Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced that SHAMOON RAFIQ, a/k/a “Shamoon Omer Rafiq,” a/k/a “Omar Rafiq,” a/k/a “Omer Rafiq,” was sentenced today by U.S. District Judge Victor Marrero to 57 months in prison for engaging in a scheme in which RAFIQ solicited millions of dollars of investors’ money by falsely representing that he was offering investments in shares of stock in privately held companies that had not yet conducted an initial public offering (“pre-IPO stock”), even though he did not actually have those shares to offer, by impersonating senior officials of a reputable family office investment firm and by engaging in other acts of deception.  RAFIQ previously pled guilty to conspiracy to commit securities fraud and wire fraud before U.S. Magistrate Judge Sarah L. Cave.

U.S. Attorney Damian Williams said: “Today’s sentence demonstrates that stiff penalties await anyone who seeks to cheat and swindle American investors, and that running an investment scheme from halfway around the world will not shield fraudsters from being pursued by this Office and our law enforcement partners.”

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

RAFIQ was born in the Netherlands and resided in Singapore.  RAFIQ was convicted in 2004 in the U.S. District Court for the Eastern District of New York for carrying out a wire fraud scheme in which he purported to sell pre-IPO stock in a privately held company that had not yet conducted its initial public offering when, in fact, RAFIQ did not own or have access to such stock.  After serving a 41-month federal prison sentence for that crime, RAFIQ was deported from the U.S. and eventually relocated to Singapore.

In or about 2020, RAFIQ engaged in a new scheme from Singapore to defraud victims into paying him millions of dollars for alleged investment interests in various pre-IPO stocks that he did not actually own or control.

In connection with his new fraud scheme, RAFIQ fraudulently impersonated two senior officials (“Victim-1” and “Victim-2”) of a prominent family office investment firm (“FamCap”) that manages and invests assets of members of a prominent billionaire family.  In July 2020, RAFIQ caused the creation of a fake FamCap website, which automatically routed users to the official FamCap website, and the creation of fake FamCap email addresses for Victim-1 and Victim-2 that closely resemble, but are slightly different from, their genuine FamCap email addresses.  The fake FamCap website and email addresses for Victim-1 and Victim-2 were created without their or FamCap’s consent.  The fake email addresses also included the names of Victim-1 and Victim-2 without their authorization.

In July 2020, RAFIQ began soliciting millions of dollars from investment firms in New York and elsewhere based on false claims that in exchange for their funds, he would sell them investment interests in a purported special purpose investment vehicle called “[Fam] Capital Technology Fund, LLC” that was supposedly managed by FamCap and allegedly owned pre-IPO stock in Airbnb, Inc., among other companies.  For example, as part of this fraudulent scheme, RAFIQ deceived an investment firm based in New York, New York (the “New York Firm”), and one of the firm’s foreign institutional clients (the “Foreign Client”) into making agreements under which the Foreign Client wired about $9 million in mid-August 2020 into an escrow account in New York for anticipated release to a bank account in Singapore to pay RAFIQ for his purported sale of investment interests in the LLC.

In soliciting this $9 million investment, RAFIQ made a variety of false representations, including the following:

• RAFIQ falsely claimed that the LLC was managed by FamCap.  In fact, the LLC never existed.

• RAFIQ falsely claimed that the LLC owned pre-IPO shares of Airbnb, Inc.  In fact, the LLC did not own and could not have owned such stock because the LLC never existed.

• RAFIQ falsely claimed that Victim-1 and Victim-2 had approved of his sale of his alleged interests in the LLC.  In fact, Victim-1 and Victim-2 do not know RAFIQ and have confirmed that FamCap was never involved in or approved of any such transaction.

During and to further the goals of this fraudulent scheme, RAFIQ also caused the creation and transmission of emails from the fake FamCap email addresses, fake contracts, and deal documents purporting to have been signed by Victim-1 or Victim-2 on behalf of FamCap that neither of them approved.  In August 2020, during the course of email communications with the New York Firm and Foreign Client concerning RAFIQ’s alleged sale to them of his purported interests in the alleged FamCap-managed LLC that supposedly held Airbnb, Inc. shares, RAFIQ copied into the email chain the fake FamCap email addresses to create the false impression that FamCap was involved in and approved of the alleged transaction.

Also pursuant to the fraudulent scheme, RAFIQ solicited over $1 million from an investment group located in California (the “California Group”) in late 2020 by yet again purporting to be a representative of FamCap offering pre-IPO stock for sale.  As a result, the California Group wired RAFIQ a total of approximately $1,002,615 in November and December 2020.

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In addition to his prison term, RAFIQ, 50, a resident of Singapore and a citizen of the Netherlands, was ordered to pay restitution and forfeiture in the amount of $1,002,615.

Mr. Williams praised the investigative work of Homeland Security Investigations, the U.S. Postal Inspection Service, the New York City Police Department, and the New York City Sheriff’s Office, and he also thanked the U.S. Securities and Exchange Commission, which conducted a separate parallel investigation, for its assistance, and the Department of Justice’s Office of International Affairs, Interpol, Singapore Police Force, and the Attorney-General’s Chambers of Singapore for their assistance in the extradition of the defendant.

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

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 that the U.S. has settled a civil fraud lawsuit against Balance Diagnostics USA, LLC (“BALANCE”), a diagnostic testing facility based in Cedarhurst, New York, for paying kickbacks to physicians and their medical practices in the form of sham “rent payments” to secure patient referrals in violation of the federal Anti-Kickback Statute (the “AKS”).  Specifically, the settlement resolves claims that from January 2009 through December 2019, BALANCE paid hundreds of thousands of dollars to over 100 physicians and their practices in the New York City area (the “Providers”) to induce them to refer patients for diagnostic testing services performed by BALANCE staff at the Providers’ offices.  The U.S. alleges that the so-called rent payments were based entirely upon the number of patient referrals and, in many instances, were well above the fair market rental value of the leased office space. 

Under the settlement approved yesterday by U.S. District Judge Vernon S. Broderick, BALANCE will pay the U.S. $1,725,850 and has admitted and accepted responsibility for conduct alleged in the U.S. Complaint, including that BALANCE determined the amount of rent to be paid pursuant to the subleases by taking into account the anticipated volume or value of the patients referred.  BALANCE has also agreed to pay the State of New York $774,150 to resolve state law claims, for a total combined recovery of $2.5 million.  BALANCE has executed judgments in favor of the U.S. for $4,280,108, and in favor of the State of New York for $1,919,892, for a total combined amount of $6.2 million, which may be enforced if BALANCE fails to make the payments required under the settlements. 

U.S. Attorney Damian Williams said: “The Anti-Kickback Statute is meant to ensure that medical decision-making is driven by what is best for the patient, and never by what is most profitable.  Balance entered into sham office rental arrangements with scores of doctors in the New York City area, paying them to refer patients to Balance for diagnostic tests, pressuring them to meet referral expectations, and terminating the arrangements when referral rates were lower than expected.  These are precisely the kind of business arrangements that the statute was enacted to prevent.  This Office will continue to scrutinize such arrangements and hold accountable those providers whose dealings violate the law.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Violations of the Anti-Kickback Statute, as demonstrated by this lawsuit and settlement, can induce diagnostic testing referrals that are compromised by profit-making considerations.  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 U.S. Complaint:

BALANCE is a diagnostic testing facility based in Cedarhurst, New York, which provides on-site mobile diagnostic testing services, such as video steganography (used to diagnose balance disorders) and ultrasound procedures.  During the period from 2009 through 2019, BALANCE orchestrated a kickback scheme designed to direct patients to BALANCE for diagnostic testing services.  BALANCE entered into sham office rental arrangements with over 100 Providers, who referred thousands of patients to BALANCE for diagnostic testing services that were reimbursed by Medicare and Medicaid.

BALANCE routinely sent employees to visit physicians and medical practices to persuade them to enter these kickback arrangements.  BALANCE representatives inquired about the volume of patients the Providers anticipated referring for diagnostic testing services each month.  BALANCE and the Providers then used these anticipated referral rates to negotiate the amount BALANCE would pay in rent to the Providers each month.  BALANCE characterized the payments to the Providers as rent payments because it knew that it was illegal to make payments in exchange for referrals and wanted to conceal the true purpose of the payments.

BALANCE’s agreements with the Providers typically provided for the use of an exam room by BALANCE personnel, as well as for the use of basic equipment (e.g., a telephone, fax machine, a computer) and administrative staff to assist with patient flow and recordkeeping.  In exchange, BALANCE agreed to pay monthly rent, which ranged from one to several thousand dollars per month.  In many cases, the monthly payments exceeded the fair market value for BALANCE’s limited use of the rented space, equipment, and services.  The sole factor BALANCE took into account when setting the monthly rent was the expected value of the patient referrals the Provider would generate. 

Many of the agreements misrepresented key terms, such as the square footage of the rented space and the number of days per month BALANCE would use the space.  In some instances, BALANCE did not even enter into written lease agreement with the Providers.

As part of the settlement, BALANCE admitted, acknowledged, and accepted responsibility for the following conduct:

• In a number of instances, BALANCE and the Providers determined the amount of rent to be paid pursuant to the sublease by taking into account the anticipated volume or value of the patients referred to BALANCE.  Frequently, BALNCE representatives reached out to the Providers about leasing office space from them, and if the Providers were interested, the BALANCE representatives inquired about the volume of patient referrals for diagnostic testing services that BALANCE could expect to receive in a given month.  The BALANCE representatives and the Providers then negotiated the monthly rent amount by taking into account the anticipated volume and/or value of such referrals.  The greater the number of patients the Providers indicated they could refer to BALANCE for diagnostic testing service each month, the greater the monthly amount BALANCE agreed to pay the Providers.

• BALANCE typically performed no meaningful analysis to determine the fair market value of the subleased premises or to verify that the agreed-upon monthly rent payments were consistent with fair market value.  In a number of instances, the payments made to the Providers substantially exceeded the fair market value of the rented space.

• BALANCE representatives monitored the number of patient referrals received each month from the Provider.  BALANCE took a number of steps to address situations where the volume of patient referrals was meaningfully less than that which BALANCE had anticipated when setting the monthly rent amount. For example, BALANCE representatives routinely reached out to Providers to press them to achieve the expected patient referral rates.  Sometimes, BALANCE representatives secured commitments from Providers to increase the number of patients they would refer for diagnostic testing services each month.  In other instances, when there were fewer referrals or BALANCE did not use the space because of low patient referrals, BALANCE paid the Providers less than the amount specified in the sublease and/or varied its payment (between the amount specified in the sublease and a lesser amount) based on the actual patient referral volume.  In other instances, BALANCE representatives renegotiated the rent amount downward or terminated the sublease arrangement entirely.

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

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Mr. Williams thanked HHS-OIG and the New York Medicaid Fraud Control Unit for their assistance with the case. 

This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Pierre G. Armand is in charge of the case.                                  

An indictment was unsealed today charging Anton Peraire-Bueno, 24, of Boston, and James Pepaire-Bueno, 28, of New York, with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. The charges in the indictment arise from an alleged novel scheme by the defendants to exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million worth of cryptocurrency within approximately 12 seconds. Anton Peraire-Bueno and James Peraire-Bueno were arrested yesterday in Boston and New York, respectively, and will be presented this afternoon before U.S. Magistrate Judge Paul G. Levenson for the District of Massachusetts and U.S. Magistrate Judge Valerie Figueredo for the Southern District of New York.

“As alleged in today’s indictment, the Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds,” said Deputy Attorney General Lisa Monaco. “Unfortunately for the defendants, their alleged crimes were no match for Department of Justice prosecutors and IRS agents, who unraveled this first-of-its kind wire fraud and money laundering scheme. As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims, and restore confidence to these markets.”

“Today, my office indicted two brothers — Anton Peraire-Bueno and James Peraire-Bueno — for conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, all stemming from their alleged scheme to exploit the Ethereum blockchain and to obtain about $25 million worth of cryptocurrency from it,” said U.S. Attorney Damian Williams for the Southern District of New York. “As we allege, the defendants’ scheme calls the very integrity of the blockchain into question. The brothers, who studied computer science and math at one of the most prestigious universities in the world, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of Ethereum users across the globe. And once they put their plan into action, their heist only took 12 seconds to complete. This alleged scheme was novel and has never before been charged. But as the indictment makes clear, no matter how sophisticated the fraud or how new the techniques used to accomplish it, the career prosecutors of this office will be relentless in pursuing people who attack the integrity of all financial systems.”

“These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of the electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims,” said Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office. “In this case, IRS-CI New York’s Cyber Unit simply followed the money. Regardless of the complexity of the case, we continue to lead the effort in financial criminal investigations with cutting-edge technology and good-ole-fashioned investigative work, on and off the blockchain.”

As alleged in the indictment, Anton Peraire-Bueno and James Pepaire-Bueno are brothers who studied mathematics and computer science at one of the most prestigious universities in the country. Using the specialized skills developed during their education, as well as their expertise in cryptocurrency trading, Anton Peraire-Bueno and James Pepaire-Bueno exploited the very integrity of the Ethereum blockchain in order to fraudulently obtain approximately $25 million worth of cryptocurrency from victim cryptocurrency traders (the “Exploit”). Through the Exploit, which is believed to be the very first of its kind, Anton Peraire-Bueno and James Pepaire-Bueno manipulated and tampered with the process and protocols by which transactions are validated and added to the Ethereum blockchain. In doing so, they fraudulently gained access to pending private transactions and used that access to alter certain transactions and obtain their victims’ cryptocurrency. Once the defendants stole their victims’ cryptocurrency, they rejected requests to return the stolen cryptocurrency and took numerous steps to hide their ill-gotten gains.

Anton Peraire-Bueno and James Pepaire-Bueno meticulously planned the Exploit over the course of several months. Among other things, they learned the trading behaviors of the victim traders whose cryptocurrency they ultimately stole. As they planned the Exploit, they also took numerous steps to conceal their identities and lay the groundwork to conceal the stolen proceeds, including by setting up shell companies and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges. After the Exploit, the defendants transferred the stolen cryptocurrency through a series of transactions designed to conceal the source and ownership of the stolen funds.

Throughout the planning, execution, and aftermath of the Exploit, Anton Peraire-Bueno and James Pepaire-Bueno also searched online for information about, among other things, how to carry out the Exploit, ways to conceal their involvement in the Exploit, cryptocurrency exchanges with limited “know your customer” procedures that they could use to launder their criminal proceeds, attorneys with expertise in cryptocurrency cases, extradition procedures, and the very crimes charged in the indictment.

If convicted, Anton Peraire-Bueno and James Pepaire-Bueno each face a maximum penalty of 20 years in prison for each count.

IRS-CI New York’s Cyber Investigations Unit investigated the case, with the assistance of the U.S. Customs and Border Protection and New York City Police Department.

Assistant U.S. Attorneys Rushmi Bhaskaran and Danielle Kudla 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; Lisa Monaco, the Deputy Attorney General of the United States; 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 an Indictment charging ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering.  The charges in the Indictment arise from an alleged novel scheme by the defendants to exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million worth of cryptocurrency within approximately 12 seconds.  ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO were arrested yesterday in Boston, Massachusetts, and New York, New York, respectively, and will be presented this afternoon before U.S. Magistrate Judge Paul G. Levenson for the District of Massachusetts and U.S. Magistrate Judge Valerie Figueredo for the Southern District of New York. 

U.S. Attorney Damian Williams said: “Today, my Office indicted two brothers—Anton Peraire-Bueno and James Peraire-Bueno—for conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, all stemming from their alleged scheme to exploit the Ethereum blockchain and to obtain about $25 million worth of cryptocurrency from it.  As we allege, the defendants’ scheme calls the very integrity of the blockchain into question.  The brothers, who studied computer science and math at one of the most prestigious universities in the world, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of Ethereum users across the globe.  And once they put their plan into action, their heist only took 12 seconds to complete.  This alleged scheme was novel and has never before been charged.  But as the Indictment makes clear, no matter how sophisticated the fraud or how new the techniques used to accomplish it, the career prosecutors of this Office will be relentless in pursuing people who attack the integrity of all financial systems.”

Deputy Attorney General Lisa Monaco said: “As alleged in today’s indictment, the Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds.  Unfortunately for the defendants, their alleged crimes were no match for Department of Justice prosecutors and IRS agents, who unraveled this first-of-its kind wire fraud and money laundering scheme.  As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims, and restore confidence to these markets.”

IRS-CI Special Agent in Charge Thomas Fattorusso said: “These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of the electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims.  In this case, IRS-CI New York’s Cyber Unit simply followed the money.  Regardless of the complexity of the case, we continue to lead the effort in financial criminal investigations with cutting-edge technology and good-ole-fashioned investigative work, on and off the blockchain.”

As alleged in the Indictment:[1]

ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO are brothers who studied mathematics and computer science at one of the most prestigious universities in the country.  Using the specialized skills developed during their education, as well as their expertise in cryptocurrency trading, ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO exploited the very integrity of the Ethereum blockchain in order to fraudulently obtain approximately $25 million worth of cryptocurrency from victim cryptocurrency traders (the “Exploit”).  Through the Exploit, which is believed to be the very first of its kind, ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO manipulated and tampered with the process and protocols by which transactions are validated and added to the Ethereum blockchain.  In doing so, they fraudulently gained access to pending private transactions and used that access to alter certain transactions and obtain their victims’ cryptocurrency.  Once the defendants stole their victims’ cryptocurrency, they rejected requests to return the stolen cryptocurrency and took numerous steps to hide their ill-gotten gains.

ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO meticulously planned the Exploit over the course of several months.  Among other things, they learned the trading behaviors of the victim traders whose cryptocurrency they ultimately stole.  As they planned the Exploit, they also took numerous steps to conceal their identities and lay the groundwork to conceal the stolen proceeds, including by setting up shell companies and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges.  After the Exploit, the defendants transferred the stolen cryptocurrency through a series of transactions designed to conceal the source and ownership of the stolen funds. 

Throughout the planning, execution, and aftermath of the Exploit, ANTON PERAIRE-BUENO and JAMES PERAIRE-BUENO also searched online for information about, among other things, how to carry out the Exploit, ways to conceal their involvement in the Exploit, cryptocurrency exchanges with limited “know your customer” procedures that they could use to launder their criminal proceeds, attorneys with expertise in cryptocurrency cases, extradition procedures, and the very crimes charged in this Indictment. 

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ANTON PERAIRE-BUENO, 24, of Boston, Massachusetts, and JAMES PERAIRE-BUENO, 28, of New York, New York, are charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years in prison. 

The statutory maximum 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 investigative work of the IRS-CI New York’s Cyber Investigations Unit.  Mr. Williams also acknowledged the assistance of the U.S. Customs and Border Protection and the New York City Police Department.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Rushmi Bhaskaran and Danielle Kudla are in charge of the prosecution.

The allegations 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.

U.S. Attorney Damian Williams said: “Bruce Garelick was part of a sophisticated group of individuals invited to invest in Digital World Acquisition Corporation (DWAC), a special purpose acquisition company that had raised funds with the intention of later investing in a target company, Trump Media & Technology Group, not yet known to the public.  When he was given that opportunity, Garelick promised to keep the information about DWAC’s interest in acquiring Trump Media secret and not use it to trade in the stock market.  Garelick was also given a seat on DWAC’s board, which gave him direct access to additional non-public information regarding the acquisition.  As a unanimous jury has just found, Garelick blatantly violated the law by using the information that he obtained as an insider at DWAC to trade and tip others.  Garelick’s federal conviction is yet another stark reminder that insider trading is always a losing bet.”

Trevor Bickford, 20, of Wells, Maine, was sentenced to 324 months in prison for attempting to kill officers and employees of the U.S. Government and persons assisting them during his brazen attack using a machete-style knife against three New York City Police Department (NYPD) officers in Times Square on Dec. 31, 2022. Bickford pleaded guilty to terrorism charges on Jan. 11.

“Today’s sentence holds Trevor Bickford accountable for his premeditated 2022 terrorist attack in Times Square during which he attempted to kill three NYPD officers in a violent rampage,” said Attorney General Merrick B. Garland. “The Justice Department is deeply grateful to the NYPD for its quick actions and bravery in disrupting this New Year’s Eve attack, and for the work it does every day to keep New Yorkers safe. The Justice Department will always stand by its state and local law enforcement partners as we work together to counter the threat of terrorism, and that includes being relentless in prosecuting those who seek to harm officers.”

“The defendant’s brutal ambush of three New York City police officers keeping watch over New Year’s Eve celebrations was a premeditated act of terrorism,” said FBI Director Christopher Wray. “Police officers work tirelessly to protect the communities they serve and assaults on them are reprehensible. He planned, prepared, and travelled to conduct a savage attack in support of his violent ideology and now he is being held accountable for his actions.”

“Inspired by radical Islamic extremism, Trevor Bickford brutally attacked three NYPD officers who were just doing their jobs by protecting the public during the Times Square New Year’s Eve festivities,” said U.S. Attorney Damian Williams for the Southern District of New York. “Thankfully, one officer’s quick-thinking actions stopped the defendant’s attack while minimizing risk to the innocent bystanders who easily might have become additional victims of the defendant’s heinous violence. Less than a year and a half after his attack, Bickford has been convicted and now sentenced to 27 years in prison. Bickford’s conviction and sentence demonstrate that cowardly acts of terrorism will be met with law enforcement’s unwavering resolve to protect New York City, our country, and our core values of freedom and democracy.” 

