Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SHAKEEB AHMED was sentenced today to three years in prison by U.S. District Judge Victor Marrero for hacking two separate decentralized cryptocurrency exchanges and stealing cryptocurrency worth over $12 million.  AHMED previously pled guilty to computer fraud.

U.S. Attorney Damian Williams said: “Today, Shakeeb Ahmed was sentenced to prison in the first ever conviction for the hack of a smart contract and ordered to forfeit all of the stolen crypto.  No matter how novel or sophisticated the hack, this Office and our law enforcement partners are committed to following the money and bringing hackers to justice.  And as today’s sentence shows, time in prison — and forfeiture of all the stolen crypto — is the inevitable consequence of such destructive hacks.”  

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

On or about July 2 and 3, 2022, AHMED carried out an attack on a decentralized cryptocurrency exchange (the “Crypto Exchange”), in which he used fake pricing data to generate approximately $9 million worth of inflated fees, then withdrew those fees in the form of cryptocurrency.  After he stole the fees, AHMED had communications with the Crypto Exchange in which he agreed to return all of the stolen funds except for $1.5 million if the Crypto Exchange agreed not to refer the attack to law enforcement.

On or about July 28, 2022, a few weeks after the hack of the Crypto Exchange, AHMED carried out an attack on a second decentralized cryptocurrency exchange called Nirvana Finance (“Nirvana”).  AHMED used an exploit he discovered in Nirvana’s smart contracts to allow him to purchase cryptocurrency from Nirvana at a lower price than the contract was designed to allow.  He then immediately resold that cryptocurrency to Nirvana at a higher price.  Nirvana offered AHMED a “bug bounty” of as much as $600,000 to return the stolen funds, but AHMED instead demanded $1.4 million, did not reach agreement with Nirvana, and kept all the stolen funds.  The $3.6 million AHMED stole represented approximately all the funds possessed by Nirvana, which as a result shut down shortly after AHMED’s attack.

AHMED laundered the millions that he stole from the Crypto Exchange and from Nirvana to conceal their source and ownership, using sophisticated techniques including token-swap transactions; “bridging” fraud proceeds from the Solana blockchain over to the Ethereum blockchain; exchanging fraud proceeds into Monero, an anonymized cryptocurrency that is particularly difficult to trace; using overseas cryptocurrency exchanges; and using cryptocurrency mixers, such as Samourai Whirlpool.

At the time of both attacks, AHMED, a U.S. citizen, was a senior security engineer for an international technology company, whose resume reflected skills in, among other things, reverse engineering smart contracts and blockchain audits, which are some of the specialized skills AHMED used to execute the hacks.  

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In addition to the prison term, AHMED, 34, of New York, New York, was sentenced to three years of supervised release.  AHMED was also ordered to forfeit approximately $12.3 million and a significant quantity of cryptocurrency and pay restitution to the Crypto Exchange and Nirvana in the amount of over $5 million. 

Mr. Williams praised the outstanding work of Homeland Security Investigations and Internal Revenue Service – Criminal Investigation.

The case is being prosecuted by the Office’s Illicit Finance and Money Laundering Unit and Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys David R. Felton and Kevin Mead are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that LIBIA AMANDA PALACIO MENA was sentenced to 14 years in prison for conspiring to import cocaine into the U.S.  PALACIO MENA pled guilty on December 21, 2023, before U.S. District Judge Lewis J. Liman, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Libia Amanda Palacio Mena's sentence marks a significant blow to drug trafficking networks, demonstrating our steadfast commitment to dismantling criminal enterprises.  Through the collaborative efforts of law enforcement, this Office and our partners uncovered the complex network Palacio Mena and others orchestrated alongside FARC operatives and other violent drug trafficking organizations.  This outcome underscores that those who conspire to flood our streets with narcotics will face stiff consequences for their actions.”

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

PALACIO MENA conspired with her 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 U.S. — to source and distribute tons of cocaine destined for the U.S.  PALACIO MENA negotiated with individuals she 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 U.S.  These individuals, however, were actually confidential sources working at the direction of the U.S. Drug Enforcement Administration (the “DEA”).

In dozens of communications recorded during the investigation, PALACIO MENA presented herself to the Mexican DTO as a broker for large cocaine and weapons transactions.  PALACIO MENA touted her connections to, among others, Colombian political leaders, the FARC, and the Cartel of the Suns — a group of high-ranking Venezuelan officials who abused the Venezuelan people and corrupted the legitimate institutions of Venezuela to facilitate the importation of tons of cocaine into the U.S. in partnership with the FARC.  After exploring working with various drug traffickers and introducing the confidential sources to several possible partners for sourcing and transporting cocaine, PALACIO MENA ultimately introduced the confidential sources to one of her co-defendants, who agreed to use his political and logistics connections in Colombia to assist the venture.

In December 2021, to prove their bona fides and establish the quality of their supply, PALACIO MENA sold the confidential sources a five-kilogram sample of extremely pure cocaine from a FARC-associated farm outside of Medellín.  PALACIO MENA was arrested in Colombia in February 2022, in the midst of negotiating a much larger partnership with the Mexican DTO, which they envisioned entailing the shipment of approximately 500 kilograms of cocaine per week.

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In addition to the prison term, PALACIO MENA, 50, 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 Bogota Country Office, as well as the U.S. Department of Justice’s Office of International Affairs and the Narcotic and Dangerous Drug Section’s Judicial Attaché’s Office in Bogota.

This prosecution is part of an Organized Crime Drug Enforcement Task Force (“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.

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, and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced that DOMINIC COLUCCIO, the former President of the United Probation Officers Association (the “UPOA”), the union that represents all current and former New York City probation officers, pled guilty today to one count of wire fraud in connection with a scheme to steal hundreds of thousands of dollars from the UPOA and the UPOA’s active welfare fund and retirement welfare fund.  COLUCCIO pled guilty before U.S. Magistrate Judge Sarah Netburn.

U.S. Attorney Damian Williams said: “Dominic Coluccio promised to look out for all the hard-working active and retired probation officers who are members of the UPOA.  Instead, as admitted today in federal court, he stole hundreds of thousands of dollars from them to fund his lavish lifestyle.  Thanks to the hard work of the DOI and the Special Agents and career prosecutors of the Southern District of New York, Coluccio’s betrayal has been exposed, and he now faces jail time and significant financial penalties.”

DOI Commissioner Jocelyn E. Strauber said: “This defendant, former President of the United Probation Officers Association and Administrator of the Association’s Welfare Funds, used his leadership role to steal hundreds of thousands of dollars from the Association and its taxpayer-funded Welfare Funds, intended to benefit current and retired Department of Probation employees and family members.  Today he takes responsibility for that conduct and agrees to pay $684,929 in restitution to the Association.  DOI thanks the individuals who reported suspicions about misuse of funds to DOI, prompting this investigation, and the Office of the New York City Comptroller and the United States Attorney’s Office for the Southern District of New York for their commitment to hold accountable anyone who misappropriates public funds.”

According to the Information filed in the case and statements made in court:

The UPOA is a non-profit 501(c)(5) labor organization with the intended purpose of advancing the professional, health, and safety interests of its members – officers and supervisors in the New York City Department of Probation (“DOP” or “Probation”).  The UPOA’s membership consists of all active and retired Probation Officers and Supervisors within DOP.  COLUCCIO was President of the UPOA from in or about 1989 until in or about 2016.

From in or about 2010 until in or about 2019, COLUCCIO also served as Administrator of UPOA’s Active Welfare Fund and UPOA’s Retirement Welfare Fund (together, the “Welfare Funds”).  The Welfare Funds, established through an agreement between the City of New York (the “City”) and the UPOA, are benefit plans that provide supplemental health and welfare benefits (principally dental and vision benefits) to eligible retired and current Probation employees, their spouses, and dependents.  Both Welfare Funds are almost entirely funded by the City.

From in or about 2012 up to and including in or about 2019, COLUCCIO was engaged in a multi-faceted scheme to embezzle money from the UPOA and the Welfare Funds and to pay his personal expenses through money from the UPOA and Welfare Funds.  COLUCCIO did this in several ways.

From in or about 2012 until in or about 2018, COLUCCIO funded his personal expenses charged to his personal American Express credit card, in part, through money obtained from the UPOA and the Welfare Funds.  Specifically, COLUCCIO charged his personal credit card for, among other things, high-end meals and retail items, jewelry, luxury vacations and hotels, and a relative’s college tuition.  COLUCCIO then caused the UPOA, typically through electronic transfers, to pay down his personal credit card balance. 

From in or about 2012 up to and including in or about 2018, COLUCCIO misappropriated funds from the UPOA and Welfare Funds to fund an unauthorized individual retirement account in COLUCIO’s name.  In or about 2012, COLUCCIO, without approval or authorization from the UPOA, created an IRA in the name of the UPOA and a sub-account in COLUCCIO’s name.  These unauthorized transfers of funds from the UPOA to the IRA account were in addition to the pension payments COLUCCIO received from Probation and the UPOA.

In or about 2016, at or around the time of his retirement as President of the UPOA, COLUCCIO and the Welfare Funds entered into an agreement pursuant to which the Welfare Funds agreed to pay COLUCCIO, as Administrator of the Funds, “an annual salary equal to the Probation Department Commissioner’s salary. . . .”  The annual salary was in addition to COLUCCIO’s Probation pension, UPOA pension, and UPOA severance.  Notwithstanding this agreement, COLUCCIO, who effectively controlled the Welfare Funds’ bank accounts and payroll, caused the Welfare Funds to pay COLUCCIO a salary higher than the Probation Commissioner’s salary.

From in or about 2000, up to and including 2020, COLUCCIO submitted and sought reimbursement for medical, dental, and vision expenses that he and his dependents incurred.  During that time period, COLUCCIO routinely authorized and concealed overpayments to him, his spouse, and his family members, i.e., payments that exceeded policy limits.  

Through the scheme, COLUCCIO stole approximately $750,000 from the UPOA and the Funds.

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COLUCCIO, 75, of Bellmore, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison.  As part of his plea agreement, COLUCCIO agreed to forfeit $750,000 to the United States and to make restitution in the amount of $684,929.00 to the UPOA and the Funds.

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.

Mr. Williams praised the outstanding investigative work of DOI and the Special Agents of the U.S. Attorney’s Office.  Mr. Williams also thanked the New York City Comptroller’s Office Unit of Research and Investigation.

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

Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; John J. Durham, the Director of Joint Task Force Vulcan (“JTFV”); Anne Milgram, the Administrator of the Drug Enforcement Administration (“DEA”); Katrina W. Berger, the Executive Associate Director of Homeland Security Investigations (“HSI”); and Douglas Williams, the Special Agent in Charge of the Houston Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest and extradition of DAVID CAMPBELL, a/k/a “Viejo Dan,” a/k/a “Don David,” one of the principal narcotics and weapons suppliers to MS-13 in Honduras.  CAMPBELL was presented today before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court after being extradited yesterday from Honduras.

In addition to CAMPBELL, the Superseding Indictment unsealed today also charges YULAN ANDONY ARCHAGA CARÍAS, a/k/a “Alexander Mendoza,” a/k/a “Porky,” the top leader of MS-13 in Honduras, and three additional MS-13 leaders, JUAN CARLOS PORTILLO SANTOS, a/k/a “Juancy,” VICTOR EDUARDO MORALES ZELAYA, a/k/a “Cuervo,” and JORGE ALBERTO VELASQUEZ PAZ, a/k/a “Chacarron,” for racketeering, narcotics trafficking, and firearms offenses.  CAMPBELL and ARCHAGA CARÍAS were previously charged in 2021 in a Superseding Indictment in Manhattan federal court with racketeering, narcotics trafficking, and firearms offenses.  ARCHAGA CARÍAS was subsequently placed on the FBI’s Ten Most Wanted Fugitives List, the DEA’s Most Wanted Fugitives List, HSI’s Most Wanted Fugitives List, and a $5 million reward was offered by the U.S. Department of State for information related to his arrest or capture.  PORTILLO SANTOS and VELASQUEZ PAZ are in custody in Honduras.  MORALES ZELAYA remains at large.  The case is assigned to U.S. District Judge Gregory H. Woods.

U.S. Attorney Damian Williams said: “MS-13 is one of the most dangerous criminal organizations in the world.  My Office, the Justice Department, and our law enforcement partners will stop at nothing to pursue and hold accountable MS-13’s leaders, members, and associates, who, as alleged in the Superseding Indictment unsealed today, are responsible for large-scale drug trafficking and violence throughout the United States and Central America.  As alleged, David Campbell was, until his capture, one of MS-13’s major suppliers of drugs and guns, and he planned and coordinated violent acts with the top leader of MS-13 in Honduras, Archaga Carías.  Campbell has now been extradited and will face justice in the United States, and a $5 million reward is offered for information leading to the arrest of Archaga Carías.”

Attorney General Merrick B. Garland said: “Over the course of decades, MS-13 has sowed unspeakable violence in communities here in the United States and abroad.  With the arrest and extradition of the alleged principal MS-13 drug and weapons supplier, the Justice Department is making clear that those responsible for flooding our communities with violence and deadly drugs will be held accountable in an American courtroom.”

JTFV Director John J. Durham said: “MS-13’s brutal violence is fueled by firearms, funded by narcotics trafficking, and disguised by money laundering.  As alleged in the Superseding Indictment, David Campbell and his co-conspirators procured and sold multi-ton loads of narcotics, deployed firearms, including machine guns, and laundered the drug proceeds, all in furtherance of the organization.  Thanks to the tenacious efforts and collaboration of our law enforcement partners, he now will face justice in a United States courtroom.”

DEA Administrator Anne Milgram said: “Today's extradition of David Campbell and the announcement of charges against four other MS-13 leaders for their alleged involvement in trafficking multi-ton loads of cocaine and for allegedly perpetrating unspeakable acts of violence in our communities is a testament to the unwavering commitment of the men and women of DEA to save lives and hold drug traffickers accountable.  DEA will continue to seek justice for all Americans suffering the devastating effects of drug poisonings and drug-related violence in our communities.”

HSI Executive Associate Director Katrina W. Berger said: “Campbell’s arrest and extradition should serve as a clear message to those who support MS-13 and other transnational criminal organizations.  HSI will not cease its relentless pursuit of all suspects involved in this case until they are captured and brought to justice.”

FBI Special Agent in Charge Douglas Williams said: “Every day, MS-13 ravages American neighborhoods with violence, drugs, and death.  David Campbell allegedly enabled the exportation of violence and poison onto American streets as Mara Salvatrucha’s primary supplier of cocaine and weapons.  FBI Houston’s work to ensure Campbell now faces U.S. justice sends a simultaneous message to MS-13 around the world — we will not stop pursuing you, we will not stop dismantling your networks, and we will not rest until we’ve eradicated the violence you bring into our society.”

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

MS-13 is a transnational criminal organization that engages in acts of violence, including murders, kidnapping, assaults, extortion, and large-scale drug importation and distribution throughout Central America and the United States.  ARCHAGA CARÍAS is the highest-ranking member of MS-13 in Honduras.  As the leader and highest-ranking member of MS-13 in Honduras, ARCHAGA CARÍAS is in charge of, among other things, the gang’s drug trafficking operations; ordering and coordinating acts of violence, including numerous murders; and the laundering of drug proceeds.  MORALES ZELAYA and VELASQUEZ PAZ are both leaders of MS-13 in Honduras and close associates to ARCHAGA CARÍAS.  MS-13’s drug trafficking operations led by ARCHAGA CARÍAS, MORALES ZELAYA, VELASQUEZ PAZ, and others include the processing, receiving, transporting, and distributing of multi-ton loads of cocaine shipped through Honduras and into the United States. 

ARCHAGA CARÍAS and other MS-13 members and associates acting at his direction also provided protection for other drug trafficking organizations (“DTOs”) engaged in transporting multi-ton loads of cocaine through Honduras and destined for the United States.  ARCHAGA CARÍAS contracted out members of MS-13 as “Sicarios,” or hit men, to other DTOs for payment.  In that role, MS-13’s Sicarios committed numerous murders for hire for DTOs trafficking cocaine through Honduras to the United States.  ARCHAGA CARÍAS and MS-13 also supplied other DTOs with firearms, including machineguns, that were received from El Salvador, Nicaragua, and elsewhere.  ARCHAGA CARÍAS – and MORALES ZELAYA, VELASQUEZ PAZ, and PORTILLO SANTOS, operating under ARCHAGA CARÍAS’s leadership – also ordered and coordinated murders of rival gang members and drug trafficking competitors in Honduras, as well as other members of MS-13 whom ARCHAGA CARÍAS believed had been disloyal to the gang. 

CAMPBELL was one of the principal suppliers of cocaine and weapons, including machineguns, to MS-13 in Honduras.  As an associate of MS-13 and close confidant of ARCHAGA CARÍAS, CAMPBELL planned and coordinated retaliatory acts of violence with ARCHAGA CARÍAS and assisted MS-13 and ARCHAGA CARÍAS in establishing businesses to launder the gang’s drug proceeds.  CAMPBELL and MS-13 used businesses they owned or controlled to launder drug proceeds, including through banks in the United States. 

MORALES ZELAYA and VELASQUEZ PAZ were both leaders of MS-13 in Honduras and close associates of ARCHAGA CARÍAS.  MORALES ZELAYA and VELASQUEZ PAZ each coordinated the gang’s drug trafficking business, acts of violence (including murders) against rivals, and the movement of proceeds from the gang’s illicit activities.

PORTILLO SANTOS was a high-ranking member of MS-13 in Honduras who reported to MORALES ZELAYA.  PORTILLO SANTOS was responsible for leading MS-13 in one of the largest sectors in Honduras, which included the distribution and movement of large shipments of cocaine, acts of violence (including murders and kidnappings) of rival gang members, and contract murders carried out against rival drug dealers.

ARCHAGA CARÍAS and MORALES ZELAYA remain at large.  The $5 million reward offered by the U.S. Department of State remains valid today.  Anyone with information that may lead to the arrest of ARCHAGA CARÍAS or MORALES ZELAYA can contact the FBI at 1-800-CALL-FBI.  More information can be found here: https://www.fbi.gov/wanted/topten, here: https://www.dea.gov/fugitives and here: https://www.ice.gov/most-wanted.

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If convicted, CAMPBELL, 57, of Honduras; ARCHAGA CARÍAS, 42, of Honduras; PORTILLO SANTOS, 35, of Honduras; MORALES ZELAYA, 49, of Honduras; and VELASQUEZ PAZ, 41, of Honduras, face a maximum penalty of life in prison and a mandatory minimum sentence of 40 years in prison. 

A chart containing the charges and statutory minimum and maximum penalties for the defendants is set forth below.  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 defendants will be determined by a judge.

Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit; the FBI’s San Diego, Houston, Los Angeles, and New York Field Offices; the FBI’s Criminal Investigative Division’s Safe Streets Gang Unit; HSI’s National Gang and Violent Crime Unit; and HSI’s New York and Tegucigalpa, Honduras, Field Offices.  Mr. Williams also thanked the FBI Legal Attaché in San Salvador, the Organized Crime Drug Enforcement Task Forces (“OCDETF”) Executive Office, the Department of Justice’s Violent Crime and Racketeering Section, the U.S. Attorney’s Office for the Southern District of Florida, and Customs and Border Protection Air and Marine Operations, for their assistance.  The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of CAMPBELL.

The case is being handled by JTFV and the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorney David J. Robles, Special Assistant U.S. Attorney Christopher Eason, and Department of Justice Trial Attorney Jacob Warren are in charge of the prosecution.  

Since its creation in August 2019, JTFV has successfully implemented a whole-of-government approach to combatting MS-13, including increasing coordination and collaboration with domestic and foreign law enforcement partners; designating priority MS-13 programs, cliques, and leaders who have the most impact on the United States for targeted prosecutions; and coordinating significant MS-13 indictments, including the first use of national security charges against MS-13 leaders.  JTFV has been comprised of members from U.S. Attorney’s Offices across the country, including this Office, the Eastern District of New York, the Eastern District of Texas, the District of New Jersey, the Northern District of Ohio, the District of Utah, the District of Massachusetts, the Southern District of Florida, the District of Alaska, the Southern District of California, the District of Nevada, the Eastern District of Virginia, and the District of Columbia, as well as the Department of Justice’s National Security Division and the Criminal Division.  All Department of Justice law enforcement agencies are involved in the effort, including the FBI; DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; and the U.S. Bureau of Prisons.  In addition, HSI plays a critical role in JTFV.  The Department of State, Bureau of International Narcotics and Law Enforcement Affairs, and the U.S. Agency for International Development, Office of Inspector General, have also provided critical support for JTFV’s mission. 

OCDETF also supports JTFV in its mission.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

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

COUNT

CHARGE

DEFENDANTS

MIN./MAX. PENALTIES

1

Racketeering conspiracy

YULAN ANDONY ARCHAGA CARÍAS

DAVID CAMPBELL

JUAN CARLOS PORTILLO SANTOS

VICTOR EDUARDO MORALES ZELAYA

JORGE ALBERTO VELASQUEZ PAZ

Maximum of life in prison

2

Narcotics importation conspiracy

YULAN ANDONY ARCHAGA CARÍAS

DAVID CAMPBELL

JUAN CARLOS PORTILLO SANTOS

VICTOR EDUARDO MORALES ZELAYA

JORGE ALBERTO VELASQUEZ PAZ

Mandatory minimum of 10 years in prison

Maximum of life in prison

3

Using or carrying a machinegun during and in relation to, or possessing a machinegun in furtherance of, a narcotics trafficking crime

YULAN ANDONY ARCHAGA CARÍAS

DAVID CAMPBELL

JUAN CARLOS PORTILLO SANTOS

VICTOR EDUARDO MORALES ZELAYA

JORGE ALBERTO VELASQUEZ PAZ

Mandatory minimum of 30 years in prison

Maximum of life in prison

4

Machinegun conspiracy

YULAN ANDONY ARCHAGA CARÍAS

DAVID CAMPBELL

JUAN CARLOS PORTILLO SANTOS

VICTOR EDUARDO MORALES ZELAYA

JORGE ALBERTO VELASQUEZ PAZ

Maximum of life in prison

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

An indictment was unsealed today charging David Campbell, also known as Viejo Dan and Don David, 57, of Honduras, one of the principal narcotics and weapons suppliers to MS-13 in Honduras, with racketeering, narcotics, and firearms offenses.

Campbell was presented today before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court after being extradited yesterday from Honduras.

In addition to Campbell, the superseding indictment unsealed today also charges Yulan Andony Archaga Carías, also known as Alexander Mendoza and Porky, 42, of Honduras, the top leader of MS-13 in Honduras, and three additional MS-13 leaders, Juan Carlos Portillo Santos, also known as Juancy, 35; Victor Eduardo Morales Zelaya, also known as Cuervo, 49; and Jorge Alberto Velasquez Paz, also known as Chacarron, 41, for racketeering, narcotics trafficking, and firearms offenses. 

Campbell and Archaga Carías were previously charged in 2021 in a superseding indictment in Manhattan federal court with racketeering, narcotics trafficking, and firearms offenses. Archaga Carías was subsequently placed on the FBI’s Ten Most Wanted Fugitives List, the DEA’s Most Wanted Fugitives List, HSI’s Most Wanted Fugitives List, and a $5 million reward was offered by the U.S. Department of State for information related to his arrest or capture. Portillo Santos and Velasquez Paz are in custody in Honduras. Morales Zelaya remains at large. 

“Over the course of decades, MS-13 has sowed unspeakable violence in communities here in the United States and abroad,” said Attorney General Merrick B. Garland. “With the arrest and extradition of the alleged principal MS-13 drug and weapons supplier, the Justice Department is making clear that those responsible for flooding our communities with violence and deadly drugs will be held accountable in an American courtroom.”

“The FBI and our partners remain committed to the combating the violent criminal activity related to MS-13 occurring in communities across America,” said FBI Director Christopher Wray. “Criminals that engage in illegal activity targeting the American people should take today's announcement as a warning — they cannot hide beyond our borders. We are proud of the close collaboration with our partners which resulted in David Campbell having to face the consequences of his actions.”

“Today’s extradition of David Campbell and the announcement of charges against four other MS-13 leaders for their alleged involvement in trafficking multi-ton loads of cocaine and for allegedly perpetrating unspeakable acts of violence in our communities is a testament to the unwavering commitment of the men and women of DEA to save lives and hold drug traffickers accountable,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “DEA will continue to seek justice for all Americans suffering the devastating effects of drug poisonings and drug-related violence in our communities.”

