Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOSEPH GARRISON was sentenced to 18 months in prison for his role in a scheme to hack user accounts on a fantasy sports and betting website (the “Betting Website”) and sell access to those accounts, resulting in losses of hundreds of thousands of dollars to the users.  GARRISON was sentenced today before U.S. District Judge Lewis A. Kaplan.  On November 15, 2023, GARRISON pled guilty to one count of conspiring to commit computer intrusion.

U.S. Attorney Damian Williams said: “Joseph Garrison and his co-conspirators orchestrated a bold credential stuffing attack – collecting stolen usernames and password pairs from other large-scale data breaches – by exploiting vulnerabilities to siphon approximately $600,000 from unsuspecting victims.  Such attacks not only breach personal security but erode trust in online platforms.  Today’s sentencing underscores the urgent need for vigilance and the critical importance of our collective efforts in combatting cyber threats and safeguarding digital integrity.” 

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

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

GARRISON and others successfully accessed approximately 60,000 accounts on the Betting Website (the “Victim Accounts”) through the credential stuffing attack.  In some instances, the individuals who unlawfully accessed the Victim Accounts were able to add a new payment method on the account, deposit $5 into that account through the new payment method to verify that method, and then withdraw all the existing funds in the Victim Account through the new payment method (i.e., to a newly added financial account belonging to the hacker), thus stealing the funds in the Victim Accounts.  Using this method, GARRISON and others stole approximately $600,000 from approximately 1,600 Victim Accounts on the Betting Website.

Law enforcement executed a search on GARRISON’s home in February 2023.  In that search, they located programs typically used for credential stuffing attacks.  Those programs require individualized “config” files for a target website to launch credential stuffing attacks, and law enforcement located approximately 700 such config files for dozens of different corporate websites on GARRISON’s computer.  Law enforcement also located files containing nearly 40 million username and password pairs on GARRISON’s computer, which are also used in credential stuffing attacks.

On GARRISON’s cellphone, law enforcement also located conversations between GARRISON and his co-conspirators, including discussions about how to hack the Betting Website and how to profit from the hack of the Betting Website by extracting funds from the Victim Accounts directly or by selling access to the Victim Accounts.  In one particular conversation, GARRISON discussed, in substance and in part, how successful he was at credential stuffing attacks, how much he enjoyed credential stuffing attacks, and how GARRISON believed that law enforcement would not catch or prosecute him.  Specifically, GARRISON messaged the following, in substance and in part: “fraud is fun . . . im addicted to see money in my account . . . im like obsessed with bypassing shit.”

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In addition to the prison term, GARRISON, 19, of Madison, Wisconsin, was sentenced to 3 years of supervised release and ordered to pay $175,019.11 in forfeiture and $1,327,061 in restitution.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams also thanked the New York City Police Department for its 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 Micah Fergenson are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Erin Keegan, the Acting Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”); Tommy Kalogiros, Assistant Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of a Complaint charging CHRISTEN CHEN, a/k/a “Nauti,” SHAQOYA HALL, a/k/a “Q,” and ZACHARY HAMPTON, a/k/a “J,” with conspiracy to engage in the unlicensed dealing of firearms, firearms trafficking, and interstate transportation of firearms, in connection with their involvement in a scheme to illegally transport firearms from Georgia to New York, among other places, for resale.  

SHAQOYA HALL and ZACHARY HAMPTON were arrested on January 30, 2024, in New York, New York.  CHRISTEN CHEN was arrested on January 30, 2024, in Staten Island, New York.  HALL and HAMPTON were presented before U.S. Magistrate Judge Robert W. Lehrburger and detained.  CHEN will be presented later today before Judge Lehrburger. 

U.S. Attorney Damian Williams said: “As alleged, these defendants directly contributed to the flow of illegal guns into New York City, endangering communities in this District for little more than financial gain.  To anyone who is thinking about illegally selling guns to New Yorkers or illegally bringing guns to New York: we and our law enforcement partners are watching.”

