Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced that TATIANA DANIEL was sentenced today to 33 months in prison for conspiracy to commit wire fraud.  DANIEL participated in a scheme to commit COVID-19 pandemic fraud by defrauding New York City’s COVID-19 Hotel Room Isolation Program; committing unemployment insurance (“UI”) benefits fraud; selling fabricated COVID-19 test results, both positive and negative; and obtaining fraudulent COVID-19 loans from both the U.S. Small Business Administration’s Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loan (“EIDL”) program.  DANIEL’s sentence was imposed by U.S. District Judge Lewis A. Kaplan.

U.S. Attorney Damian Williams said: “Tatiana Daniel repeatedly exploited resources offered to help people and businesses in crisis.  Her misconduct included selling fabricated COVID-19 test results, which likely put members of the public at risk of contracting the deadly virus from one of her customers.  Daniel’s sentence reaffirms that those who illegally exploit disaster relief programs and endanger the public should expect to go to prison.”

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

From June 2020 through September 2021, DANIEL conspired to commit COVID-19 pandemic fraud through a variety of different means.

First, DANIEL defrauded the COVID-19 Hotel Room Isolation Program (the “Program”).  In response to the COVID-19 pandemic, New York City created the Program.  Funded by New York City and the Federal Emergency Management Agency, the Program provided free hotel rooms for qualifying individuals throughout New York City.  The Program was ultimately open to healthcare workers who needed to isolate because of exposure to COVID-19; patients who had tested positive for COVID-19; individuals who believed, based on their symptoms, that they were infected with COVID-19; and individuals who lived with someone who had COVID-19.  As stated on the City’s website describing the Program, such individuals “may qualify to self-isolate in a hotel, free of charge, for up to 14 days if you do not have a safe place to self-isolate.”  Those who wished to book a hotel room through the Program could either call a phone number or use an online hotel booking platform. 

DANIEL defrauded the Program in at least two respects.  First, she secured free Program hotel rooms for herself by falsely claiming to be a healthcare worker — specifically, a respiratory therapist.  Second, she sold at least approximately 144 nights’ worth of fraudulently obtained hotel rooms to customers who were ineligible for the Program.  In connection with this scheme, DANIEL used Facebook to advertise the sale of Program hotel rooms, to communicate directly with potential purchasers of Program hotel rooms, and to communicate with a co-defendant who worked at a call center that handled phone calls and certain reservations for the Program for several months in 2020. 

Second, DANIEL conspired to fraudulently obtain more than approximately $97,000 in expanded COVID-19 UI benefits for both herself and others.  She did so by making misrepresentations about herself and by stealing the identities of more than 10 individuals and collecting unemployment benefits issued for the benefit of those individuals, including an incarcerated individual.  In addition, DANIEL filed unsuccessful UI benefits applications in other states.

Third, DANIEL operated a fraudulent document mill, through which DANIEL sold, among other things, “COVID Results,” “COVID-19 Hardship Letters,” “Doctors Notes,” and more (e.g., pay stubs, W2s, work verification letters).  As part of her fraudulent document mill, DANIEL sold fabricated COVID-19 test results, both positive and negative.  These fabricated test results included the names of purported medical personnel. 

Fourth, DANIEL submitted fraudulent applications for COVID-19 loans through both the PPP and EIDL programs, resulting in the disbursement of thousands of dollars in pandemic loan funding to DANIEL and a co-conspirator.

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In addition to her prison sentence, DANIEL, 29, of Brooklyn, New York, was sentenced to three years of supervised release and ordered to forfeit $109,655 and to pay restitution of $401,206. 

DANIEL’s three co-defendants were previously sentenced by Judge Kaplan, and their sentences are as follows: Chanette Lewis was sentenced principally to three years in prison, three years of supervised release, restitution of $360,330, and forfeiture of $289,536; Tatiana Benjamin was sentenced principally to one year and one day in prison, three years of supervised release, restitution of $294,624, and forfeiture of $51,088; and Heaven West was sentenced principally to time served, three years of supervised release, restitution of $59,644, and forfeiture of $23,684. 

Mr. Williams praised the outstanding efforts of agents, investigators, and analysts from the New York City Department of Investigation, the New York Regional Office of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), and the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams also thanked the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this investigation.  He also expressed gratitude to the New York City Police Department, the New York State Department of Labor, and the DOL-OIG Atlanta Regional Office for their assistance.

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 LIAQUAT CHEEMA pled guilty today to conspiracy to commit wire fraud for his leadership of a scheme to defraud New York City (the “City”) in connection with public contracts to perform general contracting work at City homeless shelters.  

U.S. Attorney Damian Williams said: “Liaquat Cheema has admitted to leading a scheme to steal millions of dollars in public funds intended to pay for vital maintenance at homeless shelters in New York City.  This Office has no tolerance for those who use public contracts intended to aid underserved members of our society to fraudulently enrich themselves.  We will continue to aggressively detect and dismantle schemes such as this one.”

According to the Indictment to which CHEEMA pled guilty, the Complaint, the plea agreement, and statements made in court:  

LIAQUAT CHEEMA was the President of AFL Construction Co. Inc. (“AFL”), located in Queens, New York.  AFL entered into public contracts with the City worth approximately $12 million to perform general contracting work at homeless shelters located in the City, including in the Southern District of New York.  Pursuant to the contracts, AFL was to perform, among other things, general maintenance, landscaping, roofing, and snow removal at shelter sites.

From at least in or about 2014 through at least in or about 2017, CHEEMA and others used the contracts to fraudulently enrich themselves and steal from the City.  In furtherance of the scheme, CHEEMA and others, among other things, submitted fraudulent invoices and other documentation in support of requests for payment on the contracts, which falsely claimed that workers had performed work on certain projects and inflated amounts paid by the defendants for materials purportedly used on such projects.  These fraudulent invoices and supporting documentation contained, without authorization, the identities of other persons, including the names, and in at least one case, the social security number, of purported workers who in fact had not worked on the projects specified in the requests for payment submitted by CHEEMA and others. 

CHEEMA and others also obtained tens of thousands of dollars’ worth of Medicaid benefits by repeatedly submitting fraudulent certifications, which underreported their actual incomes and accordingly enabled them to obtain Medicaid benefits for which they were not eligible.  In support of requests for Medicaid benefits, CHEEMA and others repeatedly submitted nearly identical employment letters, which, among other misrepresentations, contained the name and purported signature of a purported “Project Manager” who, in fact, was deceased.  In connection with his guilty plea, CHEEMA agreed to pay back the money misappropriated from Medicaid.

*                *                *

LIAQUAT CHEEMA, 64, of East Elmhurst, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.  As part of his plea agreement, CHEEMA agreed to pay restitution and forfeiture of $3,267,811. 

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

Mr. Williams praised the work of the U.S. Department of Labor Office of Inspector General and the New York City Department of Investigation. 

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that MARTIN MIZRAHI, a/k/a “Marty Mizrahi,” was convicted of wire fraud, bank fraud, money laundering, aggravated identity theft, and other offenses for his participation in multiple schemes to defraud banks and credit card companies of almost $8 million and to launder more than $4 million in fraud and illegal narcotics proceeds.  The verdict followed a 12-day trial before U.S. District Judge J. Paul Oetken. 

U.S. Attorney Damian Williams said: “Martin Mizrahi brazenly used his company as a front to launder millions of dollars in drug and fraud proceeds and to deceive credit card companies into processing additional millions of dollars in sham charges.  The jury’s unanimous verdict sends a resounding message that individuals who steal and introduce illicit funds into the U.S. financial system will be held accountable.”

According to the evidence presented in court during the trial:

From at least in or about February 2021 through at least in or about June 2021, MIZRAHI and his co-defendants participated in multiple schemes to defraud banks and credit card companies and to launder narcotics proceeds in addition to the fraud proceeds received.

Beginning in or about February 2021, MIZRAHI began accepting bulk cash narcotics proceeds, which he laundered for individuals associated with a Mexican-based cartel by converting the money into Bitcoin and then sending it to anonymous cryptocurrency wallets provided to him by co-conspirators.  In addition, MIZRAHI laundered fraud proceeds sent to his company by wire transfer, which he also converted into cryptocurrency before sending it to anonymous cryptocurrency wallets.  Those funds were obtained through, among other things, a business email compromise scheme in which a New York City-based non-profit organization had more than $3 million dollars stolen from it by hackers.  Between February and June 2021, MIZRAHI laundered a total of more than $4 million in fraud and narcotics proceeds.   

In addition, between April and June 2021, MIZRAHI participated in a credit card fraud scheme in which he ran nearly $8 million in fraudulent credit card charges through his company.  Those charges were run on multiple credit cards issued in the names of third parties, some of which had been stolen, and without any legitimate work being done or services being provided.  As part of the scheme, MIZRAHI prepared false invoices which he sent to banks and credit card companies to justify the charges.

*                *                *

MARTIN MIZRAHI, 51, of Las Vegas, Nevada, was convicted of (i) conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison; (ii) wire fraud, which carries a maximum sentence of 20 years in prison; (iii) bank fraud, which carries a maximum sentence of 30 years in prison; (iv) conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; (v) money laundering, which carries a maximum sentence of 20 years in prison; (vi) aggravated identity theft, which carries a mandatory minimum sentence of two years in prison to run consecutively to any other prison terms imposed; and (vii) conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison.

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

Mr. Williams praised the Federal Bureau of Investigation for its outstanding work on the investigation. 

The prosecution of this case is being handled by the Office’s White Plains Division and the Illicit Finance and Money Laundering Unit.  Assistant U.S. Attorneys Benjamin Klein and Emily Deininger are in charge of the prosecution, with the assistance of Paralegal Specialists Dean Iannuzzelli and Nerlande Pierre.

          دیمین ویلیامز، دادستان ایالات متحده برای منطقه جنوبی نیویورک؛ متیو جی. اولسن، دستیار دادستان کل برای امنیت ملی؛ برایان ورندرن، دستیار مدیر بخش سایبری اداره تحقیقات فدرال («اف بی ای»)؛ و جیمز اسمیت، دستیار مدیر مسئول دفتر منطقه‌ای نیویورک اف بی آی، امروز بازکردن کیفرخواستی را اعلام کردند که شهروند و ساکن ایران علیرضا شفیعی نسب را متهم می‌کند به دست داشتن در یک کارزار سایبری برای به مخاطره انداختن دولت ایالات متحده و نهادهای خصوصی، از جمله وزارتهای خزانه‌ داری و امور خارجه ایالات متحده، پیمانکاران دفاعی، و دو شرکت مستقر در نیویورک. این پرونده به قاضی منطقه ای ایالات متحده مری کی ویسکوسیل محول شده است. شفیعی نسب هنوز آزاد است.

دیمین ویلیامز، دادستان ایالات متحده گفت: «همانطور که ادعا می‎‌شود، علیرضا شفیعی نسب در یک کارزار سایبری با به کاربردن فیشینگ نیزه‌ای و سایر فنون هک برای آلوده کردن بیش از ۰۰۰/۲۰۰ دستگاه قربانی شرکت کرد، که بسیاری از آنها حاوی اطلاعات دفاعی حساس یا محرمانه بوده‌اند. طرحهای نفوذ سایبری مانند جرمی که ادعا شده است، امنیت ملی ما را تهدید می‌کنند و من به شرکای مجری قانونمان و دادستانهای
حرفه ای این دفتر افتخار می‌کنم که با به کاربردن فناوریهای نوآورانه و اقدامات تحقیقاتی، این مجرمان سایبری را مختل و ردیابی می‌کنند.»

متیو جی. اولسن، دستیار دادستان کل برای امنیت ملی گفت: «ادعا می‌شود که آقای شفیعی نسب در حالی که در ظاهر به عنوان یک کارشناس امنیت سایبری برای مشتریان مستقر در ایران کار می‌کرد، در یک کارزار مداوم برای به مخاطره انداختن سامانه‌های رایانه‌ای بخش خصوصی و دولتی ایالات متحده شرکت داشت. اتهامات امروز روشنگر بوم‌سازگان سایبری فاسد ایران است که در آن مجرمان آزادند که سامانه‌های رایانه‌ای خارج از کشور را هدف قراردهند و اطلاعات و زیرساختهای حساس ایالات متحده را تهدید کنند. قسمت سایبری امنیت ملی ما همچنان تمرکز دارد که این طرحهای هک فرامرزی را مختل، و با آنهایی که مسئول هستند برخورد کند.»

برایان ورندرن، دستیار مدیر بخش سایبری اف بی آی گفت: «اف بی آی اهرم همه تواناییهایش را در مبارزه با سازمانهای هکری ایرانی که بخش دولتی و خصوصی آمریکا را تهدید می‌کنند به‌ کار خواهد برد. ما همه را تشویق می‌کنیم که با رعایت بهداشت سایبری احتمال آسیب‌پذیری از عاملان بدخواهی مثل شفیعی نسب را تعدیل کنند. همکاری نزدیک با شرکا که امروز منجر به باز کردن این کیفرخواست شد اینجا تمام نمی‌شود، و ما مشتاقانه در انتظار ادامه همکاری در این فضا هستیم.»

جیمز اسمیت، دستیار مدیر مسئول دفتر منطقه‌ای نیویورک اف بی آی گفت: «مجرمان سایبری مخاصم مصمم هستند که با به کار بردن کارزار هک به ایمنی عمومی ما آسیب بزنند و امنیت ملی ما را تهدید کنند.  ادعا می‌شود که علیرضا شفیعی نسب در طول چندین سال در یک کارزار تهاجمی برای هدف قراردادن نهادهای دولتی ایالات متحده، پیمانکاران دفاعی، و شرکتهای مستقر در نیویورک که از نزدیک با وزارت دفاع کار می‌کنند شرکت می‌کرد. این پرونده یادآور این است که لازم است همه ما در امنیت سایبری آگاه و کوشا باشیم تا قربانی عاملان بدخواه نشویم. برای مبارزه با عاملان متخاصم دولت-ملت که در تلاش به آسیب زدن به کشورمان در فصای سایبری هستند، اف بی آی همچنان به رهبری ادامه خواهد داد.»         

 بر پایه اتهامات موجود در کیفرخواستی که امروز در دادگاه فدرال منهتن باز شد:۱

 دست کم از سال ۲۰۱۶ تا حدود آوریل ۲۰۲۱، علیرضا شفیعی نسب و دیگر توطئه‌گران عضو یک سازمان هکری بودند که در یک کارزار چند ساله هماهنگ برای انجام و تلاش برای انجام نفوذهای کامپیوتری شرکت داشتند. این نفوذها بیش از دوازده شرکت آمریکایی و وزارت خزانه‌های داریی و امور خارجه ایالات متحده را هدف قرار دادند.

قربانیان بخش خصوصی این گروه هکری در درجه اول پیمانکاران دفاعی بوده‌اند که شرکتهایی هستند که برنامه‌های وزارت دفاع ایالات متحده را حمایت می‌کنند. علاوه بر این، این گروه یک شرکت حسابداری مستقر در نیویورک و یک شرکت مهمان‌نوازی مستقر در نیویورک را هدف قرار داد.

در انجام کارزار هک خود، این گروه از فیشینگ نیزه‌ای برای آلوده کردن رایانه های قربانی با بدافزار
استفاده کرد - یعنی فریب دادن دریافت کننده یک رایانامه برای کلیک کردن روی یک پیوند مخرب. در جریان کارزار خود علیه یک قربانی، این گروه بیش از ۰۰۰/۲۰۰ هزار حساب کاربری کارکنان را به مخاطره انداخت. در یک قربانی دیگر، توطئه‌گران حسابهای کاربری ۰۰۰/۲ کارمند را هدف قرار دادند.  به منظور مدیریت کارزار فیشینگ نیزه‌ای خود، این گروه یک برنامه کامپیوتری خاص ساخت و به کاربرد که توطئه‌گران را قادر به سازماندهی و استقرار حملات فیشینگ نیزه‌ای کرد.

در جریان این حملات فیشینگ نیزه‌ای، توطئه‌گران یک حساب مدیریتی رایانامه‌ متعلق به یک پیمانکار دفاعی («پیمانکار دفاعی-۱») را هک کردند. دسترسی به این حساب مدیریتی توطئه‌گران را قادر به ایجاد حساب های غیر مجاز پیمانکار دفاعی-۱ کرد، که سپس توطئه‌گران از آنها برای فرستادن کارزار فیشینگ نیزه‎‌ای به کارکنان یک پیمانکار دفاعی دیگر و یک شرکت مشاوره استفاده کردند.

علاوه بر فیشینگ نیزه‌ای، توطئه‌گران مهندسی اجتماعی به کار بردند، از جمله جا زدن خود به نام دیگران، معمولا زنان، تا اعتماد قربانیان را بدست بیاورند. این تماسهای مهندسی اجتماعی شیوه دیگر توطئه برا

شفیعی نسب در این طرحها شرکت می‌کرد. در طول مشارکت خود در آن طرح، او در استخدام محک رایان افراز، یک شرکت مستقر در ایران که در ظاهر خدمات امنیت سایبری ارائه می‌داد، اما در واقع چهره‌ای برای عملیات توطئه‌گران بود. شفیعی نسب مسئول تهیه زیرساختهای مورد استفاده توطئه بود. در طول انجام این کارها شفیعی نسب با به کاربردن هویت دزدیده شده یک فرد حقیقی یک سرور و حسابهای رایانامه‌ای ثبت کرد که در طول عملیات سایبری به کاربرده شدند.

*                *                *

شفیعی نسب، ۳۹ ساله از ایران، متهم به یک فقره توطئه برای ارتکاب تقلب کامپیوتری است که حداکثر مجازات آن پنج سال زندان است؛ یک فقره توطئه برای ارتکاب کلاهبرداری سیمی، که حداکثر مجازات آن ۲۰ سال زندان است؛ یک فقره کلاهبرداری سیمی، که حداکثر مجازات آن ۲۰ سال زندان است؛ و یک فقره سرقت هویت وخیم، که مجازات آن یک دوره پی‌در‌پی اجباری دو سال زندان است.      

حداکثر مجازاتهای بالقوه در این مورد توسط کنگره مقرر می‌شود و در اینجا فقط برای اطلاع ارائه شده، زیرا هر گونه مجازات متهم توسط قاضی تعیین خواهد شود.

همزمان با باز کردن کیفرخواست، برنامه «پاداش برای عدالت» وزارت امور خارجه پاداشی تا
۱۰ میلیون دلار برای اطلاعاتی که منجر به شناسایی شفیعی نسب یا مکان او می‌شود ارائه می‌دهد. هر کسی که اطلاعاتی در باره شفیعی نسب و فعالیتهای سایبری بدخواهانه او دارد با «پاداش برای عدالت» از راه کانال تور آن وزارتخانه تماس بگیرد: he5dybnt7sr6cm32xt77pazmtm65flqy6irivtflruqfc5ep7eiodiad.onion

(مرورگر تور نیاز دارد).

آقای ویلیامز از کار تحقیقاتی برجسته اف بی ای، از جمله کار بخش سایبری اف بی ای، ستایش کرد.

این پرونده توسط واحد تقلبها و جرایم سایبری پیچیده اجرا می شود. دستیاران دادستان ایالات متحده رایان ب. فینکل، داینا مک‌‌ کلود، و دنیل جی. نسیم مسئولین پیگرد قانونی هستند، با کمک از وکیل محاکمه متیو چنگ از قسمت سایبری بخش امنیت ملی.

          اتهامات مندرج در کیفرخواست صرفا اتهام هستند، و متهم بیگناه فرض می شود مگر اینکه و تا زمانی که گناهکار بودنش ثابت شود.

_____________________

۱همانگونه که سرفصل بیان می‌کند، تمام متن کیفرخواست و توصیفی که کیفرخواست در اینجا مطرح می‌کند فقط ادعا است، و هر واقعیتی که توصیف شده است فقط باید به عنوان یک ادعا تلقی شود.

استقرار بدافزار روی رایانه‌های قربانی و به مخاطره انداختن آن دستگاه‌ها و حسابها بود.

Damian Williams, the United States Attorney for the Southern District of New York; Brian M. Boynton, the Principal Deputy Assistant Attorney General and head of the Department of Justice’s Civil Division; Patrizia Cavazzoni, M.D., the Director of the Center for Drug Evaluation and Research of the Food and Drug Administration (“FDA”); Michael Rogers, the Associate Commissioner for Regulatory Affairs of the FDA; Christi A. Grimm, the Inspector General of the Department of Health and Human Services (“HHS-OIG”); Robert P. Storch, the Inspector General of the Department of Defense (“DOD”); Michael J.  Missal, the Inspector General of the Department of Veterans Affairs (“VA”); and Derek M. Holt, the Special Agent in Charge of the Office of Personnel Management – Office of Inspector General (“OPM OIG”), announced today that the United States has reached an agreement to resolve its monetary claims — including claims arising from criminal and civil investigations — against ENDO INTERNATIONAL PLC and its affiliates (together, “ENDO”), a large pharmaceutical company that previously manufactured Opana ER, a powerful branded opioid drug, in its Chapter 11 bankruptcy proceeding.  As part of ENDO’s bankruptcy plan, a group of ENDO’s secured lenders will purchase ENDO’s assets and operate the business under a new corporate structure.  The agreement provides that this new business will pay the United States $364.9 million over 10 years, which can be prepaid at $200 million on the bankruptcy plan’s effective date, plus up to an additional $100 million contingent on the business performance of the new company.  The bankruptcy settlement, which is subject to court approval, resolves multiple federal claims against ENDO, including criminal and civil fraud claims, healthcare agency claims, and tax claims.

As part of the overall settlement, the Department of Justice announced that Endo Health Solutions, Inc. (“EHSI”), one of ENDO’s affiliates, has agreed to resolve criminal and civil investigations related to the company’s sales and marketing of the opioid drug Opana ER with INTAC (“Opana ER”).  The payments required by the civil and criminal agreements will be paid as claims in the Chapter 11 bankruptcy proceedings. 

Under the proposed global resolution, EHSI agreed to plead guilty in federal court in the Eastern District of Michigan to a one-count misdemeanor information charging it with violating the Federal Food, Drug, and Cosmetic Act (“FDCA”) by introducing misbranded drugs into interstate commerce.  The criminal resolution includes the second-largest set of criminal financial penalties ever levied against a pharmaceutical company, including a criminal fine of $1.086 billion and an additional $450 million in criminal forfeiture.  The proposed resolution includes a corporate criminal release regarding conduct relating to the sale, marketing, and distribution of Opana ER, but does not release any individual criminal liability.

EHSI also has agreed to a civil settlement of $475.6 million to resolve its civil liability under the False Claims Act.  The civil settlement will address alleged losses to federal healthcare programs that paid for Opana ER. 

When ENDO filed for bankruptcy in August 2022, it proposed to sell substantially all of its assets in a manner that contravened key requirements of the Bankruptcy Code.  ENDO’s original proposal would have provided virtually no recovery to the federal government on account of its claims, while improperly paying several other creditor groups on account of their claims, even though they were entitled to lower or equal priority as the Government’s claims.  This settlement was achieved after the Government objected to the proposed sale in Bankruptcy Court.  Through the settlement, the Government has ensured both that it is compensated for its claims and that ENDO does not run afoul of the Bankruptcy Code by paying only certain of its creditors or violating the Bankruptcy Code’s priority scheme.

U.S. Attorney Damian Williams said: “Chapter 11 is an important tool for businesses to preserve value for their stakeholders.  Bankruptcy protections are not a free pass to evade responsibility for criminal misconduct, civil fraud, or taxes.  Today’s settlement ensures that Endo takes responsibility for its past misconduct, pays its federal debts, helps abate the nation’s opioid crisis by funding evidence-based treatment programs at the state and local level, and distributes payments to individuals harmed by the opioid epidemic.”

Principal Deputy Assistant Attorney General Brian M. Boynton said: “Companies that profit from the opioid abuse epidemic by misrepresenting the safety of their opioid products and using reckless marketing tactics to increase sales threaten the health and safety of Americans.  With today’s announcement of a criminal guilty plea and a substantial civil settlement, the Department of Justice re-affirms its commitment to holding accountable those whose illegal conduct contributed to the opioid crisis.”

FDA Director Patrizia Cavazzoni, M.D. said: “Combatting the opioid epidemic remains a top public health priority for the FDA.  This case demonstrates FDA and DOJ’s commitment to work collaboratively to hold drug manufacturers accountable if they fail to share accurate information with health care professionals about the risks and benefits of opioids.”

FDA Associate Commissioner Michael Rogers said: “The metrics of the opioid crisis are staggering.  When companies do not provide accurate information about the safety and abuse potential of their products, they put patients at risk of abuse and addiction.  Such conduct will not be tolerated, and we will aggressively pursue and bring to justice those who endanger the public health in this manner.”

HHS-OIG Inspector General Christi A. Grimm said: “The opioid crisis remains a public health emergency nationwide, and those impacted are at the forefront of our work.  HHS-OIG is staunchly committed to protecting the millions of people served by federal healthcare programs from schemes such as this, while also striving to ensure they have access to necessary treatment.”

DOD Inspector General Robert P. Storch said: “The misbranding of opioids negatively impacts the integrity of TRICARE, the military’s healthcare system relied on by more than nine million service members, retirees, and their families.  Today’s settlement demonstrates the ongoing commitment of the Defense Criminal Investigative Service and its law enforcement partners to promote accountability and transparency throughout the pharmaceutical industry and prosecute those who put profits ahead of patient welfare.  The delivery of quality healthcare is too important to let a single dollar go to waste.”

VA Inspector General Michael J. Missal said: “Veterans and their families expect and deserve the highest quality health care delivered in a safe and accountable setting.  False or misleading claims about potentially dangerous drugs put veterans’ care at risk.  The VA Office of Inspector General is committed to working with our law enforcement partners to ensure the safety of those who entrust their health care to the providers and staff at VA’s 1,300 medical facilities.”

OPM OIG Special Agent in Charge Derek M. Holt said: “Protecting the health and safety of Federal employees, annuitants, and their families is a top priority for OPM OIG.  Today’s criminal and civil resolutions demonstrate the exemplary work of our investigative staff, law enforcement partners, and colleagues at the Department of Justice in holding manufacturers accountable for actions that contribute to the opioid epidemic.”

The Bankruptcy Resolution

As part of ENDO’s bankruptcy plan, a group of ENDO’s secured lenders will purchase ENDO’s assets and operate the business under a new corporate structure.  The agreement provides that this new business will pay the United States $364.9 million over 10 years, which can be prepaid at $200 million on the bankruptcy plan’s effective date, plus up to an additional $100 million contingent on the business performance of the new company.  The bankruptcy settlement resolves multiple federal claims against ENDO, including the criminal and civil fraud claims, as well as additional healthcare agency claims and tax claims. 

In addition to the Justice Department’s criminal and civil claims, the HHS Centers for Medicare and Medicaid Services (“CMS”), HHS’s Indian Health Service, and the VA have asserted claims against ENDO for the costs these programs incurred in providing medical care to treat individuals who suffer from opioid-use disorder as a result of their use of Opana ER and other opioids manufactured and sold by ENDO.  CMS has also filed a claim to recover costs it incurred based on Medicare beneficiaries’ use of other ENDO products, including transvaginal mesh and ranitidine.

Finally, the Internal Revenue Service (“IRS”) filed substantial tax claims against ENDO based on ongoing audits.  These audits concerned, among other things, ENDO’s valuation of assets it transferred to foreign affiliates and its payment of a large loan pre-payment penalty to a foreign affiliate for which it sought a tax deduction.  A substantial majority of these payments were entitled to priority in bankruptcy over ENDO’s other unsecured claims.  The health care agency and IRS claims have also been resolved though the bankruptcy settlement.

In the settlement agreement, the Government will receive up to a total of $464.9 million to satisfy all of these categories of claims in the bankruptcy.  First, the Government will receive $364.9 million in 10 annual payments that can be prepaid at either party’s request.  If prepaid on the effective date of the bankruptcy plan, the Government will receive $200 million.  The Government will also receive up to an additional $100 million if the new company substantially exceeds its revenue projections in the next several years.  The settlement agreement further precludes the new company from acquiring any unused tax credits or other beneficial tax attributes of ENDO.

Besides paying government claims, the bankruptcy plan has other significant features.  Earlier in the bankruptcy case, ENDO agreed to stop promoting opioids to prescribers and to turn over millions of documents related to its role in the opioid crisis for publication in a public online archive.  The new ENDO business will also make significant payments to state, local, and tribal governments to fund programs to help abate the opioid crisis.  The Government has agreed to credit these payments, which will support programs to treat and prevent opioid-use disorder, against ENDO’s criminal forfeiture judgment.