“MS-13 is one of the most dangerous criminal organizations in the world,” said U.S. Attorney Damian Williams for the Southern District of New York. “My office, the Justice Department, and our law enforcement partners will stop at nothing to pursue and hold accountable MS-13’s leaders, members, and associates, who, as alleged in the superseding indictment unsealed today, are responsible for large-scale drug trafficking and violence throughout the United States and Central America. As alleged, David Campbell was, until his capture, one of MS-13’s major suppliers of drugs and guns, and he planned and coordinated violent acts with the top leader of MS-13 in Honduras, Archaga Carías. Campbell has now been extradited and will face justice in the United States, and a $5 million reward is offered for information leading to the arrest of Archaga Carías.”

According to the superseding indictment, MS-13 is a transnational criminal organization that engages in acts of violence, including murders, kidnapping, assaults, extortion, and large-scale drug importation and distribution throughout Central America and the United States. Archaga Carías is the highest-ranking member of MS-13 in Honduras. As the leader and highest-ranking member of MS-13 in Honduras, Archaga Carías is in charge of, among other things, the gang’s drug trafficking operations; ordering and coordinating acts of violence, including numerous murders; and the laundering of drug proceeds. Morales Zelaya and Velasquez Paz are both leaders of MS-13 in Honduras and close associates to Archaga Carías. MS-13’s drug trafficking operations led by Archaga Carías, Morales Zelaya, Velasquez Paz, and others include the processing, receiving, transporting, and distributing of multi-ton loads of cocaine shipped through Honduras and into the United States. 

“MS-13’s brutal violence is fueled by firearms, funded by narcotics trafficking, and disguised by money laundering,” said Director John J. Durham of Joint Task Force Vulcan (JTFV). “As alleged in the superseding indictment, David Campbell and his co-conspirators procured and sold multi-ton loads of narcotics, deployed firearms, including machine guns, and laundered the drug proceeds, all in furtherance of the organization. Thanks to the tenacious efforts and collaboration of our law enforcement partners, he now will face justice in a U.S. courtroom.”

Archaga Carías and other MS-13 members and associates acting at his direction also provided protection for other drug trafficking organizations (DTO) engaged in transporting multi-ton loads of cocaine through Honduras and destined for the United States. Archaga Carías contracted out members of MS-13 as “Sicarios,” or hit men, to other DTOs for payment. In that role, MS-13’s Sicarios committed numerous murders for hire for DTOs trafficking cocaine through Honduras to the United States. Archaga Carías and MS-13 also supplied other DTOs with firearms, including machineguns, that were received from El Salvador, Nicaragua, and elsewhere. Archaga Carías – and Morales Zelaya, Velasquez Paz, and Portillo Santos, operating under Archaga Carías’ leadership – also ordered and coordinated murders of rival gang members and drug trafficking competitors in Honduras, as well as other members of MS-13 whom Archaga Carías believed had been disloyal to the gang. 

Campbell was one of the principal suppliers of cocaine and weapons, including machineguns, to MS-13 in Honduras. As an associate of MS-13 and close confidant of Archaga Carías, Campbell planned and coordinated retaliatory acts of violence with Archaga Carías and assisted MS-13 and Archaga Carías in establishing businesses to launder the gang’s drug proceeds. Campbell and MS-13 used businesses they owned or controlled to launder drug proceeds, including through banks in the United States. 

Morales Zelaya and Velasquez Paz were both leaders of MS-13 in Honduras and close associates of Archaga Carías. Morales Zelaya and Velasquez Paz each coordinated the gang’s drug trafficking business, acts of violence (including murders) against rivals, and the movement of proceeds from the gang’s illicit activities.

Portillo Santos was a high-ranking member of MS-13 in Honduras who reported to Morales Zelaya. Portillo Santos was responsible for leading MS-13 in one of the largest sectors in Honduras, which included the distribution and movement of large shipments of cocaine, acts of violence (including murders and kidnappings) of rival gang members, and contract murders carried out against rival drug dealers.

 “Campbell’s arrest and extradition should serve as a clear message to those who support MS-13 and other transnational criminal organizations,” said Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI). “HSI will not cease its relentless pursuit of all suspects involved in this case until they are captured and brought to justice.”

“Every day, MS-13 ravages American neighborhoods with violence, drugs, and death,” said Special Agent in Charge Douglas Williams of the FBI Houston Field Office. “David Campbell allegedly enabled the exportation of violence and poison onto American streets as Mara Salvatrucha’s primary supplier of cocaine and weapons. FBI Houston’s work to ensure Campbell now faces U.S. justice sends a simultaneous message to MS-13 around the world — we will not stop pursuing you, we will not stop dismantling your networks, and we will not rest until we’ve eradicated the violence you bring into our society.”

Archaga Carías and Morales Zelaya remain at large. The $5 million reward offered by the U.S. Department of State remains valid today. Anyone with information that may lead to the arrest of Archaga Carías or Morales Zelaya can contact the FBI at 1-800-CALL-FBI.  More information can be found at https://www.fbi.gov/wanted/topten, https://www.dea.gov/fugitives, and https://www.ice.gov/most-wanted.

If convicted, Campbell, Archaga Carías, Portillo Santos, Morales Zelaya, and Velasquez Paz face a maximum penalty of life in prison and a mandatory minimum of 40 years in prison. 

The DEA’s Special Operations Division Bilateral Investigations Unit; the FBI San Diego, Houston, Los Angeles, and New York Field Offices; the FBI’s Criminal Investigative Division’s Safe Streets Gang Unit; HSI’s National Gang and Violent Crime Unit; and HSI’s New York and Tegucigalpa, Honduras, Field Offices investigated the case, with assistance from the FBI Legal Attaché in San Salvador, the Organized Crime Drug Enforcement Task Forces (OCDETF) Executive Office, the Justice Department’s Violent Crime and Racketeering Section, the U.S. Attorney’s Office for the Southern District of Florida, and the U.S. Customs and Border Protection’s Air and Maritime Operations, for their assistance. The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of Campbell.

The JTFV and U.S. Attorney’s Office for the Southern District of New York’s National Security and International Narcotics Unit are handling the case. Assistant U.S. Attorney David J. Robles and Special Assistant U.S. Attorney Christopher Eason for the Southern District of New York and Trial Attorney Jacob Warren of the Justice Department are prosecuting the case.  

Since its creation in August 2019, JTFV has successfully implemented a whole-of-government approach to combatting MS-13, including increasing coordination and collaboration with domestic and foreign law enforcement partners; designating priority MS-13 programs, cliques, and leaders who have the most impact on the United States for targeted prosecutions; and coordinating significant MS-13 indictments, including the first use of national security charges against MS-13 leaders. JTFV has been comprised of members from U.S. Attorney’s Offices across the country, including the Southern District of New York, the Eastern District of New York, the Eastern District of Texas, the District of New Jersey, the Northern District of Ohio, the District of Utah, the District of Massachusetts, the Southern District of Florida, the District of Alaska, the Southern District of California, the District of Nevada, the Eastern District of Virginia, and the District of Columbia, as well as the Justice Department’s National Security Division and the Criminal Division. All Justice Department law enforcement agencies are involved in the effort, including the FBI; DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; and the U.S. Bureau of Prisons. In addition, HSI plays a critical role in JTFV. The Department of State, Bureau of International Narcotics and Law Enforcement Affairs, and the U.S. Agency for International Development Office of Inspector General have also provided critical support for JTFV’s mission. 

OCDETF also supports JTFV in its mission. 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 www.justice.gov/OCDETF.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of JIMMY SOLANO-ARIAS, an armed security guard at the Jacob K. Javits Federal Office Building located at 26 Federal Plaza in Manhattan, in connection with SOLANO-ARIAS’s sexual assault of an asylum seeker (the “Victim”) on May 4, 2023.  SOLANO-ARIAS pled guilty to lying to federal law enforcement agents following his sexual abuse of the Victim.  As part of his guilty plea, SOLANO-ARIAS admitted that while acting under color of law as an armed security guard at 26 Federal Plaza, he engaged in a non-consensual sexual act with the Victim.  SOLANO-ARIAS was arrested on May 5, 2023, and pled guilty today before U.S. Magistrate Judge Sarah Netburn.

U.S. Attorney Damian Williams said: “Jimmy Solano-Arias abused the trust and privileges bestowed on him as an armed security officer at a federal building.  Instead of working to keep the many federal employees and visitors at 26 Federal Plaza safe, Solano-Arias exploited his position of authority to sexually abuse an individual seeking asylum protection in the United States.  This Office is committed to holding all those in positions of public trust accountable when they abuse their power and violate the constitutional rights of others.”

According to the allegations in the Indictment, Superseding Information, other public court documents, and statements made during court proceedings:

On May 4, 2023, SOLANO-ARIAS was employed as a security guard by a company that contracts with the Federal Protective Service of the Department of Homeland Security to provide armed security services at 26 Federal Plaza.  SOLANO-ARIAS wore a black and gray security guard uniform and carried his employer-issued firearm on his waistband.

Early in the morning on May 4, 2023, the Victim went to 26 Federal Plaza for the purpose of submitting an asylum application.  Once there, SOLANO-ARIAS offered to assist the Victim with his asylum paperwork.  Instead of providing assistance, however, SOLANO-ARIAS led the Victim through non-public areas of 26 Federal Plaza, eventually secluding the Victim in a locked office on the second floor.  Inside the locked office, SOLANO-ARIAS demanded that the Victim perform oral sex on SOLANO-ARIAS.  When the Victim attempted to resist SOLANO-ARIAS’s demands, SOLANO-ARIAS reached to the company-issued firearm on his person.  Fearing that SOLANO-ARIAS would kill the Victim, the Victim performed oral sex on SOLANO-ARIAS, which caused physical pain and injury to the Victim.  Following the assault, when the Victim was able to leave the office, he immediately reported the sexual assault to law enforcement.

The following morning, when SOLANO-ARIAS arrived at 26 Federal Plaza for his shift, law enforcement agents with the Federal Bureau of Investigation (“FBI”) approached SOLANO-ARIAS and asked to speak with him.  SOLANO-ARIAS agreed to speak with the federal agents.  During the interview that followed, SOLANO-ARIAS lied to the federal agents about his sexual abuse of the Victim, initially disclaiming entirely that he had engaged in a sexual act with the Victim and then falsely claiming that the sexual act was consensual when it was not.  SOLANO-ARIAS was arrested after the interview. 

*                *                *

SOLANO-ARIAS, 42, of the Bronx, New York, pled guilty to one count of making false statements to federal law enforcement agents, 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 of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorneys Elizabeth Espinosa and Mitzi Steiner are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Patrick J. Freaney, the Special Agent in Charge of the New York Field Office of the U.S. Secret Service (“USSS”), announced today the unsealing of an Indictment charging YISROEL HEBER, a/k/a “Scott Heber,” and YECHIEL MESHI-ZAHAV with running an advance-fee loan fraud scheme through which they defrauded dozens of victims of at least approximately $2 million.  HEBER and MESHI-ZAHAV were arrested this morning and will be presented later today before U.S. District Judge Lewis A. Kaplan, to whom this case is assigned.

U.S. Attorney Damian Williams said: “Yisroel Heber and Yechiel Meshi-Zahav allegedly brazenly siphoned funds from the bank accounts of dozens of victims after fraudulently inducing them to provide their bank details.  Herberand Meshi-Zahav’s victims thought they were securing loans, but instead they were robbed of large sums of cash.  No matter the complexity of the scheme or size of the loss amount, this Office will relentlessly investigate fraudsters who dare to illicitly line their own pockets by victimizing others.”

USSS Special Agent in Charge Patrick J. Freaney said: “These individuals allegedly garnered the trust of victims by posing as lending companies, only to turn around and steal millions from them.  This kind of fraudulent activity has a very real impact on people’s lives, and the Secret Service appreciates our partnership with the U.S. Attorney’s Office for the Southern District of New York as we work together to deliver justice for these victims.”

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

From at least in or about March 2021 through at least in or about December 2021, YISROEL HEBER and YECHIEL MESHI-ZAHAV participated in an advance-fee loan fraud scheme that defrauded dozens of victims of at least approximately $2 million.  HEBER and MESHI-ZAHAV operated this fraudulent scheme through purported lending companies called Blue Ribbon Funding, Tru Capital Funding, Fund Capital LLC, a/k/a “Fund Cap LLC,” and Ameriquest Capital (collectively, the “Fraudulent Lenders”).  During the course of the scheme, HEBER and MESHI-ZAHAV, through their control of the Fraudulent Lenders, induced victims to provide their bank account information in order to make payments related to loans that the Fraudulent Lenders promised to issue to the victims.  Instead, however, HEBER and MESHI-ZAHAV defrauded the victims by withdrawing thousands of dollars from each of the victims’ bank accounts without issuing the promised loans.

*                *                *

HEBER, 43, of Kings Point, New York, and MESHI-ZAHAV, 32, of Valley Stream, New York, are each charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.

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

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

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Alexandra S. Messiter is 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; James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Jocelyn E. Strauber,  the Commissioner of the New York City Department of Investigation (“DOI”), announced today the unsealing of Complaints charging former Rikers Island correction officers CARLOS RIVERA, CHANTAL DE LOS SANTOS, and STEPHANIE DAVILA; former Rikers Island program counselor SHANEQUA WASHIGTON; former Rikers Island contractor KENNETH WEBSTER; and former Rikers Island inmate KRISTOPHER FRANCISCO with federal crimes arising from their involvement in corruption at Rikers Island.  RIVERA, DE LOS SANTOS, WASHINGTON, WEBSTER, and DAVILA were arrested earlier today.  RIVERA, DE LOS SANTOS, WASHINGTON, and DAVILA will be presented this afternoon before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court, and WEBSTER will be presented tomorrow in Manhattan federal court.  FRANCISCO is currently in state custody.

U.S. Attorney Damian Williams said: “Rikers Island is less safe, for inmates and officers alike, when corrections officers and others in positions of public trust accept bribes to smuggle contraband.  As alleged, the defendants in these cases engaged in corruption for their own enrichment.  In our relentless pursuit of justice, we leave no stone unturned, especially within the confines of jails and prisons, where the safety and dignity of all individuals must be safeguarded.  We will not tolerate any breach of trust or corruption that jeopardizes the well-being of inmates and staff.”

FBI Assistant Director in Charge James Smith said: “These defendants allegedly abused their former positions within the Department of Corrections by accepting bribes from multiple inmates - including one charged along with them - to smuggle contraband, including illicit substances, into several jail facilities on Rikers Island.  This alleged conspiracy permeated Rikers Island, polluting the integrity of the Department and its institutions, while jeopardizing the trust in other officials with similar job roles.  The FBI is committed to pursuing all forms of corruption, especially schemes involving those responsible for safeguarding our corrections system.”

DOI Commissioner Jocelyn E. Strauber said: “As charged, former City Correction officers and employees, and a former employee of a vendor to DOC, used their positions of trust to traffic drugs and cell phones into Rikers Island jail facilities.  Contraband in our City’s jails fuels disorder and violence, and DOI has issued recommendations to the Department of Correction intended to improve controls around officers’ and vendors’ entry and access to jail facilities, and to thereby limit the flow of contraband.  I thank the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation for their continued partnership and commitment to hold accountable those who undermine the stability and security of the City’s jails.”

According to the three Complaints unsealed today in Manhattan federal court:[1]

RIVERA was a correction officer who was assigned to the North Infirmary Command, one of the jail facilities on Rikers Island in the Bronx, New York.  From December 2021 through February 2022, RIVERA accepted bribes from an inmate and smuggled contraband, including oxycodone and marijuana, into the jail.

DE LOS SANTOS, a former correction officer who was assigned to the Anna M. Kross Center (“AMKC”), another jail facility on Rikers Island, accepted bribes from multiple inmates to smuggle contraband into the jail from March through June 2022.  WASHINGTON, a program counselor at the Department of Correction, also accepted bribes in exchange for smuggling contraband into AMKC, conspiring with DE LOS SANTOS from March through April 2022.  In addition, WEBSTER, an employee of a contractor that provided services at Rikers Island, also accepted bribes to smuggle contraband and conspired with DE LOS SANTOS from May through June 2022.

DAVILA, a former correction officer who was assigned to AMKC, and FRANCISCO, then an inmate at the facility, conspired to smuggle contraband into AMKC in exchange for bribes between approximately July and August 2021.  Specifically, DAVILA and FRANCISCO bribed another correction officer to induce the officer to smuggle contraband, including fentanyl, marijuana, and synthetic cannabinoids commonly known as “K2,” into AMKC.

*                *                *

RIVERA, 27, of Yonkers, New York, is charged with conspiracy to commit honest services wire fraud, which carries a maximum potential penalty of 20 years in prison, and conspiracy to distribute narcotics and controlled substances, which carries a maximum potential penalty of 20 years in prison.  

DE LOS SANTOS, 30, of the Bronx, New York, is charged with one count of conspiracy to commit bribery, which carries a maximum potential penalty of five years in prison, and two counts of conspiracy to commit honest services wire fraud, each of which carry a maximum potential penalty of 20 years in prison.  

WASHINGTON, 39, of Brooklyn, New York, is charged with conspiracy to commit bribery, which carries a maximum potential penalty of five years in prison, and conspiracy to commit honest services wire fraud, which carries a maximum potential penalty of 20 years in prison.  

WEBSTER, 42, of the Bronx, New York, is charged with conspiracy to commit honest services wire fraud, which carries a maximum potential penalty of 20 years in prison.  

DAVILA, 30, of Brooklyn, New York, and FRANCISCO, 29, of Ossining, New York, are each charged with conspiracy to commit bribery, which carries a maximum potential penalty of five years in prison; conspiracy to commit honest services wire fraud, which carries a maximum potential penalty of 20 years in prison; and conspiracy to distribute narcotics and controlled substances, which carries a maximum potential penalty of 20 years in prison.   

The maximum potential sentences in these cases 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 and DOI.

The cases are being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Adam Z. Margulies, Jonathan E. Rebold, and Derek Wikstrom are in charge of the prosecutions.

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 Complaints and the descriptions 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 today that NATHANAEL FOUCAULT — a former U.S. Postal Service (“USPS”) letter carrier who was charged with eight other defendants in connection with their theft and unauthorized use of credit cards to defraud several national financial institutions, credit card companies, and major retailers — was sentenced today by U.S. District Judge Paul G. Gardephe.  FOUCAULT’s co-defendants, JOHNNY DAMUS, a/k/a “Ace,” RASHAAN RICHARDS, a/k/a “Jay Dee,” a/k/a “JD,” a/k/a “Payso,” DEVON RICHARDS, a/k/a “Dev,” CONRAD HERON, a/k/a “Conny Cash,” LOUIS JEUNE VERLY, a/k/a “Luis Jesus Virola,” KAREEM SHEPHERD, a/k/a “Reem,” a/k/a “Marcus Ford,” a/k/a “Frank James,” FABIOLA MOMPOINT, a/k/a “Lady Fab,” and JOHNATHAN PERSAUD were previously sentenced by Judge Gardephe. 

U.S. Attorney Damian Williams said: “These individuals participated in a years-long scheme to manipulate credit card companies and major retailers across New York and New Jersey in order to enrich themselves.  The sprawling scheme was sophisticated, organized, and efficient.  The USPS employees involved in this scheme abused their positions of trust in order to supercharge the fraud, which caused serious financial loss and compromised the identities of hundreds of victims.  Thanks to the diligence of our law enforcement partners and the career prosecutors of this Office, the defendants have now been held accountable for their brazen criminal conduct.”

According to the allegations contained in the Superseding Indictment and statements made in public filings:

The defendants were convicted and sentenced for their participation in a multi-year scheme to steal credit cards from the mail spanning from approximately December 2018 to September 2022; use those stolen credit cards at a variety of stores, including high-end retailers; and sell some of the merchandise purchased with the stolen cards online.  In order to obtain credit cards for use in the scheme, beginning in December 2018, RASHAAN RICHARDS, DEVON RICHARDS, and SHEPHERD conspired with USPS letter carriers, including MOMPOINT, FOULCAULT, and PERSAUD, to steal credit cards directly from mail routes.  At the direction of DAMUS, members of the conspiracy, including RASHAAN RICHARDS, DEVON RICHARDS, SHEPHERD, HERON, and VERLY used the stolen credit cards at a variety of stores, including high-end retailers in Manhattan, resulting in over $1.4 million in charges to the credit card companies.  In order to use the stolen credit cards, the defendants worked together to obtain personal identification information for hundreds of victims using a variety of internet-based sources so that they could provide credit card companies with the information necessary to activate the stolen credit cards.  Following their purchases, the defendants transferred some of the fraudulently obtained items to DAMUS who, working together with a close associate, sold the items on a particular website, LuxurySnob.com, which purported to be an “online consignment and personal shopping company” specializing in “pre-owned luxury items,” but, in truth and in fact, many of the items it sells were purchased using stolen credit cards.

*                *                *

FOUCAULT, 30, of Brooklyn, New York, was sentenced to three years of supervised release and ordered to pay $11,803.91 in restitution and $11,803.91 in forfeiture.  

A chart containing the sentences of FOUCAULT’s co-defendants is below.

Mr. Williams praised the outstanding investigative work and diligence of the U.S. Postal Inspection Service, USPS – Office of the Inspector General, and the New York City Police Department.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Ashley C. Nicolas, Madison Reddick Smyser, and Chelsea Scism are in charge of the prosecution.

DEFENDANT

SENTENCE IMPOSED

RASHAAN RICHARDS*

Six years in prison, forfeiture of $536,434.01 and 90 luxury goods and electronics

JOHNNY DAMUS*

63 months in prison, forfeiture of $536,434.01, over 600 luxury items, and the URL www.luxurysnob.com

KAREEM SHEPHERD

Seven years in prison and forfeiture of $536,434.01

DEVON RICHARDS

Three years in prison, forfeiture of $369,543.43 and 15 luxury goods

CONRAD HERON

Three years in prison and forfeiture of $536,434.01

LOUIS JEUNE VERLY

Two years in prison

FABIOLA MOMPOINT

One year in prison and forfeiture of $91,456.39

JOHNATHAN PERSAUD

Three years of probation and forfeiture of $29,104.73

Damian Williams, the United States Attorney for the Southern District of New York; Darren B. McCormack, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); and Frank A. Tarentino III, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), announced today the filing of a Complaint in Manhattan federal court charging JUAN MOISES PEREZ MENDEZ, a/k/a “Caballero,” and ODALIS EUSEBIO PERALTA BAUTISTA, a/k/a “Luis Collazo Santos,” with conspiracy to distribute narcotics and distribution of narcotics.  PEREZ MENDEZ and PERALTA BAUTISTA were arrested on Saturday evening, April 6, 2024, in the Bronx.  They were presented this afternoon before U.S. Magistrate Judge Stewart D. Aaron. 

U.S. Attorney Damian Williams said: “Over the past year, this Office has worked with laser focus to disrupt industrial-scale pill mills that press powdered narcotics into pills.  In the process, we have removed millions of deadly fentanyl pills, meant to mimic legitimate prescription drugs, from the street.  This past weekend, we acted again, shutting down an alleged pill mill in the Bronx and seizing large amounts of fentanyl and methamphetamine.  We also arrested the two individuals who allegedly operated that pill mill.  As alleged, one of those individuals, Juan Moises Perez Mendez, is a prolific narcotics trafficker, connected to at least two other major pill presses this Office has disrupted in the last year.  I am deeply grateful for the efforts of our law enforcement partners and the career prosecutors of this Office as we work to save lives by keeping fentanyl off the streets of our community.”   

HSI Acting Special Agent in Charge Darren B. McCormack said: “These arrests are the result of the exceptional work our El Dorado Task Force does to remove the threat of lethal amounts of fentanyl-laced counterfeit prescription pills that are wreaking havoc in our communities.  HSI New York, along with our law enforcement partners, remain determined to shut down these underground poison mills and dismantle the flow of deadly substances into our communities.  The criminals who operate these illegitimate manufacturing sites will face justice for their production and distribution of illicit synthetic opioids which are responsible for perpetuating the public safety epidemic across the country.”

