Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced that LAMOR WHITEHEAD was sentenced today by U.S. District Judge Lorna G. Schofield to nine years in prison for wire fraud, attempted wire fraud, attempted extortion, and making false statements to federal law enforcement agents.  WHITEHEAD was previously convicted on all charges following a two-week trial.

U.S. Attorney Damian Williams said: “Lamor Whitehead is a con man who stole millions of dollars in a string of financial frauds and even stole from one of his own parishioners.  He lied to federal agents, and again to the Court at his trial.  Today’s sentence puts an end to Whitehead’s various schemes and reflects this Office’s commitment to bring accountability to those who abuse their positions of trust.”

According to the allegations in the Indictment and the evidence at trial:

WHITEHEAD, who leads a church in Brooklyn, New York, stole from his own parishioners, sought to defraud and extort a businessman, and committed loan fraud.  First, WHITEHEAD induced one of his parishioners to invest approximately $90,000 of her retirement savings with him by promising to use the money to help her buy a home.  He then spent the money on luxury goods and other personal expenses and, when she demanded to be paid back, he continued to lie to avoid returning the money.  Second, WHITEHEAD extorted a businessman for $5,000, then attempted to convince the same businessman to lend him $500,000 and give him a stake in certain real estate transactions in return for favorable actions from the Mayor of New York City, even though WHITEHEAD knew he could not obtain the favors he promised.  Third, WHITEHEAD submitted a fraudulent application for a $250,000 business loan, including doctored bank statements that falsely claimed WHITEHEAD had millions of dollars in the bank and hundreds of thousands of dollars in monthly revenue.  He submitted similar fraudulent applications to various other financial institutions, stealing millions of dollars in the process.  Finally, when speaking with FBI agents who were executing a search warrant outside WHITEHEAD’s mansion in New Jersey, WHITEHEAD falsely claimed that he had no cellphones other than the phone he was carrying when, in fact, WHITEHEAD had and regularly used a second cellphone, which was inside his house at the time.

*                *                *

In addition to the prison term, WHITEHEAD, 45, of Paramus, New Jersey, was sentenced to three years of supervised release and ordered to pay $85,000 in restitution and forfeit $95,000.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation. 

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Jessica Greenwood, Jane Kim, and Derek Wikstrom are in charge of the prosecution.

An Indian national was extradited to the United States from the Czech Republic to face murder-for-hire charges.

Nikhil Gupta, also known as Nick, 53, an Indian national, was arrested and detained in the Czech Republic on June 30, 2023, and extradited pursuant to the bilateral extradition treaty between the United States and the Czech Republic. Gupta arrived in the United States on June 14 and was presented on the charges today.

“This extradition makes clear that the Justice Department will not tolerate attempts to silence or harm American citizens,” said Attorney General Merrick B. Garland. “Nikhil Gupta will now face justice in an American courtroom for his involvement in an alleged plot, directed by an employee of the Indian government, to target and assassinate a U.S. citizen for his support of the Sikh separatist movement in India. I am grateful to the Department’s agents who foiled this assassination plot and to our Czech partners for their assistance in this arrest and extradition.”

“This murder-for-hire plot — allegedly orchestrated by an Indian government employee to kill a U.S. citizen in New York City — was a brazen attempt to silence a political activist for exercising a quintessential American right: his freedom of speech,” said Deputy Attorney General Lisa Monaco. “The extradition of the defendant is a vital step toward justice, and I am grateful to our Czech partners for their assistance in this matter. We will continue working relentlessly to identify, disrupt, and hold accountable those who seek to harm American citizens here or abroad.”

“This defendant has been extradited for his alleged role in a plot to assassinate a U.S. citizen on American soil,” said Director Christopher Wray of the FBI. “The FBI will not tolerate attempts by foreign nationals, or anyone else for that matter, to repress constitutionally-protected freedoms in the United States. We will continue to work with our partners at home and abroad to protect our citizens and these sacred rights.”

“As alleged, the defendant conspired from India with an Indian government employee to in an unsuccessful assassination plot, right here in New York City, against a U.S. citizen of Indian origin,” said U.S. Attorney Damian Williams for the Southern District of New York. “Today’s extradition makes clear our unwavering resolve to investigate, thwart, and prosecute those who seek to harm and silence U.S. citizens here and elsewhere. We thank our Czech government counterparts for their close cooperation in this extradition.”

“Last year, the DEA uncovered an assassination plot orchestrated by an Indian government employee and Nikhil Gupta, an international narcotics trafficker. Gupta is alleged to have orchestrated a dangerous plot to murder a U.S. citizen on U.S. soil. DEA’s number one priority is always the health and safety of the American people,” said DEA Administrator Anne Milgram. “This extradition is the result of the hard work and commitment of the DEA New York Division’s Drug Enforcement Task Force, which is comprised of DEA, the New York State Police, and the New York City Police Department. This case is also a testament to the partnerships DEA has built with our law enforcement partners around the globe, like the Czech Republic’s National Drug Headquarters, as well as our federal law enforcement partners here at home.” 

According to court documents, last year, an Indian government employee (CC-1) worked together with Gupta and others in India and elsewhere to direct an assassination plot against an attorney and political activist, who is a U.S. citizen of Indian origin, on U.S. soil.

Gupta is an Indian national who resides in India, is an associate of CC-1, and has described his involvement in international narcotics and weapons trafficking in his communications with CC-1 and others. CC-1 is an Indian government agency employee who has variously described himself as a “senior field officer” with responsibilities in “security management” and “intelligence” and has referenced previously serving in India’s Central Reserve Police Force and receiving “officer [] training” in “battle craft” and “weapons.” CC-1 directed the assassination plot from India.

In or about May 2023, CC-1 recruited Gupta to orchestrate the assassination of the victim in the U.S. The victim is a vocal critic of the Indian government and leads a U.S.-based organization that advocates for the secession of Punjab, a state in northern India that is home to a large population of Sikhs, an ethnoreligious minority group in India. The victim has publicly called for some or all of Punjab to secede from India and establish a Sikh sovereign state called Khalistan, and the Indian government has banned the victim and his separatist organization from India.

At CC-1’s direction, Gupta contacted an individual whom Gupta believed to be a criminal associate but was in fact a confidential source working with the DEA (the CS) for assistance in contracting a hitman to murder the victim in New York City. The CS introduced Gupta to a purported hitman, who was in fact a DEA undercover officer (the UC). CC-1 subsequently agreed, in dealings brokered by Gupta, to pay the UC $100,000 to murder the victim. On or about June 9, 2023, CC-1 and Gupta arranged for an associate to deliver $15,000 in cash to the UC as an advance payment for the murder. CC-1’s associate then delivered the $15,000 to the UC in Manhattan.

In or about June 2023, in furtherance of the assassination plot, CC-1 provided Gupta with personal information about the victim, including the victim’s home address, phone numbers associated with the victim and details about the victim’s day-to-day conduct, which Gupta then passed to the UC. CC-1 directed Gupta to provide regular updates on the progress of the assassination plot, which Gupta accomplished by forwarding to CC-1, among other things, surveillance photographs of the victim. Gupta directed the UC to carry out the murder as soon as possible, but Gupta also specifically instructed the UC not to commit the murder around the time of anticipated engagements scheduled to occur in the ensuing weeks between high-level U.S. and Indian government officials.

On or about June 18, 2023, masked gunmen murdered Hardeep Singh Nijjar outside a Sikh temple in British Columbia, Canada. Nijjar was an associate of the victim, and like the victim, was a leader of the Sikh separatist movement and an outspoken critic of the Indian government. On or about June 19, 2023, the day after the Nijjar murder, Gupta told the UC that Nijjar “was also the target” and “we have so many targets.” Gupta added that, in light of Nijjar’s murder, there was “now no need to wait” on killing the victim. On or about June 20, 2023, CC-1 sent Gupta a news article about the victim and messaged Gupta, “[i]t’s [a] priority now.”

Gupta is charged with murder-for-hire and conspiracy to commit murder-for-hire. If convicted, he faces a maximum sentence of 10 years in prison for each charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI and DEA are investigating the case.

The Justice Department’s Office of International Affairs worked with Czech authorities to secure the arrest and extradition of Gupta.

Trial Attorneys Christopher Cook and Robert McCullers of the National Security Division’s Counterintelligence and Export Control Section, Trial Attorney A.J. Dixon of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorneys Camille L. Fletcher, Ashley C. Nicolas and Alexander Li for the Southern 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.

Damian Williams, the United States Attorney for the Southern District of New York, announced that LAURA PERRYMAN was sentenced today to six years in prison in connection with a health care fraud scheme whereby PERRYMAN created and sold a fake medical device component and told doctors that they could claim approximately $18,000 for implanting the fake component into patients.  The device was sold by Stimwave, a medical device company of which the defendant was the founder, and, at the time of the offense, Chief Executive Officer.  Stimwave previously entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Southern District of New York.  PERRYMAN was found guilty of heath care fraud and conspiracy to commit health care fraud and wire fraud following a two-week trial before U.S. District Judge Denise L. Cote, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Laura Perryman callously created a dummy medical device component and told doctors to implant it into patients.  She did this out of greed, so doctors could bill Medicare and private insurance companies approximately $18,000 for each implantation of that dummy component and so she could entice doctors to buy her device for many thousands of dollars.  Perryman breached the trust of the doctors who bought her medical device, and more importantly, the patients who were implanted with that piece of plastic.  This prosecution and today’s sentence are part of this Office’s ongoing work in combating fraud in the health care system and protecting patients from being exploited for money.”

According to the allegations in the Indictment and the evidence at trial:

Stimwave was a medical device company that manufactured and distributed implantable neurostimulation devices.  As the founder and CEO of Stimwave, PERRYMAN oversaw the design of the StimQ PNS System (the “Device”), a neurostimulator system designed to treat chronic pain by providing electrical currents to peripheral nerves.  The Device included a component containing electrodes (the “Lead”) and a receiver component that acted as an antenna, transmitting energy from an external power source to the Lead (the “Pink Stylet”).  From at least in or about 2017 up to and including 2020, PERRYMAN, as Stimwave’s CEO, engaged in a multi-year scheme (the “Scheme”) to design, create, manufacture, and market an inert, non-functioning component of the Device — called the “White Stylet.”  The White Stylet was marketed as a receiver of radiofrequency energy, but it was made of plastic and could not function as a receiver.

Stimwave sold the Device to doctors and medical providers for approximately $16,000.  PERRYMAN instructed health care providers to bill medical insurance providers, including Medicare, for implanting the Device into patients through two separate reimbursement codes.  One code was for implantation of the stimulator portion of the Lead, and a second was for implantation of a receiver.  The billing code for implanting the Lead provided for reimbursement at a rate of between approximately $4,000 and $6,000, while the billing code for implanting a receiver provided for reimbursement at a rate of between approximately $16,000 and $18,000.

Soon after the Device was released, physicians informed Stimwave that they were having trouble implanting the Pink Stylet in certain patients because the Pink Stylet was too long.  PERRYMAN knew that the Pink Stylet could not be cut or trimmed to shorten it without interfering with the functionality of the Pink Stylet as a receiver.  And, without a receiver component for doctors to implant and seek reimbursement for, doctors would incur a substantial financial loss with every purchase of the Device, thereby making it more difficult for PERRYMAN to sell the Device to doctors and medical providers at the approximately $16,000 price.

However, Stimwave — at the direction of PERRYMAN — did not lower the price of the Device so that its cost to doctors and medical providers could be covered by reimbursement for the implantation of only the Lead.  Nor did PERRYMAN recommend that doctors not implant the Device or its receiver component in cases where the Pink Stylet could not fit comfortably.  Instead, PERRYMAN directed that Stimwave create the White Stylet — a dummy component made entirely of plastic, but which PERRYMAN misrepresented to doctors as a receiver alternative to the Pink Stylet.  The White Stylet could be cut to size by the doctor for use in smaller anatomical spaces and was created solely so that doctors and medical providers would continue to purchase the Device for use in those scenarios and continue to bill for the implantation of a receiver component.  To perpetuate the lie that the White Stylet was functional, PERRYMAN oversaw trainings for doctors that indicated the White Stylet was a “receiver,” when in fact it was made entirely of plastic, contained no copper, and therefore had no conductivity.  In addition, PERRYMAN directed other Stimwave employees to vouch for the efficacy of the White Stylet as a receiver, when she knew that the White Stylet could not function as a receiver.

As a result of these misrepresentations regarding the functionality of the White Stylet, PERRYMAN caused doctors and medical providers to implant the White Stylet into patients and submit reimbursement claims for implantation of the White Stylet to health insurance providers, including Medicare.

*                *                *

In addition to the prison term, PERRYMAN, 55, of Delray Beach, Florida, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation for its assistance in this matter.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Jacob Bergman, Mónica Folch, Steven Kochevar, and Kimberly Ravener, with the assistance of Paralegal Specialists Joseph Carbone and Julia Gutierrez, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Elysia Doherty, Assistant Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that the United States has filed a Complaint against LABQ CLINICAL DIAGNOSTICS, LLC (“LABQ”); COMMUNITY MOBILE TESTING, INC. (“CMT”); DART MEDICAL LABORATORY, INC. (“DART MEDICAL”); and their CEO, MOSHE LANDAU (collectively, the “Defendants”), alleging that the Defendants fraudulently billed the federal program that reimbursed health care providers for COVID-19 testing provided to uninsured persons (the “Uninsured Program”).  The lawsuit seeks damages and civil penalties under the False Claims Act as well as a recovery of government funds under the common law. 

Prior to seeking reimbursement for COVID-19 testing services from the Uninsured Program, testing providers were required to attest to the Health Services and Resources Administration (“HRSA”), a component agency within the U.S. Department of Health and Human Services (“HHS”), that they had confirmed their patients were uninsured and that no one else would pay for the cost of the COVID-19 testing.  However, as alleged in the Complaint, the Defendants frequently knowingly submitted, or caused to be submitted, claims to the Uninsured Program for COVID-19 testing in instances when the cost of the COVID-19 testing had been (or would be) reimbursed by another source and/or the COVID-19 testing had been provided to persons who had health coverage on the relevant date of the service.  The Complaint alleges that the Defendants’ fraudulent scheme drained limited funds appropriated by Congress to cover COVID-19 testing costs for uninsured persons.

U.S. Attorney Damian Williams said: “As alleged, LabQ, CMT, Dart Medical, and their CEO, Moshe Landau, fraudulently took tens of millions of dollars from the Uninsured Program for the testing of individuals with health care coverage, and thereby depleted the funds that Congress authorized for the testing of uninsured individuals who truly needed the federal assistance.  This Office will hold accountable those who divert federal funds designed to provide critical medical care to the uninsured population of this city and nation in order to line their own pockets.” 

HHS-OIG Assistant Special Agent in Charge Elysia Doherty said: “It is alleged in this case that the defendants knowingly sought reimbursements from federal funds available during the COVID-19 pandemic to which they were not entitled.  We will continue to work with our law enforcement partners to seek resolutions and effect change to preserve the integrity of the federal health care system.”

FBI Assistant Director in Charge James Smith said: “Moshe Landau, the CEO of various COVID-19 testing companies, allegedly defrauded a federal healthcare program by submitting illegitimate claims to receive unlawful reimbursements.  Collecting tens of millions of dollars in reimbursements, Landau and his companies allegedly took advantage of a government initiative that provided support and assistance to healthcare providers during a global pandemic.  The FBI is committed to ensuring that people like Landau are rightfully held accountable for their knowing attempts to deceive the government for personal gain, and for exploiting programs designed to serve vulnerable citizens.”

The following allegations are based on the Complaint filed in Manhattan federal court on June 13, 2024: 

During the COVID-19 pandemic, LABQ provided COVID-19 testing for school districts and nursing homes, as well as to walk-up patients at numerous LABQ-branded vans and tents located on public streets in New York City.  LABQ and DART MEDICAL received approximately $130 million from the Uninsured Program for COVID-19 Testing.  In direct contravention of their promises and attestations to HRSA, however, the Defendants frequently submitted, or caused to be submitted, ineligible and fraudulent claims to the Uninsured Program for COVID-19 testing in instances when the cost of the COVID-19 testing had been (or would be) reimbursed by another source and/or the COVID-19 testing had been provided to persons who had health coverage on the relevant date of the service.

More specifically, the Defendants engaged in the following schemes: LABQ, DART MEDICAL, and LANDAU double-billed the Uninsured Program and other health care programs and private institutions for the same COVID-19 testing; LABQ and CMT employees frequently told patients and customers, in sum and substance, that LABQ did not need insurance information and, in instances when LABQ possessed patient insurance information, LABQ, DART MEDICAL, and LANDAU often submitted claims (or caused claims to be submitted) to the Uninsured Program for those patients; and in clear violation of the Uninsured Program’s Terms and Conditions, LABQ, LANDAU, and DART MEDICAL, as a matter of policy, sought reimbursement (or caused others to seek reimbursement) from the Uninsured Program for COVID-19 tests provided to people with health care coverage in instances where LABQ, LANDAU, and DART MEDICAL believed that the patient’s insurer might deny LABQ or DART MEDICAL’s claim for reimbursement.

As a result of the Defendants’ fraudulent conduct, the Uninsured Program paid tens of millions of dollars to LABQ and DART MEDICAL to which they were not entitled.  Further, at LANDAU’s direction, LABQ, CMT, and DART MEDICAL disbursed a significant portion of these funds to LANDAU’s personal bank accounts.

Through these practices, the Defendants improperly obtained tens of millions of dollars from the Uninsured Program in violation of both the False Claims Act and the common law.

*                *                *

The Government intervened, in part, in two whistleblower lawsuits before U.S. District Judge Lewis J. Liman that had previously been filed under seal pursuant to the False Claims Act.

Mr. Williams thanked HHS-OIG, the FBI, HHS, and HRSA for their assistance with the case.

The case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorneys Zack Bannon, Lawrence H. Fogelman, Charles S. Jacob, and Danielle J. Marryshow are in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, announced that MUKHIDDIN KADIROV was sentenced today to 30 months in prison for his involvement in a conspiracy to launder millions of dollars from a health care fraud scheme that primarily targeted the Medicare and Medicaid programs.  KADIROV controlled three shell company bank accounts, opened in the name of another person, that he used to launder over $6 million in health care fraud proceeds, including over $4 million for his co-defendant NERIK ILYAYEV.  KADIROV previously pled guilty to one count of conspiracy to commit concealment money laundering before U.S. District Judge Gregory H. Woods, who imposed today’s sentence.  

U.S. Attorney Damian Williams said: “Mukhiddin Kadirov participated in a complex international money laundering network to launder millions of dollars fraudulently obtained from Medicare and Medicaid, as well as from other insurers.  Kadirov abused our financial system by providing false information to banks to use shell company bank accounts to launder millions in fraud proceeds.  This prosecution and today’s sentence are part of my Office’s ongoing work to take down complex money laundering networks and safeguard the integrity of our financial systems.” 

According to the Complaint, the Information, court filings, and public court proceedings:

From approximately March 2021 through the spring of 2022, KADIROV participated in a sophisticated money laundering network that primarily launders health care fraud proceeds (the “Money Laundering Network”).  Members of the Money Laundering Network typically deposit checks from health care companies that represent health care fraud proceeds into New York-based bank accounts held by shell companies.  The conspirators controlling the shell companies collect cash typically from U.S.-based individuals who want to remit funds, often to Uzbekistan, through unlicensed channels.  The conspirators controlling the shell companies then provide that cash, minus a fee, to the conspirators providing the health care checks.  The conspirators controlling the shell companies next typically wire the check deposit proceeds from the shell companies to foreign companies to purchase goods from those foreign companies.  The foreign companies ship the goods to importers in Uzbekistan.  The importers pay the Uzbekistan-based partners of the conspirators operating the shell companies in U.S. currency for the goods.  Those Uzbekistan-based partners would then give the U.S. currency to the families and friends of the individuals who had provided the cash to the conspirators controlling the shell companies in New York.

As part of his participation in the Money Laundering Network, KADIROV controlled three business bank accounts held in the names of three different shell companies that were purportedly wholesale companies (the “Shell Company Accounts”).  KADIROV used the Shell Company Accounts to launder approximately $4.2 million from a pharmacy in Manhattan (“Pharmacy-1”) controlled by ILYAYEV that was engaged in a scheme to defraud Medicare and Medicaid by submitting fraudulent billing for expensive HIV medications.  Between March 2021 and April 2022, approximately $6.9 million flowed through KADIROV’s Shell Company Accounts, which included not only the fraud proceeds from Pharmacy-1 but also deposits from other pharmacies and health care companies.

KADIROV took significant steps to conceal his role in the money laundering scheme.  KADIROV used the identity of another person who was no longer in the United States to control the Shell Company Accounts.  When using ATM machines to access the Shell Company Accounts, KADIROV covered his face to obscure his face on bank surveillance video and wore latex gloves to prevent leaving fingerprints.  KADIROV also used a burner phone subscribed using a fake name and email address to access the Shell Company Accounts and to call the banks regarding the Shell Company Accounts.

KADIROV conducted his money laundering scheme consistent with the typical practices of the Money Laundering Network, using the Shell Company Accounts to engage in check cashing and unlicensed money transmitting.  The three Shell Companies KADIROV used to conduct the money laundering all had either “Wholesale” or “Supply” in their names to give the false impression to banks and law enforcement that the Shell Companies were medical supply companies to disguise the true nature of the transactions between Pharmacy-1 and the Shell Companies.  KADIROV’s Shell Company Accounts were funded virtually entirely by check deposits from Pharmacy-1 and other pharmacies.  Moreover, consistent with the practices of the Money Laundering Network, KADIROV wired virtually all the funds that flowed through the Shell Company Accounts abroad to companies in China, Ukraine, and Russia.

KADIROV stopped operating the Shell Company Accounts by the spring of 2022, soon after Pharmacy-1 closed in March 2022 after another member of the Money Laundering Network who attempted to launder fraud proceeds from Pharmacy-1 was arrested.  KADIROV nevertheless continued to facilitate ILYAYEV’s money laundering.  After closing Pharmacy-1, ILYAYEV, using the identity of another person, continued to operate another pharmacy, which he used to defraud No Fault insurance providers of over $1.2 million and to unlawfully sell medications obtained from illegitimate sources, for which the pharmacy received over $900,000 in proceeds.  ILYAYEV also used that stolen identity to open multiple corporate bank accounts for the pharmacy to receive and spend the fraud proceeds generated by the pharmacy.  KADIROV, who is also a construction contractor, used a debit card in the name of that stolen identity to buy materials for a construction project for ILYAYEV.  

*                *                *

In addition to the prison term, KADIROV, 46, of Queens, New York, was sentenced to three years of supervised release and ordered to forfeit more than $6 million.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the U.S. Department of Health and Human Services, Office of the Inspector General.  Mr. Williams also thanked the National Insurance Crime Bureau and the Investigations Medicare Drug Integrity Contractor for their assistance in the investigation.

The case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Cecilia E. Vogel and Thane Rehn are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSE LEMA, a/k/a “Jose Lema Mizhirumbay,” the founder and principal of ALJ Home Improvement, Inc., a New York roofing company, was sentenced today to four months in prison by U.S. Magistrate Judge Judith C. McCarthy for willfully violating Occupational Safety and Health Administration (“OSHA”) regulations, resulting in the death of an employee (“Victim-1”) in New Square, New York, on February 8, 2022.  LEMA previously pled guilty to one count of willfully violating OSHA regulations, resulting in the death of an employee on February 26, 2024.  

U.S. Attorney Damian Williams said: “Jose Lema endangered the safety of his workers by disregarding regulations and failing to ensure his employees used fall protection systems.  This conduct led to the death of a roof worker on a construction site.  Today’s sentence should send a message to small businesses that failure to comply with safety regulations endangers workers and can lead to unnecessary and preventable tragedy, and this Office will hold you accountable.”

According to the allegations contained in the Information, court filings, and statements made during court proceedings:

On the morning of February 8, 2022, LEMA sent Victim-1 and three other ALJ employees to install a roof on a three-story multi-family apartment building under construction in New Square, New York.  LEMA failed to protect his employees from fall hazards by having them work on the roof of the building without fall protection.  After ascending a ladder to the roof, Victim-1 fell to the ground and died from his injuries.

Victim-1’s deadly fall was not the first time an employee of LEMA and ALJ fell to his death at one of ALJ’s worksites or that ALJ employees were exposed to fall hazards.  The first fatal fall, on February 27, 2019, involved an ALJ employee who slipped off the roof of a newly constructed three-story home in Kiamesha Lake, New York.  During the time between the two employees’ deaths, OSHA investigated and issued numerous citations to ALJ relating to six other ALJ worksites for failure to ensure employees were using fall protection systems.  Even after Victim-1’s death, OSHA investigated yet another ALJ worksite and issued citations to ALJ for failing to ensure employees were using fall protection.  

In imposing LEMA’s sentence, Judge McCarthy observed that Victim-1’s death was “avoidable” and noted LEMA’s repeated failures to comply with fall protection regulations after the first ALJ employee’s death from falling from a roof.

*                *                *

In addition to the prison term, LEMA, 41, of Nanuet, New York, was sentenced to one year of supervised release.

Mr. Williams praised the outstanding work of OSHA; the Department of Labor, Office of the Inspector General; and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York.           

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Margery Feinzig is in charge of the prosecution.  

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today a Complaint charging DEREK HASSELBRINK, a/k/a “Derek Spear,” with enticing a minor to engage in unlawful sexual activity and committing this offense while being required to register as a sex offender.  HASSELBRINK was arrested this morning and was presented in federal court in the Central District of Illinois before U.S. Magistrate Judge Karen L. McNaught.

U.S. Attorney Damian Williams said: “As alleged, Derek Hasselbrink, a 48-year-old convicted sex offender, pretended to be a 17-year-old boy online in an effort to coerce and entice a 15-year-old girl to engage in sexual activity.  Hasselbrink allegedly knew that his victim was a minor, so he lied about his own age and took other measures to hide his unlawful intent.  This Office will continue to relentlessly pursue predators who sexually exploit children, whether online or in person.” 