According to court documents, In December 2022, Bickford, a U.S. citizen and resident of Maine, traveled from Maine to New York City to, in his own words, wage jihad and kill as many targets as possible. He targeted one of the most densely populated areas in the United States at one of the most densely populated times possible: Times Square on New Year’s Eve. It was there that Bickford ambushed three NYPD officers, declared “Allahu Akbar,” an Arabic phrase meaning “God is great” that other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks, and swung his blade at their heads, seriously injuring all three officers. Bickford also tried to grab one of the NYPD officers’ guns during his attack. One of the victims that Bickford struck managed to shoot Bickford in the shoulder, halting his brutal rampage before he could attack and possibly kill others. Bickford later proudly declared that he carried out his attack to wage jihad and proclaimed that his goal was to kill as many military-aged men who worked for the U.S. Government as he could, before himself becoming a martyr in the attack.

Bickford’s violent rampage on Dec. 31, 2022, was premeditated. He consumed materials espousing radical Islamic ideology – including materials promoting the Taliban and reflecting the teachings of Sheikh Abu Muhammad Al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda – and contemplated ways to wage jihad. As he immersed himself deeper into this propaganda, Bickford devoted himself to violent Islamic extremism and pursuit of the jihad that he would eventually unleash in the heart of New York City. In the months leading up to his attack, Bickford focused on traveling overseas to support the Taliban in Afghanistan or elsewhere. He planned to ally himself with the Taliban to fight against governments that, in his view, oppress Muslims and to wage jihad against officials of governments that he believes are anti-Muslim, including the U.S. government. Ultimately, Bickford decided that he would not travel overseas and instead turned his attention to an attack here in the United States. This decision resulted in Bickford perpetrating his attack in Times Square on New Year’s Eve in 2022.

Near the scene of the attack, law enforcement officers recovered a book from Bickford’s backpack with the following passage highlighted: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.” In addition, Bickford had used an encrypted application and secure browser on his cellphone to conduct extensive research in advance of his attack, including research about al Qaeda (including internet searches for “Al Qaeda recruitment”); about waging jihad; about his eventual time (New Year’s Eve) and place (Times Square) of attack (including “how often do the police patrol in NYC” and “New Years Eve 2023 itinerary in New York City Times Square”); about potential weapons he could use to carry out his attack (including “[g]un buying laws for New York City” and “Do you need to pass a background check for a used gun”); and various ways to incapacitate, injure, and kill his potential targets (including “[w]hat are the terms for taking slaves in Islam” and whether Islam “permit[s] rape of female prisoners of war”). Finally, less than an hour before his attack, Bickford watched an Al Qaeda propaganda video imploring viewers to “fight” as he finalized his targets.

The FBI New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies, investigated the case.

Assistant U.S. Attorneys Matthew J.C. Hellman, Sarah L. Kushner, and Kaylan E. Lasky for the Southern District of New York are prosecuting the case, with valuable assistance from Trial Attorney D. Andrew Sigler of the National Security Division’s Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”); and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI, announced that TREVOR BICKFORD was sentenced today to 27 years in prison for attempting to kill officers and employees of the U.S. Government and persons assisting them during his brazen attack using a machete-style knife against three New York City Police Department (“NYPD”) officers in Times Square on December 31, 2022.  BICKFORD pled guilty on January 11, 2024, before U.S. District Judge P. Kevin Castel, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “Inspired by radical Islamic extremism, Trevor Bickford brutally attacked three NYPD officers who were just doing their jobs by protecting the public during the Times Square New Year’s Eve festivities.  Thankfully, one officer’s quick-thinking actions stopped the defendant’s attack while minimizing risk to the innocent bystanders who easily might have become additional victims of the defendant’s heinous violence.  Less than a year and a half after his attack, Bickford has been convicted and now sentenced to 27 years in prison.  Bickford’s conviction and sentence demonstrate that cowardly acts of terrorism will be met with law enforcement’s unwavering resolve to protect New York City, our country, and our core values of freedom and democracy.” 

Attorney General Merrick B. Garland said: “Today’s sentence holds Trevor Bickford accountable for his premeditated 2022 terrorist attack in Times Square during which he attempted to kill three NYPD officers in a violent rampage.  The Justice Department is deeply grateful to the NYPD for its quick actions and bravery in disrupting this New Year’s Eve attack, and for the work it does every day to keep New Yorkers safe.  The Justice Department will always stand by its state and local law enforcement partners as we work together to counter the threat of terrorism, and that includes being relentless in prosecuting those who seek to harm officers.”

FBI Director Christopher A. Wray said: “The defendant’s brutal ambush of three New York City police officers keeping watch over New Year’s Eve celebrations was a premeditated act of terrorism.  Police officers work tirelessly to protect the communities they serve and assaults on them are reprehensible.  He planned, prepared, and traveled to conduct a savage attack in support of his violent ideology, and now he is being held accountable for his actions.”

FBI Assistant Director in Charge James Smith said: “Today, Trevor Bickford was handed a deserved punishment for intentionally committing an act of terrorism against New York City and police officers sworn to protect it.  Thankfully, these brave police officers fulfilled their duty and stopped Bickford's brutal attack before he could cause more harm.  The FBI’s Joint Terrorism Task Force in New York remains determined to bring to justice anyone attempting to commit violence in the name of terrorism to ensure the safety of New York.”

According to court documents and statements made during court proceedings:

In December 2022, BICKFORD, a U.S. citizen and resident of Maine, traveled from Maine to New York City to, in his own words, wage jihad and kill as many of his targets as possible.  He targeted one of the most densely populated areas in the U.S. at one of the most densely populated times possible: Times Square on New Year’s Eve.  It was there that BICKFORD ambushed three NYPD officers, declared “Allahu Akbar,” an Arabic phrase meaning “God is great” that other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks, and swung his blade at their heads, seriously injuring all three officers.  BICKFORD also tried to grab one of the NYPD officers’ guns during his attack.  One of the victims that BICKFORD struck managed to shoot BICKFORD in the shoulder, halting his brutal rampage before he could attack and possibly kill others.  BICKFORD later proudly declared that he carried out his attack to wage jihad and proclaimed that his goal was to kill as many military-aged men who worked for the U.S. Government as he could, before himself becoming a martyr in the attack.  The machete-style knife, which has a blade more than a foot long, that BICKFORD used to carry out his attack is shown below:

BICKFORD’s violent rampage on December 31, 2022, was premeditated.  He consumed materials espousing radical Islamic ideology — including materials promoting the Taliban and reflecting the teachings of Sheikh Abu Muhammad Al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda — and contemplated ways to wage jihad.  As he immersed himself deeper into this propaganda, BICKFORD devoted himself to violent Islamic extremism and pursuit of the jihad that he would eventually unleash in the heart of New York City.  In the months leading up to his attack, BICKFORD focused on traveling overseas to support the Taliban in Afghanistan or elsewhere.  He planned to ally himself with the Taliban to fight against governments that, in his view, oppress Muslims and to wage jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government.  Ultimately, BICKFORD decided that he would not travel overseas and instead turned his attention to an attack here in the United States.  This decision resulted in BICKFORD perpetrating his attack in Times Square on New Year’s Eve in 2022. 

Near the scene of the attack, law enforcement officers recovered a book from BICKFORD’s backpack with the following passage highlighted: “Fight in the Name of Allah and in the Cause of Allah.  Fight against those who do not believe in Allah.  Wage a holy war.”  In addition, BICKFORD had used an encrypted application and secure browser on his cellphone to conduct extensive research in advance of his attack, including research about al Qaeda (including internet searches for “Al Qaeda recruitment”); about waging jihad; about his eventual time (New Year’s Eve) and place (Times Square) of attack (including “how often do the police patrol in NYC” and “New Years Eve 2023 itinerary in New York City Times Square”); about potential weapons he could use to carry out his attack (including “[g]un buying laws for New York City” and “Do you need to pass a background check for a used gun”); and various ways to incapacitate, injure, and kill his potential targets (including “[w]hat are the terms for taking slaves in Islam” and whether Islam “permit[s] rape of female prisoners of war”).  Finally, less than an hour before his attack, BICKFORD watched an Al Qaeda propaganda video imploring viewers to “fight” as he finalized his targets.

*                *                *

In addition to the prison term, BICKFORD, 20, of Wells, Maine, was sentenced to a lifetime of supervised release.

Mr. Williams praised the outstanding efforts of the New York Joint Terrorism Task Force of the FBI, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies, and thanked the Counterterrorism Section of the Department of Justice’s National Security Division for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Matthew J.C. Hellman, Sarah L. Kushner, and Kaylan E. Lasky are in charge of the prosecution, with assistance from Trial Attorney D. Andrew Sigler of the Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced that CHRISTOPHER SMITH, a/k/a “Christopher Johnson,” a/k/a “Mad Max,” a/k/a “Max,” a/k/a “Trouble,” was sentenced today by U.S. District Judge Ronnie Abrams to eight years in prison in connection with committing two shootings and an armed carjacking in the Bronx and Yonkers, New York.   

U.S. Attorney Damian Williams said: “Christopher Smith committed two dangerous shootings and an armed carjacking over the span of two months.  He put New Yorkers’ lives in jeopardy and brazenly flouted the rule of law.  This Office remains steadfast in its commitment to ending the scourge of gun violence on the streets of New York City and will continue to hold accountable those who endanger public spaces.”

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

Over a two-month period in the fall of 2022, SMITH committed two shootings and an armed carjacking. 

In September 2022, SMITH encountered a group of men standing in front of a convenient store in Yonkers, New York.  SMITH asked the men to sell drugs for him, but when the men refused, SMITH brandished a black handgun with a light blue handle, as depicted in the images below: 

After SMITH brandished his gun, the group of men dispersed, and SMITH and a friend drove away in the friend’s black Mercedes-Benz.  Approximately 30 minutes later, SMITH and his friend drove back to the same area and found the group of men with whom SMITH had gotten into an argument.  After another altercation, SMITH fired his gun twice in the vicinity of the group of men, and SMITH and his friend sped off in the Mercedes-Benz.

Approximately 30 minutes later, law enforcement stopped the Mercedes-Benz in Mount Vernon, New York.  Although SMITH’s friend was in the driver’s seat, SMITH jumped onto his friend’s lap and attempted to drive the Mercedes-Benz into the police vehicle to flee.  When that failed, law enforcement opened the driver’s side door and arrested SMITH’s friend, but SMITH fled the scene on foot while carrying his gun in his pocket.  A 30-minute foot chase ensued.  Eventually, SMITH ran up to a 70-year-old woman who was exiting her church and placing her belongings into her Jeep.  SMITH shouted at the woman to give him her car keys, forcibly ripped her keys out of her hands, climbed into her Jeep, and sped off with her Jeep, as well as her other personal belongings.

Just two months later, in November 2022, SMITH was residing in the Bronx, New York, with a friend whom he had known for approximately 10 years.  SMITH argued with his friend over poor quality narcotics and left the apartment.  Soon thereafter, SMITH reappeared on the outside balcony of the apartment with a black handgun with a light blue handle.  SMITH lifted the window screen, aimed his firearm through the window at his friend’s head, and fired one shot.  The friend ducked and ran at SMITH, who fled the scene.

*                *                *

In addition to his prison term, SMITH, 28, of Mount Vernon, New York, was sentenced to three years of supervised release. 

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, the New York City Police Department, the Mount Vernon Police Department, the Yonkers Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Amanda C. Weingarten and Katherine Cheng are in charge of the prosecution.

U.S. Attorney Damian Williams said: “As a unanimous jury has just found, Darius A. Paduch leveraged his position of trust as a medical doctor for his own perverse gratification.  For years, patients seeking needed medical care, many of them children, left his office as victims.  I commend the career prosecutors of this Office for bringing this important case to a just conclusion.”

Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the unsealing of two Complaints charging flight attendants CHARLIE HERNANDEZ, SARAH VALERIO PUJOLS, EMMANUEL TORRES, and JAROL FABIO with various offenses in connection with their years-long participation in smuggling narcotics trafficking proceeds from the United States to the Dominican Republic on commercial flights.  All of the defendants were arrested yesterday.  PUJOLS and FABIO were presented yesterday in Manhattan federal court before U.S. Magistrate Judge Gary Stein, and HERNANDEZ and TORRES will be presented later today before Judge Stein.  

U.S. Attorney Damian Williams said: “As alleged, these flight attendants smuggled millions of dollars of drug money and law enforcement funds that they thought was drug money from the United States to the Dominican Republic over many years by abusing their privileges as airline employees.  Today’s charges should serve as a reminder to those who break the law by helping drug traffickers move their money that crime doesn’t pay.”

HSI Special Agent in Charge Ivan J. Arvelo said: “As alleged, the defendants knowingly smuggled large amounts of illicit money linked to the sale of narcotics, to include fentanyl, and took advantage of airport security checkpoints by using their trusted positions as flight attendants.  This investigation has exposed critical vulnerabilities in the airline security industry and has illuminated methods that narcotics traffickers are utilizing.  Today’s announcement should serve as a warning to all airline personnel: HSI New York will not tolerate employees’ attempts to abuse their power for the sake of transporting illicit goods.  I commend El Dorado Task Force’s Transnational Criminal Enterprise Investigations Group and our partners in the public and private sectors for recognizing the seriousness of this issue.”

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

During the relevant period charged in the Complaints, all of the defendants were employed as flight attendants with different international airlines that operated routes between New York City and the Dominican Republic.  All of the defendants had “Known Crewmember” (“KCM”) status with the Transportation Security Administration, which allowed them to pass through a special security lane at John F. Kennedy International Airport and other airports with less scrutiny than normal passengers.  In total, the defendants smuggled approximately $8 million in bulk cash from the United States to the Dominican Republic.

Before his or her arrest in about October 2021, a cooperating witness (“CW-1”) operated a significant money laundering organization (“MLO”) in New York City, specializing in the movement of cash proceeds from narcotics sales from New York City to the Dominican Republic.  One method that CW-1 used in furtherance of his or her MLO was corrupting flight attendants, like the defendants, who worked routes between New York City and the Dominican Republic.  In exchange for a fee – which generally amounted to a small percentage of the amount of money that they would be smuggling – the defendants accepted bulk cash from CW-1 in New York City, got it past airport security via the KCM lane, and passed it off to other members of CW-1’s MLO in the Dominican Republic, including another cooperating witness (“CW-2”).  After CW-1 and CW-2 began cooperating with law enforcement, HSI orchestrated a number of sting operations in which CW-1 provided law enforcement funds represented to be narcotics proceeds to the defendants, who then smuggled it down to the Dominican Republic and handed it off to CW-2. 

*                *                *

CHARLIE HERNANDEZ, 42, of West New York, New Jersey, SARAH VALERIO PUJOLS, 42, of the Bronx, New York, EMMANUEL TORRES, 34, of Brooklyn, New York, and JAROL FABIO, 35, of New York, New York, are each charged with one count of operation of an unlicensed money transmission business, which carries a maximum sentence of five years in prison, and one count of entering an airport or aircraft area in violation of security requirements, which carries a maximum sentence of 10 years in prison.  PUJOLS and HERNANDEZ are additionally charged with one count of conspiracy to operate an unlicensed money transmission business, which carries a maximum sentence of five years in prison, and PUJOLS is further charged with one count of bulk cash smuggling, which carries a maximum sentence of five 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 HSI and the New York City Police Department.

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

The charges contained in the Complaints are merely allegations, 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, announced that WILLIAM JONES, a/k/a “Principe,” was sentenced today to life in prison for the December 2019 murder of Frederick Delacruz.  JONES, who was a high-ranking member of the Trinitarios gang, lured Delacruz from the Bronx to Suffolk County, New York, where JONES shot and killed Delacruz next to a cemetery because Delacruz was acting as a confidential informant for law enforcement.  JONES was sentenced today by U.S. District Judge Edgardo Ramos after being convicted by a jury following an eight-day trial in October 2023.

U.S. Attorney Damian Williams said: “William Jones executed Frederick Delacruz in cold blood because Delacruz had the courage to cooperate with law enforcement.  Now, Jones will spend the rest of his life in a federal prison.”

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

WILLIAM JONES was a high-ranking member of the Trinitarios, a racketeering enterprise that has engaged in a pattern of murder, attempted murder, drug trafficking, fraud, and witness tampering and retaliation.  On December 28, 2019, JONES and other Trinitarios lured Frederick Delacruz from the Bronx, New York, to Suffolk County, New York, where JONES shot and killed Delacruz because Delacruz was acting as a confidential informant for law enforcement.

Delacruz is the second known person whom JONES has murdered.  On October 18, 1993, JONES shot and killed Audrey Walker with a TEC .9mm assault weapon in the lobby of the Manhattan apartment building where Walker resided.  On October 26, 1994, JONES was convicted after a bench trial in New York County Supreme Court of intentional murder in the second degree.  JONES was sentenced to nine years to life in prison.  He was released on parole on September 8, 2008.

*                *                *

JONES, 45, of the Bronx, New York, was convicted at trial of racketeering conspiracy, murder in aid of racketeering, and murder through the use of a firearm.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, the New York City Police Department, and the Suffolk County Police Department.  He also thanked the Suffolk County District Attorney’s Office for their assistance.

The prosecution is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Emily A. Johnson, Justin V. Rodriguez, and Christy Slavik are in charge of the prosecution, with the assistance of Paralegal Specialist Grayson Glogoff. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of MARIO ELPIDIO CHAVEZ MILLAN, a human trafficker working with Mexican “coyotes,” for conspiring to transport illegal aliens throughout the United States.  As part of his plea, CHAVEZ also admitted to his participation in a kidnapping conspiracy.  CHAVEZ pled guilty before U.S. District Judge Vincent L. Briccetti and is scheduled to be sentenced on August 7, 2024.

U.S. Attorney Damian Williams said: “Mario Elpidio Chavez Millan and others like him are an integral cog in the human trafficking machine that preys on people who attempt to enter the United States through its southern border each year.  The services that Chavez offers are what make it possible for coyotes, the cartels, and others to smuggle people throughout the country, often times for large fees.  And in this case — as in many cases involving human traffickers — Chavez and those working with him sought to extort their victims for even more money.  This Office will use every tool available to law enforcement to investigate and prosecute those involved in human trafficking.”

According to the Complaint previously filed against CHAVEZ, the Indictment, and other filings:

On about July 10, 2023, the New York State Police in the Town of Cortlandt, New York, received a report from an individual (“Individual-1”) that Individual-1’s relative (“Victim-1”) had entered the country illegally with the assistance of “coyotes” and was being transported by a man in the United States working with the coyotes, who was later identified as CHAVEZ.  Individual-1 further informed the State Police that CHAVEZ had told Victim-1 that he was not going to release Victim-1 unless Victim-1 or his/her family paid $1,000 in addition to the money that Victim-1 had already paid to the coyotes.

That evening, State Police executed a traffic stop of CHAVEZ’s vehicle in the Town of Cortlandt.  At that time, there were approximately five people in the vehicle in addition to CHAVEZ.  After those passengers and Victim-1 were brought to the State Police barracks, each reported that they had illegally entered the United States and that they were being driven by CHAVEZ from in or about New Mexico to other states throughout the country.  Several of CHAVEZ’s passengers stated that CHAVEZ threatened them during the drive, telling them that they could not leave without paying him an additional $1,000 and that CHAVEZ told them he had previously killed someone for running away without paying.

*                *                *

CHAVEZ, 19, of Albuquerque, New Mexico, pled guilty to one count of conspiring to transport aliens throughout the United States, which carries a maximum sentence of 10 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 work of the Federal Bureau of Investigation’s Hudson Valley Resident Agency and Safe Streets Task Force and the New York State Police.

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

U.S. Attorney Damian Williams said: “Yvette Wang played a leadership role in a broad and complex scheme to defraud thousands.  Through false promises and lies, this scheme collected more than $1 billion from innocent victims located throughout the country and the world.  Wang inflicted pain and loss on so many, and she will now be held to account for the harm she and others caused.  I want to thank our partners in the FBI and the career prosecutors of this Office for their persistent work investigating and prosecuting this pernicious scheme.” 

*                *                *

WANG, 45, of New York, New York, pled guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, which together carry a maximum term of 10 years in prison.  As part of her guilty plea, WANG agreed to pay restitution of $1,400,000,000 and to forfeit $1,400,000,000 to the United States.

The statutory 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.  WANG will be sentenced on September 10, 2024, at 11:00 a.m. by U.S. District Judge Analisa Torres.

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

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Micah F. Fergenson, Ryan B. Finkel, Justin Horton, and Juliana N. Murray are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JAMES ROBINSON and DAVID KENNEDY, both citizens of the United Kingdom, pled guilty to engaging in a conspiracy to defraud victims by making material misrepresentations about the management and operations of a company called Bar Works Inc. and related entities (“Bar Works”).  ROBINSON and KENNEDY were arrested in Spain on November 30, 2022, and were subsequently extradited.  ROBINSON pled guilty today before U.S. Magistrate Judge Barbara Moses and is scheduled to be sentenced on September 25, 2024, before U.S. District Judge Lewis A. Kaplan.  KENNEDY pled guilty on October 13, 2023, before U.S. Magistrate Valerie Figueredo, and is scheduled to be sentenced on May 7, 2024, before Judge Kaplan.