DEA Special Agent in Charge Frank A. Tarentino III said: “Over the weekend, the DEA New York and our law enforcement partners conducted another successful operation resulting in two arrests and shutting down another illegal pill mill located near a school in the Bronx.  Fake pills, laced with fentanyl and methamphetamine, like the ones seized this weekend, come in every color, shape, and form, and are disguised to mirror the appearance of prescription pills, making them hard to detect by sight and extremely deadly.  This operation emphasizes our commitment to protecting communities from these fake pills and those responsible for producing them.  I commend our special agents and law enforcement partners on this successful operation.”

As alleged in the Complaint filed today in Manhattan federal court:[1]

Law enforcement has been investigating a network of drug traffickers operating industrial-scale illegal narcotics pill pressing operations in multiple locations throughout New York City.  As part of those operations, the traffickers have converted spaces in residential buildings to press large quantities of powder narcotics, including fentanyl and methamphetamine, into pill form for wholesale distribution.  At these locations, drug traffickers have manufactured millions of pills for further distribution, sometimes manufacturing hundreds of thousands of pills in a single session. 

In or about May 2023, law enforcement searched the basement of a particular building in Washington Heights (the “Washington Heights Building”), where they found large quantities of narcotics, as well as the materials and equipment necessary to press narcotics into pill form, including commercial-grade pill presses.  In connection with that search, law enforcement officers arrested Juan Efren Paulino. 

PEREZ MENDEZ appears to have entered the basement of the Washington Heights Building in the days leading up to the search and communicated with Paulino regarding narcotics.

A photograph of the narcotics recovered from the Washington Heights Building is below:

In or about October 2023, law enforcement officers searched the basement of a building located on Beaumont Avenue in the Bronx (the “Beaumont Building”) and arrested four individuals.  In the basement of the Beaumont Building, law enforcement officers found hundreds of thousands of pills and over 20 kilograms of narcotics, along with three industrial pill press machines, one disassembled pill press, a kilogram press, and narcotics mixing and repackaging materials including blenders, dyes, jars of calcium citrate (frequently used as a narcotics cutting agent), and industrial-grade gas masks (used for protection when handling narcotic powders intended for pill pressing). 

In or about August 2023, law enforcement officers observed PEREZ MENDEZ appearing to enter or exit the Beaumont Building. 

A photograph of the narcotics recovered from the Beaumont Building is below:

In light of PEREZ MENDEZ’s involvement in the pill mills at the Washington Heights and Beaumont Buildings, law enforcement officers began conducting surveillance of PEREZ MENDEZ.  During the course of that surveillance, law enforcement officers identified a storage room (the “Storage Room”) in the basement of a particular building located on Gerard Avenue in the Bronx (the “Gerard Avenue Building”) that was frequented by PEREZ MENDEZ and PERALTA BAUTISTA.

On April 6, 2024, at approximately 7:15 p.m., law enforcement officers arrested PEREZ MENDEZ as he was exiting the Gerard Avenue Building, only minutes after leaving the Storage Room.  After the arrest of PEREZ MENDEZ, law enforcement officers approached the door to the Storage Room.  A loud pounding sound could be heard emanating from within the Storage Room, which was consistent with the operation of a pill press.

Not long after, the loud pounding sound stopped, and PERALTA BAUTISTA exited the Storage Room.  At the time, PERALTA BAUTISTA’s shirt appears to have had white powder on it.  As PERALTA BAUTISTA exited the Storage Room, he was placed under arrest.

Law enforcement officers then searched the Storage Room, which was used by PEREZ MENDEZ and PERALTA BAUTISTA to store powdered narcotics, combine the narcotics with other fillers, use dyes to color the combined powders, and then use large industrial-scale pill presses to create hundreds of thousands of deadly pills.  Many of the pills appear to have been manufactured to be indistinguishable from prescription medications such as Xanax, Adderall, and OxyContin, though in fact they contain, among other things, varying quantities of fentanyl. 

Among other things, law enforcement officers found two industrial-scale pill presses; approximately 130,000 pills, the vast majority of which field tested positive for the presence of fentanyl (the remainder of which field tested positive for the presence of methamphetamine); approximately three kilograms of a powder in zip lock bags that tested positive for the presence of fentanyl; a bucket containing approximately 20 pounds of powdered narcotics, which field tested positive for the presence of methamphetamine; and approximately 3.5 pounds of suspected crystalized methamphetamine.  The suspected narcotics and pill presses are depicted, in part, below:       

Additionally, law enforcement officers found materials used to mix powdered narcotics with fillers as well as packaging materials used to package narcotics for further distribution.  Those items included mixing bowls, a blender, strainers, dyes, thousands of glassine envelopes, and empty bottles of calcium citrate.  From on or about June 10, 2023, to on or about March 3, 2024, PEREZ MENDEZ and his girlfriend purchased approximately 1,274 bottles of calcium pills from a particular retail chain of consumer products.  This amounts to approximately 356,720 calcium pills.

*                *                *

JUAN MOISES PEREZ MENDEZ, 56, of the Bronx, New York, and ODALIS EUSEBIO PERALTA BAUTISTA, 53, of New York, New York, are each charged with one count of conspiracy to distribute narcotics and one count of narcotics distribution, both of which carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.   

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

Mr. Williams praised the outstanding investigative work of the El Dorado Task Force International Narcotics and Money Laundering Unit, which is comprised of law enforcement officers and investigators from HSI, the DEA, the New York City Police Department, the New York State Police, the U.S. Postal Service, the Kings County District Attorney’s Office, and the New York High Intensity Drug Trafficking Area Task Force, in connection with this investigation.  

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Maggie Lynaugh and Adam Sowlati are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that DIONISIO FIGUEROA, a/k/a “Dionicio,” a former employee of the U.S. District Court for the Southern District of New York (“SDNY”) Magistrate Clerk’s Office, and TELESFORO DEL VALLE, JR., a now-disbarred criminal defense attorney who practiced in SDNY and elsewhere for more than 20 years, were sentenced to two years and one year and one day in prison, respectively, following their convictions on conspiracy, bribery, and false statements charges.  The defendants were sentenced by U.S. District Judge Mae A. D’Agostino, sitting by designation from the U.S. District Court for the Northern District of New York.  

U.S. Attorney Damian Williams said: “The public relies on attorneys and court employees to maintain and validate its faith in our criminal justice system.  Del Valle, a former criminal defense attorney, and Figueroa, a longtime employee of the SDNY Clerk’s Office, betrayed criminal defendants, the public, and those who rely on the court to remain impartial.  Through their actions, Del Valle and Figueroa undermined the fair administration of justice and the work of the many good people in the courthouse who serve the criminal justice system with honesty and integrity.  Let these sentences serve as a warning to those who seek to pervert justice for personal gain.”

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

As a clerk in the SDNY Magistrate Clerk’s Office since in or about 2002, FIGUEROA was responsible for performing duties that included, among other things, making data entries regarding official case events in criminal cases; making summary entries of documents and proceedings on case dockets; and performing inquiries and furnishing information, either in person or by correspondence, regarding the status of cases.  FIGUEROA also played a role with respect to the intake of criminal cases, including by preparing appearance bonds, advising defendants and their family members about the conditions of the bonds, and ensuring that appearance bonds were signed by all parties prior to a defendant’s release. 

SDNY District Court personnel policies prohibited FIGUEROA from having outside employment that would pose a conflict of interest; receiving payments, gifts, or other benefits from persons having business before the District Court; and recommending particular attorneys to members of the public.  FIGUEROA also was subject to the U.S. Courts’ Code of Conduct for Judicial Employees (the “Code of Conduct”), which cautioned judicial employees that “[a] number of criminal statutes of general applicability govern federal employees’ performance of official duties.  These include:  18 U.S.C. § 201 (bribery of public officials and witnesses) . . . .”  The Code of Conduct likewise admonished that “[a] judicial employee should never influence or attempt to influence the assignment of cases, or perform any discretionary or ministerial function of the court in a manner that improperly favors any litigant or attorney, nor should a judicial employee imply that he or she is in a position to do so.” 

DEL VALLE was a private attorney who, over the course of more than two decades, had appeared in numerous federal criminal cases pending before the SDNY District Court.

Between at least 2011 and 2022, FIGUEROA and DEL VALLE engaged in a scheme whereby FIGUEROA used his position as an employee of the SDNY Magistrate Clerk’s Office to encourage criminal defendants to retain DEL VALLE to represent them in pending criminal cases.  In return, DEL VALLE paid FIGUEROA a portion of the fees that referred clients paid to DEL VALLE.  Over the course of more than a decade, FIGUEROA referred at least 45 SDNY criminal defendants to DEL VALLE, and, in exchange, DEL VALLE paid FIGUEROA tens of thousands of dollars in bribes.  DEL VALLE paid FIGUEROA directly and through FIGUEROA’s romantic partner, who would travel to DEL VALLE’s law office and pick up envelopes of cash for FIGUEROA.  Many of the clients who retained and paid DEL VALLE based on FIGUEROA’s referral were originally assigned free, court-appointed counsel.  Nevertheless, FIGUEROA encouraged those individuals to change counsel, including by vouching for DEL VALLE’s abilities as a lawyer.

In November 2022, federal law enforcement agents separately interviewed both FIGUEROA and DEL VALLE.  After agents advised each that lying to federal law enforcement agents is a crime, FIGUEROA and DEL VALLE each made materially false, fictitious, and fraudulent statements and representations in response to the agents’ questions.  In particular, FIGUEROA denied making any referrals to DEL VALLE, except on a small number of occasions concerning close relations or friends, and further denied ever having received payments from DEL VALLE for referrals.  DEL VALLE, upon being served with a federal grand jury subpoena requiring the production of records from his law firm, falsely denied having any records reflecting client referrals from, or payments to, FIGUEROA or anyone else.

*                *                *

In addition to the prison sentence, FIGUEROA, 66, of New York, New York, was sentenced to one year of supervised release and was ordered to forfeit $40,000.  DEL VALLE, 65, of Leonia, New Jersey, was sentenced to one year of supervised release and was ordered to pay a fine of $10,000. 

Mr. Williams praised the outstanding investigative work of the Special Agents from the U.S. Attorney’s Office for the Southern District of New York.

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Frank Balsamello and Stephanie Simon are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that CHINWENDU ALISIGWE was sentenced to five years in prison for his role in a wide-ranging bank fraud and money laundering conspiracy, which resulted in the misappropriation of approximately $4.5 million in victim funds.  ALISIGWE was previously convicted by a jury following a trial before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Over the course of years, Chinwendu Alisigwe used fake IDs to open dozens of bank accounts, which he then used to launder proceeds obtained from victims of business email compromise and other fraud schemes.  Alisigwe’s co-conspirators scammed dozens of victims — including individuals, businesses, a county government, and a charity that provides wheelchairs for children — into sending money to Alisigwe’s network of bank accounts.  Alisigwe then laundered the money, spending his cut on shopping sprees and sending the rest to his co-conspirators overseas.  As today’s sentence demonstrates, money launderers who assist scammers abroad, like Alisigwe, will be held accountable by this Office.”

According to the allegations contained in the Superseding Indictment, the evidence offered at trial, and statements made in public filings:

From approximately 2017 to 2020, ALISIGWE used fake identifications to open 36 separate bank accounts at six different financial institutions.  He opened those accounts with over a dozen fraudulent passports and other fraudulent identity documents bearing his photograph but the names of other individuals.  In the course of this criminal conduct, ALISIGWE used the names and social security numbers of real people who were completely unaware that ALISIGWE was using them in his fraud. 

After ALISIGWE opened the fraudulent bank accounts, the accounts received millions of dollars from a variety of fraud schemes, including business email compromise schemes.  The funds came from numerous victims, including a children’s charity, individual bank accounts, a public company, a life insurance company, and a county government.  In total, ALISIGWE received approximately $4.5 million of fraud proceeds into his network of bank accounts. 

After the fraud proceeds were deposited into the accounts opened by ALISIGWE, he laundered the proceeds through a series of transactions designed to disguise their nature and source.  For example, ALISIGWE consistently transferred large sums of the victims’ money from account to account that he had opened in other people’s names.  After disguising the nature and source of the fraud proceeds through these transactions, ALISIGWE wired these funds to bank accounts in foreign countries, including China and the United Kingdom.  ALISIGWE also spent large portions of the stolen money on clothing and other personal items.  For example, ALISIGWE used fraud proceeds to make approximately $100,000 in purchases from retail stores like Zara, Nordstrom, Macy’s, Best Buy, and Rockaway Liquor.  He also withdrew approximately $650,000 of the fraud proceeds in cash.  Ultimately, the transactions into and out of the 36 accounts opened by ALISIGWE amounted to nearly $6 million. 

*                *                *

In addition to his prison term, ALISIGWE, 38, of Jamaica, New York, was sentenced to five years of supervised release and ordered to pay $499,949.88 in restitution and $4,463,475.80 in forfeiture.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation in the course of this investigation.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys William C. Kinder, Meredith Foster, and Adam Hobson are in charge of the prosecution, with assistance from Paralegal Specialists Phineas Santello and Olivia Sebade.

Damian Williams, the United States Attorney for the Southern District of New York, announced that CLÍVER ANTONIO ALCALÁ CORDONES was sentenced to 260 months in prison for providing material support, including firearms, to the Revolutionary Armed Forces of Colombia (the “FARC”).  ALCALÁ CORDONES pled guilty on June 29, 2023, before U.S. District Judge Alvin K. Hellerstein, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “As a high-ranking member of the Venezuelan military and the Cártel de Los Soles, Clíver Antonio Alcalá Cordones and his co-conspirators sought to weaponize cocaine as they helped the FARC arm its members and ship tons of drugs to the United States.  Alcalá Cordones corrupted the vital institutions of his own country as he helped the FARC flood this country with cocaine — but no longer.  Instead, he will now spend more than two decades in a United States prison.”

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

ALCALÁ CORDONES, a Venezuelan citizen and a former general in Venezuela’s military, along with other high-ranking Venezuelan officials, acted as leaders and managers of the Cártel de Los Soles, or “Cartel of the Suns.”  ALCALÁ CORDONES and other Cartel members abused the Venezuelan people and corrupted the legitimate institutions of Venezuela — including parts of the military, intelligence apparatus, legislature, and judiciary — to facilitate the importation of tons of cocaine into the United States in partnership with the 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.  The Cártel de Los Soles sought not only to enrich its members and enhance their power but also to weaponize cocaine by inflicting the drug’s harmful and addictive effects on users in the United States.

Beginning in or about 2006, ALCALÁ CORDONES took advantage of his position in the Venezuelan military, including his command of thousands of heavily armed military officers, to provide support to the FARC as the FARC distributed tons of U.S.-bound cocaine.  Among other things, ALCALÁ CORDONES (i) prevented FARC members and associates from being arrested by Venezuelan law enforcement or being engaged by the Venezuelan military; (ii) provided protection, including freedom of movement and freedom from interference, for FARC members and associates that the defendant knew trafficked cocaine; and (iii) provided high-powered weapons to the FARC, including directly to high-ranking FARC leaders such as Luciano Marín Arango, a/k/a “Iván Márquez,” and Rodrigo Londoño Echeverri, a/k/a “Timochenko.”  ALCALÁ CORDONES also directly participated in the FARC’s cocaine distribution.  Among other things, ALCALÁ CORDONES participated in meetings with some of the largest drug traffickers in South America, during which they discussed how ALCALÁ CORDONES and other members of the Cártel de Los Soles could assist in their cocaine distribution.  ALCALÁ CORDONES also personally intervened to ensure that large shipments — over thousands of kilograms of cocaine — were not interdicted by law enforcement in Venezuela.  In exchange, ALCALÁ CORDONES received millions of dollars in cocaine-fueled bribes.

*                *                *

ALCALÁ CORDONES, 62, of Caracas, Venezuela, pled guilty to providing material support to a designated foreign terrorist organization, the FARC, and for knowingly receiving and transferring firearms, knowing and having reasonable cause to believe that such firearms would be used to commit a federal crime of terrorism, namely, the provision of material support and resources to the FARC.  In addition to the prison term, ALCALÁ CORDONES was sentenced to three years of supervised release. 

This prosecution is part of an Organized Crime Drug Enforcement Task Force (“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.

Mr. Williams praised the outstanding investigative work of the U.S. Drug Enforcement Administration’s Special Operations Division Bilateral Investigations Unit, Miami Field Division, the OCDETF New York Strike Force, and the U.S. Treasury Department, Office of Foreign Assets Control, as well as the U.S. Department of Justice’s Office of International Affairs, the National Security Division’s Counterterrorism Section, and the Narcotic and Dangerous Drug Section’s Judicial Attaché’s Office.

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, Kevin T. Sullivan, and Kyle A. Wirshba 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 today that GUYATREE SINGH was sentenced to 42 months in prison in connection with a years-long scheme to defraud at least approximately 120 low-income residents of New York City out of tens of thousands of dollars of their Supplemental Nutrition Assistance Program (“SNAP”) benefits.  SINGH previously pled guilty before U.S. District Judge Jed S. Rakoff, who also imposed today’s sentence, to one count of wire fraud and one count of aggravated identity theft.

U.S. Attorney Damian Williams said: “Guyatree Singh stole SNAP benefits from at least approximately 120 low-income, primarily elderly, residents of New York City, leaving the victims without money to buy food.  By preying on those using their benefits for basic needs for survival, Singh showed there was no line she would not cross for a quick buck.  Today’s sentence demonstrates this Office’s commitment to ensuring that our justice system protects everyone from fraud, especially the most vulnerable New Yorkers.”

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

From at least in or about April 2019 through at least May 2023, SINGH engaged in a scheme to defraud at least approximately 120 SNAP recipients living in the Southern District of New York — a majority of whom appear to be elderly — of their SNAP benefits.  In total, SINGH defrauded the victims out of approximately $51,868.39 in benefits. 

SNAP provides low-income individuals with electronic benefits that can be used like cash to purchase food.  People eligible for SNAP benefits are given an electronic benefits transfer (“EBT”) card, which looks like a debit card and gives a person access to his or her SNAP benefits, allowing the SNAP recipient to buy groceries and other items at participating stores. 

SINGH called SNAP recipients and pretended to be a New York State employee working for SNAP.  SINGH then asked the victims for their personally identifiable information, including their dates of birth and social security numbers.  Unbeknownst to the victims, SINGH then used this information to reset the personal identification numbers (“PIN”) on their EBT cards.  Once the PINs were reset, SINGH used the victims’ EBT account numbers and new PINs to make purchases for herself at grocery stores in Florida using the victims’ SNAP funds. 

*                *                *

In addition to her prison term, SINGH, 51, of West Palm Beach, Florida, was sentenced to three years of supervised release and ordered to pay restitution in the amount of $51,868.39 and forfeit the same amount.

Mr. Williams praised the outstanding investigative work of the New York City Department of Investigation and the Special Agents of the U.S. Attorney’s Office.

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 WAYNE HICKS, a/k/a “Weez,” was sentenced to 17 years in prison for drug trafficking and violent crimes, including a brutal beating and robbery of a victim in New City, New York, on February 28, 2021.  HICKS pled guilty on August 25, 2023, in White Plains federal court to one count of conspiracy to commit Hobbs Act Robbery, one count of Hobbs Act Robbery, one count of Travel Act Assault, one count of conspiracy to distribute marijuana, and one count of possessing a firearm in furtherance of a drug trafficking crime before U.S. District Judge Cathy Seibel, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Wayne Hicks was a drug dealer who directed multiple violent attacks as retribution for drug robberies.  After one such attack, he bragged and circulated gruesome videos of it to bolster his brutal reputation.  The substantial sentence imposed by the court makes clear that the law has no tolerance for this kind of brazen violence.  Thanks to the tenacious work of our law enforcement partners and the career prosecutors of this Office, all the participants in this attack have now been convicted and brought to justice.”

According to the allegations in the Superseding Indictment and other court filings and based on statements made in public court proceedings:

HICKS, a marijuana dealer, directed two separate acts of violence to support his drug business.  First, in November 2020, after a marijuana dealer who worked for HICKS was robbed, HICKS arranged for a co-conspirator to shoot one of the robbers.  Second, in February 2021, after JORDAN WOODBINE, another marijuana dealer who worked for HICKS, was robbed, HICKS contacted his brother, co-defendant DWAYNE HICKS, to arrange retribution.  Thereafter, DWAYNE HICKS lured a victim, who the conspirators believed had participated in the robbery of WOODBINE, to a residence in New City, New York, where DWAYNE HICKS and multiple other assailants, including TNAIYA WILLIAMS, BRIAN THOMAS, and WOODBINE, physically attacked the victim.  At times, WAYNE HICKS monitored the attack over video chat.  The assailants forced the victim to strip naked, stole his belongings, including a quantity of marijuana the assailants believed the victim had stolen, then beat the victim with a baseball bat, belts, and their hands and feet, and repeatedly slashed and stabbed the victim with a large knife.  The victim ultimately fled after being left, naked and covered in blood, in a pile of snow.

The other individuals who carried out the February 28, 2021, attack at HICKS’s direction were convicted along with HICKS.  At a previous sentencing hearing for one of HICKS’s codefendants, Judge Seibel remarked that the February 28, 2021, attack was “sickening,” “vicious,” “stomach turning, and the sort of thing that you really can’t imagine how any human being could partake in.”

*                *                *

In addition to the prison term, HICKS, 32, of Hawthorne, New York, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation (“FBI”), the Clarkstown Police Department, the Rockland County District Attorney’s Office, and the Westchester County Safe Streets Task Force, which is comprised of special agents and task force officers from the FBI, U.S. Probation, New York State Police, New York State Department of Corrections and Community Supervision, Putnam County Sheriff's Office, Westchester County District Attorney’s Office, Rockland County District Attorney’s Office, and the New York City, Westchester County, Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown Police Departments.

The case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Timothy Ly, Josiah Pertz, and Derek Wikstrom are in charge of the prosecution.

A Bronx man was arrested today in Manhattan on criminal charges related to the alleged 2021 murder of a man in Bangladesh.

“As alleged in the indictment, the defendant, a U.S. national, murdered another U.S. national while they were both in Bangladesh,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “When an American murders another American abroad, they will face serious consequences.  The Criminal Division is committed to investigating and prosecuting violent crimes committed against U.S. nationals wherever they occur and holding perpetrators accountable for their actions.” 

According to court documents, on or about June 11, 2021, Ganet Rozario, 52, of the Bronx, New York, killed Michael Rozario in Bangladesh. Ganet Rozario allegedly used and carried a firearm to carry out the murder.

“Ganet Rozario, a citizen of the United States, allegedly murdered another U.S. national in Bangladesh,” said U.S. Attorney Damian Williams for the Southern District of New York. “Today’s charges demonstrate that the reach of this office and that of our law enforcement partners is vast and that our commitment to protect the men and women of New York City extends far beyond its geographical boundaries. The message is clear: this office and its partners will be relentless in our pursuit of anyone who takes another life, even overseas.”

“The FBI devotes significant resources to investigating crimes that occur overseas which affect U.S. interests and impact American citizens,” said Acting Assistant Director in Charge Mehtab Syed of the FBI Los Angeles Field Office. “Individuals who commit crimes against U.S. citizens abroad will be held accountable through the FBI’s extraterritorial investigations, which exist to deliver justice for victims of crimes beyond U.S. borders.”

“Ganet Rozario allegedly committed the cold and calculated murder of Michael Rozario, a U.S. national, overseas in Bangladesh,” said Assistant Director in Charge James H. Smith III of the FBI New York Field Office. “It’s not up to the discretion of a single individual to take the life of another as this greatly disrupts the scales of justice. Today’s arrest emphasizes the FBI’s promise to aggressively pursue such egregious criminal acts against our citizens, even if they occur in foreign countries.

Ganet Rozario will also make his court appearance today in the Southern District of New York.

Ganet Rozario is charged with one count of foreign murder of a U.S. national and one count of use, carrying, and possession of a firearm during a crime of violence. If convicted, he faces a maximum penalty of life in prison.

The FBI Los Angeles and New York Field Offices investigated the case.

Senior Trial Attorney Frank Rangoussis of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Christy Slavik for the Southern District of New York are prosecuting the case.

The Justice Department’s Office of International Affairs also provided assistance.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JONATHAN GARCIA, a/k/a “Jayo,” was sentenced to life plus seven years in prison for the May 2017 murder of Joshua Flores.  GARCIA, who was a leader in the Latin Kings gang, shot and killed Flores in front of a playground on a residential street in Queens, New York, while Flores was running away from GARCIA.  GARCIA was sentenced by U.S District Judge Valerie E. Caproni after being convicted by a jury following a four-day trial in June 2023.