FBI Assistant Director in Charge James Smith said: “Those who prey upon the innocence of children represent the dark and twisted side of the criminal underworld.  Derek Hasselbrink - having failed to register as a previously convicted sex offender - allegedly seduced and coerced a minor female to participate in illicit sexual activity through lewd and horrifyingly explicit messages.  Today's arrest emphasizes the FBI's intrepid vigilance to protecting one of our most vulnerable populations, especially from those who seek to exploit and harm them for perverse gratification.”

According to allegations contained in the Complaint:[1]  

From at least in or about April 2023 up to on or about July 2, 2023, HASSELBRINK, a 48-year-old male who was a convicted sex offender, engaged in sexually explicit message conversations with a 15-year-old girl (“Victim-1”) and traveled to meet Victim-1 near her home in Dutchess County, New York, to engage in sexual activity.

Any individuals with information concerning DEREK HASSELBRINK, a/k/a “Derek Spear,” or whose child may have had any communications with HASSELBRINK, are asked to contact the FBI at 1-800-CALL-FBI (225-5324) or https://tips.fbi.gov.

*                *                *

HASSELBRINK, 48, of Quincy, Illinois, is charged with one count of enticing a minor to engage in unlawful sexual activity, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and one count of engaging in this offense while being required to register as a sex offender, which carries a mandatory minimum sentence of 10 years in prison, which must run consecutively to any other sentence imposed. 

The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the investigative work of the FBI; the Dutchess County Sheriff’s Office; the Quincy, Illinois Police Department; the Adams County States Attorney’s Office; the Office of the Attorney General of Kentucky; the Springfield, Illinois Field Office of the FBI; and the Cleveland Division of the FBI, Canton Resident Agency’s Child Exploitation Task Force.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Marcia Cohen and Kingdar Prussien are in charge of the prosecution.

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

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, דער US אדוואקאט פאר דער דרום דיסטריקט פון ניו יארק, און Kristen Clarke, די אסיסטענט גענעראל פראקוראר פון דער יוסטיץ דעפארטמענט'ס בירגעררעכט דיוויזיע, האבן היינט געמאלדן אז די US האט זיך ארייגעלאזט אין אן אפמאך-מעמאראנדום ("MOU") מיט דער ניו יארק סטעיט פאראייניגטע געריכט סיסטעם, אפיס פון געריכט אדמיניסטראציע ("OCA"), צו לייזן דער איבערקוק פון דער ראקלענד קאונטי דראג באהאנדלונג געריכטס אויספאלג פון טיטל VI פון דער בירגערגעריכט אקט פון 1964, וואס פארבאט דיסקרימינאציע אויפן גרונט פון ראסע, פארב, און נאציאנאלע אפשטאם קעגן באקומערס פון פעדעראלע פינאנציעלע הילף.  פארבאטענע דיסקרימינאציע קען כולל זיין פארפעלן צו צושטעלן באדײטפולע שפראך צוטריט. 

  US אדוואקאטDamian Williams   האט געזאגט: "מיטגלידער פון דער קאמיוניטי זאלן נישט ווערן אפגעזאגט באדײטפולע צוטריט צום געריכט פראצעס און פראגראמען וואס באטן אָן אלטערנאטיווען צו טרעדיציאנעלע אורטייל צוליב זייער באגרענעצטע קענטשאפט פון ענגליש.  מיר דאנקען דעם ראקלענד קאונטי דיסטריקט אדוואקאטס אפיס און OCA פאר מיטארבעטן מיט אונדז צו פארזיכערן אז די ראקלענד קאונטי דראג באהאנדלונג געריכט איז גרייט פאר אלע בארעכטיגטע באטייליגערס, און מיר האפן אז דער אפמאך-מעמאראנדום וועט דינען אלץ א מאדעל פאר אלע געריכטן אין דעם דיסטריקט צו פארזיכערן באדײטפולע צוטריט צו מענטשן מיט באגרענעצטע קענטשאפט פון ענגליש, אין צושטימונג מיט טיטל VI."

אסיסטענט גענעראל פראקוראר Kristen Clarke האט געזאגט: "פארזיכערן גלייכע יוסטיץ לויטן געזעץ מיינט דאס צו טאן אויף א יושרדיגן אופן, גענױ, און פארשטענדליך פאר אלעמען, אבער דאס געשעט נישט נאר אז מענטשן וואס געפונען זיך אין דער געריכט פראצעס קענען קאמוניקירן איינער מיטן אנדערן.  מענטשן זאלן נישט געשטראפט ווערן צוליב זייער באגרענעצטע קענטשאפט פון ענגליש און זאלן באקומען די שפראך הילף סערוויסעס וואס זיי נייטיגן זיך, צו קענען זיך באטייליגן יושרדיג אין געריכט פראצעדורן און געריכט באפוילענע טרענירונג אדער היילונג פראגראמען.  דער הסכם שטייט אלץ א מאדעל צו פארזיכערן צוטריט צום געריכט, אריינגערעכנט געריכטליכע פראגראמען און סערוויסעס, פאר אלע מענטשן, נישט קוקנדיג אויף זייער קענטשאפט פון ענגליש, און צייכנט אן די אקציעס וואס נייטיגן זיך כדי אוועקצונעמען די פארשטעלעכצער פאר געריכט נוצערס מיט באגרענעצטע קענטשאפט פון ענגליש.

לויט די MOU און פובליק איינגעבנס און דעקלעראציעס:

אין יאנואר 2023, האט דער אפיס איבערגעקוקט א קאמפלעינט וואס טענה'ט אז מענטשן מיט באגרענעצטע קענטשאפט פון ענגליש ("LEP") קענען זיך נישט אינגאנצן באטייליגן אין דער ראקלענד קאונטי דראג באהאנדלונג געריכט ווייל דער געריכט האט נישט צוגעשטעלט קײן איבעזעץ און אויסטייטש סערוויסעס.  באלד דערנאך, האט OCA זיך ארייגעמישט אין דעם צוטריט צו די שפראך פראצעדורן פאר דער ראקלענד קאונטי דראג באהאנדלונג געריכט און סוף כל סוף האט איבערגענומען די פאראנטווארליכקייט פארן געריכט אין מארץ 2024.  דער אפיס, בשותפות מיט דער בירגעררעכט דיוויזיע, האט געארבעט מיט דער OCA און די ראקלענד קאונטי דיסטריקט אדוואקאטס אפיס, וואס האט אנגעפירט דעם דראג באהאנדלוג געריכט פאר מארץ 2024, צו אידענטיפיצרן נייטיגע רעפארמען צו פארזיכערן אז אלע LEP מענטשן וואס קוואליפיצירן זיך צו באטייליגן אין דעם דראג באהאנדלונג געריכט זאלן האבן באדײטפולע צוטריט צו שפראכן.  

בשעת'ן איבערקוקן דעם ענין, האט דער ראקלענד קאונטי דיסטריקט אדוואקאטס אפיס און OCA אנגענומען עטליכע פירמאטיווע טריט צו צושטעלן באדײטפולע צוטריט פאר געריכט באטייליגערס מיט LEP, ארײנגערעכנט זיך אונטערנעמען צו צושטעלן אויסטייטש סערוויסעס פאר אלע געריכט פראצעדורן, זיך פארבונדן מיט ראקלענד קאונטי דראג באהאנדלונג געריכט פאראינטערעסירטע צדדים, און אידנטיפיצירן א לאקאלע היילונג פראוויידער צו צושטעלן גערוכט-באפוילענע היילוג סערוויסעס אין שפאניש.

לויטן MOU, וועט די OCA אננעמען נאך שריט צו פארזיכערן באדײטפולע צוטריט פאר LEP באטייליגערס אין דער ראקלענד קאונטי דראג באהאנדלונג געריכט.  די שריט זענען כולל איבערזעצן אלע דאקומענטן צו שפאניש, קרעאל, און אידיש, און נאך אנדערע שפראכן אויב פארלאנגט, מפרסם זיין די דראג באהאנדלונג געריכט פראגראם אין די צוגעגעבענע שפראכן, און פארזיכערן היילונג פרוויידערס וואס וועלן אנבאטן געריכט-באפוילענע דראג היילונג פראגראמען אויף אן אופן וואס שטעלט צו באדײטפולע צוטריט צו מענטשן מיט LEP, אומזיסט צו באטייליגערס.  

אינפארמאציע וועגן טיטל VI און באגרענעצטע קענטשאפט פון ענגליש איז דא צו באקומען אויף www.lep.gov.  מיטגלידער פון דער פובליק קענען באריכטעווען מעגליכע בירגעררעכט פארברעכנס אין דער דרום דיסטריקט פון ניו יארק אויף https://www.justice.gov/usao-sdny/civil-rights אדער מיט דער דעפארטמענט פון יוסטיץ'ס בירגעררעכט דיוויזיע אויף www.civilrights.justice.gov/report/.

*                *                *

Mr. Williams האט באדאנקט די בירגעררעכט דיוויזיע, פעדעראלע קאארדינאציע און אויספיר אפטייל, פאר זייער מיטארבעטן צו לייזן דעם ענין. 

דער קעיס ווערט באהאנדלט דורך דער אפיס פון בירגעררעכט טייל אין דער ציווילע דיוויזיע.  אסיסטאנט US אדוואקאט Christine S. Poscablo איז דער ממונה אויף דער קעיס.

Damian Williams, the United States Attorney for the Southern District of New York, and Kristen Clarke, the Assistant Attorney General of the Justice Department’s Civil Rights Division, announced today that the United States entered into a Memorandum of Understanding (“MOU”) with the New York State Unified Court System, Office of Court Administration (“OCA”) resolving its review of the Rockland County Drug Treatment Court’s compliance with Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, and national origin by recipients of federal financial assistance.  Prohibited discrimination may include a failure to provide meaningful language access. 

U.S. Attorney Damian Williams said: “Members of the community should not be denied meaningful access to court proceedings and programs offering alternatives to traditional sentencing because of their limited English proficiency.  We thank the Rockland County District Attorney’s Office and OCA for working with us to ensure that the Rockland County Drug Treatment Court is available to all eligible participants, and we hope that this Memorandum of Understanding can serve as a model for all courts in this district to ensure meaningful access to persons with limited English proficiency, in compliance with Title VI.”

Assistant Attorney General Kristen Clarke said: “Ensuring equal justice under law means doing so in a manner that is fair, accurate and understandable for all, but that does not happen unless people involved in the judicial process can communicate with each other.  People should not be penalized for their limited English proficiency and should receive the language assistance services they need to fairly participate in court proceedings and court-mandated trainings or treatment programs.  This agreement stands as a model for ensuring access to the courts, including its programs and services, for all people, regardless of English proficiency, and outlines the actions needed to eliminate barriers for court users with limited English proficiency.”

According to the MOU and public filings and statements:

In January 2023, this Office reviewed a complaint alleging that people with limited English proficiency (“LEP”) could not participate fully in the Rockland County Drug Treatment Court because the Court did not provide translation and interpretation services.  Shortly thereafter, OCA became involved in the language access procedures for the Rockland County Drug Treatment Court and ultimately assumed responsibility for the Court in March 2024.  This Office, in collaboration with the Civil Rights Division, worked with OCA and the Rockland County District Attorney’s Office, which operated the Drug Treatment Court prior to March 2024, to identify reforms necessary to ensure that all LEP individuals qualified to participate in the Drug Treatment Court had meaningful language access. 

During the review of this matter, the Rockland County District Attorney’s Office and OCA took several affirmative steps to provide meaningful access for Court participants with LEP, including committing to provide interpreter services for all court proceedings, conducting outreach to Rockland County Drug Treatment Court stakeholders, and identifying a local treatment provider to provide court-mandated treatment services in Spanish.

Under the MOU, OCA will take a number of additional steps to ensure meaningful access for LEP participants in the Rockland County Drug Treatment Court.  These steps include translating all documents into Spanish, Creole, and Yiddish, and into other languages upon request, publicizing the Drug Treatment Court program in these additional languages, and securing treatment providers that will offer court-mandated drug treatment programs in a manner that provides meaningful access to people with LEP, at no cost to participants.

Information about Title VI and limited English proficiency is available at www.lep.gov.  Members of the public may report possible civil rights violations in the Southern District of New York at https://www.justice.gov/usao-sdny/civil-rights or with the Department of Justice’s Civil Rights Division at www.civilrights.justice.gov/report/.

*                *                *

Mr. Williams thanked the Civil Rights Division, Federal Coordination and Compliance Section, for its collaboration in resolving this matter. 

This case is being handled by the Office’s Civil Rights Unit in the Civil Division.  Assistant U.S. Attorney Christine S. Poscablo is in charge of the case.

Damian Williams, el Fiscal Federal del Distrito Sur de Nueva York y Kristen Clarke, la Fiscal General Adjunta de la División de Derechos Civiles del Departamento de Justicia, anunciaron hoy que los Estados Unidos firmó un Memorando de Entendimiento (“MOU”) con la Oficina de Administración Judicial (“OCA”) del Sistema Judicial Unificado del Estado de Nueva York, la cual soluciona su revisión del cumplimiento del Tribunal de Tratamiento de Drogas del Condado de Rockland con el Título VI de la Ley de Derechos Civiles de 1964 , que prohíbe la discriminación por motivos de raza, color y origen nacional por parte de los beneficiarios de asistencia financiera federal. La discriminación que se prohibe puede incluir el no proporcionar un acceso sustancial al idioma.

El Fiscal Federal Damian Williams dijo: “A los miembros de la comunidad no se les debe negar un acceso sustancial a los procedimientos judiciales y a los programas que ofrecen alternativas a las penas tradicionales debido a su dominio limitado del inglés. Agradecemos a la Oficina del Fiscal de Distrito del Condado de Rockland y a la OCA por cooperar con nosotros para garantizar que el Tribunal de Tratamiento de Drogas del Condado de Rockland esté a la disposición de todos los participantes elegibles, y esperamos que este Memorando de Entendimiento pueda servir como modelo para que todos los tribunales de este distrito garanticen un acceso sustancial a personas con dominio limitado del inglés, de conformidad con el Título VI”.

La Fiscal General Adjunta Kristen Clarke dijo: “Garantizar la igualdad de justicia ante la ley significa hacerlo de una manera que sea justa, precisa y comprensible para todos, pero eso no sucede a menos que las personas involucradas en el proceso judicial puedan comunicarse entre sí. Las personas no deberían ser penalizadas por su dominio limitado del inglés y deberían recibir los servicios de asistencia lingüística que necesitan para participar de manera justa en los procedimientos judiciales y en las capacitaciones o programas de tratamiento exigidos por el tribunal. Este acuerdo es un modelo para garantizar el acceso a los tribunales, incluidos sus programas y servicios, a todas las personas, independientemente de su dominio del inglés, y describe las acciones necesarias para eliminar las barreras para los usuarios de los tribunales con un dominio limitado del inglés”.

Según el MOU y las presentaciones y declaraciones públicas:

En enero de 2023, esta Oficina analizó una queja que alegaba que las personas con dominio limitado del inglés (“LEP”) no podían participar plenamente en el Tribunal de Tratamiento de Drogas del Condado de Rockland porque el tribunal no brindaba servicios de traducción e interpretación. Poco después, la OCA se involucró en los procedimientos de acceso lingüístico para el Tribunal de Tratamiento de Drogas del Condado de Rockland y finalmente asumió la responsabilidad del Tribunal en marzo de 2024. Esta Oficina, en colaboración con la División de Derechos Civiles, trabajó con la OCA y la Oficina del Fiscal de Distrito del Condado de Rockland que operaba el Tribunal de Tratamiento de Drogas antes de marzo de 2024, para identificar las reformas necesarias para garantizar que todas las personas con dominio limitado del inglés que califican para participar en el Tribunal de Tratamiento de Drogas tuvieran acceso sustancial al idioma.

Durante la revisión de este asunto, la Oficina del Fiscal de Distrito del Condado de Rockland y la OCA tomaron varias medidas positivas para brindar acceso sustancial a los participantes del Tribunal con dominio limitado del inglés, incluido el compromiso de brindar servicios de interpretación para todos los procedimientos judiciales, realizar actividades comunitarias con las partes interesadas del Tribunal de Tratamiento de Drogas del Condado de Rockland, e identificar un proveedor de tratamiento local para brindar servicios de tratamiento ordenados por el tribunal en español.

Según el MOU, la OCA tomará una serie de medidas adicionales para garantizar un acceso sustancial a los participantes con dominio limitado del inglés al Tribunal de Tratamiento de Drogas del Condado de Rockland. Estos pasos incluyen traducir todos los documentos al español, creole y yiddish, y a otros idiomas previa solicitud, publicitar el programa del Tribunal de Tratamiento de Drogas en estos idiomas adicionales y conseguir proveedores de tratamiento que ofrezcan programas de tratamiento de drogas ordenados por el tribunal de una manera que proporcione acceso sustancial a personas con dominio limitado del inglés, sin costo para los participantes.

La información sobre el Título VI y el dominio limitado del inglés están disponibles en www.lep.gov . El público puede denunciar posibles violaciones de los derechos civiles en el Distrito Sur de Nueva York en https://www.justice.gov/usao-sdny/civil-rights o en la División de Derechos Civiles del Departamento de Justicia en www.civilrights.justice .gov/report/ .

*                *                *

El Sr. Williams agradeció a la División de Derechos Civiles, Sección de Coordinación y Cumplimiento Federal, por su colaboración para resolver este asunto.

Este caso está siendo atendido por la Unidad de Derechos Civiles de la Oficina en la División Civil. La encargada de este caso es la Fiscal Federal Adjunta Christine S. Poscablo.

View the press release in Yiddish here.

The Justice Department announced today a memorandum of understanding (MOU) with the New York State Court System, Office of Court Administration (OCA) to improve access to the Rockland County, New York, Drug Treatment Court for people with limited English proficiency (LEP). The department enforces Title VI of the Civil Rights Act of 1964 (Title VI), which prohibits discrimination on the basis of race, color and national origin by recipients of federal financial assistance. Prohibited discrimination may include a failure to provide meaningful language access.

“Ensuring equal justice under law means doing so in a manner that is fair, accurate and understandable for all, but that does not happen unless people involved in the judicial process can communicate with each other,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “People should not be penalized for their limited English proficiency and should receive the language assistance services they need to fairly participate in court proceedings and court-mandated trainings or treatment programs. This agreement stands as a model for ensuring access to the courts, including their programs and services, for all people, regardless of English proficiency, and outlines the actions needed to eliminate barriers for court users with limited English proficiency.”

“Members of the community should not be denied meaningful access to court proceedings and programs offering alternatives to traditional sentencing because of their limited English proficiency,” said U.S. Attorney Damian Williams for the Southern District of New York. “We thank the Rockland County District Attorney’s Office and OCA for working with us to ensure that the Rockland County Drug Treatment Court is available to all eligible participants, and we hope that this memorandum of understanding can serve as a model for all courts in this district to ensure meaningful access to persons with limited English proficiency, in compliance with Title VI.”

The Justice Department reviewed a complaint alleging that people with LEP could not participate fully in the Rockland County Drug Treatment Court because it did not provide meaningful language access. Shortly after this complaint, OCA became involved in the language access procedures for the Rockland County Drug Treatment Court and OCA ultimately assumed responsibility for the Court in March.

Together with the Rockland County District Attorney’s Office, which ran the Drug Treatment Court prior to March, OCA took several affirmative steps to provide meaningful access for all Rockland County Drug Treatment Court users with LEP during the department’s review of this matter. Among other actions, OCA committed to provide interpreter services for all court proceedings at no cost and conducted outreach to Rockland County Drug Treatment Court stakeholders about meaningful access for people with LEP.

Under the MOU, OCA will take a number of additional steps to ensure meaningful access for LEP participants in Rockland County Drug Treatment Court. These steps include translating all documents into Spanish, Creole and Yiddish, and into other languages by request, and securing treatment providers that will offer court-mandated drug treatment programs in a manner that provides meaningful access to people with LEP, at no additional cost to participants.

Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt. Information about limited English proficiency and Title VI is available at www.lep.gov. Members of the public may report possible civil rights violations at www.civilrights.justice.gov/report/  or with the U.S. Attorney’s Office for the Southern District of New York at www.justice.gov/usao-sdny/civil-rights.

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging ILIT RAZ, the founder and former Chief Executive Officer of Joonko Diversity, Inc. (“Joonko”), with securities fraud and wire fraud for defrauding investors and misleading them about core aspects of the company she founded, including the identity and quantity of Joonko’s customers and Joonko’s revenue.  On May 24, 2024, Joonko filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.  The case has been assigned to U.S. District Judge Alvin K. Hellerstein.

U.S. Attorney Damian Williams said: “As alleged, Ilit Raz falsely represented key aspects of her company, Joonko Diversity, Inc., and fabricated documents to support those lies in order to obtain $27 million in investments.  Raz’s now-bankrupt company allegedly left victim investors with millions of dollars in losses.  Entrepreneurs tempted to artificially inflate revenues to solicit investments should be warned that this Office keeps a watchful eye of funding rounds and will continue to protect market investors.”

FBI Assistant Director in Charge James Smith said: “Ilit Raz, the founder and former CEO of Joonko, allegedly defrauded her investors of more than $27 million by misrepresenting the esteem and scope of her clientele as well as grossly inflating the company’s revenue in forged financial statements.  To garner fiscal interest in the company's innovative concept for diverse hiring practices, the defendant’s alleged recruitment methods relied on deception and mistruths rather than transparency and honesty.  The FBI is dedicated to protecting our nation’s economic framework, especially from fraudulent schemes designed to ensnare stakeholders and pilfer their pockets.”

According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]

Joonko was a company that purported to offer an artificial intelligence-based product designed to help prospective employers identify and hire job candidates from diverse backgrounds.  To induce prospective and existing Joonko investors to invest approximately $27 million in funding rounds in 2021 and 2022, RAZ made false claims regarding central aspects of Joonko’s business, including by falsely representing how many customers Joonko had at the time and falsely representing the identity of those customers.  For example, RAZ falsely represented that Joonko’s customers included some of the world’s largest companies, including a credit card company, sports apparel brand, online travel company, and luxury fashion brand.  In truth and in fact, and as RAZ knew, these companies were never Joonko customers.  In addition to overstating the number of customers that Joonko had and the identity of those customers, RAZ also made false representations about Joonko’s actual and anticipated revenues.

After RAZ made false and misleading statements regarding Joonko’s customers and revenue, several investors who received those statements invested in a series of funding rounds with Joonko.  Specifically, on or about June 1, 2021, several investors, including venture capital firms, invested a total of approximately $10 million in a Series A round with Joonko.  On or about June 2, 2022, several investors, including venture capital firms, invested a total of approximately $17 million in a Series B round with Joonko.

In or about 2023, a Joonko investor (“Investor-1”) became suspicious about Joonko’s performance and requested certain information from Joonko, including bank statements.  In response, on or about April 3, 2023, RAZ emailed Investor-1 a purported Joonko bank statement, which depicted that the company had an average balance of over $5,000,000.  In truth and in fact, and as RAZ well knew, the bank records that RAZ emailed to Investor-1 were forged, and the actual bank records showed that Joonko’s true account balance was millions of dollars lower.  Less than a week later, on or about April 8, 2023, RAZ emailed Investor-1 a set of purported purchase orders for Joonko customers.  RAZ knew that many of the purchase orders she emailed to Investor-1 were fictitious, contained forged signatures, and were executed on behalf of purported customers that had no business relationship with Joonko.

*                *                *

RAZ, 38, an Israeli citizen, is charged with one count of securities fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of the FBI.  Mr. Williams further thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action against RAZ.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Thomas Burnett, Peter J. Davis, and Nicholas Folly are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

---

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, Pwokirè Etazini an pou Distri Sid Nouyòk la, ak Kristen Clarke, Pwokirè Jeneral Adjwen Divizyon Dwa Sivil Depatman Jistis la, te anonse jodi a Etazini te konkli yon Pwotokòl Antant (“MOU”) ak Sistèm Tribinal Inifye Eta Nouyòk la, Biwo Administrasyon Jidisyè a (“OCA”) ki rezoud analiz li sou konfòmite Tribinal pou Tretman kont Dwòg Konte Rockland la ak Tit VI Lwa 1964 sou Dwa Sivil yo, ki entèdi diskriminasyon sou baz ras, koulè, ak orijin nasyonal nan men benefisyè asistans finansye federal. Diskriminasyon ki entèdi an gendwa gen ladann yon enkapasite pou bay yon aksè lengwistik ki enpòtan.

Pwokirè Etazini an Damian Williams te di: “Yo ta dwe refize manm kominote a yon aksè enpòtan ak pwosedi jidisyè yo e ak pwogram yo ki ofri yon altènativ ak kondanasyon tradisyonèl yo akòz konpetans limite yo nan anglè. Nou remèsye Biwo Pwokirè Distri Konte Rockland la ak OCA paske yo te travay avèk nou pou asire Tribinal pou Tretman kont Dwòg Konte Rockland lan disponib pou tout patisipan ki elijib yo, e nou espere Pwotokòl Antant sa a ka sèvi kòm modèl pou tout tribinal nan distri sa a pou asire yon aksè enpòtan pou moun ki gen konpetans limite nan anglè, nan konfòmite ak Tit VI.”

Pwokirè Jeneral Adjwen an Kristen Clarke te di: “Asire yon jistis egalit devan lalwa vle di fè sa nan yon fason ki jis, egzat ak konpreyansib pou tout moun, men sa ap rive sof si moun yo ki enplike nan pwosesis jidisyè a ka kominike youn ak lòt. Moun pa ta dwe penalize pou konpetans limite yo nan anglè yo epi yo ta dwe resevwa sèvis asistans lengwistik yo bezwen pou yo patisipe san fòs kote nan pwosedi jidisyè yo ak fòmasyon tribinal oswa pwogram tretman la mandate. Akò sa a reprezante yon modèl pou asire aksè ak tribinal yo, ansanm ak pwogram ak sèvis li yo, pou tout moun, kèlkeswa konpetans yo nan anglè, epi li esplike aksyon ki nesesè yo pou elimine baryè pou itilizatè tribinal yo ki gen yon konpetans limite nan anglè.”