In addition, one important condition in the resolution is that ENDO would cease to operate in its current form and would not emerge from the bankruptcy.  Moreover, as part of its resolution with bankruptcy opioid claimants, ENDO’s affiliates have agreed to a Voluntary Operating Injunction that restrains opioid marketing and sales and requires ENDO to turn over millions of documents related to its role in the opioid crisis for publication in a public online archive.

The settlement is contingent on Bankruptcy Court approval of ENDO’s Chapter 11 plan.  U.S. Bankruptcy Judge James M. Garrity has scheduled a hearing on March 19, 2024, to consider approving this plan.

The Criminal Plea

As part of the criminal plea, EHSI will admit that from April 2012 through May 2013, certain EHSI sales representatives marketed Opana ER to prescribers by touting Opana ER’s purported abuse deterrence, tamper resistance, and/or crush resistance, despite a lack of clinical data supporting those claims.  According to the plea agreement, certain EHSI sales managers were aware that the sales representatives were making claims of purported abuse deterrence, tamper resistance, and/or crush resistance during sales calls, including hitting demonstration “blister packs” of non-medicated sample pills with hammers and conducting other demonstrations to convey the message that Opana ER was, in fact, crush proof and tamper resistant.  The approved labeling for Opana ER did not provide adequate information for healthcare providers to safely prescribe Opana ER for use as an opioid that is abuse deterrent.  According to the plea agreement, EHSI was responsible for the misbranding of Opana ER by marketing the drug with a label that failed to include adequate directions for its claimed abuse deterrence use, in violation of the FDCA.

EHSI voluntarily withdrew Opana ER from the market in 2017.

The Civil Settlement

The civil settlement announced today resolves allegations that, from 2011 to 2017, EHSI used a marketing scheme that targeted healthcare providers that EHSI knew were prescribing Opana ER for non-medically accepted indications.  Aware that fewer than 10% of Opana ER prescribers wrote more than half of all Opana ER prescriptions, EHSI allegedly sought to increase its revenue from Opana ER prescriptions by focusing its marketing on those healthcare providers who prescribed the highest levels of opioids in general and Opana ER in particular.  When EHSI employees raised concerns about prescribers believed to be engaged in abuse, diversion, or pill mill prescribing, EHSI allegedly ignored or minimized such concerns and continued to directly market Opana ER to such prescribers.

The allegations resolved by the civil settlement relating to EHSI’s marketing activities include that in 2015, after marketing the reformulated Opana ER for years, EHSI sought to further increase prescriptions by partnering with a consulting company to “pull[] all the levers” it could “to drive incremental growth” of Opana ER prescriptions.  In what it termed a “sales force blitz,” EHSI allegedly added 3,000 priority targets to its sales representatives’ call lists, with nearly all of these priority targets chosen because they prescribed a high volume of opioids in general or Opana ER in particular.  EHSI allegedly used sales goals and contests to ensure that its sales representatives targeted these outlier prescribers, including prescribers who previously had been excluded from EHSI’s call lists as posing risks of abuse and diversion.

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Mr. Williams thanked the U.S. Department of Justice’s Tax Division and Civil Division’s Commercial Litigation Branch, Corporate/Financial Litigation and Civil Fraud Sections, and Consumer Protection Branch; the U.S. Attorney’s Office for the Southern District of Florida; the IRS; the Office of the U.S. Trustee for Region 2; the HHS Office of General Counsel, CMS, and Indian Health Service; and the VA for their assistance in achieving this settlement agreement.

This bankruptcy case is being handled by the Office’s Tax & Bankruptcy Unit.  Assistant U.S. Attorneys Jean-David Barnea, Peter Aronoff, and Tara Schwartz are in charge of the case.

Except to the extent that EHSI’s admissions are part of its criminal resolution, the claims resolved by the civil settlement are allegations only and there has been no determination of liability.

Damian Williams, the United States Attorney for the Southern District of New York; Matthew G. Olsen, the Assistant Attorney General for National Security; Bryan Vorndran, the Assistant Director of the Cyber Division of the Federal Bureau of Investigation (“FBI”); and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI, announced today the unsealing of an Indictment charging Iranian citizen and resident ALIREZA SHAFIE NASAB for his involvement in a cyber-enabled campaign to compromise U.S. government and private entities, including the U.S. Departments of the Treasury and State, defense contractors, and two New York-based companies.  The case has been assigned to U.S. District Judge Mary Kay Vyskocil.  NASAB remains at large.

U.S. Attorney Damian Williams said: “As alleged, Alireza Shafie Nasab participated in a cyber campaign using spearphishing and other hacking techniques to infect more than 200,000 victim devices, many of which contained sensitive or classified defense information.  Cyber intrusion schemes such as the one alleged threaten our national security, and I’m proud of our law enforcement partners and the career prosecutors of this Office for using innovative technologies and investigative measures to disrupt and track down these cybercriminals.”

Assistant Attorney General for National Security Matthew G. Olsen said: “While purporting to work as a cybersecurity specialist for Iran-based clients, Mr. Nasab allegedly participated in a persistent campaign to compromise U.S. private sector and government computer systems.  Today’s charges highlight Iran’s corrupt cyber ecosystem, in which criminals are given free rein to target computer systems abroad and threaten U.S. sensitive information and critical infrastructure.  Our National Security Cyber Section remains focused on disputing these cross-border hacking schemes and holding those responsible to account.”

FBI Cyber Division Assistant Director Bryan Vorndran said: “The FBI will leverage all of our capabilities in combatting the threat waged by Iranian hacker organizations against America’s public and private sector.  We encourage everyone to practice proper cyber hygiene to mitigate the risk of becoming vulnerable to malicious actors like Nasab.  The close collaboration with partners that led to today’s unsealed indictment does not end there, and we are looking forward to continued teamwork in this space.”

FBI New York Assistant Director in Charge James Smith said: “Hostile cybercriminals are determined to use hacking campaigns to harm public safety and threaten our national security.  Alireza Nasab, over an extended number of years, allegedly participated in an aggressive campaign of cyberattacks targeting U.S. government agencies, defense contractors, and New York-based companies working closely with the Department of Defense.  This case is a reminder that we all need to maintain proper cybersecurity and awareness to avoid falling victim to malicious cyber actors.  The FBI will continue to lead the fight against hostile nation state actors attempting to harm our country in cyberspace.”

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

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

The hacking group’s private sector victims were primarily cleared defense contractors, which are companies that support U.S. Department of Defense programs.  In addition, the group targeted a New York-based accounting firm and a New York-based hospitality company.

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

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

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

NASAB took part in these schemes.  During his participation in the scheme, he was employed by Mahak Rayan Afraz, an Iran-based company that purported to provide cybersecurity services, but which was, in fact, a front for the conspirators’ operations.  NASAB was responsible for procuring infrastructure used by the conspiracy.  During the course of this conduct, NASAB used the stolen identity of a real person in order to register a server and email accounts used in the course of the cyber campaigns.

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

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

Concurrent with the unsealing of the Indictment, the Department of State’s Rewards for Justice Program is offering a reward of up to $10 million for information leading to the identification or location of NASAB.  Anyone with information on NASAB and his malicious cyberactivity should contact Rewards for Justice via their Tor-based tips-reporting channel at: he5dybnt7sr6cm32xt77pazmtm65flqy6irivtflruqfc5ep7eiodiad.onion (the Tor browser is required).

Mr. Williams praised the outstanding investigative work of the FBI, including the work of the FBI Cyber Division.    

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

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; Ralph Sozio, the U.S. Marshal for the Southern District of New York; and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of AUSTIN MORRISHOW, who was charged with possessing ammunition after conviction of a felony.  MORRISHOW and a co-defendant, CURTIS WHITE, were congregated outside on a busy sidewalk in the Bronx the Friday before the July Fourth holiday weekend last year when they fired multiple shots at three cars in the Bronx, New York, hitting and seriously injuring a five-year-old child sitting in the backseat of one of the cars.  MORRISHOW, who had been on the run since June 30, 2023, following the shooting, was arrested yesterday afternoon in the Bronx, New York.  MORRISHOW’s and WHITE’s cases are assigned to District Judge Loretta A. Preska.  MORRISHOW was presented and arraigned before U.S. Magistrate Judge Jennifer E. Willis today, and WHITE was previously arrested and arraigned before District Judge Paul A. Crotty.

U.S. Attorney Damian Williams said: “As alleged, Austin Morrishow recklessly fired multiple rounds of illegally possessed ammunition at innocent New Yorkers, striking and injuring a young child and endangering the lives of other bystanders.  Instead of turning himself in, Morrishow fled for over seven months.  Today’s arrest keeps our promise to work relentlessly with our law enforcement partners to track down and capture fugitives—whether it takes seven days, seven weeks, or seven months—and bring them to justice.”

U.S. Marshal Ralph Sozio said: “This was another successful takedown of an alleged dangerous fugitive, who was involved in the shooting of an innocent 5-year-old girl.  I want to thank the Southern District of New York Warrant Squad, the NY/NJ Regional Fugitive Task Force and the NYPD for their relentless pursuit in apprehending him without incident. This is a true testament that we will be relentless in our pursuit to bring you to justice, making our city streets safe.” 

NYPD Commissioner Edward A. Caban said: “This arrest is about intelligence-driven crime-fighting and, above all else, consequences.  If you commit a violent felony in New York City, we will find you, we will arrest you, and we will build a case to prosecute you to the fullest extent of the law.  I thank our unremitting NYPD detectives, and all the members of the U.S. Marshals Service Regional Fugitive Task Force, for taking another alleged criminal off our streets.”

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

On June 30, 2023, MORRISHOW and WHITE were gathered outside at a makeshift memorial for an individual who had been shot and killed the day before.  A tan sedan was parked nearby with a five-year-old girl in the backseat and her father in the front seat, waiting for two friends to arrive so that they could attend a car show.  After the two friends arrived in a silver sedan and red minivan, the driver of the silver sedan pulled next to the tan sedan, revving his engine and causing it to backfire.  The sound of the backfire caused MORRISHOW, WHITE, and others to scatter. 

MORRISHOW took cover behind a parked vehicle and fired a .40 caliber pistol multiple times at the three cars, which began fleeing from the gunfire.  A still image from surveillance video footage is below with MORRISHOW circled in red.

WHITE ran down the street after the fleeing cars, firing a .380 caliber pistol.  A still image from surveillance video footage is below with WHITE circled in red.

After the victim’s father drove his daughter to safety a couple blocks away, he got out of his car to check on his daughter.  Realizing that she had been shot in the back, he held her in his arms and yelled for somebody to call an ambulance.  The driver of the silver car called 911.  Minutes later, NYPD officers arrived and transported the victim to the hospital.

The NYPD subsequently recovered seven .40 caliber shell casings from the vicinity of the parked car near where MORRISHOW fired his gun, two .380 caliber shell casings from the street near where WHITE fired his gun, and a .380 caliber firearm from an apartment that WHITE was seen entering immediately after the shooting.  MORRISHOW was not permitted to possess a firearm or ammunition because of his prior federal conviction for using and carrying a firearm during and in relation to a narcotics conspiracy, and WHITE was not permitted to possess a firearm or ammunition because of his prior state conviction for attempted first-degree assault with intent to cause serious injury with a weapon.

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MORRISHOW, 26, and WHITE, 26, both of the Bronx, New York, are each charged with one count of possession of ammunition after a felony conviction, which carries a maximum sentence of 15 years in prison.      

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

Mr. Williams praised the outstanding work by the U.S. Marshals Service and the NYPD to apprehend MORRISHOW.  Mr. Williams also thanked the Bureau of Alcohol, Tobacco, Firearms, and Explosives for their participation in the investigation.

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

The charges contained in the Complaint and 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 Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Maxim Marchenko, 51, a Russian citizen who has resided in Hong Kong, pleaded guilty today to charges of money laundering and smuggling goods from the United States. Marchenko was arrested in September 2023.

According to court documents, Marchenko operated several Hong Kong-based shell companies, including Alice Components Co. Ltd. (Alice Components), Neway Technologies Limited (Neway) and RG Solutions Limited (RG Solutions). Marchenko and two co-conspirators (CC-1 and CC-2), who are also Russian nationals, operate an illicit procurement network in Russia, Hong Kong, and elsewhere overseas. This procurement network has fraudulently obtained from U.S. distributors large quantities of dual-use, military grade microelectronics, specifically OLED micro-displays, on behalf of Russia-based end users. To carry out this scheme, Marchenko, CC-1, and CC-2 used shell companies based in Hong Kong and other deceptive means to conceal from U.S. Government agencies and U.S. distributors that the OLED micro-displays were destined for Russia. The technology that Marchenko and his co-conspirators fraudulently procured have significant military applications, such as in rifle scopes, night-vision googles, thermal optics and other weapon systems.

“By his own admission, Mr. Marchenko conspired to smuggle military-grade technology to Russia, using a complex network of front companies to hide his illicit activity,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today, once again, the Justice Department is holding accountable those who would enable the Kremlin and its unjust war of aggression against Ukraine.” 

“Today, Maxim Marchenko admitted in court that he illicitly sought to procure U.S.-manufactured, military grade microelectronics to deliver to end users in Russia,” said U.S. Attorney Damian Williams for the Southern District of New York. “Marchenko concealed his scheme to funnel these microelectronics – which had application for use in rifle scopes, night-vision goggles, thermal optics and other weapons systems – by using shell companies and other elaborate money laundering techniques. Today’s guilty plea should send a strong message to those who attempt to break the law by supplying Russia with U.S. military technology that this office will vigorously pursue such smuggling schemes and hold those involved to full account.”

“Today’s guilty plea demonstrates the FBI’s relentless pursuit of justice as we put yet another individual who tried to illegally transport military-grade U.S. technology to Russia behind bars,” said Executive Assistant Director of the FBI's National Security Branch Larissa L. Knapp. “We will continue to collaborate with our partners to protect our national security and prevent the smuggling of such goods which could benefit authoritarian adversaries.”

“The Russian military relies on illicit procurement networks, including the one Marchenko operated here, to perpetrate their brutal war against the Ukrainian people,” said Matthew Axelrod, Assistant Secretary of Commerce for Export Enforcement. “We will continue to leverage all of our authorities to combat the transshipment of U.S. parts through third countries, like the People’s Republic of China, to the Russian military.”

To perpetrate the scheme, Marchenko and other members of the conspiracy acquired the dual-use OLED micro-displays from U.S.-based distributors using Marchenko’s Hong Kong-based shell companies, including Alice Components, Neway and RG Solutions. Members of the conspiracy, including Marchenko, procured these sensitive microelectronics by falsely representing to the U.S. distributors (who, in turn, are required to report to U.S. agencies) that Alice Components was sending the shipments to end users located in China, Hong Kong and other countries outside of Russia for use in electron microscopes for medical research. In reality, the OLED micro-displays were destined for end users in Russia. Marchenko and other members of the conspiracy concealed the true final destination (Russia) from U.S. distributors for the purpose of causing false statements to the U.S. agencies.

To conceal the fact that these OLED micro-displays were destined for Russia, Marchenko and other members of the conspiracy worked together to transship the illicitly procured OLED micro-displays by using pass-through entities principally operated by Marchenko in third countries, such as Hong Kong. Marchenko then caused the OLED micro-displays to be shipped to the ultimate destination in Russia using, among other entities, a freight forwarder known to provide freight forwarding services to Russia. In addition, Marchenko and other members of the conspiracy used Hong Kong-based shell companies, principally operated by Marchenko, to conceal the fact that payments for the OLED micro-displays were coming from Russia. In total, between in or about May 2022 and in or about August 2023, Marchenko’s shell companies funneled a total of more than $1.6 million to the United States in support of the procurement network’s efforts to smuggle the OLED micro-displays to Russia.

Marchenko pleaded guilty to one count of money laundering, which carries a maximum penalty of 20 years in prison, and one count of smuggling goods from the United States which carries a maximum penalty of up to 10 years in prison. He is scheduled to be sentenced on May 29 in Manhattan. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI and Commerce Department’s Bureau of Industry and Security are investigating the case. 

Assistant U.S. Attorneys Jennifer N. Ong and Shiva H. Logarajah for the Southern District of New York are in charge of the prosecution, with assistance from Trial Attorney Garrett Coyle of the Counterintelligence and Export Control Section.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Matthew G. Olsen, the Assistant Attorney General of the Justice Department’s National Security Division, announced today that MAXIM MARCHENKO pled guilty to charges of money laundering and smuggling goods from the U.S. MARCHENKO was arrested in September 2023 and pled guilty earlier today before U.S. Magistrate Judge Victoria Reznik.

U.S. Attorney Damian Williams said: “Today, Maxim Marchenko admitted in court that he illicitly sought to procure U.S.-manufactured, military grade microelectronics to deliver to end users in Russia.  Marchenko concealed his scheme to funnel these microelectronics – which had application for use in rifle scopes, night-vision goggles, thermal optics, and other weapons systems – by using shell companies and other elaborate money laundering techniques.  Today’s guilty plea should send a strong message to those who attempt to break the law by supplying Russia with U.S. military technology that this Office will vigorously pursue such smuggling schemes and hold those involved to full account.”

Assistant Attorney General Matthew G. Olsen said: “By his own admission, Mr. Marchenko conspired to smuggle military-grade technology to Russia, using a complex network of front companies to hide his illicit activity.  Today, once again, the Justice Department is holding accountable those who would enable the Kremlin and its unjust war of aggression against Ukraine.” 

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

At all relevant times, MARCHENKO was a Russian national who resided in Hong Kong and operated several Hong Kong-based shell companies.  MARCHENKO and two co-conspirators (“CC-1” and “CC-2”), who are also Russian nationals, operated an illicit procurement network in Russia, Hong Kong, and elsewhere overseas.  This procurement network fraudulently obtained from U.S. distributors large quantities of dual-use, military grade microelectronics, specifically OLED micro-displays, on behalf of Russia-based end users.  To carry out this scheme, MARCHENKO, CC-1, and CC-2 used shell companies based in Hong Kong and other deceptive means to conceal from U.S. government agencies and U.S. distributors that the OLED micro-displays were destined for Russia.  The technology that MARCHENKO and his co-conspirators fraudulently procured had significant military applications, such as in rifle scopes, night-vision googles, thermal optics, and other weapon systems.

To perpetrate the scheme, MARCHENKO and other members of the conspiracy acquired the dual-use OLED micro-displays from U.S.-based distributors using MARCHENKO’s Hong Kong-based shell companies.  Members of the conspiracy, including MARCHENKO, procured these sensitive microelectronics by falsely representing to the U.S. distributors (who, in turn, are required to report to U.S. agencies) that the Hong Kong shell entity was sending the shipments to end users located in China, Hong Kong, and other countries outside of Russia for use in electron microscopes for medical research.  In reality, the OLED micro-displays were destined for end users in Russia.  MARCHENKO and other members of the conspiracy concealed the true destination (Russia) from U.S. distributors for the purpose of causing false statements to the U.S. agencies.

To conceal the fact that these OLED micro-displays were destined for Russia, MARCHENKO and other members of the conspiracy worked together to transship the illicitly procured OLED micro-displays by using pass-through entities principally operated by MARCHENKO in third countries, such as Hong Kong.  MARCHENKO then caused the OLED micro-displays to be shipped to the ultimate destination in Russia using, among other entities, a freight forwarder known to provide freight forwarding services to Russia.  In addition, MARCHENKO and other members of the conspiracy used Hong Kong-based shell companies, principally operated by MARCHENKO, to conceal the fact that payments for the OLED micro-displays were coming from Russia.

*                *                *

MARCHENKO, 51, a Russian citizen who resided in Hong Kong, pled guilty to one count of money laundering, which carries a maximum sentence of 20 years in prison, and one count of smuggling goods from the U.S., which carries a maximum sentence of 10 years in prison.  MARCHENKO is scheduled to be sentenced on June 6, 2024, before the Honorable Nelson S. Román.

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

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation (“FBI”) and its New York Field Office, Counterintelligence Division and the New York Field Office of the Bureau of Industry and Security of the Department of Commerce.  Mr. Williams also thanked the FBI’s Legal Attaché office in Australia; the U.S. Department of State’s Diplomatic Security Service; the Department of Justice’s National Security Division, Counterintelligence and Export Control Section; and the Office of International Affairs of the Department of Justice’s Criminal Division for their assistance.

This case is being handled by the Office’s Illicit Finance & Money Laundering Unit and White Plains Division.  Assistant U.S. Attorneys Jennifer N. Ong and Shiva H. Logarajah are in charge of the prosecution, with assistance from Trial Attorney Garrett Coyle of the National Security Division’s Counterintelligence and Export Control Section.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced that ROY ESCOBAR was sentenced today to 175 months in prison by U.S. District Judge Andrew L. Carter Jr. for his years of fentanyl trafficking, which caused the overdose death of a 26-year-old man (the “Victim”) in Brooklyn, New York.  ESCOBAR, who previously pled guilty to one count of conspiracy to distribute narcotics, operated his drug trafficking business alongside his two adult sons, Pablo Escobar and Roy Escobar Jr., who have also pled guilty and are awaiting sentencing.

U.S. Attorney Damian Williams said: “Roy Escobar’s actions have left a path of ruin in their wake.  He contributed to the flood of fentanyl plaguing our communities, causing the death of a young man with a bright future ahead of him.  He did all of this despite repeated prior drug trafficking charges and convictions, and he involved his own sons in this criminal activity.  Escobar’s sentence is an important step toward bringing justice to his victims, and it reaffirms our unwavering commitment to combating this ongoing fentanyl crisis by holding drug traffickers like Escobar accountable.”

NYPD Commissioner Edward A. Caban said: “This meaningful prison sentence assures New Yorkers that the NYPD and our law enforcement partners refuse to tolerate the illegal distribution of these poisons in our neighborhoods.  I commend our courageous undercover officer in this case, and I thank our colleagues at the Office of the U.S. Attorney for the Southern District of New York, for continuing to be highly effective partners in our public safety mission.”

According to the sentencing papers and the Court’s determinations at the sentencing hearing:

On May 13, 2022, ROY ESCOBAR texted with the Victim to arrange a sale of what the Victim understood to be heroin.  The Victim confided to ESCOBAR that he was “scared about the fent,” i.e., fentanyl, but ESCOBAR reassured the Victim that he understood the concern, and that he had heroin for sale.  At approximately 10:30 p.m. that night, ESCOBAR arrived outside the Victim’s apartment and sold the Victim the drugs.  Three days later, the Victim was found dead in his apartment, having overdosed the day prior on the drugs sold to him by ESCOBAR.  Unbeknownst to the Victim, the drugs that he purchased from ESCOBAR in fact contained no heroin, but rather fentanyl and fentanyl analogue — far more potent, and deadly, substances — and the Victim died as a result of having consumed them.

Following the Victim’s death, officers with the NYPD recovered the Victim’s phone and discovered his communications with ESCOBAR.  An undercover NYPD officer (the “UC”) subsequently contacted ESCOBAR and began discussions concerning the purchase of narcotics.

ESCOBAR sold fentanyl to the UC eight times over the next several months.  Each time, the UC requested heroin and was led to believe that he was buying heroin, but the drugs that ESCOBAR sold in fact contained fentanyl and fentanyl analogue — the same fatal drugs that ESCOBAR sold to the Victim.

Although ESCOBAR was the primary point of contact for the UC, ESCOBAR also involved his young adult sons, co-defendants Pablo Escobar and Roy Escobar Jr., in the narcotics trafficking.  ESCOBAR explained to the UC that if ESCOBAR was ever unavailable, Pablo Escobar would be available to sell narcotics to the UC on ESCOBAR’s behalf.  And, on two separate occasions, ESCOBAR sent Roy Escobar Jr. to deliver the drugs to the UC in ESCOBAR’s place.

On October 18, 2022, ESCOBAR and his sons were arrested in connection with this investigation.  Later that day, NYPD officers conducted searches of ESCOBAR’s residence in East Rockaway, New York, and a nearby storage unit rented in Roy Escobar Jr.’s name.  During their searches, the officers recovered approximately 4.5 kilograms of cocaine, 198 grams of fentanyl analogue, five grams of crack cocaine, 163 grams of methamphetamine, and drug trafficking paraphernalia, including drug packaging materials that matched packaging recovered from the Victim’s apartment, near the Victim’s body.

The investigation further revealed that ESCOBAR had been significantly involved in this pattern of narcotics trafficking since at least as early as April 2018.  Specifically, the evidence showed that beginning in April 2018, a Venmo account used by ESCOBAR for drug sales received more than 2,000 separate payments, with an average transaction amount of $168.74 and a total amount of $347,772.25.

ESCOBAR engaged in much of this conduct, including the sale of fatal drugs to the Victim, while he was already facing pending drug charges in New York state court.  ESCOBAR had also previously been convicted for narcotics offenses in 2015 and 2002.

*                *                *

In addition to the prison term, ESCOBAR, 46, a Bolivian national residing in East Rockaway, New York, was sentenced to five years of supervised release, ordered to forfeit $55,803, and ordered to pay a $100 mandatory special assessment.

Mr. Williams praised the outstanding investigative work of the NYPD, as well as the Special Agents and Task Force Officers from the U.S. Attorney’s Office for the Southern District of New York involved in this investigation.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Jonathan L. Bodansky and Andrew Jones are in charge of the prosecution.

The Justice Department unsealed an indictment charging an Iranian national with involvement in a cyber-enabled campaign to compromise U.S. governmental and private entities, including the U.S. Departments of the Treasury and State, defense contractors, and two New York-based companies.

According to court documents, from at least in or about 2016 through in or about April 2021, Alireza Shafie Nasab, 39, of Iran, and other co-conspirators were members of a hacking organization that participated in a coordinated multi-year campaign to conduct and attempt to conduct computer intrusions. These intrusions targeted more than a dozen U.S. companies and the U.S. Departments of the Treasury and State. Nasab remains at large.

“While purporting to work as a cybersecurity specialist for Iran-based clients, Mr. Nasab allegedly participated in a persistent campaign to compromise U.S. private sector and government computer systems,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today’s charges highlight Iran’s corrupt cyber ecosystem, in which criminals are given free rein to target computer systems abroad and threaten U.S. sensitive information and critical infrastructure. Our National Security Cyber Section remains focused on disputing these cross-border hacking schemes and holding those responsible to account.”

“As alleged, Alireza Shafie Nasab participated in a cyber campaign using spear phishing and other hacking techniques to infect more than 200,000 victim devices, many of which contained sensitive or classified defense information,” said U.S. Attorney Damian Williams for the Southern District of New York. “Cyber intrusion schemes such as the one alleged threaten our national security, and I’m proud of our law enforcement partners and the career prosecutors of this office for using innovative technologies and investigative measures to disrupt and track down these cybercriminals.”

“The FBI will leverage all of its capabilities in combating the threat posed by Iranian hacker organizations to America’s public and private sectors,” said Assistant Director Bryan Vorndran of the FBI’s Cyber Division. “The close collaboration with partners that led to today’s unsealed indictment of Alireza Shafie Nasab will continue to keep the pressure on cyber adversaries.”

The hacking group’s private sector victims were primarily cleared defense contractors, which are companies that support U.S. Department of Defense programs. In addition, the group targeted a New York-based accounting firm and a New York-based hospitality company.

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

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

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

Nasab took part in these schemes. During his participation in the scheme, he was employed by Mahak Rayan Afraz, an Iran-based company that purported to provide cybersecurity services, but which was, in fact, a front for the conspirators’ operations. Nasab was responsible for procuring infrastructure used by the conspiracy. During the course of this conduct, Nasab used the stolen identity of a real person in order to register a server and email accounts used in the course of the cyber campaigns.

Nasab is charged with one count of conspiracy to commit computer fraud, which carries a maximum penalty of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison; one count of wire fraud, which carries a maximum penalty of 20 years in prison and one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Concurrent with the unsealing of the indictment, the U.S. Department of State’s Rewards for Justice Program is offering a reward of up to $10 million for information leading to the identification or location of Nasab.

Anyone with information on Nasab and his malicious cyberactivity should contact Rewards for Justice via their Tor-based tips-reporting channel at:

he5dybnt7sr6cm32xt77pazmtm65flqy6irivtflruqfc5ep7eiodiad.onion (the Tor browser is required).