U.S. Attorney Damian Williams said: “James Robinson and David Kennedy partnered with notorious fraudster Renwick Haddow and used their agent network in Spain to launch a massive Ponzi scheme that lured hundreds of unsuspecting investors from around the world, all in exchange for massive commissions.  Today’s plea signifies this Office’s commitment to hold accountable every perpetrator of fraudulent investment schemes, no matter where they operate.”

According to the Indictments and other court documents:

ROBINSON, KENNEDY, and co-conspirators Renwick Haddow and James Moore are citizens of the United Kingdom.  At all times relevant to the Indictment, United Property Group and related entities (collectively, “UPG”) constituted a company based in Spain that was controlled in part by ROBINSON and KENNEDY.  UPG sold real estate and other investing opportunities to potential investors.  Bar Works was a private co-working space company controlled by Haddow, which operated locations in New York City and elsewhere between in or about 2015 through 2017 and accepted millions of dollars in investments from investors recruited through UPG, among others.  Prior to launching Bar Works, Haddow had been disqualified as a director of any UK company for eight years and was later sued by the Financial Conduct Authority, a British regulator, for operating investment schemes through misrepresentations that lost investors substantially all of their money.  These sanctions and lawsuit were publicized online.  

In exchange for millions of dollars in commissions, ROBINSON, KENNEDY, and Moore partnered with Haddow in soliciting investments into workspace leases in Bar Works through material misrepresentations concerning, among other things, the identity of Bar Works’ management and the operations of Bar Works.  Specifically, as ROBINSON and KENNEDY knew, notwithstanding Haddow’s control over Bar Works, Haddow caused the Bar Works offering materials to omit his name entirely, list a fictitious individual named “Jonathan Black” as the Chief Executive Officer of Bar Works, and claim that “Black” had an extensive background in finance and past success with start-up companies.

Through UPG, ROBINSON and KENNEDY recruited agents to sell workspace leases in Bar Works and knowingly provided them with fraudulent offering documents and other information.  In marketing Bar Works to investors attempting to do due diligence, UPG agents supervised by ROBINSON and KENNEDY represented that ROBINSON and KENNEDY had met “Jonathan Black” in New York as part of UPG’s own due diligence.  An account controlled in whole or in part by ROBINSON and KENNEDY received over $2 million in commissions from Bar Works in exchange for soliciting victims to invest at least approximately $7.5 million in this scheme.  Separately, Moore received another approximately $1.6 million from Bar Works.   Overall, prior to its collapse in or about June 2017, Bar Works obtained over $57 million from over 800 investors worldwide.

*                *                *

ROBINSON, 47, and KENNEDY, 48, both residents of the UK, each pled guilty to one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison.

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

Renwick Haddow, 55, pled guilty pursuant to a cooperation agreement, on May 23, 2019, to one count each of wire fraud and wire fraud conspiracy relating to the Bar Works scheme, and one count each of wire fraud and wire fraud conspiracy relating to a separate Bitcoin-related investment scheme.  Haddow’s sentencing is currently scheduled for November 1, 2024, before U.S. District Judge Laura Taylor Swain.

James Moore, 63, was found guilty on June 7, 2019, of wire fraud and conspiracy to commit wire fraud following a week-long jury trial before U.S. District Judge Richard M. Berman.  On February 1, 2022, Moore was sentenced to 140 months in prison by Judge Berman.

Savraj Gata-Aura, 37, pled guilty on November 18, 2019, to one count of wire fraud conspiracy for his participation in the scheme and was sentenced to four years in prison on July 27, 2020, by U.S. District Judge Jed. S. Rakoff.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation.  He further thanked the Government of Spain for arresting and extraditing ROBINSON and KENNEDY and the Securities and Exchange Commission, which has separately brought civil actions against ROBINSON, KENNEDY, Moore, Haddow, and Gata-Aura.  The Department of Justice’s Office of International Affairs also provided substantial assistance in securing ROBINSON and KENNEDY’s arrest and extradition. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorney Vladislav Vainberg is 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”); Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); and Kareem A. Carter, the Executive Special Agent in Charge of the Washington, D.C. Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing of a Superseding Indictment charging MAXIMILIEN DE HOOP CARTIER, LEONARDO DE JESUS ZULUAGA DUQUE, a/k/a “Rey,” ERICA MILENA LOPEZ ORTIZ, and FELIPE ESTRADA ECHEVERRY, a/k/a “Pepe,” with conspiring to commit money laundering based on their alleged participation in a network that laundered millions in Tether (a stablecoin connected to the U.S. dollar), which constituted the proceeds of drug trafficking, through the U.S. to Colombia.  CARTIER is also charged with money laundering, bank fraud, engaging in a monetary transaction in property derived from bank fraud, and operating an unlicensed money transmitting business based on CARTIER’s system of U.S.-based shell companies and bank accounts that he used to operate an unlicensed over-the-counter cryptocurrency exchange.  In addition, the Superseding Indictment charges ZULUAGA DUQUE, LOPEZ ORTIZ, ALEXANDER EGIDIO AREIZA CEBALLOS, and ADRIAN FERNANDO AREIZA CEBALLOS with conspiring to import more than 100 kilograms of cocaine into the U.S.

CARTIER, who purports to be a direct descendant of the Cartier family known for luxury jewelry, was arrested on February 22, 2024, in Miami, Florida, and presented before a U.S. Magistrate Judge in the Southern District of Florida.  ZULUAGA DUQUE, LOPEZ ORTIZ, ESTRADA ECHEVERRY, ALEXANDER AREIZA CEBALLOS, and ADRIAN AREIZA CEBALLOS, all Colombian nationals, were taken into custody by Colombian authorities on April 30, 2024.  The case is assigned to U.S. District Judge Mary Kay Vyskocil.

U.S. Attorney Damian Williams said: “The charges brought today demonstrate this Office’s commitment to prosecuting international drug traffickers and piercing complicated money laundering networks seeking to exploit the U.S financial system.  As alleged, Maximilien de Hoop Cartier, Leonardo de Jesus Zuluage Duque, Erica Milena Lopez Ortiz, and Felipe Estrada Echeverry were members of a network that laundered millions of dollars’ worth of drug trafficking proceeds using cryptocurrency and the U.S. financial system.  Cartier is additionally alleged to have committed a series of financial offenses while working with this money laundering network that resulted in hundreds of millions of dollars’ worth of unlawful transactions.  I commend the efforts of our law enforcements partners and the career prosecutors from this Office who work tirelessly to investigate and disrupt these money laundering and drug trafficking networks.  We will continue to relentlessly protect the U.S. financial system from exploitation.”

FBI Assistant Director in Charge James Smith said: “Maximilien de Hoop Cartier and five Colombian nationals allegedly attempted to import more than 100 kilograms of cocaine and laundered hundreds of millions of dollars – including revenue from drug trafficking operations – through an unlicensed cryptocurrency exchange to transfer illicit funds from the United States to Colombia.  This alleged scheme illustrates advancements in criminals’ use of complex financial methods to conceal their profits and other nefarious activity from law enforcement.  The FBI is committed to dismantling international criminal enterprises by disrupting the flow of illegal money and narcotics across our borders.”

HSI Special Agent in Charge Ivan J. Arvelo said: “Today’s announcement serves as a reminder that criminals do not fit a certain mold.  While Maximilien de Hoop Cartier represents himself as a member of a family associated with wealth and luxury, he stands accused of executing a bank fraud scheme where hundreds of millions in criminal funds were laundered.  Both here and in Colombia, he and his co-conspirators allegedly laundered drug-trafficking proceeds to the tune of over $14 million.  I commend HSI New York’s El Dorado Task Force and our law enforcement partners for relentlessly pursuing suspected criminals regardless of their names or whereabouts.”

IRS-CI Executive Special Agent in Charge Kareem A. Carter said: “IRS Criminal Investigation is proud to have provided its financial expertise in this investigation.  CI and our law enforcement partners are committed to aggressively investigating individuals who engage in money laundering, tax fraud, and other financial crimes.”

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

CARTIER, ZULUAGA DUQUE, LOPEZ ORTIZ, and ESTRADA ECHEVERRY are members of a money laundering network that operates in the U.S. and Colombia, among other countries (the “Network”).  The Network utilizes a system of money laundering brokers and shell companies in the U.S., Colombia, and elsewhere to, among other things, launder crime proceeds through the U.S. to Colombia.  Between in or about May 2023 and November 2023, CARTIER, ZULUAGA DUQUE, LOPEZ ORTIZ, ESTRADA ECHEVERRY, and others used the Network to launder a total of approximately $14.5 million Tether derived directly from the proceeds of drug trafficking.  In particular, ZULUAGA DUQUE, with the assistance of LOPEZ ORTIZ, coordinated and communicated with other members of the Network to convert drug proceeds into Tether to be sent to the U.S. where it was converted into fiat currency by CARTIER and delivered by wire transfers from the U.S. to shell companies in Colombia that were operated or maintained by ESTRADA ECHEVERRY and others.

CARTIER has been a member of the Network since at least about January 2020.  As part of his role in the Network, CARTIER operated an unlicensed over-the-counter cryptocurrency exchange.  Specifically, CARTIER operated and/or controlled several U.S.-based shell companies, including Bullpix Solutions LLC, Vintech Capital LLC, VC Innovated Technologies LLC, AZ Technologies LLC, Softmill LLC, and Sun Technologies LLC (the “Cartier Shell Companies”), and maintained multiple accounts for the Cartier Shell Companies at several U.S. financial institutions.  In opening these bank accounts, CARTIER misrepresented the true nature of the business of the Cartier Shell Companies — i.e., CARTIER claimed to the banks that the Cartier Shell Companies were in the business of software or technology when, in fact, CARTIER was using the companies to operate as an unlicensed money remitting business related to the operation of a cryptocurrency exchange.  From January 2020 to the present, CARTIER’s unlicensed money transmitting business executed hundreds of millions of dollars’ worth of unlawful transactions and laundered hundreds of millions in criminal proceeds, including drug trafficking proceeds with ZULUAGA DUQUE, LOPEZ ORTIZ, and ESTRADA ECHEVERRY between about May and November 2023.

Finally, ZULUAGA DUQUE and LOPEZ ORTIZ conspired with ALEXANDER AREIZA CEBALLOS and ADRIAN AREIZA CEBALLOS to import more than 100 kilograms of cocaine into the U.S.  Specifically, in about November 2023, confidential sources, at the direction of law enforcement, coordinated with LOPEZ ORTIZ and ALEXANDER AREIZA CEBALLOS for the purchase of approximately nine kilograms of cocaine paste, which was to be manufactured into cocaine before being delivered to New York.  For that purchase, ADRIAN AREIZA CEBALLOS delivered the narcotics to an undercover officer and ZULUAGA DUQUE received a commission for helping to set up the deal.  Additionally, in about February 2024, a confidential source, at the direction of law enforcement, arranged for the purchase of approximately 100 kilograms of cocaine paste from ALEXANDER AREIZA CEBALLOS and ADRIAN AREIZA CEBALLOS.  In anticipation of this deal, the Colombian National Police executed two search warrants and recovered approximately 111 kilograms of cocaine paste from ALEXANDER AREIZA CEBALLOS and ADRIAN AREIZA CEBALLOS.

*                *                *

CARTIER, 57, an Argentinian citizen who has resided France, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison; one count of money laundering, which a maximum sentence of 20 years in prison; one count of bank fraud, which a maximum sentence of 30 years in prison; one count of engaging in a monetary transaction in property derived from specified unlawful activity, which carries a maximum sentence of 10 years in prison; and one count of operating of an unlicensed money remitting business, which carries a maximum sentence of five years in prison.

ZULUAGA DUQUE, 61, a Colombian citizen, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

LOPEZ ORTIZ, 42, a Colombian citizen, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

ESTRADA ECHEVERRY, 38, a Colombian citizen, is charged with one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison.

ALEXANDER AREIZA CEBALLOS, 45, a Colombian citizen, is charged with one count of conspiring to import five kilograms or more of cocaine into the U.S., which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

ADRIAN AREIZA CEBALLOS, 44, a Colombian citizen, is charged with one count of conspiring to import five kilograms or more of cocaine into the U.S., 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 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 investigative work of the FBI’s New York Field Office, HSI’s New York El Dorado Task Force, and IRS-CI, Global Illicit Financial Team.  Mr. Williams also thanked the FBI’s Legal Attaché office in Colombia; the Colombian National Police; the Department of Justice’s Office of International Affairs; the U.S. Embassy Colombia; and the Narcotic and Dangerous Drug Section’s Office of the Judicial Attaché in Bogotá.

This case is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorney Jennifer N. Ong is 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 JAMES NEFF.  The defendant is charged with the possession of a firearm and ammunition after a felony conviction in connection with the discovery by law enforcement of the defendant’s trove of firearms, including multiple personally manufactured firearms, or “ghost guns,” and ammunition.  In addition, members of law enforcement discovered, and continue to investigate, suspected explosives, paraphernalia related to improvised explosive devices, and suspected readily assembled explosive devices.  NEFF was arrested yesterday and presented earlier today before U.S. Magistrate Judge Judith C. McCarthy.

U.S. Attorney Damian Williams said: “As alleged, James Neff, some 23 years after having been convicted on similar state charges for criminal possession of a weapon, has again illegally stockpiled numerous firearms, including what appear to be assault rifles and personally manufactured firearms, or ‘ghost guns,’ a significant amount of ammunition, and suspected materials and paraphernalia consistent with suspected homemade and improvised explosive devices.  Our investigation remains ongoing, and I thank the dedication and expertise of our law enforcement partners and the career prosecutors of this Office who are diligently investigating this case and working tirelessly to keep ‘ghost guns’ and homemade explosives out of our communities.”

FBI Assistant Director in Charge James Smith said: “James Neff allegedly amassed and stored an alarming collection of suspected explosives, materials for improvised explosive devices, and more than 30 firearms – some of which were assault rifles and unregistered ‘ghost guns.’  There is no reasonable explanation to justify the arsenal law enforcement discovered, and convicted felons with access to such armaments pose an incredible threat to public safety.  The FBI will continue to confiscate weapons from criminals and ensure these devices are not used to inflict harm against our citizens.”

As alleged in the Complaint filed today in White Plains federal court and statements made in court proceedings:[1]

On May 1, 2024, following an investigation, members of law enforcement executed search warrants on the residence of JAMES NEFF and two storage units known to be possessed and rented by him.  After executing these searches, members of law enforcement discovered over 30 firearms, including firearms that appear to be personally manufactured and assault rifle-style firearms; a significant amount of ammunition; and suspected explosives-related materials, including multiple books on how to make homemade or improvised explosives, such as  “The Anarchist Arsenal, Improvised Incendiary and Explosives Techniques,” “How to Bury Your Goods,” and multiple volumes of the “Improvised Munitions Black Book.”  In addition, members of law enforcement also found suspected precursors to explosives, suspected low explosives or smokeless powders, and other items consistent with the preparation of homemade explosive devices, including what appears to be fuse that can be used to initiate a low explosive, cardboard containers with endcaps, a pipe with two endcaps, and grenade bodies, items which could be used to create readily assembled explosive devices.  Photographs taken from the storage unit containing these items are below:

After these searches, NEFF admitted to owning these firearms and suspected explosives chemicals and related materials and to storing them at his house in Dobbs Ferry, New York, before moving them to storage units.

If you have any information about this case, please contact the FBI at 1-800-CALL-FBI or tips.fbi.gov.

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NEFF, 61, of Dobbs Ferry, New York, is charged with one count of possession of a firearm and ammunition after a felony conviction, having previously been convicted on New York state charges of a crime punishable for a term longer than one year, which carries a maximum sentence of 15 years in prison.

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

Mr. Williams praised the outstanding work of the FBI’s Westchester County Safe Streets Task Force and the Westchester County Police Department.  Mr. Williams also thanked the Bureau of Alcohol, Tobacco and Firearms; the Greenburgh Drug and Alcohol Task Force; the Dobbs Ferry Police Department; the FBI’s Philadelphia Division; the New York State Police; and the U.S. Postal Inspection Service.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Justin L. Brooke and Margaret N. Vasu 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 should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOSEPH SANDERS was sentenced by U.S. District Judge Katherine Polk Failla to nine years in prison in connection with committing 11 armed robberies of bodegas, smoke shops, and other retail businesses across the Bronx, Queens, and Brooklyn.

U.S. Attorney Damian Williams said: “Joseph Sanders terrorized hardworking New Yorkers across the City, committing 11 armed robberies.  On multiple occasions, he brutally pistol whipped his victims.  This Office’s career prosecutors continue their exhaustive commitment to keeping those who commit violent robberies off of our streets.”

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

In the spring and fall of 2022, SANDERS committed 11 armed robberies throughout New York City.  Between March and April 2022, he committed four armed robberies of bodegas and smoke shops located in Queens, the Bronx, and Brooklyn.  Wearing a mask, SANDERS would enter the businesses, brandishing a silver gun and demanding money.  At times, he would point the gun directly at the terrified cashier.  For three of the robberies, SANDERS was accompanied by co-conspirators, but in all cases, it was SANDERS carrying the firearm.

In November 2022, SANDERS continued his robbery spree.  Between November and December 2022, he committed seven armed robberies of a tax preparation business, bodegas, and smoke shops located in the Bronx and Brooklyn.  SANDERS would enter the businesses brandishing a firearm and demanding money.  During one of those robberies, he kicked open a door, holding a firearm in his hand, then grabbed the sole employee by the arm and led her to a back room.  After the victim told SANDERS that the business had no cash on hand, he took her phone and $200 from her wallet. 

On two occasions, SANDERS violently pistol-whipped cashiers of the stores that he was robbing, before taking thousands of dollars from the cash registers.  Even when not assaulting the victims with a firearm, SANDERS threatened violence, pointing his firearm directly at the victims.  One such example is below, from the November 26, 2022, robbery of a deli:

In total, SANDERS stole $22,374.  At the time of his arrest, a .40 caliber Iberia pistol, which was loaded with ammunition, was found in his apartment. 

*                *                *

In addition to his prison term, SANDERS, 46, of Brooklyn, New York, was sentenced to three years of supervised release and ordered to pay restitution in the amount of $22,374 and to forfeit the same amount.

Mr. Williams praised the outstanding investigative work of the Bureau of Alcohol, Tobacco and Firearms (“ATF”) and the New York City Police Department (“NYPD”), in particular, the Strategic Patterned Armed Robbery Technical Apprehension Task Force, which is composed of agents and officers of the ATF and the NYPD.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSEPH ORENGO JR. was sentenced today to 12 years in prison for a shooting on September 7, 2021, on a residential street in the Bronx and conspiracy to distribute narcotics, including fentanyl.  ORENGO previously pled guilty before U.S. District Judge Vincent L. Briccetti, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “This Office has been steadfast in its commitment to ending the scourge of gun violence on the streets of New York City.  The defendant chose to fire multiple rounds on a residential street in the Bronx in broad daylight.  He put the safety of New Yorkers at risk and terrorized a public space.  Today’s sentence sends a clear message: this must stop.  If you fire a gun on the streets of New York City as part of drug dealing, you will go to prison.”

According to statements made in public court proceedings and filings and a video of the attempted shooting:

On September 7, 2021, ORENGO confronted a man on a residential street in the Bronx over a disputed drug debt.  As that man drove away, ORENGO fired two shots at him:

The shooting occurred at approximately 11:35 a.m., as bystanders were walking down the block.

*                *                *

In addition to his prison term, ORENGO, 29, of Bronx, New York, was sentenced to five years of supervised release.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of TOMAS IANCHAUSKAS, a regional leader of a sanctioned Russian Organization known as the Tsargrad Society (the “Society”), for lying to the Federal Bureau of Investigation (“FBI”) about his participation in the Society and its predecessor during an in-person interview in the U.S.  IANCHAUSKAS pled guilty before U.S. District Judge Coleen McMahon and is scheduled to be sentenced on July 11, 2024.

U.S. Attorney Damian Williams said: “While enjoying the benefits of U.S. permanent residency, Tomas Ianchauskas served as a regional leader of the Tsargrad Society, a sanctioned Russian organization controlled by sanctioned oligarch Konstantin Malofeyev, who was previously indicted by this Office for willfully violating U.S. sanctions laws.  On two separate occasions, Ianchauskas lied to the FBI, falsely claiming that he had no involvement in the Tsargrad Society whatsoever, and no involvement in its predecessor entity the Double Headed Eagle Society for the three prior years.  Together with our law enforcement partners, we will continue to hold accountable those who seek to undermine critical sanctions put in place to challenge Russia’s aggression.”

According to the Complaint previously filed against IANCHAUSKAS, the Information, and other filings:

IANCHAUSKAS is a U.S. green card holder who principally resides in Russia.  By operation of the Ukraine-Related Executive Orders 13660, 13661, 13662, and 14024, IANCHAUSKAS is prohibited from, among other things, making any contribution or provision of funds, goods, or services to or for the benefit of sanctioned Russian oligarch Konstantin Valeryevich Malofeyev or certain Malofeyev-controlled designated entities, including the Society, formerly known as the Double Headed Eagle Society (“DHES”).  