Dapre Pwotokòl Antant lan ak fichye epi deklarasyon piblik yo:

An janvye 2023, Biwo sa a te revize yon plent ki te pretann moun ki gen konpetans limite yo nan anglè ("LEP") pa t kapab patisipe totalman nan Tribinal pou Tretman kont Dwòg Konte Rockland la paske tribinal la pa t bay sèvis tradiksyon ak entèpretasyon. Yon ti tan apresa, OCA te enplike l nan pwosedi aksè lengwistik yo pou Tribinal pou Tretman kont Dwòg Konte Rockland la epi li te finalman pran responsablite pou Tribinal la nan mwa mas 2024. Biwo sa a, nan kolaborasyon ak Divizyon Dwa Sivil yo, te travay avèk OCA ak Biwo Pwokirè Distri Konte Rockland la, ki t ap jere Tribinal pou Tretman kont Dwòg la anvan mas 2024, pou idantifye refòm ki nesesè yo pou asire tout moun LEP yo ki kalifye pou patisipe nan Tribinal pou Tretman kont Dwòg la te gen aksè lengwistik ki enpòtan.

Pandan revizyon dosye sa a, Biwo Pwokirè Distri Konte Rockland la ak OCA te pran plizyè mezi pozitif pou bay patisipan nan Tribinal yo ki gen LEP yon aksè enpòtan, sa gen ladan l angajman pou founi sèvis entèprèt pou tout pwosedi jidisyè yo, reyalize aktivite sansibilizasyon ak patisipan yo ki nan Tribinal pou Tretman kont Dwòg Konte Rockland la, epi idantifye yon founisè tretman lokal pou bay sèvis tretman tribinal lan mandate an panyòl.

Dapre Pwotokòl Antant lan, OCA pral pran yon kantite mezi adisyonèl pou garanti yon aksè enpòtan pou patisipan ki gen LEP yo nan Tribinal pou Tretman kont Dwòg Konte Rockland lan. Etap sa yo gen ladan yo tradiksyon tout dokiman yo an panyòl, kreyòl, ak yiddish, ak nan lòt lang sou demann, fè piblikasyon pwogram Tribinal pou Tretman kont Dwòg la nan lòt lang sa yo, epi chèche founisè tretman ki pral ofri pwogram tretman kont dwòg tribinal mandate yo nan yon fason ki bay yon aksè enpòtan ak moun ki gen LEP yo, san patisipan yo pa peye anyen.

Enfòmasyon sou Tit VI ak konpetans limite nan anglè disponib nan www.lep.gov. Manm piblik la gendwa rapòte potansyèl vyolasyon dwa sivil yo nan Distri Sid Nouyòk la nan https://www.justice.gov/usao-sdny/civil-rights oswa avèk Divizyon Dwa Sivil Depatman Jistis la nan www.civilrights.justice.gov/report/.

*                *                *

Mesye Williams te remèsye Divizyon Dwa Sivil lan, Seksyon Kowòdinasyon ak Konfòmite Federal la, pou kolaborasyon li nan rezoud pwoblèm sa a.

Se Inite Dwa Sivil Biwo an nan Divizyon Sivil la ki ap jere dosye sa a. Asistan Pwokirè Etazini an Christine S. Poscablo se responsab dosye a.

El Departamento de Justicia anunció hoy un memorando de entendimiento (MOU, por sus siglas en inglés) con el Sistema Judicial del Estado de New York, la Oficina de Administración del Tribunal (OCA, por sus siglas en inglés) para mejorar el acceso al Tribunal de Tratamiento para Usuarios de Drogas del Condado de Rockland, New York, para personas con un dominio limitado del inglés (LEP, por sus siglas en inglés). El Departamento hace cumplir el Título VI de la ley de Derechos Civiles de 1964 (Título VI), que prohíbe la discriminación por motivos de raza, color de piel y origen nacional por parte de beneficiarios de apoyo financiero federal. La discriminación prohibida puede incluir la falta de provisión de acceso lingüístico significativo.

«La garantía de la igualdad de justicia en virtud de la ley se asegura de una manera justa, precisa y comprensible para todos, pero eso no sucede a menos que las personas involucradas en el proceso judicial puedan comunicarse entre sí», comentó Kristen Clarke, la Fiscal General Auxiliar de la División de Derechos Civiles del Departamento de Justicia. «Las personas no deben ser penalizadas por su dominio limitado del inglés y deben recibir los servicios de apoyo lingüístico que necesitan para participar de forma justa en procedimientos judiciales y programas de formación o tratamiento exigidos por el tribunal. Este acuerdo sirve como modelo para garantizar el acceso a los tribunales, incluidos sus programas y servicios, para todas las personas, independientemente de su dominio del inglés, y detalla acciones que pueden ayudar a eliminar barreras para los usuarios de tribunales con un dominio limitado del inglés».

«No se debe negar a los miembros de la comunidad el acceso significativo a procedimientos y programas judiciales que ofrezcan alternativas a las sentencias tradicionales debido a su dominio limitado del inglés», afirmó Damian Williams, el Fiscal Federal para el Distrito Sur de New York. «Agradecemos a la Fiscalía de Distrito del Condado de Rockland y a la OCA por trabajar con nosotros para garantizar que el Tribunal de Tratamiento para Usuarios de Drogas del Condado de Rockland esté disponible para todos los participantes elegibles, y esperamos que este memorando de entendimiento pueda servir como modelo para todos los tribunales de este distrito para garantizar un acceso significativo a las personas con un dominio limitado del inglés, de conformidad con el Título VI».

El Departamento de Justicia revisó una queja alegando que las personas LEP no podían participar plenamente en el Tribunal de Tratamiento para Usuarios de Drogas del Condado de Rockland porque no proporcionaba un acceso lingüístico significativo. Poco después de esta queja, la OCA se involucró en los procedimientos de acceso lingüístico para el Tribunal de Tratamiento para Usuarios de Drogas del Condado de Rockland y finalmente, la OCA asumió la responsabilidad del Tribunal en marzo.

Junto con la Fiscalía de Distrito del Condado de Rockland, que dirigió el Tribunal de Tratamiento para Usuarios de Drogas antes de marzo, la OCA tomó varias medidas afirmativas para proporcionar un acceso significativo a todos los usuarios LEP del Tribunal de Tratamiento para Usuarios de Drogas del Condado de Rockland durante la revisión de este asunto por parte del Departamento. Entre otras acciones, la OCA se comprometió a proporcionar servicios de interpretación gratuitos para todos los procedimientos judiciales y tomó acciones directas en cuanto a las partes interesadas del Tribunal de Tratamiento para Usuarios de Drogas del Condado de Rockland sobre el acceso significativo para las personas LEP.

En virtud del MOU, la OCA tomará una serie de medidas adicionales para garantizar un acceso significativo para los participantes LEP en el Tribunal de Tratamiento para Usuarios de Drogas del Condado de Rockland. Estos pasos incluyen traducir todos los documentos al español, criollo y yiddish, y a otros idiomas a pedido, y conseguir a proveedores de tratamiento que ofrecerán programas de tratamiento para usuarios de drogas exigidos por los tribunales de manera que proporcione un acceso significativo a las personas LEP, sin costo adicional para los participantes.

Hay más información sobre la División de Derechos Civiles en su sitio web en a www.justice.gov/crt. La información sobre el dominio limitado del inglés y el Título VI está disponible en www.lep.gov. Los miembros del público pueden denunciar posibles vulneraciones de los derechos civiles en www.civilrights.justice.gov/report/  o ante la Fiscalía Federal para el Distrito Sur de New York en www.justice.gov/usao-sdny/civil-rights.

Depatman Jistis la te anonse jodi a siyati yon akò (MOU) ak Administrasyon Sistèm Tribinal Eta New York la, Biwo Administrasyon Tribinal la (OCA) pou amelyore aksè nan Tribinal pou Trètman Dwòg nan Distri Rockland, New York, pou moun ki gen konpetans limite nan anglè (LEP). Depatman an aplike Tit VI Lwa sou Dwa Sivil 1964 yo (Tit VI) "Title VI of the Civil Rights Act of 1964 (Title VI)" ki entèdi diskriminasyon sou baz ras, koulè ak peyi kote w soti bò kote benefisyè èd finansye yo. Entèdiksyon diskriminasyon an kapab gen ladan l pa rive bay aksè lengwistik nesesè.

"Asire jistis ekitab dapre lalwa vle di aji nan yon fason ki jis, fyab e konpreyansif pou toutmoun, men sa pa rive sof si moun ki enplike nan pwosesis jistis la kapab kominike ak youn lòt, se sa Asistan Pwokirè Jeneral, Kristen Clarke, Divizyon Dwa Sivil nan Depatman Jistis la te deklare. "Yo pa dwe penalize moun akoz yo gen konpetans ki limite nan anglè epi dwe resevwa sèvis asistans lengwistik yo bezwen pou patisipe yon fason ki jis nan pwosedi tribinal yo ak fòmasyon oswa pwogram trètman tribinal mande ki pou fèt. Akò sa sèvi tankou yon modèl pou asire aksè nan tribinal, ki gen ladan l pwogram ak sèvis yo, pou tout moun, kèlkeswa konpetans anglè yo genyen, epi prezante aksyon yo kapab poze pou kraze baryè pou ki konparèt nan tribinal ak konpetans yo nan anglè ki limite."

"Manm komite a pa dwe nye aksè nesesè nan pwosedi tribinal yo ak pwogram ki ofri altènatif nan santans tradisyonèl yo akoz konpetans yo nan anglè ki limite," se sa Pwokirè Ameriken an Damian Williams se sa li deklare pou Distri Sid New York la. "Nou remèsye Biwo Pwokirè Distri Rockland lan ak OCA paske y ap travay ak nou pou asire Tribinal pou Trètman Dwòg nan Distri Rockland lan disponib pou tout patisipan ki elijib yo, e nou espere pwotokòl akò sa kapab sèvi tankou yon modèl pou tout tribinal nan distri saa pou asire aksè nesesè pou moun ki gen konpetans limite nan anglè, nan konfòmite ak Tit VI la."

Depatman Jistis la te revize yon plent konsèman moun ki gen konpetans limite nan anglè (LEP) pa kapab patisipe konplètmannan Tribinal pou Trètman Dwòg nan Distri Rockland lan paske li pa t bay aksè lengwistik nesesè. Yon ti tan apore plent lan, OCA te in enplike nan pwosedi aksè lengwistik pou Tribinal pou Trètman Dwòg nan Distri Rockland lan ak OCA te finaman pran responsablite pou Tribinal la an mas.

Ansanm ak Biwo Pwokirè Distri Rockland lan, ki responsab Tribinal pou Trètman Dwòg anvan mas, OCA te pase nan lòt etap pou bay aksè nesesè pou itilizatè ki gen konpetans nan anglè nan Tribinal pou Trètman Dwòg nan Distri Rockland lan pandan depatman ap revize dosye sa a. Pami lòt aksyon ki fèt, OCA te pran angajman pou bay sèvis entèpretasyon pou tout pwosedi tribinal yo gratis ak fè dyalòg ak pati enterese yo nan Tribinal pou Trètman Dwòg nan Distri Rockland lan konsènan aksè nesesè pou moun ki gen konpetans limite nan anglè (LEP). 

Dapre MOU, OCA ap franchi yon kantite etap anplis pou asire gen aksè nesesè pou patisipan ki gen konpetans limite nan Tribinal pou Trètman Dwòg nan Distri Rockland lan. Etap sa yo ap gen ladan yo tradiksyon tout dokiman yo an espanyòl, kreyòl ak Yidich, ak nan lòt lang sou demann, epi sekirize founisè trètman yo ap ofri pwogram trètman sou lòd tribinal la yon fason ki bay aksè nesesè pou ki gen konpetans limite nan anglè san sa pou koute patisipan yo yon santim anplis.

Enfòmasyon siplemantè sou Divizyon Dwa Sivil yo disponib sou sitwèb li a nan www.justice.gov/crt. Enfòmasyon sou konpetans limite nan anglè ak Tit VI la disponib nan www.lep.gov. Manm popilasyon an kapab denonse vyolasyon dwa sivil posib nan www.civilrights.justice.gov/report/ or with the U.S. Biwo Pwokirè pou Distri Sid New Yorkla nan www.justice.gov/usao-sdny/civil-rights.

Damian Williams, the United States Attorney for the Southern District of New York, and Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of a Complaint charging KEITH TAYLOR with defrauding a charity he ran by embezzling approximately $2.5 million in donations meant for low-income families and spending them instead on personal expenses including rent in a luxury apartment building in midtown Manhattan, food delivery services, cosmetic surgery, and lavish meals at some of New York City’s most expensive restaurants.  TAYLOR was arrested today and will be presented in Manhattan federal court before U.S. Magistrate Judge Sarah L. Cave.

U.S. Attorney Damian Williams said: “As alleged, Keith Taylor falsely claimed that donations to his charity would help working families with unexpected expenses that put them at risk of homelessness.  Instead, Taylor allegedly took those donations to pay for his meals at upscale restaurants, rent for a luxury apartment in a Manhattan skyscraper, and even cosmetic surgery.  Taylor allegedly defrauded the charity’s donors and unconscionably took money from the pockets of those most in need, and he is now facing federal charges for his alleged crimes.”

IRS-CI Special Agent in Charge Thomas Fattorusso said: “Taylor acted like a do-gooder, founding a charity meant to help underserved communities.  But it’s alleged he later took this as an opportunity to victimize both his donors and his own charity by pocketing millions in donations to live a luxurious lifestyle.  Today’s arrest means that Taylor can no longer allegedly exploit the kindness of others for his own gain, and he now faces the consequences of his alleged greed.”

As alleged in the Complaint:[1]

KEITH TAYLOR founded a charity in 2002 that used a crowd-sourcing funding model to help low-income workers pay for unexpected expenses like medical bills or broken appliances.  Its mission was to provide short-term financial assistance to individuals and families that were living paycheck-to-paycheck who were faced with an unexpected crisis or expense that they could not pay.

Between at least 2016 and May 2024, TAYLOR embezzled more than $2.5 million from the charity and its donors and used that money to fund his lavish personal spending.  TAYLOR regularly dined at Per Se, Jean-Georges, Masa, and Marea in midtown Manhattan, sometimes as often as twice a day, spending more than $320,000 of charity funds at New York City restaurants and steakhouses.  Funds donated to the charity paid over $300,000 of TAYLOR’s rent for a luxury apartment on the 30th floor of a midtown Manhattan skyscraper.  TAYLOR also used charity funds to buy himself expensive electronics, to pay over $100,000 to food delivery services, and to pay for his own cosmetic surgery.  TAYLOR put over $270,000 of charity funds directly into his personal brokerage account.  TAYLOR also routinely paid his other personal expenses from the charity’s bank accounts.

TAYLOR attempted to hide his embezzlement of charity funds by creating a fake board of directors and claiming it had approved his personal spending.  TAYLOR used the names of his acquaintances and falsely listed them on the charity’s website as board members.  TAYLOR’s acquaintances who were listed as the charity’s board members included a bartender from Jean-Georges, a friend, and his house-cleaner, none of whom ever attended a board meeting or even knew that they had been listed on the charity’s website as board members.

For at least the calendars years of 2017 through 2022, TAYLOR did not file personal income tax returns or pay income taxes on the income he received from the charity.

*                *                *

TAYLOR, 56, of New York, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison, and six counts of tax evasion, each of which carry a maximum sentence of five years in prison.

The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the exceptional investigative work of IRS-CI and the Special Agents of the United States Attorney’s Office.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Rebecca R. Delfiner and Eli J. Mark are in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Darcel D. Clark, the Bronx County District Attorney, announced today that, on the morning he was scheduled to begin trial, FELIX HERRERA GARCIA pled guilty to conspiracy to distribute narcotics resulting in death and serious bodily injury, as well as possession of narcotics with intent to distribute, resulting in death and serious bodily injury, all in connection with the poisoning of four children under the age of three, one of whom died, at a daycare facility in the Bronx (the “Daycare”) on September 15, 2023.  Approximately two weeks ago, on May 23, 2024, RENNY ANTONIO PARRA PAREDES pled guilty to conspiring to distribute narcotics and stipulated that his conduct caused death and serious bodily injury, in connection with his role in the poisonings.

U.S. Attorney Damian Williams said: “In September 2023, four children at a Bronx daycare were poisoned by fentanyl.  The children were seriously injured, and one baby died.  This happened because, as they admitted in court, Felix Herrera Garcia and Renny Antonio Parra Paredes operated an illegal fentanyl operation out of the center, where they processed the deadly drugs for sale.  We said at the time that this case shocks the conscience of the City, and now Herrera Garcia and Parra Paredes have been brought to justice for this heinous crime.”

Bronx County District Attorney Darcel D. Clark said: “Today, on the morning his trial was set to begin in Manhattan Federal Court, Felix Herrera Garcia pled guilty to Conspiracy to Distribute Narcotics Resulting in Death and other federal charges for causing the fatal fentanyl ingestion of 22-month-old Nicholas Dominici and the injury to three other babies at the Divino Nino Day Care Center in the Bronx on September 15, 2023.  Herrera Garcia has now been held accountable in the tragic loss of little Nicholas, the serious injury of Abel, and the harm to Kiara and Jaziel.”

As alleged in public filings: 

From at least in or about October 2022 through at least in or about September 2023, HERRERA GARCIA, PARRA PAREDES, and others conspired to distribute fentanyl, para-fluorofentanyl, and heroin, including at the Daycare.  There, despite the daily presence of children, including infants, HERRERA GARCIA, PARRA PAREDES, and their co-conspirators maintained large quantities of fentanyl, including more than 10 kilograms of narcotics hidden inside secret compartments, or traps, located beneath the floor of the Daycare’s playroom. 

As a consequence of the drug conspiracy perpetrated by HERRERA GARCIA, PARRA PAREDES, and their co-conspirators, on or about September 15, 2023, four children at the Daycare, who were all under three years of age, experienced the effects of poisoning from exposure to fentanyl.  Three of the children were hospitalized.  The fourth child, a boy just under two years-of-age, died. 

*                *                *

HERRERA GARCIA, 35, of the Bronx, New York, pled guilty to one count of conspiracy to distribute narcotics resulting in death and serious bodily injury, one count of possession with intent to distribute narcotics resulting in death, and one count of possession with intent to distribute narcotics resulting in serious bodily injury.  All three counts carry a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.  

PARRA PAREDES, 38, of the Bronx, New York, pled guilty to one count of conspiracy to distribute narcotics resulting in death and serious bodily injury, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.  

The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. 

Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration (“DEA”), the New York City Police Department (“NYPD”), the Southern District of New York Digital Forensic Unit, the Complex Analytical and Social Media Enhancement Team at the New York/New Jersey High Intensity Drug Trafficking Area, the Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force, and the United States Marshals Service (“USMS”).  Mr. Williams also thanks the NY/NJ Regional Fugitive Task Force of the USMS, the USMS Office of International Operations, the USMS for the Southern District of New York, the USMS for the Southern District of Texas, the USMS for the Southern District of California, the USMS Mexico Field Office, the USMS Investigative Operations Division, the DEA New York Strike Force, the DEA Regional Office in Allentown, Pennsylvania, the DEA Regional Office in McAllen, Texas, the DEA Regional Office in Mexico City, Mexico, the DEA Regional Office in Hermosillo, Mexico, the DEA Regional Office in Monterrey, Mexico, the DEA Special Operations Division, the NYPD 52nd Precinct’s Detective Squad, the NYPD Bronx Homicide Squad, the Office of International Affairs of the Justice Department’s Criminal Division, the U.S. Attorney’s Office for the Southern District of Texas, the U.S. Attorney’s Office for the Southern District of California, U.S. Customs and Border Protection, and Mexican Federal and State authorities.

The OCDETF New York Strike Force provides for the establishment of permanent, multi-agency task force teams that work side-by-side in the same location.  This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.  The specific mission of the New York Strike Force is to target, disrupt, and dismantle drug trafficking and money laundering organizations, reduce the illegal drug supply in the United States, and bring criminals to justice.

This case is being prosecuted by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Brandon C. Thompson, Maggie Lynaugh, and Justin V. Rodriguez, as well as Special Assistant U.S. Attorney Karl P. Miller of the Office of the Bronx County District Attorney’s Homicide Bureau, are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that OMAR KHAN was sentenced to two years in prison by U.S. District Judge Paul A. Engelmayer in connection with an investment fraud scheme involving rare and expensive wines and his impersonation of his attorney in furtherance of that scheme.  KHAN previously pled guilty on March 28, 2024, to one count of aggravated identity theft.

U.S. Attorney Damian Williams said: “Whether a fraudulent scheme involves business ventures, cryptocurrency, or expensive wines, the career prosecutors of this Office will bring justice to the perpetrators of these crimes.  Omar Khan fleeced his victims of millions of dollars, leaving devastation in the wake of his lies, but he now justly faces two years in federal prison and has been ordered to make restitution to his victims.”

FBI Assistant Director in Charge James Smith said: “Omar Khan’s wine-and-dine scheme did not age well.  For four years, Khan exploited the prestigious reputation of the wine industry to embezzle millions of dollars from well-intended investors using empty promises of future, lavish networking events while offering excuses for the lack of returns.  He utilized his public notoriety as a wine aficionado to lure and coax his victims into financing significant amounts, costing some the entirety of their investments.  Today’s sentence emphasizes the FBI’s tireless efforts investigating those who manipulate their social status and relationships to deprive others of their wealth.”

According to the charging documents and other filings and statements made in court:

From in or about 2015 through 2019, OMAR KHAN orchestrated a global fraud scheme involving the solicitation of investments for wine tasting and networking events.  KHAN founded and operated a management consulting firm (“Firm-1”) in New York, New York.  Firm‑1’s website described KHAN as one of “the most global consultants and speakers in the world.”  KHAN has been profiled by Forbes Magazine as a “fanatical wine connoisseur.”

KHAN hosted networking events for successful and wealthy individuals at which he would privately solicit victims to invest in ventures and events involving rare, vintage wines and expensive dinners.  For example, on or about December 13, 2017, KHAN hosted a dinner, which he titled, “An Evening of Daring Duos and Tantalizing Trios,” at which KHAN served vintage wines and a variety of expensive food items, including Nantucket bay scallops, oysters, caviar, risotto cooked in bone marrow broth, uni served in its shell, and jalapeño foam. 

At these extravagant dinners and networking events, KHAN would solicit individuals to invest in other expensive dinners, networking events, and ventures.  KHAN represented to his investors that they would earn a profit on their investment.  KHAN frequently lied to prospective investors to induce investments.  With few exceptions, KHAN embezzled his investors’ investment monies and used the proceeds on personal expenditures.  KHAN then made additional false statements to his investors to excuse his failure to pay them back. 

For example, one of KHAN’s victims (“Victim-1”) was a New York retiree who in early 2015 attended one of KHAN’s dinner parties which involved expensive wines and expensive cuisine.  After that first dinner, KHAN began to actively communicate with Victim-1, and they formed a friendship.  After Victim-1 attended several of those events, KHAN solicited Victim-1 to invest his money with KHAN to put on similar wine and dinner events for other wealthy individuals.  At first, Victim-1 invested smaller amounts of money for the dinner events.  Later on, Victim-1 began to invest larger sums of money with KHAN.

In approximately 2018, KHAN induced Victim-1 to pool all of Victim-1’s investments to date into one large, purported consulting deal.  In doing so, KHAN had Victim-1 invest approximately $5,000,000 with a famous French vineyard located in Bordeaux, France (“Vineyard-1”).  KHAN pitched this investment as a consulting deal that involved a New York club backed by Vineyard-1.  After stalling for several months, KHAN began to make up excuses about why there was a delay in closing the deal.  For example, KHAN falsely claimed in an email to Victim-1 that Victim-1’s money “was on the move” but the very next day falsely claimed that the IRS had placed a lien on his business account for unrelated activity in Dubai (“IRS slapped a lien on us, due to ‘unusual activity,’ ‘unpaid taxes’ and various other allegations, which I learned of this morning to my shock.”). 

Likewise, in February 2018, KHAN falsely claimed to another victim (“Victim-2”) that KHAN’s bank had delayed a bank transfer from KHAN to Victim-2 due to a lack of authorization documents.  In a March 2018 email, KHAN falsely told Victim-2 that KHAN’s attorneys had sent legal demands to the bank to resolve the issue.  In both these emails, KHAN purported to forward emails from KHAN’s attorney about the delayed bank wire.  The March email also stated that KHAN’s attorneys had “issued a legal demand” to the bank to resolve the issue with the delayed bank wire.  The emails appearing to be sent from KHAN’s lawyer were fraudulent, and KHAN had sent them impersonating his own lawyer.

On or about September 3, 2019, multiple victims commenced a civil lawsuit against KHAN (the “Khan Lawsuit”), alleging that KHAN induced them to invest in wine dinners and ventures on the basis of fraudulent misrepresentations.  In early September, the New York Post published multiple articles about KHAN — one concerning the Khan Lawsuit and another about a criminal investigation into KHAN’s ventures.  KHAN then left the country, ultimately residing at a hotel in Sri Lanka for several years.  In February 2024, KHAN was expelled from Sri Lanka and arrested at John F. Kennedy airport in New York.

*                *                *

In addition to the prison term, OMAR KHAN, 58, was sentenced to one year of supervised release and ordered to make restitution to the victims in the amount of $6,699,582.

Mr. Williams praised the investigative work of the FBI.

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas Chiuchiolo and Nicholas Folly are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that NICHOLAS TARTAGLIONE was sentenced today to four consecutive life sentences for his leadership role in the 2016 murders of Martin Luna, Urbano Santiago, Miguel Luna, and Hector Gutierrez.  TARTAGLIONE, who is a former police officer, orchestrated the kidnapping and murders of all four victims on April 11, 2016.  TARTAGLIONE was sentenced today by U.S. District Judge Kenneth M. Karas.

U.S. Attorney Damian Williams said: “Nicholas Tartaglione brutally and senselessly murdered Martin Luna over money, and then ruthlessly executed Urbano Santiago, Miguel Luna, and Hector Gutierrez simply because they were in the wrong place at the wrong time.  He tried to cover up his crimes by burying all four victims in a shallow grave on his property.  Thanks to the tireless efforts of countless law enforcement officers at the federal, state, and local level, and the relentless pursuit of justice by the career prosecutors in my Office, Tartaglione has now been held accountable for his reprehensible crimes.  Today’s sentence of four consecutive life terms justly reflects the pain and suffering each victim underwent at Tartaglione’s hands.  I hope that this outcome brings some measure of closure to the victims’ families and to their community.”