The FBI New York Field Office and Cyber Division are investigating the case.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty pleas today of LARS WINKELBAUER and ABILASH KURIEN in connection with a massive scheme to defraud Polar Air Cargo Worldwide, Inc. (“Polar”), a leading cargo airline, of tens of millions of dollars in revenue.  WINKELBAUER pled guilty today to conspiracy to commit wire fraud and money laundering before U.S. District Judge Jesse M. Furman, and KURIEN pled guilty yesterday to the same offense.

U.S. Attorney Damian Williams said: “In April 2023, this Office charged 10 defendants for their involvement in a widespread scheme that permeated nearly every facet of Polar Air Cargo Worldwide.  To date, nine individuals have pled guilty, including Lars Winkelbauer and Abilash Kurien, two top executives who have confessed today and are poised to face time in prison for their betrayal of the company’s trust and that of the wider community.  Wire fraud and money laundering are not merely financial crimes; they erode faith in institutions, undermine economic stability, and harm innocent individuals and businesses.  This Office and our partners recognize that profound impact and we will not falter in our work to uphold the rule of the law.”    

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

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

WINKELBAUER was Polar’s Chief Operating Officer and Executive Vice President and is the most senior of the Executive Defendants.  KURIEN was the Vice President of Marketing, Revenue Management, and Network Planning.

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

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

WINKELBAUER and KURIEN are the eighth and ninth defendants to plead guilty in the case thus far.

*                *                *

WINKELBAUER, 48, of Bangkok, Thailand, and KURIEN, 46, of Wilton, Connecticut, each pled guilty to one count of conspiracy to commit wire fraud and money laundering, which carries a maximum sentence of five years in prison.  WINKELBAUER agreed to pay forfeiture in the amount of $6,774,039.30 and to make restitution to Polar in the amount of $33,539,396.  KURIEN agreed to pay forfeiture in the amount of $7,192,064.41 and to make restitution to Polar in the amount of $22,956,341.  WINKELBAUER is scheduled to be sentenced by Judge Furman on May 30, 2024, and KURIEN is scheduled to be sentenced by Judge Furman on July 23, 2024.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSE LUIS TEJADA AYBAR was sentenced yesterday to 150 months in prison for operating the Cab Louie Delivery Service, an on-demand drug courier service that delivered fentanyl-tainted cocaine to customers in September 2019.  The deadly mix caused the overdose deaths of Marsha Clarke of the Bronx, New York, and Martin Banks and Edward Lynch of Yonkers, New York, as well as the hospitalization of Clarke’s husband.  TEJADA was sentenced before U.S. District Judge Andrew L. Carter, Jr.  Co-defendants ALLEN ALEXIS ABISADA GUZMAN and MARTIN PEREZ were previously sentenced to 98 months and 70 months in prison, respectively.

U.S. Attorney Damian Williams said: “The sentencing of Jose Luis Tejada Aybar marks a crucial step in bringing justice to the victims not only of the Cab Louie Delivery Service but also those victims of fentanyl and other lethal drugs.  The devastating consequences of Tejada’s operation underscore the importance of dismantling criminal enterprises like this, and this prosecution reaffirms our unwavering commitment to combating organized crime and protecting our communities from the dangers of drug trafficking.”

According to the sentencing papers and the Court’s determinations at the sentencing hearing: 

In March 2018, JOSE LUIS TEJADA AYBAR (“TEJADA”) started the Cab Louie Delivery Service, which delivered cocaine to customers in the Bronx and Westchester County.  Customers would call or text one of the business’s rotating dispatch lines to place an order, and the Cab Louie Delivery Service would send a driver to deliver cocaine to the customer.  During its operation from March 2018 to September 2021, the Cab Louie Delivery Service sold, in total, more than 15 kilograms of cocaine — equivalent to nearly 24,000 bags of cocaine. 

As his business expanded, TEJADA hired employees for the Cab Louie Delivery Service.  Two of those employees were ALLEN ALEXIS ABISADA GUZMAN (“ABISADA”) and PEREZ, both of whom delivered cocaine for the business.  In addition to hiring employees, TEJADA led the Cab Louie Delivery Service by sourcing its cocaine, obtaining and operating the dispatch phones, and providing ABISADA with a car to deliver cocaine.  TEJADA profited from the business throughout its three-plus years of operation.

On September 19, 2019, ABISADA delivered cocaine on behalf of the Cab Louie Delivery Service to three different customers:  Clarke, Banks, and Lynch.  The cocaine was tainted with fentanyl.  Within two days, Clarke, Banks, and Lynch were found dead, and Clarke’s husband was found unresponsive.  Medical examiners determined that Clarke, Banks, and Lynch all died from acute intoxication by the combined effects of cocaine and fentanyl, among other drugs.  Clarke’s husband was hospitalized for a fentanyl overdose and in a coma for a period.  When he emerged from the coma, Clarke’s husband had to relearn how to speak, how to feed himself, how to use the restroom, and how to walk. 

Despite learning of the overdose deaths of Banks and Lynch through a local news article, which he saved on his phone, TEJADA continued operating the Cab Louie Delivery Service.  Between November 6, 2019, and February 13, 2020, a New York Police Department (“NYPD”) undercover officer made six controlled purchases of cocaine from the Cab Louie Delivery Service.  TEJADA personally made two of the deliveries, ABISADA made three, and PEREZ made one. 

*                *                *

In addition to the prison term, TEJADA, 41, of Miami, Florida, was sentenced to five years of supervised release and a $100 mandatory special assessment.   

Mr. Williams praised the outstanding investigative work of the NYPD, the Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force, and the Complex Analytical and Social Media Enhancement Team at the New York/New Jersey High Intensity Drug Trafficking Area.  Mr. Williams also thanked the Yonkers Police Department and the Westchester County District Attorney’s Office for their assistance in the case. 

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.  The Strike Force is affiliated with the DEA’s New York Division and includes agents and officers of the DEA; NYPD; New York State Police; Homeland Security Investigations; U.S. Internal Revenue Service, Criminal Investigation; U.S. Customs and Border Protection; New York National Guard; U.S. Coast Guard; New York State Department of Corrections and Community Supervision; Bergen County Prosecutor’s Office; Fort Lee Police Department; Palisades Interstate Parkway Police; Teaneck Police Department; Hillsdale Police Department; Closter Police Department; Northvale Police Department; River Vale Police Department; Englewood Police Department; Saddle River Police Department; Bergen County Sheriff’s Department; Hawthorne Police Department; and Hackensack Police Department.

The case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorney Alexander Li is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York; Frank A. Tarentino III, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”); and Erin Keegan, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the filing of a Complaint in Manhattan federal court charging EDWARD EUSTATE JIMENEZ, a/k/a “Chino,” and WILIANYI ALMANZAR POLANCO with conspiracy to distribute narcotics and distribution of narcotics.  JIMENEZ and POLANCO were arrested yesterday afternoon in the Washington Heights neighborhood of Manhattan.  They were presented earlier today before U.S. Magistrate Judge Gary Stein. 

U.S. Attorney Damian Williams said: “This seizure removed substantial quantities of narcotics from the streets and helped to disrupt an alleged mail order business that promised legitimate prescriptions drugs but was really distributing deadly narcotics, like fentanyl.  I express deep gratitude to the efforts of our law enforcement partners and the career prosecutors of this Office as we remain committed to saving lives by keeping fentanyl off the streets of our community.”   

DEA Special Agent in Charge Frank A. Tarentino III said: “Simply put, this alleged fentanyl pill distribution organization was delivering deadly fentanyl to doorstops across America.  This emerging trend of mail order fentanyl pill delivery services elevates the danger of ordering pills from rogue online platforms and social media.  Fentanyl is the greatest threat to Americans ages 18-45, and DEA lab analysis has found that 7 out of 10 fentanyl pills contain a potential lethal dose; therefore, tens of thousands of potential lethal doses were removed from circulation today.  I commend our law enforcement partners for their collaboration and focus on arresting drug traffickers bringing the most harm to our communities and taking deadly poison off our streets.”  

HSI Acting Special Agent in Charge Erin Keegan said: “Fentanyl contributed to more than 100,000 overdose fatalities in 2023 — with a large number of cases tragically stemming from individuals unknowingly ingesting fentanyl in seemingly legitimate pharmaceuticals purchased via the Internet and delivered through the mail.  The goal of the HSI New York El Dorado Task Force is to leverage every tool at the state, local, and federal level to disrupt fentanyl production, transportation, and distribution both locally and globally.  Working with our law enforcement partners and the U.S. Attorney’s Office, we will continue to conduct cross border investigations that degrade the ability of drug traffickers to operate in the New York City area and beyond, ultimately making a profound impact in the fight against the opioid crisis and saving innocent lives.”

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

Since at least in or about September 2023, law enforcement has been investigating a network of drug traffickers (the “Drug Traffickers”) who, among other things, have been distributing large quantities of counterfeit prescription drugs using a mail-order system.  The drugs distributed include pills colored and pressed to look like, among other things, prescription oxycodone and Adderall, but that are, in fact, counterfeit pills laced with fentanyl. 

On multiple occasions, an undercover law enforcement officer purchased pills from the Drug Traffickers which tested positive for, among other things, fentanyl.  Postal records show that at least two of the packages of pills were mailed by someone who appears to be JIMENEZ from a post office (the “Post Office”) located in the Bronx.  Since in or about January 20, 2024, JIMENEZ appears to have sent approximately 188 U.S. Postal Service (“USPS”) packages, including approximately 80 packages that were sent from the Post Office.  On at least one occasion, he was joined by an individual who appears to be POLANCO.

On or about February 26, 2024, law enforcement agents arrested JIMENEZ and POLANCO.  At the time of his arrest, JIMENEZ was scanning parcels for mailing.  Around the same time, law enforcement arrested POLANCO, who was waiting in a vehicle near the Post Office.  Inside the vehicle was a black trash bag containing additional mail packages.

In total, law enforcement encountered more than 35 priority mail packages, each of which contained a quantity of what appeared to be counterfeit prescription pills.  The contents of two of the priority mail packages, containing what appears to be counterfeit oxycodone and counterfeit Adderall, are pictured below:

Also on or about February 26, 2024, law enforcement searched an apartment (the “Apartment”) that was rented or lived in by JIMENEZ and POLANCO and used to package and distribute narcotics for mailing.  During the course of that search, law enforcement officers recovered approximately 100,000 counterfeit pills that appear to be colored and pressed to imitate, among other things, prescription oxycodone, Adderall, and Xanax; a “kilo press,” or device used to press powdered narcotics into kilogram-weight bricks; over 2,000 USPS priority mail envelopes that appear to be unused; and bags containing what appear to be shipping receipts.  A photograph of the narcotics and some of the other material recovered from the Apartment is below: 

Although lab testing is pending, preliminary field tests reveal that almost all of the narcotics recovered have tested positive for fentanyl and methamphetamine.

*                *                *

EDWARD EUSTATE JIMENEZ, 23, and WILIANYI ALMANZAR POLANCO, 32, both of the Bronx, 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 the DEA, HSI, the New York City Police Department, the New York State Police, the USPS, the Kings County District Attorney’s Office, and the New York High Intensity Drug Trafficking Area Task Force, in connection with this investigation.  Mr. Williams also thanked the New York Strike Force Tactical Diversion Squad for their assistance.

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 the guilty plea today of MAYOVANEX RODRIGUEZ, a/k/a “Menorcito,” in connection with his criminal activities as a member of the violent gang Own Every Dollar (“OED”), including the 2022 murder of Anthony Savarese.  RODRIGUEZ pled guilty today to several charges, including murder through use of a firearm, before U.S. Magistrate Judge Jennifer E. Willis. 

U.S. Attorney Damian Williams said: “On February 7, 2022, Mayovanex Rodriguez shot and killed Anthony Savarese in the head at point-blank range in the Bronx.  That murder is just one of the many acts of violence that members and associates of OED have committed that have terrorized Washington Heights and surrounding communities.  This plea is a reminder that this Office will relentlessly pursue any gangs who threaten the safety of New Yorkers and that gang members who commit violent crimes will be apprehended and prosecuted to the fullest extent of the law.” 

As alleged in the Indictment and statements made in public filings and public court proceedings:

RODRIGUEZ is a member of the violent gang OED, a subset of the Trinitarios gang based in and around the Washington Heights area of Manhattan.  The indictments in this case charge 24 members and associates of OED with numerous violent crimes, including five murders and 15 attempted murders.

On February 7, 2022, shortly after midnight, RODRIGUEZ attempted to commit a gunpoint robbery of 41-year-old Anthony Savarese on Andrews Avenue between West 183rd Street and West Fordham Road in the Bronx.  During the attempted robbery, RODRIGUEZ shot Savarese in the head from point-blank range, killing him. 

Nine other defendants previously pled guilty in the case.

*                *                *

RODRIGUEZ, 29, of the Bronx, New York, pled guilty to one count of racketeering conspiracy, which carries a maximum sentence of life in prison; one count of murder through the use of a firearm, which carries a maximum sentence of life in prison; and one count of narcotics conspiracy, which carries a mandatory minimum term of 10 years in prison and a maximum sentence of life in prison.  RODRIGUEZ is scheduled to be sentenced by U.S. District Judge J. Paul Oetken on May 30, 2024.

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 work of the New York City Police Department and the Drug Enforcement Administration.

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Sarah L. Kushner, Kevin Mead, and Ashley C. Nicolas are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and Erin Keegan, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the conviction of NELSON OLIVO on charges of narcotics trafficking conspiracy.  The defendant was found guilty yesterday following a one-week trial before U.S. District Judge Valerie E. Caproni.  OLIVO will be sentenced on June 27, 2024, by Judge Caproni.

U.S. Attorney Damian Williams said: “Yesterday, a unanimous jury found that Nelson Olivo agreed with others to sell large amounts of deadly drugs, including fentanyl, in New York City.  Olivo posed a danger to the community through his involvement in the distribution of dangerous narcotics, including fentanyl—the deadliest drug our nation has ever encountered.  Together with our law enforcement partners, this Office will continue to be hyper-focused on combatting the fentanyl crisis by holding narcotics traffickers, such as Nelson Olivo, responsible for their actions.”

HSI Acting Special Agent in Charge Erin Keegan said: “Nelson Olivo’s conviction signals the public’s understanding not only of the brazen severity of his crimes, but also of the continued, deadly impacts of the drug epidemic, especially fentanyl, on our country.  HSI, in conjunction with our law enforcement partners, seized over 5,500 pounds of fentanyl in the first two months of fiscal year 2024 – with more than 3,000 pounds seized in November alone.  I commend HSI New York and our law enforcement partners within the El Dorado Task Force for their continued efforts toward securing justice and, in turn, saving lives.”

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

From about July 2022 to about October 12, 2022, OLIVO operated a stash house in the Bronx where he worked with co-conspirators to distribute wholesale and retail quantities of counterfeit pills containing fentanyl and methamphetamine, as well as powder cocaine, crack cocaine, and other narcotics.

On October 12, 2022, a search warrant was executed on OLIVO’s Bronx stash house after he and his co-conspirators were seen attempting to empty the house of evidence of their drug conspiracy.  The search of the house and cars outside it recovered approximately one kilogram of pills containing methamphetamine; fentanyl in pill and powder form, including fentanyl mixed with the dangerous animal tranquilizer xylazine; additional narcotics; two kilo presses and a kilo stamp; and other narcotics paraphernalia and ammunition.  At trial, text messages, photographs, video evidence, and wiretap recordings of the defendant’s phone, established that the defendant had returned to the U.S. in June 2022 to set up the stash house after having spent the prior 18 months in Colombia, where he participated in manufacturing large amounts of cocaine in a jungle laboratory.  Below are photographs of some of the evidence recovered in this case.

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OLIVO, 46, of New York, New York, was convicted by a jury of one count of conspiracy to distribute and possess with intent to distribute methamphetamine, cocaine, and fentanyl.  The charges carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

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

Mr. Williams praised the outstanding investigative work of the El Dorado Task Force, which is comprised of law enforcement officers from HSI, the New York State Police, the Inspector General for the New York City Housing Authority, the Nassau County Sherriff’s Department, and the Fort Lee Police Department.

The prosecution of this case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Jane Y. Chong and Matthew R. Shahabian are in charge of the prosecution, with the assistance of Paralegal Specialists Owen Foley and Jayda Foote.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOSE LEMA, a/k/a “Jose Lema Mizhirumbay,” the founder and principal of ALJ Home Improvement, Inc., a New York roofing company, pled guilty to willfully violating Occupational Safety and Health Administration (“OSHA”) regulations, resulting in the death of an employee in New Square, New York, on or about February 8, 2022.  LEMA pled guilty before U.S. Magistrate Judge Judith C. McCarthy, to whom the case is assigned.  The defendant is scheduled to be sentenced on May 22, 2024. 

U.S. Attorney Damian Williams said: “Jose Lema endangered the safety of his workers by disregarding regulations and failing to ensure his employees used fall protection systems.  This conduct led to the tragically avoidable death of a roof worker at a construction site.  Failure of small businesses to comply with safety regulations endangers workers and can lead to unnecessary and preventable tragedy, and this Office will hold them accountable.”

According to statements and filings made in court:

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

Victim-1’s deadly fall was not the first time an employee of LEMA and ALJ fell to their death at one of ALJ’s worksites or were exposed to fall hazards.  The first death, on or about February 27, 2019, involved an ALJ employee who slipped off the roof of a newly constructed three-story home in Kiamesha Lake, New York.  OSHA investigated and issued citations to ALJ numerous times for failing to ensure employes were using fall protection systems following the 2019 death and once after Victim-1’s death.

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LEMA, 41, of Nanuet, New York, is charged with one count of willful violation of OSHA regulations resulting in death, which carries a maximum sentence of six months in prison and a maximum fine of $250,000.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of PATRICK O’CONNOR to charges of committing securities fraud and conspiring to commit securities fraud through insider trading.  O’CONNOR was arrested in July 2023 and pled guilty before U.S. District Judge Jessica G.L. Clarke today. 

U.S. Attorney Damian Williams said: “As the private pilot for billionaire Joe Lewis — previously convicted by this Office of insider trading — Patrick O’Connor was in the orbit of Lewis’s high-flying lifestyle, and a criminal beneficiary of non-public information provided by Lewis.  O’Connor accepted and criminally traded on what he knew to be inside information from his well-connected boss, for his own personal gain.  O’Connor has now accepted responsibility and awaits sentencing for his federal crimes.”

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

PATRICK O’CONNOR worked as a personal pilot to his co-defendant in this case, JOSEPH LEWIS, for several years.  LEWIS is a billionaire businessman and investor who is the principal owner of the Tavistock Group, an international private investment organization.  At relevant times, by virtue of LEWIS’s investments in certain companies, he controlled one or more board of director seats at those companies and deputized employees to serve on various company boards.  In turn, through these employees, LEWIS received material, non-public information about these companies. 

During the course of his employment for LEWIS, on multiple occasions, O’CONNOR received material, non-public information from LEWIS and then traded on the basis of that information.  On one occasion, after receiving inside information from LEWIS concerning Mirati Therapeutics, O’CONNOR wrote in a WhatsApp message to a friend that he had “talked with Mr. Lewis,” “we will make much more within the next 6 weeks with Mirati,” and “think we have people who know.”  Days later, O’CONNOR wrote to the same friend to buy Mirati and that the “Boss[i.e., LEWIS] is helping us out and told us to get ASAP.”  O’CONNOR added that “All conversations on app is encrypted so all good. No one can ever see.”  A day later, O’CONNOR added in the same text thread that LEWIS said to buy Mirati stock, that Mirati “should only be short term,” and that the “Boss mentioned around 6 to 8 weeks for [Mirati] to take profit.”  Within days, LEWIS wired $500,000 to O’CONNOR, and O’CONNOR then used the $500,000 to purchase Mirati stock.  On or about October 22, 2019, O’CONNOR texted his same friend that October 28, 2019, was the “big day for MRTX.”  O’CONNOR then added that he thought “the Boss has inside info” and “knows the outcome” because “otherwise why would he make us invest.”

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O’CONNOR, 67, of Preston Hollow, New York, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum potential sentence of five years in prison, and one count of securities fraud, which carries a maximum potential sentence of 20 years in prison.

LEWIS, 87, a British national, pled guilty on January 24, 2024, to one count of conspiracy to commit securities fraud, which carries a maximum potential sentence of five years in prison, and two counts of securities fraud, which each carry a maximum potential sentence of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  O’CONNOR is sentenced to be scheduled on May 29, 2024.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.  He also expressed appreciation for the Securities Exchange Commission, which previously initiated civil proceedings against O’CONNOR. 

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

“As a unanimous jury found moments ago, Bevelyn Beatty Williams unlawfully interfered with patients seeking, and medical professionals providing, reproductive health services at a Manhattan health clinic.  Over two days in June 2020, the defendant used threats and physical force and repeatedly blocked doors to prevent individuals from gaining access to the health clinic.  Williams went so far as to crush a staff member’s hand in the clinic door as the staff member was attempting to open the door.  Regardless of one’s personal views, bullying and depriving other citizens of their right to healthcare is not a legitimate form of protest, and I’m proud of the career prosecutors of the Civil Rights Unit in the Criminal Division for enforcing our nation’s laws — without fear or favor — in this case.”

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of SHAMOON RAFIQ, a/k/a “Shamoon Omer Rafiq,” a/k/a “Omar Rafiq,” a/k/a “Omer Rafiq,” a resident of Singapore, for engaging in a scheme in which RAFIQ solicited millions of dollars of investors’ money by falsely representing that he was offering investments in shares of stock in privately held companies that had not yet conducted an initial public offering (“pre-IPO stock”), even though in fact he did not actually have those shares to offer, by impersonating senior officials of a reputable family office investment firm, and by engaging in other acts of deception.

U.S. Attorney Damian Williams said: “Shamoon Rafiq ran a brazen scheme from Singapore to defraud U.S. investors who wished to invest in well-known private companies before they went public.  This prosecution demonstrates the continued efforts of this Office and our law enforcement partners to pursue those who defraud American investors no matter where the perpetrators are located.”

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

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

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

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

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

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

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

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

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

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

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

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RAFIQ, 50, a resident of Singapore and a citizen of the Netherlands, pled guilty to a one-count Information charging him with conspiring to commit securities fraud and wire fraud, which carries a maximum potential sentence of five years in prison.  RAFIQ agreed to pay restitution and forfeiture in the amount of $1,002,615 in connection with his guilty plea.

The maximum potential prison 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 the judge. 

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

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

Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; Lisa O. Monaco, the Deputy Attorney General of the United States; Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”); and David J. Scott, the Special Agent in Charge of the Washington Field Office (“WFO”) of the FBI, announced the unsealing of an Indictment charging sanctioned Russian oligarch and the President and Chairman of a Russian state-owned bank, ANDREY KOSTIN, with participating in two separate schemes that violated U.S. sanctions.  In one scheme, KOSTIN and others conspired to evade sanctions and launder funds by using a series of shell companies and strawmen in order to access the U.S. financial system to operate, maintain, and improve KOSTIN’s two superyachts, collectively worth over $135 million.  The other scheme charges KOSTIN and two U.S. persons, VADIM WOLFSON and GANNON BOND, for their roles in providing goods, funds, and services to KOSTIN related to a luxury home in Aspen, Colorado, including wiring KOSTIN approximately $12 million after he was sanctioned.  WOLFSON and BOND were arrested this morning in Austin, Texas, and Edgewater, New Jersey, respectively, and will be presented in federal courts in Texas and New York today.  KOSTIN remains at large and is believed to be in Russia.  The case is assigned to U.S. District Judge Gregory H. Woods.

U.S. Attorney Damian Williams said: "As alleged, sanctioned oligarch Andrey Kostin and his co-defendants flouted U.S. sanctions to support his exceptionally lavish lifestyle.  Through complex schemes involving shell companies and illicit transactions, Kostin and his associates allegedly laundered funds and illegally made transactions with U.S. currency for the maintenance and enhancement of Kostin’s superyachts and luxury Aspen home, blatantly disregarding U.S. law.  This investigation highlights the collaborative efforts of this Office and our law enforcement partners around the globe to uphold critical sanctions put in place to support our national security goals and hold accountable those who seek to undermine them."

Attorney General Merrick B. Garland said: “The Justice Department is more committed than ever to cutting off the flow of illegal funds that are fueling Putin’s war and to holding accountable those who continue to enable it.  That is why today we are announcing several additional enforcement actions that the Justice Department has taken to bring prosecutions against and seize assets of sanctioned enablers of the Kremlin and Russian military.”

Deputy Attorney General Lisa O. Monaco said: “Since the onset of Russia’s brutal and unprovoked invasion of Ukraine, the Justice Department has used every tool in our arsenal – including our international partnerships – to target the criminal actors and activity propping up Vladimir Putin, his henchmen, and his illegal war.  Over the last two years, our Task Force KleptoCapture has restrained, seized, and obtained judgments to forfeit nearly $700 million in assets from Russian enablers and charged more than 70 individuals for violating international sanctions and export controls levied against Russia.  The charges we announce today against oligarchs, facilitators, and money launderers are the next chapter: so long as Russia's aggression continues, so too will our resolve to hold its enablers accountable.  We stand firmly with the people of Ukraine.”

FBI Director Christopher A. Wray said: “It has been two years since Russia's unprovoked invasion of Ukraine and the FBI continues to go after the Russian criminals who finance and enable Russia’s war.  To the people of Ukraine fighting for their freedom: The FBI remains steadfast in our efforts to disrupt and hold accountable the criminals supporting the Russian War, and we will continue to stand with you to fend off Russian aggression for as long as it takes.”

FBI WFO Special Agent in Charge David J. Scott said: "As alleged, Kostin conspired with the defendants and others to violate U.S. sanctions.  Today's indictment demonstrates that the FBI will work with our partners to hold sanctioned oligarchs and their co-conspirators responsible for their crimes and ensure that they cannot use U.S. financial institutions to harbor illicit funds and goods."

As alleged in the Indictment:[1]

KOSTIN is a Russian oligarch who was sanctioned and designated a Specially Designated National (“SDN”) by U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) on April 6, 2018, pursuant to the International Emergency Economic Powers Act (“IEEPA”).  From at least on or about April 6, 2018, through at least on or about March 2, 2022, KOSTIN and others, including at times WOLFSON and BOND, participated in schemes to violate IEEPA through the provision of funds, goods, and services, including U.S. financial services and U.S. dollar transactions, to and for KOSTIN’s benefit.  KOSTIN also engaged in a scheme to commit money laundering to promote IEEPA violations.

Before and after OFAC sanctioned KOSTIN, he beneficially owned and controlled, through various shell companies, several assets worth tens of millions of dollars, including two superyachts identified as the Sea Rhapsody and Sea & Us.  The Sea Rhapsody, valued at approximately $65 million, is a 216-foot superyacht and has six staterooms, including two luxurious master cabins identical in size.  This superyacht is equipped with amenities including water toys, gym equipment, an infinity pool, a jacuzzi, a cinema and club area, and customized stationery.  The Sea & Us, valued at approximately $70 million, is a 205-foot superyacht that was custom-built for KOSTIN.

KOSTIN and others violated IEEPA on numerous occasions, including by causing U.S. dollar payments to be made for the maintenance, operation, and/or improvement of the Sea Rhapsody and Sea & Us for the benefit of KOSTIN and without an OFAC license, which is required to transact with an SDN.  In causing these U.S. dollar payments to be made, KOSTIN and others also committed international money laundering.

KOSTIN also owned a luxury home in Aspen, Colorado, that he purchased for $12.5 million in 2010.  From at least on or about April 6, 2018, through at least in or about September 2019, KOSTIN, WOLFSON, BOND, and others participated in a scheme to violate IEEPA by providing funds, goods, and services for the benefit of KOSTIN, whose property and interests in property, including the Aspen home, were blocked as a result of his SDN designation.  Specifically, notwithstanding having been designated an SDN by OFAC, KOSTIN and his conspirators schemed to operate, maintain, and improve KOSTIN’s Aspen residence in a manner designed to conceal KOSTIN’s continued ownership of this luxury asset.  In addition, in or about September 2019, KOSTIN, WOLFSON, BOND, and others committed additional sanctions violations by dealing in and transferring KOSTIN's blocked property.  Specifically, the conspirators arranged to sell the Aspen home and provide KOSTIN with approximately $12 million resulting from the sale.

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KOSTIN, 67, of Russia, is charged with two counts of conspiracy to violate IEEPA, two counts of violating IEEPA, and one count of conspiracy to commit international money laundering, each of which carries a maximum sentence of 20 years in prison.

WOLFSON, 56, of Austin, Texas, a legal permanent resident of the U.S., is charged with one count of conspiracy to violate IEEPA and two counts of violating IEEPA, each of which carries a maximum sentence of 20 years in prison.