The Office of Foreign Assets Control (“OFAC”) initially designated Malofeyev in 2014, explaining that he was one of the main sources of financing for Russians promoting separatism in Crimea and has materially assisted, sponsored, and provided financial, material, or technological support for, or goods and services to or in support of, the so-called Donetsk People’s Republic, a separatist organization in the Ukrainian region of Donetsk.  The Society was designated by OFAC in or about April 2022 for being owned or controlled by, or for having acted or purported to act for or on behalf of, Malofeyev.  As described by OFAC, the Society was formerly known as DHES, a Russia-registered organization which has been accused of involvement in espionage on behalf of Russia.  OFAC further explained that the Society is part of Malofeyev’s “malign influence ecosystem” and “advocates for Russia to return to a monarchical system of government and counts among its core principles revanchist aims like the ‘reunification of the Russian people’ and ‘returning the Russian Empire to its historical borders’ — to include, in the Society’s definition, Ukraine, Belarus, the Baltic States, Moldova, Central Asia, and the Caucasus.”[1]

Following OFAC’s designations, on or about April 6, 2022, this Office indicted Malofeyev on one count of conspiracy to violate the International Emergency Economic Powers Act (“IEEPA”) and one count of violation of IEEPA.

On or about January 12, 2022, during an in-person interview with FBI agents in the Southern District of New York, IANCHAUSKAS falsely stated, in substance and in part, that he had no involvement in the Society whatsoever, he had no involvement with DHES for approximately three years, and he never had a leadership position at DHES and never did anything on behalf of DHES.  In truth and in fact, and as IANCHAUSKAS knew, from at least in or about 2020 through in or about 2022, IANCHAUSKAS served as the head of the Penza Regional Branch of DHES, which in or about November 2020 was renamed the Society.  In his leadership capacity, IANCHAUSKAS planned DHES events in Russia and received funding from DHES in or about 2020, among other times.

Subsequent to his interview with the FBI in January 2022, IANCHAUSKAS continued his membership in the Society and provided services to the Society.  In or about April 2023, when inviting individuals to attend an event with Malofeyev in Penza, Russia, IANCHAUSKAS wrote, among other things, “we are his regional department,” and distributed a photograph of Malofeyev with the message, in part and substance, “it is thanks to him and his subordinates that Crimea was joined to Russia and Donbass began to be joined.”  During a second interview with the FBI on December 22, 2023, IANCHAUSKAS reiterated certain false statements, including that he had never been a member of the Society. 

*                *                *

IANCHAUSKAS, 39, a U.S. green card holder principally residing in Russia, pled guilty to one count of making false statements to special agents of the FBI, which carries a maximum sentence of five 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 work of the FBI.

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

[1] U.S. Department of Treasury, Press Release “U.S. Treasury Designates Facilitators of Russian Sanctions Evasion,” available online https://home.treasury.gov/news/press-releases/jy0731

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 SHARON TONEY‑FINCH with defrauding military charities and the Veteran’s Administration (“VA”) and with fraudulently claiming to have received a Purple Heart.  TONEY-FINCH was arrested today and will be presented in White Plains federal court before U.S. Magistrate Judge Judith C. McCarthy.  

U.S. Attorney Damian Williams said: “As alleged, Sharon Toney-Finch falsely claimed to have received a military award bestowed on those wounded or killed in the line of duty, and she used this lie to drive donations to her charitable organization, which in fact was a ruse the defendant allegedly used to line her own pockets.  The defendant’s alleged crimes are dishonorable to the highest degree, and I thank the career prosecutors of this Office and our law enforcement partners for bringing today’s charges and exposing Toney-Finch’s attempt to profit on stolen valor.”

FBI Assistant Director in Charge James Smith said: “Sharon Toney-Finch allegedly engaged in a series of lies in which she misappropriated donations for military charities and falsely nominated herself as a Purple Heart recipient to receive illicit disability benefits.  Acts of stolen valor are especially egregious as they distract from sacrifices of those who were truly injured defending our nation.  The FBI does not tolerate those who choose to perpetuate fraudulent schemes at the expense of our armed forces and will continue to aggressively investigate those who choose to do so.”

As alleged in public court filings and the Indictment unsealed today in White Plains federal court:[1] 

Between at least July 2019 through about September 2023, TONEY-FINCH engaged in a scheme to defraud donors to her charitable organization by falsely claiming that donation funds would be spent solely to support homeless military veterans, when in fact she spent the funds on personal expenses.  She further falsely claimed that she survived and was injured in a terrorist attack to a vehicle convoy in Iraq in or about March 2010 and that she is a Purple Heart recipient.

Between at least March 2016 through the present, TONEY-FINCH knowingly obtained hundreds of thousands of dollars in disability benefits from the VA by fraudulently representing that, during her military service in Iraq, she sustained combat-related injuries during a mortar attack in or about February 2010 and a vehicle rollover that occurred in or about March 2010.

Between about August 2021 through the present, TONEY-FINCH has falsely claimed that she is a Purple Heart recipient in statements made to donors to her charitable organization, an application to the New York Department of Motor Vehicles to obtain a vanity license plate, and an application to the National Purple Heart Hall of Honor to obtain a medallion and recognition on their website.  TONEY-FINCH has also used, possessed, and exhibited a military discharge certificate that had been altered to reflect falsely that she is a Purple Heart recipient.

*                *                *

TONEY-FINCH, 43, of Newburgh, New York, is charged with wire fraud, which carries a maximum potential sentence of 20 years in prison; theft of government funds, which carries a maximum potential sentence of 10 years in prison; stolen valor, which carries a maximum potential sentence of one year in prison; and altering military discharge paperwork, which carries a maximum potential sentence of one year in prison.

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

Mr. Williams praised the work of the FBI Hudson Valley White Collar Crime Task Force, the Orange County District Attorney’s Office, the Orange County Sheriff’s Office, the U.S. Department of Veterans Affairs – Office of Inspector General, and the U.S. Army Criminal Investigation Division. 

This case is being handled by the Office’s White Plains Division.  Assistant U. S. Attorneys Ryan W. Allison and Margaret N. Vasu 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 today the unsealing of an Indictment charging IDIN DALPOUR with wire fraud in connection with a multi-year Ponzi scheme that defrauded investors of at least $43 million.  DALPOUR was arrested this morning and will be presented in Manhattan federal court before U.S. Magistrate Judge Barbara Moses later today. 

U.S. Attorney Damian Williams said: “Idin Dalpour told investors that they could reap huge returns by investing through him in a purported Las Vegas hospitality business and a crypto trading operation.  As alleged, Dalpour’s promises were a mirage, and he was running a classic Ponzi scheme by paying investors purported returns with other investors’ money.  Instead of using investors’ funds as promised, Dalpour spent lavishly on himself, which included racking up gambling losses of approximately $1.7 million and paying for his children’s private school tuition.  Now, Dalpour’s gamble has him facing federal criminal charges for his alleged crimes.” 

FBI Assistant Director in Charge James Smith said: “For four years, Idin Dalpour allegedly used false promises of high returns to entice victims to invest in his purported hospitality and cryptocurrency trading enterprises, but in reality, used these payments to satisfy other debts or personal expenditures.  Cheating investors of millions severs the trust of clients and credibility of prospective advisors, both of which are vital to the success of the investment market.  Today’s arrest illustrates the FBI’s dedication to maintaining economic justice and ensuring the actions of one individual are not at the expense of others.”

According to allegations contained in the Indictment:[1]  

From at least approximately 2020 through April 2024, DALPOUR ran a Ponzi scheme targeting investors located in the U.S. and abroad.  DALPOUR solicited investments from victims through an entity that he controlled (“Entity-1”), which purported to have an interest in two business ventures: a Las Vegas hospitality enterprise and a cryptocurrency trading enterprise.  In reality, DALPOUR did not use investors’ funds as promised and paid earlier investors purported returns using funds that were contributed by later investors.  DALPOUR defrauded investors of at least $43 million over the course of the scheme.

As part of the purported Las Vegas hospitality enterprise, DALPOUR falsely represented that Entity-1 had contracted with a management company (the “Management Company”) and/or a prominent Las Vegas hotel (the “Hotel”) to rent condominiums to Las Vegas visitors for a fee.  DALPOUR further claimed that the Hotel arranged entertainment packages for these visitors, including food, nightlife, and sports events, and that DALPOUR and Entity-1 received a portion of these proceeds.  DALPOUR also falsely claimed that he owned shares in several Las Vegas-based sports stadiums (the “Stadiums”) and would receive a portion of concessions revenues when these visitors went to the Stadiums.

DALPOUR lured investors into the Las Vegas hospitality enterprise through false promises of lucrative returns beginning at 42% interest per year.  In order to further the fraud, DALPOUR provided certain investors with fabricated contracts between Entity-1, the Management Company, and the Stadiums.  DALPOUR also fabricated email correspondence from the Hotel falsely claiming that his company, Entity-1, was owed millions of dollars and created phony bank statements overstating the assets in Entity-1’s bank accounts.  DALPOUR also claimed that investors’ money was safe because it was insured and/or would be held in escrow.  These statements were false.

In connection with the Ponzi scheme, DALPOUR further misrepresented a so-called cryptocurrency trading enterprise that DALPOUR purportedly operated.  As part of the cryptocurrency trading scheme, DALPOUR falsely represented to investors that he purchased cryptocurrency at wholesale and sold the cryptocurrency at a profit to retail investors.  As with the Las Vegas hospitality enterprise, DALPOUR promised investors lucrative annual returns and that their money was insured.  These statements were false.

In reality, DALPOUR did not use investor money for the Las Vegas hospitality enterprise or the cryptocurrency trading enterprise.  Instead, DALPOUR used investor money to pay other investors their expected returns, as well as to pay for his own personal expenses.  These personal expenses included, among other things, approximately $1.7 million in gambling losses, over $400,000 from Art Direct, and private school tuition for his children.

DALPOUR also lied to investors when they sought to recoup their money.  Among other things, DALPOUR claimed that his company’s funds were temporarily frozen because the Hotel’s servers had been hacked and that the Nevada-based bank allegedly holding Entity-1’s funds would not release the proceeds.  In fact, Entity-1 did not even have a bank account with the Nevada-based bank, as DALPOUR well knew.

In or about November 2023, a group of victims confronted DALPOUR about the Ponzi scheme.  During this conversation, DALPOUR admitted that he had lied to the victims about the operation of the Las Vegas hospitality business, that he had not used investor money for its intended purpose, and that he had fabricated contracts and bank records that he had provided to the victims.  DALPOUR further stated, in his own words, “[w]hat you already have, you have, you can put me in jail now. Like right now.”

If you believe you are a victim of these crimes, please contact the FBI at 1-800-CALL-FBI and reference this case.

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DALPOUR, 39, of New York, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 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 investigative work of the FBI. 

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

The allegations 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 Fernando P. McMillan, the Special Agent in Charge of the New York Field Office of the Office of Criminal Investigations of the U.S. Food and Drug Administration (“FDA”), announced the unsealing of a criminal Complaint in Manhattan federal court charging ISIS NAVARRO REYES, a/k/a “Beraly Navarro,” with receipt of misbranded drugs in interstate commerce and subsequent delivery thereof, dispensing prescription drugs without a prescription, conspiracy to introduce and deliver for introduction misbranded drugs in interstate commerce, and smuggling.  As alleged in the Complaint, from about November 2022 through about January 2024, REYES marketed, advertised, and sold various misbranded weight loss drugs that require a prescription, including Ozempic, Mesofrance, and Axcion, to followers on social media.  REYES, who is not licensed by law to prescribe or administer prescription medication, obtained the weight loss drugs that she held for sale from Central and South America.  None of the weight loss drugs that REYES sold were approved for sale or dispensing in the United States by the FDA.  REYES was arrested this morning and will be presented in Manhattan federal court later today before U.S. Magistrate Judge Barbara Moses.

U.S. Attorney Damian Williams said: “As alleged, Isis Navarro Reyes used her social media following to sell weight loss drugs unapproved for distribution in the United States.  Reyes’s alleged unlawful dispensing of these drugs caused significant, life-threatening injuries to some victims and put all of her victims in harm’s way.  Recently, public interest in semaglutide and weight loss drugs has skyrocketed, and criminals have sought to take advantage of this interest for their ends.  With this, the first misbranding and adulteration charges brought pertaining to Ozempic, Reyes will be held accountable for her conduct, and criminals should think twice before trying to sell weight loss drugs without a license to do so.  This case makes clear that extreme caution and physician consultation should always be taken when purchasing medications, especially on social media.”

FDA Office of Criminal Investigations Special Agent in Charge Fernando P. McMillan said: “Selling misbranded prescription drugs, particularly injectable products that should be sterile, in the U.S. marketplace puts all consumers’ health at risk.  We will continue to pursue and bring to justice those who jeopardize the public’s health by selling misbranded drugs.” 

As alleged in the Complaint:[1]

From about November 2022 through about November 2023, ISIS NAVARRO REYES, using TikTok, posted dozens of videos about weight loss drugs including, but not limited to, Ozempic, Axcion, and Mesotherapy.     

In her videos, REYES showcases the weight loss drugs, instructs viewers how frequently they should be used, describes how they should be taken or injected, and claims to describe her personal experiences — for example, side effects and effectiveness in causing weight loss — in detail.  In several of these videos, REYES tells viewers that they can contact her via an encrypted messaging application on her cellphone (the “Cellphone”) if they would like to order the weight loss drugs that she is selling. 

On about October 11, 2023, REYES posted a video pertaining to Ozempic.  In this video, REYES demonstrates how to inject oneself with the medication and shares her experience using the drug.  Toward the end of the video, REYES instructs viewers to contact her on the Cellphone if they are interested in having her obtain Ozempic for them.  A screenshot from this TikTok post is below: 

In about December 2023, a law enforcement officer acting in an undercover capacity (the “UC”) began messaging REYES on the Cellphone.  From about December 2023 through about January 2024, the UC and REYES exchanged several messages concerning REYES’s supply of Ozempic and the UC’s interest in purchasing Ozempic from REYES.  On about January 7, 2024, pursuant to instructions from REYES, the UC sent $375 to a Zelle account in the name of “Isis Reyes Navarro.”  REYES did not ask the UC to provide a prescription, and the UC did not provide one.  On about January 9, 2024, REYES dropped off a package intended for the UC at a post office located in or around Shirley, New York.

On about January 12, 2024, law enforcement received a package addressed to the UC from REYES (the “UC Parcel”) in Manhattan.  The UC Parcel contained a box containing what purported to be Ozempic.[2]  Photos of packaging containing the purported Ozempic that REYES mailed the UC are below:

All of the labeling accompanying the Ozempic in the UC Parcel was in Spanish, in violation of FDA regulations.

In about November 2022, a woman who had viewed content posted to REYES’s TikTok account (“Victim-1”) called the Cellphone for the purpose of ordering weight loss drugs.  The individual who answered Victim‑1’s call identified herself as “Isis Navarro Reyes.”  In about February 2023, Victim-1 purchased 30 injections of Mesofrance, an injectable weight loss drug, from REYES.  REYES mailed the Mesofrance to Victim-1’s residence in White Plains, New York.  REYES did not ask Victim-1 to provide a prescription, and Victim-1 did not provide one. 

Between about February 2023 and about June 2023, Victim-1 self-administered 28 injections.  In an audio message that she recorded and transmitted, REYES provided Victim-1 with instructions on how to administer the drug.  REYES told Victim-1, among other things, to inject herself every three days.  All of the labeling of the vials that contained the Mesofrance that Victim‑1 purchased from REYES were in a language other than English, in violation of FDA regulations.

On about July 13, 2023, Victim-1 began developing lesions from administering the Mesofrance.  Victim-1 sent messages to REYES about her injuries and sent photos.  In about October 2023, Victim-1’s physician diagnosed her with a mycobacterium abscessus infection, which is frequently caused by the contamination of medications, medical products, and medical devices with the mycobacterium abscessus bacterium.  In about November 2023, the New York Department of Health tested one of the vials of Mesofrance that Victim-1 purchased from REYES.  The substance tested positive for mycobacterium abscessus, a species of rapidly growing, multidrug-resistant, nontuberculous mycobacteria.

*                *                *

REYES, 36, of Shirley, New York, is charged with one count of smuggling, which carries a maximum sentence of 20 years in prison; one count of receipt of misbranded drugs in interstate commerce and subsequent delivery thereof, which carries a maximum sentence of one year in prison; three counts of dispensing  prescription drugs without prescriptions, which each carry a maximum sentence of one year in prison; and one count of conspiracy to introduce and deliver for introduction a misbranded drug in interstate commerce, which carries a maximum sentence of one year in prison.

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

Mr. Williams praised the outstanding investigative work of the FDA Office of Criminal Investigations, the U.S. Postal Inspection Service, the New York City Police Department, the Customs and Border Protection Task Force Officers of the Drug Enforcement Administration, and the Special Agents and Task Force Officers of the U.S. Attorney’s Office for the Southern District of New York.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorney Brandon C. Thompson 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 herein should be treated as an allegation.

[2] To date, there is no evidence that the Ozempic that REYES sold the UC is not genuine.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that VINCENT CANNADY was arrested in connection with his scheme to extort a publicly traded information technology infrastructure services provider of up to $1.5 million by threatening to publicly disclose the company’s confidential and proprietary information.  CANNADY was arrested in El Dorado Springs, Missouri, this morning and is expected to appear in Missouri federal court tomorrow.

U.S. Attorney Damian Williams said: “As alleged, Vincent Cannady used illegal and extortionate threats for the purpose of obtaining over a million dollars in payments from a public company after his engagement was terminated.  When those entrusted with sensitive information steal that information on their way out the door, only to extort money with a threat of releasing that information, my Office will hold them responsible for their conduct.”

As alleged in the Complaint:[1]

CANNADY was assigned by a staffing company to work on an engagement with the victim company.  Under the engagement, CANNADY’s responsibilities included assessing and remediating potential vulnerabilities that an unauthorized party could use to access the victim’s information systems.  As a result, CANNADY had access to the victim company’s sensitive and proprietary information.  After about a year, CANNADY’s engagement was terminated.  Days after, and while he still had access to the company’s information, CANNADY downloaded the company’s sensitive and proprietary information without its authorization and uploaded the information to a personal cloud storage account.

CANNADY then demanded that the company settle unspecified discrimination and emotional distress claims.  He threatened to “upload all of the documents in his possession immediately once the case is filed” if the company did not settle his claims for $1.5 million.  He added, “[a]s we all know those documents will imperil [the company’s] reputation and shake investor confidence.”  He specifically demanded “a 10 year Certificate of Deposit for 1.5 million dollars,” which would “buy a[n] attestation that all files destroyed by me and a gag order preventing me from ever talking about what I saw or the documents I had in my possession or the documents I had created at [the company] or downloaded.”

At several points during his attempt to get the company to agree to a settlement, CANNADY sought specifically to add in provisions to a draft settlement agreement that would prohibit the company from pursuing criminal charges against him in connection with the settlement.

*                *                *

VINCENT CANNADY, 57, of El Dorado Springs, Missouri, is charged with Hobbs Act extortion, which carries a maximum sentence of 20 years in prison.

The maximum potential sentence 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 thanked the Federal Bureau of Investigation’s (“FBI”) New York Field Office, Westchester Resident Agency and the FBI’s Kansas City Field Office, Joplin and Springfield Resident Agencies.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Reyhan Watson and James McMahon are in charge of the prosecution.

The charge contained in the Complaint is merely an accusation, 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 SHAWN RAINS and JOSEPH MAHARAJ were sentenced by U.S. District Judge Nelson S. Román to 12 years and 90 months in prison, respectively, for their participation in a scheme to steal millions of dollars from a White Plains company where they were formerly high-ranking executives.  RAINS was previously convicted, following a two-week jury trial, of mail fraud conspiracy, mail fraud, and money laundering conspiracy.  MAHARAJ previously pled guilty to one count of mail fraud conspiracy.

U.S. Attorney Damian Williams said: “Shawn Rains and Joseph Maharaj, former executives at a White Plains healthcare consulting company, betrayed the trust of their employer by stealing millions of dollars.  Along with co-conspirators, Rains and Maharaj used sham companies to submit fake invoices and trick their employer into paying for work that never happened, then laundered the proceeds.  Prosecuting cases like this is crucial to maintaining trust in business and protecting the integrity of financial systems upon which countless individuals and institutions rely.”

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

RAINS and MAHARJ were executives at OrthoNet, a healthcare claims processing company based in White Plains, New York.  Between approximately 2009 and 2017, RAINS and MAHARAJ designed and executed a scheme to defraud OrthoNet of over $4 million and to launder the fraud proceeds.  RAINS and MAHARAJ conspired with others to create fake vendors that purported to do work on behalf of OrthoNet.  RAINS, MAHARAJ, and their co-conspirators then signed invoices approving payment for the fake work, and OrthoNet sent payments to the fake vendors.  RAINS, MAHARAJ, and their co-conspirators then converted the money to cash to hide the source of the fraud proceeds and split it up amongst themselves.

*                *                *

In addition to the prison sentence, RAINS, 57, of Le Bouscat, France, was ordered to forfeit $4,043,798.69 and pay restitution in the amount of $4,636,150.69.  MAHARAJ, 42, of Goldens Bridge, New York, was ordered to forfeit $4,034,411.19 and pay restitution in the amount of $4,034,411.19.

Mr. Williams thanked the Federal Bureau of Investigation for their outstanding work on the investigation.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Stephanie Simon, Benjamin Klein, Jim Ligtenberg, and Jamie Bagliebter are in charge of the prosecution, with the assistance of Paralegal Specialist Shannon Becker.

