank accounts to ship those semiconductors to Russia following the invasion of Ukraine, often arranging for the semiconductors to be sent to the U.S. and then re-exported to Russia via China and other locations around the world.

In March 2022, the Commerce Department added Elvees to the Entity List, imposing a license requirement to export any item subject to the Export Administration Regulations to Elvees, and stating that it would review license applications under a policy of denial.  Despite these sanctions, Kahn continued to work with Elvees. For example, in May 2022, Kahn emailed a Taiwanese manufacturer design guidance for an Elvees-branded microchip.  Subsequently, Kahn shipped thousands of units of this microchip to a Hong Kong-based shipping company, and then to a company located in the mainland of the People’s Republic of China.  Kahn noted in communications with the Hong Kong shipping company that he received a “call from Russia” about the PRC business to which he was directing the goods.

Kahn’s export activity for the benefit of Elvees dates to at least 2012, and accounts under his control received more than $50 million from Elvees and related entities between 2012 and 2022.  Of that money, Kahn channeled nearly $5 million for his personal use, which he did not report to the IRS and on which he did not pay income taxes.  As part of his plea, Kahn agreed to forfeit $4,923,548.94 in ill-gotten gains and to pay an additional $1,892,816.00 in restitution to the IRS. 

Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.  Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys Artie McConnell and Matthew Skurnik are in charge of the prosecution, along with Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section, with assistance from Litigation Analysts Emma Tavangari and Mary Clare McMahon.  Assistant U.S. Attorney Laura Mantell of the Office’s Asset Recovery Section is handling forfeiture matters.

The Defendant:

ILYA KAHN
Age: 66
Israel; Brooklyn, New York; Los Angeles, California

E.D.N.Y. Docket No. 24-CR-56 (S-1) (AMD)

Earlier today, in federal court in Brooklyn, Cory Martin was sentenced by United States District Judge Ann M. Donnelly to life in prison for murdering and dismembering a woman in order to collect $200,000 in life insurance proceeds. Martin was convicted by a federal jury in March 2024 following a two-week trial of murder-for-hire, murder-for-hire conspiracy, wire fraud conspiracy, aggravated identify theft and fraudulent use of identification relating to a scheme to fraudulently obtain life insurance policies in the name of his victim, kill her and collect the insurance money. Martin was also sentenced to a concurrent term of 20 years’ imprisonment for wire fraud conspiracy and a consecutive term of two years in prison for aggravated identity theft.

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) and Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), announced the sentence.

“The defendant will spend the rest of his life in prison for this ghastly, cold-blooded crime that was motivated by greed and executed after extensive planning,” stated United States Attorney Peace. “Martin preyed on Brandy Odom. He saw the victim as a way to make money. He trafficked her for commercial sex, then killed her with his bare hands so he could profit from her death. The defendant believed he could thwart law enforcement and cover up this heinous crime by relying on television shows about murder, but the investigatory efforts of law enforcement brought him to justice. Brandy Odom’s life mattered and I hope that this sentence, which protects our community by ensuring that the defendant cannot victimize another person, brings some measure of closure to her family.” 

Mr. Peace expressed his thanks to the FBI’s Metro Safe Streets Task Force and the NYPD’s Brooklyn South Homicide Squad, Brooklyn South Video Team and 69th Precinct Detective Squad for their outstanding work on the case.

“Today, Cory Martin received his punishment for the despicable murder of Brandy Odom. Martin utilized fictional stories to devise his own wicked tale of murder as an amoral avenue for selfish financial gain,” stated FBI Assistant Director in Charge Dennehy. “His grisly actions reflect an utter disregard for human life as he continued to brutalize Brandy even after her death in attempt to evade law enforcement detection. May today’s sentencing offer Brandy’s family some justice and reiterate the FBI’s stout intolerance against those willing to take another's life.