BOND, 49, of Edgewater, New Jersey, a U.S. citizen, is charged with one count of conspiracy to violate IEEPA and two counts of violating IEEPA, 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 defendants will be determined by a judge.

Mr. Williams praised the outstanding work of the FBI and its Washington Field Office.  Mr. Williams further thanked the Department of Justice (“DOJ”)’s National Security Division, Counterintelligence and Export Control Section, and DOJ’s Criminal Division, Money Laundering and Asset Recovery Section for their work on this matter.

Assistant U.S. Attorneys Emily Deininger and David Felton for the Southern District of New York’s Illicit Finance and Money Laundering Unit, and Trial Attorneys Derek Shugert of the National Security Division’s Counterintelligence and Export Control Section and Oleksandra Johnson of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case.

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

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

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

Damian Williams, United States Attorney for the Southern District of New York, announced today the unsealing of a Superseding Indictment charging multiple defendants with narcotics and firearm offenses in and around Monticello, New York, following the recovery of body armor, ammunition, and approximately 30 firearms from the residence of DWAYNE JOHNSON.  JOHNSON, who was previously arrested on May 24, 2023, is charged with conspiracy to engage in narcotics trafficking, possession of short-barreled rifles in furtherance of the narcotics conspiracy, unlawful possession of firearms and ammunition, unlawful possession of body armor, aiding and abetting the unlawful interstate transfer of firearms, and aiding and abetting firearms trafficking.  JESSICA FRANCIS, who was previously arrested on September 14, 2023, is charged with engaging in the narcotics conspiracy with JOHNSON.  LORI COONEY was arrested earlier today in Scranton, Pennsylvania, and is charged with the unlawful interstate transfer of firearms to JOHNSON.  TERESA SANTINI was arrested earlier today in Milford, Pennsylvania, and is charged with trafficking firearms to JOHNSON and the unlawful interstate transfer of firearms to JOHNSON. 

SANTINI and COONEY were presented in federal court earlier today before U.S. Magistrate Judge Judith C. McCarthy.  JOHNSON and FRANCIS will be arraigned before U.S. District Court Judge Vincent Briccetti on March 13, 2024.

U.S. Attorney Damian Williams said: “As alleged, the sheer number of firearms recovered from Johnson’s residence — which include assault weapons, short-barreled rifles, and an untraceable “ghost gun” — underscores the harsh reality of violence that accompanies drug trafficking and the danger its poses to communities.  Today’s Superseding Indictment sends a clear message that those who engage in violent and illegal enterprises and those who offer their support will face federal criminal charges.”

As alleged in the Complaint previously filed in this case and the Superseding Indictment unsealed today:[1]

Between at least October 2016 through May 2023, JOHNSON, FRANCIS, and others known and unknown conspired to possess with the intent to distribute over 1,000 kilograms of marijuana.  In 2023, law enforcement secured a warrant to search JOHNSON’s known Gmail Account, which contained multiple photos and videos associated with JOHNSON’s marijuana trafficking business, including videos of JOHNSON counting large quantities of cash in a particular room within his residence, photographs of marijuana in its retail packaging, and pounds of marijuana stored on tables and in a safe within the house.  In one video, JOHNSON can be seen holding stacks of United States currency, counting a stack of bills, and saying, in sum and substance, that it’s “hard work” to accrue that amount of currency.  JOHNSON then pans to the walls of guns and states, “you have to protect it, though.”  JOHNSON also can be heard in a video saying, “Just in case you think you can fuck with my money, you come and I’ll spread you with a 12-gauge, you run and I’ll catch you with the 30 aught 6 or the 308.” 

Screenshots taken from videos and photos taken from the Gmail Account are depicted below:

During the pendency of the conspiracy, COONEY and SANTINI separately and unlawfully transferred, sold, traded, gave, transported, or otherwise delivered to JOHNSON multiple firearms from Pennsylvania, including five pistols, the lower receiver of a short-barreled rifle, and the upper receiver of a second short-barreled rifle.

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JOHNSON, 44, of Monticello, New York, is charged with conspiracy to distribute and possess with intent to distribute over 1,000 kilograms of marijuana, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; possession of a short-barreled rifle in furtherance of the narcotics conspiracy, which carries a mandatory minimum sentence of 10 years in prison to be served consecutively to any sentence for the underlying conspiracy and a maximum sentence of life in prison; unlawful possession of firearms, which carries a maximum sentence of 15 years in prison; unlawful possession of ammunition, which carries a maximum sentence of 15 years in prison; firearms trafficking, which carries a maximum sentence of 15 years in prison; unlawful interstate transfer of firearms, which carries a maximum sentence of five years in prison; and unlawful possession of body armor, which carries a maximum sentence of three years in prison.

FRANCIS, 35, of Monticello, New York, is charged with conspiracy to distribute and possess with intent to distribute over 1,000 kilograms of marijuana, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

COONEY, 57, of Scranton, Pennsylvania, is charged with unlawful interstate transfer of firearms, which carries a maximum sentence of five years in prison.

SANTINI, 45, of Milford, Pennsylvania, is charged with firearms trafficking, which carries a maximum sentence of 15 years in prison, and unlawful interstate transfer of firearms, which carries a maximum sentence of five years 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 defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI Hudson Valley Safe Streets Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Sullivan County District Attorney’s Office, the New York State Police, and the Hudson Valley White Collar Crime Task Force. 

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

The charges contained in the Superseding 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 Complaint and the Superseding Indictment and the description of the Complaint and the Superseding 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 DUSTIN GENCO, a former investigator with the Nassau County District Attorney’s Office and Task Force Officer with the U.S. Drug Enforcement Administration (“DEA”), was sentenced by U.S. Magistrate Judge James L. Cott to three months in prison for depriving an individual (the “Victim”) of his constitutional right to be free from excessive force.  On October 20, 2022, GENCO assaulted the Victim while the Victim was restrained in handcuffs.  GENCO pled guilty on August 2, 2023, before Judge Cott to deprivation of rights under color of law. 

U.S. Attorney Damian Williams said: “Today, former DEA Task Force Officer Dustin Genco was sentenced to prison for depriving a restrained individual of his constitutional right to be free from excessive force.  Genco abused his authority as a law enforcement officer two-fold: First, he broke a bright-line rule when he kicked in the chest a handcuffed and restrained man.  Then, he lied repeatedly to his supervisor about his conduct and falsified an official report about the arrest.  When an officer acts outside the law, he must be held to account in order to protect the rule of law and the public trust in the countless law-abiding officers and agents who put their own safety on the line every day.  I commend the hard work of the career prosecutors of my Office and our law enforcement partners at the DOJ Office of the Inspector General for their commitment to upholding the rule of law and ensuring justice in this case.”

According to public documents and statements made in court:

On or about October 20, 2022, GENCO was employed as a Task Force Officer with the DEA.  GENCO was assigned to assist with the arrest of the Victim.  During the arrest, GENCO assaulted the Victim by forcefully kicking the Victim in the chest and stomach area while the Victim was restrained in handcuffs, resulting in injury to the Victim.  After the assault, GENCO intentionally misled a federal law enforcement agent about the assault, claiming that the Victim had continued to resist arrest after he was handcuffed.  GENCO also failed to truthfully disclose in an official report that he had kicked the Victim in the chest and stomach area while the Victim was restrained in handcuffs. 

*                *                *

In addition to the prison term, DUSTIN GENCO, 51, of Seaford, New York, was sentenced to one year of supervised release and a $10,000 fine.  The judgment also included GENCO’s agreement to permanently cease and refrain from seeking or obtaining law enforcement employment on behalf of any federal, state, or local entity.

Mr. Williams praised the outstanding investigative work of the Department of Justice, Office of the Inspector General.

The prosecution is being handled by the Office’s Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorney Mitzi Steiner is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that BRANDON SOTO, a/k/a “Stacks,” was sentenced today by U.S. District Judge Philip M. Halpern to 35 years in prison for racketeering, transferring a firearm to a juvenile, and conspiracy to commit arson arising out of his leadership role in the Untouchable Gorilla Stone Nation Bloods Gang (“Gorilla Stone”).  As part of his participation in the racketeering conspiracy, SOTO planned out and ordered a fellow gang member, who was a teenager at the time, to murder a rival gang member.  On September 21, 2020, SOTO drove the shooter to the location and provided him with the gun and directions to commit the shooting.  With people, including small children, nearby, the shooter shot Jalani Jones in the head, killing him instantly.  Jones was just 15 years old at the time.  Following the murder, SOTO took numerous steps to avoid detection, including setting fire to the car that was used in connection with the murder and ordering the deletion of social media accounts associated with those involved.  SOTO previously pled guilty on October 27, 2022, before Judge Halpern to one count of conspiring to conduct and participate in the conduct of the affairs of a criminal enterprise through a pattern of racketeering activity, one count of transferring a firearm to a juvenile, and one count of conspiracy to commit arson.

U.S. Attorney Damian Williams said: “Brandon Soto used his leadership role in the violent Gorilla Stone gang to direct a teenager to kill a 15-year-old boy, who was riding his bike down the street.  This horrific act of violence was committed in broad daylight as small children looked on just feet away.  Today’s sentence holds Soto accountable for the senseless murder of Jalani Jones, as well as for his yearslong participation in the wide range of crimes committed by the Gorilla Stone gang.  Together with our law enforcement partners, we will continue to aggressively prosecute those who engage in such violence in our communities.” 

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

Since at least 2004, Gorilla Stone has been a brutally violent street gang with a national presence that was founded by SOTO’s co-defendant Dwight Reid, a/k/a “Dick Wolf.”  Gorilla Stone has many members across New York State, including throughout New York City, Westchester, and the New York State Prison System, and all over the country.  Gorilla Stone is comprised of various sets (or “Caves” as they are called by gang members).  Gorilla Stone is a highly organized and efficient street gang with an organizational commitment to violence that strictly enforces its internal laws.

For years, SOTO participated in and was associated with the Gorilla Stone racketeering conspiracy.  Over time, SOTO rose to a leadership role in the gang.  SOTO took an active role in the gang’s distribution of crack cocaine, which is one of the main ways the gang made money.  SOTO was also one of the gang’s more violent members.  SOTO bragged about his access to firearms and directed that his reports in the gang commit retaliatory acts of violence, the most significant of which was his direction and involvement in the murder of Jalani Jones.  Following the murder of Mr. Jones, SOTO got a new phone number and directed another Gorilla Stone member to delete relevant social media accounts to avoid being caught.  Days after the murder, SOTO’s car, which he had used in connection with the murder, was towed.  SOTO went with other Gorilla Stone members to the lot where the car was parked, stole the car from the lot, and then set it on fire in a further effort to avoid being caught.

SOTO’s violence extended beyond his involvement in the murder of Mr. Jones.  SOTO violently attacked someone in the street, punching and kicking the man in the head and body as he lay defenseless on the ground and ultimately became unconscious.  As SOTO beat the man unconscious, he yelled “You’re not Gorilla.”  The violent incident was recorded on video, and SOTO proudly posted the video to his Instagram account.

*                *                *

In addition to the prison term, SOTO, 26, of the Bronx, New York, was sentenced to three years of supervised release.

All 21 defendants in the Gorilla Stone case before Judge Halpern have been convicted.  With SOTO’s sentencing today, 14 defendants have been sentenced and seven defendants have been convicted and are awaiting sentencing.  The 13 defendants aside from SOTO who have been sentenced by Judge Halpern to date are:

• Godfather DONAVAN GILLARD, a/k/a “Donnie Love,” who was sentenced to 248 months in prison;
• Godmother NAYA AUSTIN, a/k/a “Baby,” who was sentenced to 234 months in prison;
• Godmother BRINAE THORNTON, a/k/a “Luxury,” who was sentenced to 210 months in prison;
• JARRETT CRISLER, Jr., a/k/a “Jayecee,” who was sentenced to 207 months in prison;
• CASWELL SENIOR, a/k/a “Casanova,” who was sentenced to 188 months in prison;
• Godfather BRANDON NIEVES, a/k/a “Untouchable Dot,” who was sentenced to 110 months in prison;
• JAMAL TRENT, a/k/a “Trap Smoke,” who was sentenced to nine years in prison;
• DEZON WASHINGTON, a/k/a “Blakk,” who was sentenced to 97 months in prison;
• ROBERTA SLIGH, a/k/a “Trouble,” who was sentenced to eight years in prison; 
• JORDAN INGRAM, a/k/a “Flow,” who was sentenced to eight years in prison;
• STEPHEN HUGH, a/k/a “Chino,” who was sentenced to seven years in prison;
• ISAIAH SANTOS, a/k/a “Zay,” who was sentenced to seven years in prison; and
• SHANAY OUTLAW, a/k/a “Easy,” who was sentenced to three years in prison.

Five additional defendants have pled guilty and are awaiting sentencing: Godfather DESHAWN THOMAS, a/k/a “Don,” Godfather WALTER LUSTER, a/k/a “Shells,” AHMED WALKER, a/k/a “Ammo,” NEIKO CRUDUP, a/k/a “JhitRilla,” and ROBERT WOODS, a/k/a “Blakk Rob.”  Finally, DWIGHT REID a/k/a “Dick Wolf,” and CHRISTOPHER ERSKINE, a/k/a “Beagle,” were convicted following a jury trial and are awaiting sentencing.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s (“FBI”) 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; New York City Police Department; Westchester County Police Department; Westchester County District Attorney’s Office; Putnam County Sheriff’s Office; Rockland District Attorney’s Office; and the Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown Police Departments.  Mr. Williams also thanked the Dutchess County District Attorney’s Office and the Poughkeepsie Police Department for their assistance. 

This case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Shiva H. Logarajah, David R. Felton, Courtney L. Heavey, and Kathryn Wheelock are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York; Matthew G. Olsen, the Assistant Attorney General of the Justice Department’s National Security Division; and Anne Milgram, the Administrator of the U.S. Drug Enforcement Administration (“DEA”), announced the issuance today of a Superseding Indictment charging TAKESHI EBISAWA with conspiring with a network of associates to traffic nuclear materials from Burma to other countries.  In the course of this conspiracy, EBISAWA and his confederates showed samples of nuclear materials in Thailand to a DEA undercover agent (“UC-1”), who was posing as a narcotics and weapons trafficker.  With the assistance of Thai authorities, the nuclear samples were seized and subsequently transferred to the custody of U.S. law enforcement.  A U.S. nuclear forensic laboratory later analyzed the samples and confirmed that the samples contain uranium and weapons-grade plutonium.    

EBISAWA and co-defendant SOMPHOP SINGHASIRI were previously charged in April 2022 with international narcotics trafficking and firearms offenses, and both have been ordered detained.  EBISAWA and SINGHASIRI will be arraigned on the Superseding Indictment before U.S. District Judge Colleen McMahon tomorrow at noon.

U.S. Attorney Damian Williams said: “It is impossible to overstate the seriousness of the conduct alleged in today’s Indictment.  As alleged, Takeshi Ebisawa brazenly trafficked material containing uranium and weapons-grade plutonium from Burma to other countries.  He allegedly did so while believing that the material was going to be used in the development of a nuclear weapons program, and the weapons-grade plutonium he trafficked, if produced in sufficient quantities, could have been used for that purpose.  Even as he allegedly attempted to sell nuclear materials, Ebisawa also negotiated for the purchase of deadly weapons, including surface-to-air missiles.   I want to thank the career prosecutors of my Office and our law enforcement partners for their unwavering commitment to protecting our national security by ensuring that the defendant will now face justice in an American court.”      

Assistant Attorney General Matthew G. Olsen said: “The defendant stands accused of conspiring to sell weapons grade nuclear material and lethal narcotics from Burma, and to purchase military weaponry on behalf of an armed insurgent group.  It is chilling to imagine the consequences had these efforts succeeded, and the Justice Department will hold accountable those who traffic in these materials and threaten U.S. national security and international stability.”

DEA Administrator Anne Milgram said: “As alleged, the defendants in this case trafficked in drugs, weapons, and nuclear material — going so far as to offer uranium and weapons-grade plutonium fully expecting that Iran would use it for nuclear weapons.  This is an extraordinary example of the depravity of drug traffickers who operate with total disregard for human life.  I commend the men and women of DEA and this prosecution team for their tireless work to protect us from such evil.”

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

Beginning in early 2020, EBISAWA informed UC-1 and a DEA confidential source (“CS-1”) that EBISAWA had access to a large quantity of nuclear materials that he wanted to sell.  Later that year, EBISAWA sent UC-1 a series of photographs depicting rocky substances with Geiger counters measuring radiation, as well as pages of what EBISAWA represented to be lab analyses indicating the presence of thorium and uranium in the depicted substances.  In response to EBISAWA’s repeated inquiries, UC-1 agreed, as part of the DEA’s investigation, to help EBISAWA broker the sale of his nuclear materials to UC-1’s associate, who was posing as an Iranian general (the “General”), for use in a nuclear weapons program.  EBISAWA then offered to supply the General with “plutonium” that would be even “better” and more “powerful” than uranium for this purpose.  Examples of the photographs sent by EBISAWA are shown below:

During their discussions regarding EBISAWA’s access to nuclear materials, EBISAWA also engaged with UC-1 concerning EBISAWA’s desire to purchase military-grade weapons.  To that end, in May 2021, EBISAWA sent UC-1 a list of weapons, including surface-to-air missiles, that EBISAWA wished to purchase from UC-1 on behalf of the leader of an ethnic insurgent group in Burma (“CC-1”).  Together with two other co-conspirators (“CC-2” and “CC-3”), EBISAWA proposed to UC-1 that CC-1 sell uranium to the General, through EBISAWA, to fund CC-1’s weapons purchase.  On a February 4, 2022 videoconference, CC-2 told UC-1 that CC-1 had available more than 2,000 kilograms of Thorium-232 and more than 100 kilograms of uranium in the compound U3O8 — referring to a compound of uranium commonly found in the uranium concentrate powder known as “yellowcake” — and that CC-1 could produce as much as five tons of nuclear materials in Burma.  CC-2 also advised that CC-1 had provided samples of the uranium and thorium, which CC-2 was prepared to show to UC-1’s purported buyers.  CC-2 noted that the samples should be packed “to contain . . . the radiation.” 

About one week later, EBISAWA, CC-2, and CC-3 participated in a series of meetings with UC-1 and CS-1 in Southeast Asia, to discuss their ongoing weapons, narcotics, and nuclear materials transactions.  During one of these meetings, CC-2 asked UC-1 to meet in CC-2’s hotel room.  Inside the room, CC-2 showed UC-1 two plastic containers each holding a powdery yellow substance (the “Nuclear Samples”), which CC-2 described as “yellowcake.”  CC-2 advised that one container held a sample of uranium in the compound U3O8, and the other container held Thorium-232.  UC-1 photographed and video-recorded the Nuclear Samples, images of which are shown below:

With the assistance of Thai authorities, the Nuclear Samples were seized and subsequently transferred to the custody of U.S. law enforcement authorities.  A U.S. nuclear forensic laboratory examined the Nuclear Samples and determined that both samples contain detectable quantities of uranium, thorium, and plutonium.  In particular, the laboratory determined that the isotope composition of the plutonium found in the Nuclear Samples is weapons-grade, meaning that the plutonium, if produced in sufficient quantities, would be suitable for use in a nuclear weapon. 

*                *                *

A table containing the charges and minimum and maximum penalties for EBISAWA, 60, of Japan, and SINGHASIRI, 61, of Thailand, 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 Judge McMahon.

Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division Bilateral Investigations Unit.  Mr. Williams also thanked the DEA Tokyo Country Office, DEA Bangkok Country Office, DEA Chiang Mai Resident Office, DEA Jakarta Country Office, DEA Copenhagen Country Office, DEA New York Field Office, DEA New Delhi Country Office, the Counterterrorism Section of the Department of Justice’s National Security Division, the Office of International Affairs of the Department of Justice’s Criminal Division, and our law enforcement partners in Indonesia, Japan, and the Kingdom of Thailand for their assistance.

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

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Alexander Li, Kaylan E. Lasky, and Kevin T. Sullivan are in charge of the prosecution, with assistance from Trial Attorney Dmitriy Slavin of the Counterterrorism Section.

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

COUNT

DEFENDANT(S)

MIN. AND MAX. PRISON TERM

Count One: Conspiracy to commit international trafficking of nuclear materials

EBISAWA

Maximum of 10 years in prison

Count Two: International trafficking of nuclear materials

EBISAWA

Maximum of 20 years in prison

Count Three: Narcotics importation conspiracy

EBISAWA and SINGHASIRI

Mandatory minimum of 10 years in prison; maximum of life in prison

Count Four: Conspiracy to possess firearms, including machineguns and destructive devices

SINGHASIRI

Maximum of life in prison

Count Five: Conspiracy to acquire, transfer, and possess surface-to-air missiles

EBISAWA

Mandatory minimum of 25 years in prison; maximum of life in prison

Count Six: Narcotics importation conspiracy

EBISAWA

Mandatory minimum of 10 years in prison; maximum of life in prison

Count Seven: Conspiracy to possess firearms, including machineguns and destructive devices

EBISAWA

Maximum of life in prison

Count Eight: Money laundering

EBISAWA

Maximum of 20 years 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.

Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; and Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), announced the extradition of POLAD OMAROV, a/k/a “Araz Aliyev,” a/k/a “Polad Qaqa,” a/k/a “Haci Qaqa,” from the Czech Republic on murder-for-hire and money laundering charges contained in a Superseding Indictment.  The case is pending before U.S. District Judge Colleen McMahon.  OMAROV was arrested in the Czech Republic on January 4, 2023, at the request of the United States, arrived in the Southern District of New York on February 21, 2024, and will be arraigned on the charges in the Superseding Indictment before U.S. Magistrate Judge Sarah L. Cave later today.

U.S. Attorney Damian Williams said: “Polad Omarov is alleged to have brazenly attempted to murder an outspoken critic of Iran’s human rights abuses – right here on American soil.  The audacious alleged plot to kidnap and murder the victim are indicative of Iran’s policies of aggressive suppression and violence against anyone who speaks against them.  Today’s extradition makes clear our unwavering resolve to charge and bring to justice any individuals attempting to stifle free speech in the U.S., especially at the behest of a malign foreign regime.”

Attorney General Merrick B. Garland said: “Last year, I announced charges against three defendants for their roles in a conspiracy to murder a U.S. citizen who has long been targeted by the Government of Iran.  At the time of the announcement, two of the defendants were in U.S. custody, and we said that the long arm of the law would find and bring to justice those who seek to threaten, silence, or harm American citizens.  Today, we have done just that.  The third defendant, Polad Omarov, was extradited to the United States to face charges for attempting to murder on U.S. soil a journalist, author, and human rights activist who is a U.S. citizen of Iranian origin.  We are grateful to our Czech government counterparts for this extradition.  The Department of Justice will not tolerate attempts by an authoritarian regime to undermine the rights to which every American citizen is entitled.”

FBI Director Christopher A. Wray said: “With today’s extradition of Omarov, we have taken a significant step forward to hold Iranian actors accountable for their brazen plot to assassinate a U.S. citizen on American soil.  I am honored to be here in Prague today to thank our Czech law enforcement, intelligence, and prosecutor partners for their collaboration and commitment to upholding the rule of law.”

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

OMAROV, a leader within an Eastern European organized crime group (the “Organization”), worked with other members of the Organization to attempt to murder a U.S. citizen of Iranian origin (the “Victim”) on instructions from individuals in Iran.  The Victim previously has been the target of plots by the Government of Iran to intimidate, harass, and kidnap the Victim.  The Victim is a journalist, author, and human rights activist who has publicized the Government of Iran’s human rights abuses and suppression of political expression, including in connection with continuing protests against the regime across Iran.  As recently as 2020 and 2021, Iranian intelligence officials and assets plotted to kidnap the Victim from within the United States for rendition to Iran in an effort to silence the Victim’s criticism of the regime. 

Beginning in approximately mid-July 2022, OMAROV’s co-defendant, RAFAT AMIROV, a leader within the Organization residing in Iran, sent targeting information – which AMIROV had received from other individuals in Iran – about the Victim and the Victim’s residence to OMAROV.  OMAROV, in turn, communicated the targeting information to co-defendant KHALID MEHDIYEV, a leader within the Organization residing in Yonkers, New York, in order to begin conducting surveillance of the Victim and reconnaissance of the Victim’s residence and surrounding neighborhood.  MEHDIYEV sent photographs and videos of the Victim’s residence to OMAROV for further sharing with AMIROV and the plot’s orchestrators in Iran. 

After MEHDIYEV’s initial surveillance of the Victim’s residence, AMIROV and OMAROV arranged for the delivery of a $30,000 cash payment to MEHDIYEV in New York City in furtherance of the plot.  MEHDIYEV used a portion of this cash payment to buy an AK-47-style assault rifle manufactured in China, along with two magazines for ammunition and at least 66 rounds.  MEHDIYEV bragged in electronic communications that he had procured for himself a “war machine.”

Between July 20 and 28, 2022, MEHDIYEV repeatedly travelled to the Victim’s neighborhood to conduct surveillance and reconnaissance, sending reports of the Victim’s activities, photographs, and videos to OMAROV for further distribution to AMIROV.  On July 24, 2022, after arriving at the Victim’s residence, MEHDIYEV reported to OMAROV that MEHDIYEV was “at the crime scene.”  OMAROV encouraged MEHDIYEV, “You are a man!”  MEHDIYEV described to OMAROV that “we blocked it from both sides, it will be a show once she steps out of the house.”  OMAROV forwarded this report to AMIROV, who responded, “God willing.”

MEHDIYEV was unable to carry out the assassination that day and returned on several subsequent days to seek out opportunities to complete the murder mission.  AMIROV, OMAROV, and MEHDIYEV schemed different strategies to attempt to draw the Victim out, including by attempting to ask the Victim for flowers from the Victim’s garden.  On July 28, 2022, MEHDIYEV sent OMAROV a video taken from inside the car MEHDIYEV was driving showing the assault rifle, along with the message that “we are ready.”  The Victim, after observing suspicious activity outside the residence, left the area, and MEHDIYEV drove away shortly afterwards.  After MEHDIYEV drove away from the Victim’s residence, he was stopped after a traffic violation, and during a subsequent search of the car, police officers found the assault rifle, 66 rounds of ammunition, approximately $1,100 in cash, and a black ski mask.

*                *                *

OMAROV, 39, of Georgia, has been charged with: (i) murder-for-hire, which carries a maximum sentence of 10 years in prison; (ii) conspiracy to commit murder-for-hire, which carries a maximum sentence of 10 years in prison; and (iii) conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. 

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

AMIROV, 45, of Iran, and MEHDIYEV, 25, of Yonkers, New York, were previously arrested on the charges contained in the Superseding Indictment.

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office Counterintelligence Division and the New York FBI Iran Threat Task Force.  Mr. Williams also thanked the New York Field Office Criminal Division, the New York City Police Department (“NYPD”) and the NYPD Intelligence Bureau, and the Department of Justice’s National Security Division for their assistance.  The Department of Justice’s Office of International Affairs provided critical assistance in securing OMAROV’s arrest and extradition.  Mr. Williams also appreciates the significant cooperation and assistance provided by authorities in the Czech Republic.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Jacob H. Gutwillig, Matthew J.C. Hellman, and Michael D. Lockard are in charge of the prosecution, with assistance from Trial Attorney Christopher Rigali of the National Security Division, Counterintelligence and Export Control Section.

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

[1] As the introductory phrase signifies, 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.

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of MONA FAIZ MONTRAGE for her role in laundering the proceeds of a series of romance scams.  MONTRAGE pled guilty today to conspiracy to receive stolen money before U.S. Magistrate Judge Sarah L. Cave. 

U.S. Attorney Damian Williams said: “Mona Faiz Montrage knowingly received money stolen from older Americans through romance scams and was arrested abroad and now faces serious consequences for her actions.  Romance scams such as Montrage’s harmed her vulnerable, elderly victims not only in the cruel betrayal of trust in the realization that their online romantic connection was fiction, but by also callously stealing their money.  This Office and our law enforcement partners are relentless in bringing fraudsters who target Americans to justice, no matter where they are.”

As alleged in the Indictment and statements made in public filings and public court proceedings:

From at least in or about 2013 through in or about 2019, MONTRAGE was a member of a criminal enterprise (the “Enterprise”) based in West Africa that committed a series of frauds against individuals and businesses in the U.S., including romance scams. 