U.S. Attorney Damian Williams said: “Jonathan Garcia gunned down his victim, 23-year-old Joshua Flores, to gain standing within the violent Latin Kings street gang.  Then, Garcia bragged about the murder for years as he advanced in the ranks of the Latin Kings and engaged in additional violence and drug trafficking with his fellow gang members.  Gang violence will not be tolerated in this community.  This Office remains fully committed to working with our law enforcement partners to root out gang violence from the streets of New York City.”

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

GARCIA is a member of a racketeering enterprise known as the Latin Kings and, specifically, the set, or “tribe,” of the Latin Kings known as the Black Mob, which operates in the Bronx, Manhattan, Queens, Brooklyn, and Long Island.  In order to enrich the enterprise, protect and expand its criminal operations, enforce discipline among its members, and retaliate against members of rival gangs, members and associates of the Black Mob committed, conspired, attempted, and threatened to commit acts of violence; distributed and possessed with intent to distribute narcotics, including heroin, fentanyl, and crack; committed robberies; and obtained, possessed, and used firearms.  In December 2019 and April 2021, several members and associates of the Black Mob, including its senior-most leaders, were charged with racketeering offenses, narcotics conspiracy, and firearms offenses.

GARCIA has been a member of the Latin Kings since at least 2012.  On May 18, 2017, GARCIA brought a firearm to a meeting with other Latin Kings members with whom he had been arguing and who intended to revoke GARCIA’s membership in the Latin Kings.  During the meeting, next to a park and playground in a residential area of Queens, GARCIA began arguing with the other gang members.  When the argument escalated, one of GARCIA’s associates fired a warning shot into the air, and gang members immediately began running away.  GARCIA then took the firearm from his associate and shot at the fleeing gang members, hitting Joshua Flores, who was trying to run away.  The bullet went through Flores’s back, into his jaw, and killed him.  The murder elevated GARCIA’s status within the Latin Kings, including the Black Mob, with whom GARCIA committed additional crimes in the years after the murder. 

*                *                *

GARCIA, 29, of Queens, New York, was previously found guilty of conspiracy to commit racketeering, murder in aid of racketeering, narcotics conspiracy, and use of a firearm in furtherance of a drug trafficking offense.

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

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

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Adam S. Hobson, David J. Robles, and Patrick R. Moroney are in charge of the prosecution.

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; Mehtab Syed, the Acting Assistant Director in Charge of the Los Angeles Field Office of the Federal Bureau of Investigation (“FBI”), and James Smith, the Assistant Director in Charge New York Field Office of the FBI, announced today that GANET ROZARIO was charged with the murder of a U.S. national on foreign soil, specifically, in Bangladesh.  ROZARIO was arrested this morning and will be presented later today in Manhattan federal court.  The case has been assigned to U.S. District Judge George B. Daniels.

U.S. Attorney Damian Williams said: “Ganet Rozario, a citizen of the United States, allegedly murdered another U.S. national in Bangladesh.  Today’s charges demonstrate that the reach of this Office and that of our law enforcement partners is vast and that our commitment to protect the men and women of New York City extends far beyond its geographical boundaries.  The message is clear: this Office and its partners will be relentless in our pursuit of anyone who takes another life, even overseas.”  

Principal Deputy Assistant Attorney General Nicole M. Argentieri said: “As alleged in the indictment, the defendant, a U.S. national, murdered another U.S. national while they were both in Bangladesh.  When an American murders another American abroad, they will face serious consequences.  The Criminal Division is committed to investigating and prosecuting violent crimes committed against U.S. nationals wherever they occur and holding perpetrators accountable for their actions.” 

FBI Los Angeles Acting Assistant Director in Charge Mehtab Syed said: “The FBI devotes significant resources to investigating crimes that occur overseas which affect U.S. interests and impact American citizens.  Individuals who commit crimes against U.S. citizens abroad will be held accountable through the FBI's extraterritorial investigations, which exist to deliver justice for victims of crimes beyond U.S. borders.” 

FBI New York Assistant Director in Charge James Smith said: “Ganet Rozario allegedly committed the cold and calculated murder of Michael Rozario, a United States national, overseas in Bangladesh.  It’s not up to the discretion of a single individual to take the life of another as this greatly disrupts the scales of justice.  Today’s arrest emphasizes the FBI’s promise to aggressively pursue such egregious criminal acts against our citizens, even if they occur in foreign countries.”

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

On June 11, 2021, GANET ROZARIO shot and killed Michael Rozario in Bangladesh.

*                *                *

ROZARIO, 52, of the Bronx, New York, is charged with the foreign murder of a U.S. national, which carries a maximum penalty of life in prison, and use and carrying of a firearm during and in relation to a crime of violence, which was discharged, which carries a mandatory minimum sentence of 10 years in prison and a maximum penalty of life in prison.         

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

Mr. Williams praised the outstanding investigative work of the FBI and thanked the Justice Department’s Office of International Affairs for its assistance. 

The prosecution is being handled by the Office’s Violent & Organized Crime Unit, in conjunction with the Criminal Division’s Human Rights and Special Prosecutions Section.  Assistant U.S. Attorney Christy Slavik and Senior Trial Attorney Frank Rangoussis of the Human Rights and Special Prosecutions Section 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, announced today that IRINA DILKINSKA was sentenced to four years in prison by U.S. District Judge Edgardo Ramos for her role in the massive OneCoin fraud scheme.  OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level marketing (“MLM”) network.  As a result of misrepresentations made about OneCoin, victims invested over $4 billion in the fraudulent cryptocurrency.  DILKINSKA previously pled guilty to conspiracy to commit wire fraud and conspiracy to commit money laundering.

U.S. Attorney Damian Williams said: “Irina Dilkinska's involvement in the sprawling OneCoin pyramid scheme was a flagrant breach of conduct.  Rather than upholding the law and embracing her position as the Head of Legal and Compliance, she facilitated and committed money laundering, aiding in the exploitation of millions of victims.  As Dilkinska learned today, this Office will hold accountable every perpetrator of the OneCoin scheme, no matter where they may hide.”

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

In 2014, RUJA IGNATOVA, a/k/a “the Cryptoqueen,” and KARL SEBASTIAN GREENWOOD co-founded OneCoin,[1] a company based in Sofia, Bulgaria, that marketed a purported cryptocurrency by the same name, which was in fact a fraudulent pyramid scheme.  OneCoin operated as a MLM network through which members received commissions for recruiting others to purchase cryptocurrency packages.  This MLM structure influenced rapid growth of the OneCoin member network.  According to OneCoin’s promotional materials, over three million people invested in fraudulent cryptocurrency packages.  OneCoin records show that between the fourth quarter of 2014 and the fourth quarter of 2016 alone, OneCoin generated €4.037 billion in sales revenue and earned “profits” of €2.735 billion.

DILKINSKA was the purported Head of Legal and Compliance for OneCoin.  But rather than ensuring that OneCoin complied with the law, DILKINKSA assisted in running its day-to-day operations and laundered money for OneCoin, including arranging for the transfer of $110 million in fraudulently obtained OneCoin proceeds to a Cayman Islands entity.

*                *                *

In addition to the prison term, DILKINSKA, 42, a citizen of Bulgaria, was sentenced to one month of supervised release and ordered to forfeit $111,440,000.

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

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas Folly, Juliana Murray, and Kevin Mead are in charge of the prosecution.

[1] OneCoin has operated using several corporate entities and d/b/a names, including “OneCoin Ltd.,” “OnePayments Ltd.,” “OneNetwork Services Ltd.,” “OneAcademy,” and “OneLife.”  These entities and d/b/a names are referred to collectively here as “OneCoin.”

Damian Williams, the United States Attorney for the Southern District of New York, announced today that MICHAEL SHVARTSMAN and GERALD SHVARTSMAN each pled guilty to one count of securities fraud, both in connection with their participation in an insider trading scheme surrounding the merger of Digital World Acquisition Corporation (“DWAC”) with Trump Media & Technology Group (“Trump Media”).  MICHAEL and GERALD SHVARTSMAN were arrested in June 2023 and pled guilty today before U.S. District Judge Lewis J. Liman.

U.S. Attorney Damian Williams said: “Michael and Gerald Shvartsman admitted in court that they received confidential, inside information about an upcoming merger between DWAC and Trump Media and used that information to make profitable, but illegal, open-market trades.  Insider trading is cheating, plain and simple, and today’s convictions should remind anyone who may be tempted to corrupt the integrity of the stock market that it will earn them a ticket to prison.”

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

In October 2021, MICHAEL SHVARTSMAN and GERALD SHVARTSMAN together made more than $22 million dollars in illegal profits by trading in securities of DWAC based on material, non-public information (“MNPI”) about DWAC’s planned, but not yet public, business combination with Trump Media, a media company founded by former President Donald J. Trump.

As sophisticated investors, MICHAEL SHVARTSMAN and GERALD SHVARTSMAN were invited to invest in DWAC and another special purpose acquisition company (“SPAC”), and after signing non-disclosure agreements, they were provided confidential information about the SPACs, including that a potential target of the SPACs was Trump Media.  As a condition of receiving this information, the defendants were prohibited by the non-disclosure agreements from disclosing the confidential information they learned or using it to buy and sell securities on the open market.  After making initial investments into DWAC through the initial public offering process, through placing their associate on DWAC’s board of directors, the defendants continued to learn valuable MNPI about DWAC’s plans to merge with Trump Media, such the status of the merger negotiations and the timing of a public merger announcement.

In violation of the non-disclosure agreements that they had signed, and in contravention of their associate’s duties and responsibilities as a board member, the defendants bought millions of dollars of DWAC securities on the open market before the news of the Trump Media business combination was public.  The defendants also tipped others about the upcoming merger, inducing further trades in DWAC securities on the basis of the MNPI they had obtained subject to their non-disclosure agreement and through their associate’s board seat.

*                *                *

MICHAEL SHVARTSMAN, 53, of Sunny Isles Beach, Florida, and GERALD SHVARTSMAN, 46, of Aventura, Florida, each pled guilty to one count of securities fraud, 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 the judge.  MICHAEL SHVARTSMAN and GERALD SHVARTSMAN are scheduled to be sentenced by Judge Liman on July 17, 2024, at 2:00 p.m. and 3:00 p.m., respectively.

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

The prosecution of this case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Elizabeth A. Hanft, Daniel G. Nessim, and Matthew R. Shahabian are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty pleas of JAMES ANDREW STILES and EDWARD GRAY STILES in connection with a scheme to commit insider trading based on misappropriated information about potential government loans to be made to the Eastman Kodak Company to finance the production of COVID-19-related pharmaceutical components.  ANDREW STILES and GRAY STILES were arrested in 2023 and pled guilty today to securities fraud based on insider trading before U.S. District Judge Ronnie Abrams.

U.S. Attorney Damian Williams said: “Andrew Stiles betrayed the trust and confidence of his employer by stealing confidential business information and using it alongside his cousin, Gray Stiles, to make unlawful trades in Kodak’s stock based on inside information.  Even secret codes and lies to regulators could not stop them from getting caught.  No one is above the law, and this Office’s commitment to protecting the integrity of the financial markets remains a priority.”

As alleged in the Indictment, other public court documents, and statements made during court proceedings:

Between June and July 2020, ANDREW STILES conducted an insider trading scheme in which he misappropriated material, non-public information (“MNPI”) and used it to trade in the stock of the Eastman Kodak Company (“Kodak”).  He further provided that MNPI to his cousin, GRAY STILES, so that he would likewise trade on the MNPI.

During that time, ANDREW STILES was an executive at a company (“Company-1”) that was working with Kodak to collaborate on the production of chemicals for pharmaceutical manufacturing in connection with the COVID-19 pandemic.  Company-1 was also assisting Kodak in its application for a significant government loan, which ultimately resulted in the news, on July 27, 2020, of a government “letter of interest” to provide Kodak with a loan of $765 million (the “LOI”).  In the following days, Kodak’s stock rose substantially, at one point increasing to more than 2,500% above the closing price prior to the news of the LOI.

During June and July 2020, ANDREW STILES was kept apprised of Kodak’s efforts to obtain the government loan, and he both traded using that non-public information and passed that information to GRAY STILES.  For example, on July 9, 2020, when Kodak had applied for a loan in the amount of $655 million, ANDREW STILES and GRAY STILES exchanged the following coded text messages:

GRAY:           Any update on the film we sent off a few weeks ago to get developed

ANDREW:     600+.  Maybe 2 weeks out

GRAY:            I can live with that hahaha

Between June 2020, after ANDREW STILES learned about the potential loan to Kodak, and July 27, 2020, the date the LOI was first publicized, ANDREW STILES purchased more than 90,000 shares of Kodak stock, including multiple purchases the day before the LOI was scheduled to be announced.  GRAY STILES purchased more than 30,000 shares, more than half of which were purchased the day prior to the scheduled announcement of the LOI.  In fact, on July 27, 2020, ANDREW STILES texted GRAY STILES, “Tmw,” indicating the expected date of the announcement.  Less than one minute later, GRAY STILES responded, “Hot damn.”  Following that exchange, and before the news was announced, ANDREW STILES and GRAY STILES each purchased more than 10,000 additional shares. 

ANDREW STILES and GRAY STILES each sold the entirety of their shares in the days and weeks after the announcement.  ANDREW STILES realized profits of more than $500,000, and GRAY STILES realized profits of more than $700,000.

*                *                *

ANDREW STILES, 38, of Charleston, South Carolina, and GRAY STILES, 39, of Richmond, Virginia, each pled guilty to one count of securities 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 defendants will be determined by a judge.

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

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Alex Rossmiller, Nicolas Roos, and Allison Nichols are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York; James E. Dennehy, Special Agent in Charge of the Newark Field Office of the Federal Bureau of Investigation (“FBI”); Edward T. Cetnar, Superintendent of Police and Director of Public Safety of the Port Authority of New York and New Jersey (“PANYNJ”); and Sean Douris, the Chief of Police, Public Safety, and Infrastructure Protection at CSX, announced today the unsealing of a seven-count Indictment charging JOSE CESARI, a/k/a “Cry,” MIGUEL CINTRON, LUIS IZQUIERDO, a/k/a “Luis Zapata,” WAKIEM JOHNSON, a/k/a “Waka,” KEMAR BONITTO, DEYLIN MARTINEZ-GUERRERO, ANTONIO GONZALEZ, and JUSTIN BRUNO with crimes arising from their participation in a multi-year scheme to steal beer — primarily Corona and Modelo shipped from Mexico — from railroad cars and beverage distribution facilities located throughout the Northeast, including in Connecticut, Massachusetts, New Jersey, and New York (the “Beer Theft Enterprise”).  Six defendants were arrested today and will be presented this afternoon before U.S. Magistrate Judge Robyn F. Tarnofsky.  CESARI remains at large, and BONITTO is in state custody in Connecticut.  The case is assigned to U.S. District Judge Edgardo Ramos.

U.S. Attorney Damian Williams said: “For years, the Beer Theft Enterprise has operated brazenly, allegedly breaking into railyards and beverage distribution facilities throughout the Northeast and filling U-Haul box trucks to the brim with cases of beer.  That dangerous and disruptive conduct — sometimes allegedly accompanied by the threat of violence — has left several beverage distribution and railroad companies ailing.  Today’s arrests reinforce that the Beer Theft Enterprise’s staggering thefts will not be tolerated in the Southern District of New York.”

FBI Special Agent in Charge James E. Dennehy said: “Train heists harken back to the days of the Wild West and gunslingers riding horses, stealing loot from rail cars.  The romanticized image has nothing to do with the modern-day criminals we allege took part in a theft ring in New Jersey, New York, and beyond that targeted railyards and beverage distribution centers.  They used the cover of night to cut through fencing, off-load pallets of beer, and sold off the stolen goods, costing the victims’ companies hundreds of thousands of dollars.  The alleged ringleader Cesari often used a weapon during the robberies.  Our team of agents and investigators working on this case has done an outstanding job bringing these alleged thieves' crime spree to the end of the line.”

PANYNJ Superintendent of Police and Director of Public Safety Edward T. Cetnar said: “These brazen thefts result in millions of dollars of lost revenue every year, directly affecting the regional economy and everyone’s safety.  The cooperative efforts of law enforcement in this case show our focus on securing our facilities and bringing perpetrators to justice.”

CSX Chief of Police, Public Safety, and Infrastructure Protection Sean Douris said: “CSX is committed to protecting the safety of its property and that of its customers.  We take criminal activity very seriously.  Railyards are privately owned property and unauthorized activity is considered criminal trespassing and violators will be prosecuted.  CSX appreciates the valuable partnerships we have with federal and local law enforcement agencies in New York, and across our network, who are crucial when it comes to investigating incidents and prosecuting individuals responsible for theft.”

According to the allegations in the Indictment:[1]     

Between in or about July 2022 and in or about March 2024, the Beer Theft Enterprise carried out dozens of beer thefts throughout the Northeast, which cumulatively resulted in losses to certain beverage distribution companies of at least hundreds of thousands of dollars.

In a typical theft, the Beer Theft Enterprise operated under cover of night.  At least some of the members of the Enterprise working that night assembled in the Bronx before travelling to that night’s target railyard or beverage distribution facility.  Typically, one or more members working that night drove a vehicle — often a U-Haul box truck — to the target location to be filled with cases of stolen beer.  After arriving at the railyard or beverage distribution facility, members of the Enterprise commonly gained unauthorized access by cutting a hole in the fencing surrounding the location.  When stealing from a railyard, members frequently cut the lock to railroad cars containing sealed pallets of cases of beer — usually Corona or Modelo — then unsealed the pallets and transported the cases of beer to their waiting vehicles.  Generally, they transported the stolen beer to the Bronx, where it was inspected and made available for sale.  The participating members of the Beer Theft Enterprise were usually paid hundreds of dollars for the night’s work after assisting in a beer theft.

As a leader of the Beer Theft Enterprise, CESARI was often present during these robberies.  Sometimes, during a particular beer theft, CESARI used a police scanner to monitor potential police activity.  In addition to participating in many of the Enterprise’s raids over the course of the conspiracy, CESARI sometimes sought to recruit new members to the conspiracy with promises of monetary gain.

CINTRON, IZQUIERDO, JOHNSON, BONITTO, MARTINEZ-GUERRERO, GONZALEZ, and BRUNO were members of the Beer Theft Enterprise.  These defendants participated in certain thefts perpetrated by the organization by, for example, renting or driving vehicles that were used in particular thefts, helping plan or execute particular thefts by communicating with CESARI, and otherwise assisting in particular thefts.

*                *                *

A chart containing the names, ages, charges, and minimum and maximum penalties for the defendants is set forth below. 

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 defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI, the PANYNJ, and the CSX Police Department.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Joseph H. Rosenberg is 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.

Count 

Charge

Defendants

Min. and Max. Penalties

1

Conspiracy to steal from interstate or foreign shipments by carrier, and to break and enter carrier facilities with intent to commit larceny therein

CESARI, 27; CINTRON, 32;

IZQUIERDO, 40; JOHNSON, 31; 

BONITTO, 38; MARTINEZ-GUERRERO, 28;

GONZALEZ, 33; and

BRUNO, 23

Maximum sentence of five years in prison

2

Theft from interstate or foreign shipments

CESARI, CINTRON,

IZQUIERDO, and

JOHNSON

Maximum sentence of 10 years in prison

3

Theft from interstate or foreign shipments

CESARI, BONITTO,

and GONZALEZ

Maximum sentence of 10 years in prison

4

Theft from interstate or foreign shipments

CESARI and

BRUNO

Maximum sentence of 10 years in prison

5

Conspiracy to commit Hobbs Act robbery

CESARI

Maximum sentence of 20 years in prison

6

Hobbs Act robbery

CESARI

Maximum sentence of 20 years in prison

7

Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence

CESARI

Mandatory minimum consecutive sentence of seven years in prison

Maximum sentence

of

life in prison

[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 DARREN SMITH was sentenced today by U.S. District Judge Philip M. Halpern to 230 months in prison for assaulting a Federal Bureau of Investigation (“FBI”) Task Force Officer and related offenses.  SMITH was previously convicted after a jury trial on September 12, 2022, of assaulting a federal officer, discharging a firearm in relation to his assault of a federal officer, and unlawfully possessing a firearm.

U.S. Attorney Damian Williams said: “This Office stands shoulder to shoulder with our partners in law enforcement when they come under attack.  We will stop at nothing to ensure that those who seek to harm them face justice.”

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

On September 25, 2020, after officers of the Yonkers Police Department (“YPD”) initiated a lawful stop of the car SMITH was driving, SMITH sped away and led law enforcement officers on a car chase and then foot pursuit through the crowded streets of downtown Yonkers, holding a loaded handgun and refusing multiple law enforcement orders to stop and put down the gun.  An FBI Task Force Officer assigned to the FBI’s Westchester-based Safe Streets Task Force was among the law enforcement who responded and pursued SMITH.  Eventually, the Task Force Officer and members of the YPD brought SMITH to the ground.  While they attempted to restrain SMITH, who still refused to let go of the gun, SMITH fired five shots into the crowded Getty Square area of Yonkers in close proximity to members of law enforcement and bystanders, including a woman pushing a stroller with a baby.  While firing his gun, SMITH attempted to turn the gun back towards members of law enforcement, including the Task Force Officer, who were on top of him and trying to restrain him.  A photograph of SMITH on foot running with his gun is shown below:

*                *                *

In addition to the prison term, SMITH, 27, of New Rochelle, New York, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of the FBI’s Westchester County Safe Streets Task Force and the Yonkers Police Department.  The FBI’s Westchester County Safe Streets Task Force is comprised of special agents and task force officers from the FBI; U.S. Probation; New York State Police; New York State Department of Corrections and Community Supervision; Westchester County District Attorney’s Office; Putnam County Sheriff’s Office; Rockland District Attorney’s Office; and the New York City, Westchester County, Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown Police Departments.

This case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Shiva H. Logarajah, Kevin T. Sullivan, and Celia V. Cohen are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that GINA MESTRE, a former New York City Police (“NYPD”) Officer, was sentenced to 70 months in prison in connection with her involvement in obstructing a federal grand jury investigation into the Shooting Boys gang and serving as an accessory after the fact to a murder committed by a member of the gang.  MESTRE pled guilty to the charge on December 7, 2023, in Manhattan federal court before U.S. District Judge Denise L. Cote, who imposed today’s sentence.  

 U.S. Attorney Damian Williams said: “Gina Mestre betrayed and abused the trust placed in her by the NYPD and the people of New York.  She swore to protect the public from criminal activity, but instead participated in significant crimes of her own by passing confidential information to a gang leader and helping him evade capture for the murder of a rival gang member.  For violating her oath to the citizens of New York City and her fellow police officers, Mestre has been sentenced to spend more than five years in federal prison.”  

According to the allegations in the Indictment and other documents filed in federal court and based on statements made in public court proceedings:

MESTRE was an NYPD Officer assigned to the 52nd Precinct’s Public Safety Unit.  In the summer of 2020, a major focus of both the precinct and the Public Safety Unit was the reduction of gun violence in the area.  Much of that violence was attributed to members of the Shooting Boys, a violent street gang based in the University Heights section of the Bronx.

In or about June 2020, MESTRE began communicating with Andrew Done, a/k/a “Caballo,” the leader of the Shooting Boys.  MESTRE and Done communicated through secret social media accounts and phone numbers and eventually began an intimate relationship, during which MESTRE provided Done and other gang members with confidential, non-public law enforcement information about the federal grand jury investigation into the Shooting Boys.

MESTRE warned Done, and other gang members, that federal investigators were preparing to bring a federal indictment against the Shooting Boys.  MESTRE also warned Done about impending law enforcement operations, which enabled Done and other gang members to dispose of weapons and conceal other criminal activity before law enforcement arrived on scene.  In addition, MESTRE disclosed the identity of a cooperating witness who provided information about the gang to law enforcement.  Armed with this information, Done and other Shooting Boys assaulted the witness to prevent the witness from further cooperation and to send a clear message within the gang that the punishment for cooperation would be severe.  

On or about November 5, 2020, Done shot and killed a rival gang member (“Victim-1”) as Victim-1 sat in his car on Cromwell Avenue in the Bronx.  NYPD Detectives investigating the murder recovered security camera video (the “Video”) capturing Done’s commission of the murder.  Several members of the 52nd Precinct, including MESTRE, were tasked with identifying the shooter in the video.  In fact, MESTRE was ultimately one of several officers who actually identified Done as the perpetrator.