“Mr. Martin has been justly sentenced to prison for his abhorrent actions, ensuring that society will be safe from him for the remainder of his life,” stated NYPD Interim Commissioner Donlon. “I applaud the unwavering commitment of our NYPD investigators, as well as our partners at the FBI and the office of the U.S. Attorney for the Eastern District of New York, whose persistence led to today’s result. We remain dedicated to holding accountable those who seek to profit from the mistreatment and exploitation of others.”

Martin, who operated as a pimp, resided at a house in Rosedale, Queens, with the then-26-year-old victim, Brandy Odom, and a co-conspirator. Both Odom and the co-conspirator were engaged in commercial sex work for the defendant. In March and December 2017, Martin and the co-conspirator fraudulently obtained two life insurance policies in Odom’s name. They made premium payments to the life insurance companies by Western Union money orders and by using a debit card in Odom’s name. At trial, Martin’s co-conspirator testified that prior to Odom’s murder, she and the defendant watched “The First 48,” a true-crime TV show about police tactics and they discussed “what not to do, and what things to do to avoid being caught by the police.” The co-conspirator testified that Martin also watched “Dexter,” a TV show about a serial killer who dismembered his victims, because the defendant was “looking for ways to commit the crime when he got rid of Brandy.”

In early April 2018, Martin strangled Odom in her bedroom. Martin and the co- conspirator then purchased cleaning supplies and a vacuum to clean up the murder scene. On April 6, 2018, Martin searched Home Depot’s website for a “Dewalt 12-Amp Corded Reciprocating Saw,” described as featuring a “powerful 12 Amp motor designed for heavy-duty applications.” Later that evening, Martin searched YouTube for “how to insert blade for reciprocating saw” and “using reciprocating saw.” The co-conspirator testified that Martin used an electric saw to dismember the victim’s corpse in the bathtub after covering every surface in the bathroom with heavy-duty, black garbage bags to avoid leaving evidence of the killing.

In the early morning of April 8 and April 9, 2018, Martin discarded Odom’s body parts in Canarsie Park with the assistance of his co-conspirator. On April 10, 2018, Martin conducted dozens of Internet searches for news articles, including “Search area expands after dismembered body found in Canarsie Park in Brooklyn.” Martin also accessed a Twitter post titled “Person walking dog discovers remains of woman in Brooklyn park.” The following day on April 11, 2018, Martin searched YouTube using the search term “exclusive interview of mother of girl found in park.” After Odom’s murder, at Martin’s direction, his co-conspirator made several unsuccessful attempts to claim benefits under Odom’s life insurance policies.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Tanya Hajjar, Emily J. Dean and Andy Palacio are in charge of the prosecution, with the assistance of Paralegal Specialist Theodore Rader.

The Defendant: CORY MARTIN
Age: 37 
Rosedale, Queens

E.D.N.Y. Docket No. 20-CR-549(S-1) (AMD)

A criminal complaint was filed today in federal court in Brooklyn charging Syed Aman, a U.S. citizen and resident of Nassau County, New York, with attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS). Aman was arrested at John F. Kennedy International Airport (JFK Airport) in Queens, New York, on Nov. 5 as he tried to board a flight to Doha, Qatar, from which he intended to ultimately travel to Syria to join ISIS. Aman's initial appearance is scheduled for this afternoon.

As alleged in the complaint, throughout 2023 and 2024, Aman expressed his support for ISIS through social media posts in an online ISIS group forum, sent money to an individual he believed to be an ISIS operative that was intended to support ISIS’s efforts in Syria and made arrangements to travel to Syria to engage in jihad, or holy war, on behalf of ISIS.

Since the beginning of October, Aman has been in contact with a confidential human source (CHS) working with the FBI about Aman's plan to join ISIS in Syria. Aman expressed that “jihad and hijrah,” referring to traveling to ISIS-controlled territory and waging war on ISIS's behalf, are “the most important thing, more than anything else at the moment.” Aman shared with the CHS Aman's hatred for “kuffar [non-believers] who deny the path of Allah.” Aman explained to the CHS, “[i]f you don't kill them they will kill us and ruin the earth with decay." During this same time period, Aman also posted on a social media platform his desire "to kill Americans” and wrote in a notebook his intent to study becoming a shaheed, or martyr on behalf of ISIS.