Many of the Enterprise’s romance scam victims were vulnerable, older men and women who lived alone.  The Enterprise frequently conducted the romance scams by sending the victims emails, text messages, and social media messages that deceived the victims into believing that they were in romantic relationships with a person who was, in fact, a fake identity assumed by members of the Enterprise.  Once members of the Enterprise had successfully convinced victims that they were in a romantic relationship and had gained their trust, they convinced the victims, under false pretenses, to transfer money to bank accounts the victims believed were controlled by their romantic interests, when, in fact, the bank accounts were controlled by members of the Enterprise.

MONTRAGE is a Ghanaian public figure who rose to fame as an influencer through her Instagram profile under the username “Hajia4Reall,” which at one point had approximately 3.4 million Instagram followers and was among the top 10 profiles with the most followers in Ghana.

MONTRAGE received money from several victims of romance frauds who members of the Enterprise tricked into sending money.  Among the false pretenses used to induce victims to send money to MONTRAGE were payments to transport gold to the U.S. from overseas payments to resolve a fake FBI investigation, and payments to assist a fake U.S. Army officer in receiving funds from Afghanistan.

In total, MONTRAGE controlled bank accounts that received over $2 million in fraudulent funds from the Enterprise.

*                *                *

MONTRAGE, 31, of Accra, Ghana, pled guilty to one count of conspiring to receive stolen money, which carries a maximum sentence of five years in prison.  MONTRAGE also agreed to pay forfeiture in the amount of $2,164,758.41 and make restitution in the same amount.  MONTRAGE is scheduled to be sentenced by U.S. District Judge Paul A. Crotty.

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 the judge.

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

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

A superseding indictment was unsealed in Manhattan today charging a Japanese national with conspiring with a network of associates to traffic nuclear materials from Burma to other countries.

According to court documents, Takeshi Ebisawa, 60, and co-defendant Somphop Singhasiri, 61, were previously charged in April 2022 with international narcotics trafficking and firearms offenses, and both have been ordered detained.

“The defendant stands accused of conspiring to sell weapons grade nuclear material and lethal narcotics from Burma, and to purchase military weaponry on behalf of an armed insurgent group,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “It is chilling to imagine the consequences had these efforts succeeded and the Justice Department will hold accountable those who traffic in these materials and threaten U.S. national security and international stability.”

“As alleged, the defendant brazenly trafficked material containing uranium and weapons-grade plutonium from Burma to other countries,” said U.S. Attorney Damian Williams for the Southern District of New York. “He did so while believing that the material was going to be used in the development of a nuclear weapons program, and while also negotiating for the purchase of deadly weapons. It is impossible to overstate the seriousness of this conduct. I want to thank the career prosecutors of my office and our law enforcement partners for ensuring that the defendant will now face justice in an American court.”      

“As alleged, the defendants in this case trafficked in drugs, weapons, and nuclear material – going so far as to offer uranium and weapons-grade plutonium fully expecting that Iran would use it for nuclear weapons,” said Administrator Anne Milgram of the Drug Enforcement Administration (DEA). “This is an extraordinary example of the depravity of drug traffickers who operate with total disregard for human life. I commend the men and women of DEA and this prosecution team for their tireless work to protect us from such evil.”  

According to the allegations contained in the indictment, beginning in early 2020, Ebisawa informed UC-1 and a DEA confidential source (CS-1) that Ebisawa had access to a large quantity of nuclear materials that he wanted to sell. Later that year, Ebisawa sent UC-1 a series of photographs depicting rocky substances with Geiger counters measuring radiation, as well as pages of what Ebisawa represented to be lab analyses indicating the presence of thorium and uranium in the depicted substances. In response to Ebisawa’s repeated inquiries, UC-1 agreed, as part of the DEA’s investigation, to help Ebisawa broker the sale of his nuclear materials to UC-1’s associate, who was posing as an Iranian general (the General), for use in a nuclear weapons program. Ebisawa then offered to supply the General with “plutonium” that would be even “better” and more “powerful” than uranium for this purpose. An example of a photograph sent by Ebisawa is shown below:

During their discussions regarding Ebisawa’s access to nuclear materials, Ebisawa also engaged with UC-1 concerning Ebisawa’s desire to purchase military-grade weapons. To that end, in May 2021, Ebisawa sent UC-1 a list of weapons, including surface-to-air missiles, that Ebisawa wished to purchase from UC-1 on behalf of the leader of an ethnic insurgent group in Burma (CC-1).  Together with two other co-conspirators (CC-2 and CC-3), Ebisawa proposed to UC-1 that CC-1 sell uranium to the General, through Ebisawa, to fund CC-1’s weapons purchase. On a Feb.4, 2022 videoconference, CC-2 told UC-1 that CC-1 had available more than 2,000 kilograms of Thorium-232 and more than 100 kilograms of uranium in the compound U3O8 — referring to a compound of uranium commonly found in the uranium concentrate powder known as “yellowcake” — and that CC-1 could produce as much as five tons of nuclear materials in Burma. CC-2 also advised that CC-1 had provided samples of the uranium and thorium, which CC-2 was prepared to show to UC-1’s purported buyers. CC-2 noted that the samples should be packed “to contain . . . the radiation.” 

About one week later, Ebisawa, CC-2 and CC-3 participated in a series of meetings with UC-1 and CS-1 in Southeast Asia to discuss their ongoing weapons, narcotics, and nuclear materials transactions. During one of these meetings, CC-2 asked UC-1 to meet in CC-2’s hotel room.  Inside the room, CC-2 showed UC-1 two plastic containers, each holding a powdery yellow substance (the Nuclear Samples), which CC-2 described as “yellowcake.” CC-2 advised that one container held a sample of uranium in the compound U3O8, and the other container held Thorium-232. UC-1 photographed and video-recorded the Nuclear Samples, an example image of which is shown below:

With the assistance of Thai authorities, the Nuclear Samples were seized and subsequently transferred to the custody of U.S. law enforcement authorities. A U.S. nuclear forensic laboratory examined the Nuclear Samples and determined that both samples contain detectable quantities of uranium, thorium and plutonium. In particular, the laboratory determined that the isotope composition of the plutonium found in the Nuclear Samples is weapons-grade, meaning that the plutonium, if produced in sufficient quantities, would be suitable for use in a nuclear weapon. 

A table containing the charges and maximum penalties for Ebisawa and Singhasiri is set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Count

Defendant(s)

Maximum Penalty

Count One: conspiracy to commit international trafficking of nuclear materials

Ebisawa

20 years in prison

Count Two: international trafficking of nuclear materials

Ebisawa

10 years in prison

Count Three: narcotics importation conspiracy

Ebisawa and Singhasiri

Life in prison; mandatory minimum penalty of 10 years in prison

Count Four: conspiracy to possess firearms, including machineguns and destructive devices

Singhasiri

Life in prison

Count Five: conspiracy to acquire, transfer, and possess surface-to-air missiles.

Ebisawa

Life in prison; mandatory minimum sentence of 25 years in prison

Count Six: narcotics importation conspiracy

Ebisawa

Life in prison; mandatory minimum sentence of 10 years in prison

Count Seven: conspiracy to possess firearms, including machine guns and destructive devices

Ebisawa

Life in prison

Count Eight: money laundering

Ebisawa

20 years in prison

The DEA Special Operations Division Bilateral Investigations Unit is investigating the case, with valuable assistance provided by the DEA Tokyo Country Office, DEA Bangkok Country Office, DEA Chiang Mai Resident Office, DEA Jakarta Country Office, DEA Copenhagen Country Office, DEA New York Field Office, DEA New Delhi Country Office, the Justice Department’s Office of International Affairs and the National Security Division’s Counterterrorism Section, and law enforcement partners in Indonesia, Japan and the Kingdom of Thailand.

Trial Attorney Dmitry Slavin of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorneys Alexander Li, Kaylan E. Lasky and Kevin T. Sullivan for the Southern District of New York are prosecuting the case.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at 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 that ERIC LIRA was sentenced to three months in prison by U.S. District Judge Lorna G. Schofield for his role in providing banned performance-enhancing drugs (“PEDs”) to Olympic athletes in advance of the 2020 Summer Olympic Games held in Tokyo in 2021.  LIRA is the first defendant to be charged and convicted, following his guilty plea in May 2023, under the Rodchenkov Anti-Doping Act, which criminalizes the operation of doping schemes for the purpose of influencing international sports competitions, such as the Olympic Games.  

U.S. Attorney Damian Williams said: “Today’s sentence sends a clear message: violating the Rodchenkov Anti-Doping Act comes with serious consequences up to and including incarceration.  That message is especially important this year with the upcoming Summer Olympic Games in Paris.  It is imperative that those tempted to supply performance-enhancing drugs to Olympians understand the severity of their actions.  Doping not only distorts fair play but also erodes the essence of sportsmanship, tarnishing the sanctity of international sporting events and betraying the trust of athletes and spectators alike.  It has no place in any community, and this Office is committed to rooting out efforts to compromise the integrity of sports and other affected events.” 

According to the allegations contained in the Complaint, the Indictment, other filings in this case, and statements during court proceedings:

The charges in this case arise from an investigation of a scheme to provide Olympic athletes with PEDs, including drugs widely banned throughout competitive sports, such as human growth hormone and the “blood building” drug erythropoietin, in advance of and for the purpose of corrupting the 2020 Olympic Games, which convened in Tokyo in the summer of 2021.  LIRA, who claims to be a “kinesiologist and naturopathic” doctor operating principally in and around El Paso, Texas, obtained unapproved versions of these and other prescription drugs from sources in Central and South America before bringing those drugs into the U.S. and distributing them to, among others, the two athletes referred to in the Indictment.  Throughout the scheme, LIRA and an athlete competing for Nigeria communicated via encrypted electronic communications regarding the sale, shipment, and use of LIRA’s illegal drugs and specifically discussed the “testability” of those drugs by anti-doping authorities.  LIRA separately communicated with an athlete competing for Switzerland via encrypted electronic communications on the use of human growth hormone and erythropoietin.  Both athletes tested positive for prohibited substances, and in both cases, LIRA directly and indirectly advised that the athletes should blame the positive drug test on contaminated meat, knowing full well that the drug tests had accurately detected the presence of banned, performance-enhancing drugs.

*                *                *

In addition to the prison term, LIRA, 44, of El Paso, Texas, was sentenced to one year of supervised release and ordered to forfeit $16,410.   

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation (“FBI”) and the FBI’s Integrity in Sports and Gaming Initiative.  Mr. Williams also thanked the U.S. Anti-Doping Agency for their support of this investigation.

This case is being handled by the Office’s Illicit Finance & Money Laundering Unit.  Assistant U.S. Attorneys Sarah Mortazavi, Josiah Pertz, and Benjamin A. Gianforti are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York; Matthew G. Olsen, the Assistant Attorney General for National Security; James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of a Complaint charging HARAFA HUSSEIN ABDI with providing and conspiring to provide material support to a designated foreign terrorist organization, the Islamic State of Iraq and al-Sham (“ISIS”), and receiving and conspiring to receive military-type training from ISIS.  ABDI, a U.S. citizen, was recently taken into custody overseas and was transported to the United States yesterday, February 15, 2024.  ABDI will be presented before U.S. Magistrate Judge Valerie Figueredo in Manhattan federal court later today.

U.S. Attorney Damian Williams said: “As alleged, Harafa Hussein Abdi, a citizen of this country, traveled from Minnesota to join a group of ISIS fighters in Somalia.  While training with ISIS fighters in Somalia, Abdi allegedly carried an AK-47, threatened to attack civilians in New York City, and encouraged others to carry out such attacks.  Our law enforcement partners have relentlessly pursued this investigation to ensure the disruption of Abdi’s alleged plans to wage terror on our shores and bring Abdi to an American court to face justice.  No matter how long it takes, this Office is steadfast in its commitment to investigate, disrupt, and prosecute terrorist threats against Americans.” 

Assistant Attorney General Matthew G. Olsen said: “As stated in the complaint, Mr. Abdi left his country to join ISIS, trained as a fighter, and actively aided the group’s propaganda efforts to spread its vile ideology.  There is no higher priority for the National Security Division than to protect Americans from terrorist organizations, and we will work tirelessly to find and hold accountable those who would join these groups to do our people harm wherever they may be.”

FBI Assistant Director in Charge James Smith said: “Harafa Hussein Abdi allegedly moved overseas to join ISIS, aided in their propaganda efforts, and openly threatened violence against New York City.  Abdi was arrested before his plans came to fruition.  The FBI’s New York Joint Terrorism Task Force is determined to bring to justice anyone willing to carry out evil in order to protect the American people.”

NYPD Commissioner Edward A. Caban said: “As alleged, this arrest is the result of New York law enforcement’s ongoing commitment to hold accountable anyone who voices solidarity with terrorist organizations and, motivated by ideology, desires to harm Americans.  I commend everyone from the NYPD, the FBI, and the dozens of other agencies on New York’s Joint Terrorism Task Force for always relying heavily on the strength of our partnerships here and around the world.”

As alleged in the Complaint:[1]

ABDI is a U.S. citizen who moved from Minnesota to Somalia in 2015.  Once there, ABDI joined a group of ISIS fighters at an ISIS training camp in the Puntland region of Somalia.  During his time with the ISIS group, ABDI regularly carried an AK-47 assault rifle and received training on how to use it.  In addition, ABDI worked in the ISIS group’s “media” wing, where he filmed footage for distribution by a pro-ISIS media outlet.

In social media communications during his time at the ISIS camp, ABDI described how he had left the United States and joined the “Islamic state.”  ABDI also stated that he had made “hijra,” an Arabic term used by ISIS supporters to refer to traveling overseas to join ISIS and engage in jihad.  ABDI also sent a photograph of himself carrying an AK-47 assault rifle, as depicted below:

 In or about January 2017, ABDI sent an audio clip of rap lyrics in which ABDI expressed his support for ISIS and described multiple acts of violence, including shooting and bombing individuals in New York City.  Specifically, ABDI stated, “hollow tips put a hole in your Catholic vest, and chop his head off let it rest on his Catholic chest.”  ABDI further stated, “We going to carry on jihad”; “Fly through America on our way to shoot New York up. They trying to shut this thing. We ain’t going. We going to come blow New York up.”  ABDI sent the audio clip to at least 20 other social media users and included messages with the audio clip, such as “Fighting back the kuffar who’s at war with Muslims if [that] is not islam then I don’t know wats Islam.”

ABDI left the ISIS camp in 2017 after his relationship with the ISIS group’s leadership deteriorated.  After being jailed by the ISIS group, ABDI escaped and traveled to East Africa, where he was arrested by law enforcement authorities.  In subsequent Mirandized interviews with FBI personnel, ABDI admitted that he had joined the ISIS training camp in the Puntland region, which was affiliated with a known leader of ISIS fighters in Somalia.  ABDI also identified himself in an ISIS propaganda video that he helped to film at the ISIS training camp in which ABDI carried an AK-47 assault rifle, promoted ISIS, and urged others to join ISIS and fight on its behalf.  In the video, ABDI stated, “We thank almighty God for making us His soldiers and chose us to be among the Khilafa troops,” and “So do not stay behind, brother, and get on this caravan. . .  Those who believe fight in the cause of Allah, and those who reject Faith fight in the cause of Evil.”  ABDI also admitted that he was trained on and regularly carried an AK-47 assault rifle while at the ISIS camp and practiced shooting the AK-47 in the Somali wilderness outside the camp.

*                *                *

ABDI, 41, of Minneapolis, Minnesota, is charged with (i) conspiring to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; (ii) providing material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; (iii) conspiring to receive military-type training from a designated foreign terrorist organization, which carries a maximum sentence of five years in prison; and (iv) receiving military-type training from a designated foreign terrorist organization, which carries a maximum sentence of 10 years in prison, a fine, or both.

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 efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies.  Mr. Williams also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, the Department of Justice’s Office of International Affairs, the FBI’s Counterterrorism Division, the FBI’s International Operations Division, and the Department of Homeland Security, U.S. Customs and Border Protection for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorney Nicholas S. Bradley is in charge of the prosecution, with assistance from Trial Attorney Kevin Nunnally of the Counterterrorism Section.

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; Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”); 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”); Derek M. Holt, the Special Agent in Charge of the Office of Personnel Management, Office of the Inspector General (“OPM-OIG”); and Michael J. Waters, the Special Agent in Charge of the Eastern Field Office of the Amtrak Office of Inspector General (“Amtrak-OIG”), announced that the United States has settled a civil fraud lawsuit against LINCARE INC., a large durable medical equipment (“DME”) supplier with approximately 700 locations throughout the United States.  The settlement resolves claims that LINCARE violated the False Claims Act by fraudulently continuing to bill federal health care programs for the rental of costly non-invasive ventilators (“NIVs”) when patients no longer needed or used the devices.  The settlement also resolves claims that LINCARE violated the Anti-Kickback Statute by waiving coinsurance payments to induce certain Medicare and TRICARE beneficiaries to rent NIVs.

Under the settlement, which was approved yesterday by U.S. District Judge Paul G. Gardephe, LINCARE agreed to pay a total sum of $25.5 million, of which $24,228,517.96 will be paid to the United States and the remainder will be paid to various states.  As part of the settlement, LINCARE also made factual admissions regarding its conduct.  LINCARE admitted that it received reimbursement from federal health care programs for some NIV rental claims that did not comply with all of those programs’ billing rules and guidance.  LINCARE also admitted that in some instances, it continued to seek monthly payments when it was aware that patients were not using the devices.

U.S. Attorney Damian Williams said: “When DME suppliers like Lincare knowingly seek federal funds for items that are not medically necessary and not being used, they threaten the sustainability and financial integrity of vital federal health care programs like Medicare and Medicaid.  Companies will be held accountable for fraudulent billing practices that prioritize profits over legal obligations.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “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.  Our agency, working closely with our law enforcement partners, will continue to hold health care providers responsible for receiving improper payments from federal health care programs.”

DCIS Acting Special Agent in Charge Brian J. Solecki said: “This settlement makes clear that firms will pay a price for attempting to defraud the government.  We, along with our federal partners, are committed to protecting taxpayers from companies that engage in deceptive practices.”

OPM-OIG Special Agent in Charge Derek M. Holt said: “I applaud the excellent work of our investigators and law enforcement partners on this case.  We take all false claims seriously as the integrity of the federal health care programs relies on the submission of medically reasonable and necessary claims.”

Amtrak-OIG Special Agent in Charge Michael J. Waters said: “The favorable outcome in this case is a testament to the professionalism and teamwork displayed by our agents, our fellow investigative agencies, and the U.S. Attorney’s Office.  We are very proud of this well-coordinated joint effort.”

As alleged in the Complaint filed in Manhattan federal court: 

NIVs are a type of respiratory equipment designed to deliver pressurized air into the lungs of patients with respiratory failure.  Patients frequently rent NIVs for regular use in their homes.  During the period of January 1, 2013, through February 29, 2020 (the “Relevant Period”), Medicare and other federal health care programs reimbursed DME suppliers like LINCARE as much as $1,400 per month for supplying NIV rentals to patients.

When DME suppliers like LINCARE rent NIVs to federal health care program beneficiaries and seek reimbursement for such rentals, the DME suppliers must ensure that the NIVs continue to be used and that they remain medically reasonable and necessary during the rental period.  For example, under Medicare, a DME supplier is required to monitor the extent to which the beneficiary is using the NIV at home and to maintain documentation to support that the device continues to be used and is medically reasonable and necessary.  In addition, DME suppliers must discontinue billing federal health care programs when the NIV is no longer being used and is not medically reasonable and necessary.

LINCARE often continued to submit monthly claims for payments to federal health care programs when the NIVs were no longer medically necessary or the beneficiary had stopped using the device.  LINCARE frequently did not know, or have documentation to support, that a patient continued to use or need the NIV.  LINCARE nonetheless continued to seek monthly payments from federal health care programs for these NIV rentals.

LINCARE’s primary method to monitor patient usage of NIVs was by having their Respiratory Therapists (“RTs”) conduct home visits, during which RTs would evaluate the device’s settings, usage, and need for maintenance.  As part of these “vent checks,” RTs were supposed to record the extent to which patients had been using the NIVs and confirm that they were using their devices as directed by their physicians.  Under LINCARE’s own policy, home visits were supposed to occur at least every 60 days.  However, LINCARE’s RTs frequently failed to comply with this policy; on tens of thousands of occasions during the Relevant Period, LINCARE failed to perform home visits for NIV patients as required by its policy.  Further, when RTs did conduct vent checks, they often failed to record whether, and for how many hours, patients had used their NIVs.  In some instances, LINCARE continued to seek monthly payments from federal health care programs when it was aware, through home visits and vent checks conducted by its RTs, that beneficiaries had stopped using their devices.  LINCARE billed for NIVs in instances when the beneficiary had not used or had very rarely used the device for over a year.

Finally, in violation of the Anti-Kickback Statute, LINCARE’s Regional Vice Presidents waived, either partially or in full, the coinsurance payment due from certain Medicare and TRICARE beneficiaries in an effort to persuade them to rent NIVs from LINCARE instead of another DME supplier.  These coinsurance payment waivers were not based on an individualized assessment of the beneficiaries’ financial needs.

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

• In violation of LINCARE’s internal protocols, LINCARE’s center clinical staff frequently failed to visit NIV patients every 60 days to confirm that the patients were using their NIVs as directed by their physicians.  Some centers lacked sufficient staff to adequately monitor patient progress and confirm that patients were using the devices as directed by their physicians.  On many occasions, clinical staff did not perform home visits for NIV patients for several months.

• In addition to conducting patient visits, LINCARE had the ability to remotely monitor certain patients’ NIV usage for certain newer NIV models through online cloud-based platforms.  However, LINCARE did not use these systems to confirm that those patients were using the devices as directed.

• LINCARE continued to seek monthly payments from federal health care programs for NIV rentals in many instances when its staff had not verified that patients were still using their NIVs or had not maintained documentation showing that the patient continued to use the devices.

• In some instances, LINCARE continued to seek monthly payments from federal health care programs when it was aware that patients were not using the devices.

• On certain occasions, LINCARE granted coinsurance payment waivers that were not based on the patient’s financial need in order to persuade patients to rent NIVs.

• As a result of the above-referenced conduct, LINCARE received reimbursements from federal health care programs for some NIV rental claims that did not comply with all of those programs’ billing rules and guidance.

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

*                *                *

Mr. Williams thanked the Washington and Texas State Medicaid Fraud Control Units for their extensive collaboration in the investigation and resolution of this case, and also praised the outstanding investigative work of HHS-OIG, DCIS, OPM-OIG, and Amtrak-OIG.

The case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorneys Charles S. Jacob, Ilan Stein, and Amanda Lee are in charge of the case.

Damian Williams, the United States Attorney for the Southern District of New York, and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the filing of a criminal Complaint in Manhattan federal court charging RUBINSKY PADILLA and LUIS ROSARIO, a/k/a “Gallo,” with conspiracy to distribute narcotics.  ROSARIO was arrested yesterday afternoon in the Hunts Point neighborhood of the Bronx.  PADILLA is currently at large.  ROSARIO will be presented today before U.S. Magistrate Judge Valerie Figueredo.

U.S. Attorney Damian Williams said: “Yesterday afternoon, law enforcement conducted a Court-authorized search of a residence in the Bronx at 755 Coster Street, a home that the defendants have allegedly used for years to sell lethal narcotics.  The defendants’ alleged actions have plagued the neighborhood and littered the street with drugs — endangering residents, including children.  As alleged, there have been 12 fatal overdoses and 30 non-fatal overdoses within a three-block radius of this residence in the last five years.  The most recent suspected fatal overdose was less than a month ago and occurred inside the house.  If you or anyone you know has bought drugs from 755 Coster Street, they are considered extremely hazardous, potentially fatal, and should not be ingested under any circumstance.”

NYPD Commissioner Edward A. Caban said: “These charges underscore the gravity of the illegal drug crisis plaguing New York City and our nation.  For far too long, the Bronx house from which these two men allegedly distributed their poison was a locus of tragedy that diminished quality of life for everyone in the neighborhood.  I commend our NYPD narcotics investigators for their perseverance in shutting down this alleged drug operation, and I thank everyone from the Office of the U.S. Attorney for the Southern District of New York for their partnership in prosecuting this important case.”

According to the allegations in the Complaint charging PADILLA and ROSARIO:[1]

From at least in or about October 2022 through on or about February 15, 2024, a group of narcotics traffickers, including PADILLA, ROSARIO, and others, illegally ran an extensive narcotics distribution operation out of a house located at the street address 755 Coster Street in the Bronx, New York.  Over the course of the investigation, the NYPD has established that the group is responsible for the sale of heroin, fentanyl, para-fluorofentanyl (a fentanyl analogue), and cocaine, among other drugs, at the house.  Residents in the neighborhood have called 911 on multiple occasions to report continuous narcotics activity and use at the house and drug paraphernalia found outside on the sidewalk.  The group continued to operate despite repeated law enforcement actions, including multiple judicially authorized searches of the house from approximately 2015 through 2024.  Each search resulted in the seizure of narcotics, including, for example, heroin, fentanyl, cocaine, and cocaine base.  PADILLA and ROSARIO were both arrested in April 2023 after one such search of the house resulted in the seizure of a substantial quantity of narcotics, but both continued operating the narcotics distribution operation uninterrupted from the same location.

Between approximately in or about 2018 through 2024, there have been at least 12 fatal overdoses and 30 non-fatal overdoses reported within a three-block radius of the house at 755 Coster Street.  Most recently, on or about January 19, 2024, law enforcement responded to a 911 call reporting an unresponsive male in need of medical assistance at the house located at 755 Coster Street and found an individual who appeared to have died hours earlier of an apparent overdose.

On or about February 14, 2024, law enforcement searched 755 Coster Street and found ROSARIO inside.  As pictured below, during their search, law enforcement found, among other things, quantities of suspected cocaine base and heroin, as well as narcotics paraphernalia, including materials designed for use in packing narcotics for distribution. 

Any member of the public who has overdosed, or has knowledge of anyone who has overdosed, as a result from narcotics purchased at 755 Coster Street should anonymously call 866-874-8900.

*                *                *

RUBINSKY PADILLA, 48, and LUIS ROSARIO, 67, both of the Bronx, New York, are charged with one count of conspiracy to distribute narcotics, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

The statutory minimum and maximum sentences are prescribed by Congress and 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 NYPD’s Narcotics Bureau Bronx Major Case Unit as well as the Bronx County District Attorney’s Office.   

The prosecution of this case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Ashley C. Nicolas and Lisa Daniels 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; Frank A. Tarentino III, the Special Agent in Charge of the Drug Enforcement Administration (“DEA”); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of a Complaint charging IVAN COLLADO with conspiracy to commit kidnapping and kidnapping resulting in death in connection with the kidnapping and murder of Raymond Resto, a/k/a “Sugar Hill Tone,” on November 26, 2023, in the Bronx.  COLLADO is in custody and will be presented today before U.S. Magistrate Judge Valerie Figueredo.

U.S. Attorney Damian Williams said: “As alleged, Ivan Collado mapped out and participated in the brazen and incredibly brutal kidnapping of Raymond Resto in a Target parking lot in the Bronx.  When Resto tried to escape, he was cruelly gunned down in front of his wife.  Today’s charges show that the relentlessness with which my Office will investigate such alleged callous violence is unwavering, and our message to violent criminals has never been clearer: we won’t stop until justice is served.”

DEA Special Agent in Charge Frank A. Tarentino III said: “The brutality associated with this case exemplifies the dangers posed to our communities by criminal organizations.  DEA and our law enforcement partners are committed to bringing those who cause the most harm to justice.   I applaud the swift and diligent work by the U.S. Attorney’s Office for the Southern District of New York, the NYPD, NYSP and DEA.”

NYPD Police Commissioner Edward A. Caban said: “There is no place in civil society for the alleged acts of barbarism outlined in today’s charges.  When grievous crimes like these are committed anywhere in New York City, NYPD detectives are relentless in their work to hold those involved to full account.  A major component of those efforts is to keep bringing strong cases to our law enforcement partners, including the skilled prosecutors in the Office of the U.S. Attorney for the Southern District of New York.”

As alleged in the Complaint:[1]

From at least in or about November 23, 2023, through at least in or about November 26, 2023, COLLADO and others conspired to kidnap Raymond Resto, a/k/a “Sugar Hill Tone” (the “Victim”).