Despite identifying Done as the shooter and ostensibly participating in the NYPD’s efforts to apprehend him, MESTRE sent Done a copy of the Video to his phone and secretly communicated with Done the day of the murder and in the weeks afterwards.  Specifically, MESTRE warned Done about law enforcement’s efforts to capture him, allowing Done to eventually flee from the United States. 

In March 2022, 10 members of the Shooting Boys were charged in a 15-count indictment with various federal crimes, including racketeering conspiracy and murder.  Done was charged with the murder of Victim-1 and was apprehended in the Dominican Republic several months later. 

On November 17, 2022, Done pled guilty to racketeering conspiracy and admitted to his role in the murder of Victim-1.  On February 22, 2023, Done was sentenced to 35 years in prison.

*                *                *

In addition to the prison term, MESTRE, 33, of Mohegan Lakes, New York, was sentenced to two years of supervised release.

Mr. Williams praised the outstanding investigative work of the NYPD’s Internal Affairs Bureau, Group 25, and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York.   

The case is being prosecuted by the Office’s Violent & Organized Crime Unit.  Assistant U.S. Attorneys Dominic A. Gentile and James Ligtenberg are in charge of the prosecution.  

Damian Williams, the United States Attorney for the Southern District of New York; Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”); Brian J. Solecki, the Acting Special Agent in Charge of the Northeast Field Office of the U.S. Department of Defense - Office of Inspector General, Defense Criminal Investigative Service (“DCIS”); and Christopher Algieri, the Special Agent in Charge of the Northeast Field Office of the Department of Veterans Affairs Office of Inspector General (“VA OIG”), announced today that the United States has settled a civil fraud lawsuit against THE RADIOLOGY GROUP LLC and its CEO, ANAND LALAJI.

THE RADIOLOGY GROUP is a teleradiology company based in Atlanta, Georgia, that provides diagnostic radiology services to hospitals, urgent care centers, and primary care physician centers located across the country.  The settlement resolves claims that THE RADIOLOGY GROUP and LALAJI violated the False Claims Act by fraudulently billing federal health care programs when the U.S.-based radiologist just “rubber stamped” interpretation reports prepared by contractors in India who were not permitted to practice medicine in the United States or bill federal health care programs.  The Government further alleges that THE RADIOLOGY GROUP and LALAJI misrepresented who actually rendered the radiology services when seeking payments and improperly sought reimbursement for services furnished entirely by persons located outside of the United States in violation of applicable statutes and regulations.

Under the settlement approved yesterday by U.S. District Judge Analisa Torres, THE RADIOLOGY GROUP and LALAJI will pay a total sum of $3.1 million, of which $2,678,387.21 will be paid to the United States with the remainder being paid to various states.  As part of the settlement, THE RADIOLOGY GROUP and LALAJI also made extensive factual admissions regarding their conduct.  Among other things, THE RADIOLOGY GROUP and LALAJI admitted that they failed to ensure that their U.S.-based radiologists were conducting a meaningful and adequate review of draft interpretations of radiology scans prepared by India-based contractors.  THE RADIOLOGY GROUP and LALAJI also admitted that, on numerous occasions, they submitted claims to federal health care programs where the radiologist who reviewed and interpreted the imaging was someone other than the individual listed on the claim for reimbursement.

U.S. Attorney Damian Williams said: “The Radiology Group failed to put in place appropriate safeguards to ensure that their U.S.-licensed radiologists adequately reviewed non-credentialed contractors’ findings before transmitting the reports to physicians who relied on the findings to make patient care decisions.  This Office is committed to holding healthcare providers accountable when they violate clear rules and regulations designed to ensure the integrity of taxpayer funded healthcare programs and protect patient quality of care.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “As part of the settlement, The Radiology Group and Anand Lalaji admitted that they failed to ensure that their U.S.-based radiologists were conducting a meaningful and adequate review of draft radiology interpretation reports.  Defendants potentially jeopardized patients’ health by taking shortcuts when it came to ensuring that important radiological tests were done and reviewed properly.  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.”

VA OIG Special Agent in Charge Christopher Algieri said: “The VA OIG is dedicated to ensuring veterans receive the quality health care they deserve, and we will continue to work to make certain that VA healthcare programs are not compromised by fraudulent billing practices.  The VA OIG thanks the U.S. Attorney’s Office and our law enforcement partners for their efforts in this investigation.”

As alleged in the Complaint filed in Manhattan federal court: 

Diagnostic radiology involves the diagnosis of diseases and injuries using imaging techniques, such as Computed Tomography scans, Magnetic Resonance Imaging, and ultrasounds.  Radiologists review the generated images and prepare written reports summarizing their findings (an “Interpretation Report”).  Health care providers rely on these Interpretation Reports when diagnosing patient conditions and when making important decisions regarding patient medical care.

THE RADIOLOGY GROUP is a teleradiology practice that provides diagnostic radiology services to hospitals, urgent care centers, and primary care physician offices (the “Referring Providers”) located throughout the United States.  The Referring Providers transmitted imaging to THE RADIOLOGY GROUP so that THE RADIOLOGY GROUP could review the images and prepare Interpretation Reports.  Using online-based teleradiology platforms, THE RADIOLOGY GROUP sent the images to contractors located outside the United States, who would conduct initial reviews of the imaging and prepare draft Interpretation Reports.  After that process was complete, THE RADIOLOGY GROUP’s U.S.-based radiologists were supposed to conduct an independent and separate review of the imaging and make all necessary changes to the Interpretation Reports before transmitting them to the Referring Provider.  The final Interpretation Reports were signed by the U.S.-based radiologist, who was responsible for the Interpretation Report’s content.

THE RADIOLOGY GROUP and LALAJI knew that contractors located in India who prepared draft Interpretation Reports were not permitted to practice medicine in the United States or bill federal health care programs.  Nevertheless, certain radiologists at THE RADIOLOGY GROUP merely “rubber stamped” the draft reports and transmitted them to the providers without conducting a meaningful and adequate review of the findings.  For instance, one radiologist (“Radiologist A”) approved, signed, and transmitted to providers over 100,000 Interpretation Reports and frequently approved draft CT scan reports in less than 30 seconds. 

THE RADIOLOGY GROUP and LALAJI also understood that they were prohibited by federal health care program rules from submitting claims for reimbursement for radiology services if the radiologist listed as the rendering provider on the claim for reimbursement had not actually rendered the services.  THE RADIOLOGY GROUP and LALAJI, however, consistently submitted, or caused to be submitted, claims for payment to federal health care programs that identified either LALAJI or the other owner of THE RADIOLOGY GROUP as the rendering provider, even though they had not in fact rendered the radiology services for which reimbursement was sought.  Further, on numerous occasions, THE RADIOLOGY GROUP and LALAJI submitted, or caused to be submitted, claims for payment for diagnostic radiology services provided by a radiologist who resided and worked in the United Kingdom, in violation of relevant Medicare regulations. 

As part of the settlement, THE RADIOLOGY GROUP and LALAJI admitted and accepted responsibility for certain conduct alleged by the United States, including the following:

• THE RADIOLOGY GROUP and LALAJI knew that they could not bill federal health care programs for the radiology services unless a U.S.-based and licensed radiologist reviewed all of the images associated with the scan, reviewed the Interpretation Report prepared by the individual in India, and made any necessary changes to the Interpretation Report.  However, there were some instances when this did not occur.
• For example, THE RADIOLOGY GROUP employed a U.S.-based radiologist (“Radiologist A”) who repeatedly approved Interpretation Reports prepared by non-licensed individuals in India without reviewing relevant images associated with the scan and without conducting any meaningful review of the report or properly considering whether any changes needed to be made to it.
• THE RADIOLOGY GROUP and LALAJI failed to ensure that their U.S.-based radiologists were conducting a meaningful and adequate review of the draft interpretations of scans prepared by the non-licensed contractors in India.
• On numerous occasions, THE RADIOLOGY GROUP and LALAJI submitted claims to federal health care programs where the radiologist who reviewed and interpreted the imaging was someone other than the individual listed on the claim.
• THE RADIOLOGY GROUP and LALAJI understood that Medicare did not pay for medical services rendered by individuals located outside of the United States.  Nonetheless, on numerous occasions, THE RADIOLOGY GROUP and LALAJI submitted claims to Medicare for diagnostic radiology services rendered in the United Kingdom by a radiologist employed by THE RADIOLOGY GROUP who lived there. 

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

*                *                *

Mr. Williams praised the outstanding investigative work of HHS-OIG, DCIS, and VA-OIG, and thanked the Wisconsin Medicaid Fraud Control and Elder Abuse Unit for their extensive collaboration in the investigation and resolution of this case.

The case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Charles S. Jacob is in charge of the case.

Samuel Bankman-Fried, also known as SBF, 32, of Stanford, California, was sentenced today to 25 years in prison, three years of supervised release, and ordered to pay $11 billion in forfeiture for his orchestration of multiple fraudulent schemes. Bankman-Fried, who was the founder of the cryptocurrency exchange FTX and the cryptocurrency trading firm Alameda Research, misappropriated billions of dollars of customer funds deposited with FTX, defrauded investors in FTX of more than $1.7 billion, and defrauded lenders to Alameda of more than $1.3 billion. Bankman-Fried was previously found guilty on two counts of wire fraud, two counts of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud, and one count of conspiracy to commit money laundering, following a one-month trial before U.S. District Judge Lewis A. Kaplan, who imposed today’s sentence.

“There are serious consequences for defrauding customers and investors,” said Attorney General Merrick B. Garland, “Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice. I am grateful to the U.S. Attorney’s Office for the Southern District of New York and the FBI for their outstanding work in bringing Mr. Bankman-Fried to justice.”

“The FBI will aggressively investigate individuals, like Samuel Bankman-Fried, who engage in fraudulent schemes at the expense of the American public and our financial systems,” said FBI Director Christopher Wray. “We are proud of the successful collaboration that ended this massive mismanagement and misappropriation of billions of dollars. Today's sentencing should serve as a warning to others looking to use fraudulent means for personal gain — there are consequences for your actions.”

“Samuel Bankman-Fried orchestrated one of the largest financial frauds in history, stealing over $8 billion of his customers’ money,” said U.S. Attorney Damian Williams for the Southern District of New York. “His deliberate and ongoing lies demonstrated a brazen disregard for customers’ expectations and disrespect for the rule of law, all so that he could secretly use his customers’ money to expand his own power and influence. The scale of his crimes is measured not just by the amount of money that was stolen, but by the extraordinary harm caused to victims, who in some cases had their life savings wiped out overnight. As a result of his unprecedented fraud, Bankman-Fried faces 25 years in prison and forfeiture of over $11 billion dollars. Today’s sentence will prevent the defendant from ever again committing fraud and is an important message to others who might be tempted to engage in financial crimes that justice will be swift, and the consequences will be severe.”

According to the allegations contained in the indictment, the evidence offered at trial, and matters included in public filings:

Samuel Bankman-Fried was the founder and chief executive officer of FTX, an international cryptocurrency exchange. From 2019 to 2022, Bankman-Fried was the leader and mastermind of a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds. Bankman-Fried took FTX customer funds for his personal use, to make investments and millions of dollars of political contributions to candidates from both parties, and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency trading fund that Bankman-Fried also founded. Bankman-Fried also defrauded lenders to Alameda and equity investors in FTX by providing them false and misleading financial information that concealed his misuse of customer deposits.

Samuel Bankman-Fried repeatedly told his customers, his investors, and the public that customer deposits into FTX were kept safe and were held in custody for the customers, that customer deposits were kept separate from company assets, and that customer deposits would not be used by FTX. He also repeatedly claimed that his trading company, Alameda, did not have any privileged access to FTX and did not receive special treatment from FTX. Those statements were false, and Bankman-Fried in fact channeled billions of dollars in customer deposits from FTX to Alameda, and then used those funds to make investments for his own benefit, to make political contributions, and to spend on real estate, among other expenditures. He employed a variety of fraudulent means to perpetrate this fraud. For instance, Bankman-Fried directed co-conspirators to alter FTX’s computer code to allow Alameda to withdraw effectively unlimited amounts of cryptocurrency from the exchange. Bankman-Fried also made false statements to financial institutions to conceal his misuse of customer dollar deposits. And he directed the creation of false financial statements for Alameda’s lenders, inflated FTX’s revenues and profits in numbers provided to investors, and backdated contracts and other documents to conceal his fraudulent conduct.

Judge Kaplan authorized the government to use the funds recovered through the forfeiture process to provide compensation to victims of Bankman-Fried’s crimes.

The FBI investigated the case.

The Southern District of New York’s Securities and Commodities Fraud Task Force, with assistance from the office’s Illicit Finance & Money Laundering and Complex Frauds and Cybercrime Units are handling the case. Assistant U.S. Attorneys Nicolas Roos, Danielle Sassoon, Samuel Raymond, Thane Rehn, and Danielle Kudla are prosecuting the case.

Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI, announced that SAMUEL BANKMAN-FRIED, a/k/a “SBF,” was sentenced today to 25 years in prison for his orchestration of multiple fraudulent schemes.  The defendant, who was the founder of the cryptocurrency exchange FTX and the cryptocurrency trading firm Alameda Research, misappropriated billions of dollars of customer funds deposited with FTX, defrauded investors in FTX of more than $1.7 billion, and defrauded lenders to Alameda of more than $1.3 billion.  BANKMAN-FRIED was previously found guilty on two counts of wire fraud, two counts of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud, and one count of conspiracy to commit money laundering following a one-month trial before U.S. District Judge Lewis A. Kaplan, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “Samuel Bankman-Fried orchestrated one of the largest financial frauds in history, stealing over $8 billion of his customers’ money.  His deliberate and ongoing lies demonstrated a brazen disregard for customers’ expectations and disrespect for the rule of law, all so that he could secretly use his customers’ money to expand his own power and influence.  The scale of his crimes is measured not just by the amount of money that was stolen, but by the extraordinary harm caused to victims, who in some cases had their life savings wiped out overnight.  As a result of his unprecedented fraud, Bankman-Fried faces 25 years in prison and forfeiture of over $11 billion.  Today’s sentence will prevent the defendant from ever again committing fraud and is an important message to others who might be tempted to engage in financial crimes that justice will be swift, and the consequences will be severe.”

Attorney General Merrick B. Garland said: “There are serious consequences for defrauding customers and investors.  Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice.  I am grateful to the U.S. Attorney’s Office for the Southern District of New York and the FBI for their outstanding work in bringing Mr. Bankman-Fried to justice.”

FBI Assistant Director in Charge James Smith said: “Sam Bankman-Fried was justly sentenced to significant time behind bars for his multibillion-dollar defrauding of FTX customers.  The FBI will remain relentless in our efforts to ensure the perpetrators of fraud—no matter the nature—face appropriate punishment in the criminal justice system.”

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

BANKMAN-FRIED was the founder and chief executive officer of FTX, an international cryptocurrency exchange.  From 2019 to 2022, BANKMAN-FRIED was the leader and mastermind of a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds.  BANKMAN-FRIED took FTX customer funds for his personal use, to make investments and millions of dollars of political contributions to candidates from both parties, and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency trading fund that BANKMAN-FRIED also founded.  BANKMAN-FRIED also defrauded lenders to Alameda and equity investors in FTX by providing them false and misleading financial information that concealed his misuse of customer deposits.  

BANKMAN-FRIED repeatedly told his customers, his investors, and the public that customer deposits into FTX were kept safe and were held in custody for the customers, that customer deposits were kept separate from company assets, and that customer deposits would not be used by FTX.  He also repeatedly claimed that his trading company, Alameda, did not have any privileged access to FTX and did not receive special treatment from FTX.  Those statements were false, and BANKMAN-FRIED in fact channeled billions of dollars in customer deposits from FTX to Alameda, and then used those funds to make investments for his own benefit, to make political contributions, and to spend on real estate, among other expenditures.  He employed a variety of fraudulent means to perpetrate this fraud. For instance, BANKMAN-FRIED directed co-conspirators to alter FTX’s computer code to allow Alameda to withdraw effectively unlimited amounts of cryptocurrency from the exchange and made false statements to financial institutions to conceal his misuse of customer dollar deposits.  He also directed the creation of false financial statements for Alameda’s lenders, inflated FTX’s revenues and profits in numbers provided to investors, and backdated contracts and other documents to conceal his fraudulent conduct.

*                *                *

In addition to the prison term, BANKMAN-FRIED, 32, of Stanford, California, was sentenced to three years of supervised release and over $11 billion in forfeiture.  Judge Kaplan authorized the Government to use the funds recovered through the forfeiture process to provide compensation to victims of BANKMAN-FRIED’s crimes. 

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

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

“Yoil Weingarten, Yakov Weingarten, and Shmiel Weingarten, leaders of Lev Tahor, an extremist Jewish sect based in Guatemala, have been found guilty of kidnapping a 12-year-old boy and a 14-year-old girl and transporting the 14-year-old girl outside the United States to continue a sexual relationship with her adult male ‘husband.’  With this verdict, all nine Lev Tahor leaders and operatives charged for these heinous crimes have been held accountable.  The defendants’ conduct — which included forced child marriages, physical beatings, and family separations — is unthinkable and has caused irreparable harm to children in their formative years.  Whether in the name of religion or any other belief system, subjecting children to physical, sexual, or emotional abuse will never be tolerated by this Office.”

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that federal inmate DANIEL V. SMITH was charged with the murder of a fellow inmate.  SMITH was presented this morning before U.S. Magistrate Judge Andrew E. Krause.  The case has been assigned to U.S. District Judge Philip M. Halpern.

According to the allegations contained in the Indictment and statements made in court:[1]

On or about October 26, 2021, SMITH murdered Patrick Deck, an inmate at FCI Otisville.

*                *                *

SMITH, 63, was charged with one count of murder in the first degree, which carries a maximum sentence of death.

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.

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

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Jeffrey C. Coffman is 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 herein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York, and Darren McCormack, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the unsealing of an Indictment against global cryptocurrency exchange KuCoin and two of its founders, CHUN GAN, a/k/a “Michael,” and KE TANG, a/k/a “Eric,” for conspiring to operate an unlicensed money transmitting business and conspiring to violate the Bank Secrecy Act by willfully failing to maintain an adequate anti-money laundering (“AML”) program designed to prevent KuCoin from being used for money laundering and terrorist financing, failing to maintain reasonable procedures for verifying the identity of customers, and failing to file any suspicious activity reports.  KuCoin was also charged with operating an unlicensed money transmitting business and a substantive violation of the Bank Secrecy Act.  GAN and TANG remain at large. 

U.S. Attorney Damian Williams said: “As today’s Indictment alleges, KuCoin and its founders deliberately sought to conceal the fact that substantial numbers of U.S. users were trading on KuCoin’s platform.  Indeed, KuCoin allegedly took advantage of its sizeable U.S. customer base to become one of the world’s largest cryptocurrency derivatives and spot exchanges, with billions of dollars of daily trades and trillions of dollars of annual trade volume.  But financial institutions like KuCoin that take advantage of the unique opportunities available in the United States must also comply with U.S. law to help identify and drive out crime and corrupt financing schemes.  KuCoin allegedly deliberately chose not to do so.  As alleged, in failing to implement even basic anti-money laundering policies, the defendants allowed KuCoin to operate in the shadows of the financial markets and be used as a haven for illicit money laundering, with KuCoin receiving over $5 billion and sending over $4 billion of suspicious and criminal funds.  Crypto exchanges like KuCoin cannot have it both ways.  Today’s Indictment should send a clear message to other crypto exchanges: if you plan to serve U.S. customers, you must follow U.S. law, plain and simple.” 

HSI Acting Special Agent in Charge Darren McCormack said: “Today, we exposed one of the largest global cryptocurrency exchanges for what our investigation has found it to truly be: an alleged multibillion-dollar criminal conspiracy.  KuCoin grew to service over 30 million customers, despite its alleged failure to follow laws necessary to ensuring the security and stability of our world’s digital banking infrastructure.  The defendants’ alleged pattern of skirting these vitally important laws has finally come to an end.  I commend HSI New York’s El Dorado Task Force and our law enforcement partners for their commitment to the mission.”

According to the allegations in the Indictment and KuCoin’s statements on its website:[1]

FLASHDOT LIMITED, formerly known as “Phoenixfin Limited,” PEKEN GLOBAL LIMITED, and PHOENIXFIN PRIVATE LIMITED are three entities collectively doing business as global cryptocurrency exchange KuCoin.  GAN and TANG, among others, founded KuCoin in September 2017. 

KuCoin solicited business from U.S. customers through its spot trading platform and, later, its futures trading platform, which was launched in July 2019.  Since its founding in 2017, KuCoin has become one of the largest global cryptocurrency exchange platforms, with more than 30 million customers and billions of dollars’ worth of cryptocurrency in daily trading volume.  KuCoin’s website touts public rankings of cryptocurrency exchanges that place KuCoin in the top five worldwide.  One of these public rankings listed KuCoin as the fourth largest cryptocurrency derivatives exchange and fifth largest cryptocurrency spot exchange.  KuCoin, GAN, and TANG sought to serve, and have in fact served, numerous customers located in the United States and in the Southern District of New York.

As a result, at all relevant times, KuCoin has been a money transmitting business required to register with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) and, since July 2019, has been a futures commission merchant required to register with the U.S. Commodity and Futures Trading Commission (“CFTC”).  As a money transmitting business and a futures commission merchant, KuCoin is required to comply with the applicable Bank Secrecy Act provisions requiring maintenance of an adequate AML program, including customer identity verification, or know-your-customer (“KYC”) processes.  AML and KYC programs ensure that financial institutions, such as KuCoin, are not used for illicit purposes, including money laundering.

GAN, TANG, and KuCoin were aware of their U.S. AML obligations but willfully chose to flout those requirements.  KuCoin failed, for example, to implement an adequate KYC program.  Indeed, until at least July 2023, KuCoin did not require customers to provide any identifying information.  It was only in July 2023, after KuCoin was notified of a federal criminal investigation into its activities, that KuCoin belatedly adopted a KYC program for new customers.  However, this KYC process applied to new customers only and did not apply to KuCoin’s millions of existing customers, including the substantial number of customers based in the United States.  KuCoin also never filed any required suspicious activity reports, never registered with the CFTC as a futures commission merchant, and, through at least the end of 2023, never registered with FinCEN as a money transmitting business.

In fact, GAN, TANG, and KuCoin affirmatively attempted to conceal the existence of KuCoin’s U.S. customers in order to make it appear as if KuCoin was exempt from U.S. AML and KYC requirements.  Despite the fact that KuCoin gathered and tracked location information for its customers, KuCoin actively prevented its U.S. customers from identifying themselves as such when opening KuCoin accounts.  And KuCoin lied to at least one investor, in 2022, about where its customers were located, falsely representing that it had no U.S. customers when, in truth, KuCoin had a substantial U.S. customer base.  In fact, in a number of social media posts, KuCoin actively marketed itself to U.S. customers as an exchange where they could trade without having to undergo KYC.  For example, KuCoin stated in an April 2022 message on Twitter that “KYC is not supported to USA users, however, it is not mandatory on KuCoin to do KYC.  Usual transactions can be done using an unverified account-”

As a result of KuCoin’s willful failures to maintain the required AML and KYC programs, KuCoin has been used as a vehicle to launder large sums of criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes.  Since its founding in 2017, KuCoin has received over $5 billion, and sent over $4 billion, of suspicious and criminal proceeds.  Many KuCoin customers used its trading platform specifically because of the anonymity of the services it provided.  In other words, KuCoin’s no-KYC policy was integral to its growth and success.

*                *                *

GAN, 34, and TANG, 39, both citizens of China, are each charged with one count of conspiring to violate the Bank Secrecy Act and one count of conspiring to operate an unlicensed money transmitting business, each of which carries a maximum sentence of five years in prison. 

FLASHDOT LIMITED, an entity incorporated in the Cayman Islands; PEKEN GLOBAL LIMITED, an entity incorporated in the Republic of Seychelles; and PHOENIXFIN PRIVATE LIMITED, an entity incorporated in Singapore, together d/b/a “KuCoin,” are each charged with one count of conspiring to violate the Bank Secrecy Act, which carries a maximum sentence of five years in prison; one count of conspiring to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison; one count of violating the Bank Secrecy Act, which carries a maximum sentence of 10 years in prison; and one count of operating an unlicensed money transmitting business, which carries a maximum sentence of five years in prison. 