Damian Williams, the United States Attorney for the Southern District of New York, announced that OKAMI LANDA was sentenced to 130 months in prison for possession of child pornography and for sending a threatening, powder-filled letter to a federal agent who previously investigated and arrested him.  LANDA previously pled guilty before U.S. District Judge P. Kevin Castel, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Okami Landa has twice been convicted in this District of possessing child pornography.  Today’s sentence holds Landa accountable not only for his participation in the exploitation and victimization of young children, but also for his intolerable decision to retaliate against the FBI by sending a terrifying, powder-filled letter to the agent who investigated him.  This Office stands shoulder-to-shoulder with the dedicated FBI agents who investigate crimes against children.  Their work should never make them targets of reprisal.”

According to court documents and statements made during court proceedings:[1]

In November 2021, LANDA, who had previously been convicted and sentenced to two years in prison for possession of child pornography in 2016, mailed a threatening letter filled with white powder to a Federal Bureau of Investigation (“FBI”) agent (the “FBI Agent”) who was assigned to a squad responsible for investigating crimes against children.  The FBI Agent had interviewed and arrested LANDA in connection with his previous child pornography conviction.  The threatening letter, which the FBI Agent opened inside a forensic laboratory at an FBI office in Manhattan, contained a white powdery substance and a message that said, among other things: “Hope you and your ugly cracker children and family get what you deserved, a slow, painful and terminal disease to end your sorry life.”  The letter and powder prompted an emergency response from the FBI’s weapons and mass destruction team, which sealed the forensic laboratory before examining the powder and determining that it was safe.  The FBI Agent and other FBI personnel in the area were quarantined and hospitalized for medical evaluation.

Through the FBI’s investigation, law enforcement examined the serial number of the stamp affixed to the threatening letter and learned that it was purchased using a credit card belonging to LANDA’s mother, who lived with LANDA at their residence in the Bronx.  At the time, LANDA was on federal supervised release for his previous child pornography conviction and had previously made threatening statements about law enforcement, including about a desire to “blow up Federal Plaza because I hate the feds and they ruined my life.”  Following an interview at his residence by FBI agents, the U.S. Probation Office conducted a search of LANDA’s residence, where they recovered multiple electronic devices, including a USB drive that contained 11 files with child pornography.  The child pornography on LANDA’s USB drive included depictions of prepubescent minor females and adult males engaging in sex acts.

*                *                *

In addition to the prison term, LANDA, 41, of the Bronx, New York, was sentenced to 10 years of supervised release.

Mr. Williams praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the New York City Police Department, and over 50 other federal, state, and local agencies.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Nicholas S. Bradley and Matthew J.C. Hellman are in charge of the prosecution.

[1] Communications, conversations, and statements discussed and quoted herein are described in substance and in part.

Damian Williams, the United States Attorney for the Southern District of New York, announced that WILLIE EVANS was sentenced today by U.S. District Judge George B. Daniels to 20 years in prison for racketeering offenses related to his leadership role as the former godfather of the 59 Brims gang, a set of the violent Bloods street gang that operates throughout the U.S., including New York City.  During his eight-year run as godfather of the 59 Brims, EVANS oversaw the gang’s day-to-day operations and supervised its most violent and dangerous crimes.  EVANS was the last of 22 defendants in the 59 Brims case before Judge Daniels to have been convicted and sentenced.

U.S. Attorney Damian Williams said: “Willie Evans’s sentencing marks a pivotal moment in our ongoing battle against organized crime.  While the 59 Brims and other gangs may still linger, they do so on borrowed time.  With each conviction, their power weakens, and we will continue to dismantle these networks piece by piece until our streets are safe for all.”

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

The 59 Brims operated in and around Manhattan, the Bronx, Queens, and Brooklyn, New York.  Members of the 59 Brims engaged in a series of violent disputes with rivals, including those within the 59 Brims who they deemed disloyal.  During these disputes, members and associates of the gang committed multiple murders, shootings, robberies, and assaults against their rivals and fellow members.  Members of the 59 Brims sold heroin, fentanyl, crack cocaine, and marijuana and committed, or attempted to commit, acts of violence to protect and expand their narcotics business.

Among other crimes committed by the gang, the 59 Brims was responsible for the following:

On November 29, 2018, after a victim was lured to JERLAINE LITTLE’s apartment building, JAMARR SIMMONS and other 59 Brims gang members, including MARKQUEL SIMMONS, MARKELL BOBIAN, TYRONE ERVIN, and SEAN GAMBRELL, robbed the victim at gunpoint and pistol-whipped the victim.

On March 30, 2019, JAMARR SIMMONS and TIMOTHY COLEMAN committed a stabbing of a rival gang member outside of a bar at 145 East 149th Street in the Bronx.  Surveillance video captured COLEMAN and JAMARR SIMMONS committing the stabbing.

In July 2019, LITTLE was kicked out of the 59 Brims over a dispute with a fellow gang member.  Shortly thereafter, LITTLE joined the Mac Baller Brims, a rival gang.  EVANS ordered members of the 59 Brims to slash LITTLE.  JAMARR SIMMONS and SYLVESTER WINT discussed having LITTLE slashed.  Thereafter, members of the gang successfully slashed LITTLE on or about August 8, 2019.

On August 24, 2019, EVANS conspired with WINT and SHAMARE REID to commit a shooting of rival gang members.  Shortly after midnight on August 24, 2019, two victims were shot multiple times outside of a bodega in front of 755 East 216th Street in the Bronx (both victims survived).  Surveillance video captured WINT and REID committing the shooting of the rival gang members.  EVANS, as the godfather of the 59 Brims, subsequently criticized WINT for letting himself be caught on camera: “Why y’all was walking Back & forth like that Bammy [camera] kaught ya Face Good.”

In the early morning hours of September 28, 2019, JAMARR SIMMONS and MARKQUEL SIMMONS told Bradford Mensah to come to Crotona Park in the Bronx to receive gang discipline from others, including EVANS, because Mensah had been seen hugging LITTLE after he had been kicked out of the gang.  Sometime after Mensah arrived at Crotona Park, he was shot at point blank range in the back of the head and died.

On January 11, 2020, JAMARR SIMMONS, DARON GOODMAN, JOSE RODRIGUEZ, DARNELL COOPER, and Jason Parris were together on the sidewalk near 1437 Webster Avenue in the Bronx.  A rival gang member punched Jason Parris and a fight broke out that continued into the middle of the street on Webster Avenue.  While the fight was ongoing in the middle of the street, GOODMAN fired a shot that errantly struck Parris in the throat, killing him.

All 22 defendants in the 59 Brims case before Judge Daniels have been convicted and sentenced.  In addition to EVANS’s sentence, Judge Daniels has imposed the following sentences, among others:

• JAMARR SIMMONS was sentenced to 20 years in prison;
• GOODMAN was sentenced to 12 years in prison;
• COLEMAN was sentenced to eight years in prison;
• and WINT, ERVIN, JAVARIS JENKINS, REID, and MARCUS AYALA were each sentenced to seven years in prison.

*                *                *

In addition to the prison term, EVANS, 32, of the Bronx, New York, was sentenced to three years of supervised release.

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

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Rushmi Bhaskaran and Peter J. Davis are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ALICIA AYERS and ANDREA AYERS were sentenced today to two years in prison followed by six months of home confinement and 42 months in prison, respectively, for conspiracy to commit wire fraud, wire fraud, and making false statements in connection with a scheme to defraud the U.S. Small Business Administration (“SBA”), resulting in a loss to the SBA of approximately $1.7 million.  ALICIA AYERS and ANDREA AYERS previously pled guilty before U.S. District Judge Nelson S. Román, who imposed today’s sentences. 

U.S. Attorney Damian Williams said: “These defendants stole from a taxpayer-funded program intended to help small businesses that were in desperate need of assistance during the COVID-19 pandemic.  As their convictions and sentences reflect, my Office is determined to continue to work to bring to justice those who exploit and defraud government programs during a national emergency.  I thank the FBI and the career prosecutors of this Office for their outstanding work investigating and prosecuting this scheme.”   

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

The SBA is a federal agency of the Executive Branch that administers assistance to American small businesses.  This assistance includes making direct loans to applicants through the Economic Injury Disaster Loan (“EIDL”) Program.  In response to the COVID-19 pandemic, Congress expanded the SBA’s EIDL Program to provide small businesses with low-interest loans of up to $2 million prior to in or about May 2020 and up to $150,000 beginning in or about May 2020 in order to provide vital economic support to help overcome the loss of revenue small businesses were experiencing due to COVID-19.  Applicants seeking a loan under the EIDL program were also permitted to request and receive an advance of approximately $1,000 per employee, for an amount up to $10,000, which the SBA generally provided while the loan application was pending.

In June and July 2020, ALICIA AYERS and her mother, ANDREA AYERS, a former Code Enforcement Officer for the City of Mount Vernon Police Department, used the identities of approximately 300 other individuals (the “Applicants”) to submit approximately 315 online applications to the SBA, seeking over $3 million of funds through the SBA’s EIDL Program (the “EIDL Applications”).  In connection with the EIDL Applications, ALICIA AYERS and ANDREA AYERS falsely represented to the SBA that the applicants were the owners of businesses with 10 or more employees.  However, that was a lie – as ALICIA AYERS and ANDREA AYERS knew, the applicants did not employ the number of people reported, and the majority of the applicants did not own businesses or have any employees.  Based on the fraudulent EIDL Applications, the SBA made advance payments of approximately $1,690,000 to the applicants, who then kicked back a portion of the advance payments to ALICIA AYERS and ANDREA AYERS. 

*                *                *

In addition to the prison terms, ALICIA AYERS, 37, and ANDREA AYERS, 57, both of Mount Vernon, New York, were each sentenced to three years of supervised release and ordered to pay forfeiture in the amount of $1,690,000 and to pay restitution to the SBA in the amount of $1,690,000.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that MANISHKUMAR PATEL pled guilty today in connection with a $50 million health care fraud and kickback scheme involving the sale of fraudulent prescriptions for durable medical equipment, among other medical supplies, to suppliers, pharmacies, and laboratories who obtained payment for those fraudulent prescriptions from Medicare.  PATEL pled guilty before U.S. Magistrate Judge Ona T. Wang and is scheduled to be sentenced on July 26, 2024, at 10:00 a.m. before U.S. District Judge Lorna Schofield.

U.S. Attorney Damian Williams said: “Behind every dollar siphoned through fraud lies a patient denied rightful care.  Manishkumar Patel cost Medicare nearly $50 million in resources that could have been used to provide genuine care to those in need.  His guilty plea today is a step toward restoring integrity and trust in our health care system.”

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

Between 2019 and 2022, PATEL and a co-conspirator (“CC-1”) fraudulently sold prescriptions and doctors’ orders for durable medical equipment, pharmaceuticals, and laboratory tests (collectively, “scripts”) to durable medical equipment suppliers, pharmacies, and laboratories (collectively, the “Medicare Providers”).

PATEL obtained the scripts from call centers that called Medicare beneficiaries and asked them perfunctory questions designed to justify a script that would be reimbursed by Medicare.  PATEL turned the information from those calls into scripts by arranging cursory telemedicine appointments with the beneficiaries — a practice called “doctor chasing,” in which the information was sent to a doctor who signed the script without seeing the patient and who was frequently unaware of what they were signing — and obtaining forged scripts.  PATEL then sold the scripts to Medicare Providers, which filled the orders and billed Medicare. 

Because the scripts were fraudulently obtained, many beneficiaries rejected the items they were sent by the Medicare Providers, many doctors threatened to report PATEL for fraud, and Medicare frequently refused to pay for the scripts.

The Medicare Providers made payments to PATEL for the scripts in violation of the Anti-Kickback Statue.  PATEL and the Medicare Providers entered into sham contracts for generic marketing services at flat rates in an attempt to conceal their illegal kickback scheme.

PATEL was a leader of the scheme, which resulted in losses to Medicare of nearly $50 million.

*                *                *

PATEL, 44, of Pelham Manor, New York, pled guilty to one count of conspiracy to commit health care fraud, one count of wire fraud, and one count of violating the Anti-Kickback Statute, each of which carries a maximum sentence of five years in prison.  In addition, PATEL was ordered to pay $48,150,692.49 in restitution to the U.S. Centers for Medicare and Medicaid Services and forfeit $6,839,900.

The 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 outstanding work of the Department of Health and Human Services, Office of Inspector General.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Kevin Mead is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ÁLVARO FREDY CÓRDOBA RUÍZ was sentenced to 14 years in prison today for conspiring to import cocaine into the United States.  CÓRDOBA RUÍZ pled guilty on January 2, 2024, before U.S. District Judge Lewis J. Liman, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Today’s sentence demonstrates this Office’s commitment to prosecuting drug traffickers like Córdoba Ruíz, who seek to import tons of cocaine into the United States.  Those who seek to flood our streets with narcotics will face serious consequences, especially when they partner with violent drug trafficking organizations like the FARC.  I commend the efforts of our law enforcement partners and the career prosecutors of this Office who work tirelessly to investigate and disrupt these complex drug importation networks.  Their work has a profound impact on countless lives in our communities.”

According to court documents and statements made during court proceedings:[1]

CÓRDOBA RUÍZ conspired with his co-defendants and other individuals associated with the Fuerzas Armadas Revolucionarias de Colombia (“FARC”) — a violent organization based in Colombia that was dedicated to the overthrow of the Colombian government and responsible for the production and distribution of the majority of the cocaine that eventually reached the United States — to source and distribute tons of cocaine destined for the United States.  CÓRDOBA RUÍZ negotiated with individuals he believed to be narcotics traffickers from a Mexico-based drug trafficking organization (the “Mexican DTO”) seeking to establish a cocaine supply line from Venezuela to the United States.  These individuals, however, were actually confidential sources working at the direction of the U.S. Drug Enforcement Administration (“DEA”).

In recorded communications during the investigation, CÓRDOBA RUÍZ agreed to assist the planned cocaine venture through his political and logistics connections in Colombia.  With respect to the former, CÓRDOBA RUÍZ connected confidential sources purporting to be members of the Mexican DTO with a Colombian politician, conveying that, in exchange for financial and political support, the politician would help to facilitate a cocaine partnership between the defendant, his co-conspirators, and the confidential sources purportedly functioning as the Mexican DTO.  CÓRDOBA RUÍZ also connected the confidential sources with individuals who offered to provide large quantities of cocaine and security for the promised cocaine loads.  In December 2021, to prove their bona fides and establish the quality of their supply, CÓRDOBA RUÍZ sold the confidential sources a five-kilogram sample of cocaine containing a high level of purity — lab tests demonstrate the cocaine was between 86.6% to 89.1% pure — from a FARC-associated farm outside of Medellín.  CÓRDOBA RUÍZ was arrested in Colombia in February 2022, while negotiating a much larger partnership with the Mexican DTO, which contemplated the shipment of approximately 500 kilograms of cocaine per week.

*                *                *

In addition to the prison term, CÓRDOBA RUÍZ, 65, of Medellín, Colombia, was sentenced to four years of supervised release.

Mr. Williams praised the outstanding investigative work of the DEA’s Special Operations Division Bilateral Investigations Unit and Bogotá Country Office, as well as the U.S. Department of Justice’s Office of International Affairs and the Narcotic and Dangerous Drug Section’s Office of the Judicial Attaché in Bogotá.

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 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.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Nicholas S. Bradley, Kaylan E. Lasky, and Kevin T. Sullivan are in charge of the prosecution.

[1] Communications, conversations, and statements discussed and quoted herein are described in substance and in part, and many of these conversations occurred in Spanish.

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of KAMERIN STOKES, a/k/a “TheMFNPlug,” in connection with a scheme to hack user accounts at a fantasy sports and betting website (the “Betting Website”) and sell access to those accounts in order to steal hundreds of thousands of dollars from them.  STOKES pled guilty today to conspiracy to commit computer intrusion before U.S. District Judge Naomi Reice Buchwald.

U.S. Attorney Damian Williams said: “With today’s guilty plea, this Office has successfully prosecuted a second member of a scheme to hack fantasy sports and betting accounts and sell access to them online.  Kamerin Stokes and his co-defendants greedily lined their own pockets by profiting off of harmful hacks that drained victims of hundreds of thousands of dollars and erode the public’s trust in online platforms.  Hackers and cybercriminals who sell stolen information online should be warned that this Office is watching and will continue to protect internet-users from malicious actors.” 

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

On or about November 18, 2022, several individuals launched a “credential stuffing attack” on the Betting Website.  During a credential stuffing attack, a cyber threat actor collects stolen credentials, or username and password pairs, obtained from other large-scale data breaches of other companies, which can be purchased on the darkweb.  The threat actor then systematically attempts to use those stolen credentials to obtain unauthorized access to accounts held by the same user with other companies and providers in order to compromise accounts where the user has maintained the same password.  Here, in connection with the attack on the Betting Website, there was a series of attempts to log into the Betting Website accounts using a large list of stolen credentials.

Those individuals successfully accessed approximately 60,000 accounts at the Betting Website (the “Victim Accounts”) through the credential stuffing attack.  In some instances, the individuals who unlawfully accessed the Victim Accounts were able to add a new payment method on the account, deposit $5 into that account through the new payment method to verify that method, and then withdraw all the existing funds in the Victim Account through the new payment method (i.e., to a newly added financial account belonging to the hacker), thus stealing the funds in the Victim Account. 

Access to the Victim Accounts were sold on various websites that traffic in stolen accounts, which are frequently referred to as “Shops.”  STOKES controlled his own Shop, used the alias, “TheMFNPlug,” and purchased Victim Accounts in bulk.  STOKES obtained Victim Accounts from the Betting Website with a total listed account value of over $125,000 and then offered access to those accounts for sale on his Shop.

*                *                *

STOKES, 21, of Memphis, Tennessee, pled guilty to one count of conspiracy to commit computer intrusion, which carries a maximum sentence of five years in prison.

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  STOKES is scheduled to be sentenced by Judge Buchwald on August 15, 2024, at 11:00 a.m.

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

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Kevin Mead and Micah Fergenson are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that MOUNIR MRABET was sentenced yesterday by U.S. District Judge Jed S. Rakoff to 270 months in prison for trafficking wholesale quantities of fentanyl and methamphetamine in and around midtown Manhattan.  On November 9, 2023, a jury convicted MRABET of narcotics conspiracy, narcotics trafficking, and a firearms offense.

U.S. Attorney Damian Williams said: “The defendant flooded the streets of New York with methamphetamine and fentanyl and kept a gun as part of his drug operations.  He sold these dangerous drugs to other dealers in wholesale quantities and even stored and sold these drugs in hotel rooms with abject disregard for those he endangered.  This sentence is a just punishment for an individual who chose to profit from destroying others and actively contributed to a drug crisis that continues to claim lives across our city and our nation.”

According to public filings and the evidence presented at trial:

From at least late 2021 to January 2023, MRABET coordinated with suppliers in Mexico and California to receive boxes of crystal methamphetamine and fentanyl in the mail.  He then worked with co-conspirators to distribute wholesale quantities of these drugs to other drug dealers in New York City, and he kept a gun and used threats to promote his drug operations.  For example, in October 2022, he texted a fellow dealer, “I will fucking shoot u one day,” and “Now bring me a pound.”  MRABET’s voice was also captured on a video depicting stacks of cash, bundles of apparent drugs, and a revolver.  Additional videos, photographs, and text messages confirmed that MRABET stored and sold drugs out of hotel rooms.

After MRABET was recorded selling drugs to an undercover detective, including fake oxycodone pills laced with fentanyl, law enforcement agents conducted a search of his Manhattan apartment and seized 24 pounds of crystal methamphetamine and, from the scaffolding outside his window, approximately half a pound of fentanyl powder.

The evidence at trial included the defendant’s own texts arranging sales to co-conspirators and texts from customers who described being sickened by his drugs.  The evidence also included numerous videos and photographs of drugs and drug proceeds, including some that depicted MRABET pouring and weighing containers of crystal methamphetamine and wrapping and spritzing a scented spray on stacks of cash.

*                *                *

In addition to the prison term, MRABET, 40, of New York, New York, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of Task Force Officers assigned to the U.S. Attorney’s Office for the Southern District of New York, Homeland Security Investigations, the New York City Police Department, and the Drug Enforcement Administration.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Jane Y. Chong and Edward C. Robinson Jr. are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOHN COSTANZO JR. was sentenced today by U.S. District Judge J. Paul Oetken to four years in prison for participating in a scheme in which his co-defendant, MANUEL RECIO, and others funneled tens of thousands of dollars to COSTANZO in exchange for COSTANZO providing sensitive law enforcement information to assist defense lawyers.

U.S. Attorney Damian Williams said: “With today’s sentence, John Costanzo Jr. finally faces the consequences of selling his office as part of a bribery scheme.  By disclosing sensitive information in exchange for money, Costanzo endangered his fellow officers, interfered in significant criminal investigations, and violated the laws he had sworn to uphold.  Such conduct demands serious punishment, and today’s sentence does just that.  Let this be a message to all public officials who are tempted to profit illegally from their service — there will be serious consequences.”