On or about November 25, 2023, COLLADO and a co-conspirator (“CC-1”) registered and activated a tracking device (the “Tracking Device”).  The next day, on or about November 26, 2023, COLLADO and CC-1 conducted surveillance at the Victim’s home in the Bronx, New York, until approximately 3:00 a.m.  COLLADO and CC-1 then followed the Victim as he left his home and drove to an enclosed parking lot in the Bronx (the “Parking Lot”).  The Victim parked his car in the Parking Lot and left it overnight.  Approximately one hour after the Victim left the Parking Lot, a BMW (the “BMW”) entered and pulled up next to the Victim’s unoccupied car.  At the same time, COLLADO and CC-1 positioned a Nissan (the “Nissan”), registered to COLLADO, just outside of the Parking Lot where they could observe the driver of the BMW.  An individual (“CC-2”) then exited the BMW from the driver’s side and bent down next to the Victim’s car.  CC-2 then reentered the BMW and departed with the Nissan following close behind.  From that moment until the Victim’s murder, location data for the Tracking Device that COLLADO and CC-1 activated was consistent with the location of the Victim’s car, demonstrating that CC-2 had installed the Tracking Device on the Victim’s car under COLLADO’s supervision. 

On or about November 26, 2023, at approximately 6:01 p.m., the Victim and his wife returned to the Parking Lot, entered their car, and traveled to a location outside New York City.  The Victim and his wife returned to the Parking Lot several hours later at approximately 11:45 p.m., parked their car in the same location, and began walking towards a cab that was waiting for them.  As they approached the cab, at approximately 11:49 p.m., the BMW returned to the Parking Lot, and pulled in front of the Victim and his wife.  Three kidnappers exited the BMW; two of them attempted to force the Victim into the BMW.  Unable to get the Victim inside, one of the kidnappers began shooting the Victim at close range.  The Victim struggled to escape while the other kidnappers also opened fire.  The Victim was struck at least four times, including once in the face.  The kidnappers then entered the BMW and fled the Parking Lot at approximately 11:53 p.m.  The Victim was later pronounced dead at a local hospital.          

On or about November 27, 2023, the Tracking Device was deactivated, and an email address associated with the Tracking Device was deleted.

If you have any information about this case, please call 866-874-8900.

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COLLADO, 46, of Queens, New York, is charged with one count of conspiracy to commit kidnapping, which carries a maximum sentence of life in prison, and one count of kidnapping resulting in death, which carries a mandatory minimum of life in prison and a maximum sentence of death.

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

Mr. Williams praised the outstanding work of the DEA Task Force comprised of members of the DEA, NYPD, and New York State Police, as well as members of the NYPD’s Bronx Homicide Squad.

The case is being prosecuted by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Ashley C. Nicolas, Courtney L. Heavey, and Joseph H. Rosenberg are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty pleas today of LOUIS LLUBERES and MOISES LLUBERES for their roles in orchestrating a years-long scheme to fraudulently boost the revenues of their staffing company (“Company-1”).  The scheme allowed Company-1 to fraudulently obtain hundreds of millions of dollars on its line of credit from a U.S. bank (“Bank-1”) and supported the sale of Company-1 to a group of investors (the “Investor Group”) at a grossly inflated price.  LOUIS LLUBERES and MOISES LLUBERES pled guilty today to conspiracy commit bank fraud and conspiracy to commit wire fraud before U.S. District Judge Vernon S. Broderick.

U.S. Attorney Damian Williams said: “For many years, the defendants perpetrated a massive accounting fraud scheme in order to deceive their lenders and investors.  In addition to causing more than $70 million in losses to victims, the defendants’ fraud jeopardized the livelihoods of hundreds of their employees.  The defendants used accounting tricks, thinking their fraud would go undetected.  They were wrong.  Thanks to the tireless work of the FBI and the career prosecutors from my Office, the fraud was halted, the defendants’ assets were seized, and the defendants will face tough consequences for their criminal conduct.” 

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

LOUIS LLUBERES founded Company-1 in 1995 and served as Company-1’s Chief Executive Officer until March 2020.  Company-1 served as a staffing company, supplying other businesses with temporary and permanent labor.  MOISES LLUBERES, LOUIS LLUBERES’s brother, served as Company-1’s Chief Financial Officer. 

Company-1 had established a revolving line of credit with Bank-1.  Under the terms of the line of credit, Company-1 could only borrow up to a designated ratio of Company-1’s eligible accounts receivable (the “Borrowing Base”).  By its terms, invoices that had gone more than 90 or 120 days without being paid were no longer eligible to be considered as part of Company-1’s Borrowing Base.  Officials at Company-1 were required to submit weekly financial reports to Bank-1, which included information on Company-1’s sales and collections, among other items, that allowed Bank-1 representatives to calculate Company-1’s Borrowing Base.

Beginning in or about 2017, after losing significant business from major clients, the defendants began creating fraudulent invoices (the “Fictitious Receivables”).  The Fictitious Receivables, which were recorded on Company-1’s books, created the appearance that Company-1 was engaged in more business and would be receiving more client payments than Company-1 did in reality.  All told, the defendants created more than 2,000 such fraudulent invoices. 

By inflating Company-1’s Borrowing Base through the creation of Fictitious Receivables, Company-1 and the defendants were able to borrow more than $500 million from Bank-1 through a revolving line of credit.  Had Company-1 not deceived Bank-1 with the Fictitious Receivables, Company-1 would not have been entitled to borrow these funds under the terms of the line of credit.

In order to perpetuate their fraud, the defendants utilized two shell to disguise the loan proceeds before transferring those funds back to Company-1 and mischaracterizing the funds as client collection payments. 

Once the misappropriated funds had been returned to Company-1’s collections account, they were applied to aging accounts receivable, including the Fictitious Receivables.  This allowed Company-1 to maintain its Borrowing Base and continue borrowing from Bank-1 while artificially inflating Company-1’s revenues. 

Beginning in or about 2017, the Investor Group initiated negotiations to acquire Company‑1, and the Investor Group executed an agreement to purchase Company-1 in May 2018.  During those negotiations, LOUIS LLUBERES and MOISES LLUBERES actively concealed the fraud scheme, knowing that the fraud grossly inflated the value of Company-1. 

LOUIS LLUBERES was paid approximately $11.3 million on the day the Investor Group acquired Company-1.  LOUIS LLUBERES also received an additional approximately $6.2 million based, in part, on fraudulent representations to the Investor Group and Company-1.  In total, LOUIS LLUBERES made at least $17.5 million from the sale of Company-1, and he transferred approximately $716,000 of those funds to MOISES LLUBERES.

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LOUIS LLUBERES, 61, of Windermere, Florida, and MOISES LLUBERES, 60, of Winter Grove, Florida, each pled guilty to one count of conspiracy to commit bank fraud, which carries a maximum sentence of five years in prison, and one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison.  Both defendants agreed to pay restitution jointly and severally in the amount of $75,460,611.  LOUIS LLUBERES was further ordered to forfeit $75,460,611, and MOISES LLUBERES was ordered to forfeit $1,063,342.45.  In addition, the defendants were ordered to forfeit properties in the U.S. and abroad.

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

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

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Daniel G. Nessim, Rushmi Bhaskaran, and Kevin Mead are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction of JATIEK SMITH, a/k/a “Tiek,” of racketeering and extortion conspiracies.  The verdict was issued yesterday following a two-week bench trial before U.S. District Judge Jed S. Rakoff in December 2023. 

U.S. Attorney Damian Williams said: “Jatiek Smith’s audacious takeover of the New York City fire mitigation industry with the help of his gang associates presented a new form of organized criminal activity in our community, but the experienced career prosecutors of this Office and our law enforcement partners stand ready to combat violent and organized crime, no matter how unconventional.  We will not stand for gangs or any criminal groups who try to corrupt our communities and threaten our safety.  Those who do should expect to find themselves in handcuffs.”

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

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

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

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

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JATIEK SMITH, 39, of Staten Island, New York, was convicted of racketeering conspiracy, which carries a maximum sentence of 20 years in prison, and extortion conspiracy, which carries a maximum sentence of 20 years in prison. 

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ROBERT WISNICKI was sentenced to 78 months in prison today by U.S. District Judge Paul G. Gardephe for operating an $18.8 million Ponzi scheme run through his New York-based law firms, Wisnicki & Associates LLP and Wisnicki Neuhauser LLP (the “Wisnicki Firms”), and a separate conspiracy to commit money laundering to conceal a healthcare fraud scheme.  WISNICKI pled guilty before Judge Gardephe to conspiracy to commit wire fraud and conspiracy to commit money laundering on September 18, 2023.

U.S. Attorney Damian Williams said: “As an attorney, Robert Wisnicki was well aware that organizing a Ponzi scheme, laundering money for a healthcare fraud conspiracy, obstructing justice, and committing perjury would expose him to criminal charges and potentially land him in federal prison.  Wisnicki’s sprawling schemes showed his flagrant disregard for the law, and today’s sentence should make crystal clear to anyone who believes they are above the law that this Office will not waver in our commitment to hold all offenders accountable.”

According to public documents and statements made in court:

The Ponzi Scheme

The Wisnicki Firms specialized in real estate transactional work — namely, assisting clients with purchasing and selling property.  In or about 2007, WISNICKI began a real estate investment business using the Wisnicki Firms.  Existing clients of the Wisnicki Firms (“Investor Clients”) asked WISNICKI to identify potential real estate investment opportunities for them.  The Investor Clients then either transferred funds to WISNICKI or asked him to retain their funds that were already held in the Wisnicki Firms’ Interest Only Lawyers Accounts (“IOLA”) accounts.  WISNICKI then identified real estate investment opportunities for the Investor Clients, and the Wisnicki Firms represented the Investor Clients in the resulting investment transactions.

The Investor Clients began suffering losses in the investments that WISNICKI had arranged.  Rather than notify the Investor Clients of their losses, WISNICKI used funds from the Wisnicki Firms’ clients who did not participate in the real estate investments, which were held in trust in the firm’s IOLA accounts, and transferred those funds to the Investor Clients to mask their losses.  WISNICKI falsely represented to these other clients that their funds were still held in the Wisnicki Firms’ IOLA accounts when, in fact, he had transferred those funds to his Investor Clients.

WISNICKI also used funds from new Investor Clients to cover up losses suffered by prior Investor Clients.  WISNICKI falsely told the new Investor Clients that their funds would be invested in real estate when, in fact, he used those funds to repay his prior Investor Clients.

WISNICKI continued the above-described fraud through at least in or about 2022.  WISNICKI misappropriated approximately $18.8 million from Investor Clients, which includes approximately $6.3 million stolen from members of his own family and approximately $12.5 million stolen from non-family members.

The Money Laundering, Obstruction, and Perjury Scheme

WISNICKI engineered deceptive financial transactions, submitted fabricated documents, lied to investigators, and committed perjury in testimony before the grand jury all in an effort to conceal one of the largest no-fault insurance schemes in New York history.

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

Beginning in or about 2014, a criminal organization (the “Gulkarov Conspiracy” or the “Gulkarov Conspirators”) began a scheme to exploit the No-Fault Laws.  As part of the scheme, the Gulkarov Conspirators fraudulently owned and controlled more than a dozen medical professional corporations – including medical, acupuncture, and chiropractic practices – by paying licensed medical professionals to use their licenses to incorporate the professional corporations (collectively, the “Gulkarov Clinics”).  The Gulkarov Conspirators further defrauded automobile insurance companies by billing insurance companies for unnecessary, harmful, and excessive medical treatments, and lying under oath to insurance company representatives.

The Gulkarov Conspirators laundered the proceeds of the healthcare fraud through, among other ways, the Wisnicki Firms.  In or about 2016 and 2017, one of the Gulkarov Conspirators (“CC-1”) transferred funds from the Gulkarov Clinics to the Wisnicki Firms.  WISNICKI deposited the funds into one of his IOLA accounts, despite the fact that the Wisnicki Firms did not represent the Gulkarov Clinics and had no attorney-client relationship with the Gulkarov Conspirators.  The Gulkarov Conspirators then arranged for the Wisnicki Firms to use the healthcare fraud proceeds to pay for real estate on behalf of the leaders of the Gulkarov Conspiracy.

In or about April 2021, the Wisnicki Firms were served with a subpoena from a grand jury sitting in the Southern District of New York (the “Subpoena”).  Among other things, the Subpoena required the Wisnicki Firms to produce documentation concerning the funds obtained from the Gulkarov Clinics.

WISNICKI, CC-1, and a second member of the Gulkarov Conspiracy (“CC-2”) agreed to respond to the Subpoena by submitting fabricated documents to the grand jury, lying in communications with the U.S. Attorney’s Office for the Southern District of New York, and committing perjury before the grand jury. 

WISNICKI, CC-1, and CC-2 further agreed to re-launder the proceeds in response to the Subpoena.  At the direction of CC-1, WISNICKI wrote checks, drawn on his IOLA account, purporting to return the monies that had been previously paid to his firm.  The checks were made payable to physicians who purported to be owners of the Gulkarov Clinics and to family members of the Gulkarov Conspirators (together, the “Payees”).  WISNICKI wrote the checks under the false pretense that the Payees were clients of the Wisnicki Firms who had previously paid money to the Wisnicki Firms for legal services.  WISNICKI and others agreed that the checks to the Payees would be deposited, and the funds would then be withdrawn and returned to the Wisnicki Firms.  WISNICKI delivered the checks to CC-1 for this purpose.

Thereafter, on or about April 19, 2021, WISNICKI submitted to the grand jury over a dozen fabricated retainer agreements.  The same day, WISNICKI falsely stated to the U.S. Attorney’s Office that the funds paid to the Wisnicki Firms “were originally supposed to be used for a [sic] retainer fees, which is why the agreements were originally prepared,” but that the clients ultimately “instead asked us to hold the funds to be used for future investments.”  WISNICKI further represented that the Wisnicki Firms decided to return the retainer fees after receiving the Subpoena.

On or about July 6, 2021, WISNICKI was called to appear before the grand jury as custodian of records for the Wisnicki Firms.  WISNICKI falsely testified to the grand jury, among other things, that payments to the Wisnicki Firms had been made for the purpose of opening a “lending platform” that was never completed and that WISNICKI had not spoken to anyone outside of the Wisnicki Firms about the Subpoena.   

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In addition to the prison term, ROBERT WISNICKI, 45, of Woodmere, New York, was sentenced to three years of supervised release.  WISNICKI was also ordered to forfeit a money judgment of $19,010,548.06 and to pay $18,800,000 in restitution.

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

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit and the White Plains Division.  Assistant U.S. Attorneys Mathew Andrews, Timothy Capozzi, and Ryan W. Allison are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint charging BRANDALENE HORN with mail fraud, wire fraud, and the interstate transportation of stolen property in connection with a scheme to defraud victim clothing rental companies by opening hundreds of accounts to rent women’s apparel and accessories, stealing those rented items, and selling them on an e-commerce marketplace.  HORN was arrested this morning in Freeland, Michigan, and she will be presented later today before U.S. Magistrate Judge Elizabeth Stafford in the Eastern District of Michigan.  

U.S. Attorney Damian Williams said: “As alleged, Brandalene Horn perpetrated a lucrative scheme in which she defrauded at least three victim companies, stole hundreds of thousands of dollars’ worth of luxury and designer items, and then sold those stolen items online.  Thanks to the work of the prosecutors and investigators of my Office, Horn now faces criminal federal charges for her alleged deceptive behavior and fraudulent activity.”

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

From at least April 2022 through at least February 2024, HORN engaged in a fraud scheme that involved opening hundreds of accounts with at least three victim companies that offer subscription-based clothing rental services.  Those services enable customers to access and rent from the companies’ inventory of apparel and accessories, including luxury and designer items.  After receiving rental items, including pieces worth thousands of dollars, HORN kept, instead of returned, the items from the victim companies and sold them on an e-commerce marketplace.  HORN’s listings for the stolen items on the e-commerce marketplace often used the victim companies’ proprietary photographs and item descriptions that substantially matched the descriptions used by the victim companies. 

An image of HORN’s listing for a stolen designer dress on an e-commerce marketplace is below:

An image of a listing by one of the victim companies for this same designer dress is below:

Although the victim companies attempted to charge HORN for the items she stole, HORN avoided those charges by disputing them with her credit union or canceling the credit and debit cards she had provided to the victim companies.  HORN’s fraudulent activity caused the victim companies to flag or close her accounts, but HORN opened new accounts so she could continue stealing and selling luxury and designer goods.

During this period, HORN stole over 1,000 items, valued at over $823,000, from the victim companies and sold over $750,000 worth of stolen items.

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HORN, 42, of Freeland, Michigan, is charged with one count of mail fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of interstate transportation of stolen property, which carries a maximum sentence of 10 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 exceptional investigative work of the Special Agents of the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams also thanked the New York State Police and the Michigan State Police for their assistance.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that DANIEL ABAYEV was sentenced to four years in prison and PETER LEYMAN was sentenced to two years in prison for their roles in a scheme to hack the electronic taxi dispatch system (the “Dispatch System”) at John F. Kennedy International Airport (“JFK”).  ABAYEV and LEYMAN were both sentenced today before U.S. District Judge Paul A. Crotty.  On October 4 and October 30, 2023, respectively, LEYMAN and ABAYEV each pled guilty to one count of conspiring to commit computer intrusion.

U.S. Attorney Damian Williams said: “Daniel Abayev and Peter Leyman, allegedly assisted by Russian hackers, wrought havoc on JFK's electronic taxi dispatch system, impacting fair order and creating chaos for honest taxi professionals.  Their actions enabled up to 1,000 fraudulent taxi trips daily, underscoring the serious threat cyber hacking poses to critical infrastructure.  Through our collaborative efforts with law enforcement partners, their scheme was dismantled, and the defendants have been rightfully sentenced.”

According to the charging documents and other filings and statements made in court:[1]

From at least September 2019 through September 2021, ABAYEV and LEYMAN, who are U.S. citizens residing in Queens, New York, and ALEKSANDR DEREBENETC, a/k/a “Sasha Novgorod,” and KIRILL SHIPULIN, a/k/a “Kirill Russia,” who are Russian nationals residing in Russia, engaged in a scheme (the “Hacking Scheme”) to hack the Dispatch System at JFK.

At all relevant times, taxi drivers who sought to pick up a fare at JFK were required to wait in a holding lot at JFK before being dispatched to a specific terminal by the Dispatch System.  Taxi drivers were frequently required to wait several hours in the lot before being dispatched to a terminal and were dispatched in approximately the order in which they arrived at the holding lot.

Beginning in 2019, ABAYEV, LEYMAN, DEREBENETC, and SHIPULIN attempted various mechanisms to access the Dispatch System without authorization, including bribing someone to insert a flash drive containing malware into computers connected to the Dispatch System, obtaining unauthorized access to the Dispatch System via a Wi-Fi connection, and stealing computer tablets connected to the Dispatch System.  The members of the Hacking Scheme also sent messages to each other in which they explicitly discussed their intention to hack the Dispatch System.  For example, on or about November 10, 2019, ABAYEV messaged DEREBENETC in Russian: “I know that the Pentagon is being hacked[.].  So, can’t we hack the taxi industry[?]”

At various times between November 2019 and November 2020, the members of the Hacking Scheme successfully hacked the Dispatch System.  They used their unauthorized access to alter the Dispatch System and move specific taxis to the front of the line, thereby allowing drivers of those taxis to skip other taxi drivers waiting in the line.  ABAYEV and LEYMAN charged taxi drivers $10 each time they were advanced to the front of the line and transferred part of their profits to SHIPULIN and DEREBENETC.

ABAYEV was the leader of the Hacking Scheme and recruited the other participants.  ABAYEV and LEYMAN’s scheme resulted in large numbers of taxi drivers skipping the taxi line.  Over the course of the scheme, they enabled as many as 1,000 fraudulently expedited taxi trips a day.

DEREBENETC and SHIPULIN remain at large.

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In addition to the prison term, ABAYEV, 47, and LEYMAN, 49, both of Queens, New York, were sentenced to three years of supervised release and each ordered to pay $161,858.26 in forfeiture and $3,456,169.50 in restitution.

Mr. Williams praised the outstanding work of the Port Authority Office of the Inspector General.  Mr. Williams also thanked Homeland Security Investigations for their assistance in the investigation.

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

[1] The entirety of text of the Indictment charging DEREBENETC and SHIPULIN and the description of the Indictment set forth herein constitute only allegations, and every fact described regarding DEREBENETC and SHIPULIN should be treated as an allegation.”

Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint charging FEDERICO HERNANDEZ GAMBOA with conspiring to commit wire fraud, conspiring to commit bank fraud, bank fraud, and aggravated identity theft in connection with a scheme to defraud elderly victims by convincing them that they had won millions of dollars in a sweepstakes lottery that could only be collected after they paid millions of dollars’ worth of supposed taxes and fees.  GAMBOA was arrested on February 10, 2024, at George Bush Intercontinental Airport in Houston, Texas.  He will be presented today before U.S. Magistrate Judge Dena Hanovice Palermo in the Southern District of Texas.  

U.S. Attorney Damian Williams said: “As alleged, Federico Hernandez Gamboa defrauded numerous elderly victims who were lured into thinking that they had won life-changing prizes in a sweepstakes lottery of millions of dollars.  By allegedly impersonating high-ranking federal government officials, Gamboa and others convinced victims that they had to pay supposed taxes and fees in order to claim their sweepstakes winnings.  Scammers who target vulnerable elderly men and women to line their own pockets, take note – you will be held accountable.”

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

From at least August 2020 through at least May 2023, GAMBOA and others contacted elderly victims while claiming to be high-ranking federal government officials, including the Chief of the Criminal Division of the U.S. Attorney’s Office for the Southern District of New York, the Deputy Director of the Financial Crimes Enforcement Network, and others, to convince victims that they had won large cash prizes as part of a sweepstakes lottery.  GAMBOA and others induced the victims to wire millions of dollars in supposed taxes and fees associated with their sweepstakes winnings to bank accounts controlled by members of the fraud scheme.  GAMBOA and others then wired most of the money to bank accounts in Costa Rica. 

Members of the fraud scheme also induced victims to send their personal identifying information, which GAMBOA and others used to create fake identification cards.  They also forged victims’ names on loan agreements that they submitted to financial institutions in order to persuade those institutions that the fraudulently obtained funds belonged to them.

The victims collectively sent approximately $4.3 million in fraud proceeds to bank accounts controlled by members of the fraud scheme, approximately $664,000 of which was sent directly to bank accounts controlled by GAMBOA.

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GAMBOA, 51, of San Jose, Costa Rica, is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; one count of bank fraud, which carries a maximum sentence of 30 years in prison; and one count of aggravated identity theft, which carries a mandatory prison term of two years that must run consecutively to any other prison term.  

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

Mr. Williams praised the exceptional investigative work of the Special Agents and Analysts of the U.S. Attorney’s Office for the Southern District of New York and thanked the U.S. Customs and Border Protection for their assistance with the investigation.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint charging CHARUDET SMITH, a/k/a “Charles Smith,” with sexual exploitation of a minor.  SMITH was arrested yesterday and presented before U.S. Magistrate Judge Victoria Resnik this afternoon in White Plains federal court.

U.S. Attorney Damian Williams said: “Charudet Smith allegedly constructed an elaborate web of lies and fabricated multiple identities in order to gain the trust of an unsuspecting minor.  Today’s arrest underscores the urgent need to protect children from the dangers posed by predators who use social media to prey on children both online and in person.” 

As alleged in the Complaint:[1]

From at least on or about December 21, 2019, up to and including at least on or about February 13, 2020, SMITH impersonated various individuals and created and used a series of Instagram accounts, emails, and phone numbers in order to deceive a 17-year-old minor (“Victim-1”) into creating and sending sexually explicit videos and images to SMITH and agreeing to meet SMITH to engage in sexual activity in Seattle, Washington.

SMITH posed as an established freelance photographer for a well-known international camera company (“Company-1”) and told Victim-1, an aspiring teenage photographer, that he had numerous contacts within the media industry and could act as Victim-1’s mentor.  SMITH then posed as multiple employees of Company-1 who purported to offer Victim-1 a position in a sought-after youth professional development program.  In fact, SMITH was never an employee of Company-1 and had never been paid by Company-1 for any services or any employment. 

Anyone who may have encountered CHARUDET SMITH, a/k/a “Charles Smith,” or whose child may have had any communications with SMITH is asked to contact the FBI at 1-800-CALL-FBI (225-5324).

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SMITH, 31, of New Rochelle, New York, is charged with one count of sexual exploitation of a minor, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison.

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 a judge.

Mr. Williams praised the efforts of the Federal Bureau of Investigation, the Connecticut U.S. Attorney’s Office, the U.S. Attorney’s Office for the District of Vermont, the Sherriff’s Office in Washington, Vermont, the Massachusetts State Police, the New Rochelle Police Department, and the Westchester County 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.  

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that a jury returned a guilty verdict against JACOB CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN for conspiracy to commit wire fraud, wire fraud, and aggravated identity theft in connection with a scheme to defraud the U.S. Small Business Administration (“SBA”) that resulted in a loss to the SBA of approximately $7.9 million.  The defendants were found guilty of all counts following a two-week trial before U.S. District Judge Nelson S. Román. 

U.S. Attorney Damian Williams said: “As the jury’s swift verdict shows, the proof at trial was overwhelming.  The defendants schemed to steal from a taxpayer-funded program that was intended to help small businesses that were in desperate need of assistance during the COVID-19 pandemic.  Let this be a lesson that my Office will continue to work to bring justice to those who exploit and defraud government programs during a national emergency.  We thank the FBI for their partnership in investigating and prosecuting the alleged scheme.”   

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

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

From March through July 2020, CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN used the identities of more than 1,000 other individuals (the “Applicants”) to submit more than 1,000 online applications to the SBA, seeking over $10 million in funds through the SBA’s EIDL Program (the “EIDL Applications”).  In connection with the EIDL Applications, CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN falsely represented to the SBA that the Applicants were the owners of businesses with 10 or more employees.  However, that was a lie – the individuals did not own businesses or employ people.  Based on the fraudulent EIDL Applications, the SBA made advance payments of approximately $7.9 million to the Applicants, who then kicked back a portion of the advance payments to CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN.  After collecting hundreds of thousands of dollars in kickback payments, CARTER, QUADRI SALAHUDDIN, and ANWAR SALAHUDDIN took photographs of their stacks of cash, purchased expensive jewelry, and CARTER leased a Lamborghini.  

*                *                *

CARTER, 38, of Capitol Heights, Maryland, and QUADRI SALAHUDDIN, 28, and ANWAR SALAHUDDIN, 38, both of Mount Vernon, New York, were each convicted of one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory two-year consecutive sentence.   

The maximum and mandatory 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 work of the Federal Bureau of Investigation.

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Jeffrey C. Coffman, Courtney L. Heavey, and Jared D. Hoffman are in charge of the prosecution, with the assistance of paralegal specialist Liam Ronan.

Damian Williams, the United States Attorney for the Southern District of New York, announced that CHANETTE LEWIS was sentenced today to three years in prison for her role in two fraud schemes.  LEWIS participated in a scheme to commit COVID-19 pandemic fraud by (i) defrauding New York City’s COVID-19 Hotel Room Isolation Program, and (ii) committing unemployment benefits fraud.  LEWIS also committed a fraud in which she submitted fabricated documents to the New York City Housing Authority (“NYCHA”) — such as purported Orders of Protection bearing Judges’ names, purported letters from a District Attorney, and purported letters from healthcare professionals attesting to alleged medical issues — in order to secure public housing benefits for her customers.  LEWIS’s sentence was imposed by U.S. District Judge Lewis A. Kaplan.

U.S. Attorney Damian Williams said: “Chanette Lewis exploited multiple lifelines offered to New York City residents in need during the COVID-19 pandemic.  Each of her schemes misappropriated identifying information of hardworking individuals, including medical professionals whose services were vital during the pandemic.  For her brazen crimes, Lewis has now been sentenced to prison.”

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

LEWIS’s COVID-19 Pandemic Fraud Scheme

During 2020 and 2021, LEWIS conspired to commit COVID-19 pandemic fraud in two ways.

First, LEWIS defrauded the COVID-19 Hotel Room Isolation Program (the “Program”).  In response to the COVID-19 pandemic, New York City created the Program.  Funded by New York City and the Federal Emergency Management Agency, the Program provided free hotel rooms for qualifying individuals throughout New York City.  In total, the Program was open to (i) healthcare workers who needed to isolate because of exposure to COVID-19; (ii) patients who had tested positive for COVID-19; (iii) individuals who believed, based on their symptoms, that they were infected with COVID-19; and (iv) individuals who lived with someone who contracted COVID-19.  As stated on the City’s website describing the Program, such individuals “may qualify to self-isolate in a hotel, free of charge, for up to 14 days if you do not have a safe place to self-isolate.”  Those who wished to book a hotel room through the Program could either call a phone number or use an online hotel booking platform. 