Aman made two attempts to book travel to the Middle East in late October 2024, but his purchases were blocked by his credit card company. On his third attempt, Aman was successful in booking a flight from JFK Airport to Bangladesh via Doha. Aman told the CHS that he intended to disembark from his flight in Qatar and to purchase a flight from Qatar to Turkey where he would seek to cross into Syria to join ISIS. Aman also stated that he would travel with a steel pen to defend himself if he were arrested and that he would attack law enforcement. A silver metal pen was found in Aman's crossbody bag when he was arrested.

On Nov. 5, Aman traveled to JFK Airport for his flight to Qatar. After Aman had checked in, been processed through airport security and attempted to board his flight, he was arrested by the FBI.

Assistant Attorney General Matthew G. Olsen of the Justice Department's National Security Division, U.S. Attorney Breon Peace for the Eastern District of New York, and Executive Assistant Director Robert Wells for the FBI’s National Security Branch made the announcement.

The FBI is investigating the case.

Assistant U.S. Attorney Antoinette N. Rangel for the Eastern District of New York is prosecuting the case with assistance provided by Trial Attorney T.J. Reardon III of the National Security Division's Counterterrorism Section.

A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

BROOKLYN, NY - A criminal complaint was filed today in federal court in Brooklyn charging Syed Aman, a U.S. citizen and resident of Nassau County, with attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS). Aman was arrested at John F. Kennedy International Airport (JFK Airport) in Queens, New York, on November 5, 2024 as he tried to board a flight to Doha, Qatar, from which he intended to ultimately travel to Syria to join ISIS. Aman is scheduled to make his initial appearance this afternoon before United States Magistrate Judge Peggy Kuo.

Breon Peace, United States Attorney for the Eastern District of New York, Matthew G. Olsen, Assistant Attorney General for the Justice Department’s National Security Division and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the arrest and charges.

“As alleged, Aman was steadfast in his attempts to travel to the Middle East to join ISIS and fortunately his evil plan to wage jihad was thwarted,” stated United States Attorney Peace. “My Office will continue to identify and prosecute would-be terrorists like the defendant before they are able to harm individuals at home or abroad on behalf of ISIS.”

Mr. Peace extended his appreciation to the FBI’s Joint Terrorism Task Force, which comprises a number of federal, state, and local agencies from the region, for their outstanding work on the case, and U.S. Customs and Border Protection for their assistance. “Syed Aman was allegedly determined in his efforts to support ISIS through financial donation and by making multiple attempts to travel overseas to engage in jihad on their behalf,” stated FBI Assistant Director in Charge Dennehy. “Thankfully, the New York Joint Terrorism Task Force was able to intervene before his disturbing plans of supporting a deadly terrorist organization could come to fruition. The FBI, along with our law enforcement partners, are unmatched in our resolve to protect our nation from those willing to support the evils of terrorism.”

As alleged in the complaint, throughout 2023 and 2024, Aman expressed his support for ISIS through social media posts in an online ISIS group forum, sent money to an individual he believed to be an ISIS operative that was intended to support ISIS’s efforts in Syria and made arrangements to travel to Syria to engage in jihad, or holy war, on behalf of ISIS.

Since the beginning of October 2024, Aman has been in contact with a confidential human source (CHS) working with the FBI about Aman’s plan to join ISIS in Syria. Aman expressed that “jihad and hijrah,” referring to traveling to ISIS-controlled territory and waging war on ISIS’s behalf, are “the most important thing, more than anything else at the moment.” Aman shared with the CHS Aman’s hatred for “kuffar [non-believers] who deny the path of Allah.” Aman explained to the CHS, “[i]f you don’t kill them they will kill us and ruin the earth with decay.” During this same time period, Aman also posted on a social media platform his desire “to kill Americans” and wrote in a notebook his intent to study becoming a shaheed, or martyr on behalf of ISIS.