According to the evidence presented in court during the trial:

JOHN COSTANZO JR. was a Drug Enforcement Administration (“DEA”) special agent most recently assigned to DEA Headquarters.  He was a Group Supervisor in the DEA’s Miami Field Office until June 2019.  MANUEL RECIO is a former DEA special agent who retired as the Assistant Special Agent in Charge for the Miami Field Office in November 2018.  Upon his retirement, RECIO began operating his own business, which provided private investigative services to criminal defense attorneys and also helped defense attorneys to recruit clients.  From around the time of RECIO’s retirement through around November 2019, RECIO agreed with COSTANZO to provide benefits to COSTANZO in exchange for COSTANZO providing RECIO with nonpublic information about DEA investigations.  COSTANZO provided RECIO with information about nonpublic investigations, such as the identities of individuals charged and the anticipated timing of indictments and arrests, and intelligence which COSTANZO obtained from the Narcotics and Dangerous Drugs Information System (“NADDIS”), a DEA database that contains information about individuals who are or have been under investigation by the DEA.  RECIO paid COSTANZO for this information, which RECIO used to help recruit new clients for criminal defense attorneys.

Among the benefits paid to COSTANZO were a $2,500 payment made in November 2018, shortly after RECIO’s retirement from the DEA, which was funneled to COSTANZO through a company owned by a close family member of COSTANZO.  At the same time that this payment was made, RECIO began asking COSTANZO to run searches in NADDIS to provide RECIO with nonpublic DEA information about DEA targets and investigations.  Following that initial payment, RECIO and others continued to provide benefits to COSTANZO, including tens of thousands of dollars that were funneled from RECIO through a company created by a DEA task force officer and $50,000 that was paid to COSTANZO through a close family member for COSTANZO’s purchase of a condominium in January and February 2019.

In return, COSTANZO continued to provide nonpublic DEA information to RECIO, including information about the timing of forthcoming indictments and information about DEA arrest plans of particular targets.  COSTANZO also searched NADDIS for names of particular individuals requested by RECIO on dozens of occasions during the scheme and provided RECIO with information and assistance with particular charged defendants represented by attorneys for whom REICO was working.  During the scheme, COSTANZO and RECIO took steps to conceal the existence of the scheme, including by structuring the payments from RECIO to COSTANZO through third parties and through COSTANZO’s use of a cellphone provided by RECIO for communications related to the scheme.

*                *                *

In addition to the prison term, COSTANZO, 49, of Coral Gables, Florida, was sentenced to three years of supervised release and ordered to forfeit $98,250.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the Department of Justice’s Office of the Inspector General and thanked the DEA’s Office of Professional Responsibility for its support in this matter.

The prosecution is being handled by the Office’s Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Mathew Andrews, Emily Deininger, and Sheb Swett are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York; Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”); 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 KEONNE RODRIGUEZ, the Chief Executive Officer and a co-founder of Samourai Wallet (“Samourai”), and WILLIAM LONERGAN HILL, the Chief Technology Officer and also a co-founder of Samourai, with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business.  These charges arise from the defendants’ development, marketing, and operation of a cryptocurrency mixer that executed over $2 billion in unlawful transactions and facilitated more than $100 million in money laundering transactions from illegal dark web markets, such as Silk Road and Hydra Market; a web-server intrusion; a spearphishing scheme; and schemes to defraud multiple decentralized finance protocols.  RODRIGUEZ was arrested this morning and is expected to be presented today or tomorrow before a U.S. Magistrate Judge in the Western District of Pennsylvania.  HILL was arrested this morning in Portugal based on the U.S. criminal charges.  The United States will seek HILL’s extradition to stand trial in the United States.  The case is assigned to U.S. District Judge Richard M. Berman.

In coordination with law enforcement authorities in Iceland, Samourai’s web servers and domain (https://samourai.io/) were seized.  Additionally, a seizure warrant for Samourai’s mobile application was served on the Google Play Store.  As a result, the application will no longer be available to be downloaded from the Google Play Store in the United States.

U.S. Attorney Damian Williams said: “As alleged, Keonne Rodriguez and William Lonergan Hill are responsible for developing, marketing, and operating Samourai, a cryptocurrency mixing service that executed over $2 billion in unlawful transactions and served as a haven for criminals to engage in large-scale money laundering.  Rodriguez and Hill allegedly knowingly facilitated the laundering of over $100 million of criminal proceeds from the Silk Road, Hydra Market, and a host of other computer hacking and fraud campaigns.  Together with our law enforcement partners, we will continue to relentlessly pursue and dismantle criminal organizations that use cryptocurrency to hide illicit conduct.”

IRS-CI Special Agent in Charge Thomas Fattorusso said: “$2 billion in transactions with an unlicensed money transmitter means $2 billion flowed without any oversight, from whomever to wherever.  Because of the company’s disregard for regulation, it’s alleged that Samourai Wallet laundered more than $100 million in criminal proceeds.  Special Agents with IRS:CI New York and IRS:CI LA’s Cyber units worked with our federal and international law enforcement partners to not only arrest the founders and CEO, but to also seize their domain.  Samourai Wallet is now closed for business.”

FBI Assistant Director in Charge James Smith said: “Threat actors utilize technology to evade law enforcement detection and create environments conducive to criminal activity.  For almost 10 years, Keonne Rodriguez and William Hill allegedly operated a mobile cryptocurrency mixing platform which provided other criminals a virtual haven for the clandestine exchange of illicit funds, the facilitation of more than $2 billion in illegal transactions, and $100 million in dark web money laundering.  The FBI is committed to exposing covert financial schemes and ensuring no one can hide behind a screen to perpetuate financial wrongdoing.”

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

Background on Samourai

From about 2015 through February 2024, RODRIGUEZ and HILL developed, marketed, and operated a cryptocurrency mixing service known as Samourai, an unlicensed money transmitting business from which they earned millions of dollars in fees.  Samourai unlawfully combined multiple unique features to execute anonymous financial transactions valued at over $2 billion for its customers.  While offering Samourai as a “privacy” service, the defendants knew that it was a haven for criminals to engage in large-scale money laundering and sanctions evasion.  Indeed, as the defendants intended and well knew, a substantial portion of the funds that Samourai processed were criminal proceeds passed through Samourai for purposes of concealment.  During the relevant period, Samourai laundered over $100 million of crime proceeds originating from, among other criminal sources, illegal darkweb markets, such as Silk Road and Hydra Market; various wire fraud and computer fraud schemes, including a web-server intrusion, a spearphishing scheme, and schemes to defraud multiple decentralized finance protocols; and other illegal activities.

RODRIGUEZ and HILL began developing Samourai in or about 2015.  Samourai is a mobile application that users can download onto their cellphones, and the application has been downloaded over 100,000 times.  After users download Samourai, they can store their private keys for any BTC addresses they control inside of the Samourai program.  These private keys are not shared with Samourai employees, but Samourai operates a centralized server that, among other things, supervises and facilitates transactions between Samourai users and creates new BTC addresses used during the transactions.  Samourai is used by customers all over the world, including customers located in the United States and in the Southern District of New York.

RODRIGUEZ and HILL designed Samourai to offer at least two features intended to assist individuals engaged in criminal conduct to conceal the source of the proceeds of their criminal activities.  First, Samourai offers a cryptocurrency mixing service known as “Whirlpool,” which coordinates batches of cryptocurrency exchanges between groups of Samourai users to prevent tracing of criminal proceeds by law enforcement on the Blockchain.  Second, Samourai offers a service called “Ricochet,” which allows a Samourai user to build in additional and unnecessary intermediate transactions (known as “hops”) when sending cryptocurrency from one address to another address.  This feature similarly may prevent law enforcement and/or cryptocurrency exchanges from recognizing that a particular batch of cryptocurrency originates from criminal activity.  Since the start of the Whirlpool service in or about 2019, and of the Ricochet service in or about 2017, over 80,000 BTC (worth over $2 billion applying the BTC-USD conversion rates at the time of each transaction) has passed through these two services operated by Samourai.  Samourai collects a fee for both services, estimated to be about $3.4 million for Whirlpool transactions and $1.1 million for Ricochet transactions over the same time period.

RODRIGUEZ and HILL’s Knowledge and Intent for Criminal Proceeds to be Laundered by Samourai

RODRIGUEZ and HILL operated Twitter accounts that encouraged and openly invited users to launder criminal proceeds through Samourai.  For example, in or around June 2022, Samourai’s Twitter account — operated by RODRIGUEZ — posted the following message regarding Russian oligarchs seeking to circumvent sanctions:

Similarly, in a private message on or about August 27, 2020, HILL — using a Twitter account with the username “Samourai Dev” — discussed the use of Samourai by criminals operating in online black markets such as Silk Road in private messages with another Twitter user (the “Twitter User”) (emphasis added):

Twitter User:             Silk Road is why I first found Bitcoin and the desire to keep engaging in those types of markets is one reason that I want to defend/strengthen those use cases . . .

Samourai Dev:          No, not at all. We probably have different views on some basic tenets of bitcoin, you and I – so to each his own so to speak. At Samourai we are entirely focused on the censorship resistance and black/grey circular economy. This implies no foreseeable mass adoption, although black/grey markets have already started to expand during covid and will continue to do so post-covid. . . .

Additionally, in response to Europol highlighting Samourai as a “top threat” to the ability of law enforcement to trace the proceeds of criminal activity, HILL posted a message in or around March 2021 suggesting that Samourai would not change its practices in response to allegations that Samourai was being used for money laundering:

Similarly, RODRIGUEZ and HILL possessed and transmitted to potential investors marketing materials that discussed how Samourai’s customer base was intended to include criminals seeking privacy or the subversion of safeguards and reporting requirements by financial institutions.  For example, in Samourai’s marketing materials, RODRIGUEZ and HILL similarly acknowledge that the individuals most likely to use a service like Samourai include individuals engaged in criminal activities, including “Restricted Markets.”

In the below excerpt from Samourai’s marketing materials, RODRIGUEZ and HILL acknowledge that its revenues will be derived from “Dark/Grey Market participants” seeking to “swap their bitcoins with multiple parties” to avoid detection:

In Samourai’s marketing materials, RODRIGUEZ and HILL promoted Samourai’s Wallet and its “Mixing Service” as a “Premium Privacy Service” for transactions involving the proceeds of goods and services that include, among other things, “Illicit Activity.”

*                *                *

RODRIGUEZ, 35, of Harmony, Pennsylvania, and HILL, 65, a U.S. national who was arrested in Portugal, are each charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five 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 IRS-CI and the FBI.  He also acknowledged the assistance of the Justice Department’s Office of International Affairs.  Mr. Williams also thanked Europol, the Portugal Judiciary Police, the Icelandic Police, the FBI Field Office in Pittsburgh, the FBI’s International Operations Division, and the IRS-CI Los Angeles Field Office for their assistance in the investigation of this case.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Andrew K. Chan and David R. Felton 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 should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that JEREMY JOSEPH was sentenced today to 27 months in prison for sending interstate threats to injure or kill two former co-workers.  JOSEPH previously pled guilty, two days after his trial on these charges had begun, before U.S. District Judge J. Paul Oetken, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “Jeremy Joseph sent hateful, violent, and antisemitic death threats over email to two former co-workers.  Joseph made these threats as part of a broader scheme in which Joseph threatened dozens of victims, many of whom were Jewish or were perceived to be Jewish.  This prosecution and today’s sentence make clear that this Office will not tolerate crimes of hate and will continue to seek justice for the victims of these offensive and harmful acts.”

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

From in or about December 2022 through at least in or about January 2023, JOSEPH sent terrifying death threats over email to two former colleagues (the “Victims”) that he worked with over 10 years prior.  The emails detailed how JOSEPH planned to murder his Victims and included photographs of pipe bombs, ammunition, and a firearm.  The emails also included personal information about the Victims and their families. 

JOSEPH’s threats towards the Victims were part of a larger pattern of death threats sent to various other individuals from JOSEPH’s life, as well as politicians, judges, and prosecutors.  The targets of his threats spanned multiples countries and U.S. states.  In these communications, JOSEPH consistently used violent, threatening language that targeted Jewish people. 

*                *                *

In addition to the prison term, JOSEPH, 41, of Houston, Texas, was sentenced to three years of supervised release. 

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

The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorneys Jamie Bagliebter and Diarra M. Guthrie are in charge of the prosecution.

An indictment was unsealed today in Manhattan federal court charging Iranian nationals Hossein Harooni (حسین هارونی), Reza Kazemifar (رضا کاظمی فر), Komeil Baradaran Salmani (کمیل برادران سلمانی), and Alireza Shafie Nasab (علیرضا شفیعی نسب) for their involvement in a cyber-enabled campaign to compromise U.S. government and private entities, including the U.S. Departments of Treasury and State, defense contractors, and two New York-based companies. Nasab was charged for the same conduct in a previous indictment that was unsealed on Feb. 29. The defendants remain at large.

Concurrent with today’s unsealing, the U.S. Department of State’s Rewards for Justice program (RFJ) is offering a reward of up to $10 million for information leading to the identification or location of the group and the defendants. The RFJ program seeks information on any person who, while acting at the direction or under the control of a foreign government, engages in certain malicious cyber activities in violation of the Computer Fraud and Abuse Act (CFAA). Additionally, the Treasury Department announced sanctions against the four defendants, among other malicious cyber actors.

“Criminal activity originating from Iran poses a grave threat to America’s national security and economic stability,” said Attorney General Merrick B. Garland. “These defendants are alleged to have engaged in a coordinated, multi-year hacking campaign from Iran targeting more than a dozen American companies and the U.S. Treasury and State Departments. This case represents just one part of the U.S. government’s effort to counter the range of threats originating from Iran that endanger the American people.”

“The FBI is constantly working to detect and counter cyber campaigns like the one described in today’s indictment. From enabling lethal plots and repressing our citizens and residents to targeting our critical infrastructure, we’ve often seen the trail of dangerous cyber-criminal activity lead back to Iran,” said FBI Director Christopher Wray. “Today’s announcement demonstrates the FBI’s commitment to using every lawful tool at our disposal, together with our domestic and international partners, to disrupt the threats posed from Iran to American businesses and citizens.”

“Today’s charges pull back the curtain on an Iran-based company that purported to provide ‘cybersecurity services’ while in actuality scheming to compromise U.S. private and public sector computer systems, including through spearphishing and social engineering attacks,” said Assistant Attorney General Matthew G. Olsen of the Department of Justice’s National Security Division. “The Department is committed to using a whole of government approach to disrupt such malicious activities and impose consequences on the individuals that carry them out.  Employees that continue to work at these companies risk arrest and prosecution or a lifetime as an international fugitive from justice.”  

“As alleged, the defendants participated in a cyber campaign using spearphishing and other hacking techniques in an attempt to compromise private companies with access to defense-related information,” said U.S. Attorney Damian Williams for the Southern District of New York. “Cyber intrusion schemes such as the one alleged threaten our national security, and I’m proud of our law enforcement partners and the career prosecutors of this office for continuing to use innovative technologies and investigative measures to disrupt and track down these cybercriminals. If you have information leading to the to the identification or location of Harooni, Kazemifar, Salmani, or Nasab, please reach out to the Department of State at rewardsforjustice.net.”

According to court documents, from at least in or about 2016 through at least in or about April 2021, Harooni, Kazemifar, Salmani, Nasab, and other conspirators were members of a hacking organization that participated in a coordinated multi-year campaign to conduct and attempt to conduct computer intrusions. These intrusions targeted more than a dozen U.S. companies and the U.S. Departments of Treasury and State.

During the conspiracy, Kazemifar, Salmani, and Nasab were employed by Mahak Rayan Afraz (محک رایان افراز), an Iran-based company that purported to provide cybersecurity services, but which was, in fact, a front for the conspirators’ operations.

The hacking group’s private sector victims were primarily cleared defense contractors, which are companies that have been granted security clearances by the U.S. Department of Defense to access, receive, and store classified information for the purpose of conducting activities in support of U.S. Department of Defense programs. In addition, the group targeted a New York-based accounting firm and a New York-based hospitality company.

In conducting their hacking campaigns, the group used spearphishing — tricking an email recipient into clicking on a malicious link — to infect victim computers with malware. During their campaigns against one victim, the group compromised more than 200,000 employee accounts. In another campaign, the conspirators targeted 2,000 employee accounts. In order to manage their spearphishing operations, the group created and used a particular computer application that enabled the conspirators to organize and deploy their spearphishing attacks.

In the course of these spearphishing attacks, the conspirators compromised an administrator email account belonging to a defense contractor (Defense Contractor-1). Access to this administrator account empowered the conspirators to create unauthorized Defense Contractor-1 accounts, which the conspirators then used to send spearphishing campaigns to employees of a different defense contractor and a consulting firm.

In addition to spearphishing, the conspirators utilized social engineering, which involved impersonating others, generally women, to obtain the confidence of victims. These social engineering contacts were another means the conspiracy used to deploy malware onto victim computers and compromise those devices and accounts.

Kazemifar was responsible for testing the tools utilized by the conspiracy to execute its cyber campaigns. For example, Kazemifar was involved in testing spearphishing emails used to target victim companies and was involved in developing malware utilized by the conspiracy in social engineering initiatives. During the course of his involvement in the conspiracy, from at least in or about 2014 through at least in or about 2020, Kazemifar also worked for the Iranian Organization for Electronic Warfare and Cyber Defense (EWCD). EWCD is a component of the Islamic Revolutionary Guard Corps (IRGC), which is itself a component of the Iranian Armed Forces. Among other things, the IRGC is responsible for Iran’s offensive cyber capabilities. The United States has designated the IRGC as a foreign terrorist organization.

Harooni was responsible for procuring, administering, and managing the online network infrastructure, including computer servers and customized software used to facilitate the computer intrusions. Harooni also fraudulently used the identity of a real person (Individual-1), including his use of a copy of Individual-1’s true passport, to conceal his role in procuring online infrastructure used by the conspiracy to facilitate the computer intrusion campaign.

Salmani was responsible for testing tools utilized by the conspiracy to execute spearphishing campaigns, including the campaign against a hospitality company. Salmani was also involved in maintaining infrastructure used by the conspirators.

Nasab was responsible for procuring infrastructure used by the conspiracy, particularly infrastructure used in furtherance of social engineering campaigns. Nasab also used Individual-1’s identity, including Individual-1’s name and passport, to register server and email accounts that were used during malicious cyber campaigns.           

The defendants are each charged with conspiracy to commit computer fraud, conspiracy to commit wire fraud, and wire fraud. If convicted, they face up to five years in prison for the computer fraud conspiracy, and up to 20 years in prison for each count of wire fraud and conspiracy to commit wire fraud. Harooni is additionally charged with knowingly damaging a protected computer, which carries a maximum penalty of 10 years in prison. Harooni, Salamani, and Nasab are additionally charged with aggravated identity theft, which carries a mandatory consecutive term of two years in prison. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI Cyber Division is investigating the case.

Assistant U.S. Attorneys Ryan B. Finkel, Dina McLeod, and Daniel G. Nessim for the Southern District of New York are prosecuting the case, with assistance from Trial Attorney Matthew Chang of the National Security Division’s National Security Cyber Section.

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; Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”); Matthew G. Olsen, the Assistant Attorney General of the Justice Department’s National Security Division; and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI, announced today the unsealing of an Indictment charging Iranian nationals HOSSEIN HAROONI (حسین هارونی), REZA KAZEMIFAR (رضا کاظمی فر), KOMEIL BARADARAN SALMANI (کمیل برادران سلمانی), and ALIREZA SHAFIE NASAB (علیرضا شفیعی نسب) for their involvement in a cyber-enabled campaign to compromise U.S. government and private entities, including the U.S. Departments of Treasury and State, defense contractors, and two New York-based companies.  The case has been assigned to U.S. District Judge Mary Kay Vyskocil.  NASAB was charged for the same conduct in a previous Indictment that was unsealed on February 29, 2024.  The defendants remain at large.

U.S. Attorney Damian Williams said: “As alleged, the defendants participated in a cyber campaign using spearphishing and other hacking techniques in an attempt to compromise private companies with access to defense-related information.  Cyber intrusion schemes such as the one alleged threaten our national security, and I’m proud of our law enforcement partners and the career prosecutors of this Office for continuing to use innovative technologies and investigative measures to disrupt and track down these cybercriminals.  If you have information leading to the to the identification or location of Harooni, Kazemifar, Salmani, or Nasab, please reach out to the Department of State at rewardsforjustice.net.”

Attorney General Merrick B. Garland said: “Criminal activity originating from Iran poses a grave threat to America’s national security and economic stability.  These defendants are alleged to have engaged in a coordinated, multi-year hacking campaign from Iran targeting more than a dozen American companies and the U.S. Treasury and State Departments.  This case represents just one part of the U.S. government’s effort to counter the range of threats originating from Iran that endanger the American people.”

FBI Director Christopher A. Wray said: “The FBI is constantly working to detect and counter cyber campaigns like the one described in today’s indictment.  From enabling lethal plots, and repressing our citizens and residents, to targeting our critical infrastructure, we’ve often seen the trail of dangerous cyber-criminal activity lead back to Iran.  Today’s announcement demonstrates the FBI’s commitment to using every lawful tool at our disposal, together with our domestic and international partners, to disrupt the threats posed from Iran to American businesses and citizens.”

Assistant Attorney General Matthew G. Olsen said: “Today’s charges pull back the curtain on an Iran-based company that purported to provide ‘cybersecurity services’ while in actuality scheming to compromise U.S. private and public sector computer systems, including through spearphishing and social engineering attacks.  The Department is committed to using a whole of government approach to disrupt such malicious activities and impose consequences on the individuals that carry them out.  Employees that continue to work at these companies risk arrest and prosecution or a lifetime as an international fugitive from justice.”  