According to the allegations contained in the Indictment, the evidence offered at trial, statements made in open court, and matters included in public filings:

On April 11, 2016, NICHOLAS TARTAGLIONE, a former police officer, orchestrated the kidnapping and murders of Martin Luna, Urbano Santiago, Miguel Luna, and Hector Gutierrez.  Martin was 41 years old when he died.  Urbano was Martin’s nephew by marriage and was 35 years old when he died.  Miguel was Martin’s nephew and was 25 years old when he died.  Hector was a close family friend of all three and was 43 years old when he died.  All four victims left behind a loving family, and many of their family members attended the trial in this case.

Martin was killed because TARTAGLIONE believed Martin had stolen approximately $250,000 meant for the purchase of cocaine.  TARTAGLIONE tortured Martin by restraining him and beating him for over an hour, but when Martin did not provide the location of the missing money, TARTAGLIONE strangled Martin to death with a zip-tie.  Urbano, Miguel, and Hector were killed — each with a single gunshot to the back of the head, execution style — because they witnessed Martin’s murder and were in the wrong place at the wrong time.  TARTAGLIONE buried all four victims in a mass grave on his remote property in Otisville, New York.  The four victims remained in the ground until the Federal Bureau of Investigation’s (“FBI”) Hudson Valley Safe Streets Task Force located the grave in December 2016.

At today’s sentencing, Judge Karas described TARTAGLIONE as a “monster” who has shown no remorse for his conduct.

*                *                *

TARTAGLIONE, 56, of Otisville, New York, was found guilty of 11 counts of murder, four counts of kidnapping resulting in death, one count of kidnapping conspiracy, and one count of narcotics conspiracy.

Mr. Williams praised the outstanding investigative work of the FBI, the New York State Police, and the Village of Chester Police Department.  Mr. Williams also thanked the City of Middletown Police Department and the Houston, Texas Police Department for their assistance in the case.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation.  OCDETF identifies, disrupts, and dismantles criminal organizations using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF program can be found at https://www.justice.gov/OCDETF.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Maurene Comey and Jacob R. Fiddelman, with the assistance of Paralegal Specialist Shannon Becker, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Daniel B. Brubaker, the Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an Indictment charging MARIO GOGLIORMELLA, STEVEN LACAJ, and KARIM IBRAHIM, a/k/a “Chris Hayes,” with conspiracy, securities fraud, wire fraud, and investment adviser fraud in connection with their management of L & G Capital Corp., Legend Venture Partners LLC, and a related series of funds.  The defendants’ fraudulent misrepresentations about the operation of their funds allowed them to raise approximately $185 million from hundreds of investors.  Based in large part on the excessive and undisclosed share price markups they charged to investors, the defendants were able to divert nearly $28 million in investor funds to themselves.  They also used investor funds to pay their sales representatives at least $17.5 million in fees and commissions, despite making explicit representations to investors that fees were not being charged.  GOGLIORMELLA, LACAJ, and IBRAHIM were arrested earlier today and will be presented this afternoon in Manhattan federal court.  The case has been assigned to U.S. District Judge Vernon S. Broderick.

U.S. Attorney Damian Williams said: “By allegedly raising approximately $185 million from over 1,400 investors, Mario Gogliormella, Steven Lacaj, and Karim Ibrahim left a trail of shattered trust and financial ruin.  Today’s Indictment is a resolute stance against such alleged egregious breaches of investor confidence in the pre-IPO markets. We will hold perpetrators accountable and safeguard investors from such deceitful practices.”

USPIS Inspector in Charge Daniel B. Brubaker said: “The U.S. Postal Inspection Service thoroughly investigates investment fraud cases which involve the criminal use of the mail to defraud investors.  This case highlights the crooked path these greedy individuals allegedly took as they charged excessive and undisclosed share price markups, callously defrauding investors out of millions.  I commend the work of our Postal Inspectors, the Securities and Exchange Commission, and the Assistant U.S. Attorneys for the Southern District of New York’s Securities and Commodities Fraud Task Force.  Together we are ensuring that investors are protected, the sanctity of the U.S. Mail is preserved, and ultimately fraudsters are held accountable for their dirty deeds.”

According to the allegations in the Indictment:[1]

From at least in or about 2019 through at least in or about October 2022, GOGLIORMELLA, LACAJ, and IBRAHIM engaged in a scheme to defraud investors in a group of related private funds known generally as the “StraightPath Funds” and the “Legend Funds” (the “Funds”).  In particular, the defendants, and others working at their direction, used “boiler room”-style call centers to market the funds, including to individual, non-professional investors, and present an opportunity to invest in privately held companies expected to go public in the near future (“pre-IPO companies”).  The defendants purported to offer investors the chance to acquire shares in pre-IPO companies at favorable prices in advance of an anticipated public offering, at which time they claimed the shares would be worth significantly more.

Although the defendants and their agents represented to existing and prospective investors in the Funds that they earned no upfront fees or commission in connection with the acquisition of pre-IPO shares on the Funds’ behalf, in reality and contrary to their fiduciary duties, the defendants acquired the shares and then sold them to the Funds at arbitrarily inflated and excessive prices without disclosing to investors the nature or extent of the markup.  The defendants also misled investors regarding the nature of their investments and hid the involvement of GOGLIORMELLA and IBRAHIM, who had previously been disciplined by the Financial Industry Regulatory Authority (“FINRA”) for the management of the Funds.  Moreover, in order to evade detection of their scheme, the defendants destroyed records and otherwise obstructed the efforts of the U.S. Securities and Exchange Commission (“SEC”) to uncover the defendants’ fraud on investors.

GOGLIORMELLA, LACAJ, and IBRAHIM conducted this scheme through several related entities.  Among those entities was L & G Capital Corp. (“L & G”), which, from approximately 2019 up to approximately February 2022, marketed the StraightPath Funds on behalf of StraightPath Venture Partners, Inc. (“SPVP”).  In approximately 2021, multiple individuals associated with SPVP received subpoenas from the SEC in connection with an investigation into SPVP’s unlawful marketing of pre-IPO shares to investors, and in approximately February 2022, SPVP ceased operations.  On or about May 13, 2022, the SEC filed a civil action against SPVP and its founders.  In approximately February 2022, when SPVP ceased operations, GOGLIORMELLA, LACAJ, and IBRAHIM began conducting the scheme under the corporate entity Legend Venture Partners, LLC (“Legend”).  The defendants, now through the corporate entity Legend, continued to market funds investing in pre-IPO shares to investors.  In addition to marketing these funds, Legend was the manager and investment adviser to each of the five Legend Funds. 

In order to generate interest in the Funds among retail investors, GOGLIORMELLA, LACAJ, and IBRAHIM used finders, or “referral agents,” to pitch prospective investors and thereafter to serve as the investors’ primary point of contact.  The defendants used “boiler room”-style call centers wherein salespeople cold-called potential investors, many of whom were not experienced investors, and gave aggressive sales pitches using notes and pitch scripts.  The defendants referred to their pitch scripts as “The Bible.”  Contrary to the defendants’ claim that they and their agents did not make money unless and until investors received a profit on their investments, L & G and Legend paid referral agents a commission, typically a 10 to 15% front-end fee based on the amount of the investment that agents were able to draw to the Funds, plus a portion of the carried interest when the Funds exited their position in a particular company.

In addition to misleading prospective investors about the compensation paid to referral agents, GOGLIORMELLA, LACAJ, and IBRAHIM defrauded investors in the Funds, for which they acted as fiduciaries, by charging investors excessive and undisclosed markups on share prices of pre-IPO companies, which benefited the defendants and their associates at the expense of investors and the Funds.  These markups regularly exceeded 50% of the price at which Legend had acquired the shares and sometimes were as high as 150%.  These markups, in turn, were used to pay fees and commissions to the defendants and their sales representatives.

GOGLIORMELLA, LACAJ, and IBRAHIM also misled investors by actively taking steps to prevent investors from learning about GOGLIORMELLA’s and IBRAHIM’s leadership roles at Legend because of the fact that both had been disciplined by FINRA.  In addition, GOGLIORMELLA, LACAJ, and IBRAHIM misled investors by misrepresenting the experience and knowledge of the sales representatives who were advising investors to invest in their funds.

In total, during the course of their scheme, from in or about 2019 through in or about October 2022, GOGLIROMELLA, LACAJ, IBRAHIM, and their agents solicited investments into the Funds of approximately $185 million from at least 1,400 investors.  GOGLIROMELLA, LACAJ, and IBRAHIM used much of these investor funds to enrich themselves and their associates and referral agents.  GOGLIORMELLA, LACAJ, and IBRAHIM themselves received a total of more than $28 million in investors’ funds.  For the most part, these distributions were not disclosed to investors or made in accordance with the Funds’ offering documents.  The defendants also paid at least $17.5 million in investor funds to their associates and referral agents, despite having made and caused to be made explicit representations to investors that fees were not being charged or were being waived.  In all, approximately 25% of the capital contributions the Funds received from investors was diverted to pay the defendants and their associates.

The Funds are no longer operational and are under the control of court-appointed receivers tasked with taking possession of the funds’ assets and recommending a plan to return value to investors.

*                *                *

GOGLIORMELLA, 47, of Manhasset, New York, LACAJ, 27, of New York, New York, and IBRAHIM, 34, of Queens, New York, are each charged with one count of conspiracy to commit securities fraud, wire fraud, and investment adviser fraud, which carries a maximum potential sentence of five years in prison; one count of securities fraud, which carries a maximum potential sentence of 20 years in prison; one count of wire fraud, which carries a maximum potential sentence of 20 years in prison; and one count of investment advisor fraud, which carries a maximum potential sentence of five years in prison.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding work of the USPIS.  Mr. Williams further thanked the SEC, which has separately filed civil charges against GOGLIORMELLA, LACAJ, and IBRAHIM.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Adam S. Hobson and Matthew R. Shahabian are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ISRAEL GARCIA, a/k/a “Shorty Rock,” the former leader of the Get Money Gunnaz set of the Young Gunnaz street gang (the “GMG YGz”), was sentenced to life plus five years in prison for the October 11, 2010, murder of Alfonso “Joey” McClinton.  GARCIA shot and killed McClinton on a residential street in the Bronx, New York, as part of a dispute over narcotics trafficking territory.  Following a seven-day trial in July 2023 before U.S. District Judge Jed S. Rakoff, who imposed today’s sentence, a jury also convicted GARCIA of engaging in a conspiracy to distribute narcotics, murder while engaged in a narcotics conspiracy, murder through the use of a firearm, possessing firearms in connection with narcotics trafficking, and attempted witness tampering.      

U.S. Attorney Damian Williams said: “Today’s strong sentence reflects our unwavering commitment to holding those who take another life fully accountable for their heinous crimes.  Israel Garcia, a former high school dean who could have had a positive impact on our community, will now spend the rest of his life in prison for the brutal murder of Joey McClinton, for engaging in a narcotics conspiracy, and for witness tampering.  I commend the career prosecutors of this Office and our law enforcement partners for doggedly pursuing this case and for bringing justice to Joey McClinton, nearly 14 years after his death.”

According to court filings and the evidence presented in court during trial: 

For more than a decade, the defendant controlled the sale of narcotics in the vicinity of East 184th Street and Morris Avenue in the Bronx as the leader of the GMG YGz.  As part of their narcotics operation, GMG YGz members carried firearms and engaged in back-and-forth shootings with neighboring, rival crews.  This violence resulted in, among other acts, the 2010 murder of Alfonso “Joey” McClinton (“McClinton”).  The State of New York arrested and prosecuted GMG YGz member Joseph Johnson, a/k/a “Juice,” for the killing.[1] However, Ballistics, video evidence, and eyewitness testimony revealed that there was a second shooter involved in Mr. McClinton’s murder.  GARCIA was that second shooter.  When GARCIA became concerned that Johnson might cooperate with law enforcement, GARCIA took steps to prevent Johnson from identifying GARCIA as the person with whom he committed the murder.

*                *                *

GARCIA, 33, of the Bronx, New York, was previously found guilty of murder in aid of racketeering, narcotics conspiracy, murder while engaged in a narcotics conspiracy, murder through the use of a firearm, use of a firearm in furtherance of a drug trafficking offense, and attempted witness tampering offenses.  Judge Rakoff imposed the following sentences on each count of conviction, with the sentences on Counts One, Two, Three, Four, and Six to run concurrently with one another, and the sentence on Count Five to run consecutively to all other sentences:

COUNT

SENTENCE

Count One: Murder in Aid of Racketeering

Life in prison

Count Two: Conspiracy to Distribute Controlled Substances

35 years in prison

Count Three: Murder While Engaged in a Narcotics Conspiracy

40 years in prison

Count Four: Murder Through the Use of a Firearm

40 years in prison

Count Five: Possession of a Firearm During and in Relation to a Drug Trafficking Crime

Five years in prison

Count Six: Attempted Witness Tampering

10 years in prison

Mr. Williams praised the investigative work of the Drug Enforcement Administration, the New York City Police Department, the Department of Homeland Security, Homeland Security Investigations, and the U.S. Marshals Service.  

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the U.S. using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Jacob Gutwillig, Maggie Lynaugh, and Jonathan Bodansky, with the assistance of paralegal specialist Owen Foley, are in charge of the prosecution.

 

---

[1] Johnson was convicted at trial of second-degree murder in The People of the State of New York v. Joseph Johnson, Index Number 4311/2010.  On February 3, 2022, the verdict against Johnson was vacated.  Johnson subsequently pled guilty to manslaughter and is serving a 17-year sentence. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of GREGOIRE TOURNANT, the former chief investment officer and co-lead portfolio manager for a series of private investment funds managed by Allianz Global Investors U.S. LLC (“AGI”), to investment adviser fraud.  AGI and two other AGI employees previously pled guilty, and AGI paid more than $3 billion in restitution to the innocent victims of this fraud, paid a criminal fine of approximately $2.3 billion, and forfeited approximately $463 million to the Government.  TOURNANT pled guilty today before U.S. District Judge Laura Taylor Swain, and he is scheduled to be sentenced on October 16, 2024.  

U.S. Attorney Damian Williams said: “Gregoire Tournant and his co-conspirators lied to investors, secretly exposed them to risk, and as Tournant has now admitted, sent victims altered risk reports.  Today’s guilty plea is the culmination of a multi-year investigation and prosecution that has held wrongdoers responsible, made victims whole, and demonstrated this Office’s resolve to pursue even the most sophisticated of financial crimes.”

According to the allegations contained in the Indictments, Superseding Information, and other filings and statements made in court:

Between 2014 and 2020, TOURNANT was the chief investment officer of a set of private funds at AGI known as the Structured Alpha Funds.  These funds were marketed largely to institutional investors, including pension funds for workers all across America.  TOURNANT and his co-defendants misled these investors about the risk associated with their investments.  To conceal the risk associated with how the Structured Alpha Funds were being managed, TOURNANT and his co-defendants provided investors with altered documents to hide the true riskiness of the funds’ investments, including that investments were not sufficiently hedged against risks associated with a market crash.  In March 2020, following the onset of market declines brought on by the COVID-19 pandemic, the Structured Alpha Funds lost in excess of $7 billion in market value, including over $3.2 billion in principal, faced margin calls and redemption requests, and ultimately were shut down. 

On May 17, 2022, AGI pled guilty to securities fraud in connection with this fraudulent scheme and later was sentenced to a pay a criminal fine of approximately $2.3 billion, forfeit approximately $463 million, and pay more than $3 billion in restitution to the investor victims.  TOURNANT’s co-defendants, Trevor Taylor and Stephen Bond-Nelson, previously pled guilty on March 8, 2022, and March 3, 2022, respectively.

*                *                *

TOURNANT, 57, of Basalt, Colorado, pled guilty to two counts of investment adviser fraud, each of which carries a maximum sentence of five years in prison.  In connection with his plea, TOURNANT agreed to forfeit approximately $17 million in paid and deferred compensation traceable to his commission of the fraud.

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding work of the U.S. Postal Inspection Service and the Special Agents of the U.S. Attorney’s Office.  He also expressed appreciation for the Securities Exchange Commission, which previously initiated a civil proceeding against TOURNANT. 

This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Margaret Graham, Nicholas Folly, Allison Nichols, Thomas Burnett, Sarah Mortazavi, and Nicolas Roos are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York; James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an Indictment charging BRUCE MORRIS, a/k/a “G,” with murder through the use of a firearm and a conspiracy to distribute crack cocaine.  MORRIS was arrested this morning and will be presented today before U.S. Magistrate Judge Stewart D. Aaron.  The case is assigned to U.S. District Judge Jesse M. Furman.

U.S. Attorney Damian Williams said: “As alleged, almost eight years ago, Bruce Morris murdered Jerome Jemison in the Bronx in connection with a long-running drug conspiracy.  Thanks to the hard work of the prosecutors in this Office and our law enforcement partners at the NYPD and FBI, Morris will finally be held to account for this heinous crime.  With these charges, we continue our daily work of investigating and prosecuting those who perpetrate these senseless acts – no matter how many years have passed.  We hope this prosecution brings some measure of comfort to the victim’s loved ones.”

FBI Assistant Director in Charge James Smith said: “Firearms and illegal narcotics continue to infiltrate and plague our city, posing a grave danger to New Yorkers.  In 2016, Bruce Morris allegedly murdered Jerome Jemison – prematurely ending the life of another over a drug trafficking operation.  The FBI remains steadfast in its mission to remove firearms from the streets and deliver justice for those fallen victim to unnecessary gun violence, regardless of when the crime was committed.”

NYPD Commissioner Edward A. Caban said: “Gun violence goes hand-in-hand with the illicit drug trade, and today’s charges show the tragic consequences of that reality.  The NYPD and our law enforcement partners remain committed to investigating drug-related murders, no matter how long it takes.  We also remain committed to disrupting and dismantling the actors and enterprises that fuel such drug-related violence, as well as to removing from our streets all illegal firearms and everyone allegedly willing to use them.  I commend the NYPD investigators and FBI agents involved in this important case, as well as the prosecutors at the office of the U.S. Attorney for the Southern District of New York, for their indispensable work.”

As alleged in the Indictment:[1]

MORRIS shot and killed Jerome Jemison on August 11, 2016, in the Bronx, New York, in relation to an eight-year crack cocaine distribution conspiracy.

*                *                *

MORRIS, 42, of the Bronx, New York, is charged with one count of murder through use of a firearm, which carries a statutory maximum sentence of death or life in prison, and one count of narcotics conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

The minimum and maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI and the NYPD. 

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Matthew Weinberg, Camille L. Fletcher, and Jeffrey W. Coyle are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

---

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging MOHAMED-AMIN ATCHA, MOHAMED RILAZ WALEEDH, and DAOOD HASSAN, all United Kingdom nationals, with conspiracy to commit wire fraud and money laundering.  The charges arise from the defendants’ scheme to defraud victims into purchasing digital artwork known as the “Evolved Apes” collection of non-fungible tokens (“NFTs”).  The case has been assigned to U.S. District Judge J. Paul Oetken.

U.S. Attorney Damian Williams said: “As alleged, the defendants ran a scam to drive up the price of digital artwork through false promises about developing a videogame.  They allegedly took investor funds, never developed the game, and pocketed the proceeds.  Digital art may be new, but old rules still apply: making false promises for money is illegal.  As we allege, thousands of people believed these false promises and were tricked into buying these NFTs, including here in the Southern District of New York.  NFT fraud is no game, and those responsible will be held accountable.”

FBI Assistant Director in Charge James Smith said: “These three defendants allegedly were part of a scheme to pump up the price of NFTs with lies to the public about developing a related videogame, and to surreptitiously transfer the proceeds of the fraud to their personal accounts.  Ghosting customers without fulfilling a promise not only reflects poor business integrity, it also violates the implicit trust buyers place in sellers when purchasing a product, no matter if that product is in a store or stored on a blockchain.  The FBI remains committed to pursuing those who perpetrate fraudulent schemes out of a selfish desire for a quick profit.”

According to the allegations in the Indictment:[1]

In the fall of 2021, ATCHA, WALEEDH, and HASSAN executed a type of scam commonly known as a “rug pull,” where developers advertise a digital project, collect funds from purchasers, then abandon the project and keep the funds.  ATCHA, WALEEDH, and HASSAN allegedly created and promoted an NFT project called “Evolved Apes” that involved the marketing of digital images of cartoon apes.  The following is a graphic typical of the images that became Evolved Apes NFTs:

The creators and promoters of the Evolved Apes project publicly promised to use funds raised from selling the NFTs to develop a videogame based on the NFTs, which they claimed would increase the NFTs’ value.  But after selling the NFTs and collecting large sums from purchasers, including in the Southern District of New York, they quickly shut down the Project’s website and kept the funds without developing the promised videogame.  ATCHA, WALEEDH and HASSAN then laundered the misappropriated funds through multiple cryptocurrency transactions to their own personal accounts to conceal their ill-gotten gains.

*                *                *

ATCHA, 23, WALEEDH, 23, and HASSAN, 23, all United Kingdom nationals, are charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI.

The case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Samuel L. Raymond and Josiah Pertz are in charge of the prosecution.

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

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of TOMMY LIN in connection with a scheme to steal millions of dollars from financial institutions, which resulted in the theft of over $10 million.  LIN was arrested this morning and will be presented today before U.S. Magistrate Judge Stewart D. Aaron.  LIN was charged in a Superseding Indictment along with ZHONG SHI GAO, a/k/a “George,” and FEI JIANG, a/k/a “Jeffrey,” a/k/a “Brother Fei,” who were previously arrested in November 2023.  The case is assigned to U.S. District Judge Colleen McMahon.

U.S. Attorney Damian Williams said: “Tommy Lin allegedly participated in a complex bank fraud scheme while also serving as a Director in the New York City Mayor’s Office and Senior Advisor to the NYPD’s Asian Advisory Council.  Leveraging his connections to law enforcement, he allegedly leaked personal identifying information to members of the scheme, ran background checks for them, and even arranged for federal immigration authorities to arrest an individual in exchange for $20,000 in cash.  I thank the career prosecutors of this Office and our law enforcement partners for their persistence in investigating this fraudulent and corrupt scheme.”

FBI Assistant Director in Charge James Smith said: “Tommy Lin, a former director in the Mayor’s Office, allegedly participated in a scheme to defraud more than a dozen financial institutions of at least $10 million by submitting illegitimate fraud reports to force the banks to reimburse them.  To facilitate this conspiracy, Lin allegedly assisted members of the scheme in running background checks and accepted a significant cash bribe to arrange the arrest of a slighted accountholder by immigration authorities.  Those in municipal offices are expected to conduct themselves with rectitude and obedience to the law, not engage in the purposeful manipulation of our economic infrastructure.  The FBI is committed to ensuring all citizens, especially those in positions of authority, adhere to financial regulations and will investigate individuals who seek to profit from fraudulent plots.” 

According to the allegations in the Superseding Indictment unsealed today in Manhattan federal court:[1]

LIN previously served as the Director of Constituent Services in the Community Affairs Unit for the New York City Mayor’s Office between in or about 2014 and in or about 2019.  As part of his responsibilities in the New York City Mayor’s Office, LIN served as a Senior Advisor to the New York City Police Department’s Asian Advisory Council. 

Between at least in or about 2018 and in or about 2022, LIN participated in a scheme with GAO, JIANG, and others to steal millions of dollars from banks by causing transfers of funds between accounts they controlled, then falsely and fraudulently reporting that the transfers were unauthorized, which induced the financial institutions to credit them the amount of the transfers.  The scheme was responsible for over $10 million in actual losses to nearly a dozen banks.

LIN participated in the bank fraud conspiracy by, among other things: providing names and dates of birth for potential accountholders to be used in the scheme, running background checks on members of the scheme to ensure that law enforcement was not investigating them, and accepting approximately $20,000 in cash in exchange for arranging for a Deportation Officer with Immigration and Customs Enforcement to arrest a disgruntled accountholder who had previously participated in the scheme.

*                *                *

LIN, 41, of Forest Hills, New York, is charged with one count of bank fraud conspiracy, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit wire fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to be served consecutively to any other sentence imposed. 

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the investigative work of the FBI.  Mr. Williams also thanked the New York City Department of Investigation and the Department of Homeland Security’s Office of Inspector General for their assistance in the investigation of this case.  

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Andrew K. Chan, James Ligtenberg, and Ni Qian are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Thomas M. Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that GEORGE SANOSSIAN and JACK N. SARDIS pled guilty to conspiracy to defraud the IRS, on May 29 and June 5, 2024, respectively, in White Plains federal court.  SANOSSIAN’s sentencing before U.S. District Judge Cathy Seibel is scheduled for September 24, 2024.  SARDIS’s sentencing before U.S. District Judge Nelson S. Román is scheduled for September 26, 2024.   

U.S. Attorney Damian Williams said: “As they admitted in court, the defendants, both certified public accountants, conspired to fraudulently reduce the tax liability of clients of their accounting firm.  This case serves as a reminder to all Americans that they are required to truthfully report their earnings and that criminal penalties could await those who fraudulently deceive the IRS, as George Sanossian and Jack Sardis have learned.  My Office will continue to hold to account those who scheme to impede the lawful functions of the IRS.”   

IRS-CI Special Agent in Charge Thomas M. Fattorusso said: “Schemes to conceal and reduce federal income and payroll tax liability, such as those utilized by Sardis and Sanossian, are unfair to every taxpayer who obeys the law and pays their fair share.  The prosecution of individuals who intentionally conceal income and evade taxes is a key step in the IRS’s enforcement strategy.  These guilty pleas place the defendants a step closer to realizing the consequences of their actions.”