Aman made two attempts to book travel to the Middle East in late October 2024, but his purchases were blocked by his credit card company. On his third attempt, Aman was successful in booking a flight from JFK Airport to Bangladesh via Doha, Qatar. Aman told the CHS that he intended to disembark from his flight in Qatar and to purchase a flight from Qatar to Turkey where he would seek to cross into Syria to join ISIS. Aman also stated that he would travel with a steel pen to defend himself if he were arrested and that he would attack law enforcement. A silver metal pen was found in Aman’s crossbody bag when he was arrested.

On November 5, 2024, Aman traveled to JFK Airport for his flight to Qatar. After Aman had checked in, been processed through airport security and attempted to board his flight, he was arrested by the FBI.

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

The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorney Antoinette N. Rangel is in charge of the prosecution, with assistance provided by Trial Attorney T.J. Reardon III of the Justice Department’s Counterterrorism Section.

The Defendant: SYED AMAN
Age: 28
Franklin Square, Long Island
 

E.D.N.Y. Docket No. 24-MJ-599

A 49-count superseding indictment was unsealed today in federal court in Brooklyn that includes new charges relating to murders allegedly ordered and committed by national leaders, members and associates of the violent transnational criminal organization La Mara Salvatrucha, also known as MS-13.  To date, multiple MS-13 members and associates have been charged in the case for numerous crimes including the murders of Andy Peralta in 2018, Victor Alvarenga in 2018, Abel Mosso in 2019 and Eric Monge in 2020.  The superseding indictment filed today includes new charges against the following MS-13 members and associates:

• Edenilson Velasquez Larin, also known as “Agresor,” “Saturno,” “Tiny,” “Erick” and “Paco,” allegedly a national leader of MS-13 and the Fulton Locos Salvatruchas (Fulton) clique, who is charged with the 2016 murder of Kenney Reyes and for ordering the murders of Monge in 2020 and Oswaldo Gutierrez Medrano in 2022.
• Hugo Diaz Amaya, also known as “21” and “Splinter,” allegedly another national leader of MS-13 and the Park View Locos Salvatruchas clique, who is charged with racketeering conspiracy and the murder of Gutierrez Medrano in 2022.
• Numerous other members of the Fulton clique, all of whom were previously charged in the case, have also now been charged with the murders of Reyes, Monge and Gutierrez Medrano.  

Breon Peace, United States Attorney for the Eastern District of New York, James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), William S. Walker, Special Agent in Charge, Homeland Security Investigations (HSI), New York, Thomas G. Donlon, Interim Commissioner, New York City Police Department (NYPD), and Patrick Ryder, Commissioner, Nassau County Police Department (NCPD), announced the arrests and charges.

“My Office and our law enforcement partners have worked tirelessly to hold MS-13 accountable for the unspeakable harm it has done to its victims and our communities.  As these charges make clear, our pursuit of those responsible will not be deterred by the passage of time or by the leaders of MS-13’s futile attempts to hide in the shadows,” stated United States Attorney Peace.  “This indictment strikes yet another blow at MS-13’s leadership and demonstrates our work to dismantle MS-13 from top to bottom.”

Mr. Peace also thanked the FBI Baltimore Field Office’s Cross Border Task Force, the Nassau County District Attorney’s Office and the Suffolk County District Attorney’s Office for their valuable coordination with the investigation.

“Edenilson Velasquez Larin and Hugo Diaz Amaya, national MS-13 leaders, allegedly assumed the role of executioner by ordering and participating with the other charged defendants in a series of brutal murders to achieve status and revenge. These alleged conspiracies highlight the fearmongering and callousness in which MS-13 leaders and members operate. May today’s charges reflect the FBI’s commitment to continue its close collaboration with our law enforcement partners to rigorously dismantle the MS-13 hierarchy and disrupt all gang violence terrorizing our communities,” stated FBI Assistant Director in Charge Dennehy.