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

Mr. Williams praised the outstanding investigative work of HSI New York’s El Dorado Task Force.  Mr. Williams further thanked the Commodity Futures Trading Commission, which today filed a parallel civil action against KuCoin.

This matter is being handled by the Office’s Illicit Finance & Money Laundering Unit.  Assistant U.S. Attorneys Emily Deininger 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 today that BRIAN REED was sentenced to 15 years in prison by U.S. District Judge Phillip M. Halpern for attempted enticement of a minor.  The sentencing today followed REED’s guilty plea on October 23, 2023.

U.S. Attorney Damian Williams said: “Brian Reed’s actions demonstrate the depths of depravity and danger potentially lurking in the digital realm that connects us all. Let this sentencing serve as a reminder that this Office will harness every tool at our disposal to hold accountable those who prey on and exploit our youth.”

According to documents filed in this case and statements made in related court proceedings:

On May 26, 2022, an investigator with the Rockland County’s District Attorney’s Office (“Investigator-1), who was working in an undercover capacity and posing as a 13-year-old girl on an online platform, engaged in text communications with REED.  Investigator-1 told REED that she was 13 years old.  During the communications, REED requested sexually explicit photos of Investigator-1 and asked her to meet with him to have sex.  REED described the sexual things he wanted to do to Investigator-1 and, when she asked if he was “ok w my age,” REED responded, “Yes of course.”  REED made a plan to meet Investigator-1 on the evening of May 26, 2022, in Rockland County, New York.  That morning, REED told her, “Im going to make you moan so loud you are going to feel amazing” and instructed, “You should wear something thats easy to take off.”

On May 26, 2022, REED drove from New Jersey to Rockland County to have sex with the purported 13-year-old.  When he arrived at the designated meeting location, he was arrested.

Previously, on October 17, 2016, REED was convicted in Morris County Superior Court in New Jersey of endangering the welfare of a child through sexual conduct.  As a result of this conviction, on February 17, 2017, REED was sentenced to three years in prison and required to register as a sex offender.

*                *                *

In addition to the prison term, REED, 36, of Franklin, New Jersey, was sentenced to a lifetime of supervised release.

Mr. Williams praised the efforts of the Federal Bureau of Investigation, the Rockland County Sherriff’s Office, the Rockland County District Attorney’s Office, the Clarkstown Police Department, and the Orangetown Police Department 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.  

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 that KENNEDY CARTER, a convicted sex offender who had fled to Mexico from probation in Oregon following a conviction for encouraging child sexual abuse in the first degree in that state, was arrested yesterday evening and charged with sexual exploitation of a child and other child sex offenses.  Yesterday, March 21, 2024, CARTER was deported from Mexico by Mexican immigration authorities and arrived at San Francisco International Airport, where he was arrested by the FBI upon arrival.  CARTER will be presented today in San Francisco federal court before U.S. Magistrate Judge Laurel Beeler. 

U.S. Attorney Damian Williams said: “The charges unsealed today reflect the tenacity of the career prosecutors of this Office and our law enforcement partners who tracked down this alleged recidivist sex offender to Mexico after he fled from probation in Oregon.  The defendant went to great lengths to avoid responsibility for his alleged unconscionable actions, but we relentlessly pursue justice for victims of child sexual abuse, and those responsible will face the full weight of the law, no matter where they may hide.”

FBI Assistant Director in Charge James Smith said: “Kennedy Carter, a convicted sex offender, allegedly coerced a 12-year-old girl to send him sexually explicit photos and videos of herself over the Internet.  Carter’s arrest reaffirms the FBI’s commitment to protecting children from dangerous sexual predators.  Crimes of this nature are inexcusable, making victims out of some of our most vulnerable members of society.  We urge parents to continue having conversations with their children about safe online surfing and encourage the public to come forward with information that could help us identify other potential victims in this or any other case.” 

As alleged in the Complaint:[1]

From at least on or about May 20, 2023, through at least on or about May 29, 2023, CARTER knowingly induced, enticed, and coerced a 12-year-old female minor located in Putnam County (“Victim-1”) to engage in sexually explicit conduct, to take sexually explicit photos and videos of herself engaging in such conduct, and to transmit them over the internet to CARTER.  In addition, from at least on or about May 20, 2023, through at least on or about May 29, 2023, CARTER knowingly distributed material that contained child pornography, including photographs and videos of another minor female (“Victim-2”) to Victim-1 over the Internet.  Finally, because CARTER is required by federal or any other law to register as a sex offender, and is so registered, and has committed a felony offense involving a minor in engaging in sexual exploitation of a minor, he is also subject to an enhanced penalty as charged in the Complaint. 

Any individuals with information concerning KENNEDY CARTER and any individuals who may have encountered someone using the WhatsApp username 5215591447960@s.whatsapp.net or the aliases “Mikey Portuguez Perez” or “Javed Montero,” please contact the FBI at 1-800-CALL-FBI or https://tips.fbi.gov. 

*                *                *

CARTER, 27, previously of Corvallis, Oregon, is charged with one count of sexual exploitation of a child, which, because of his prior state conviction in Oregon for encouraging child sexual abuse in the first degree, carries an enhanced mandatory minimum sentence of 25 years in prison and a maximum sentence of 50 years in prison; one count of receipt and distribution of child pornography, which, again due to his prior conviction, carries an enhanced mandatory minimum sentence of 15 years in prison and a maximum sentence of 40 years in prison; and one count of penalties for registered sex offenders, which carries a mandatory minimum sentence of 10 years in prison to run consecutive to any sentence imposed for the underlying offense of sexual exploitation of a child.

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 the judge.

Mr. Williams praised the outstanding investigative work of the FBI’s Westchester Safe Streets Task Force and the Putnam County Sheriff’s Office.  Mr. Williams also thanked law enforcement partners in Mexico, the Benton County Probation Office in Benton County, Oregon, the Department of Justice’s Office of International Affairs, and the U.S. Attorney’s Office for the Northern District of California for their assistance.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorney Margaret N. Vasu 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 SILFREDO CASTILLO MARTINEZ pled guilty today before U.S. District Judge Paul A. Engelmayer to a Superseding Information charging him with sexual exploitation of a child and production of child pornography. 

U.S. Attorney Damian Williams said: “Silfredo Castillo Martinez exploited the trust placed in him as a daycare provider by sexually abusing one of the minor children under his care and by forcing that child to perform sex acts on him.  Additionally, Castillo Martinez had nearly 10,000 images depicting child pornography in his possession, all the while caring for children on a daily basis.  Castillo Martinez’s conduct is reprehensible, and he now faces more than a decade in prison for his crimes.”

According to the allegations contained in the Superseding Information and the Complaint filed on March 10, 2023:

From in or about July 2015 through in or about at least May 3, 2022, CASTILLO MARTINEZ operated a licensed daycare facility for children at his residence in the Bronx, New York (the “Daycare Facility”). 

From at least in or about May 2018 through at least in or about July 2018, CASTILLO MARTINEZ induced an 11-year-old minor (“Minor Victim-1”) who attended the Daycare Facility to engage in sexually explicit conduct with him at the Daycare Facility while CASTILLO MARTINEZ recorded that conduct on his cellphone and camera. 

On or about May 3, 2022, law enforcement agents executed a search warrant at CASTILLO MARTINEZ’s residence and seized several electronic devices belonging to CASTILLO MARTINEZ.  Those devices contained, among other things, several images and a video containing child pornography depicting Minor Victim-1 and approximately 9,800 other images depicting child pornography.

*                *                *

CASTILLO MARTINEZ, 34, of the Bronx, New York, pled guilty to one count of production of child pornography and 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.  CASTILLO MARTINEZ is scheduled to be sentenced by Judge Engelmayer on June 25, 2024, at 11:00 a.m. 

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 the judge.

Mr. Williams praised the outstanding investigative work of the U.S. Secret Service’s Internet Crimes Against Children Task Force, the Federal Bureau of Investigation, and the New York City Police Department.  Mr. Williams also thanked the Bronx County District Attorney’s Office for its assistance.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Jackie Delligatti 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”); and David Gibson, the Commissioner of the Mount Vernon Police Department, announced the arrest of ILARIO CONTRERAS, JERPI DIAZ-FELIZ, a/k/a “Jorge Diaz-Feliz,” JHOAN DIAZ-FELIZ, VICTOR JIMENEZ, and JOSEPH PEREZ.  The defendants are charged with murder in connection with an attempted gunpoint robbery of a Mount Vernon warehouse that sells various unlicensed marijuana and nicotine products.  Two individuals — one employee of the warehouse and one member of the robbery crew — were shot and killed during the failed robbery attempt.  The defendants were arrested and will be presented later today before U.S. Magistrate Judge Victoria Reznik.

U.S. Attorney Damian Williams said: “As alleged in the Complaint, these five defendants carried out a violent armed robbery that left two dead in Mount Vernon.  The dedication, bravery, and expertise of our law enforcement partners led to the swift arrest of this dangerous crew.  This was an outstanding coordinated effort to uphold the law and keep the public safe.  This Office is determined to ensure that these defendants now face justice.”

FBI Assistant Director in Charge James Smith said: “These five subjects allegedly orchestrated an attempted armed robbery of a warehouse that sells to smoke shops, which quickly turned deadly as a shootout ensued, culminating in the death of both an employee and one robbery crew affiliate.  The defendants’ alleged brazen actions demonstrated extreme disregard for public safety and posed a significant threat to the community.  The FBI will not cease its relentless pursuit of those who choose violence, especially using firearms, to further their criminal behavior.  We urge the public to contact us at 1-800-Call-FBI or at tips.fbi.gov with any additional information related to this case.” 

Mount Vernon Police Commissioner David Gibson said: “I would like to thank the U.S. Attorney’s Office for the Southern District of New York, the FBI’s Westchester County Safe Streets Task Force, the Westchester County District Attorney’s Office, and the New York Police Department for their partnership, assistance, and continued support in this investigation.  I would also like to thank the Westchester County Police Department and the Westchester Real Time Crime Center for their vital assistance and teamwork.  The Mount Vernon Police Department and the Patterson-Howard administration takes crime in our City seriously.  We want to send a message to those who seek to commit heinous crimes in our community.  We will partner with local, state, and federal partners to prosecute them to the fullest extent of the law. ”

As alleged in the Complaint filed today in White Plains federal court:[1] 

On or about March 19, 2024, ILARIO CONTRERAS, JERPI DIAZ-FELIZ, JHOAN DIAZ-FELIZ, VICTOR JIMENEZ, JOSEPH PEREZ, and others known and unknown attempted to rob at gunpoint a warehouse in Mount Vernon that sells various unlicensed marijuana and nicotine products.  As employees of the warehouse were assisting customers, approximately 10 to 15 people, including the defendants, approached the employees and customers with weapons and forced them back into the warehouse at gunpoint.  A still image from video surveillance outside the warehouse is depicted below:

Shortly after the defendants and others approached the employees and customers with firearms, a gunfight between the warehouse employees and defendants broke out.  As a result, one of the employees and one of the robbers were killed.

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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CONTRERAS, 23; JERPI DIAZ-FELIZ, 25; JHOAN DIAZ-FELIZ, 23; JIMENEZ, 35; and PEREZ, 26, are each charged with one count of conspiracy to commit Hobbs Act Robbery, which carries a maximum sentence of 20 years in prison, one count of conspiracy to engage in drug trafficking, which carries a maximum sentence of life in prison, one count of possessing and discharging a firearm in furtherance of drug trafficking activity, which carries a maximum sentence of life in prison, and murder through the use of a firearm in furtherance of a drug trafficking crime, which carries a maximum sentence of the death penalty or life imprisonment.

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

Mr. Williams praised the work of the FBI’s Westchester County Safe Streets Task Force and the Mount Vernon Police Department.  Mr. Williams also thanked the Westchester County District Attorney’s Office, the Westchester County Police Department, the New York City Police Department, and the Westchester Real Time Crime Center for their invaluable assistance.  

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Jared D. Hoffman and Justin L. Brooke are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that MENDEL ZILBERBERG was sentenced today to 30 months in prison in connection with a scheme to obtain a fraudulent $1.4 million loan from Park Avenue Bank.  The defendant was a member of Park Avenue Bank’s board of directors at the time of the offense.  ZILBERBERG was previously found guilty following a one-week trial before U.S. District Judge George B. Daniels, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Those entrusted with the stewardship of financial institutions must uphold their responsibilities with integrity, not exploit their positions.  Mendel Zilberberg’s manipulation of his roles as a legal practitioner and a director of Park Avenue Bank exemplifies a disturbing breach: one that led to a staggering loss for the institution.  Safeguarding the integrity of our financial systems is imperative, and this Office will not tire in our mission to track down those who pose threats to this vital cornerstone of stability.”

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

In or about 2009, ZILBERBERG conspired with a co-defendant, Aron Fried, and others to obtain a fraudulent loan from Park Avenue Bank (the “Bank”).  Knowing that the co-conspirators would not be able to obtain the loan directly, the co-conspirators recruited a straw borrower (the “Straw Borrower”) to make the loan application.  The Straw Borrower applied for a $1.4 million loan from the Bank on the basis of numerous lies, as directed by ZILBERBERG and his co-conspirators. 

ZILBERBERG used his privileged position at the Bank to ensure that the loan was processed promptly.  Based on the false representations made to the Bank and ZILBERBERG’s involvement in the loan approval process, the Bank issued a $1.4 million loan to the Straw Borrower, which was quickly disbursed to ZILBERBERG and his co-conspirators through multiple bank accounts and transfers.  In total, ZILBERBERG received more than approximately $500,000 of the loan proceeds.  The Straw Borrower received nothing from the loan and ultimately defaulted, resulting in a loss to the Bank of over $1 million.

On November 15, 2022, Fried pled guilty to conspiracy to commit bank fraud.  On April 10, 2023, Judge Daniels sentenced Fried to one year and one day in prison. 

*                *                *

In addition to the prison term, ZILBERBERG, 65, of Monsey, New York, was sentenced to three years of supervised release and ordered to pay $1,066,853 in restitution and $506,000 in forfeiture.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation’s Office of the Inspector General.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Dina McLeod, Daniel G. Nessim, and Kimberly Ravener, with the assistance of Paralegal Specialist Joseph Carbone, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict yesterday against DAVID BREND and GUSTAVO RODRIGUEZ on one count of conspiracy to commit wire fraud in connection with BREND’s and RODRIGUEZ’s participation in a large-scale cryptocurrency Ponzi scheme known as IcomTech.  U.S. District Judge Jennifer L. Rochon presided over the two-week trial.

U.S. Attorney Damian Williams said: “IcomTech defrauded tens of thousands of people out of tens of millions of dollars.  It offered the false promise of easy riches based on supposed cryptocurrency investments but wound up cheating working people out of their hard-earned money.  Yesterday, David Brend and Gustavo Rodriguez – two individuals who were central to the IcomTech Ponzi scheme – were swiftly convicted by a unanimous jury for their role in defrauding IcomTech investors.  This verdict should send a clear message to those who engage in Ponzi schemes — whether in the cryptocurrency markets or elsewhere — that this Office is committed to rooting out fraud in all its forms and holding those responsible to full account.  Now, as a result of their lies to hardworking people, Brend and Rodriguez stand convicted of a federal crime and face substantial time in prison.”

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

IcomTech launched in mid-2018, when co-defendant DAVID CARMONA hired RODRIGUEZ to build a website for the scheme.  IcomTech was a purported cryptocurrency mining and trading company that promised to earn its victim-investors profits in exchange for their purchase of purported cryptocurrency-related investment products.  CARMONA, BREND, and the other promoters of IcomTech falsely promised their respective victims, among other things, that profits from the companies’ cryptocurrency trading and mining would result in guaranteed daily returns on victims’ investments.  In reality, IcomTech did not engage in cryptocurrency trading or mining for its Investors, and BREND and IcomTech’s other promoters used victim funds to pay other victims, to further promote the schemes, and to enrich themselves.

IcomTech promoters, including BREND, traveled throughout the United States and abroad, where they hosted lavish expos and small community presentations aimed at luring victims to invest in the schemes, including in the Southern District of New York.  During larger-scale events, IcomTech promoters presented on purported investment products and the compensation plan, encouraged victims to invest as a means of achieving financial freedom, and boasted about the amount of money they were earning.  IcomTech promoters often showed up at larger-scale events in expensive cars and wearing luxury clothing as a way of exhibiting their purportedly legitimate success from IcomTech.  The atmosphere of these events was festive and designed to generate excitement about the schemes.

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

RODRIGUEZ worked with CARMONA to run IcomTech’s website and online portal, where victims were provided with personal accounts.  CARMONA and RODRIGUEZ discussed how to structure IcomTech’s compensation plan and investment products; for example, RODRIGUEZ advised CARMONA on where CARMONA should set the purported daily returns on victims’ investment packages and on the size of the investment packages that CARMONA should offer for sale.

At least as early as August 2018, victims who attempted to withdraw money from their online portal accounts had difficulty doing so, and when they complained to promoters, they were met with excuses, delays, and hidden fees, if they were able to make any withdrawals at all.  Despite these complaints, IcomTech promoters, including BREND, continued to promote IcomTech and accept victims’ investments, and RODRIGUEZ continued to maintain the website.  As complaints mounted, IcomTech began offering proprietary crypto-tokens for sale as a means of injecting liquidity into IcomTech.  Promoters of the schemes claimed that these tokens, known as “Icoms,” would eventually be worth a significant amount of money when they were accepted by companies for payment for goods and services.  This was false.  In reality, “Icoms” were essentially worthless and resulted in further financial loss to victims.  By in or about the end of 2019, IcomTech stopped making payments to victims, and IcomTech collapsed.

*                *                *

BREND, 49, of Tampa, Florida, and RODRIGUEZ, 47, of North Hollywood, California, were each convicted of one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.

The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendants will be determined by the judge.  BREND is scheduled to be sentenced by Judge Rochon on June 27, 2024, at 10:00 a.m., and RODRIGUEZ is scheduled to be sentenced by Judge Rochon on June 28, 2024, at 10:00 a.m.

Mr. Williams praised the outstanding investigative work of Special Agents from Homeland Security Investigations’ El Dorado Task Force.  Mr. Williams also thanked the Securities and Exchange Commission and the Commodity Futures Trading Commission for their assistance.

If you believe you are a victim of the IcomTech fraud, updated information regarding the case and victims’ rights, as well as contact information for the victim witness coordinator is available here.

The case is being handled by the Office’s Illicit Finance & Money Laundering Unit.  Assistant U.S. Attorneys Michael D. Maimin, T. Josiah Pertz, Benjamin A. Gianforti, and Cecilia E. Vogel are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced that VINOTH PONMARAN pled guilty today to participating in a conspiracy that for several years exploited elderly victims by remotely accessing their computers and convincing victims to pay for computer support services they did not need, and which were never actually provided.  In total, the conspiracy generated more than $6 million in criminal proceeds from at least approximately 6,500 victims.  PONMARAN pled guilty to conspiracy to commit wire fraud and conspiracy to intentionally damage victims’ computers before U.S. District Judge Vernon S. Broderick, to whom his case is assigned.

U.S. Attorney Damian Williams said: “As he admitted today, Vinoth Ponmaran was a leader of a sophisticated fraud scheme that preyed on thousands of victims, including the elderly.  This conspiracy caused pop-up windows to appear on victims’ computers — pop-up windows which claimed, falsely, that a virus had infected the victim’s computer.  Through this and other misrepresentations, this prolific fraud scheme deceived victims into paying a total of more than $6 million.”

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

From approximately March 2015 through July 2018, PONMARAN was a member of a criminal fraud ring (the “Fraud Ring”) based in the United States and India that committed a technical support fraud scheme targeting elderly victims located across the United States and Canada, including in the Southern District of New York.  The Fraud Ring’s primary objective was to trick victims into believing that their computers were infected with malware in order to deceive them into paying hundreds or thousands of dollars for phony computer repair services.  Over the course of the conspiracy, the Fraud Ring generated more than $6 million in proceeds from at least 6,500 victims.

The scheme generally worked as follows.  First, the Fraud Ring caused pop-up windows to appear on victims’ computers.  The pop-up windows claimed, falsely, that a virus had infected the victims’ computers.  The pop-up windows directed the victims to call a particular telephone number to obtain technical support.  In at least some instances, the pop-up windows threatened victims that, if they restarted or shut down their computer, it could “cause serious damage to the system,” including “complete data loss.”  In an attempt to give the false appearance of legitimacy, in some instances, the pop-up windows included, without authorization, the corporate logo of a well-known, legitimate technology company.  In fact, no virus had infected victims’ computers, and the technical support phone numbers in the pop-up windows were not associated with the legitimate technology company.  Rather, these representations were false and were designed to trick victims into paying the Fraud Ring to “fix” a problem that did not exist.  And while the purported “virus” was a hoax, the pop-up windows themselves did cause various victims’ computers to completely “freeze,” thereby preventing these victims from accessing the data and files in their computer — which caused some victims to call the phone number listed in the pop-up windows.  In exchange for victims’ payment of several hundred or thousand dollars (depending on the precise “service” victims purchased), the purported technicians remotely accessed the victim’s computers and ran an anti-virus tool, which is free and available on the Internet. 

PONMARAN was an India-based leader of the Fraud Ring.  Among other things, PONMARAN managed a call center in India that was used to provide purported computer repair services to victims of the scheme.  PONMARAN also recruited co-conspirators in the United States to register fraudulent corporate entities and open bank accounts that were used to receive fraud proceeds from victims of the scheme.  PONMARAN also laundered fraud proceeds in multiple ways, including by directing co-conspirators to wire fraud proceeds to accounts in India and the United States.

*                *                *

PONMARAN, 35, a citizen of India, pled guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to intentionally damage a protected computer, each of which carries a maximum penalty of five years in prison.  Under the terms of his plea agreement, PONMARAN has agreed to forfeit $6,110,884.51 and to pay restitution of $1,851,830.18.

The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as PONMARAN’s sentence will be determined by the judge.  PONMARAN’s sentencing is scheduled for June 24, 2024, at 3:00 p.m.

PONMARAN’s co-defendants, Romana Leyva and Ariful Haque, were both sentenced by U.S. District Judge Paul A. Crotty in 2022, following their respective guilty pleas.  Leyva was sentenced to 100 months in prison and three years of supervised release, and she was ordered to forfeit $4,679,586.93 and to pay restitution of $2,707,882.91.  Haque was sentenced to one year and one day in prison and three years of supervised release, and he was ordered to forfeit $38,886.32 and to pay restitution of $470,672.16.

Mr. Williams praised the outstanding work of the New York Office of Homeland Security Investigations’ El Dorado Task Force, Cyber Intrusion/Cyber Fraud Group.  Mr. Williams also thanked the New York City Police Department for its assistance on this case. 

This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Michael D. Neff is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that NAREK MARUTYAN and SARO MOURADIAN, a/k/a “Paul Mouradian,” were sentenced today to six years and 10 months in prison, respectively, for their participation in a multi-year, coast-to-coast credit card fraud scheme run by a racketeering enterprise referred to as “Pure Armenian Blood” or “P.A.B.”  MARUTYAN, a leader of the P.A.B., previously pled guilty to participating in a racketeering conspiracy on June 12, 2023, before U.S. Magistrate Judge Ona T. Wang, and MOURADIAN, who owned and operated a Florida-based business that was used by the P.A.B. to run sham credit card charges, previously pled guilty to participating in a conspiracy to commit access device fraud on August 17, 2023, before U.S. Magistrate Judge Katherine H. Parker.  U.S. District Judge Victor Marrero imposed today’s sentences.   

U.S. Attorney Damian Williams said: “Pure Armenian Blood’s members enriched themselves and their criminal associates for almost a decade through fraudulent schemes that involved stealing others’ identities and spending millions of dollars of other people’s money as though there were no consequences.  As a leader of the sophisticated, organized criminal enterprise, Narek Marutyan orchestrated these schemes and reaped the ill-gotten gains.  He now faces years in prison for his crime.  This prosecution reaffirms our unwavering commitment to combating organized crime in all its forms.”