According to the Informations, to which SARDIS and SANOSSIAN pled guilty, and statements made court:

SARDIS and SANOSSIAN were certified public accountants and partners in an accounting firm in Scarsdale, New York, that provided accounting and income and payroll tax services to clients, including nine businesses in the construction industry (the “Clients”).  From in or about 2012 through at least on or about April 15, 2018, SARDIS and SANOSSIAN agreed with Clients to scheme to: (i) fraudulently reduce the income tax liability of the Clients; (ii) conceal wages paid to employees by the Clients and, thereby, fraudulently reduce the Clients’ payroll tax liability; and (iii) conceal personal income of the Clients.  The defendants advised the Clients to participate in a scheme to reduce their federal income and payroll tax liability, pursuant to which the Clients issued checks made payable to a shell company and gave the checks to SARDIS and SANOSSIAN, who then caused the checks to be cashed at a check cashing service and returned the cash, minus a fee, to the Clients.  Some Clients used the cash to pay employees without reporting the cash wages on their IRS Forms 941, thereby evading both their employer contributions to Social Security and Medicare and their obligation to withhold income tax on those wages, which permitted the employees to evade federal and state income tax.  The owners and managers of some Clients took the cash for personal use without reporting the income on their personal federal and state tax returns.  SARDIS and SANOSSIAN caused checks to be cashed in this manner for Clients in a total amount exceeding $2 million.

 *                *                *

SARDIS, 66, of Englewood Cliffs, New Jersey, and SANOSSIAN, 70, of Scarsdale, New York, pled guilty to one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison.  SARDIS and SANOSSIAN have agreed to pay restitution to the IRS and New York State, representing the additional tax due and owing as a result of their conduct, in the total amount of $652,883.60. 

The maximum potential sentence in these cases is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the IRS-CI in this case.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Jeffrey C. Coffman and James McMahon are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JUAN TACURI, a senior promoter in the cryptocurrency Ponzi scheme known as Forcount (and later known as Weltsys), pled guilty to conspiracy to commit wire fraud before U.S. District Judge Analisa Torres.  The Forcount scheme spanned the globe and, in the U.S., principally targeted Spanish-speaking populations.  TACURI was one of the scheme’s most successful promoters and reaped millions of dollars from his participation in the fraud.  TACURI is scheduled to be sentenced on September 24, 2024, before Judge Torres.

U.S. Attorney Damian Williams said: “With this guilty plea, Juan Tacuri is being held to account for taking advantage of retail investors and selling them a fabricated investment opportunity.  Tacuri brought in millions of dollars in victim funds — funds the victims could not afford to lose — and spent it lavishly on luxury goods and real estate.  This Office will not stop pursuing Ponzi schemers like Tacuri, particularly where they target regular, working people who are in dire straits financially.”

According to allegations in the Indictment, public filings, and statements made in court:

Forcount was a purported cryptocurrency mining and trading company that promised to earn its victim-investors (“Victims”) profits in exchange for their purchase of purported cryptocurrency-related investment products.  The founders and promoters of the scheme, such as TACURI, falsely promised their Victims, among other things, that profits from the company’s cryptocurrency trading and mining would result in guaranteed daily returns on Victims’ investments and the doubling of those investments within six months.  In reality, Forcount was not engaging in cryptocurrency trading or mining, and the founder and promoters of the scheme were using Victim funds to pay other Victims, to further promote the schemes, and to enrich themselves.

TACURI traveled throughout the U.S., where he and others hosted lavish expos and small community presentations aimed at luring Victims to invest in the schemes, including in the Southern District of New York.  During larger-scale events, TACURI would present Forcount’s investment products and compensation plan, encourage Victims to invest as a means of achieving financial freedom, and boast about the amount of money he was earning, including by wearing designer clothing to such events.  The atmosphere of these events was festive and designed to generate excitement about the schemes.

Victims invested in the Forcount scheme by purchasing investment products from promoters, such as TACURI, using cash, checks, wire transfers, and actual cryptocurrency.  Following a Victim’s investment, they would be provided with access to an online portal where they could monitor their purported returns.  While Victims saw “profits” accumulate on the scheme’s online portal, most Victims were unable to withdraw any of these so-called profits and ultimately lost their entire investments.  By contrast, Forcount’s promoters, like TACURI, siphoned off, in some cases, hundreds of thousands of dollars in Victim funds, which they withdrew as cash, spent on promotional expenses for the schemes, and used for personal expenditures such as luxury goods and real estate.

At least as early as in or about April 2018, Victims who attempted to withdraw money from their online portal accounts had difficulty doing so, and when they complained to promoters, such as TACURI, they were met with excuses, delays, and hidden fees, if they were able to make any withdrawals at all.  Despite these complaints, Forcount’s promoters, including TACURI, continued to promote the fraudulent scheme and accept Victims’ investments.  As complaints mounted, Forcount began offering proprietary crypto-tokens for sale as a means of injecting liquidity into the scheme.  TACURI claimed that these tokens, known as “Mindexcoin,” would eventually be worth a significant amount of money when they were accepted by companies for payment for goods and services.  This was false.  In reality, they were essentially worthless and resulted in further financial loss to Victims.  By in or about 2021, the scheme had stopped making payments to Victims and their chief promoters, including TACURI, stopped promoting the schemes, and, in some instances, stopped responding to Victims’ complaints altogether.

The U.S. Attorney’s Office for the Southern District of New York is committed to protecting the rights of crime victims.  If you believe you are a victim of the Forcount scheme, our Victim/Witness Unit can make sure that you are notified of important stages of these cases to help you exercise your rights.  You can reach them at 866-874-8900.

*                *                *

TACURI, 46, of Greenacres, Florida, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.  As part of his guilty plea, TACURI also agreed to forfeit nearly $4 million in Victim funds and certain real estate TACURI purchased using Victim funds. 

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of Homeland Security Investigations.  Mr. Williams also thanked the New York City Police Department; the New York City Sheriff’s Office; the Bureau of Insurance Fraud, Property, and Casualty in the Division of Investigative and Forensic Services of the Florida Department of Financial Services; and the Florida Office of Financial Regulation for their assistance.  Mr. Williams also thanked the Securities and Exchange Commission and the Brazilian Federal Police for their assistance. 

The case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Benjamin A. Gianforti and Michael D. Maimin are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York; Frank A. Tarentino III, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”); Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”); James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of Complaints charging Feroze Nazirbage, a pharmacy owner, and Mordechai Bar, a physician, with illegally diverting oxycodone and other controlled substances.  Both NAZIRBAGE and BAR were arrested today and will be presented tomorrow in White Plains federal court.

U.S. Attorney Damian Williams said: “As alleged, Dr. Mordechai Bar and Feroze Nazirbage breached the trust that was placed in them to prescribe and dispense controlled substances only for legitimate medical purposes.  They allegedly used their positions as healthcare professionals as a cover for what amounted to no more than common drug dealing operations.  We will not tolerate the illegal sale of oxycodone and other addictive substances into the community, whether those sales take place on the street corner, at a doctor’s office, or behind a pharmacy counter.”

DEA Special Agent in Charge Frank A. Tarentino III said: “The arrests today of Doctor Mordechai Bar and pharmacy owner Feroze Nazirbage are the result of the DEA’s commitment in pursuing those individuals who allegedly exacerbate the ongoing opioid crisis.  As alleged, these two healthcare professionals, who illegally diverted the highly addictive oxycodone for cash had a responsibility of protecting patients’ lives, not destroying them.  The DEA will relentlessly pursue those individuals responsible for putting profits and greed over the health of their patients.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “This physician and pharmacy owner are alleged to have illegally distributed controlled substances, which is behavior that could contribute to the ongoing opioid epidemic.  HHS-OIG works with our law enforcement partners to ensure that individuals involved in fraud schemes that exploit federal health care programs and threaten patient safety are held accountable.”

FBI Assistant Director in Charge James Smith said: “In exchange for financial compensation, Feroze Nazirbage and Mordechai Bar, a pharmacy owner and physician, respectively, allegedly conspired to distribute controlled substances – including oxycodone – without a legitimate prescription or patient medical examination.  Failing their ethical duty to do good, the defendants allegedly abused their positions in healthcare by serving as suppliers for a highly addictive narcotic while greedily pocketing the rewards.  With assistance from our law enforcement partners, today’s charges reflect the FBI’s intolerance of those who selfishly jeopardize the health of others, especially those entrusted with prioritizing and preserving the wellness of our city.”

IRS-CI Special Agent in Charge Thomas Fattorusso said: “Nazirbage and Bar went against all medical ethics and broke the law with their alleged dealing of oxycodone, a highly addictive drug.  Law enforcement understands the continued need to stop the flow of this drug getting into hands with no medical need, and we remain steadfast in working investigations to arrest those who prey on the vulnerable.”

As alleged in the two Complaints filed on May 30, 2024, in White Plains federal court and unsealed today:[1]

Oxycodone, a Schedule II narcotic, is a highly addictive opioid analgesic that is used to treat severe and chronic pain conditions, such as post-operative pain, severe back and orthopedic injuries, as well as pain associated with certain forms of cancer and other terminal illnesses.  Oxycodone prescriptions are in high demand and have significant cash value to drug dealers.  The street value of oxycodone depends on the number of milligrams of oxycodone in each tablet, and in and around the New York City area, each milligram of oxycodone roughly translates to around $1 in street value.

NAZIRBAGE is associated with multiple pharmacies in and around New York City, including F&N Pharmacy, of which he is the president, and QV Pharmacy, where he has been observed working and directing customers.  From at least about December 2022 up to the date of the Complaint, NAZIRBAGE has conspired with others to dispense or distribute oxycodone and other controlled substances, in violation of the law, in exchange for cash.  In addition to filling prescriptions that he knew were not issued for a legitimate medical purpose by a practitioner acting within the usual course of professional practice, NAZIRBAGE also repeatedly sold controlled substances to a customer without a prescription in what is commonly referred to as a “backdoor sale.”  During one of those sales, NAZIRBAGE gave that customer a handwritten menu of various prescription drugs and their per-pill cost for future backdoor sales (pictured below):

BAR is a physician whose practice is located in New Rochelle, New York.  From at least in or about January 2023 up to the date of the Complaint, BAR conspired with others to provide prescriptions not issued for a legitimate medical purpose for oxycodone, amphetamine, and alprazolam to patients in exchange for cash payments.  BAR issued those prescriptions without conducting medical examinations of the patients and, in many cases, without even speaking to or meeting with the patients.

*                *                *

NAZIRBAGE, 50, of Bellerose, New York, is charged with one count of conspiring to illegally dispense or distribute oxycodone and other controlled substances, which carries a maximum sentence of 20 years in prison, and 11 counts of dispensing or distributing oxycodone and other controlled substances, each of which carries a maximum sentence of 20 years in prison.

BAR, 71, of Larchmont, New York, is charged with one count of conspiring to illegally dispense or distribute oxycodone and other controlled substances, which carries a maximum sentence of 20 years in prison, and 12 counts of dispensing or distributing oxycodone and other controlled substances, each of which carries a maximum sentence of 20 years in prison.

The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding efforts of the DEA, HHS-OIG, the FBI, and IRS-CI.  He also thanked the DEA Task Force Officers from the Yonkers Police Department, the Westchester County Police Department, the Putnam Sheriff Department, the Orangetown Police Department, and the Rockland Seriff Department.  He added that the investigation is ongoing.  Any individuals who believe they have information that may be relevant to this investigation should contact DEA Victim/Witness Coordinator James Lee at James.H.Lee@dea.gov and/or by calling (646) 529-4042.

This effort is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.   

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S Attorneys David A. Markewitz and Kathryn Wheelock are in charge of the prosecution.

The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the filing of a Complaint in Manhattan federal court charging JERMAINE GREENE with firearms and narcotics offenses in connection with a March 28, 2024, incident at the New York City subway station located on Fordham Road and Jerome Avenue in the Bronx (the “Fordham Road Station”).  GREENE was arrested today and presented before U.S. Magistrate Judge Stewart D. Aaron.

U.S. Attorney Damian Williams said: “As alleged, Jermaine Greene brought a loaded gun, a drug stash, and tools of the drug trade into the New York City subway system.  I am grateful to the NYPD for its efforts to bring to justice those who endanger their follow passengers and abuse public transportation.”

NYPD Commissioner Edward A. Caban said: “Policing methods that focus on relatively minor offenses — in this case, fare evasion — often lead police officers to larger alleged crimes that are putting unsuspecting New Yorkers in danger.  The NYPD refuses to turn a blind eye to criminal recidivists who allegedly continue to act with impunity and vows to keep addressing crime and disorder in every form.  I commend the police officers who made this arrest and thank everyone at the office of the U.S. Attorney for the Southern District of New York for their continued partnership in our public safety mission.”

According to the allegations in the Complaint:[1]

On or about March 28, 2024, at approximately 5:37 p.m., NYPD officers observed GREENE entering the Fordham Road Station without paying a fare and walking upstairs to the southbound subway platform.  The officers arrested GREENE after determining that he was the subject of open arrest warrants.

NYPD officers searched GREENE incident to arrest and recovered a privately assembled 9 mm “ghost” gun loaded with 12 rounds of ammunition.  A photograph of the firearm and ammunition is below:

After transporting GREENE to NYPD Transit District 11 for processing, NYPD officers conducted an inventory search of GREENE.  From inside a bookbag worn by GREENE underneath his jacket, the officers recovered a plastic bag containing approximately 50 grams of cocaine, a scale, and several empty plastic bags.  The officers also found a small plastic bag of cocaine in GREENE’s pants pocket.  A photograph of the scale and bags of cocaine is below:

GREENE was not permitted to possess ammunition because of prior felony convictions, including a Delaware conviction for second degree murder, for which GREENE was under court supervision at the time of these offenses.

*                *                *

GREENE, 42, of the Bronx, New York, is charged with one count of possessing ammunition after a felony conviction, which carries a maximum sentence of 15 years in prison; one count of distribution of narcotics, which carries a maximum sentence of 20 years in prison; and one count of possession of a firearm in furtherance of a drug trafficking crime, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison.

The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding work of the NYPD in connection with this investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Henry Ross is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that TERRIS OLIVER, a/k/a “T-Bird,” and RICARDO AYALA, a/k/a “Richie,” were sentenced to 185 and 220 months in prison, respectively, for their roles in the March 27, 2002, shooting death of 19-year-old Atari Felton.  OLIVER and AYALA were participants in a drug conspiracy, members of which shot and killed Felton after a feud broke out between their group and Felton’s own drug business.  OLIVER was sentenced this afternoon, and AYALA was sentenced on May 6, 2024, both by U.S. District Judge Alvin K. Hellerstein after pleading guilty to conspiring to distribute controlled substances.  During their pleas, they admitted to participating in the Felton murder.

U.S. Attorney Damian Williams said: “This case is yet another reminder that no matter how much time passes, this Office will prosecute, and seek significant sentences for, any drug dealers and gang members who shoot and kill another person.  There is absolutely no excuse for the taking of another life.  Atari Felton has been dead for longer than he lived — a tragedy brought about by gun violence that this Office and City should never abide.”

According to the allegations in the Indictment and Information and statements made in public court proceedings:

OLIVER and AYALA were members of a drug crew that conducted open-air drug sales around 240 East 175th Street in the Bronx, near Monroe Avenue.  The group had planned to merge operations with Felton, but when that failed, Felton attempted to shoot at members of OLIVER’s and AYALA’s group.  Later that night, OLIVER, AYALA, and several other men traveled to the area of 1665 Topping Avenue, where at least four men, including OLIVER, fired shots at Felton as Felton exited a corner store.[1]  One bullet struck Felton in the back, causing lethal injuries. 

Following the murder, both OLIVER and AYALA incurred arrests and periods of incarceration on state charges of, among other things, gun possession, to which OLIVER pled guilty in 2006, and continued drug distribution, to which AYALA pled guilty in 2004.

*                *                *

OLIVER, 42, of Bridgewater, Massachusetts, and AYALA, 43, of the Bronx, New York, previously pled guilty to conspiring to distribute crack cocaine, heroin, and marijuana, and both admitted to participating in the Felton murder.  In addition to the prison term, OLIVER and AYALA were sentenced to three years of supervised release.

Mr. Williams praised the outstanding work of Special Agents from the U.S. Attorney’s Office for the Southern District of New York and the New York City Police Department’s Cold Case Squad.  He also thanked the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this matter.

The case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Frank Balsamello, Andrew K. Chan, and Mathew Andrews are in charge of the prosecution.

---

[1] The Court accepted for purposes of sentencing that AYALA had acted as a lookout during the shooting.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the selection of Edward Y. Kim as Deputy U.S. Attorney and Lillian Evans as Executive Assistant U.S. Attorney, as well as the departure of Andrea Griswold, Deputy U.S. Attorney, and Neil M. Corwin, Executive Assistant U.S. Attorney.

Since February 2024, Mr. Kim has served as the Chief Counsel to the U.S. Attorney for the Southern District of New York.  Mr. Kim was previously an Assistant U.S. Attorney in the Office from 2008 to 2017, serving in the Criminal Division.  From 2015 to 2016, Mr. Kim was Chief of the General Crimes Unit, and from 2016 to 2017, he was Chief of the Complex Frauds and Cybercrime Unit.  During his tenure, Mr. Kim twice received the Attorney General’s Distinguished Service Award.  He also received the Assistant Attorney General’s Exceptional Service Award and was named a prosecutor of the year by the Federal Law Enforcement Foundation.  From 2017 to 2024, Mr. Kim was a partner at Krieger Kim & Lewin LLP, a firm which he co-founded, where he represented individuals and entities in white collar criminal and regulatory matters.  Mr. Kim graduated magna cum laude from Brown University in 1998 and cum laude from Harvard Law School in 2004.  Upon graduation from law school, Mr. Kim served as a law clerk to the Honorable Naomi Reice Buchwald of the U.S. District Court in the Southern District of New York.

Ms. Evans joins the Office from the New York City Law Department, where she has worked since 2012.  Since 2021, she has served as that office’s Director of Legal Recruitment, in which capacity she has overseen recruiting, hiring, and career counseling.  Ms. Evans graduated from the University of Michigan in 2005 and from Benjamin N. Cardozo School of Law in 2011. 

In making these selections, U.S. Attorney Damian Williams said: “I am pleased to appoint Ed Kim as Deputy United States Attorney.  Ed’s intellect and leadership have already been invaluable to the Office, and I look forward to benefiting from his wise counsel as the newest Deputy.  Lillian Evans’s impressive work in recruiting, hiring, and career counseling at the New York City Law Department makes her an ideal person to continue the uniquely important role of staffing this Office with the most talented lawyers in the country.  Lillian has big shoes to fill, and I commend and thank Neil Corwin for his remarkable tenure in this Office and wish him well in retirement. Neil’s reputation for combining excellence and kindness is reflected in the many AUSAs and interns he has recruited and mentored. Lastly, I want to thank Andrea Griswold for her service to this Office. Having worked side-by-side with Andrea for nearly a decade, I know Andrea to be a relentless investigator, a talented trial lawyer, and a strategic counselor and leader with excellent judgement. Andrea is a generational talent.  I will miss her dearly.” 

Damian Williams, the United States Attorney for the Southern District of New York, announced that on May 29, 2024, a jury returned a guilty verdict against NORMAN GRAY for wire fraud in connection with a scheme to defraud a victim (“Victim-1”) of nearly $1.5 million through false promises and bogus documents.  GRAY falsely represented to Victim-1 that Victim-1’s funds would be invested in GRAY’s biomedical company (the “Biomedical Company”) and in deals to support the Biomedical Company through the sale of personal protective equipment (“PPE”) during the height of the COVID-19 pandemic.  In reality, Victim-1’s funds were not used by GRAY as promised, and he instead used Victim-1’s funds to, among other things, retire prior debts and purchase himself a high-end automobile and a large home in Connecticut.  GRAY’s scheme to defraud Victim-1 also involved the use of fabricated documents and the wholesale invention of a fake mortgage company and a fictitious mortgage broker.  GRAY was found guilty after a seven-day trial before U.S. District Judge Paul A. Engelmayer.  Judge Engelmayer remanded GRAY to the custody of the U.S. Marshals Service earlier today.  

U.S. Attorney Damian Williams said: “Norman Gray meticulously crafted a relationship of trust and confidence with his victim by lying about his background, the financial health of his company, and how he would invest the victim’s money.  Over the course of just a few weeks in 2020, Gray induced his victim to send him nearly $1.5 million after learning that the victim had recently been awarded a substantial sum of money in a commercial arbitration.  Gray’s brazen scheme involved lie after lie, which included the use of fake documents and a made-up mortgage company.  Gray’s lies have finally caught up with him, and he now faces substantial time in prison.”

According to the Superseding Indictment, public filings, public court proceedings, and the evidence presented at trial:

At all relevant times, GRAY was the founder and CEO of the Biomedical Company, which is headquartered in Hamden, Connecticut.  GRAY presented himself to Victim-1 and others as a billionaire scientist with a Ph.D. from MIT at the helm of a company he was personally funding that was potentially worth hundreds of millions of dollars.  In reality, GRAY did not have a Ph.D., and, as of August 2020, both he and the Biomedical Company were in significant debt.  In or about August 2020, GRAY induced Victim-1 to send him $250,000 as a purported investment in the Biomedical Company.  Rather than purchase equity for Victim-1, GRAY used nearly all of Victim-1’s $250,000 payment to repay a loan that GRAY had taken out from a tenant in the same building where the Biomedical Company is headquartered in order to make payroll.  In the ensuing weeks, GRAY extracted an additional $1,217,000 from Victim-1, representing that Victim-1’s funds would be invested in deals involving the procurement of PPE for two major universities in the tristate area.  GRAY falsely represented that his prior PPE deals had turned a 40% profit within 90 days, that he already had purchase orders in hand for PPE worth nearly $8 million, and that, therefore, the risk was “virtually zero.”  In reality, over the preceding months, GRAY had accumulated a vast inventory of unsellable PPE, the purported purchase orders were fake, and GRAY did not invest Victim-1’s funds in PPE.  Instead, GRAY misappropriated Vicitm-1’s funds, in part, to purchase himself a nearly $1 million home, a $50,000 luxury SUV, and to pay down $200,000 of his and his family’s credit card debt.  

As part of his scheme to defraud Victim-1, and as a means of dispelling Victim-1’s concern that an investment with GRAY might require Victim-1 to forego the purchase of a home, GRAY offered Victim-1 a mortgage from a purported boutique mortgage company of which he was the sole investor.  GRAY directed Victim-1 to a purported mortgage broker that worked for this boutique mortgage company.  In reality, both the mortgage company and the mortgage broker were completely fabricated by GRAY and did not exist.  To further this aspect of the fraud on Victim-1, GRAY registered an internet domain in the name of the purported mortgage company and created an email address in the name of the invented mortgage broker contemporaneously with making his false representations to Victim-1.  As GRAY’s fraud began to unravel in or about early November 2020, GRAY promised to return all of Victim-1’s money.  Ultimately, GRAY never returned any money to Victim-1, and after Victim-1 asked GRAY to provide her with the purported PPE purchase orders from the two universities, she never heard from GRAY again.

 As demonstrated at trial, at the outset of the scheme to defraud Victim-1, GRAY separately attempted to defraud a board member of the Biomedical Company who had introduced Victim-1 to GRAY.  GRAY solicited a $150,000 loan from the board member to make the Biomedical Company’s payroll and sent the board member a fake wire transfer supposedly demonstrating that GRAY would soon receive over half a million dollars and therefore would be able to repay the board member in short order.  In reality, GRAY forged the wire transfer document, and no such money actually arrived. 

If you believe you are a victim of any crimes related to NORMAN GRAY, please email USANYS.NormanGrayCase@usdoj.gov.

*                *                *

GRAY, 68, of Hamden, Connecticut, was convicted of one count of wire fraud, which carries a maximum potential sentence of 20 years in prison. 

The maximum potential penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  GRAY is scheduled to be sentenced by Judge Engelmayer on September 12, 2024, at 2:30 p.m.

Mr. Williams praised the outstanding investigative work of the Special Agents of Homeland Security Investigations.  Mr. Williams also thanked the New Haven Police Department, as well as law enforcement authorities in the United Kingdom and Spain and the Justice Department’s Office of International Affairs, for their assistance.

This case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Benjamin A. Gianforti, Vladislav Vainberg, and Jessica Greenwood are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that BRADLEY PIERRE was sentenced to 10 years in prison by U.S. District Judge Paul G. Gardephe for conspiracy to commit bribery and conspiracy to defraud the Internal Revenue Service (“IRS”) in connection with his orchestration of a $60 million fraud targeting No-Fault automobile insurance companies.  PIERRE pled guilty before Judge Gardephe on December 18, 2023.

U.S. Attorney Damian Williams said: “Bradley Pierre’s deceitful orchestration of a $60 million fraud — the largest in New York’s history — targeting No-Fault automobile insurance companies exemplifies a blatant disregard for justice and fairness.  Through bribery and manipulation, Pierre callously exploited the system, denying accident victims the rightful care they deserved.  We commend the diligent work of the investigative team and career prosecutors whose dedication ensured accountability in this complex case.”

According to the Indictment, the plea agreement, and statements made in court:  

New York and New Jersey No-Fault insurance laws require a driver’s automobile insurance company to pay automobile insurance claims automatically for certain types of motor vehicle accidents, provided that the claim is legitimate and below a particular monetary threshold.  Pursuant to these requirements, insurance companies will often pay medical service providers directly for the treatment they provide to automobile accident victims without the need to bill the victims themselves.  This process resolves automobile claims without apportioning blame or fault for the accident, thereby avoiding protracted disputes and the costs associated with an extended investigation of the accident. 

From at least in or about 2008 through in or about 2021, PIERRE agreed with others (the “Clinic Controllers”) to unlawfully own and run medical clinics located in the New York area, including, among others, Veda Medical, Sky Medical, Sun Medical, and Rutland Medical (the “Clinics”).  PIERRE knew that clinics are unable to bill insurance companies for No-Fault benefits if the medical facilities are controlled by non-physicians.  PIERRE nonetheless agreed with others, including doctors, to submit bills to insurance companies falsely representing that the Clinics were owned and operated by licensed doctors and to direct doctors to lie under oath during Examinations under Oath (“EUOs”) about the ownership, control, and finances of the Clinics.  PIERRE personally coached doctors to lie under oath in these EUOs.