“The defendants’ ruthless violence, in furtherance of the MS-13 gang, has no place in society and our communities,” said Special Agent in Charge William S. Walker. “Everyday, HSI New York and our law enforcement partners are utilizing every tool at our disposal to dismantle transnational gangs that jeopardize the safety of New Yorkers, as demonstrated with today’s announcement. No stone will be left unturned in our pursuit of justice on behalf of the victims slain by MS-13 gang members.”

“These new charges highlight the NYPD’s relentless pursuit of individuals terrorizing our communities,” stated NYPD Interim Commissioner Donlon. “We and our law enforcement partners must continue to find and dismantle the gangs that fuel crime on our streets, and we must hold their members accountable for their senseless acts of violence. I express my gratitude to all of our federal, state, and local partners for their steadfast dedication to our shared public safety goal.”

“We want to thank our partners in federal law enforcement, particularly the United States Attorney’s Office, for this collaborative effort to bring these violent and destructive criminals to justice,” stated Nassau County Police Commissioner Patrick Ryder.  “From our patrol officers on the street to the dedicated investigators in our Detective Division, the Nassau County Police Department is committed to fighting gang violence and rooting out those who bring destruction to our communities.”

The U.S. Program

As alleged in court filings, MS-13 is an extraordinarily violent street gang operating through “cliques” or chapters in Queens, Long Island and communities across the United States, as well as El Salvador, Honduras and other countries in the Americas and Europe.  The gang primarily makes money through drug trafficking and extortion, and is known for its gruesome murders of perceived gang rivals and gang members and associates who have violated the gang’s rules.  MS-13 has been responsible for dozens of murders in the Eastern District of New York alone.

Since approximately 2021, virtually all MS-13 cliques in the United States have been united under a single hierarchy known as the “U.S. Program.”  The U.S. Program is led by a group of senior gang leaders, most of whom are incarcerated, known as “La Mesa” or “The Table.”  La Mesa, among other roles, allegedly authorizes and directs murders throughout the country, including in New York.  Prior to their arrests, Velasquez Larin and Diaz Amaya were allegedly two of the few members of La Mesa outside of prison — Velasquez Larin was living in Colorado and Diaz Amaya was living in Kansas — and were among the top leaders responsible for the gang’s operations on the East Coast.

Murder of Kenny Reyes

The superseding indictment adds charges for the 2016 murder in Uniondale, New York, of 18-year-old Kenny Reyes, who had recently come to the United States from Honduras.  As alleged in court filings, Fulton clique member Jose Espinoza Sanchez befriended Reyes and learned that he had been associated with the 18th Street gang, rivals of MS-13.  Velasquez Larin and Espinoza Sanchez plotted with other members of MS-13 in Nassau County to murder Reyes to increase their positions in the gang.  On May 23, 2016, Velasquez Larin, Espinoza Sanchez and two others lured Reyes to a wooded area to smoke marijuana, where they killed him with machetes and buried his body.  For years after the murder, Velasquez Larin bragged about their roles in the killing to other MS-13 members.

Murder of Eric Monge

The superseding indictment charges Velasquez Larin and Espinoza Sanchez for their roles in ordering the murder of Eric Monge, and Jose Guevara Aguilar, Jose Arevalo Iraheta and Erick Zavala Hernandez for their participation in the murder.  As alleged, in the early morning hours of September 6, 2020, Guevara Aguilar and fellow Fulton clique member Oscar Hernandez Baires shot and killed Monge while he was seated in the front passenger seat of his parked car near his home in Queens. Monge’s wife had just returned to the car after bringing their young children inside their residence when Hernandez Baires and Guevara Aguilar began shooting.  After the shooting, Guevara Aguilar and Hernandez Baires ran back to a car where Arevalo Iraheta and Zavala Hernandez were waiting to help them escape. As they fled to the car, Guevara Aguilar dropped his hat, which was later found to have his DNA on it.