FBI Assistant Director in Charge James Smith said: “Hostile threat actors have become increasingly aggressive in their attempts to infiltrate and disrupt our country’s cyber infrastructure.  These four defendants allegedly employed sophisticated techniques in a multi-year cyber hacking campaign targeting the U.S. Departments of Treasury and State and several private sector companies entrusted with supporting the work of the Department of Defense.  These charges send a clear message – the FBI prioritizes cybersecurity to protect our sensitive information and will not tolerate threats or cyber-attacks by anyone.”

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

From at least in or about 2016 through at least in or about April 2021, HAROONI, KAZEMIFAR, SALMANI, NASAB, and other conspirators were members of a hacking organization that participated in a coordinated multi-year campaign to conduct and attempt to conduct computer intrusions.  These intrusions targeted more than a dozen U.S. companies and the U.S. Departments of the Treasury and State.

During the conspiracy, KAZEMIFAR, SALMANI, and NASAB were employed by Mahak Rayan Afraz (محک رایان افراز), an Iran-based company that purported to provide cybersecurity services, but which was, in fact, a front for the conspirators’ operations.

The hacking group’s private sector victims were primarily cleared defense contractors, which are companies that have been granted security clearances by the U.S. Department of Defense to access, receive, and store classified information for the purpose of conducting activities in support of U.S. Department of Defense programs.  In addition, the group targeted a New York-based accounting firm and a New York-based hospitality company.

In conducting their hacking campaigns, the group used spearphishing — tricking an email recipient into clicking on a malicious link — to infect victim computers with malware.  During their campaigns against one victim, the group compromised more than 200,000 employee accounts.  In another campaign, the conspirators targeted 2,000 employee accounts.  In order to manage their spearphishing operations, the group created and used a particular computer application that enabled the conspirators to organize and deploy their spearphishing attacks.

In the course of these spearphishing attacks, the conspirators compromised an administrator email account belonging to a defense contractor (“Defense Contractor-1”).  Access to this administrator account empowered the conspirators to create unauthorized Defense Contractor-1 accounts, which the conspirators then used to send spearphishing campaigns to employees of a different defense contractor and a consulting firm.

In addition to spearphishing, the conspirators utilized social engineering, which involved impersonating others, generally women, to obtain the confidence of victims.  These social engineering contacts were another means the conspiracy used to deploy malware onto victim computers and compromise those devices and accounts.

KAZEMIFAR was responsible for testing the tools utilized by the conspiracy to execute its cyber campaigns.  For example, KAZEMIFAR was involved in testing spearphishing emails used to target victim companies and was involved in developing malware utilized by the conspiracy in social engineering initiatives.  During the course of his involvement in the conspiracy, from at least in or about 2014 through at least in or about 2020, KAZEMIFAR also worked for the Iranian Organization for Electronic Warfare and Cyber Defense (“EWCD”).  EWCD is a component of the Islamic Revolutionary Guard Corps (“IRGC”), which is itself a component of the Iranian Armed Forces.  Among other things, the IRGC is responsible for Iran’s offensive cyber capabilities.  The U.S. has designated the IRGC as a foreign terrorist organization. 

HAROONI was responsible for procuring, administering, and managing the online network infrastructure, including computer servers and customized software used to facilitate the computer intrusions.  HAROONI also fraudulently used the identity of a real person (“Individual-1”), including his use of a copy of Individual-1’s true passport, to conceal his role in procuring online infrastructure used by the conspiracy to facilitate the computer intrusion campaign. 

SALMANI was responsible for testing tools utilized by the conspiracy to execute spearphishing campaigns, including the campaign against a hospitality company.  SALMANI was also involved in maintaining infrastructure used by the conspirators.

NASAB was responsible for procuring infrastructure used by the conspiracy, particularly infrastructure used in furtherance of social engineering campaigns.  NASAB also used Individual-1’s identity, including Individual-1’s name and passport, to register server and email accounts that were used during malicious cyber campaigns.     

Concurrent with the unsealing of the Indictment, the U.S. Department of State’s Rewards for Justice program (“RFJ”) is offering a reward of up to $10 million for information leading to the identification or location of the group and the defendants.  The RFJ program seeks information on any person who, while acting at the direction or under the control of a foreign government, engages in certain malicious cyber activities in violation of the Computer Fraud and Abuse Act.

Anyone with information on these malicious cyber actors, or associated individuals or entities, please contact Rewards for Justice via the Tor-based tips-reporting channel at: he5dybnt7sr6cm32xt77pazmtm65flqy6irivtflruqfc5ep7eiodiad.onion .  More information about this RFJ reward offer is located on the Rewards for Justice website.

*                *                *

KAZEMIFAR, 36, of Iran, is charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison. 

HAROONI, 34, of Iran, is charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of knowingly damaging a protected computer, which carries a maximum sentence of 10 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison.

SALMANI, 38, of Iran, is charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison.

NASAB, 39, of Iran, is charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory consecutive term of two 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 investigative work of the FBI, including the work of the FBI Cyber Division.   

The case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Ryan B. Finkel, Dina McLeod, and Daniel G. Nessim are in charge of the prosecution, with assistance from Trial Attorney Matthew Chang of the National Security Division’s National Security Cyber Section.

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 should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced today that BRANDON SANTANOO, an employee of the New York City Law Department (the “Law Department”), pled guilty to conspiracy to commit bank fraud in connection with his participation in a scheme to steal checks mailed to the Law Department and then to deposit or attempt to deposit forged, altered, and fraudulently endorsed versions of those checks into bank accounts not associated with the Law Department.  SANTANOO pled guilty before U.S. Magistrate Judge Jennifer E. Willis.

U.S. Attorney Damian Williams said: “Brandon Santanoo abused his position of trust as a city employee.  As he admitted today in federal court, he stole hundreds of thousands of dollars’ worth of checks made payable to the Law Department and passed them along to others to fraudulently deposit.  We will not tolerate any breach of trust or corruption within city agencies.”

DOI Commissioner Jocelyn E. Strauber said: “Brandon Santanoo used his position at the City Law Department to steal approximately 40 checks payable to the City – and valued at approximately $600,000 – and then handed them out to acquaintances to forge, alter, or fraudulently endorse the checks and then deposit into private bank accounts.  I thank the Law Department for the referral to DOI that prompted this investigation and our law enforcement partners in the United States Attorney’s Office for the Southern District of New York for their commitment to hold accountable City employees who exploit their access to engage in criminal conduct, and to protect valuable City resources from theft.”

According to the allegations in the Information and the Complaint, the plea agreement, and statements made in court:

Beginning in 2017, SANTANOO worked as a clerk in the mail room at the Law Department’s office in Brooklyn.  By virtue of his position, SANTANOO had access to mail that was sent to the Law Department. 

From at least in or about June 2021 through at least in or about May 2023, SANTANOO stole checks that had been mailed to the Law Department, including checks made payable to the Law Department’s Worker’s Compensation Division, which is responsible for administering claims of city employees who are injured on the job.  SANTANOO then passed those checks onto other people, who deposited or attempted to deposit forged, altered, and fraudulently endorsed versions of those checks into third parties’ bank accounts.  Approximately 40 checks, totaling approximately $600,000, were stolen and deposited or attempted to be deposited as part of the scheme.

*                *                *

SANTANOO, 27, of Queens Village, New York, pled guilty to one count of conspiracy to commit bank fraud, which carries a maximum potential sentence of 30 years in prison. 

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  Sentencing is scheduled for September 4, 2024, at 10:00 a.m. before U.S. District Judge Richard M. Berman.

Mr. Williams praised the outstanding investigative work of the DOI.  Mr. Williams also thanked the Special Agents from the U.S. Attorney’s Office for the Southern District of New York for their assistance on this matter.

The case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorney Stephanie Simon is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that NERIK ILYAYEV was sentenced today to four years in prison for his involvement in a multimillion-dollar health care fraud scheme that targeted the Medicare and Medicaid programs and private insurance companies.  ILYAYEV owned and operated two different pharmacies and submitted millions of dollars in fraudulent claims to the government health care programs and private insurers.  ILYAYEV previously pled guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Gregory H. Woods, who imposed today’s sentence.  

U.S. Attorney Damian Williams said: “Nerik Ilyayev took advantage of our nation’s health care system, which provides payments for critical medications for low-income HIV patients.  He paid illegal kickbacks to these patients to use their billing information and took millions of dollars in reimbursements from the Medicare and Medicaid program for medications that he did not actually dispense.  This prosecution and today’s sentence are part of our Office’s ongoing work in combating fraud in the health care system and ensuring that public resources are spent on patients who need them, rather than being fraudulently stolen by criminal actors.”    

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

From approximately February 2021 through March 2022, ILYAYEV owned and operated a pharmacy in Manhattan (“Pharmacy-1”).  ILYAYEV used Pharmacy-1 to pay illegal kickbacks to low-income HIV patients to recruit them to fill prescriptions for expensive HIV medications at Pharmacy-1.  ILYAYEV did not actually obtain or provide HIV medications to these illegally recruited patients, but instead bought unopened bottles of pills back from the patients at a small fraction of their true value so he could re-use the same pills over and over again.  ILYAYEV, on behalf of Pharmacy-1, then submitted fraudulent insurance claims to Medicare and Medicaid to cover the cost of the HIV medications he claimed to be dispensing.  In order to conceal his role in the fraud scheme, ILYAYEV used the identity of another person (“Individual-1”) and pretended to be Individual-1 to own and operate Pharmacy-1.  Medicare and Medicaid collectively paid approximately $5.2 million in fraudulent claims for HIV medications to Pharmacy-1.      

After shutting down Pharmacy-1, ILYAYEV took control of another pharmacy in Queens, New York (“Pharmacy-2”).  Again, to conceal his role in the fraud, ILYAYEV used the identity of another person and pretended to be this individual to own and operate Pharmacy-2.  Pharmacy-2 submitted fraudulent insurance claims to no-fault automobile insurance providers.  Pharmacy-2 defrauded the no-fault automobile insurance providers of approximately $1.2 million.  In addition, Pharmacy-2 unlawfully sold pharmaceuticals to other pharmacies that ILYAYEV had obtained from illegitimate sources.       

*                *                *

In addition to the prison term, ILYAYEV, 36, of Queens, New York, was sentenced to three years of supervised release and ordered to pay restitution and 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. 

A federal jury in New York convicted a man residing in Puerto Rico today of commodities fraud, commodities market manipulation, and wire fraud in connection with the manipulation on the Mango Markets decentralized cryptocurrency exchange. 

According to court documents and evidence presented at trial, Avraham Eisenberg, 28, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from Mango Markets and its customers by artificially manipulating the price of certain perpetual futures contracts. 

“Avraham Eisenberg executed a manipulative trading scheme on a cryptocurrency exchange, defrauding the exchange and its investors out of $110 million,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Manipulative trading puts our financial markets and investors at risk. This prosecution—the first involving the manipulation of cryptocurrency through open-market trades—demonstrates the Criminal Division’s commitment to protecting U.S. financial markets and holding wrongdoers accountable, no matter what mechanism they use to commit manipulation and fraud.” 

“Moments ago, Avraham Eisenberg was found guilty by a unanimous jury in the first-ever cryptocurrency open-market manipulation case,” said U.S. Attorney Damian Williams for the Southern District of New York. “This ground-breaking prosecution epitomizes this office’s ability to employ innovative methods and cutting-edge law enforcement tools to continue to protect all financial markets. The career prosecutors of this office continue their expertise in prosecuting financial fraud, one of our core priorities, and would-be financial criminals should think twice before daring to engage in illicit conduct on our watch.”

“The FBI and its partners will not stand by when criminals engage in illicit activity at the expense of the American people and our financial institutions,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response, and Services Branch. “If you engage in fraudulent activity, whether that be in the cryptocurrency space or through other forms of market manipulation, you will be held accountable for your ill-gotten gains.”

Eisenberg is scheduled to be sentenced on July 29 and faces a maximum penalty of 10 years in prison on the commodities fraud count and the commodities manipulation count, and a maximum penalty of 20 years in prison on the wire fraud count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI investigated the case, with assistance from Homeland Security Investigations and IRS Criminal Investigation.

Trial Attorney and Special Assistant U.S. Attorney Tian Huang of the Criminal Division’s Fraud Section, a member of the National Cryptocurrency Enforcement Team (NCET), and Assistant U.S. Attorneys Thomas Burnett and Peter Davis for the Southern District of New York are prosecuting the case.

The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.

Damian Williams, the United States Attorney for the Southern District of New York; Nicole M. Argentieri, the Principal Deputy Assistant Attorney General and head of the Justice Department’s Criminal Division; Timothy Langan, the Executive Assistant Director of the Criminal, Cyber, Response, and Services Branch of the Federal Bureau of Investigation (“FBI”); and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI, announced today the conviction of AVRAHAM EISENBERG of commodities fraud, commodities market manipulation, and wire fraud in connection with manipulation on the Mango Markets decentralized cryptocurrency exchange.  EISENBERG was found guilty following a 10-day jury trial before U.S. District Judge Arun Subramanian.

U.S. Attorney Damian Williams said: “Moments ago, Avraham Eisenberg was found guilty by a unanimous jury in the first-ever cryptocurrency open-market manipulation case.  This ground-breaking prosecution epitomizes this Office’s ability to employ innovative methods and cutting-edge law enforcement tools to continue to protect all financial markets.  The career prosecutors of this Office continue their expertise in prosecuting financial fraud, one of our core priorities, and would-be financial criminals should think twice before daring to engage in illicit conduct on our watch.”

Principal Deputy Assistant Attorney General Nicole M. Argentieri said: “Avraham Eisenberg executed a manipulative trading scheme on a cryptocurrency exchange, defrauding the exchange and its investors out of $110 million.  Manipulative trading puts our financial markets and investors at risk.  This prosecution — the first involving the manipulation of cryptocurrency through open-market trades — demonstrates the Criminal Division’s commitment to protecting U.S. financial markets and holding wrongdoers accountable, no matter what mechanism they use to commit manipulation and fraud.” 

FBI Executive Assistant Director Timothy Langan said: “The FBI and its partners will not stand by when criminals engage in illicit activity at the expense of the American people and our financial institutions.  If you engage in fraudulent activity, whether that be in the cryptocurrency space or through other forms of market manipulation, you will be held accountable for your ill-gotten gains.”

FBI Assistant Director in Charge James Smith said: “With today’s conviction, Avraham Eisenberg now rightly faces justice for his duplicitous manipulation of virtual currencies on the Mango Markets exchange.  The FBI will continue to ensure that any individual attempting to scheme and take advantage of financial markets, whether traditional or emerging, for personal gain be held accountable.”

According to court documents and evidence presented at trial:

EISENBERG engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from Mango Markets and its customers by artificially manipulating the price of certain perpetual futures contracts.

*                *                *

EISENBERG, 28, of Puerto Rico, was convicted of commodities fraud, which carries a maximum penalty of 10 years in prison; commodities manipulation, which carries a maximum penalty of 10 years in prison; and wire fraud, which carries a maximum penalty of 20 years in prison.

The statutory maximum penalties 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.  EISENBERG is scheduled to be sentenced on July 29, 2024. 

Mr. Williams praised the investigative work of the FBI and further thanked Homeland Security Investigations and the Internal Revenue Service – Criminal Investigation for their assistance.

The case is being prosecuted by the Office’s Securities and Commodities Fraud Task Force and the Criminal Division’s Computer Crime and Intellectual Property Section’s National Cryptocurrency Enforcement Team (“NCET”).  Assistant U.S. Attorneys Thomas Burnett and Peter Davis and Trial Attorney and Special Assistant U.S. Attorney Tian Huang of the Criminal Division’s Fraud Section, a member of the NCET, are in charge of the prosecution, with assistance from Paralegal Specialists Ryan Sears and Jonathan Oshinsky.

The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets.  Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers.  The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the Department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint charging JOHN TOWERS with sexual exploitation of a minor and possession of child pornography.  TOWERS was arrested this morning and presented today before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court.

U.S. Attorney Damian Williams said: “John Towers’s alleged disturbing conduct violated the public’s trust by placing hidden cameras in a public bathroom and using those cameras to capture sexually explicit images of children.  As today’s arrest shows, we will use every tool available to law enforcement to investigate and prosecute those alleged to have sexually exploited children.” 

As alleged in the Complaint filed on April 17, 2024, in White Plains federal court and unsealed today:[1]

From at least on or about July 24, 2018, up to and including at least on or about December 9, 2019, TOWERS placed hidden cameras in a bathroom in a privately owned, public park in Putnam County, New York, to surreptitiously record prepubescent minors in order to capture sexually explicit images of the minors.  TOWERS then transferred the recordings to a hard drive.

Following the execution of a search warrant at TOWERS’s residence, law enforcement recovered a hard drive that was found to contain over 800 videos of females, including prepubescent females, using a bathroom.  Approximately 78 of the videos had file names that included the term “yung.”

On or about March 29, 2024, TOWERS, while in Putnam County, New York, possessed DVDs containing video files he downloaded from the internet depicting prepubescent minors engaging in sexually explicit activity.

On March 29, 2024, TOWERS was arrested and charged in Carmel Town Court in Putnam Valley with two counts of promoting a sexual performance by a child less than 17 years old, three counts of possessing an obscene sexual performance by a child, and one count of endangering the welfare of a child.  He was on bail at the time of today’s arrest.

Anyone who may have relevant information regarding JOHN TOWERS is asked to contact the FBI at 1-800-CALL-FBI (225-5324).

*                *                *

JOHN TOWERS, 54, of Mahopac, New York, is charged with one count of sexual exploitation of a minor, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison, and one count of possession of child pornography, which carries a maximum sentence of 20 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 efforts of the Federal Bureau of Investigation, the Putnam County District Attorney’s Office, and the Putnam County Sherriff’s Office in connection with this investigation.

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Marcia S. Cohen 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 that BORIS AMINOV was sentenced today to nine years in prison for engaging in a years-long scheme that exploited vulnerable HIV patients and defrauded Medicaid, Medicare, and private insurance companies out of at least $20 million.  AMINOV previously pled guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Mary Kay Vyskocil, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “Boris Aminov orchestrated a scheme to get rich by lying to Medicaid, Medicare, and private insurance companies and by depriving vulnerable HIV patients of legitimate and safe medications.  He also made millions of dollars through buying and distributing black-market HIV medications to pharmacies all over New York City.  Today’s sentencing brings a measure of closure with Aminov now facing the obligation to pay over 13 million in restitution.”

According to the allegations contained in the Superseding Indictments and statements made in court proceedings:

From at least in or about 2017 through at least in or about 2023, AMINOV and others engaged in a scheme that defrauded Medicaid, Medicare, and private insurance companies out of at least approximately $20 million through trafficking in black-market HIV medication.  In doing so, they exploited at least hundreds of low-income individuals who had been prescribed HIV medication, jeopardizing the health and safety of those patients. 

AMINOV distributed black-market HIV medications to pharmacies that were owned and operated by other co-conspirators.  That medication was then dispensed to unknowing patients who believed they were receiving legitimate medication.  To further their scheme and conceal their proceeds, co-conspirators used bank accounts associated with their respective pharmacies to funnel money to shell companies controlled by AMINOV.

*                *                *

In addition to the prison term, AMINOV, 47, of Brooklyn, New York, was sentenced to three years of supervised release, ordered to pay restitution in the amount of $13,270,379.50, and ordered to pay forfeiture in the amount of $4,401,495.00.

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

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Jeffrey W. Coyle and Jackie Delligatti are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Spencer L. Evans, the Special Agent in Charge of the Las Vegas Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of YOHANAN ELIGOOLA and DAVID ELIGOOLA in connection with a conspiracy to launder money that the defendants believed to be narcotics proceeds.  The individuals who purported to be operatives of a narcotics cartel were in fact undercover law enforcement officers (the “Undercover Agents”), and YOHANAN ELIGOOLA also attempted to sell those individuals various weapons, including surface-to-air missiles.  YOHANAN ELIGOOLA was arrested on April 15, 2024, in New York, New York, and presented yesterday before U.S. Magistrate Judge Katharine H. Parker in the Southern District of New York.  DAVID ELIGOOLA was arrested yesterday in Miami, Florida, and presented before a U.S. Magistrate Judge in the Southern District of Florida.

U.S. Attorney Damian Williams said: “As alleged, Yohanan Eligoola worked with individuals he believed to be representing a drug cartel to launder hundreds of thousands of dollars and to sell them deadly weapons, including surface-to-air missiles.  Unbeknownst to him, those cartel members were in fact undercover FBI agents.  Our law enforcement partners and the career prosecutors of this Office work relentlessly to disrupt dangerous criminal activity.”

FBI Special Agent in Charge Spencer L. Evans said: “FBI Las Vegas would like to thank our partners at the SDNY U.S. Attorney’s Office, FBI New York, and FBI Miami for their diligent work leading to these arrests.  We are committed to working collaboratively and utilizing our partnerships to combat organized crime groups to stem the illegal flow of weapons that endangers U.S. national security.”

As alleged in the Complaints:[1]

The Undercover Agents represented to YOHANAN ELIGOOLA that they worked for a drug cartel, and YOHANAN ELIGOOLA arranged to launder their narcotics proceeds.  Over the course of 2023, YOHANAN ELIGOOLA, DAVID ELIGOOLA — YOHANAN ELIGOOLA’s son — or their co-conspirators received large quantities of cash from the Undercover Agents on five separate occasions.  In total, they received more than $500,000 in cash, and returned all of it — minus their fee — back to the Undercover Agents in the form of laundered cryptocurrency and bank wires.