PIERRE used his control of the Clinics for personal profit.  Between 2008 and 2021, PIERRE took over $20,000,000 from the Clinics by either transferring the funds directly to bank accounts under his control or using the Clinics’ bank accounts to pay his personal finances.  PIERRE also used his control of the Clinics to steer prescriptions to pharmacies in return for over a million dollars in kickbacks and to steer patients to seek legal representation from his wife’s law firm, the Law Firm of Nonna Shikh (the“Shikh Firm”).  The Shikh Firm then filed lawsuits against insurance companies on these patients’ behalf.  PIERRE maintained an office at the Shikh Firm and was actively involved in the legal practice as a “manager.”  The Shikh Firm made millions of dollars from the scheme and transferred over $4 million of illegal proceeds to PIERRE through a “marketing” arrangement between PIERRE’s shell companies and the Shikh Firm.

PIERRE used his control of the Clinics and his managerial role at the Shikh Firm to also steer patients to seek MRIs at a medical facility over which he exercised substantial control (the “MRI Facility”).  PIERRE also agreed with the purported sole owner of the MRI Facility, who was a doctor, that the doctor would falsely report injuries in MRI reports.  These falsified injuries allowed the Clinics to bill insurance companies for additional, unnecessary medical services and allowed attorneys to falsely claim injuries in lawsuits against insurance companies.  PIERRE and the doctor agreed that the doctor would lie to insurance companies during EUOs about PIERRE’s role in the MRI Facility.

PIERRE hid his control over several of the Clinics and the MRI Facility using phony loan arrangements.  These agreements claimed that PIERRE was making non-recourse loans to the Clinics and the MRI Facility, which would only have to be paid back if insurance companies paid the medical practices’ claims.  The agreements also set PIERRE’s “fee” as twice the amount loaned to the practices.  However, in reality, PIERRE took almost $10,000,000 in excess of what these purported loan agreements permitted.

PIERRE further agreed to pay bribes to fill the Clinics and the MRI Facility with patients.  From at least in or about 2015 up to and including 2021, PIERRE agreed with others to pay bribes to hospital employees, 911 dispatchers, and other individuals (collectively, “lead sources”) for the confidential names and numbers of motor vehicle accident victims.  PIERRE agreed that others, including Anthony Rose, a/k/a “Todd Chambers,” would then call victims and lie to them to induce victims to receive medical treatment at the Clinics and legal representation from the Shikh Firm.  PIERRE helped Rose expand his bribery operation to New Jersey by recommending clinics and attorneys in the state that would pay kickbacks for referrals.  PIERRE also recommended that Rose open a shell company to hide the illegality of the payments, which Rose in fact did.  PIERRE paid Rose over $800,000 as part of the bribery scheme.

PIERRE further recruited his own lead sources to participate in the bribery scheme.  For instance, in or about 2017, PIERRE recruited Andrew Prime, knowing that Prime was bribing 911 operators and a hospital employee for confidential information.  PIERRE paid Prime over $800,000 as part of the bribery scheme.  PIERRE also personally recruited and bribed several of his own lead sources, including 911 operators and a source in 2019 that PIERRE codenamed the “Motherload” or “ML.”

PIERRE also agreed to bribe medical offices to send patients to the MRI Facility for MRIs.  These medical offices included, among others, Epione Medical Center and Modern Brooklyn Medical.  PIERRE facilitated these bribe payments through several intermediaries, including Anthony Rose, Jelani Wray, and others.  PIERRE paid Jelani Wray over $800,000 in connection with these bribes.

PIERRE then engaged in tax evasion.  PIERRE utilized two companies in connection with the healthcare fraud and bribery schemes: Medical Reimbursement Consultants (“MRC”) and Marketing 4 You (“M4Y”).  PIERRE hid income from the IRS by concealing multiple bank accounts for MRC and using a series of check cashers for checks made out to MRC and M4Y.  PIERRE also paid personal expenses from MRC and M4Y’s bank accounts but improperly reported these payments as “business expenses.”  These included payments for his wedding, home renovations, jewelry, furniture, luxury clothing, travel, and gifts.  In total, PIERRE underreported income, falsely reported expenses of over $4 million, and deprived the IRS of approximately $1.5 million in taxes due.

*                *                *

In addition to the prison term, PIERRE, 41, of Closter, New Jersey, was sentenced to three years of supervised release.  PIERRE was also ordered to forfeit a money judgment of $3,500,000 and pay $1,500,000 in restitution.

Mr. Williams praised the investigative work of the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the White Plains Division.  Assistant U.S. Attorneys Mathew Andrews, Qais Ghafary, and Michael Lockard are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York; Jonathan Mellone, the Special Agent in Charge of the Northeast Region of the U.S. Department of Labor’s Office of Inspector General (“DOL-OIG”); and Andrew Wroblewski, the Assistant Director of the U.S. Department of State’s Diplomatic Security Service (“DSS”) Domestic Operations, announced the unsealing of an Indictment charging WEIDONG GUAN, a/k/a “Bill Guan,” the Chief Financial Officer of a multinational media company headquartered in New York City with participating in a transnational scheme to launder at least approximately $67 million of illegally obtained funds to benefit himself and the media company.  GUAN was arrested yesterday morning and will be presented this afternoon before U.S. Magistrate Judge Stewart D. Aaron.  The case has been assigned to U.S. District Judge Victor Marrero.  

U.S. Attorney Damian Williams said: “As alleged, Bill Guan, the Chief Financial Officer of a global newspaper and media company, conspired with others to benefit himself, the media company, and its affiliates by laundering tens of millions of dollars in fraudulently obtained unemployment insurance benefits and other crime proceeds.  When banks raised questions about the funds, Guan allegedly lied repeatedly and falsely claimed that the funds came from legitimate donations to the media company.  Today’s charges reflect this Office’s ongoing commitment to vigorously enforcing the laws against those who facilitate fraud through money laundering and to protecting the integrity of the U.S. financial system.”

DOL-OIG Special Agent in Charge Jonathan Mellone said: “An important part of the mission of the Office of Inspector General is to investigate allegations of fraud involving the U.S. Department of Labor’s unemployment insurance program.  We will continue to work with our law enforcement partners to safeguard benefits intended for unemployed American workers.”

DSS Domestic Operations Assistant Director Andrew Wroblewski said: “This case highlights the expansive global reach of the Diplomatic Security Service, demonstrating our capacity to collaborate effectively with both U.S. and international law enforcement agencies on complex transnational cases.  DSS, along with our law enforcement partners, are tirelessly working to conduct investigations of this nature daily around the world.”

According to the allegations contained in the Indictment:[1]

From at least in or about 2020, through in or about May 2024, GUAN, while working as the Chief Financial Officer of a multinational media company headquartered in New York, New York (the “Media Company”), conspired with others to participate in a sprawling, transnational scheme to launder at least approximately $67 million of illegally obtained funds to bank accounts in the names of the Media Company and related entities (together, with the Media Company, the “Media Entities”).  In furtherance of the money laundering conspiracy, GUAN managed, among other teams, the Media Company’s “Make Money Online” team (the “MMO Team”), which was located in a particular foreign office of the Media Company.  Under GUAN’s management, members of the MMO Team and others used cryptocurrency to knowingly purchase tens of millions of dollars in crime proceeds, including proceeds of fraudulently obtained unemployment insurance benefits, that had been loaded onto tens of thousands of prepaid debit cards.  The crime proceeds were generally purchased by the scheme participants, including members of the MMO Team and others working with them, using a particular cryptocurrency platform, at discounted rates of approximately 70 to 80 cents per dollar, and in exchange for cryptocurrency. 

Once the crime proceeds were purchased, the MMO Team and other participants in the scheme used stolen personal identification information to open accounts, including prepaid debit card accounts, cryptocurrency accounts, and bank accounts, that were used to transfer the crime proceeds into bank accounts associated with the Media Entities.  After the crime proceeds reached those bank accounts, they were often further laundered through other bank accounts held by the Media Entities, GUAN’s personal bank accounts, and through GUAN’s personal cryptocurrency accounts.

In or around the same time the money laundering scheme began, the Media Company’s internal financial accounting reflected an increased annual revenue over the previous year of approximately 410%—from approximately $15 million to approximately $62 million.  When banks asked GUAN about the increase in transactions entering the bank accounts of the Media Entities, GUAN lied, including to two U.S.-based banks, and claimed that the increase in funds came from donations.  However, in 2022, GUAN wrote a letter addressed to a congressional office falsely stating “donations” constitute “an insignificant portion of the overall revenue” of the Media Company.         

*                *                *

GUAN, 61, of Secaucus, New Jersey, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison, and two counts of bank fraud, each of which carries a maximum sentence of 30 years in prison.  The charges do not relate to the Media Company’s newsgathering activities. 

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of DOL-OIG, DSS, and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams also thanked the U.S. Customs and Border Protection for its valuable assistance.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation.  OCDETF identifies, disrupts, and dismantles high-level criminal organizations using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Emily Deininger, Rebecca T. Dell, and Jane Kim are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JATIEK SMITH, a/k/a “Tiek,” was sentenced to 12 years in prison for his role as the leader of a violent and extortionate racketeering enterprise that terrorized the fire restoration industry in New York City.  SMITH was sentenced by U.S. District Judge Jed S. Rakoff after being convicted following a bench trial in December 2023 of racketeering and extortion conspiracies. 

U.S. Attorney Damian Williams said: “Jatiek Smith led a group of gang members and associates that audaciously took over the New York City fire restoration industry through violence and threats.  We will not stand for gangs or any criminal groups that try to corrupt our institutions and threaten our safety.  Today’s sentence demonstrates that those who use violence and intimidation will face significant jail time.”    

According to the Indictment, statements made in public court proceedings and filings, and the evidence at trial:

The fire restoration industry refers to the businesses that repair properties that have suffered damage from fires or exposures to fires.  Within this industry, fire restoration companies (sometimes referred to as emergency mitigation services companies) provide emergency mitigation services, demolition, and construction services to properties that have suffered such damages.  First Response Cleaning Corp. (“First Response”) was one such EMS company.

In 2019, JATIEK SMITH joined First Response and quickly assumed control over its operations.  SMITH, a member of the Bloods, the violent street gang, recruited other gang members and associates to join him at First Response.  As the leader of this crew, SMITH and his associates used violence, threats of violence, and extortion to terrorize and dominate the fire restoration industry in New York City. 

SMITH asserted control over the industry by first ousting First Response’s main competitor through violence, threats, and extortion.  Once SMITH and his crew had established control over the industry, they imposed rules that allocated a preferential share of fires to First Response.  These rules were backed by threats — including threats to kill children — and violence.  Industry participants, including senior citizens, who solicited fires in violation of SMITH’s rules were assaulted in broad daylight.  Through threats of violence, actual violence, and economic fear, SMITH and his crew also extorted hundreds of thousands of dollars from other industry participants.  SMITH maximized his profits from this scheme by concealing illegal conditions in properties and defrauding insurance companies.    

*                *                *

In addition to the prison term, SMITH, 39, of Staten Island, New York, was sentenced to three years of supervised release and ordered to forfeit $354,546.44.  Restitution will be determined at a later date.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, Homeland Security Investigations, the New York City Police Department, and the New York City Department of Investigation. 

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Rushmi Bhaskaran, Marguerite B. Colson, Elizabeth A. Espinosa, and Adam S. Hobson are in charge of the prosecution, with assistance from Paralegal Specialists Grayson Glogoff and Ananya Sankar. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JESUS CABRERA, a/k/a “Gee,” and MICHAEL AMAYA, a/k/a “Miz,” pled guilty to participating in a conspiracy to distribute fentanyl and fentanyl analogue, and CABRERA also pled guilty to a related firearm count.  As part of the conspiracy, CABRERA and AMAYA distributed the fentanyl and fentanyl analogue that resulted in the death of Malik Rahman on August 25, 2021.  CABRERA and AMAYA pled guilty today before U.S. District Judge Naomi Reice Buchwald.

U.S. Attorney Damian Williams said: “In broad daylight, Jesus Cabrera and his lieutenant, Michael Amaya, sold massive amounts of fentanyl in New York City, feeding addiction and causing untold tragedy.  Their drugs were in the fatal dose that killed Malik Rahman, and glassines stamped with the defendants’ logo ‘Supreme’ were found at the scene of multiple other overdoses in the Bronx.  This Office and our law enforcement partners will continue to hold accountable the dealers who peddle this poison, exploit addiction, and cause senseless death in our community.”

As alleged in the charging instruments, court filings, and statements in the public record:

CABRERA and AMAYA were the leaders of a drug trafficking organization (“DTO”) that operated principally from a block on 142nd Street between Brook Avenue and St. Ann’s Avenue in the Bronx (the “Set”), where its members sold glassines of fentanyl in bulk to dealers who then re-distributed the DTO’s product on the Set and in other areas of the Bronx.  Members of the DTO also sold individual glassines to users who lined up on the Set on an almost daily basis.  CABRERA was the ultimate leader of the DTO, and AMAYA worked as the second in command, managing and overseeing the DTO’s various street-level dealers, baggers, and lookouts, including the other defendants charged in this case.  In the fall and winter of 2021 alone, the DTO distributed an estimated five to six kilograms of fentanyl per month.

The DTO frequently used a signature “stamp” on the glassines of fentanyl it sold.  For many months, the DTO stamped its glassines with a “Supreme” logo.  Starting in or around December 2021, the DTO began using an “Off White” logo and then switched to a “Thriller” logo.

Despite the DTO’s leadership’s awareness of the potential deadly impact of fentanyl, members of the DTO continued pushing the DTO’s product.  For example, as early as about January 2019, CABRERA sent AMAYA a link to a news article that described law enforcement’s crackdown on heroin dealers in the Bronx who were “pushing a deadly cut of heroin . . . using a new drug known as fentanyl,” which had led to a rash of overdose deaths.

On about August 25, 2021, one of CABRERA and AMAYA’s co-defendants, Alberto Concepcion, sold a quantity of loose “Supreme”-stamped glassines to an individual on the Set, who subsequently provided one of those glassines to Rahman.  Rahman died from an overdose shortly after ingesting the substances in the “Supreme”-stamped glassine, the residue of which later tested positive for, among other things, fentanyl and fentanyl analogue.  Both CABRERA and AMAYA were directly involved in overseeing Concepcion’s narcotics sales at that time.  Indeed, in the days leading up to Rahman’s fatal overdose, AMAYA and CABRERA exchanged text messages referencing certain quantities of narcotics that were going to Concepcion for resale on the Set.

Including Rahman’s fatal overdose, between around March 2021 and around December 2021, there were at least eight confirmed fatal overdoses in the Bronx at which the DTO’s “Supreme”-stamped glassines were found on the scene.

*                *                *

JESUS CABRERA, 44, of the Bronx, New York, pled guilty to conspiracy to distribute and possess with intent to distribute 400 grams and more of fentanyl, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and to using, carrying, and possessing a firearm in furtherance of the drug trafficking conspiracy, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of life in prison, which must run consecutively to any other prison term imposed.

MICHAEL AMAYA, 42, of the Bronx, New York, pled guilty to conspiracy to distribute and possess with intent to distribute 400 grams and more of fentanyl, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the New York City Police Department and the Drug Enforcement Administration, as well as the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this matter.  He also thanked the Bronx District Attorney’s Office for its assistance in the case.

The case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Matthew J. King, Kaylan E. Lasky, and David J. Robles are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that SHUKHRATJON MIRSAIDOV pled guilty to participating in a money laundering conspiracy from June 2019 to February 2022, while MIRSAIDOV was a senior executive for an international airline (“Airline-1”) with a hub at John F. Kennedy International Airport in New York.  MIRSAIDOV pled guilty before U.S. District Judge Loretta A. Preska.

U.S. Attorney Damian Williams said: “For years, Shukhratjon Mirsaidov used his position as an executive for an international airline to participate in a complex scheme to launder the proceeds of healthcare fraud.  While all forms of money laundering are pernicious, such conduct is particularly severe when it involves executives at major businesses abusing their positions to launder the proceeds of fraud.  This case demonstrates that money launderers – no matter what their station – will be held accountable by this Office.”  

According to allegations in the Indictment, the criminal Complaint, public filings, and statements made in court:

In the course of the money laundering conspiracy charged in the Indictment, MIRSAIDOV used a U.S. company bank account for Airline-1 (the “Airline-1 Bank Account”) to operate a check-cashing scheme and to launder hundreds of thousands of dollars of healthcare fraud proceeds.  As a senior executive, MIRSAIDOV was one of two signatories for the Airline-1 Bank Account.  Between approximately June 2019 and August 2021, MIRSAIDOV deposited into the Airline-1’s Bank Account over 100 checks drawn from accounts controlled by seven shell companies that were used to launder the proceeds of healthcare fraud.  For example, the shell companies had received insurance payments for medical services purportedly provided by a doctor, but the doctor did not, in fact, provide such services.  The shell companies were primarily funded by payments from medical clinics, physicians, and medical diagnostic testing companies and had no relation to the airline industry.  MIRSAIDOV obtained the checks from the shell companies from his co-defendant, SHUKHRAT ABDULLAEV.  In exchange for the checks, MIRSAIDOV provided cash generated from Airline-1 ticket sales to ABDULLAEV to give to the perpetrators controlling the shell companies.

MIRSAIDOV not only used the Airline-1 Account to launder healthcare fraud proceeds from the shell companies, but also used the Airline-1 Account to launder funds represented to be fraud proceeds in a series of sting transactions.  Between approximately June 2021 and February 2022, law enforcement, with the assistance of a confidential source (“CS-1”), conducted a series of sting money laundering transactions involving MIRSAIDOV, ABDULLAEV, and the Airline-1 Bank Account.  CS-1 asked ABDULLAEV to cash checks and transmit funds abroad and agreed to pay ABDULLAEV a four percent fee to do so.  ABDULLAEV told CS-1 a portion of the fee went to MIRSAIDOV.  During the transactions, CS-1 represented to ABDULLAEV that the funds were healthcare fraud proceeds.  Overall, CS-1 provided ABDULLAEV with 14 checks totaling $210,000 issued from a covert law enforcement account held in the name of a fictitious company.  MIRSAIDOV, working with ABDULLAEV, deposited 12 of the checks totaling $190,000 into the Airline-1 Bank Account.  CS-1 received cash from ABDULLAEV in exchange for the checks, and in one instance, ABDULLAEV coordinated the delivery of U.S. currency to an individual abroad in exchange for some of the checks.  During the course of these sting transactions, in a recorded conversation with CS-1, MIRSAIDOV admitted, in sum and substance, that he received many checks from ABDULLAEV and that MIRSAIDOV gave ABDULLAEV cash in exchange for the checks.  CS-1 informed MIRSAIDOV, in sum and substance, that the checks from CS-1 came from a medical company and that the company disguised the check payments in its financial reporting by claiming the check deposits were for business class flight tickets.  MIRSAIDOV nevertheless expressed a willingness to work directly with CS-1 to conduct check cashing using the Airline-1 Bank Account.       

*                *                *

MIRSAIDOV, 46, of Fort Lee, New Jersey, pled guilty to one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.  As part of his guilty plea, MIRSAIDOV agreed to forfeit to the U.S. $674,171, as well as funds seized from the Airline-1 Bank Account.  MIRSAIDOV will be sentenced on September 4, 2024, at 10:30 a.m. by U.S. District Judge Loretta A. Preska.

The maximum potential sentence in this case is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.

The case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Cecilia Vogel, Christopher Brumwell, and Vladislav Vainberg are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that LARS WINKELBAUER was sentenced to four years in prison by U.S. District Judge Jesse M. Furman in connection with a massive scheme to defraud Polar Air Cargo Worldwide, Inc. (“Polar”), a leading cargo airline, of more than $32 million dollars in revenue.  WINKELBAUER previously pled guilty to conspiracy to commit wire fraud and money laundering.

U.S. Attorney Damian Williams said: “Lars Winkelbauer abused his high-level position at Polar for over a decade, extracting millions of dollars in kickbacks for himself and causing tens of millions of dollars of harm to the company.  The substantial sentence imposed today sends an important message: corporate corruption doesn’t pay.” 

According to the charging documents and other filings and statements made in court:

From at least about 2009 through about July 2021, LARS WINKELBAUER and at least nine other individuals participated in a massive scheme to defraud Polar.  At all relevant times, WINKELBAUER and three co-defendants were senior executives of Polar (the “Executive Defendants”), and six co-defendants (the “Vendor Defendants”) owned and operated various Polar vendors and customers. 

The Executive Defendants agreed to accept millions of dollars in kickbacks from the Vendor Defendants, and also reaped substantial financial benefits as a result of their secret ownership interests in certain Polar vendors, in exchange for ensuring that those vendors received favorable business arrangements with Polar.  The fraud they perpetrated — which involved a substantial portion of Polar’s senior management and at least 10 customers and vendors of Polar — led to pervasive corruption of Polar’s business, touching nearly every aspect of the company’s operations for over a decade. 

As a result of the scheme, the Executive Defendants, along with two co-conspirators who also worked as senior executives at Polar, received unlawful payments, either directly or through various limited liability companies they controlled, in excess of approximately $23 million in kickback payments or disbursements as a result of their ownership of conflicted companies. 

WINKELBAUER was Polar’s Chief Operating Officer and Executive Vice President and was the most senior of the Executive Defendants.  He personally received kickbacks connected to approximately 11 separate vendors or customers of Polar totaling over $6 million.  He also attempted to conceal the illegal kickback payments through a sophisticated money laundering scheme, including via falsified invoices and the use of shell companies in China.

*                *                *

In addition to the prison term, WINKELBAUER, 48, of Bangkok, Thailand, was sentenced to three years of supervised release.  WINKELBAUER was also ordered to forfeit $6,774,039.30 and to make restitution to Polar in the amount of $32,902,847.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. 

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Katherine Reilly, Danielle Kudla, Kevin Mead, and Qais Ghafary are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that CARLOS LAUREANO was sentenced on May 23, 2024, to 30 years in prison for the murder of Luis Perez on August 12, 2014, and NNANDI BEN-JOCHANNAN was sentenced today to 10 years for his role in the murder.  LAUREANO and BEN-JOCHANNAN were sentenced by U.S. District Judge Lewis J. Liman.  LAUREANO previously pled guilty in October 2023 to discharging a firearm in connection with a drug trafficking offense and possessing a firearm in connection with a drug trafficking offense.  BEN-JOCHANNAN pled guilty in December 2023 to possessing a firearm in connection with a drug trafficking offense, which was brandished, and aiding and abetting the same. 

U.S. Attorney Damian Williams said: “Carlos Laureano and Nnandi Ben-Jochannan participated in the murder of Luis Perez nearly 10 years ago in connection with a drug debt.  Thanks to the hard work of the DEA, the NYPD, and the career prosecutors of this Office, the defendants have been sentenced for this heinous crime.  We hope that these sentences bring some measure of comfort to the family of Luis Perez and make clear that this Office and our law enforcement partners will continue to be relentless in our pursuit of anyone who takes another person’s life.” 

According to Indictment, the Superseding Informations, other public filings, and statements made in Court:   

On or about August 12, 2014, in the vicinity of 501 West 147th Street in Harlem, New York, LAUREANO shot and killed Perez in connection with a conspiracy to distribute heroin and marijuana.  BEN-JOCHANNAN drove LAUREANO to the scene of the murder, knowing that LAUREANO was armed with a firearm and served as LAUREANO’s getaway driver after the murder.  After successfully fleeing from the police, LAUREANO and BEN-JOCHANNAN cleaned BEN-JOCHANNAN’s car and disposed of evidence linking them to the murder. 

*                *                *

In addition to their prison terms, LAUREANO, 35, and BEN-JOCHANNAN, 30, both of the Bronx, New York, were sentenced to three and five years of supervised release, respectively.

Mr. Williams praised the outstanding investigative work of the New York City Police Department and the Drug Enforcement Administration.  He also thanked the Manhattan District Attorney’s Office for its assistance.

The case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Rushmi Bhaskaran is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Merrick B. Garland, the Attorney General of the United States, announced that Sinaloa Cartel leader Nestor Isidro Perez Salas, a/k/a “Nini,” was extradited Saturday, May 25, from Mexico to the U.S. based on the charges contained in two Indictments.  The first, filed in the District of Columbia by the Criminal Division’s Narcotic and Dangerous Drug Section (the “NDDS Indictment”), charges PEREZ SALAS with cocaine and methamphetamine importation, firearms offenses, and conspiracy to obstruct justice through murder.  The second, filed in the Southern District of New York (the “SDNY Indictment”) charges Perez Salas with leadership of a continuing criminal enterprise resulting in the deaths of numerous victims, including a confidential source for the Drug Enforcement Administration ("DEA"), fentanyl importation and trafficking, obstruction of justice by murdering an informant, kidnapping resulting in the deaths of eight people, including a minor boy, firearms, and money laundering offenses.  Perez Salas was arrested in Mexico by Mexican authorities on November 22, 2023.  Perez Salas was presented on the charges contained in the SDNY Indictment today before U.S. Magistrate Judge Ona T. Wang.  Perez Salas will be arraigned before U.S. District Judge Katherine Polk Failla on May 30, 2024, at 3:00 p.m.

According to the allegations contained in the NDDS Indictment, SDNY Indictment, other court filings, and statements made during court proceedings:[1]

The Sinaloa Cartel (the “Cartel”) is one of the most powerful drug cartels in Mexico and is responsible for the manufacturing and importing of fentanyl for distribution in the U.S.  Fentanyl is a dangerous synthetic opioid that is more than 50 times more potent than heroin and is the leading cause of death for Americans ages 18 to 49.  

In recent years, the Cartel has been led, in part, by the sons of the Cartel’s notorious former leader, Joaquin Archivaldo Guzman Loera, a/k/a “El Chapo”—Ivan Archivaldo Guzman Salazar, Jesus Alfredo Guzman Salazar, and Ovidio Guzman Lopez—known collectively as the “Chapitos.”[2]  Like their father, who, in July 2017, was sentenced to a term of life plus 30 years in prison, the Chapitos have used violence and rely on a sophisticated security apparatus to maintain control and to protect themselves and their operations as they traffic massive quantities of narcotics, including fentanyl, cocaine, and methamphetamine, to the U.S.  