LEWIS defrauded the Program in several respects.  First, she secured free Program hotel rooms for herself by falsely claiming to be a healthcare worker.  Second, she sold at least approximately 1,936 nights’ worth of fraudulently obtained hotel rooms to customers who were ineligible for the Program.  Third, LEWIS abused her employment, which was supposed to be in service of the Program.  Specifically, LEWIS worked at a call center that handled phone calls and certain reservations for the Program for several months in 2020.  As a result of her employment, LEWIS had access to legitimate healthcare workers’ identifying information.  LEWIS abused her position, including by misappropriating healthcare workers’ identifying information, revealing the Program’s inner workings to co-conspirators, and making unauthorized sales of Program hotel rooms to ineligible individuals.  For instance, LEWIS sold a co-defendant personal identifying information of at least five healthcare professionals, as well as certain “codes” to use when booking hotel reservations through the Program, such as an employee ID number and license number.  LEWIS also advertised to potential customers that when hotels asked for a healthcare worker’s identification, LEWIS would supply a purported paystub and a letter falsely asserting that the individual was a healthcare worker.

Second, during 2020 and 2021, LEWIS committed unemployment benefits fraud in New York State by fraudulently obtaining such benefits for herself and also by stealing the identity of an incarcerated individual and conspiring to obtain unemployment benefits issued for the benefit of that individual.  In total, LEWIS fraudulently obtained approximately $47,000 in unemployment benefits.

LEWIS’s Fraud on NYCHA

During 2020 and 2021, LEWIS participated in a separate conspiracy to defraud NYCHA.  LEWIS submitted fabricated documents to NYCHA — such as purported Orders of Protection bearing Judges’ names, purported letters from a District Attorney, and purported letters from doctors attesting to alleged medical issues — in order to secure public housing benefits for her customers, including transfers to larger NYCHA apartments.  In total, LEWIS submitted fraudulent applications to NYCHA on behalf of more than approximately 30 individuals, a number of whom in fact received the public housing benefit they requested based on fraudulent documentation submitted by LEWIS.

*                *                *

In addition to her prison term, LEWIS, 32, of Brooklyn, New York, was sentenced to three years of supervised release and ordered to forfeit $289,536 and to pay restitution of $360,330. 

LEWIS’s three co-defendants — Tatiana Benjamin, Tatiana Daniel, and Heaven West — previously pled guilty.  On February 1, 2024, Benjamin was sentenced principally to one year and one day in prison, three years of supervised release, restitution of $294,624, and forfeiture of $51,088; and West was sentenced principally to time served, three years of supervised release, restitution of $59,644, and forfeiture of $23,684.  Daniel’s sentencing is scheduled for March 6, 2024, at 11:30 a.m.

Mr. Williams praised the outstanding efforts of agents, investigators, and analysts from the New York City Department of Investigation, the New York Regional Office of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), and the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams also thanked the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this investigation.  He also expressed gratitude to the New York City Police Department, the New York State Department of Labor, and the DOL-OIG Atlanta Regional Office for their assistance.

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, 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 that JAMIL HAKIME was sentenced today to 27 months in prison for conspiring to transport a firearm interstate in connection with HAKIME’s sale of a firearm and 19 rounds of ammunition on November 18, 2022, to Christopher Brown and Matthew Mahrer.  Brown and Mahrer planned to use the weapon to violently attack a synagogue in New York City.  At the time of the sale, HAKIME was employed by New York City’s Administration for Children Services (“ACS”), where he worked with New York City youth.  HAKIME previously pled guilty on March 14, 2023, before U.S. District Judge Analisa Torres, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Jamil Hakime, a City employee who was supposed to be protecting youths, instead decided to arm two men — one of whom had just declared on Twitter his plan to ‘shoot up a synagogue’ — with a powerful firearm and ammunition.  But for swift action by law enforcement, Hakime’s actions could have resulted in a monumental tragedy on New York’s Jewish community and could have devastated the lives of many people who were targeted solely for their religious beliefs and their desire to worship.  The sentence imposed today sends a clear message to those who would recklessly arm others with weapons that may be used to commit acts of mass violence that such conduct will not be tolerated.”

FBI Assistant Director in Charge James Smith said: “Hakime admitted that he willingly chose to provide two men with a firearm enhanced with features enabling it to harm dozens of victims.  The men to whom he chose to sell that firearm planned to use it to attack a synagogue.  Thankfully, the FBI’s Joint Terrorism Task Force in New York became aware of the plot.  Along with our law enforcement partners, we were able to disrupt their plans before they could do any harm, but the outcome could have been far worse.  The punishment handed down today shows that there are serious consequences to arming others with dangerous weapons designed to kill.”

NYPD Commissioner Edward A. Caban said: “Individuals like Hakime who enable others to carry out hate-motivated attacks must face the consequences of their actions.  NYPD investigators, closely partnering with our state and federal colleagues on the FBI’s New York Joint Terrorism Task Force, likely averted tragedy through their swift and diligent work on this case.  Today’s sentencing serves as a reminder of our ongoing work to hold accountable anyone who threatens the safety and security of New Yorkers.”

According to the Indictment, documents previously filed in the case, and statements made in court:

In the early morning hours of November 18, 2022, Brown posted on Twitter that he intended to “shoot up a synagogue,” emphasizing, “This time I’m really gonna do it.”  That afternoon, Brown and Mahrer contacted HAKIME, a resident of Manhattan who had been employed since 2014 by ACS as a Youth Developmental Specialist, to obtain a firearm.  HAKIME, Brown and Mahrer traveled together in HAKIME’s vehicle from Manhattan to HAKIME’s home in Pennsylvania.  During the trip to HAKIME’s residence, law enforcement contacted Brown by phone regarding his threatening online posts.  Brown then deleted the threatening messages that he had posted on Twitter.

Shortly thereafter, HAKIME, Brown, and Mahrer arrived at HAKIME’s Pennsylvania home, where HAKIME retrieved for Brown and Mahrer a Generation 5 Glock 17 pistol (the “Firearm”) as well as 19 rounds of ammunition (the “Ammunition”).  The Firearm had an extended magazine, which allowed it to hold up to 30 rounds of ammunition, and a weapon-mounted light and red dot optic device that allowed the user to have better aim at his target.  HAKIME taught Mahrer and Brown how to use the Firearm and further instructed the men to wipe off the Firearm to remove HAKIME’s fingerprints.  Brown and Mahrer paid HAKIME approximately $650 for the Firearm and Ammunition.    

HAKIME then drove Brown and Mahrer back to Manhattan with the Firearm and Ammunition.  Brown and Mahrer temporarily hid the Firearm and Ammunition in Mahrer’s bedroom at his family’s residence in Manhattan and then traveled together to Penn Station, where they were arrested by law enforcement.  HAKIME remained in phone contact with Mahrer until minutes before Brown’s and Mahrer’s arrests.  At the time of those arrests, law enforcement recovered from a bag that Brown was carrying a large hunting knife and a Swastika arm band. Law enforcement also recovered from Mahrer’s apartment a backpack containing the Firearm and Ammunition, as depicted below:

*                *                *

In addition to his prison term, HAKIME, 59, of New York, New York, was sentenced to three years of supervised release. 

Mr. Williams praised the outstanding investigative work of the FBI New York Field Office, including the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the NYPD, and over 50 other federal, state, and local agencies, and the FBI’s Civil Rights Squad.

This case is being handled by the Office’s National Security and International Narcotics Unit and Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorneys Sarah L. Kushner and Mitzi S. Steiner are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest of DONALD DILLION on wire fraud and money laundering charges arising out of a scheme to defraud victims by convincing them that they had won prizes in a sweepstakes sponsored by a well-known marketing and sweepstakes company (the “Sweepstakes Company”).  DILLION was arrested on February 3, 2024, at John F. Kennedy International Airport while attempting to enter the United States from Jamaica.  DILLION was presented before U.S. Magistrate Judge Barbara Moses yesterday. 

U.S. Attorney Damian Williams said: “As alleged in the Complaint, Donald Dillion defrauded numerous victims, who were lured into thinking that they had won life-changing prizes in a well-known sweepstakes.  Through their lies, Dillion and others allegedly convinced these victims that they would only receive their prizes if they first parted with tens of thousands of dollars in supposed taxes and fees.  Dillion then allegedly laundered these funds by sending them to a foreign bank.  My Office will prosecute these crimes to the fullest to demonstrate that fraud schemes like Dillion’s simply do not pay.”

FBI Assistant Director in Charge James Smith said: “Winning a significant amount of cash or a luxury car through a sweepstakes often represents a dream to many Americans.  Donald Dillion turned his victims’ dream into a nightmare when he allegedly stole tens of thousands of dollars through his fraudulent scheme.   The FBI will continue to investigate and bring to justice anyone attempting defraud innocent people.”

According to the allegations in the Complaint:[1]

At least in or about 2021, DILLION, working with others, perpetrated a scheme in which victims were contacted by individuals claiming to work for the Sweepstakes Company, who convinced the victims that they had won a large cash prize and a luxury car as part of the Sweepstakes Company’s sweepstakes.  The perpetrators of the scheme told the victims that their prizes would be released to them upon the Sweepstakes Company’s receipt of, among other things, the taxes and fees purportedly owed on the prizes.  In this way, numerous victims were induced to wire tens of thousands of dollars to bank accounts held in the name of DD Metro Solutions LLC (“DD Metro”) and controlled by DILLION.  DILLION wired a significant proportion of these victim funds to a Chinese bank, including memoranda with some of these wires suggesting no connection to the Sweepstakes Company.  None of the victims received the cash prizes or luxury cars promised to them.

*                *                *

DILLION, 57, of the Bronx, New York, has been charged with conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and conspiracy to commit money laundering, 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 investigative work of the FBI.

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

The charges in the Complaint are merely accusations, and DILLION 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; Merrick B. Garland, the Attorney General of the United States; Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”); Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); Rae Oliver Davis, the Inspector General of the U.S. Department of Housing and Urban Development, Office of Inspector General (“HUD OIG”); and Jonathan Mellone, the Special Agent in Charge of the Northeast Region of the U.S. Department of Labor, Office of Inspector General (“DOL-OIG”), announced the unsealing of bribery and extortion charges against 70 current and former employees of the New York City Housing Authority (“NYCHA”).  66 of the 70 defendants were arrested this morning in New York, New Jersey, Connecticut, and North Carolina.  Defendants who were arrested in the New York area are scheduled to appear before U.S. Magistrate Judges Stewart D. Aaron, Sarah L. Cave, Valerie Figueredo, Sarah Netburn, Katharine H. Parker, Gary Stein, and Ona T. Wang in Manhattan federal court later today. 

U.S. Attorney Damian Williams said: “Instead of acting in the interests of NYCHA residents, the City of New York, or taxpayers, the 70 defendants charged today allegedly used their jobs at NYCHA to line their own pockets.  This action is the largest single-day bribery takedown in the history of the Justice Department.  NYCHA residents deserve better.  My Office is firmly committed to cleaning up the corruption that has plagued NYCHA for far too long so that its residents can be served with integrity and have the high-quality affordable homes that they deserve.  The culture of corruption at NYCHA ends today."

Attorney General Merrick B. Garland said: “The Justice Department will prosecute to the fullest extent of the law those who abuse their positions in public service in order to enrich themselves.  The crimes alleged in this case are serious violations of the public trust, and I am grateful to the agents and our partners across government who worked on this case, and to the prosecutors in the Southern District of New York for their tireless efforts to root out corruption.” 

DOI Commissioner Jocelyn E. Strauber said: “As charged, these 70 current and former NYCHA supervisors and other staff used their positions of public trust and responsibility to pocket bribes in exchange for doling out no-bid contracts.  The extensive bribery and extortion alleged here calls for significant reforms to NYCHA’s no-bid contracting process, which DOI has recommended and NYCHA has accepted.  I thank the U.S. Attorney’s Office for the Southern District of New York and our federal law enforcement partners for their commitment to protect scarce public resources intended to maintain public housing, and to hold accountable public servants who abuse their authority, and NYCHA’s senior leadership for its cooperation in this important investigation.”

HSI Special Agent in Charge Ivan J. Arvelo said: “These 70 defendants are accused of demanding kickbacks and bribes for access to no-bid contracts and lucrative, under-the-table deals.  Make no mistake, this alleged pervasive corruption had the biggest impact on NYCHA residents themselves, who may have been cheated out of better services and programs.  I commend the outstanding work of HSI New York’s Document and Benefit Fraud Task Force for today’s historic operation.  As one of the largest investigative agencies, the public can rest assured: Homeland Security Investigations will pursue all avenues of justice for the people of this great city.”

HUD OIG Inspector General Rae Oliver Davis said: “The pay-to-play bribery schemes alleged in the complaints unsealed today waste millions of dollars and risk residents staying in unacceptable living conditions.  The alleged conduct identified during this investigation harms the effectiveness of housing programs that support more than 200,000 residents.  It also poses a significant risk to the integrity of the HUD rental assistance programs that support housing assistance in New York City and erodes the trust of NYCHA residents in HUD’s programs.  We will continue our work with the U.S. Attorney’s Office and our law enforcement partners to prevent and detect these and other schemes.”

DOL-OIG Special Agent in Charge Jonathan Mellone said: “An important part of our mission is to investigate corruption and fraud involving matters within the jurisdiction of the Office of Inspector General.  We are committed to working closely with our law enforcement partners to investigate those who exploit governmental programs and the American workers.”

According to the allegations in the Complaints and publicly filed documents in these cases:[1]

NYCHA is the largest public housing authority in the country, providing housing to 1 in 17 New Yorkers in 335 developments across the City and receiving over $1.5 billion in federal funding from the U.S. Department of Housing and Urban Development every year.  When repairs or construction work require the use of outside contractors, services must typically be purchased via a bidding process.  However, at all times relevant to the Complaints, when the value of a contract was under a certain threshold (up to $10,000), designated staff at NYCHA developments could hire a contractor of their choosing without soliciting multiple bids.  This “no-bid” process was faster than the general NYCHA procurement process, and selection of the contractor required approval of only the designated staff at the development where the work was to be performed. 

The defendants, all of whom were NYCHA employees during the time of the relevant conduct, demanded and received cash in exchange for NYCHA contracts by either requiring contractors to pay up front in order to be awarded the contracts or requiring payment after the contractor finished the work and needed a NYCHA employee to sign off on the completed job so the contractor could receive payment from NYCHA.  As alleged, the defendants typically demanded approximately 10% to 20% of the contract value—between $500 and $2,000 depending on the size of the contract—but some defendants demanded even higher amounts.  In total, these defendants demanded over $2 million in corrupt payments from contractors in exchange for awarding over $13 million worth of no-bid contracts.  The map below shows the developments affected by the alleged conduct:

If you believe you have information related to bribery, extortion, or any other illegal conduct by NYCHA employees, please contact OIGNYCHA@doi.nyc.gov or (212) 306-3356.  If you were involved in such conduct, please consider self-disclosing through the SDNY Whistleblower Pilot Program at USANYS.WBP@usdoj.gov.

*                *                *

The names of the defendants, the charges against them, their ages, and their cities and states of residence are set forth below. 

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

Mr. Williams praised the outstanding investigative work of DOI, HSI, HUD OIG, and DOL-OIG, which work together collaboratively as part of the HSI Document and Benefit Fraud Task Force, as well as the special agents and task force officers of the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams thanked the New York City Police Department and the U.S. Marshals Service for their assistance with today’s arrest operations.  Mr. Williams also expressed appreciation for the cooperation and support of NYCHA’s senior executive leadership and thanked NYCHA Federal Monitor Bart Schwartz for his assistance with the investigation.

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

These cases are being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Jerry J. Fang, Jacob R. Fiddelman, Meredith Foster, Catherine Ghosh, and Sheb Swett 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.

Defendant

Age

Residence

Charges and Potential Maximum Prison Term

James Baez

58 years

Valley Stream, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Selwyn Barley

61 years

Brooklyn, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Gwendolyn Bell

38 years

Baldwin, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Nymiah Branch

44 years

Elmont, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Marc Buckner

54 years

Stroudsburg, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Patrick Butler

58 years

Brooklyn, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Roberto Cartagena

48 years

Union City, NJ

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Vernon Chambers

45 years

Brooklyn, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Rigoberto Charriez, a/k/a “Ricky”

34 years

Toms River, NJ

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Hector Colon

45 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Michael Davis

54 years

Groton, CT

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Victor De Los Santos

54 years

Bushkill, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Mauricio Escobar

55 years

East Elmhurst, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Jose Espinal

57 years

Howard Beach, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Joseph Fuller

42 years

Brooklyn, NY

Conspiracy to Solicit and Receive a Bribe: 5 years

Solicitation and Receipt of a Bribe: 10 years

Conspiracy to Commit Extortion Under Color of Official Right:  20 years

Extortion Under Color of Official Right: 20 years

Manuel Garcia

59 years

Lecanto, FL

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Tuesdai Gaskin

57 years

Staten Island, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Corey Gilmore

45 years

Garnerville, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Lateisha Harley

48 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Joy Harris

48 years

Bushkill, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Jose Hernandez

57 years

New York, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Veronica Hollman

47 years

Brooklyn, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Deshon Hopkins

47 years

Bethlehem, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Nena Huntley

36 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Michael Johnson

58 years

Staten Island, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

George Kemp

49 years

Irvington, NJ

Conspiracy to Solicit and Receive a Bribe: 5 years

Solicitation and Receipt of a Bribe: 10 years

Conspiracy to Commit Extortion Under Color of Official Right:  20 years

Extortion Under Color of Official Right: 20 years

Jaime Lan, a/k/a “Jimmy”

57 years

Stewartsville, NJ

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Dexter Lino

51 years

Rockaway Park, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Nirmal Lorick

58 years

South Richmond Hill, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Tara Lucas

50 years

Linden, NJ

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Vincent Machado, a/k/a Vincent Arcelay

30 years

New York, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Marlon Mackey

51 years

Jamaica, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Danny Matos

48 years

Effort, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Nakia McCoy

49 years

Brooklyn, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Erik McCreary

55 years

Far Rockaway, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Henry McPhatter

44 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Joacim Mendez

47 years

Milford, CT

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Juan Mendez

52 years

Stroudsburg, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Juan Mercado

49 years

West Babylon, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

James Miller

55 years

Stroudsburg, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Daniel Muniz

64 years

Long Island City, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Denise Newby-Bovian

54 years

New York, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Alexis Nieves

41 years

Stratford, CT

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Raymond Nunez

56 years

Glendale, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Evelyn Ortiz

55 years

Freeport, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Brett Owens

49 years

New York, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Orlando Pardo

56 years

Maywood, NJ

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Jorge Perez

54 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Curtis Priester

58 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Eddie Quetell

57 years

Philadelphia, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Carmen Rivera

53 years

Long Pond, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Jaime Rivera

50 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

John Rivera

56 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Herbert Rosa

45 years

New York, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Dwarka Rupnarain

63 years

Middletown, NJ

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Chrisie Salter

46 years

Brooklyn, NY

Conspiracy to Solicit and Receive a Bribe: 5 years

Solicitation and Receipt of a Bribe: 10 years

Conspiracy to Commit Extortion Under Color of Official Right:  20 years

Extortion Under Color of Official Right: 20 years

Clarence Samuel

53 years

Irvington, NJ

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Tanisha Sands

51 years

Brooklyn, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Carolyn Scott

58 years

East Stroudsburg, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Garth Small

55 years

Mount Vernon, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Charles Starks

57 years

Elmont, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Elizabeth Tapia

54 years

Pocono Summit, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Alex Tolozano

57 years

Maywood, NJ

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Luis Torres

38 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Segundo Torres

56 years

Blakeslee, PA

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Frankie Villanueva

51 years

Bronx, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Lindsay Wade

53 years

Brooklyn, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Angela Williams

64 years

Fayetteville, NC

Conspiracy to Solicit and Receive a Bribe: 5 years

Conspiracy to Commit Extortion Under Color of Official Right:  20 years

Destruction of Evidence: 20 years

False Statements: 5 years

Willie Williams

60 years

Staten Island, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

Calvin Wright

52 years

Brooklyn, NY

Solicitation and Receipt of a Bribe: 10 years

Extortion Under Color of Official Right: 20 years

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

Leaders Within Iran’s IRGC, a Designated Terrorist Organization, Partnered with Iranian Officials and a Turkish Energy Group to Launder and Sell Iranian Oil to Government-Affiliated Buyers in China, Russia, and Syria, to Finance Iran’s Terror-Supporting Qods Force

In a Related Action, the U.S. Attorney Announces the Seizure of $108 Million Used as Part of the Scheme to Fund the IRGC’s Qods Force

Damian Williams, the United States Attorney for the Southern District of New York; Merrick B. Garland, the Attorney General of the United States; Lisa O. Monaco, the Deputy Attorney General of the United States; Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”); Matthew G. Olsen, the Assistant Attorney General for National Security; and James Smith, the Assistant Director in Charge of the New York Field Office of the FBI, announced today the unsealing of terrorism, sanctions-evasion, fraud, and money laundering charges against seven key figures in an oil-laundering network orchestrated by the Islamic Revolutionary Guard Corps (“IRGC”), a designated foreign terrorist organization, and its Qods Force.  The defendants include a senior Qods Force official, the son of a former Qods Force Commander and Iranian Minister of Petroleum, an Iranian shipping official, and an agent of the Qods Force, together with three Turkish nationals who operate an energy conglomerate that acted as a Qods Force front company.  The defendants, BEHNAM SHAHRIYARI, a/k/a “Seyed Aliakbar Mirvakili,” a/k/a “Husain,” a/k/a “Huseyini Hamid,” a/k/a “Seyed Hamid Reza Shahcheraghi”; MORTEZA ROSTAM GHASEMI; MOHAMMADREZA ALIAKBARI, a/k/a “Captain Aliakbari,” a/k/a “Abu Emad”; MOHAMMAD SADEGH KARIMIAN; SITKI AYAN; BAHADDIN AYAN; and KASIM OZTAS are charged in a five-count Indictment unsealed today in Manhattan federal court.  The defendants remain at large.

In addition to the unsealing of the charges contained in the Indictment, the U.S. Attorney for the Southern District of New York also announced the seizure of $108 million that IRGC front companies attempted to launder through correspondent transaction accounts at U.S. financial institutions in furtherance of the scheme to fund the Qods Force’s malign activities through the illicit sale of Iranian oil, which are subject to forfeiture to the United States.

U.S. Attorney Damian Williams said: “For years, the IRGC and its Qods Force have been instrumental in the Iranian regime’s violent suppression of political dissent, targeting of Iranian dissidents living abroad, and support of international terrorism — including groups like Hamas, Hizballah, and Palestinian Islamic Jihad.  Today’s charges show how, as alleged, the IRGC’s Qods force built a sprawling international network of front companies to launder sanctioned Iranian oil using lies, forgery, and threats of violence.  This alleged scheme to finance the Qods Force succeeds through the complicity of wealthy businessmen in countries like Turkey who are eager to turn a corrupt profit from supporting terror groups.  The Qods Force oil-laundering network allegedly delivered millions of barrels of Iranian oil to government-affiliated buyers in Russia, China, and Syria, and transferred billions of dollars through the U.S. financial system.  This Office has long served at the forefront of law enforcement efforts to fight terrorism and terror finance and to protect the integrity of the U.S. banking system.  I commend the tireless and outstanding efforts of our law enforcement partners in unraveling and disrupting the IRGC’s scheme.”

Attorney General Merrick B. Garland said: “Iran utilizes the proceeds of its black-market oil sales to fund its criminal activities, including its support of the IRGC, Hamas, Hizballah, and other Iranian aligned terrorist groups.  The Justice Department is targeting this funding source by seizing over $108 million and 500,000 barrels of fuel that would otherwise have enabled Iran to further its destabilizing activities that threaten our national security.  In addition to disrupting Iran’s unlawful funding streams, the Justice Department has also charged nine individuals for their roles in supporting Iran in violation of U.S. sanctions.  The Justice Department will continue to use every authority we have to cut off the illegal financing and enabling of Iran’s malicious activities, which have become even more evident in recent months.”

Deputy Attorney General Lisa O. Monaco said: “While Iran’s Islamic Revolutionary Guard Corps and its Qods Force are the regime’s terrorist strongarms, oil is its lifeblood.  Today’s enforcement actions show that the Justice Department is committed to using every tool – from criminal prosecutions to the lawful seizures of Iranian oil and oil profits – to shut down Iran’s pipeline of petroleum and profits.  The charges and seizures announced today strike at the core of the global oil smuggling network that Iran has built to fund its regime of terror and repression and deny the regime millions of dollars in proceeds to further its nefarious agenda.”

FBI Director Christopher A. Wray said: “Iran presents a constant threat to the United States – trying to murder Americans right here within our borders, conducting a cyber-attack on a children’s hospital, supporting terrorists around the world, and more.  All of Iran’s crimes cost money.  And the FBI will remain committed to enforcing U.S. sanctions that keep money out of its coffers.”

Assistant Attorney General Matthew G. Olsen said: “Today’s cases are part of the Department’s ongoing efforts to cut off the flow of black-market Iranian oil that funds the regime’s malign activity, threatening the United States and our interests around the world.  We remain focused on holding accountable those involved in these smuggling schemes, from the officials who oversee the laundering operations, to the network of shadowy businesses that enable them, to the brokers who help facilitate these unlawful transactions.”

FBI Assistant Director in Charge James Smith said: “The Government of Iran has repeatedly shown itself willing to engage in complex schemes to evade U.S. sanctions, which are imposed to protect America's national security interests.  These seven individuals allegedly led an audacious effort to fund the Qods Force through the sale of sanctioned Iranian oil to our adversaries.  Today's charges serve as a warning to anyone willing to ignore and evade sanctions that the FBI will use all the tools at our disposal to rigorously defend our nation.”

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

Overview of the Scheme

Following the imposition of U.S. sanctions against Iran’s petroleum sector in 2018, the Government of Iran’s ability to finance itself through sales of crude oil and petroleum products — Iran’s most important economic sector — was severely diminished.  In response, the IRGC Qods Force built a large-scale oil laundering network to give Iran’s government-owned National Iranian Oil Company (“NIOC”) illicit access to global markets to sell crude oil and petroleum products and to use the proceeds to finance the Qods Force.

The IRGC is an Iranian military and counterintelligence organization under the authority of the Supreme Leader of Iran, and the IRGC’s Qods Force is the Government of Iran’s primary arm for carrying out its policy of supporting terrorist and insurgent groups — including Hamas, Hizballah, Palestinian Islamic Jihad, and the Taliban — and insurgent forces in Iraq and Yemen, including Ansarallah, commonly referred to as the Houthis.  In the years since sanctions were imposed, the Qods Force partnered with individuals and companies located in Turkey, Lebanon, Russia, Oman, Greece, India, the United Arab Emirates (“UAE”), Cyprus, and elsewhere to conceal the Iranian origin of the oil — including through the use of falsified government records, contracts, and other documents, and by manipulating oil tanker location and identification information — and to then launder the proceeds of the sales through layered transactions, bulk cash smuggling, and trade-based money laundering using agricultural commodities.  Through this oil-laundering scheme, the Qods Force arranged the delivery of millions of barrels of Iranian crude oil and petroleum products to government-owned and -affiliated buyers in Syria, Russia, and China.  Participants in the scheme caused billions of dollars to be illegally transferred through the U.S. banking system.  

To sell NIOC crude oil to the regime of Bashar al-Assad in Syria, the network used an intermediary company in Lebanon to conceal the Government of Iran’s involvement in the oil sales and a ship management company based in India to buy, lease, and manage oil tankers to use in the scheme.  The oil tanker fleet was supervised by ALIAKBARI, and the key agreements between the Government of Iran and its foreign partners were authorized and approved by Qods Force Commander Rostam Ghasemi, who previously served as Iran’s Minister of Oil, Minister of Transportation and Urban Development, and the Iranian chair of the Iranian-Syrian Economic Relations Development Committee.