YOHANAN ELIGOOLA informed the Undercover Agents that he could launder up to $1 million in cash per day on behalf of the cartel and that “the bank will never ask you a question” when YOHANAN ELIGOOLA transferred the laundered funds back to them.

Before he had received any money from the Undercover Agents, YOHANAN ELIGOOLA asked one of them if the money was “from drugs.”  The Undercover Agents told him that it was and that they were “dealing with Colombians.”

YOHANAN ELIGOOLA also offered to sell the Undercover Agents various munitions and bragged that he controlled a large fraction of the defense industry in a particular country.  YOHANAN ELIGOOLA further claimed that he marked up munitions he sold by approximately 500% because they were “black market.”  The Undercover Agents informed YOHANAN ELIGOOLA that they “have issues with aircraft,” referred to “the fucking helicopters,” and asked for “stingers.”  Because the Undercover Agents represented that they worked for a drug cartel, the Undercover Agents meant that government helicopters had been interdicting the operations of the cartel, and the Undercover Agents wanted Stinger missiles — which are man-portable surface-to-air missile systems that are effective in shooting down helicopters — in order to shoot down those helicopters. 

YOHANAN ELIGOOLA asked the Undercover Agents to send him a list of the type of munitions they wanted to purchase and offered to let the Undercover Agents visit him in other countries to see the munitions firsthand.

The Undercover Agents subsequently requested a number of weapons, including rifles, grenades, rocket-propelled grenades, anti-tank weapons, suicide drones, and Stinger missiles.  YOHANAN ELIGOOLA responded that he could provide most of those weapons and listed the prices he would charge.  As to the Stinger missiles, YOHANAN ELIGOOLA offered FN-6 and FN-16 man-portable surface-to-air missile systems as alternatives.

On April 15, 2024, the Undercover Agents met with YOHANAN ELIGOOLA at a restaurant in New York, New York, in order to make a down payment on the surface-to-air missiles.  The Undercover Agents provided YOHANAN ELIGOOLA with $690,000 in cash as a down payment for approximately eight such missiles.  YOHANAN ELIGOOLA was then arrested by the FBI.

*                *                *

YOHANAN ELIGOOLA, 58, of the nation of Georgia, and DAVID ELIGOOLA, 34, of Hallandale Beach, Florida, are each charged with conspiracy to launder money, which carries a maximum sentence of 20 years in prison. 

The maximum potential sentence 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 work of the FBI.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Micah Fergenson and Kevin Mead 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 therein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, announced that OLUSEUN MARTINS OMOLE, a/k/a “Seun Omole,” pled guilty today to conspiracy to commit wire fraud for his participation in a widespread scheme to defraud thousands of victims in the United States and elsewhere of thousands of consumer electronics and other goods totaling more than $12 million.  OMOLE pled guilty before U.S. Magistrate Judge Katharine H. Parker.

U.S. Attorney Damian Williams said: “Over the course of approximately five years, Oluseun Martins Omole received more than $12 million worth of fraudulently obtained consumer electronics and other items.  Thousands of victims believed that they were sending these electronics and items to romantic lovers, legitimate buyers, and reputable employers.  Instead, they went straight to Omole, who repackaged those electronics and goods and shipped them in bulk to co-conspirators located overseas in exchange for the equivalent of hundreds of thousands of U.S. dollars.  Those like Omole who participate in such fraud schemes will find themselves facing prison time.” 

According to the allegations contained in the Indictment and Complaint, the plea agreement, and other public filings and statements made in court:

From at least in or about February 2018 through at least in or about March 2023, OMOLE participated in a criminal enterprise based in Nigeria (the “Enterprise”), which orchestrated various scams to defraud thousands of victims in the United States and elsewhere of more than $12 million in consumer electronics, including smartphones, smartwatches, laptops, and tablets, among other items.  The scams perpetrated by the members of the Enterprise included (i) romance scams, in which Enterprise members sent electronic communications to victims feigning romantic intentions, gained their trust and affection, and took advantage of that goodwill to induce victims into sending consumer electronics and other money or property to OMOLE; (ii) online marketplace scams, in which Enterprise members sent electronic communications to victims feigning interest in buying consumer electronics, falsely represented to the victim that the items had been paid for, and instructed the victim to send the consumer electronics to OMOLE; and (iii) employment scams, in which Enterprise members posted phony jobs online and informed unwitting victims that they were hired before instructing victims to send electronics to OMOLE under the guise that those electronics were needed for the job (together, the “Fraudulent Electronics Scams”).

During the relevant time period, OMOLE owned and operated a business corporation named Tobylink Impessions, Inc., a/k/a Tobylink Impressions, Inc. (“Tobylink”), which claimed to be a distributor, re-seller, and supplier of satellite communications equipment.  In reality, however, Tobylink served as a vehicle through which OMOLE received thousands of fraudulently obtained goods from victims of the Enterprise before repackaging and shipping those items to various co-conspirators located in Nigeria.  During his participation in the conspiracy, OMOLE received and sent more than $12 million in consumer electronics and other items to other members of the Enterprise, in exchange for the equivalent of hundreds of thousands of U.S. dollars in fees that OMOLE charged other Enterprise members. 

If you believe you are a victim of the Fraudulent Electronics Scams, you may contact the following email address: TobylinkFraudVictims@fbi.gov. 

*                *                *

OMOLE, 57, of Sugar Land, Texas, 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 plea agreement, OMOLE agreed to pay restitution in an amount to be ordered by the Court and to forfeit an amount of U.S. currency to be ordered by the Court, as well as various consumer electronics and other goods seized by law enforcement. 

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.  OMOLE’s sentencing is scheduled for July 30, 2024, before U.S. District Judge Jesse M. Furman.

Mr. Williams praised the work of the Federal Bureau of Investigation.  Mr. Williams also thanked Homeland Security Investigations for their assistance with the investigation.

The prosecution of this case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Jerry J. Fang is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that GRACE ROSA BAEZ pled guilty today to conspiracy to distribute and possess with intent to distribute heroin, fentanyl, and para-fluorofentanyl.  BAEZ pled guilty before U.S. District Judge Denise L. Cote. 

U.S. Attorney Damian Williams said: “Fentanyl and heroin are driving this nation’s deadly opioid crisis and are responsible for thousands of tragic deaths in this city and around the nation.  Rather than protect and serve the people of New York City, former NYPD officer Grace Rosa Baez peddled deadly poison for personal gain.  Today, Baez is held accountable for her selfish and reckless betrayal.”

According to the filings and statements made in Manhattan federal court:

In 2012, BAEZ became an active member of the New York City Police Department (“NYPD”).  In 2020, due to alleged misconduct, BAEZ was placed on modified duty and was under departmental investigation.  On three occasions in October 2023, while on modified desk duty at a particular NYPD facility, BAEZ sold a confidential source working with law enforcement (the “CS”) packages containing over one kilogram of heroin, over 400 grams of fentanyl, and over 100 grams of fentanyl analogue.  BAEZ negotiated the price and quantity of the narcotics and arranged to deliver the narcotics to the CS while she was on duty with the NYPD.  BAEZ sold the narcotics to the CS outside of her homes in the Bronx and Yonkers, New York.  Upon her arrest, BAEZ resigned from the NYPD.

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BAEZ, 38, of the Bronx, New York, pled guilty to one count of conspiracy to distribute and possess with intent to distribute mixtures and substances containing a detectable amount of heroin, fentanyl, and para-fluorofentanyl, which carries a maximum sentence of 20 years in prison.  BAEZ is scheduled to be sentenced by Judge Cote on July 18, 2024. 

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 exceptional investigative work of the Federal Bureau of Investigation and the NYPD.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorney Amanda C. Weingarten is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that WILLIAM BYNUM was sentenced to 18 months in prison for his role in a scheme to make false statements to the National Basketball Association (“NBA”) Players’ Health and Welfare Benefit Plan (the “Plan”).  On November 15, 2023, BYNUM was found guilty of conspiring to make false statements relating to health care matters following a three-week trial before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “The defendant took part in this broad criminal scheme targeting a health care benefit plan.  He also took the stand at trial and lied to the jury while under oath.  His sentence stands as a stark warning that prison time awaits any who seek to defraud and obstruct justice.”

According to the Indictment, trial testimony and exhibits, public court filings, and statements made in court:

The Plan is a health care plan providing benefits to eligible active and former players of the NBA.  BYNUM is a former NBA basketball player who was eligible to obtain reimbursement for certain eligible health care expenses from the Plan.

From at least in or about 2018, up to and including at least in or about 2019, BYNUM participated in a scheme with several other former NBA players, including Terrence Williams and Keyon Dooling, to defraud the Plan.  In late 2018, Terence Williams sent BYNUM fake invoices that purported to relate to $200,000 in medical services BYNUM received at a Los Angeles-area chiropractor.  In reality, BYNUM had not received these services and the invoices were false.  BYNUM submitting these false claims to the Plan, seeking reimbursement.  The Plan reimbursed BYNUM for the majority of his false claims.

BYNUM and his co-defendant Ronald Glen Davis proceeded to trial in November 2023.  During the course of the trial, BYNUM took the stand in his own defense.  During the course of his trial testimony, BYNUM committed perjury and obstructed justice.

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In addition to his prison term, BYNUM, 41, of Bensenville, Illinois, was ordered to forfeit $182,224.09 and pay restitution of $182,224.09.

Williams and Dooling previously pled guilty and were sentenced to 10 years and 30 months in prison, respectively.  Davis was convicted of conspiracy to commit health care fraud, wire fraud, health care fraud, and conspiring to make false statements relating to health care matters and is scheduled to be sentenced on May 9, 2024, at 11:00 a.m.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint charging WINSTON COLON CORREA with sexual exploitation of a child, receipt of child pornography, and possession of child pornography.  COLON CORREA was arrested this morning and will be presented before U.S. Magistrate Judge Katharine H. Parker later today.

U.S. Attorney Damian Williams said: “As alleged, Winston Colon Correa repeatedly sought out minor girls — some as young as 12 years old — to engage in sexually explicit conversations and convince them to send pornographic videos of themselves.  Colon Correa allegedly knew that his victims were minors, and to earn their trust, he lied to them about his own age.  This Office will relentlessly pursue predators who sexually exploit children, whether online or in person.”

As alleged in the Complaint:[1]

Since at least on or about May 28, 2022, COLON CORREA, a 31-year-old male, engaged in sexually explicit text message conversations with numerous minor girls.  In the course of these conversations, COLON CORREA induced the production of child pornography, received child pornography, and possessed child pornography, including videos of minor girls engaged in sexually explicit conduct.  Law enforcement’s review of a cellphone seized from COLON CORREA has revealed the existence of sexually explicit text messages between COLON CORREA and over approximately 15 individuals believed to be minor girls and over approximately 20 files believed to contain child pornography.  COLON CORREA engaged in this conduct despite having reason to know and knowing that he was communicating with minors.  On multiple occasions, COLON CORREA falsely represented to minor girls that he was only 17 years old.

Any individuals with information concerning WINSTON COLON CORREA, or whose child may have had any communications with COLON CORREA, are asked to contact the Federal Bureau of Investigation (“FBI”) at 1-800-CALL-FBI (225-5324) or https://tips.fbi.gov. 

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COLON CORREA, 31, of the Bronx, New York, is charged with one count of sexual exploitation of a child, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison; one count of receipt of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison; and one count of possession of child pornography, which carries a maximum sentence of 10 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 outstanding work of the FBI and the Washington, D.C. Metropolitan Police Department in connection with this investigation.

The prosecution is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney William C. Kinder 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 a jury returned a guilty verdict against JOSEPH EUGENE LEMAY, a/k/a “Gene Lemay,” and JOEL LINGAT for criminal tax conspiracy.  LEMAY is the former president of a company that provides moving and storage services (“Company-1”), and LINGAT is Company-1’s head bookkeeper.  LEMAY and LINGAT conspired to perpetrate a long-running scheme to evade more than approximately $7.7 million in federal payroll taxes owed by Company-1 and affiliated companies to the Internal Revenue Service (“IRS”).  The defendants were found guilty following a two-week trial before U.S. District Judge Mary Kay Vysckocil.

U.S. Attorney Damian Williams said: “Gene Lemay and Joel Lingat cheated the systems that are in place to protect hardworking Americans at the end of their careers.  As a result, Social Security and Medicare were deprived of millions in payroll taxes.  This Office will not stand by when employers violate the public trust by refusing to pay taxes meant to support their workers.” 

According to the allegations in the Indictment, the criminal Complaint previously filed against LINGAT (where LEMAY is identified as CC-1), and the evidence at trial:

From in or about 2010 through in or about December 2016, LEMAY, LINGAT, and other co-conspirators perpetrated a scheme to defraud the U.S. government of payroll and income taxes due and owing to the IRS by Company-1 and affiliated companies.  As part of the criminal scheme, LEMAY, LINGAT, and their co-conspirators created front companies, nominally owned by close associates or family members of LEMAY or others at Company-1; assigned (on paper only) foremen and movers working for Company-1 to the sham companies; and fraudulently made it appear that the sham companies were independent contractors, including by creating fake invoices by which the sham companies purportedly billed Company-1 for labor.  Because the conspirators fraudulently made it appear that the labor was performed by independent contractors, Company-1 was able to deduct the cost of the labor as an expense on its tax returns, without withholding or paying over any payroll taxes to the IRS.  Through the criminal scheme, Company-1 and affiliated companies evaded in excess of approximately $7.7 million in payroll taxes, including FICA and Medicare contributions, during the charged period.

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LEMAY, 63, of Delray Beach, Florida, and LINGAT, 62, of Jersey City, New Jersey, were convicted of one count of conspiracy to defraud the IRS, which carries a maximum sentence of five 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 defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the IRS-Criminal Investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Timothy V. Capozzi, Jilan Kamal, and Steven Kochevar are in charge of the prosecution, with assistance from Paralegal Specialists Geoffrey Mearns and Julia Gutierrez.

Damian Williams, the United States Attorney for the Southern District of New York; Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”); James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Trevor R. Nelson, the Deputy Inspector General for Investigations for the Treasury Inspector General for Tax Administration (“TIGTA”), announced today the unsealing of an Indictment charging RAFAEL ALVAREZ, a/k/a “the Magician,” with conspiracy to defraud the United States, aiding and abetting the filing of false federal tax returns, attempting to interfere with the administration of the internal revenue laws, making false statements, and aggravated identity theft.  These charges arise from ALVAREZ’s alleged orchestration of a wide-ranging scheme to file tens of thousands of federal individual income tax returns that included false information designed to fraudulently reduce the individuals’ tax burden and to make false statements to the IRS.  ALVAREZ was arrested today and will be presented in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker.

U.S. Attorney Damian Williams said: “Rafael Alvarez was allegedly so prolific in falsifying his customers’ tax returns that he came to be known as ‘the Magician’ for his ability to make customers’ tax burden disappear.  But, Alvarez’s sleight of hand was criminal tax fraud, a serious federal tax crime he was allegedly committing for over a decade, depriving the IRS of more than $100 million in tax revenue.  Today’s charges, on Tax Day, should serve as an important reminder to tax professionals that when they try to cheat the public fisc they will face grave consequences.” 

IRS-CI Special Agent in Charge Thomas Fattorusso said: “While Alvarez may have been known as the ‘magician,’ he can’t say abracadabra and make these charges disappear.  This one person is charged with creating a criminal enterprise that defrauded the government of more than $100 million.  The evidence points to Alvarez’s alleged scheme to file tens of thousands of fraudulent tax returns, while his company, ATAX, grossed over $15 million in revenue in just three years.  Today’s arrest was no magical illusion, and Alvarez now faces the reality of his actions.”

FBI Assistant Director in Charge James Smith said: “Rafael Alvarez, the CEO, owner, and manager of ATAX New York, allegedly orchestrated one of the largest ever tax fraud schemes by submitting false federal tax returns that ultimately cost the IRS over $100 million in revenue while simultaneously generating $15 million for his own company.  Alvarez’s alleged 10-year fraudulent operation is not a magic act, but rather a deliberate slight against the integrity of our country’s tax system.  Today, Alvarez must pay the price for his actions – the FBI does not tolerate those who steal from the government for personal economic fortune.”

TIGTA Deputy Inspector General Trevor R. Nelson said: “The Treasury Inspector General for Tax Administration aggressively investigates tax preparers who attempt to corrupt our Nation’s tax system.  Our mission at TIGTA is to protect the integrity of our Nation’s system of tax administration.  We are committed to working with our law enforcement partners to ensure those who endeavor to corrupt Federal tax administration are prosecuted to the fullest extent of the law.”

As alleged in the Indictment unsealed in Manhattan federal court and court filings:[1]

From at least in or about 2010, up to and including in or about 2020, RAFAEL ALVAREZ was the CEO, owner, and manager of ATAX New York, LLC, also doing business as ATAX New York-Marble Hill, ATAX Marble Hill, ATAX Marble Hill NY, and ATAX Corporation (together, “ATAX”).  ATAX was a high-volume tax preparation company located in the Bronx, which prepared approximately 90,000 federal income tax returns for its customers during this period.  ALVAREZ both prepared tax returns for ATAX customers and recruited, supervised, and directed other ATAX personnel who in turn prepared tax returns for customers.  During this period, ALVAREZ oversaw a sweeping fraudulent scheme, whereby he and his employees submitted false information to the IRS in ATAX customers’ tax returns.  This false information, which included, among other things, bogus itemized tax deductions, made-up capital losses, phony business expenses, and fraudulent tax credits, served to fraudulently reduce the customers’ tax liability and increase the customers’ tax refunds from the IRS.  In total, ALVAREZ oversaw ATAX’s fraudulent submission of tax returns on behalf of customers that deprived the IRS of substantially more than $100 million in tax revenue.  ALVAREZ was so consistent at falsifying ATAX customer tax returns that he became known to ATAX’s customers as “the Magician.”  Additionally, as part of ALVAREZ’s unlawful operation of ATAX, he and an ATAX employee made false statements to an IRS Revenue Agent.  ALVAREZ’s operation of ATAX helped the company generate at least approximately $15 million in gross revenues over the period of in or about 2016 to in or about 2019.

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RAFAEL ALVAREZ, 60, of Cortlandt Manor, New York, is charged with one count of conspiracy to defraud the United States and making false statements, each of which carries a maximum sentence of five years in prison.  He is also charged with four counts of aiding and assisting preparation of false and fraudulent U.S. individual income tax returns and attempting to interfere with the administration of the internal revenue laws, each of which carries a maximum sentence of three years in prison.  He is further charged with aggravated identity theft, which carries a mandatory minimum sentence of two 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 IRS-CI, FBI, and TIGTA.

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

The allegations 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, announced that UWEMEDIMO UMOREN was sentenced to three years in prison for his participation in an international wire fraud conspiracy based in Nigeria, involving the theft of millions of dollars from victims across the U.S., by U.S. District Judge Victor Marrero.  UMOREN pled guilty to conspiracy to commit wire fraud on August 28, 2023, before U.S. Magistrate Judge Robert W. Lehrburger.

U.S. Attorney Damian Williams said: “The multimillion-dollar fraud enterprise Uwemedimo Umoren participated in preyed on the trust of elder Americans and others, using deceitful tactics to drain their hard-earned savings.  The impact of this financial exploitation on the victims is devastating.  With today’s sentencing, justice is served, but our fight isn’t over.  This case underscores the importance of collaboration between law enforcement agencies in combatting complex fraud schemes and safeguarding Americans from financial fraud and exploitation.”      

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

From at least in or about 2016 through at least in or about December 2021, UMOREN participated in a criminal enterprise (the “Enterprise”) based in Nigeria that conducted a series of scams against individuals and businesses located across the U.S.  UMOREN facilitated the laundering of proceeds of the Enterprise’s investment, business email compromise, and romance scams.  Members of the Enterprise used electronic messages sent via email, text messaging, or online dating websites to gain the trust of the victims, many of whom were vulnerable older men and women who lived alone, and caused the victims to transfer money to bank accounts controlled by members of the Enterprise.

UMOREN received fraud proceeds from victims of the Enterprise in more than a dozen business bank accounts that he controlled in Georgia.  The business bank accounts were opened in the names of companies formed by the defendant that were purportedly involved in, among other things, automobile sales and health care.  From in or about 2016 through at least in or about December 2021, UMOREN controlled at least 15 bank accounts held in the name of shell companies he controlled that received deposits totaling over approximately $8 million. 

At least 17 individual and corporate victims lost money as part of UMOREN and his co-conspirators’ schemes.  The victims include vulnerable, isolated, and elderly victims who entered into relationships after the deaths of their spouses and, over a period of several years, were induced to drain their entire retirement savings.  Many victims experienced severe emotional harm, including a now-deceased man whose stress from losing his life savings to the schemes contributed to his suffering a stroke.

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In addition to the prison term, UMOREN, 62, of Hoschton, Georgia, was sentenced to three years of supervised release.  UMOREN was also ordered to forfeit a money judgment in the amount of $8,230,516.04 and was ordered to pay $1,246,072 in restitution.

Mr. Williams praised the outstanding investigative work of the U.S. Secret Service (“USSS”).  Mr. Williams also thanked the USSS Field Office in Atlanta, Georgia, for its assistance in the investigation of this case.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Juliana N. Murray is in charge of the prosecution.