PEREZ SALAS is one of the senior leaders of the Chapitos’ security apparatus.  Under PEREZ SALAS’s direction, armed enforcers for the Chapitos, known as sicarios, have used rampant violence to protect the Chapitos’ operation and to demolish unsupportive businesses, capture contested territory, intimidate civilians, and attack and murder law enforcement which resist their efforts.  In part under the direction of PEREZ SALAS, these sicarios regularly used military-grade firearms and explosives, including machineguns and rocket launchers, to kidnap, torture, and kill anyone who opposed the Chapitos.  This relentless violence has led to rampant bloodshed and taken the lives of untold victims.

PEREZ SALAS has also personally committed brutal acts of violence to advance the Chapitos’ trafficking operations.  For example, in or about 2017, PEREZ SALAS, with two of the Chapitos, captured, tortured, interrogated, and killed two Mexican federal law enforcement officers.  In or about May 2017, PEREZ SALAS, with two of the Chapitos and others, captured three members of a rival drug cartel, Los Zetas, and tortured them with electrocution before interrogating and killing them.  Also in or about 2017, PEREZ SALAS and others conspired to kill and retaliate against a witness and informant.  And in or about 2022, PEREZ SALAS and another sicario tested the potency of their fentanyl on individuals, and also experimented on a woman by injecting her repeatedly with the dangerous drug until she overdosed and died.  

In addition, PEREZ SALAS has personally participated in the negotiation and sale of large quantities of fentanyl.  More specifically, in or about the summer of 2022, PEREZ SALAS and other associates sold fentanyl (later seized by the DEA) in Los Angeles.  During the course of these sales, among other things, PEREZ SALAS described that he owned his own fentanyl labs and that three fentanyl “cooks” from one of his labs had recently died from sampling the product because it was so potent. 

Finally, most recently, in or about October 2023, PEREZ SALAS, and other sicarios acting at his direction, kidnapped a DEA confidential source and 10 other victims in Mexico—including a U.S. citizen—whom PEREZ SALAS believed worked for or were related to the confidential source.  PEREZ SALAS and his sicarios killed eight of the kidnapped victims, including the DEA confidential source, and a thirteen-year-old boy.  PEREZ SALAS kidnapped and killed these victims in retaliation for the confidential source’s provision of information to the DEA in connection with the investigation of PEREZ SALAS and his associates in the Southern District of New York. 

*                *                *

PEREZ SALAS, 32, a Mexican national, is charged in the SDNY Indictment with: one count of participating in a continuing criminal enterprise resulting in death, which carries a mandatory sentence of life in prison; one count of conspiring to import fentanyl into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of conspiring to distribute and possess with intent to distribute fentanyl, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of using, carrying, and possessing machine guns and destructive devices in connection with the continuing criminal enterprise and the fentanyl importation and trafficking conspiracies, which carries a mandatory minimum sentence of 30 years in prison and a maximum sentence of life in prison; one count of conspiring to use, carry, and possess machine guns and destructive devices in connection with the continuing criminal enterprise and the fentanyl importation and trafficking conspiracies, which carries a maximum sentence of life in prison; one count of conspiring to launder money, which carries a maximum sentence of 20 years in prison; one count of obstruction of justice by retaliating against an informant through murder, which carries a mandatory sentence of life in prison; one count of conspiring to obstruct justice by retaliating against an informant through murder, which carries a mandatory sentence of life in prison; one count of kidnapping resulting in death, including of a minor, which carries a mandatory sentence of life in prison; and one count of conspiring to commit kidnapping resulting in death, including of a minor, which carries a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison.  PEREZ SALAS is charged in the NDDS Indictment with one count of conspiring to import cocaine and methamphetamine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of using, carrying, and possessing machineguns and destructive devices in connection with the cocaine and methamphetamine conspiracy, which carries a mandatory minimum sentence of 30 years in prison and a maximum sentence of life in prison; and one count of conspiracy to obstruct justice by retaliating against a witness and informant through murder, which carries a mandatory sentence of life in prison.

The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

The DEA’s Special Operations Division Bilateral Investigations Unit and the FBI Washington Field Office investigated this case, with assistance from multiple DEA offices, as well as the assistance of the Office of International Affairs of the Justice Department’s Criminal Division; the U.S. Department of State, Rewards for Justice Program; and the U.S. Marshals Service.  The Justice Department also thanks Mexican authorities for their key role in securing the arrest and extradition of PEREZ SALAS. 

This prosecution is being handled by the Southern District of New York’s National Security and International Narcotics Unit alongside the NDDS.  SDNY Assistant U.S. Attorneys Nicholas S. Bradley, Sarah L. Kushner, Alexander N. Li, David J. Robles, and Kyle A. Wirshba, and NDDS Trial Attorneys Kirk Handrich, Kate Naseef, Samantha Thompson, and Tara Arndt, are in charge of the prosecution.

The charges contained in the SDNY Indictment and NDDS Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the NDDS Indictment and the SDNY Indictment and the description of the other court filings set forth herein constitute only allegations, and every fact described should be treated as an allegation.

[2] In September 2023, Ovidio Guzman Lopez was extradited to the U.S. on charges relating to his drug trafficking operations as a leader of the Cartel.

Damian Williams, the United States Attorney for the Southern District of New York, announced that RYAN SALAME was sentenced today to 90 months in prison.  SALAME previously pled guilty to conspiracy to make unlawful political contributions and defraud the Federal Election Commission and conspiracy to operate an unlicensed money transmitting business before U.S. District Judge Lewis A. Kaplan, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside of the law.  Salame’s involvement in two serious federal crimes undermined public trust in American elections and the integrity of the financial system.  Today’s sentence underscores the substantial consequences for such offenses.” 

According to the filings and statements made during court proceedings:

RYAN SALAME was a high-ranking official at Alameda Research, the quantitative cryptocurrency trading firm founded by Samuel Bankman-Fried, from 2019 to 2021.  In or about October 2021, SALAME was named co-CEO of FTX’s Bahamian affiliate FTX Digital Markets Ltd.

While working at Alameda Research and FTX, SALAME conspired with Bankman-Fried and other employees of FTX and Alameda Research to operate an unlicensed money transmitting business, unlawfully using FTX, Alameda Research, and an entity called “North Dimension” to transmit FTX customer funds without a license.  The conspirators and others at Alameda Research and FTX also made false statements to U.S. banks in order to maintain their unlawful businesses.

Additionally, beginning in or around 2020, SALAME conspired with Bankman-Fried and FTX executive Nishad Singh to donate campaign contributions in a manner that obscured Bankman-Fried’s association with certain of the contributions.  These donations were made to improve Bankman-Fried’s personal standing in Washington, D.C., increase FTX’s profile, and curry favor with candidates that could help pass legislation favorable to FTX, Alameda, or Bankman-Fried’s personal agenda.  In total, SALAME and his co-conspirators made over 300 political contributions, totaling tens of millions of dollars, that were unlawful because they were made in the name of a straw donor or paid for with corporate funds and caused false information to be reported by campaigns and political action committees to the Federal Election Commission.

*                *                *

In addition to the prison term, SALAME, 30, of Potomac, Maryland, was sentenced to three years of supervised release and ordered to pay more than $6 million in forfeiture and more than $5 million in restitution.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force, with assistance from the Office’s Illicit Finance and Money Laundering and Complex Frauds and Cybercrime Units.  Assistant U.S. Attorneys Danielle Kudla, Samuel Raymond, Thane Rehn, Nicolas Roos, and Danielle Sassoon are in charge of the prosecution.

Alleged Sinaloa Cartel leader and lead sicario, or assassin, Néstor Isidro Pérez Salas, also known as El Nini, 32, of Mexico, was extradited on May 25 from Mexico to the United States to face charges contained in two indictments. 

“Today, El Nini joins the growing list of cartel leaders and associates extradited to the United States and held accountable in an American courtroom,” said Attorney General Merrick B. Garland. “We allege El Nini was one of the Sinaloa Cartel’s lead sicarios, or assassins, and was responsible for the murder, torture, and kidnapping of rivals and witnesses who threatened the cartel’s criminal drug trafficking enterprise. This includes killing a Drug Enforcement Administration (DEA) confidential source and killing others in retaliation for the confidential source’s cooperation. We also allege El Nini was a part of the Sinaloa Cartel’s production and sale of fentanyl, including in the United States. I am grateful to our Mexican government counterparts for their extraordinary efforts in apprehending and extraditing El Nini. The Justice Department will always be relentless in its pursuit of the cartels responsible for flooding our communities with fentanyl and other drugs.”

The first indictment, filed in the District of Columbia by the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS), charges Pérez Salas with cocaine and methamphetamine importation, firearms offenses, and conspiracy to obstruct justice through murder. The second indictment, filed in the Southern District of New York (SDNY), charges Pérez Salas with leadership of a continuing criminal enterprise resulting in the deaths of numerous victims, including a confidential source for the DEA, fentanyl importation and trafficking, obstruction of justice by murdering an informant, kidnapping resulting in the deaths of eight people, including a minor boy, firearms, and money laundering offenses. 

Pérez Salas was arrested in Culiacan, Mexico, by Mexican authorities on Nov. 22, 2023. Pérez Salas was presented on the charges contained in the SDNY indictment today at 10:30 a.m. before U.S. Magistrate Judge Ona T. Wang. 

According to court documents, the Sinaloa Cartel is one of the most powerful drug cartels in Mexico and is responsible for a substantial portion of the fentanyl that is manufactured and imported for distribution in the United States. Fentanyl is a dangerous synthetic opioid that is more than 50 times more potent than heroin and is the leading cause of death for Americans ages 18 to 49. In recent years, the cartel has been led, in part, by the sons of the cartel’s notorious former leader, Joaquin Archivaldo Guzman Loera, also known as El Chapo, and Ivan Archivaldo Guzman Salazar, Jesus Alfredo Guzman Salazar, and Ovidio Guzman Lopez—known collectively as the “Chapitos.” Like their father, the Chapitos have used violence and rely on a sophisticated security apparatus to maintain control and to protect themselves and their operations as they traffic massive quantities of narcotics, including fentanyl, cocaine, and methamphetamine, to the United States.

Pérez Salas is allegedly one of the senior leaders of the Chapitos’ security apparatus. Under Pérez Salas’ direction, armed enforcers for the Chapitos, known as sicarios, have allegedly used rampant violence to protect the Chapitos’ operations and to demolish unsupportive businesses, capture contested territory, intimidate civilians, and attack and murder law enforcement members who resist their efforts. In part under the direction of Pérez Salas, the sicarios allegedly regularly used military-grade firearms and explosives, including machineguns and rocket launchers, to kidnap, torture, and kill anyone who opposed the Chapitos.

According to court documents, Pérez Salas is allegedly a leader and commander of the “Ninis,” a violent group charged with providing security for the Chapitos. From at least 2012 until February 2021, Pérez Salas allegedly conspired to distribute and manufacture cocaine and methamphetamine for unlawful importation into the United States, used a firearm in furtherance of the alleged drug-trafficking offense, and killed, attempted to kill, threatened, and caused bodily injury to another to intimidate a government witness and informant.   

Pérez Salas has also allegedly committed brutal acts of violence to advance the Chapitos’ trafficking operations. For example, in or about 2017, Pérez Salas, with two of the Chapitos, allegedly captured, tortured, interrogated, and killed two Mexican federal law enforcement officers. In or about May 2017, Pérez Salas, with two of the Chapitos and others, allegedly captured three members of a rival drug cartel, Los Zetas, and tortured them before interrogating and killing them. Also, in or about 2017, Pérez Salas and others allegedly conspired to kill and retaliate against a witness and informant. And in or about 2022, Pérez Salas and another sicario allegedly tested the potency of their fentanyl on individuals.

In addition, Pérez Salas has allegedly participated in the negotiation and sale of fentanyl. More specifically, in or about the summer of 2022, Pérez Salas and other associates allegedly sold fentanyl (later seized by the DEA) in Los Angeles. Finally, in or about October 2023, Pérez Salas and other sicarios acting at his direction, allegedly kidnapped a confidential source and 10 other victims in Mexico—including a U.S. citizen—whom Pérez Salas believed worked for or were related to the confidential source. Pérez Salas and his sicarios allegedly killed eight of the kidnapped victims, including the confidential source, and a 13-year-old boy. Pérez Salas allegedly kidnapped and killed these victims in retaliation for the confidential source’s provision of information to law enforcement in connection with the investigation of Pérez Salas and his associates in the Southern District of New York. 

Pérez Salas is charged in the District of Columbia indictment with (i) conspiring to import cocaine and methamphetamine into the United States, which carries a mandatory minimum of 10 years in prison and a maximum penalty of life in prison; (ii) using, carrying, and possessing machineguns and destructive devices in connection with the cocaine and methamphetamine conspiracy, which carries a mandatory minimum sentence of 30 years in prison and a maximum penalty of life in prison; and (iii) conspiracy to obstruct justice by retaliating against a witness and informant through murder, which carries a mandatory minimum of life in prison.

Pérez Salas is charged in the SDNY indictment with: (i) participating in a continuing criminal enterprise resulting in death, which carries a mandatory minimum of life in prison; (ii) conspiring to import fentanyl into the United States, which carries a mandatory minimum of 10 years in prison and a maximum penalty of life in prison; (iii) conspiring to distribute and possess with intent to distribute fentanyl, which carries a mandatory minimum of 10 years in prison and a maximum penalty of life in prison; (iv) using, carrying, and possessing machineguns and destructive devices in connection with the continuing criminal enterprise and the fentanyl importation and trafficking conspiracies, which carries a mandatory minimum of 30 years in prison and a maximum penalty of life in prison; (v) conspiring to use, carry, and possess machineguns and destructive devices in connection with the continuing criminal enterprise and the fentanyl importation and trafficking conspiracies, which carries a maximum penalty of life in prison; (vi) conspiring to launder money, which carries a maximum penalty of 20 years in prison; (vii) obstruction of justice by retaliating against an informant through murder, which carries a mandatory minimum of life in prison; (viii) conspiring to obstruct justice by retaliating against an informant through murder, which carries a mandatory minimum of life in prison; (ix) kidnapping resulting in death, including of a minor, which carries a mandatory minimum of life in prison; and (x) conspiring to commit kidnapping resulting in death, including of a minor, which carries a mandatory minimum of 20 years in prison and a maximum penalty of life in prison. 

The DEA’s Special Operations Division Bilateral Investigations Unit and the FBI Washington Field Office are investigating the case, with assistance from multiple DEA offices throughout Mexico, as well as the assistance of the U.S. Department of State Rewards for Justice Program and U.S. Marshals Service. The Justice Department’s Office of International Affairs provided significant assistance in securing the arrest and extradition Pérez Salas. The Justice Department also thanks Mexican authorities for their role in securing the arrest and extradition of Pérez Salas.

NDDS Trial Attorneys Kirk Handrich, Kate Naseef, Samantha Thompson, and Tara Arndt and SDNY Assistant U.S. Attorneys Nicholas S. Bradley, Sarah L. Kushner, Alexander N. Li, David J. Robles, and Kyle A. Wirshba are prosecuting the case.

The case is supported by the Organized Crime and Drug Enforcement Task Forces (OCDETF).

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

Indictment

Damian Williams, the United States Attorney for the Southern District of New York, and Matthew Modafferi, the Special Agent in Charge of the Northeast Area Field Office of the United States Postal Service, Office of Inspector General (“USPS-OIG”), announced today that TAMEKA BABULAL, a/k/a “Tameka Williams,” a/k/a “Sharniece Williams,” a/k/a “Meek Williams,” a United States Postal Service (“USPS”) mail carrier in Mount Vernon, New York, was arrested for stealing credit cards, checks, and identities from the mail in order to carry out a scheme and conspiracy to fraudulently steal money from individuals and financial institutions.  TAMEKA BABULAL, along with her husband JOEL BABULAL, a/k/a “Joel Nical Babulal,” were arrested this morning in Hempstead, New York, this morning and appeared this afternoon before U.S. Magistrate Judge Judith C. McCarthy.

U.S. Attorney Damian Williams said: “The charges against the defendants reflect this Office’s continued commitment to working with our law enforcement partners to protect the U.S. mail system.  As alleged, Tameka Babulal abused her position as a mail carrier, targeted victims on her mail route, and stole their identities to carry out an extensive and calculated scheme to line her and her co-conspirators’ pockets.  When those entrusted to deliver mail abuse their position to corrupt our mail system from within, this Office will hold them responsible for their conduct.”

USPS-OIG Special Agent in Charge Matthew Modafferi said: “U.S. Postal Service employees who betray the American Public’s trust by using their position for personal gain will be thoroughly investigated by the Special Agents of the U.S. Postal Service Office of Inspector General.  The dedicated work of Postal Service employees should never be overshadowed by those who compromise their integrity.  Our agency values all of our relationships in the law enforcement community, and we would like to thank the U.S. Attorney’s Office Southern District of New York for their continued support.”

As alleged in the Complaint:[1]

TAMEKA BABULAL is a mail carrier who delivers mail to and from residents and businesses with mail going through the USPS Processing and Distribution Center in Mount Vernon, New York.  She, however, did not perform the role entrusted to her and, instead, used her position to steal mail in furtherance of a fraud and identity theft scheme aimed at illicitly benefitting herself and her co-conspirators, including JOEL BABULAL.

TAMEKA BABULAL’s alleged actions include stealing checks mailed from victims, stealing credit cards mailed to victims and then attempting to use those cards for personal gain, depositing altered checks that were stolen from victims throughout the U.S. into personal financial accounts, and coordinating with co-conspirators to obtain the personal identifying information of victims she targeted on her mail route so that she and her co-conspirators could open fraudulent accounts in the victims’ names.  As detailed in the Complaint, the evidence obtained during the course of law enforcement’s investigation includes photographs from TAMEKA BABULAL’s cloud storage account connected to her phone, emails and telephone calls she made to financial institutions, fraudulent credit card applications, and messages between her and her co-conspirators in furtherance of their fraud scheme and conspiracy. JOEL BABULAL is alleged to have participated in the conspiracy.

When law enforcement conducted a search of TAMEKA BABULAL and JOEL BABULAL’s residence this morning, officers recovered, among other things, dozens of credit cards and checks in other people’s names, including “washed” checks; several bundles of undelivered mail, including from financial institutions, destined for addresses on TAMEKA BABULAL’s mail route in Mount Vernon, New York; several social security cards and tax documents in other people’s names; and 17 phones, including phones alleged to have been used in the fraud scheme and conspiracy.

As a result of these allegations, TAMEKA BABULAL’s employment with USPS will be suspended indefinitely pending resolution of these charges.

*                *                *

TAMEKA BABULAL, 36, of Hempstead, New York, is charged with one count of theft of mail by a postal worker, which carries a maximum sentence of five years in prison; one count each of bank fraud and conspiracy to commit wire and bank fraud, each of which carries a maximum sentence of 30 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison.

JOEL BABULAL, 36, of Hempstead, New York, is charged with one count of conspiracy to commit wire and bank fraud, which carries a maximum sentence of 30 years in prison.

The mandatory minimum and maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the Northeast Area Field Office of the USPS-OIG.  Mr. Williams also thanked the U.S. Postal Inspection Service for its continued involvement in this investigation.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Reyhan Watson is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today a settlement of a civil fraud lawsuit against RIVERSPRING LIVING HOLDING CORP. and ELDERSERVE HEALTH, INC., d/b/a RiverSpring at Home (“RIVERSPRING”), New York not-for-profit corporations that, among other things, administer a Managed Long Term Care Plan (the “RiverSpring MLTCP”) for Medicaid beneficiaries.  In connection with the RiverSpring MLTCP, RIVERSPRING arranges for health and long-term care services and is reimbursed by Medicaid through per-member payments on a monthly basis (“Capitation Payments”).

The settlement resolves allegations that RIVERSPRING submitted false claims to Medicaid for months during which RIVERSPRING failed to provide, or failed to adequately document, certain long-term care services to RiverSpring MLTCP members as obligated by the applicable contract between RIVERSPRING and the New York State Department of Health (“DOH”).

Under the terms of the settlement approved today by U.S. District Judge P. Kevin Castel, RIVERSPRING must pay a total sum of $10,159,130.95, with $4,063,652.38 paid to the United States and the remaining amount paid to the State of New York.  As part of the settlement, RIVERSPRING admits that it either did not provide RiverSpring MLTCP members with qualifying services as required by the applicable contract with DOH or did not adequately maintain documentation of the provision of such services during some or all of their enrollment in the RiverSpring MLTCP.  As a result, RIVERSPRING obtained Medicaid payments to which it was not entitled.

U.S. Attorney Damian Williams said: “RiverSpring collected millions of dollars in Medicaid payments to provide long-term care services as part of its managed care plan, but in many cases either failed to deliver these services or failed to maintain adequate documentation showing that it did so.  This Office is committed to holding recipients of government health care funds accountable when they fail to provide the care and services the government pays them to provide.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “As a part of this settlement, the defendants acknowledged that they obtained funds from the Medicaid program to which they were not entitled.  Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”

As alleged in the Complaint filed in Manhattan federal court: 

RIVERSPRING administers a managed long-term care plan for Medicaid beneficiaries pursuant to applicable contracts with DOH (the “Contract”).  To be eligible for enrollment into a managed long-term care plan, a Medicaid beneficiary must, among other things, be assessed as needing at least one of the community-based long-term care services listed in the Contract (“Qualifying Services”) for more than 120 days from the effective date of enrollment.  These services include nursing services in the home, therapies in the home, home health aide services, personal care services in the home, and adult day health care.  In order to receive Capitation Payments from Medicaid for members of the RiverSpring MLTCP, RIVERSPRING was required to ensure that RiverSpring MLTCP members received Qualifying Services during their enrollment or otherwise remained appropriately enrolled in the RiverSpring MLTCP consistent with the Contract and DOH disenrollment practices.  In exchange for arranging and providing these services, RIVERSPRING received Capitation Payments averaging between $4,000 and $4,500 for each member.

As part of the settlement, RIVERSPRING admits, acknowledges, and accepts responsibility for the following conduct:

• In many instances, RIVERSPRING either did not provide RiverSpring MLTCP members with Qualifying Services or did not adequately maintain documentation of the provision of such Qualifying Services during some or all of their enrollment in the RiverSpring MLTCP.  Nonetheless, RIVERSPRING received Capitation Payments to which it was not entitled for these RiverSpring MLTCP members for the months in question.

• In many of these instances, RIVERSPRING collected Capitation Payments for RiverSpring MLTCP members despite the fact that RIVERSPRING either did not provide or did not maintain documentation reflecting the provision of Qualifying Services to these members for three or more consecutive months during their enrollment in the RiverSpring MLTCP.

• In other instances, RIVERSPRING collected Capitation Payments for RiverSpring MLTCP members despite the fact that RIVERSPRING either did not provide or did not maintain documentation reflecting the provision of Qualifying Services to these members during the entirety of their enrollment in the RiverSpring MLTCP.

In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.

*                *                *

Mr. Williams thanked HHS-OIG for its assistance.  Mr. Williams also thanked the Medicaid Fraud Control Unit of the New York State Attorney General’s Office for its investigative efforts and work on the case.

This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorneys Samuel Dolinger and Jacob M. Bergman are in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging ANTHONY CURCIO, a/k/a “Brendan Wooley,” and IOSIF BONDARCHUK, a/k/a “Joe Bondarchuk,” with conspiracy to commit wire fraud and wire fraud.  The charges arise from the defendants’ fraudulent scheme to defraud buyers and marketplaces to purchase sports and Pokémon trading cards at false and inflated prices by misrepresenting that low-to-mid grade cards had received high-grade ratings from a reputable card authentication company (“Company-1”), thereby causing victims to pay more money for the cards than they otherwise would have.  CURCIO and BONDARCHUK were arrested this morning and are expected to be presented today before a U.S. Magistrate Judge in the Western District of Washington.  This case is assigned to U.S. District Judge Ronnie Abrams.

U.S. Attorney Damian Williams said: “As alleged, Anthony Curcio and Iosif Bondarchuk carried out a brazen, nationwide fraud scheme involving valuable sports and Pokémon trading cards to deceive buyers and marketplaces, ultimately amassing over $2 million in fraudulent and attempted sales.  Curcio and Bondarchuk allegedly sold and tried to sell at inflated prices cards of various professional athletes, including, among others, Michael Jordan, Tom Brady, Nolan Ryan, Larry Bird, Julius Erving, and Magic Johnson, as well as various valuable Pokémon cards.  Thanks to our law enforcement partners, the dedicated prosecutors of this Office, and the many victims who came forward, this alleged fraud has had its last dance.  Our message today is clear: no matter what product you’re selling, if you try to deceive the public to make money, you will be brought to justice.”

FBI Assistant Director in Charge James Smith said: “For over two years, Anthony Curcio and Joe Bondarchuk allegedly manipulated common-level trading cards to fraudulently inflate the retail price from its true market value by assigning false validity grades, resulting in more than $2 million in victim losses.  This alleged scheme not only damages the reputation of a respectable authentication company, but the defendants’ alleged actions also betray the trust and wallets of avid collectors.  The FBI will continue to investigate all fraudulent behavior, especially those who seek to exploit the good faith of companies and consumers.”

According to the allegations in the Indictment:[1]

From at least 2022 to May 2024, CURCIO and BONDARCHUK sold and attempted to sell fraudulent sports and Pokémon trading cards to victims across the country.  In total, CURCIO and BONDARCHUK attempted to deprive victims of over $2 million through their sales and attempted sales by misrepresenting the grade of numerous trading cards.

Sports and Pokémon trading cards containing the images of professional athletes and Pokémon can have considerable resale value depending on, among other things, their condition and authenticity.  Company-1 is a prominent card authenticator and grader.  For a fee, it verifies a card’s authenticity, assesses its condition, and assigns it a numerical grade from one to 10, with one being the lowest grade and 10 being the highest grade.  The grade assigned is reflective of the card’s comparative market value.  After grading a card, Company-1 seals the card in a distinctive, tamper-resistant plastic case that encloses the card to preserve its condition and indicates its grade on an affixed label.