To sell NIOC crude oil to government-affiliated buyers in China, the network used the ASB Group of companies in Turkey, owned by SITKI AYAN, as well as intermediary companies in Oman, Greece, and elsewhere.  Commander Ghasemi again authorized and approved key agreements between the Government of Iran and its foreign partners and resolved financial disputes that arose among the participants in the scheme.  Companies in the ASB Group acted as intermediaries in the oil sales to conceal the Government of Iran’s role and the Iranian origin of the oil and leased oil tankers that were operated by co-conspirators.  SITKI AYAN’s son and senior ASB Group officer, BAHADDIN AYAN, assisted SITKI AYAN in the scheme and caused millions of dollars of wire transfers through the U.S. banking system for the leasing and operation of oil tankers.  OZTAS, who was a manager of the ASB Group of companies, also assisted SITKI AYAN in carrying out the scheme and finalizing agreements with ASB Group’s partners.  SHAHRIYARI, a senior Qods Force official; KARIMIAN, who acts as an agent of the Qods Force in oil laundering transactions; and ALIAKBARI participated in negotiations among the participants and monitored the progress of the oil sales, oil shipments, and the Qods Force’s receipt of the oil proceeds.

To sell NIOC crude oil to government-affiliated buyers in Russia, the network again used the ASB Group of companies, along with other companies in the UAE, Cyprus, Russia, and Turkey.  SHAHRIYARI and KARIMIAN organized a complex web of companies, with SITKI AYAN’s ASB Group of companies at the center, to launder NIOC oil and the proceeds through layered transactions with a Cypriot company and to launder the oil sales through bulk cash smuggling and trade-based money laundering involving Russian agricultural products.  Commander Ghasemi and his co-conspirators, including KARIMIAN, controlled the proceeds of the oil sales, which were collected in Russia and transferred through cash couriers, SITKI AYAN’s companies, or the Iranian Embassy in Moscow.

One of the key Qods Force front companies involved in the scheme was China Oil and Petroleum Company (“China Oil and Petroleum”), which, despite its name, was controlled from Iran by Commander Ghasemi and his associates, including KARIMIAN.  China Oil and Petroleum acted as an intermediary in sales of NIOC oil, including deals involving SITKI AYAN’s ASB Group of companies, in order to facilitate the ultimate delivery to government-affiliated buyers in China.  Between at least 2019 and the present, China Oil and Petroleum has been involved in the transfer of more than $2 billion through the U.S. financial system in furtherance of the scheme to finance the IRGC’s Qods Force.

The Defendants

BEHNAM SHAHRIYARI, a/k/a “Seyed Aliakbar Mirvakili,” a/k/a “Husain,” a/k/a “Huseyini Hamid,” a/k/a “Seyed Hamid Reza Shahcheraghi,” 58, an Iranian national, is a publicly identified IRGC Qods Force senior official.  In 2011, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated SHAHRIYARI as a Specially Designated National (“SDN”) under national security controls related to global terrorism for acting on behalf of an IRGC-linked shipping company that provided material support, including weapons, to Hizballah on behalf of the IRGC.

MORTEZA ROSTAM GHASEMI, 32, an Iranian national, is the son of IRGC Qods Force Commander Ghasemi.  In 2019, GHASEMI was designated by OFAC as an SDN under national security controls related to global terrorism.

MOHAMMADREZA ALIAKBARI, a/k/a “Captain Aliakbari,” a/k/a “Abu Emad,” 56, an Iranian national, is a senior officer with Safiran Payam Darya Shipping Company, which acts on behalf of the Government of Iran.  In 2019, ALIAKBARI was designated by OFAC as an SDN under national security controls related to global terrorism, including his alleged role as an interlocutor between the IRGC Qods Force and vessel managers to help the Qods Force evade sanctions.

MOHAMMAD SADEGH KARIMIAN, 36, an Iranian national, acts as an agent of the IRGC Qods Force.  KARIMIAN was designated in 2022 by OFAC as an SDN under national security controls relating to global terrorism and plays a principal role in overseeing the creation and use of intermediary companies to act on behalf of the IRGC and in organizing and supervising deals for the sale and transportation of Iranian crude oil and petroleum products. 

SITKI AYAN, 61, a Turkish national, has a long history of partnering with Iranian state-owned oil and gas companies.  AYAN is the chairman of the ASB Group of companies, which includes Som Petrol Ticaret A.S., Baslam Petrol Sanayi Ve Ticaret A.S., and Baslam Nakliyat Ve Dis Ticaret, Ltd. Sirketi, all of which have been designated by OFAC as SDNs along with AYAN in December 2022 under national security controls related to global terrorism.

BAHADDIN AYAN, 35, a Turkish national, is the son of SITKI AYAN and a vice president of the ASB Group of companies.  In December 2022, BAHADDIN AYAN was designated by OFAC as an SDN under national security controls related to global terrorism.

KASIM OZTAS, 41, a Turkish national, has been managing director of the ASB Group of companies.  In December 2022, KASIM OZTAS was designated by OFAC as an SDN under national security controls related to global terrorism.

*                *                *

The Indictment unsealed today charges each of the defendants with: (i) conspiring to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; (ii) conspiring to violate the International Emergency Economic Powers Act and sanctions against the Governments of Iran and Syria, global terrorists and proliferators of weapons of mass destruction, which carries a maximum sentence of 20 years in prison; (iii) conspiring to commit bank and wire fraud, which carries a maximum sentence of 30 years in prison; (iv) conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison; and (v) conspiring to defraud the United States, which carries a maximum sentence of five years in prison. 

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

Mr. Williams praised the outstanding investigative work of the FBI’s New York Field Office Counterintelligence Division.  Mr. Williams also thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section and Counterterrorism Section for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Michael D. Lockard, David W. Denton, Jr., and Nicholas S. Bradley are in charge of the prosecution, with assistance from Trial Attorneys Benjamin Hawk, Beaudre Barnes, and Christopher Magnani of the Counterintelligence and Export Control Section and Trial Attorneys Joshua Champagne and Jennifer Levy of the Counterterrorism Section.

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

[1] As the introductory phrase signifies, the 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; Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”); and Christopher A. Nielsen, the Inspector in Charge of the Philadelphia Division of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an Indictment charging MOHANAD AL-ZUBAIDI, SHAKER SALEH MOHAMMED HAUTER, and ABDULKADER NOORI HAMZA with conspiring to operate an unlicensed money transmitting business that was responsible for illicitly moving more than $65 million between the United States and countries in the Middle East, including Yemen, Turkey, Iraq, the United Arab Emirates, and Jordan. 

AL-ZUBAIDI was arrested yesterday morning at his home in New Jersey and presented yesterday afternoon in Manhattan federal court before U.S. Magistrate Judge Robert W. Lehrburger.  HAUTER was arrested last night at John F. Kennedy International Airport in Queens, New York, attempting to board a flight to Turkey, and will be presented today before Judge Lehrburger.  HAMZA is currently at large.  The case is assigned to U.S. District Judge P. Kevin Castel.  

U.S. Attorney Damian Williams said: “This indictment demonstrates our continued efforts to target and disrupt alleged illicit financial networks that are used every day to criminally transfer proceeds across international borders.  Our commitment remains to exposing these unlawful networks and to prosecute those who operate them to the fullest extent of the law.”

IRS-CI Special Agent in Charge Thomas Fattorusso said: “These three men are charged with moving more than $65 million in illegal proceeds to the Middle East.  Hawala networks are known to facilitate money laundering and fund criminal organizations abroad, and our investigations look to shut down these networks and stop the flow of dirty money.  IRS Criminal Investigation is committed to following the money to protect the United States from these threats, and we are resolute in building criminal cases against these illicit organizations.”

USPIS Inspector in Charge Christopher A. Nielsen said: “This announcement demonstrates the U.S. Postal Inspection Service’s commitment to stopping anyone from using our products in furtherance of an organized criminal scheme.  As alleged, these defendants went through great lengths to circumvent and deceive financial institutions for personal enrichment while using U.S. Postal Service Money Orders to engage in international illicit financial transactions.  Postal Inspectors will continue to work tirelessly with our law enforcement partners to disrupt networks perpetrating financial crimes and bring all responsible parties to justice.”

As alleged in the Indictment:[1]

Between in or about 2018 through at least in or about 2022, MOHANAD AL-ZUBAIDI, SHAKER SALEH MOHAMMED HAUTER, and ABDULKADER NOORI HAMZA operated an unlicensed money transfer business that was responsible for illicitly moving more than $65 million between the United States and countries in the Middle East.  AL-ZUBAIDI, HAUTER, and HAMZA facilitated hundreds of illicit money transfers, with each transfer ranging from thousands to hundreds of thousands of dollars.  For the illicit transactions they completed, HAUTER, AL-ZUBAIDI, and HAMZA typically earned a commission of between one and six percent of the total amount transferred.  To facilitate these illicit transfers, AL-ZUBAIDI, HAUTER, and HAMZA worked with other members of an international network of money brokers to transfer money through an informal money transmitting system known as “hawala,” which is frequently used by money launderers and other criminals to transfer criminal proceeds abroad.

In furtherance of this scheme, AL-ZUBAIDI purported to operate at least four companies based in Texas or New Jersey:  Itaqwen, LLC, Mirage Energies Inc., Mirage Auto Group Inc., and Mirage Life Style Inc.  In order to open bank accounts and transfer funds through those accounts, AL-ZUBAIDI falsely represented to banks and other financial institutions at which he opened financial accounts for Mirage Energies Inc., Mirage Auto Group Inc., and Mirage Life Style Inc. (together, the “Mirage Companies”) that he used the Mirage Companies to operate an international trading and investment business or to sell cars.  In truth and in fact, and as AL-ZUBAIDI knew, he was not operating a legitimate automobile business (or any other legitimate business) but was operating an unlicensed money transfer business.  Throughout the period charged in the Indictment, individuals, companies, and other illicit money brokers based outside of the United States contacted AL-ZUBAIDI directly — or through other money brokers like HAUTER — to enlist AL-ZUBAIDI to transfer money to others on their behalf in exchange for a fee.

HAMZA, the father of AL-ZUBAIDI, worked directly with AL-ZUBAIDI to operate their unlicensed money transfer business.  For example, HAMZA picked up cash from other members of the scheme (including HAUTER) at various locations, including in the Bronx, New York.  Then, HAMZA delivered that cash to AL-ZUBAIDI directly or used it to purchase money orders that HAMZA later deposited into bank accounts in the name of the Mirage Companies, which were used to complete illicit money transfers.

HAUTER ran his own unlicensed money transfer business based in the Bronx, New York, and served as an intermediary money broker for AL-ZUBAIDI and HAMZA.  HAUTER regularly coordinated unlicensed money transfers for AL-ZUBAIDI and HAMZA by directing customers to them or by enlisting them to complete transactions for HAUTER’s own customers.  In addition, HAUTER regularly connected AL-ZUBAIDI with other money brokers based outside of the United States to facilitate additional illicit money transfers.  Like AL-ZUBAIDI, HAUTER typically received a commission for each illicit transaction he completed.

*                *                *

MOHANAD AL-ZUBAIDI, 36, of Piscataway, New Jersey; SHAKER SALEH MOHAMMED HAUTER, 51, of the Bronx, New York; and ABDULKADER NOORI HAMZA, 62, of Piscataway, New Jersey, were charged with one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison, and one count of operating an unlicensed money transmitting business, which carries a maximum sentence of five years in prison.  AL-ZUBAIDI was also charged with bank fraud, which carries a maximum sentence of 30 years in prison.

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

Mr. Williams praised the outstanding investigative work of IRS-CI and USPIS.  Mr. Williams also recognized the assistance of U.S. Customs and Border Protection.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Matthew J. King and Amanda C. Weingarten 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 the Southern District of New York collected $2,249,716,748.68 in criminal and civil actions in Fiscal Year 2023.  Of this amount, $550,594,893.86 was collected in criminal actions, $63,979,949.82 was collected in civil actions, and $1,632,141,905 was collected in asset forfeiture actions.

Additionally, the Southern District of New York worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $2,379,785.90 in cases pursued jointly by these offices.  Of this amount, $81,164.56 was collected in criminal actions, and $2,298,261.34 was collected in civil actions.

U.S. Attorney Damian Williams said: “As advocates for the victims of criminal and civil wrongdoing, this Office has perennially been the nation’s leader in securing forfeiture, restitution, and other financial penalties – this year collecting over $2.2 billion.  I could not be prouder of the career prosecutors of this Office who work tirelessly to hold bad actors accountable and return property to those who have been victimized.”

A highlight of the Office’s work this year includes the July 2023 sentencing of Allianz Global Investors U.S. (“AGI”).  AGI was sentenced in connection with a multibillion-dollar fraud scheme involving a series of private investment funds managed by AGI after pleading guilty to securities fraud.  AGI was sentenced to financial penalties comprised of over $463 million in forfeiture, over $2.32 billion in restitution, and over $2.33 billion in fines.

The U.S. Attorney’s Offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims Fund, which distributes the funds collected to federal and state compensation and victim assistance programs.  In addition, forfeited assets deposited into the Department of Justice Asset Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

Joshua Adam Schulte, 35, of New York, New York, was sentenced today to 480 months in prison for crimes of espionage, computer hacking, contempt of court, making false statements to the FBI, and child pornography. Schulte’s theft is the largest data breach in the history of the CIA, and his transmission of that stolen information to WikiLeaks is one of the largest unauthorized disclosures of classified information in the history of the United States.

Today’s sentencing followed Schulte’s convictions at trials that concluded on March 9, 2020, July 13, 2022, and Sept. 13, 2023.

“Mr. Schulte severely harmed U.S. national security and directly risked the lives of CIA personnel, persisting in his efforts even after his arrest,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “As today’s sentence reaffirms, the Department of Justice is committed to investigating, prosecuting, and holding accountable those who would violate their constitutional oath and betray the trust of the American people they pledged to protect.”

“Joshua Schulte betrayed his country by committing some of the most brazen, heinous crimes of espionage in American history," said U.S. Attorney Damian Williams for the Southern District of New York. "He caused untold damage to our national security in his quest for revenge against the CIA for its response to Schulte’s security breaches while employed there. When the FBI caught him, Schulte doubled down and tried to cause even more harm to this nation by waging what he described as an ‘information war’ of publishing top secret information from behind bars. And all the while, Schulte collected thousands upon thousands of videos and images of children being subjected to sickening abuse for his own personal gratification. The outstanding investigative work of the FBI and the career prosecutors in this office unmasked Schulte for the traitor and predator that he is and made sure that he will spend 40 years behind bars – right where he belongs.”

“Joshua Schulte caused grave harm to U.S. national security and contributed to the abuse of scores of innocent children,” said Executive Assistant Director Larissa L. Knapp of the FBI’s National Security Branch. “Using his expertise, Schulte stole and exposed classified national security information including some of the U.S. government’s most sensitive techniques and personnel, but he didn’t only exploit the U.S. government – he also exploited vulnerable children by collecting images and videos capturing their horrific abuse for his own pleasure. Together with our partners, the FBI will remain steadfast in our pursuit of those who put the security of the American people and its most vulnerable citizens at risk.” 

According to court documents, from 2012 to 2016, Schulte was employed as a software developer in the Center for Cyber Intelligence (CCI), which conducts offensive cyber operations: cyber espionage relating to terrorist organizations and foreign governments. Schulte and other CCI developers worked on tools that were used in, among other things, human-enabled operations: cyber operations that involved a person with access to the computer network being targeted by the cyber tool. In addition to being a developer, Schulte was also temporarily one of the administrators of one of the servers and suite of development programs used to build cyber tools.

In March 2016, Schulte was moved within branches of CCI as a result of personnel disputes between Schulte and another developer. Following that transfer, in April 2016, Schulte abused his administrator powers to grant himself administrator privileges over a development project from which he had been removed as a result of the branch change. Schulte’s abuse of administrator privileges was detected, and CCI leadership directed that administrator privileges would immediately be transferred from developers, including Schulte, to another division. Schulte was also given a warning about self-granting administrator privileges that had previously been revoked.

Schulte had, however, secretly opened an administrator session on one of the servers before his privileges were removed. On April 20, 2016, after other developers had left the CCI office, Schulte used his secret server administrator session to execute a series of cyber-maneuvers on the CIA network to restore his revoked privileges, break in to the backups, steal copies of the entire CCI tool development archives (the Stolen CIA Files), revert the network back to its prior state, and delete hundreds of log files in an attempt to cover his tracks. Schulte’s theft of the Stolen CIA Files is the largest data breach in CIA history.

From his home computer, Schulte then transmitted the Stolen CIA Files to WikiLeaks, using anonymizing tools recommended by WikiLeaks to potential leakers, such as the Tails operating system and the Tor browser. On May 5, 2016, having transmitted the Stolen CIA Files to WikiLeaks, Schulte wiped and reformatted his home computer’s internal hard drives.

On March 7, 2017, WikiLeaks began publishing classified data from the Stolen CIA Files. Between March and November 2017, there were a total of 26 disclosures of classified data from the Stolen CIA Files that WikiLeaks denominated as Vault 7 and Vault 8 (the WikiLeaks Disclosures). The WikiLeaks Disclosures were one of the largest unauthorized disclosures of classified information in the history of the United States, and Schulte’s theft and disclosure immediately and profoundly damaged the CIA’s ability to collect foreign intelligence against America’s adversaries; placed CIA personnel, programs, and assets directly at risk; and cost the CIA hundreds of millions of dollars. The effect was described at trial by the former CIA Deputy Director of Digital Innovation as a “digital Pearl Harbor,” and the disclosure caused exceptionally grave harm to the national security of the United States.

Following the WikiLeaks Disclosures, Schulte was voluntarily interviewed on multiple occasions by the FBI in March 2017. During those interviews, Schulte repeatedly lied, including denying being responsible for the theft of the Stolen CIA Files or for the WikiLeaks Disclosures, and spinning fake narratives about ways the Stolen CIA Files could have been obtained from CIA computers, in the hope of deflecting suspicion away from Schulte and diverting law enforcement resources to false leads.

In March 2017, the FBI searched Schulte’s apartment in New York pursuant to a search warrant and recovered, among other things, multiple computers, servers, and other electronic storage devices, including Schulte’s personal desktop computer (the Desktop Computer), which Schulte built while living in Virginia and then transported to New York in November 2016. On the Desktop Computer, FBI agents found layers of encryption hiding tens of thousands of videos and images of child sexual abuse materials, including approximately 3,400 images and videos of disturbing and horrific child pornography and the rape and sexual abuse of children as young as two years old, as well as images of bestiality and sadomasochism. Schulte collected some of these files during his employment with the CIA and continued to stockpile child pornography from the dark web and Russian websites after moving to New York.

While detained pending trial, in approximately April 2018, Schulte sent a copy of the affidavit in support of the warrant to search his apartment, which a protective order entered by the court prohibiting Schulte from disseminating, to reporters from two different newspapers, and Schulte acknowledged in recorded phone calls that he knew he was prohibited from sharing protected material like the affidavit.

Despite being warned by the court not to violate the protective order further, in the summer and fall of 2018, Schulte made plans to wage what he proclaimed to be an “information war” against the U.S. government. To pursue these ends, Schulte obtained access to contraband cellphones while in jail that he used to create anonymous, encrypted email and social media accounts. Schulte also attempted to use the contraband cellphones to transmit protected discovery materials to WikiLeaks and planned to use the anonymous email and social media accounts to publish a manifesto and various other postings containing classified information about CIA cyber techniques and cyber tools. In a journal, Schulte wrote that he planned to “breakup diplomatic relationships, close embassies, [and] end U.S. occupation across the world[.]” Schulte successfully sent emails containing classified information about the CCI development network and the number of employees in particular CIA cyber intelligence groups to a reporter.

As a result of this conduct, on March 9, 2020, Schulte was found guilty at trial of contempt of court and making material false statements. On July 13, 2022, Schulte was found guilty at trial of eight counts: illegal gathering and transmission of national defense information in connection with his theft and dissemination of the Stolen CIA Files, illegal transmission and attempted transmission of national defense information, unauthorized access to a computer to obtain classified information and information from a department or agency of the U.S. in connection with his theft of the Stolen CIA Files, and two counts of causing transmission of harmful computer commands in connection with his theft of the Stolen CIA Files. Finally, on Sept. 13, 2023, Schulte was found guilty at trial on charges of receiving, possessing, and transporting child pornography.

The FBI Counterintelligence Division and Child Exploitation and Human Trafficking Task Force of the FBI New York Field Office investigated the case, with the extraordinary assistance of FBI computer scientists from the Cyber Action Team. The FBI Washington Field Office, CIA Office of General Counsel, and National Security Division’s Counterintelligence and Export Control Section provided significant assistance.

Assistant U.S. Attorneys David W. Denton Jr., Michael D. Lockard, and Nicholas S. Bradley for the Southern District of New York prosecuted the case.

Damian Williams, the United States Attorney for the Southern District of New York; Matthew G. Olsen, the Assistant Attorney General for National Security; and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that JOSHUA ADAM SCHULTE was sentenced to 40 years in prison by U.S. District Judge Jesse M. Furman for crimes of espionage, computer hacking, contempt of Court, making false statements to the FBI, and child pornography.  SCHULTE’s theft is the largest data breach in the history of the CIA, and his transmission of that stolen information to WikiLeaks is one of the largest unauthorized disclosures of classified information in the history of the U.S.  Today’s sentencing followed SCHULTE’s convictions at trials that concluded on March 9, 2020, July 13, 2022, and September 13, 2023.

U.S. Attorney Damian Williams said: “Joshua Schulte betrayed his country by committing some of the most brazen, heinous crimes of espionage in American history.  He caused untold damage to our national security in his quest for revenge against the CIA for its response to Schulte’s security breaches while employed there.  When the FBI caught him, Schulte doubled down and tried to cause even more harm to this nation by waging what he described as an ‘information war’ of publishing top secret information from behind bars.  And all the while, Schulte collected thousands upon thousands of videos and images of children being subjected to sickening abuse for his own personal gratification.  The outstanding investigative work of the FBI and the career prosecutors in this Office unmasked Schulte for the traitor and predator that he is and made sure that he will spend 40 years behind bars – right where he belongs.”

Assistant Attorney General Matthew G. Olsen said: “Mr. Schulte severely harmed U.S. national security and directly risked the lives of CIA personnel, persisting in his efforts even after his arrest.  As today’s sentence reaffirms, the Department of Justice is committed to investigating, prosecuting, and holding accountable those who would violate their constitutional oath and betray the trust of the American people they pledged to protect.”

FBI Assistant Director in Charge James Smith said: “Today, Joshua Schulte was rightly punished not only for his betrayal of our country, but for his substantial possession of horrific child pornographic material.  The severity of his actions is evident, and the sentence imposed reflects the magnitude of the disturbing and harmful threat posed by his criminal conduct.  The FBI will not yield in our efforts to bring to justice anyone who endangers innocent children or threatens our national security.”

According to court documents and evidence at trial:

From 2012 to 2016, SCHULTE was employed as a software developer in the Center for Cyber Intelligence (“CCI”), which conducts offensive cyber operations: cyber espionage relating to terrorist organizations and foreign governments.  SCHULTE and other CCI developers worked on tools that were used in, among other things, human-enabled operations: cyber operations that involved a person with access to the computer network being targeted by the cyber tool.  In addition to being a developer, SCHULTE was also temporarily one of the administrators of one of the servers and suite of development programs used to build cyber tools.

In March 2016, SCHULTE was moved within branches of CCI as a result of personnel disputes between SCHULTE and another developer.  Following that transfer, in April 2016, SCHULTE abused his administrator powers to grant himself administrator privileges over a development project from which he had been removed as a result of the branch change.  SCHULTE’s abuse of administrator privileges was detected, and CCI leadership directed that administrator privileges would immediately be transferred from developers, including SCHULTE, to another division.  SCHULTE was also given a warning about self-granting administrator privileges that had previously been revoked. 

SCHULTE had, however, secretly opened an administrator session on one of the servers before his privileges were removed.  On April 20, 2016, after other developers had left the CCI office, SCHULTE used his secret server administrator session to execute a series of cyber-maneuvers on the CIA network to restore his revoked privileges, break in to the backups, steal copies of the entire CCI tool development archives (the “Stolen CIA Files”), revert the network back to its prior state, and delete hundreds of log files in an attempt to cover his tracks.  SCHULTE’s theft of the Stolen CIA Files is the largest data breach in CIA history.

From his home computer, SCHULTE then transmitted the Stolen CIA Files to WikiLeaks, using anonymizing tools recommended by WikiLeaks to potential leakers, such as the Tails operating system and the Tor browser.  On May 5, 2016, having transmitted the Stolen CIA Files to WikiLeaks, SCHULTE wiped and reformatted his home computer’s internal hard drives.

On March 7, 2017, WikiLeaks began publishing classified data from the Stolen CIA Files.  Between March and November 2017, there were a total of 26 disclosures of classified data from the Stolen CIA Files that WikiLeaks denominated as Vault 7 and Vault 8 (the “WikiLeaks Disclosures”).  The WikiLeaks Disclosures were one of the largest unauthorized disclosures of classified information in the history of the U.S., and SCHULTE’s theft and disclosure immediately and profoundly damaged the CIA’s ability to collect foreign intelligence against America’s adversaries; placed CIA personnel, programs, and assets directly at risk; and cost the CIA hundreds of millions of dollars.  The effect was described at trial by the former CIA Deputy Director of Digital Innovation as a “digital Pearl Harbor,” and the disclosure caused exceptionally grave harm to the national security of the U.S.   

Following the WikiLeaks Disclosures, SCHULTE was voluntarily interviewed on multiple occasions by the FBI in March 2017.  During those interviews, SCHULTE repeatedly lied, including denying being responsible for the theft of the Stolen CIA Files or for the WikiLeaks Disclosures and spinning fake narratives about ways the Stolen CIA Files could have been obtained from CIA computers, in the hope of deflecting suspicion away from SCHULTE and diverting law enforcement resources to false leads. 

In March 2017, the FBI searched SCHULTE’s apartment in New York pursuant to a search warrant and recovered, among other things, multiple computers, servers, and other electronic storage devices, including SCHULTE’s personal desktop computer (the “Desktop Computer”), which SCHULTE built while living in Virginia and then transported to New York in November 2016.  On the Desktop Computer, FBI agents found layers of encryption hiding tens of thousands of videos and images of child sexual abuse materials, including approximately 3,400 images and videos of disturbing and horrific child pornography and the rape and sexual abuse of children as young as two years old, as well as images of bestiality and sadomasochism.  SCHULTE collected some of these files during his employment with the CIA and continued to stockpile child pornography from the dark web and Russian websites after moving to New York.

While detained pending trial, in approximately April 2018, SCHULTE sent a copy of the affidavit in support of the warrant to search his apartment, which a protective order entered by the Court prohibiting SCHULTE from disseminating, to reporters from two different newspapers, and SCHULTE acknowledged in recorded phone calls that he knew he was prohibited from sharing protected material like the affidavit.

Despite being warned by the Court not to violate the protective order further, in the summer and fall of 2018, SCHULTE made plans to wage what he proclaimed to be an “information war” against the U.S. government.  To pursue these ends, SCHULTE obtained access to contraband cellphones while in jail that he used to create anonymous, encrypted email and social media accounts.  SCHULTE also attempted to use the contraband cellphones to transmit protected discovery materials to WikiLeaks and planned to use the anonymous email and social media accounts to publish a manifesto and various other postings containing classified information about CIA cyber techniques and cyber tools.  In a journal, SCHULTE wrote that he planned to “breakup diplomatic relationships, close embassies, [and] end U.S. occupation across the world[.]”  SCHULTE successfully sent emails containing classified information about the CCI development network and the number of employees in particular CIA cyber intelligence groups to a reporter. 

As a result of this conduct, on March 9, 2020, SCHULTE was found guilty at trial of contempt of court and making material false statements.  On July 13, 2022, SCHULTE was found guilty at trial of eight counts: illegal gathering and transmission of national defense information in connection with his theft and dissemination of the Stolen CIA Files, illegal transmission and attempted transmission of national defense information, unauthorized access to a computer to obtain classified information and information from a department or agency of the U.S. in connection with his theft of the Stolen CIA Files, and two counts of causing transmission of harmful computer commands in connection with his theft of the Stolen CIA Files.  Finally, on September 13, 2023, SCHULTE was found guilty at trial on charges of receiving, possessing, and transporting child pornography.

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In addition to the prison term, SCHULTE, 35, of New York, New York, was sentenced to a lifetime of supervised release.

Mr. Williams praised the outstanding efforts of the Counterintelligence Division and the Child Exploitation and Human Trafficking Task Force of the FBI’s New York Field Office, as well as the extraordinary work of FBI computer scientists from the Cyber Action Team.  Mr. Williams also thanked the FBI Washington Field Office, the CIA Office of General Counsel, and the National Security Division’s Counterintelligence and Export Control Section for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys David W. Denton Jr., Michael D. Lockard, and Nicholas S. Bradley are in charge of the prosecution.