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

Pure Armenian Blood was an organized criminal group operating under the direction and protection of an unindicted co-conspirator (“CC-1”), a “vor v zakone” or “vor,” which are Russian phrases translated roughly as “Thief-in-Law” or “Thief,” and which refer to an order of elite criminals from the former Soviet Union who receive tribute from other criminals, offer protection, and use their recognized status as a vor to adjudicate disputes among lower-level criminals.  Members and associates of Pure Armenian Blood operated under the direction and protection of CC-1, a vor of Armenian descent previously based in Los Angeles before being deported in or about 2018.  Pure Armenian Blood operated through groups of individuals, often with overlapping members or associates, dedicated to criminal aims, particularly identity theft, access device fraud, and credit card fraud, among others.  While Pure Armenian Blood exploited victims and the financial system in New York City, it had operations in various locations throughout the U.S. and abroad, including through the use of purportedly legitimate business entities operating under the control and in conjunction with members of P.A.B. at various points throughout the conspiracy.

As a leader of the P.A.B. in New York, MARUTYAN orchestrated P.A.B’s various illicit activities, including the use of stolen personal identifying information, fraudulently opening and exhausting lines of credit, making purchases at collusive businesses with counterfeit credit cards or credit cards that were fraudulently opened, selling goods purchased with those lines of credit for profit, and the falsification of documents to “clean” the credit of account holders in whose names the lines of credit were opened.

As the owner and operator of two of the collusive businesses used by the P.A.B. to facilitate the credit card fraud scheme, MOURADIAN used credit cards that had been fraudulently obtained to run sham charges for which no legitimate goods or services were provided in exchange.  He also provided personal identifying information of individuals that he knew to P.A.B. members, who used that information to fraudulently obtain additional credit cards that were used in furtherance of the fraud scheme.

*                *                *

In addition to his prison term, MARUTYAN, 33, of Brooklyn, New York, was ordered to pay restitution of $4,258.999.79 and forfeiture of $4,258.999.79.  MOURADIAN, 40, of Hollywood, Florida, was ordered to pay restitution of $517,502.00 and forfeiture of $50,190.00.  In addition to MARUTYAN and MOURADIAN, five other co-defendants have pled guilty and been sentenced, and one other co-defendant has pled guilty but has not yet been sentenced, as set forth below.

Mr. Williams praised the outstanding work of the New York Field Office of the Federal Bureau of Investigation’s Eurasian Organized Crime Squad, as well as the FBI’s New Jersey, Los Angeles, and Miami offices, Homeland Security Investigations, the New York City Police Department, the United States Postal Inspection Service, and United States Customs and Border Protection. 

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

The prosecution of this case is being handled by the Office’s Illicit Finance & Money Laundering Unit.  Assistant U.S. Attorney Emily Deininger is in charge of the prosecution.

DEFENDANT

CHARGE OF CONVICTION

SENTENCE

Narek Marutyan

Racketeering Conspiracy

6 Years

Albert Marutyan

Racketeering Conspiracy

51 Months

Davit Yeghoyan

Racketeering Conspiracy

45 Months

Mikayel Yeghoyan

Racketeering Conspiracy

41 Months

Saro Mouradian

Access Device Fraud

10 Months

Zaven Yerkaryan

Access Device Fraud

Pending

Vahe Hovhannisyan

Travel Act Money Laundering

364 Days

Gohar Illangyozyan

Making False Statements to Law Enforcement

Time Served

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 JONATHAN MOYNAHAN LARMORE with tender offer fraud and securities fraud in connection with LARMORE’s announcement of a fake tender offer to manipulate the stock price of WeWork, Inc. (“WeWork”).  LARMORE is alleged to have announced a false $77 million tender offer for WeWork stock, news of which immediately led investors to buy WeWork stock at fraudulently inflated prices during after-hours trading, in an effort to drive up the value of his WeWork call options and shares.  LARMORE was arrested this morning and will be presented in federal court later today in the Middle District of Florida.  The case is assigned to U.S. District Judge Paul A. Engelmayer.

U.S. Attorney Damian Williams said: “Jonathan Moynahan Larmore's alleged actions strike at the heart of market integrity and investor confidence.  By allegedly orchestrating a deceptive scheme involving a counterfeit tender offer, he purportedly preyed upon investors, artificially inflating the value of WeWork stock for personal enrichment.  The charges leveled against Larmore highlight the profound implications of his alleged fraudulent conduct, emphasizing the imperative of accountability and transparency in our financial systems.”

FBI Assistant Director in Charge James Smith said: “Jonathan Larmore allegedly drafted a fraudulent press release announcing a fictitious tender offer to inflate WeWork stock prices, after personally investing in the company through call options. Thankfully, Larmore was unable to widely distribute the press release before the end of the trading day, which failed to increase the share price in time and caused Larmore’s options to expire rather than making him millions. As alleged, even though his scheme did not net him his desired profits, Larmore’s conduct artificially impacted the market and caused harm to other shareholders.  This indictment reaffirms the FBI’s commitment to protecting our nation’s economic integrity by holding responsible those who manipulate the system for financial gain.”

As alleged in the Indictment:[1]

In or about the fall of 2023, LARMORE perpetrated a scheme to use a false and fraudulent tender offer to manipulate the stock price of WeWork, a co-working space company that was, at all relevant times, headquartered in New York, New York, and publicly traded on the New York Stock Exchange.

LARMORE executed his scheme in three steps.  First, on or about October 6, 2023, LARMORE created Cole Capital Funds LLC (“Cole Capital”), a purported a real estate investment firm that was, in fact, merely a sham company.  Second, on or about November 1, 2023, and November 2, 2023, LARMORE spent more than $775,000 buying tens of thousands of cheap, short-dated, out-of-the-money WeWork call options (the vast majority of which were set to expire on November 3, 2023 at 4:00 p.m. EDT) and hundreds of thousands of shares of WeWork common stock — the latter primarily because two of LARMORE’s brokerage firms did not authorize him to trade options, but did authorize him to buy equities.  Third, on or about November 3, 2023, LARMORE caused a press release to be published announcing that Cole Capital proposed to acquire 51% of all outstanding shares owned by minority shareholders of WeWork at a more-than-700% premium in an all-cash offer worth more than $77 million.  At the time, WeWork was on the verge of bankruptcy.

In fact, neither LARMORE nor Cole Capital had the intent or ability to execute the announced tender offer.  Instead, LARMORE intended for news of the tender offer to fraudulently inflate WeWork’s share price and, thereby, to increase the value of LARMORE’s newly acquired WeWork call options and shares.

On or about November 3, 2023, at approximately 5:12 p.m. EDT, the press release about Cole Capital’s purported tender offer was published.  Within approximately one minute of publication, in after-hours trading, WeWork’s share price quickly increased more than 70% from $.85 to $1.45, and continued to rise until 5:31 p.m. EDT, when the stock reached its high of $2.14, which was a more-than-150% increase over the stock price prior to the publication of the press release.

The WeWork call options LARMORE purchased could have made LARMORE millions of dollars if the news of LARMORE’s fraudulent tender offer had caused WeWork’s share price to increase significantly prior to the expiration of LARMORE’s options.  Unfortunately for LARMORE, he mistimed how long it would take to properly format his press release and have it published.  As a result of these delays, LARMORE’s fraudulent press release was not published—and WeWork’s share price did not accordingly rise—until approximately 5:12 p.m. EDT on or about November 3, 2023, which was about an hour after the vast majority of LARMORE’s WeWork call options had expired worthless at 4:00 p.m. EDT that day.

On the following Monday, November 6, 2023, WeWork filed for Chapter 11 bankruptcy protection.  On or about November 10, 2023, the small number of remaining WeWork options LARMORE had purchased expired out of the money and worthless.

*                *                *

LARMORE, 51, of Punta Gorda, Florida, is charged with one count of tender offer fraud and one count of securities fraud, each of which carries a maximum sentence of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and 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.  Mr. Williams also thanked the U.S. Securities and Exchange Commission, which filed a civil action against LARMORE on November 28, 2023, for its assistance and cooperation in the investigation.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Justin V. Rodriguez and Alex Rossmiller 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, announced today that MICHAEL PASCHAL was sentenced to 11 years in prison by U.S. District Judge Vernon S. Broderick for sex trafficking a minor victim.  Today’s sentencing followed PASCHAL’s conviction on all counts at trial on May 9, 2023.

U.S. Attorney Damian Williams said: “Michael Paschal trafficked a vulnerable teenager who was one third his age, promising her food and shelter and immediately turning on her.  He exploited the victim for his own financial gain, and when confronted by law enforcement, he showed no remorse for his despicable actions.  Thanks to the courageous testimony of the victim, our law enforcement partners, and the career prosecutors of this Office, today, he was justly sentenced to over a decade in prison for his crimes.”

According to the Indictment and statements made in court proceedings and filings:

In July 2020, PASCHAL induced a minor victim (“Minor Victim-1”) to travel from another state to PASCHAL’s Bronx residence with the intent to sex traffic Minor Victim-1.  PASCHAL operated a prostitution business from that residence in the Bronx.  Minor Victim-1 stayed at PASCHAL’s residence for several weeks in July 2020, during which time PASCHAL directed Minor Victim-1 to engage in commercial sex and profited from it. 

Minor Victim-1 was then returned to her home state, but several weeks later, PASCHAL again began sex trafficking Minor Victim-1 from his residence in the Bronx.  PASCHAL posted prostitution ads containing sexually explicit photographs of Minor Victim-1 and communicated with sex buyers to facilitate commercial sex with Minor Victim-1.

PASCHAL sex trafficked Minor Victim-1, and worked with others to ensure that Minor Victim-1 was engaging in commercial sex for his profit, for weeks until she was recovered from PASCHAL’s residence in or about December 2020.  When confronted, PASCHAL told law enforcement, in sum and substance, “what’s the big deal, she’s about to turn 18 anyway.”

*                *                *

In addition to the prison term, PASCHAL, 53, of the Bronx, New York, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding work of Homeland Security Investigations. 

The case is being prosecuted by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Kevin Mead, Jackie Delligatti, and Jane Kim are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SETH MARKIN was sentenced by U.S. District Judge Edgardo Ramos to 15 months in prison for his participation in a scheme to trade in stock of Pandion Therapeutics (“Pandion”) based on material, non-public information that he misappropriated from his then-girlfriend and stole from her employer, a major law firm where his then-girlfriend was an attorney assigned to work on the acquisition of Pandion by Merck & Co. (“Merck”).  MARKIN was arrested in July 2022 and pled guilty to securities fraud based on insider trading on December 4, 2023.

U.S. Attorney Damian Williams said: “Seth Markin betrayed the trust of his then-girlfriend when he misappropriated confidential information, traded based on that information, and tipped several friends and family members.  Markin knew his actions were wrong and lied, repeatedly, to try to cover up his scheme.  Markin, who had been accepted into the FBI as a new agent trainee at the time of his conduct, finds himself in a complete reversal of fortune — instead of investigating crimes, he’ll now spend time in prison.  Today’s sentence should serve as a stark reminder that, no matter who you are, if you try to cheat the system by stealing and trading based on material, non-public information, you will be punished.”

As alleged in the Indictment, other public court documents, and statements made during court proceedings:

In early 2021, SETH MARKIN and BRANDON WONG together made more than $1.4 million dollars in illegal profits by trading in stock based on inside information that MARKIN stole from his then-girlfriend, who was at the time an attorney at a major law firm in Washington D.C. (the “Law Firm Associate”).  At the time, MARKIN had been accepted into the Federal Bureau of Investigation (“FBI”) as a new agent trainee, and WONG was a systems analyst at an education company.  In February 2021, MARKIN secretly looked through the Law Firm Associate’s confidential work documents, without her permission, and learned that, in a matter of weeks, Merck, a publicly traded pharmaceutical company, was going to acquire Pandion, a publicly traded biotechnology company, for approximately three times the value of Pandion’s share price.  MARKIN immediately purchased Pandion stock on the basis of this material, non-public information and also told several family members and friends to purchase Pandion’s stock, causing WONG, another friend, and several family members to do so, including Family Member-1, Family Member-2, Family Member-3, Family Member-4, and Friend-1.  In text messages, MARKIN assured WONG that he was “not uncertain” that when the “news drop[ped]” about Pandion, the price would “EXPLODE,” and they would earn “triple gains.”  

WONG purchased hundreds of thousands of dollars’ worth of Pandion shares based on the material, non-public information he received from MARKIN.  In addition to his purchases of Pandion stock, WONG told at least seven other people to purchase Pandion shares, causing some of the people he tipped to purchase tens or hundreds of thousands of dollars’ worth of Pandion stock, including Family Member-5, Friend-2, Friend-3, Friend-4, Friend-5, Friend-6, and Friend-7.

In total, MARKIN and WONG together caused at least 20 people to trade in Pandion stock based on the material, non-public information that MARKIN misappropriated from his girlfriend, resulting in millions of dollars of illegally obtained trading profits.  To conceal their illegal insider trading scheme, MARKIN and WONG used an encrypted messaging application and deleted many of their text messages with each other.  They also agreed on a cover story that they could provide to law enforcement, namely, that if they were asked how they anticipated Pandion’s stock price increase, they could say they “read it on Stocktwit,” in reference to a social media platform for sharing stock ideas, and falsely say that the news was “publicly being announced there.”

After Merck’s acquisition of Pandion was announced publicly, and the Pandion stockholdings of MARKIN and WONG, and those whom they tipped, significantly increased in value, the defendants sold their shares of Pandion for significant profits.  With their illegal profits, the defendants and their tippees purchased luxury items and bought gifts for each other.  For example, WONG purchased for MARKIN a Rolex watch valued at approximately $40,000, a trip to Hawaii, and a meal at a three-Michelin-starred restaurant in New York that cost more than $1,000.  WONG also purchased a home in Florida.

Thereafter, MARKIN lied in order to hide his illegal insider trading.  In or about June 2021, after MARKIN and the Law Firm Associate had ended their relationship and as MARKIN was preparing to begin training as a new agent at the FBI Academy in Quantico, Virginia, the Law Firm Associate called MARKIN to ask why MARKIN’s name had come up in an inquiry by the Financial Industry Regulatory Authority into trading in Pandion stock.  In response, MARKIN lied to the Law Firm Associate and falsely claimed that he did not trade in Pandion stock.

MARKIN subsequently took steps to further conceal his criminal activity.  On November 18, 2021, MARKIN lied to FBI agents when he was interviewed about his Pandion trading.  That day, Special Agents from the FBI interviewed MARKIN in connection with an investigation they told him was being conducted by law enforcement in the Southern District of New York relating to insider trading in Pandion stock.  During the interview, MARKIN adhered to the fake cover story he and WONG had concocted and falsely told the agents that he learned about Pandion on StockTwits, that he purchased the stock because of a recent earnings report and a new board member addition, and that he did not know that his former girlfriend worked on the Pandion transaction.

*                *                *

In addition to the prison sentence, MARKIN, 32, of Washington Crossing, Pennsylvania, was sentenced to three years of supervised release and ordered to forfeit $82,366. 

Mr. Williams praised the outstanding investigative work of the FBI and the Department of Justice’s Office of the Inspector General.  Mr. Williams also thanked the U.S. Securities and Exchange Commission, which has filed parallel civil actions.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Nicolas Roos and Negar Tekeei are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that VIRGIL WARDLOW was sentenced today to 15 years in prison for paying for commercial sex with a minor using fentanyl-laced pills that caused the death of a 19-year-old victim.  WARDLOW previously pled guilty to one count of distribution of narcotics before by U.S. District Judge Mary Kay Vyskocil, who imposed today’s sentence.  

U.S. Attorney Damian Williams said: “The consequences of the defendant’s conduct are heart-wrenching:  The defendant paid for sex with a 16-year-old victim using fentanyl-laced pills, which the victim’s 19-year-old friend then ingested, poisoning her and causing her death.  Today’s sentence sends a powerful message to those who traffic deadly drugs to vulnerable victims and demonstrates that this Office will seek justice for families facing the horrific tragedy of losing a loved one to fentanyl poisoning and for victims of child sexual exploitation.”

According to court filings and statements made in court proceedings:

WARDLOW engaged in a pattern of paying for commercial sex with black market pills that contained fentanyl.  On or about March 25, 2023, at a hotel room in the Bronx, New York, WARDLOW provided two of those pills to a 16-year-old female (“Victim-1”) in exchange for sex with Victim-1.  After WARDLOW had sex with Victim-1 and WARDLOW left the hotel room, Victim-1 and her 19-year-old female friend (“Victim-2”) ingested the pills provided by WARDLOW.  Thereafter, Victim-1 became ill, and Victim-2 became unconscious and died of a drug poisoning.

Between at least on or about February 8, 2023, and on or about April 24, 2023, WARDLOW exchanged several messages with other individuals in which WARDLOW offered to provide pills in exchange for sex or money.  WARDLOW sent these messages using an anonymized cellphone number that masked his identity from his intended victims.

*                *                *

In addition to the prison term, WARDLOW, 31, of the Bronx, New York, was sentenced to three years of supervised release and ordered to pay restitution in the amount of $17,000 in connection with the funeral expenses of Victim-2.

Mr. Williams praised the outstanding investigative work of the New York State Police, the New York City Police Department, and Special Agents from the U.S. Attorney’s Office for the Southern District of New York.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict last night against LAMOR WHITEHEAD on two counts of wire fraud, one count of attempted wire fraud, one count of attempted extortion, and one count of making false statements to federal law enforcement agents.  U.S. District Judge Lorna G. Schofield presided over the two-week trial.

U.S. Attorney Damian Williams said: “As a unanimous jury found, Lamor Whitehead abused the trust placed in him by a parishioner, tried to obtain a fraudulent loan using fake bank records, bullied a businessman for $5,000, tried to defraud him out of far more than that, and lied to federal agents.  Whitehead’s reprehensible lies and criminal conduct have caught up with him, as he now stands convicted of five federal crimes and faces time in prison.”

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

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

*                *                *

WHITEHEAD, 45, of Paramus, New Jersey, was convicted of two counts of wire fraud, one count of attempted wire fraud, and one count of attempted extortion, each of which carries a maximum sentence of 20 years in prison, and one count of making false statements, which carries a maximum sentence of five years in prison.

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 the judge.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that LELAND ROBINSON was sentenced to 50 years in prison by U.S. District Judge Kenneth M. Karas for his enticement of a 14-year-old minor to engage in sexual activity.  ROBINSON was convicted of enticement of a minor following a week-long jury trial in July 2023. 

U.S. Attorney Damian Williams said: “Leland Robinson’s crime is the nightmare of every parent of a child who uses a smartphone.  Robinson met his victim on a social media application and then traveled to Connecticut, where he sexually assaulted the child outside the child’s home.  I encourage parents and caregivers to have conversations with their children about the dangers of communicating online with strangers.  We will continue to use every tool available to law enforcement to prosecute and punish those who seek to exploit our children.”

According to court documents and the evidence presented in the trial of ROBINSON:

In or about February 2019, ROBINSON, who was 31 years old but posing as a high school student, met a 14-year-old boy (“Victim-1”) on a social media application.  ROBINSON sent Victim-1 sexually explicit images and videos of himself and requested the same from Victim-1.  In the fall of 2019, ROBINSON agreed to provide Victim-1 with a JUUL if Victim-1 would engage in sex with ROBINSON.  On multiple occasions in September and October 2019, ROBINSON traveled to Victim-1’s home in Connecticut.  On October 24, 2019, ROBINSON returned to Victim-1’s house and sexually assaulted him in the yard outside his house.

In imposing the sentence, Judge Karas said: “People should understand that when they prey on kids, they will pay the price.”

*                *                *

In addition to the prison term, ROBINSON, 35, of Mount Vernon, New York, was sentenced to 15 years of supervised release.     

Mr. Williams praised the efforts of the Federal Bureau of Investigation, the New Canaan Police Department, and the Greensboro Police Department in Greensboro, North Carolina, in connection with this investigation.                 

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Marcia S. Cohen and Jennifer Ong are in charge of the prosecution.  

A federal jury convicted Juan Orlando Hernández, also known as JOH, 55, of Honduras, on all three counts in the indictment, which included cocaine-importation and weapons offenses. Hernández is scheduled to be sentenced on June 26.

“Juan Orlando Hernández abused his position as President of Honduras to operate the country as a narco-state where violent drug traffickers were allowed to operate with virtual impunity, and the people of Honduras and the United States were forced to suffer the consequences,” said Attorney General Merrick B. Garland. “As today’s conviction demonstrates, the Justice Department is disrupting the entire ecosystem of drug trafficking networks that harm the American people, no matter how far or how high we must go.”

“When the leader of Honduras and the leader of the Sinaloa Cartel work hand-in-hand to send deadly drugs into American communities, both deserve to be held accountable in the United States,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “This case should send a clear message that no one is above the law or beyond our reach.”

“Juan Orlando Hernández had every opportunity to be a force for good in his native Honduras. Instead, he chose to abuse his office and country for his own personal gain and partnered with some of the largest and most violent drug trafficking organizations in the world to transport tons of cocaine to the United States,” said U.S. Attorney Damian Williams for the Southern District of New York. “It is my sincere hope that this conviction sends a message to all corrupt politicians who would consider a similar path: choose differently. My office will stop at nothing to investigate and prosecute those responsible for sending poison to this community, no matter their status or political power.”

According to court documents, from at least in or about 2004, up to and including in or about 2022, Hernández, the former two-term president of Honduras and former president of the Honduran National Congress, was at the center of one of the largest and most violent drug-trafficking conspiracies in the world. Hernández abused his position and authority in Honduras to facilitate the importation of tons of cocaine into the United States. In exchange, Hernández received millions of dollars in drug money from some of the largest and most violent drug-trafficking organizations in Honduras, Mexico, and elsewhere, and used those bribes to fuel his rise in Honduran politics.

Throughout his time in office, Hernández publicly promoted legislation and the efforts he purported to undertake in support of anti-narcotics measures in Honduras. At the same time, he protected and enriched the drug traffickers in his inner circle and those who provided him with cocaine-fueled bribes that allowed him to obtain and stay in power in Honduras. For example, Hernández selectively upheld extraditions by using his executive power to support extraditions to the United States of certain drug traffickers who threatened his grip on power, and promising drug traffickers who paid him and followed his instructions that they would remain in Honduras. In addition, Hernández and his co-conspirators abused Honduran institutions, including the Honduran National Police and Honduran Army, to protect and grow their conspiracy. Among other things, members of the conspiracy used heavily armed Honduran National Police officers to protect their cocaine loads as they transited through Honduras. Members of the conspiracy also turned to violence and murder to protect and grow their drug trafficking enterprise, attacking and murdering rival traffickers and those who threatened their grip on the Honduran cocaine trade.   

Several of Hernández’s co-conspirators have already been convicted and sentenced in connection with this investigation. Among others, Hernández’s brother, Juan Antonio Hernández Alvarado, also known as Tony Hernández, was convicted after trial in October 2019 and sentenced to life in prison, and Geovanny Fuentes Ramirez, a violent cocaine trafficker who met with Hernández on multiple occasions to discuss their drug trafficking partnership, was convicted after trial in March 2021, and sentenced to life in prison. More recently, Juan Carlos Bonilla Valladares, also known as El Tigre, the former chief of the Honduran National Police, pleaded guilty to his participation in the cocaine importation conspiracy and is scheduled to be sentenced on June 25, and Mauricio Hernández Pineda, a former member of the Honduran National Police and Hernández’s cousin, pleaded guilty to his participation in the cocaine importation conspiracy and is scheduled to be sentenced on May 2.

In total, Hernández and his co-conspirators trafficked over more than 400 tons of U.S.-bound cocaine through Honduras during Hernández’s tenure in the Honduran government.

Hernández was convicted of three counts: (i) conspiring to import cocaine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; (ii) using and carrying machineguns and destructive devices during, and possessing machineguns in furtherance of, the cocaine-importation conspiracy, which carries a mandatory consecutive prison term of 30 years; and (iii) conspiring to use and carry machineguns and destructive devices during, and possessing machineguns in furtherance of, the cocaine-importation conspiracy, which carries a maximum sentence of life in prison.

The DEA’s Special Operations Division Bilateral Investigations Unit, Organized Crime Drug Enforcement Task Forces (OCDETF) New York Strike Force, and Tegucigalpa Country Office are investigating the case. The Justice Department’s Office of International Affairs provided valuable assistance in securing his arrest and extradition. The Justice Department thanked the Government of Honduras for extraditing Hernández to the United States.