The card grade assigned by Company-1 significantly impacts the market value of the card.  As an example, among the cards that CURCIO and BONDARCHUK sold in connection with the scheme was a misrepresented 1986 Fleer Michael Jordan #57 rookie card (the “1986 MJ Card”).  The 1986 MJ Card graded as an 8 has an estimated market value of between $6,000 and $7,000.  But this same card, when graded as a 10 by Company-1, has had an estimated market value of between approximately $185,000 and $203,000.  In short, representations about Company-1’s grade of the card go directly to the value of the card itself and the price at which the card can be bought and sold.  In May 2022, CURCIO advertised one version of the 1986 MJ Card on an online marketplace based in Manhattan (the “Manhattan Marketplace”) for sale for the amount of $171,700, as pictured below:

As is depicted above, CURCIO advertised the 1986 MJ Card as having a purported grade of 10 assigned by Company-1.  In truth and in fact, CURCIO knew that Company-1 had not assigned this grade to the card.  To further make it appear that the 1986 MJ Card had received a rating of 10 from Company-1, CURCIO caused a purported Company-1 label to be included in the plastic case, along with a fraudulent bar code and certification number.

Through the Manhattan Marketplace, CURCIO and BONDARCHUK sold various cards at inflated prices by falsely claiming the cards had been assigned higher ratings by Company-1 than was true. 

CURCIO and BONDARCHUK also sold and attempted to sell fraudulent cards at in-person card shops, auctions, and card shows.  CURCIO further sold and attempted to sell fraudulent cards through other online platforms using third-party sellers.

When victims demanded refunds and confronted CURCIO and BONDARCHUK, including by showing them confirmations from Company-1 that they had misrepresented the grade of the cards they were selling, CURCIO and BONDARCHUK feigned ignorance and often refunded the victims.  Yet, after being put on notice that the cards’ grades and labels were fraudulent, CURCIO and BONDARCHUK repeatedly attempted to, and did, sell these very same cards to subsequent victims, again with fraudulent labels showing an inflated grade from Company-1.

Among the fraudulent cards that CURCIO, BONDARCHUK, and others sold and attempted to sell are a 1999 Pokémon Venusaur card and a 1999 Pokémon Charizard card, pictured below.

In July 2023, as part of a law enforcement undercover purchase of the above fraudulently misrepresented 1999 Pokémon Venusaur card for $10,500—a card which BONDARCHUK had previously attempted to sell on an online marketplace—CURCIO mailed the card to the undercover law enforcement purchaser in Manhattan after the undercover purchaser wired the money to a CURCIO-controlled bank account.

CURCIO and BONDARCHUK repeatedly used fake names and identities in order to conceal their involvement in the fraudulent scheme.  For example: after a victim complained to BONDARCHUK about his sales of fraudulent cards, including a Tom Brady rookie card, a John Elway rookie card, and various Michael Jordan cards, BONDARCHUK gave the victim CURCIO’s phone number but falsely told the victim that the phone number belonged to another individual who, in reality, was a leader of the Hells Angels motorcycle ring.  After another victim complained to BONDARCHUK about his sales of fraudulent cards, including a 1968 Topps Nolan Ryan/Jerry Koosman rookie card, BONDARCHUK gave the victim CURCIO’s phone number but this time falsely told the victim that the phone number belonged to someone named, “John Steel.”

Last month, in April 2024, at a card show in New Jersey, CURCIO gave a business card to a potential victim buyer, falsely claiming to be “Brendan Wooley” and listing, among other identifiers, a phone number and LinkedIn page purportedly belonging to “Brendan Wooley.”  In truth and in fact, CURCIO—and not “Brendan Wooley”—created and operated the LinkedIn page and controlled the phone number.

In furtherance of the fraud, CURCIO ordered from an online marketplace various items needed to create forged card cases and labels.  The items included various card grading cases, thermal transfer barcode labels, a magnifier loupe optical glass, a handheld inkjet printer, a lock-cutting kit, an electric grinding pen, an abrasive buffer and polishing wheel, an abrasive and bristle brushes, and drill bits designed for engraving.

*                *                *

CURCIO, 43, of Redmond, Washington, and BONDARCHUK, 37, of Lake Stevens, Washington, are each charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison. 

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the investigative work of the FBI. 

This case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys David R. Felton and Kingdar Prussien are in charge of the prosecution.

The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of a Criminal Information charging MATTHEW QUEEN with falsification of records in connection with falsified notes Queen produced to the FBI related to an ongoing federal investigation.  QUEEN was arraigned on the Information before U.S. District Judge Lewis Kaplan earlier today.

U.S. Attorney Damian Williams said: “As alleged, Matthew Queen attempted to interfere with a federal grand jury investigation by creating false notes in an attempt to corroborate his own lies.  The criminal obstruction charge announced today should exemplify the seriousness of attempts by any individual to manipulate or interfere with a federal investigation.”

FBI Assistant Director in Charge James Smith said: “Matthew Queen, an interim Provost, allegedly failed to inform the FBI of a conspiracy to destroy evidence related to the ongoing investigation of sexual misconduct and instead produced falsified notes to investigators.  Queen’s alleged actions deliberately violated a court order and delayed justice for the sexual abuse victims.  The FBI will never tolerate those who intentionally lie and mislead our investigation in an attempt to conceal their malicious behavior.”

According to the allegations in the Information filed today in Manhattan federal court and other public statements made in court:[1]

Since approximately 2022, the U.S. Attorney’s Office for the Southern District of New York (“U.S. Attorney’s Office”) and the FBI have been investigating allegations of sexual abuse and misconduct related to a national religious denomination (the “Denomination”) and its affiliated entities, and the alleged cover-up of such allegations by individuals and entities associated with the Denomination.  In October 2022, as part of that investigation, a grand jury subpoena was issued to a seminary that is affiliated with the Denomination (the “Seminary).  Among other things, the subpoena required the production of all documents in the Seminary’s possession related to allegations of sexual abuse against anyone employed by or associated with the Seminary.

The following month, in November 2022, a Seminary employee (“Employee-1”) received a report alleging that a current Seminary student had committed sexual abuse.  Employee-1 immediately notified the campus police at the Seminary.  No further action was taken by the Seminary at that time, however, and the allegation was not reported to the U.S. Attorney’s Office. 

In January 2023, Employee-1 created a document describing the sexual abuse allegation Employee-1 received in November 2022, and the failure of the Seminary to take action regarding the allegation at that time  (the “Document”).  On January 26, 2023, Employee-1 met with MATTHEW QUEEN, the then-Interim Provost and professor at the Seminary, and a member of the Seminary’s executive staff (“Employee-2”).  During that meeting, and in QUEEN’s presence, Employee-2 directed Employee-1, in sum and substance, to destroy the Document.

In May 2023, the U.S. Attorney’s Office and the FBI interviewed MATTHEW QUEEN in Fort Worth, Texas regarding the January 26, 2023 meeting with Employee-2 and Employee-1.  During that interview, QUEEN falsely stated that he had not heard Employee-2 direct Employee-1 to destroy the document.  Three days after the interview, QUEEN falsely stated to another Seminary employee (“Employee-3”) that he had just located a notebook in his office containing purportedly contemporaneous notes of the January 26, 2023 meeting.  The notes falsely stated that during the January 26, 2023 meeting, Employee-2 and Employee-1 merely discussed providing the Document to a different department at the Seminary, and omitted the fact that Employee-2 had directed Employee-1 to destroy the Document.  Queen provided the falsified notes to Employee-2 to produce in response to the grand jury subpoena.

In June 2023, MATTHEW QUEEN provided the U.S. Attorney’s Office with a copy of his notes.  On June 20, 2023, QUEEN met again with the U.S. Attorney’s Office and the FBI in New York and produced the original notebook containing his notes.  During his second interview, QUEEN initially falsely stated that he had written the notes contemporaneously with the January 26, 2023 meeting, but then during the same meeting, QUEEN falsely stated that he instead had written the notes months later, in April 2023. In truth and in fact, QUEEN had written the notes following his initial May 2023 interview with the U.S. Attorney’s Office and the FBI.

On June 21, 2023, MATTHEW QUEEN testified under oath that he had in fact heard Employee-2 direct Employee-1 to make the Document “go away.”

                                                            *                *                *

QUEEN, 49, of Greensboro, North Carolina, is charged with one count of falsification of records, which carries a maximum sentence of twenty years in prison.

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative efforts of the FBI.  He added that the investigation is ongoing.   

The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorney Jacqueline Kelly is in charge of the prosecution.

The charges contained in the Information are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that DOUGLAS RAYMOND ARNTSEN was sentenced to nine years in prison for his scheme to defraud the U.S. Small Business Administration (“SBA”) of more than $1.4 million in government-funded loans designed to provide relief to small businesses during the COVID-19 pandemic.  ARTSEN previously pled guilty before U.S. District Judge P. Kevin Castel, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Douglas Raymond Arntsen, a disbarred attorney and recidivist fraudster, took advantage of a national emergency to line his pockets, masterminding a scheme to defraud the government out of more than $1.4 million by submitting fraudulent COVID-19 relief loan applications.  Thanks to the hard work of this Office and our law enforcement partners, Arntsen is being held accountable for his fraud.”

According to the Indictment, other public filings, and statements made in court:

Between about June 2020 through about August 2020, DOUGLAS RAYMOND ARNTSEN orchestrated a scheme to defraud the SBA by submitting fraudulent loan applications through the Economic Injury Disaster Loan (“EIDL”) Program.  In doing so, ARNTSEN recruited multiple co-conspirators.  ARNTSEN promised potential co-conspirators a way out of their difficult financial circumstances.  Certain of those co-conspirators trusted ARNTSEN because they thought he was an attorney.  In reality, ARNTSEN had been disbarred. 

ARNTSEN asked his co-conspirators to give him their personal information, including social security and driver’s license numbers, and then used this information to submit fraudulent loan applications to the EIDL program.  The applications submitted by ARNTSEN falsely claimed that the co-conspirators owned businesses that had substantial revenue.  Often, the co-conspirators named as owners of the businesses, in fact, had no legitimate connection to the businesses at all.  After the loan applications were submitted, ARNTSEN directed his co-conspirators to lie to the SBA during the loan diligence process.

ARNTSEN also directed his co-conspirators to recruit additional participants to his fraudulent scheme.  After one co-conspirator had obtained a fraudulent loan, ARNTSEN directed him, in sum and substance, to “[g]et me one more warm body.”  The co-conspirator proceeded to give ARNTSEN the personal information of a relative, which was then used to obtain another fraudulent loan.

In total, ARNTSEN and his co-conspirators obtained at least approximately $1.4 million in fraudulent loans and attempted to obtain hundreds of thousands of dollars of additional loans that the SBA declined to fund.  After one fraudulent loan was approved by the SBA, ARNTSEN texted a co-conspirator, in sum and substance, “Need how you want your bank checks.  Your chariot has arrived this morning.” 

Prior to the instant offense, in 2012, ARNTSEN, then a barred attorney working for Crowell & Moring, was convicted and sentenced to four to 12 years in prison for engaging in a multi-year scheme to steal more than $10 million in clients’ money from escrow accounts.

*                *                *

In addition to his prison term, ARNTSEN, 45, of Staten Island, New York, was sentenced to three years of supervised release and ordered to pay restitution in the amount of $1,430,200 and to forfeit the same amount.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and additionally thanked the Suffolk County District Attorney’s Office for its assistance.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Adam Sowlati is in charge of the prosecution.

Rui-Siang Lin, also known as Ruisiang Lin, 林睿庠, Pharoah, and faro, 23, of Taiwan, was arrested today in connection with his operation and ownership of “Incognito Market,” an online dark web narcotics marketplace that enabled its users to buy and sell illegal narcotics anonymously around the world. Lin was arrested at John F. Kennedy Airport on May 18, and will be presented in Manhattan federal court before U.S. Magistrate Judge Willis later today.

“Drug traffickers who think they can operate outside the law on the dark web are wrong,” said Attorney General Merrick B. Garland. “As alleged, Rui-Siang Lin was the architect of Incognito, a $100 million dark web scheme to traffic deadly drugs to the United States and around the world. The long arm of the law extends to the dark web, and we will bring to justice those who try to hide their crimes there.”

As alleged in the complaint and the indictment, Incognito Market was an online narcotics bazaar that existed on the dark web. Incognito Market formed in October 2020. Since that time, and through its closing in March, Incognito Market sold more than $100 million of narcotics — including hundreds of kilograms of cocaine and methamphetamines. Incognito Market was available globally to anyone with internet access and could be accessed using the Tor web browser on the “dark web” or “darknet.” Lin operated the Incognito market under the online pseudonym “Pharoah” or “faro.” As “Pharoah” — the leader of Incognito market — Lin supervised all of its operations, including its employees, vendors, and customers, and had ultimate decision-making authority over every aspect of the multimillion-dollar operation.

“As alleged, Rui-Siang Lin operated a sophisticated and dangerous online narcotics marketplace through which he profited millions of dollars at the community’s expense,” said U.S. Attorney Damian Williams for the Southern District of New York. “The dedicated prosecutors from the Southern District of New York and our law enforcement partners will pursue criminal actors regardless of whether they operate on street corners or in the dark corners of the internet. The so-called ‘dark web’ is not a safe haven for those who seek to break the law.”

“For nearly four years, Rui-Siang Lin allegedly operated ‘Incognito Market,’ one of the largest online platforms for narcotics sales, conducting $100 million in illicit narcotics transactions and reaped millions of dollars in personal profits,” said Assistant Director in Charge James Smith of the FBI New York Field Office. “Under the promise of anonymity, Lin’s alleged operation offered the purchase of lethal drugs and fraudulent prescription medication on a global scale. The FBI is committed to targeting and dismantling all criminal enterprises, especially those whose leaders distribute illegal substances on the dark web.”

“As alleged, Rui-Siang Lin’s brazen operation resulted in the illicit sale of over $100 million in narcotics, including those that were mislabeled and later found to include deadly fentanyl,” said Special Agent in Charge Ivan J. Arvelo of Homeland Security Investigations (HSI) New York. “The defendant’s greed and disregard for others was further demonstrated by his alleged extortion attempt during the platform’s final days. The El Dorado Task Force’s Darkweb and Cryptocurrency Task Force leverages cutting-edge techniques to target even the Internet’s most savvy criminals. HSI New York, in coordination with law enforcement partners, remains resolute in its commitment to protecting the public from individuals utilizing dangerous means to make a profit.”

“The arrest of ‘Incognito Market’ owner Rui-Siang Lin is a result of the continued working relationship the DEA has with our law enforcement partners in targeting individuals who use the dark web as a marketplace to promote the sale of illicit narcotics,” said Special Agent in Charge Frank A. Tarentino III of the Drug Enforcement Administration (DEA)’s New York Division. “Mr. Lin’s alleged actions of putting profits before public health were not only reckless and dangerous, but unconscionable. We will continue to make sure those who hide behind a keyboard and use the dark web to profit off lives face justice.”

“The FDA is committed to continuing its work to disrupt and dismantle the illegal sales of drugs on the dark web, where such sales far too often have tragic consequences,” said Special Agent in Charge Charles Grinstead of the Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI) Kansas City Field Office. “We will continue to monitor, investigate, and bring to justice those who misuse the internet in a quest for profits with reckless disregard for the risk to public health and safety.”  

“This arrest underscores the dedicated, ongoing efforts of law enforcement to identify and dismantle illicit drug networks operating from every shadowy recess of the marketplace,” said Commissioner Edward A. Caban of the New York Police Department (NYPD). “I commend our NYPD investigators and all of our state and federal partners for their unwavering commitment to public safety.”

Incognito Market was designed to foster seamless narcotics transactions across the internet and across the world and incorporated many features of legitimate e-commerce sites such as branding, advertising, and customer service. Upon visiting the site, users were met by a splash page and graphic interface, which is picture below:

After logging in with a unique username and password, users were able to search thousands of listings for narcotics of their choice. Incognito Market sold illegal narcotics and misbranded prescription medication, including, heroin, cocaine, LSD, MDMA, oxycodone, methamphetamines, ketamine, and alprazolam. An example of listings on Incognito market is below:

Listings included offerings of prescription medication that was advertised as being authentic but was not. For example, in November 2023, an undercover law enforcement agent received several tablets that purported to be oxycodone, which were purchased on Incognito Market. Testing on those tablets revealed that they were not authentic oxycodone at all and were, in fact, fentanyl pills.

Each listing on Incognito Market was sold by a particular vendor. To become an Incognito Market vendor, each vendor was required to register with the site and pay an admission fee. In exchange for listing and selling narcotics as a vendor on Incognito Market, each vendor paid 5% of the purchase price of every narcotic sold to Incognito Market. That revenue funded Incognito Market’s operations, including paying “employee” salaries and for computer servers. Lin collected millions of dollars of profits from Incognito. To facilitate these financial transactions, Incognito Market had its own “bank,” which allowed its users to deposit cryptocurrency on the site into their own “bank accounts.” After a narcotics transaction was completed, cryptocurrency from the buyer’s “bank account” was transferred to the seller’s “bank account,” less the 5% fee that Incognito collected. The bank enabled buyers and sellers to stay anonymous from each other. The bank’s graphic interface is picture below:

If convicted, Lin faces a mandatory minimum penalty of life in prison for engaging in a continuing criminal enterprise; a maximum penalty of life in prison for narcotics conspiracy; a maximum penalty of 20 years in prison for money laundering; and a maximum penalty of five years in prison for conspiracy to sell adulterated and misbranded medication. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI, HSI, DEA, FDA-OCI, and NYPD investigated the case.

Assistant U.S. Attorneys Ryan B. Finkel and Nicholas Chiuchiolo for the Southern District of New York are prosecuting the case.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-drive, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.

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

Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); Frank A. Tarentino III, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”); Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); Charles Grinstead, the Special Agent in Charge of the Kansas City Field Office of the U.S. Food and Drug Administration, Office of Criminal Investigations (“FDA-OCI”); Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”); and Elana Iatarola, the Special Agent in Charge of the Cincinnati Field Office of the FBI, announced today the arrest of RUI-SIANG LIN, a/k/a “Ruisiang Lin,” a/k/a “林睿庠,” a/k/a “Pharoah,” a/k/a “faro,” in connection with his operation and ownership of “Incognito Market,” an online dark web narcotics marketplace that enabled its users to buy and sell illegal narcotics anonymously around the world.  LIN was arrested at John F. Kennedy Airport on May 18, 2024, and will be presented in Manhattan federal court before U.S. Magistrate Judge Willis later today.

U.S. Attorney Damian Williams said: “As alleged, Rui-Siang Lin operated a sophisticated and dangerous online narcotics marketplace through which he profited millions of dollars at the community’s expense.  The dedicated prosecutors from the Southern District of New York and our law enforcement partners will pursue criminal actors regardless of whether they operate on street corners or in the dark corners of the internet.  The so-called ‘dark web’ is not a safe haven for those who seek to break the law.”

Attorney General Merrick B. Garland said: “Drug traffickers who think they can operate outside the law on the dark web are wrong.  As alleged, Rui-Siang Lin was the architect of Incognito, a $100 million dark web scheme to traffic deadly drugs to the U.S. and around the world.  The long arm of the law extends to the dark web, and we will bring to justice those who try to hide their crimes there.”

FBI Assistant Director in Charge James Smith said: “For nearly four years, Rui-Siang Lin allegedly operated ‘Incognito Market,’ one of the largest online platforms for narcotics sales, conducting $100 million in illicit narcotics transactions and reaping millions of dollars in personal profits.  Under the promise of anonymity, Lin’s alleged operation offered the purchase of lethal drugs and fraudulent prescription medication on a global scale.  The FBI is committed to targeting and dismantling all criminal enterprises, especially those whose leaders distribute illegal substances on the dark web.”

HSI Special Agent in Charge Ivan J. Arvelo said: “As alleged, Rui-Siang Lin’s brazen operation resulted in the illicit sale of over $100 million in narcotics, including those that were mislabeled and later found to include deadly fentanyl.  The El Dorado Task Force’s Darkweb and Cryptocurrency Task Force leverages cutting-edge techniques to target even the Internet’s most savvy criminals.  HSI New York, in coordination with law enforcement partners, remains resolute in its commitment to protecting the public from individuals utilizing dangerous means to make a profit.”  

DEA Special Agent in Charge Frank A. Tarentino III said: “The arrest of ‘Incognito Market’ owner Rui-Siang Lin is a result of the continued working relationship the DEA has with our law enforcement partners in targeting individuals who use the dark web as a marketplace to promote the sale of illicit narcotics.  Mr. Lin’s alleged actions of putting profits before public health were not only reckless and dangerous, but unconscionable.  We will continue to make sure those who hide behind a keyboard and use the dark web to profit off lives face justice.”

FDA-OCI Special Agent in Charge Charles Grinstead said: “The FDA is committed to continuing its work to disrupt and dismantle the illegal sales of drugs on the dark web, where such sales far too often have tragic consequences.  We will continue to monitor, investigate and bring to justice those who misuse the internet in a quest for profits with reckless disregard for the risk to public health and safety.”   

NYPD Commissioner Edward A. Caban said: “This arrest underscores the dedicated, ongoing efforts of law enforcement to identify and dismantle illicit drug networks operating from every shadowy recess of the marketplace.  I commend our NYPD investigators and all of our state and federal partners for their unwavering commitment to public safety.”

As alleged in the Complaint and the Indictment unsealed today:[1]

Incognito Market was an online narcotics bazaar that existed on the dark web.  Incognito Market formed in October 2020.  Since that time, and through its closing in March 2024, Incognito Market sold more than $100 million of narcotics — including hundreds of kilograms of cocaine and methamphetamines.  Incognito Market was available globally to anyone with internet access and could be accessed using the Tor web browser on the “dark web” or “darknet.”  LIN operated the Incognito market under the online pseudonym “Pharoah” or “faro.”  As “Pharoah” — the leader of Incognito market — LIN supervised all of its operations, including its employees, vendors, and customers, and had ultimate decision-making authority over every aspect of the multimillion-dollar operation. 

Incognito Market was designed to foster seamless narcotics transactions across the internet and across the world and incorporated many features of legitimate e-commerce sites such as branding, advertising, and customer service.  Upon visiting the site, users were met by a splash page and graphic interface, which is picture below:

After logging in with a unique username and password, users were able to search thousands of listings for narcotics of their choice.  Incognito Market sold illegal narcotics and misbranded prescription medication, including, heroin, cocaine, LSD, MDMA, oxycodone, methamphetamines, ketamine, and alprazolam.  An example of listings on Incognito market is below:

Listings included offerings of prescription medication that was advertised as being authentic but was not.  For example, in November 2023, an undercover law enforcement agent received several tablets that purported to be oxycodone, which were purchased on Incognito Market.  Testing on those tablets revealed that they were not authentic oxycodone at all and were, in fact, fentanyl pills.

Each listing on Incognito Market was sold by a particular vendor.  To become an Incognito Market vendor, each vendor was required to register with the site and pay an admission fee.  In exchange for listing and selling narcotics as a vendor on Incognito Market, each vendor paid 5% of the purchase price of every narcotic sold to Incognito Market.  That revenue funded Incognito Market’s operations, including paying “employee” salaries and for computer servers.  LIN collected millions of dollars of profits from Incognito.  To facilitate these financial transactions, Incognito Market had its own “bank,” which allowed its users to deposit cryptocurrency on the site into their own “bank accounts.”  After a narcotics transaction was completed, cryptocurrency from the buyer’s “bank account” was transferred to the seller’s “bank account,” less the 5% fee that Incognito collected.  The bank enabled buyers and sellers to stay anonymous from each other.  The bank’s graphic interface is picture below:

*                *                *

RUI-SIANG LIN, 23, of Taiwan, is charged with one count of engaging in a continuing criminal enterprise, which carries a mandatory minimum sentence of life in prison; one count of narcotics conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum potential sentence of life in prison; one count of money laundering, which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to sell adulterated and misbranded medication, which carries a maximum potential sentence of five years in prison.

The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. 

Mr. Williams praised the investigative work of the FBI, HSI, DEA, FDA-OCI, and NYPD.  

This effort is part of an Organized Crime Drug Enforcement Task Forces (“OCDETF”) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-drive, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Ryan B. Finkel and Nicholas Chiuchiolo are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint, Indictment and the descriptions of the Complaint and Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that LAWRENCE BILLIMEK was sentenced by U.S. District Judge Paul G. Gardephe to 70 months in prison for engaging in a multi-year insider trading scheme resulting in tens of millions of dollars in profits.  BILLIMEK previously pled guilty to one count of securities fraud before Judge Gardephe. 

U.S. Attorney Damian Williams said: "Lawrence Billimek shamelessly abused his position, orchestrating an insider trading scheme that pocketed tens of millions in illicit gains.  Billimek thought that hiding his conduct behind burner phones and lies would shield him from detection from law enforcement.  He was mistaken.  Prosecuting white collar crimes like this sends a clear message that no one, regardless of their position, privilege, or the type of crime they commit, is outside the reach of the law.”

According to the filings and statements made during court proceedings:

Through his employment at TIAA-CREF, BILLIMEK had advance access to certain of TIAA-CREF’s anticipated trades.  Due to the size of certain of these TIAA-CREF trade orders, they often caused market movement in the securities they traded.  From at least 2016 through his arrest in December 2022, BILLIMEK abused his insider access and provided inside information about these trades to his co-conspirator (“CC-1”) who then bought or sold the same securities in advance of the TIAA-CREF trading.  CC-1 then provided BILLIMEK with a portion of the profits on these trades. 

BILLIMEK and CC-1 engaged in these front-running trades on over a thousand occasions between in or about 2016 and December 2022.  In an effort to hide their scheme, BILLIMEK used prepaid, unregistered “burner” phones to communicate with CC-1 throughout the trading day.  BILLIMEK and CC-1 also lied to various financial institutions about the source of funds they received during the scheme, claiming that they were, among other things, gifts.  In total, BILLIMEK and CC-1 generated tens of millions of dollars in profits.  BILLIMEK bought multiple homes and funded an active social lifestyle through the proceeds of his criminal scheme. 

*                *                *

In addition to a prison term, BILLIMEK, 52, of Hailey, Idaho, was sentenced to three years of supervised release and ordered to pay forfeiture of $12,249,000. 

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Williams also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorney Jason A. Richman is in charge of the prosecution.