Murder of Oswaldo Gutierrez Medrano

The superseding indictment also adds charges relating to the 2022 murder in Nassau County of 20-year-old Oswaldo Gutierrez Medrano, a member of the Sailors clique of MS-13.  As alleged, Velasquez Larin and Diaz Amaya ordered the murder of Gutierrez Medrano, and Diaz Amaya coordinated luring Gutierrez Medrano to meet other MS-13 members under the false pretense that he would be receiving a promotion within MS-13. In Nassau County, on February 13, 2022, Gutierrez Medrano allegedly met with those other members of MS-13, including defendants Arevalo Iraheta, Carlos Alvarado, Erick Galdamez Leon and Jose Mejia Hernandez, who allegedly killed him with machetes and knives, dismembered his body and buried him in a wooded area.

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

This case was investigated as part of the ongoing efforts by the OCDETF, a partnership that brings together the combined expertise of federal, state and local law enforcement agencies.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

Today’s charges 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.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in the Eastern District of New York.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders and assaults.  Since 2009, this Office has obtained indictments charging MS-13 members with carrying out more than 70 murders in the district and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by our law enforcement partners.

The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Jonathan Siegel, Michael W. Gibaldi, Anna L. Karamigios and Sophia M. Suarez are in charge of the prosecution, with the assistance of Paralegal Specialist Eleanor Jaffe-Pachuilo.

New Defendant:

HUGO DIAZ AMAYA (also known as “21” and “Splinter”)
Age:  36
Kansas City, Kansas

Defendants Previously Indicted:

RAMIRO GUTIERREZ (also known as “Cara de Malo”)
Age:  31
Flushing, New York

VICTOR LOPEZ (also known as “Curioso”)
Age:  26
Flushing, New York

TITO MARTINEZ-ALVARENGA (also known as “Imprudente”)
Age:  24
Flushing, New York

ISMAEL SANTOS-NOVOA (also known as “Profe” and “Travieso”)
Age:  36
Flushing, New York

EDENILSON VELASQUEZ LARIN (also known as “Agresor,” “Saturno,” “Tiny,” “Erick” and “Paco”)
Age:  35
Thornton, Colorado

CHRISTIAN ALAS LEON (also known as “Pata de Chucho”)
Age:  26
Westbury, New York

CARLOS ALVARADO (also known as “Brayle” and “Danny”)
Age:  21
Westbury, New York

JOSE AREVALO IRAHETA (also known as “Splinter,” “Inesperado” and “Daniel”)
Age:  27
Queens, New York

JOSE ESPINOZA SANCHEZ (also known as “Cable,” “Bleca,” “Clave,” “Fantasma” and “Victor”)
Age:  25
Carrboro, North Carolina

ERICK GALDAMEZ LEON (also known as “Truco,” “Burro,” and “Chicle”)
Age:  24
Westbury, New York

JOSE GUEVARA AGUILAR (also known as “Tranquilo,” “Malhechor,” and “Angel”
Age:  25
Queens, New York

KEILA HERNANDEZ MAY
Age:  37
Carrboro, North Carolina

YONATHAN HERNANDEZ
Age:  25
Hempstead, New York

JOSE MEJIA HERNANDEZ (also known as “Mismo” and “Timbre”)
Age:  22
Westbury, New York

JOSE PEREZ OVANDO (also known as “Domino” and “Incompleto”)
Age:  24
Westbury, New York

ERICK ZAVALA HERNANDEZ (also known as “Berry,” “Berro,” and “Alex”)
Age:  26
Queens, New York

E.D.N.Y. Docket No. 20-CR-228 (S-3) (LDH)