Assistant U.S. Attorneys Jacob H. Gutwillig, David J. Robles, Elinor L. Tarlow, and Kyle A. Wirshba for the Southern District of New York are prosecuting the case, with assistance from Paralegal Specialist Kayla A. Collins and Trial Attorneys Andrea Broach and Jessica Fender 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; and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced today that a jury returned a guilty verdict against JUAN ORLANDO HERNANDEZ, a/k/a “JOH,” on all three counts in the Indictment, which included cocaine-importation and weapons offenses.  U.S. District Judge P. Kevin Castel presided over the trial.  HERNANDEZ is scheduled to be sentenced on June 26, 2024.

U.S. Attorney Damian Williams said: “Juan Orlando Hernandez had every opportunity to be a force for good in his native Honduras.  Instead, he chose to abuse his office and country for his own personal gain and partnered with some of the largest and most violent drug trafficking organizations in the world to transport tons of cocaine to the United States.  It is my sincere hope that this conviction sends a message to all corrupt politicians who would consider a similar path: choose differently.  My Office will stop at nothing to investigate and prosecute those responsible for sending poison to this community, no matter their status or political power.”

Attorney General Merrick B. Garland said: “Juan Orlando Hernandez abused his position as President of Honduras to operate the country as a narco-state where violent drug traffickers were allowed to operate with virtual impunity, and the people of Honduras and the United States were forced to suffer the consequences.  As today’s conviction demonstrates, the Justice Department is disrupting the entire ecosystem of drug trafficking networks that harm the American people, no matter how far or how high we must go.”

DEA Administrator Anne Milgram said: “When the leader of Honduras and the leader of the Sinaloa Cartel work hand-in-hand to send deadly drugs into American communities, both deserve to be held accountable in the United States.  This case should send a clear message that no one is above the law or beyond our reach.”

As reflected in the Indictment and the evidence presented at trial:

From at least in or about 2004, up to and including in or about 2022, HERNANDEZ, the former two-term president of Honduras and former president of the Honduran National Congress, was at the center of one of the largest and most violent drug-trafficking conspiracies in the world.  HERNANDEZ abused his position and authority in Honduras to facilitate the importation of tons of cocaine into the United States.  In exchange, HERNANDEZ received millions of dollars in drug money from some of the largest and most violent drug-trafficking organizations in Honduras, Mexico, and elsewhere, and used those bribes to fuel his rise in Honduran politics.

Throughout his time in office, HERNANDEZ publicly promoted legislation and the efforts he purported to undertake in support of anti-narcotics measures in Honduras.  At the same time, he protected and enriched the drug traffickers in his inner circle and those who provided him with cocaine-fueled bribes that allowed him to obtain and stay in power in Honduras.  For example, HERNANDEZ selectively upheld extraditions by using his executive power to support extraditions to the United States of certain drug traffickers who threatened his grip on power and promising drug traffickers who paid him and followed his instructions that they would remain in Honduras.  In addition, HERNANDEZ and his co-conspirators abused Honduran institutions, including the Honduran National Police and Honduran Army, to protect and grow their conspiracy.  Among other things, members of the conspiracy used heavily armed Honduran National Police officers to protect their cocaine loads as they transited through Honduras.  Members of the conspiracy also turned to violence and murder to protect and grow their drug trafficking enterprise, attacking and murdering rival traffickers and those who threatened their grip on the Honduran cocaine trade.    

Several of HERNANDEZ’s co-conspirators have already been convicted and sentenced in connection with this investigation.  Among others, HERNANDEZ’s brother, Juan Antonio Hernandez Alvarado, a/k/a “Tony Hernandez,” was convicted after trial in October 2019 and sentenced to life in prison, and Geovanny Fuentes Ramirez, a violent cocaine trafficker who met with HERNANDEZ on multiple occasions to discuss their drug trafficking partnership, was convicted after trial in March 2021, and sentenced to life in prison.  More recently, Juan Carlos Bonilla Valladares, a/k/a “El Tigre,” the former chief of the Honduran National Police, pled guilty to his participation in the cocaine importation conspiracy and is scheduled to be sentenced on June 25, 2024, and Mauricio Hernandez Pineda, a former member of the Honduran National Police and HERNANDEZ’s cousin, pled guilty to his participation in the cocaine importation conspiracy and is scheduled to be sentenced on May 2, 2024.

In total, HERNANDEZ and his co-conspirators trafficked more than 400 tons of U.S.-bound cocaine through Honduras during HERNANDEZ’s tenure in the Honduran government.

*                *                *

HERNANDEZ, 55, of Honduras, was convicted of three counts: (i) conspiring to import cocaine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; (ii) using and carrying machineguns and destructive devices during, and possessing machineguns in furtherance of, the cocaine-importation conspiracy, which carries a mandatory consecutive prison term of 30 years; and (iii) conspiring to use and carry machineguns and destructive devices during, and possessing machineguns in furtherance of, the cocaine-importation conspiracy, which carries a maximum sentence of life in prison.

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

Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit, the Organized Crime Drug Enforcement Task Forces (“OCDETF”) New York Strike Force, and Tegucigalpa Country Office, as well as the U.S. Department of Justice’s Office of International Affairs and the National Security Division’s Counterterrorism Section.  Mr. Williams additionally thanked the Government of Honduras for its assistance extraditing HERNANDEZ to the United States.

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

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Jacob H. Gutwillig, David J. Robles, Elinor L. Tarlow, and Kyle A. Wirshba are in charge of the prosecution, with assistance from Paralegal Specialist Kayla A. Collins and Trial Attorneys Andrea Broach and Jessica Fender of the National Security Division’s Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, and Rear Admiral John Mauger, Commander of the First Coast Guard District, announced today the arrests of RICHARD CRUZ and JAIME PINILLA GOMEZ for causing the death of a seven-year-old boy and a 48-year-old woman after the vessel CRUZ and GOMEZ were operating in the Hudson River capsized.  The two passengers drowned after being trapped underneath the vessel.  CRUZ and GOMEZ were arrested today in Elizabeth, New Jersey, and will be presented later today before U.S. Magistrate Judge Ona T. Wang. 

U.S. Attorney Damian Williams said: “Federal regulations and safety protocols exist to ensure that captains and operators of commercial vessels keep passengers safe.  The defendants allegedly flouted those regulations, recklessly disregarded safety protocols, operated the vessel at an unsafe speed in hazardous conditions, and overloaded the vessel with too many passengers onboard.  And the result was tragic — a young boy and a woman were trapped under the vessel and drowned after the vessel capsized.”

Rear Admiral John Mauger said: “This case demonstrates the deadly consequences of illegal passenger operations.  Our thoughts are with the families of the victims today.  Through this complaint, the Coast Guard and our partners from the U.S. Attorney’s Office affirm our steadfast commitment to preventing similar tragedies by investigating and holding violators accountable.  We urge the public to assist in this detection and deterrence by notifying the Coast Guard of vessel owner and operators suspected of engaging in illegal passenger operations at the following email address:  CGIS TIPS at https://www.p3tips.com/878.” 

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

On or about July 12, 2022, at approximately 2:40 p.m., the motor vessel Stimulus Money capsized in the Hudson River resulting in the death of two passengers — a seven-year-old boy (“Victim-1”) and a 48-year-old woman (“Victim-2”).  At the time of the capsizing, RICHARD CRUZ was the owner and captain of the vessel and JAIME PINILLA GOMEZ was the pilot of the vessel.  CRUZ had purchased the vessel approximately three months before the capsizing.  CRUZ and GOMEZ conducted boat “tours” for paying customers onboard the vessel on multiple occasions in the months leading up to the capsizing, although they did not have the required United States Coast Guard (“USCG”) credentials and certifications to do so.

CRUZ’s and GOMEZ’s negligent actions and omissions caused the capsizing and the deaths of Victim-1 and Victim-2.  At the time of the capsizing, among other things: (i) CRUZ and GOMEZ operated Stimulus Money with 13 people on board, exceeding the vessel’s maximum allowable capacity; (ii) CRUZ and GOMEZ operated Stimulus Money at a high rate of speed during a Small Craft Advisory in high winds and heavy seas; (iii) neither CRUZ nor GOMEZ had obtained a required USCG certification to operate the vessel with paying customers on board; (iv) CRUZ and GOMEZ operated Stimulus Money without a valid USCG Certificate of Inspection, which is required for a vessel to operate with paying customers on board; (v) GOMEZ, an insufficiently experienced mariner, piloted Stimulus Money in a dangerous manner, including by rapidly accelerating one engine of the vessel immediately before the capsizing, which contributed to the overturning of the vessel; and (vi) GOMEZ, at the time of the capsizing, failed to properly wear a safety device that should be worn around the pilot’s wrist or life vest, which contributed to the vessel’s engine continuing to operate even after GOMEZ shifted from the helm console (at which the vessel was operated).

All 13 people on board Stimulus Money were thrown overboard during the capsizing.  Shortly after the capsizing, boats from the New York City Police Department’s (“NYPD”) Harbor Unit and the New York City Fire Department’s (“FDNY”) Dive Rescue Team, and ferries operating nearby, arrived at the scene of the capsizing to render emergency assistance.  10 passengers and GOMEZ were recovered conscious and in varying medical conditions.  They were subsequently transferred to hospitals in Manhattan and survived the capsizing.  Approximately 25 minutes after the capsizing, members of the FDNY Dive Rescue Team recovered Victim-1 and Victim-2 from the Hudson River.  They were trapped underneath the capsized vessel and found unconscious.  Emergency medical personnel subsequently pronounced Victim-1 and Victim-2 deceased.  The cause of death was drowning.  Photos of the capsized boat are below:

Please report any illegal passenger charters to the USCG at https://www.p3tips.com/878.

*                *                *

CRUZ, 32, and GOMEZ, 25, both of Elizabeth, New Jersey, are each charged with one count of misconduct and neglect of a ship officer resulting in death, 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 defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the USCG Investigative Service and the Special Agents and NYPD Detectives assigned to the U.S. Attorney’s Office for the Southern District of New York.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York; Tommy Kalogiros, Assistant Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a Complaint charging RAMEL DECKARD, DASHAWN HAMPTON, and TALIEK PAYNE in connection with three armed robberies of women engaged in sex work at hotels in the Bronx.  DECKARD, HAMPTON, and PAYNE were arrested this morning and will be presented in Manhattan federal court later today before U.S. Magistrate Judge Ona T. Wang.

U.S. Attorney Damian Williams said: “These defendants, motivated by greed, allegedly targeted individuals engaged in sex work in the Bronx.  Under the pretext of setting up appointments with the victims for sexual services, the defendants allegedly met the victims at hotel rooms and proceeded to rob them at gunpoint.  My Office is committed to doing everything possible to protect the people in this District from violent crime.”

ATF Assistant Special Agent in Charge Tommy Kalogiros said: “Today’s arrests should send a strong message to those targeting the most vulnerable in our communities.  The ATF/NYPD Strategic Pattern Armed Robbery Technical Apprehension Group will continue working tirelessly to detect, disrupt, and prosecute the most violent offenders.  We hope that these arrests demonstrate to the victims of violent crime that ATF, along with our partners, remain steadfast in our resolve to deliver justice.  Thank you to the New York City Police Department and to the Southern District of New York, two of ATF’s most valued partners.”

NYPD Commissioner Edward A. Caban said: “As alleged, today’s arrests are another example of our laser-like focus on combating violent crime and holding accountable anyone who endangers people on our streets.  If you carry an illegal gun in New York City, and especially if you use that gun to terrorize our communities, you will be arrested and charged accordingly.  Thanks to the combined efforts of the NYPD and our partners at the ATF and the Office of the U.S. Attorney for the Southern District of New York, the defendants in this case now face the prospect of significant federal prison time.”

According to the allegations in the Complaint:[1]

On August 15, 2023, DECKARD met an individual who was engaged in sex work (“Victim-1”) at a hotel room in the Bronx for an appointment to exchange sexual services for payment.  DECKARD subsequently displayed a firearm, demanded that Victim-1 go into the bathroom and sit in the shower, and then proceeded to steal personal possessions and cash from Victim-1.  A still image of DECKARD at the hotel where he robbed Victim-1 is shown below:

On September 19, 2023, DECKARD and PAYNE committed another robbery of two individuals who were engaged in sex work (“Victim-2” and “Victim-3”) at a hotel room in the Bronx.  Victim-2 and Victim-3 were spending time at a hotel room, when Victim-2 was notified by an individual, who advertised Victim-2 and Victim-3’s services online, that someone would meet Victim-2 at the hotel room later that day.  DECKARD and PAYNE then went to the hotel room where Victim-2 and Victim-3 were located.  After entering the hotel room, DECKARD displayed a firearm, and DECKARD and PAYNE stole personal items as well as cash from Victim-2 and Victim-3.  During the robbery, DECKARD struck Victim-2 in the face with his elbow.  Still images of DECKARD (left) and PAYNE (right) at the hotel where they robbed Victim-2 and Victim-3 are shown below:

On January 6, 2024, DECKARD and HAMPTON robbed Victim-1 at gunpoint a second time at a hotel room in the Bronx.  At approximately 1:30 pm on January 6, 2024, DECKARD and HAMPTON traveled to the Bronx hotel room where Victim-1 was staying for an appointment to exchange sexual services for payment.  After entering the hotel room, HAMPTON displayed a firearm, and HAMPTON and DECKARD proceeded to rob Victim-1 of her cellphone.  DECKARD also demanded that Victim-1 give him the passcode to her phone, and HAMPTON asked Victim-1, in substance and in part, whether she wanted “to die over a passcode.”  After Victim-1 gave them the passcode to her phone, HAMPTON used Victim-1’s cellphone to send $300 to his account using a payment application.  A still image of HAMPTON (left) and DECKARD (right) at the hotel where they robbed Victim-1 is shown below:

The NYPD and ATF Strategic Patterned Armed Robbery Technical Apprehension (“SPARTA”) Task Force believes these defendants may be responsible for the robberies of other women in New York.  Anyone with information about this or any other incident is asked to call the NYPD’s Crime Stoppers hotline at 1-800-577-TIPS (8477) or, for Spanish, 1-888-57-PISTA (74782).  The public can also submit tips on the Crime Stoppers website at https://crimestoppers.nypdonline.org/ or by sending a direct message to @NYPDTips on X, formerly known as Twitter.  All tips are strictly confidential.

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DECKARD, 34, of New York, New York, is charged with one count of conspiracy to commit Hobbs Act robbery and three counts of Hobbs Act robbery, each of which carries a maximum sentence of 20 years in prison, and three counts of using, carrying, and brandishing a firearm during, in relation to, and in furtherance of, a crime of violence, each of which carries a mandatory seven-year consecutive sentence.

HAMPTON, 34, of New York, New York, is charged with one count of conspiracy to commit Hobbs Act robbery and one count of Hobbs Act robbery, each of which carries a maximum sentence of 20 years in prison, and one count of using, carrying, and brandishing a firearm during, in relation to, and in furtherance of, a crime of violence, which carries a mandatory seven-year consecutive sentence.

PAYNE, 34, of East Orange, New Jersey, is charged with one count of conspiracy to commit Hobbs Act robbery and one count of Hobbs Act robbery, each of which carries a maximum sentence of 20 years in prison, and one count of using, carrying, and brandishing a firearm during, in relation to, and in furtherance of, a crime of violence, which carries a mandatory seven-year consecutive sentence.

The mandatory minimum and 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 a judge. 

Mr. Williams praised the outstanding investigative work of the ATF and NYPD, in particular, the SPARTA 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. Attorneys Meredith C. Foster and Georgia V. Kostopoulos are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below 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; James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of an Indictment charging EDWIN CARRASQUILLO, a/k/a “Malo,” HECTOR HERNANDEZ, a/k/a “Hec,” JOSE HERNANDEZ, a/k/a “Nene,” a/k/a “Little,” NATHANIEL MANNING, a/k/a “Tio,” DAMEL MARCUS, a/k/a “Shank,” EDWARDO MORENO, a/k/a “AR,” JASON RIVERA, a/k/a “Colombo,” JOSUE VARGAS, a/k/a “Leo,” JUAN KUANG, a/k/a “Jo Jo,” a/k/a “Jay,” a/k/a “Blanco,” STEVEN SANTIAGO, a/k/a “Swizz,” VICTOR MENDENG, a/k/a “Cali,” DELILAH CARRIEL, ROSEMARIE SANCHEZ, a/k/a “Rosie,” JUAN CALDERON, a/k/a “Jazzo,” a/k/a “Juanito,” CHRISTOPHER MEADOWS, and ANGEL VILLAFANE with engaging in a continuing criminal enterprise, distributing narcotics, and carrying and using firearms in connection with an armed drug trafficking operation based on Valentine Avenue in the Bronx, New York, for well over a decade from 2012 to the present. 

CARRASQUILLO, H. HERNANDEZ, J. HERNANDEZ, MANNING, MARCUS, MORENO, VARGAS, KUANG, SANTIAGO, CARRIEL, SANCHEZ, CALDERON, and MEADOWS were arrested earlier today in an operation conducted by the FBI and NYPD, and they are expected to be presented before U.S. Magistrate Judge Sarah L. Cave or U.S. Magistrate Judge Valerie Figueredo later this afternoon.  MENDENG, who is detained in the custody of the New York City Department of Correction on separate charges, will be writted into federal custody at a later date.  RIVERA and VILLAFANE were previously arrested and charged in prior indictments.  The case is assigned to U.S. District Judge Victor Marrero.

U.S. Attorney Damian Williams said: “Today, I am announcing that we have filed charges against 16 members of a violent drug trafficking crew that for over 10 years has held a Bronx neighborhood hostage.  As alleged, day in and day out, this crew distributed fentanyl, heroin, and crack along several blocks on Valentine Avenue, effectively creating an open drug market.  To protect their territory, they allegedly carried guns, extorted addicts through threats of violence and, far too often, used violence against rivals and anyone else attempting to weaken their control on their block, committing multiple shootings as they fought for control over the streets.  I promise that we are not going to abandon any of our communities.  Our commitment to public safety will never waver — not anywhere, and not for one moment.  The people of this great city deserve nothing less.”

FBI Assistant Director in Charge James Smith said: “For over 12 years, as alleged, the defendants strategically organized themselves into the 'Valentine Avenue Crew' to freely distribute fentanyl, heroin, and cocaine within the Bronx.  The Valentine Avenue Crew allegedly carried firearms and often used violence, including two non-fatal shootings, to maintain dominance in the narcotics trafficking industry.  The FBI maintains its unwavering stance against all forms of violence and drug trafficking, and will continue to apprehend those who threaten our community’s safety.”

NYPD Commissioner Edward A. Caban said: “Today’s charges demonstrate the thorough and diligent efforts of NYPD investigators and our law enforcement partners in dismantling an allegedly violent drug trafficking organization operating in New York City.  We will continue to identify and hold accountable anyone who peddles dangerous substances or possesses illegal weapons in our communities.  And I am grateful to our colleagues at the FBI and the U.S. Attorney’s Office for their commitment to this critical public safety mission.”

As alleged in the Indictment:[1]

The defendants are charged for their involvement in an armed drug trafficking organization (the “Valentine Avenue Crew”) that took over the block of Valentine Avenue between East 194th Street and East 196th Street in the Bronx, New York (the “Block”), and its surrounding neighborhood. 

Working in shifts throughout the day and night, and organized in a clear hierarchal structure, the Valentine Avenue Crew and its members, including the defendants — many of whom were typically armed with firearms and other weapons — distributed fentanyl, heroin, cocaine, and cocaine base, in a form commonly known as “crack.”  These narcotics were often manufactured and packaged elsewhere and then delivered to the Block, where members and associates of the Valentine Avenue Crew sold them to a large base of end-user customers.  Controlling the sidewalks and street of the Block, as well as the public spaces of multiple buildings along the Block, the Valentine Avenue Crew and its members, including the defendants, operated freely, creating an open market for drugs, in which they extorted payments from customers through violence.  For well over a decade, members of the Valentine Avenue Crew also used violence — including multiple shootings — to compete with rival drug traffickers, and at times within the Valentine Avenue Crew itself, to maintain dominance over the drug trade on the Block.

In addition, ANGEL VILLAFANE is charged for his commission of two non-fatal shootings in Manhattan in July 2020 and January 2021.  Specifically, in or about July 2020, VILLAFANE paid a co-conspirator (“CC-1”) to lure a victim to a location in Manhattan where VILLAFANE attempted to murder the victim over a drug debt, resulting in personal injury to the victim.  Additionally, on or about January 8, 2021, VILLAFANE committed another non-fatal shooting in Manhattan.

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A chart containing the names, charges, and minimum and maximum penalties for the defendants is set forth below.  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 defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI and NYPD and thanked the Drug Enforcement Administration and the Pennsylvania State Police for their assistance in this case.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Michael R. Herman and Thomas John Wright 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.

COUNT

CHARGE

DEFENDANTS

MIN. AND MAX. PENALTIES

1

Narcotics conspiracy

EDWIN CARRASQUILLO,

HECTOR HERNANDEZ,

JOSE HERNANDEZ,

NATHANIEL MANNING,

DAMEL MARCUS,

EDWARDO MORENO,

JASON RIVERA,

JOSUE VARGAS,

JUAN KUANG,

STEVEN SANTIAGO,

VICTOR MENDENG,

DELILAH CARRIEL,

ROSEMARIE SANCHEZ,

JUAN CALDERON,

CHRISTOPHER MEADOWS,   

and

ANGEL VILLAFANE

Mandatory minimum sentence of 10 years in prison

Maximum sentence of life in prison

2

Continuing criminal enterprise

EDWIN CARRASQUILLO,

HECTOR HERNANDEZ,

JOSE HERNANDEZ,

NATHANIEL MANNING,

DAMEL MARCUS,

EDWARDO MORENO,

JASON RIVERA,

JOSUE VARGAS,

JUAN KUANG,

and

STEVEN SANTIAGO

Mandatory sentence of life in prison for CARRASQUILLO and HERNANDEZ

Mandatory minimum sentence of 20 years in prison for other defendants

Maximum sentence of life in prison

3

Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a drug trafficking crime

EDWIN CARRASQUILLO,

HECTOR HERNANDEZ,

JOSE HERNANDEZ,

NATHANIEL MANNING,

DAMEL MARCUS,

EDWARDO MORENO,

JASON RIVERA,

JOSUE VARGAS,

JUAN KUANG,

STEVEN SANTIAGO,

VICTOR MENDENG,

DELILAH CARRIEL,

ROSEMARIE SANCHEZ,

JUAN CALDERON,

CHRISTOPHER MEADOWS,   

and

ANGEL VILLAFANE

Mandatory minimum consecutive sentence of 10 years in prison

Maximum sentence of life in prison

4

Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a drug trafficking crime

JASON RIVERA

Mandatory minimum consecutive sentence of seven years in prison

Maximum sentence of life in prison

5

Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a drug trafficking crime

ANGEL VILLAFANE

Mandatory minimum consecutive sentence of 10 years in prison

Maximum sentence of life in prison

6

Murder for hire

ANGEL VILLAFANE

Maximum sentence of 20 years in prison

7

Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a drug trafficking crime

ANGEL VILLAFANE

Mandatory minimum consecutive sentence 10 years in prison

Maximum sentence of life in prison

8

Felon in possession of ammunition

ANGEL VILLAFANE

Maximum sentence of 10 years in prison

[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 a jury returned a guilty verdict today against LAURA PERRYMAN on two counts of an Indictment charging her with conspiracy to commit health care fraud and wire fraud and substantive health care fraud in connection with her company’s creation and sale of a fake medical device component.  U.S. District Judge Denise L. Cote presided over the 11-day trial.

U.S. Attorney Damian Williams said: “Laura Perryman brazenly created a dummy medical device component — made entirely out of plastic — to be implanted into patients.  She marketed that dummy component as a means for doctors to bill Medicare and private insurance companies approximately $18,000 for each implantation of the piece of plastic.  She did this so that she could entice doctors to buy her device for many thousands of dollars.  Perryman recklessly used patients as tools for financial gain, and this jury’s unanimous verdict sends a resounding message that individuals who defraud health care programs will be held criminally accountable.”

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

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

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

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

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

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

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PERRYMAN, 55, of Delray Beach, Florida, was convicted of one count of health care fraud, which carries a maximum sentence of 10 years in prison, and one count of conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison.

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

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

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