HSI Acting Special Agent in Charge Erin Keegan said: “HSI New York’s Violent Gang Task Force worked collaboratively with the ATF and the NYPD to disrupt the alleged iron pipeline of firearms flooding New York neighborhoods.  I commend all agencies involved in this vital partnership, which prevented 13 illegal firearms from potentially making their way into the hands of criminals and gang members.”

ATF Assistant Special Agent in Charge Tommy Kalogiros said: “The unchecked flow of weapons onto our streets is a threat to every single person in NYC.  These arrests serve as a notice to those who think they are above the law and can illegally traffic guns into our communities.  The men and women of ATF NY will never waiver on our commitment to protect the public and to aggressively target firearms traffickers.  The proliferation of illegal guns may be continuous, but law enforcement is united and strong.  I thank all the members of the ATF NY Joint Firearms Task Force, HSI, NYPD, and SDNY for their diligent work and tireless dedication to our shared public safety mission.”

NYPD Commissioner Edward A. Caban said: “When investigating the gun violence that plagues our city, the NYPD and our law enforcement partners always look at how the illegal firearms arrived in the five boroughs and who is selling them here – then we devise and execute a strategy to dismantle those schemes.  These latest arrests are a prime example of a great plan coming together.  I commend everyone involved in this multi-agency effort, from our NYPD investigators to all of our colleagues at the ATF, HSI, and the Office of the U.S. Attorney for the Southern District of New York.”

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

From at least in or around September 2023, up to and including January 2024, the defendants worked together to obtain firearms in southern states — primarily Georgia —, transport the firearms to New York via car or bus, and resell the firearms in, among other places, New York City (the “Gun Trafficking Scheme”).  Over the course of the Gun Trafficking Scheme, the defendants discussed the sale of approximately 40 firearms and successfully sold at least 13 firearms to a confidential informant (the “CI”).

Over the course of the Gun Trafficking Scheme, HAMPTON and CHEN communicated directly with the CI and discussed the potential sale of a variety of firearms including, among other things and as depicted below, semi-automatic handguns, handguns with extended magazines, at least one assault style handgun, and at least one rifle:

On three occasions, CHEN, HAMPTON, and HALL met with the CI to sell firearms.  On or about October 16, 2023, CHEN, HAMPTON, and HALL sold one firearm to the CI in Staten Island.  On or about October 22, 2023, CHEN and HALL sold the CI four firearms in Staten Island.  And, on or about January 30, 2024, HAMPTON and HALL were arrested in New York, New York, while attempting to sell the CI eight firearms.

October 15, 2023, Sale

October 22, 2023, Sale

January 30, 2024, Attempted Sale

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CHEN, 28, of Staten Island, New York; HALL, 24, of Staten Island, New York; and HAMPTON 28, of Augusta, Georgia, are each charged with one count of conspiracy to commit gun trafficking, which carries a maximum sentence of five years in prison, and one count of gun trafficking, which carries a maximum sentence of five years in prison.  CHEN and HALL are additionally charged with one count of interstate travel with intent to engage in gun trafficking, 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 defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of HSI, ATF, and the NYPD.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorney Ashley C. Nicolas is in charge of the prosecution.

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

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[1] As the introductory phrase signifies, 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 the arrest of ALAN SWISS on charges of health care fraud and conspiracy to violate the Anti-Kickback Statute.  SWISS is the third defendant charged, following the arrests in December of co-defendants ERIN FOLEY and TED ALBIN.  As alleged in a four-count Indictment unsealed today, SWISS ran two medical supply companies that illegally submitted more than $17 million in claims to Medicare, submitting those claims through a Medicare billing company run by FOLEY and ALBIN.  FOLEY and ALBIN are charged with using that billing company to bill Medicare for more than $25 million in fraudulent claims for durable medical equipment (“DME”), on which Medicare and related private insurers paid out more than $9 million.

SWISS was presented this morning before U.S. Magistrate Judge William Matthewman in West Palm Beach, Florida, and ordered to appear again in the West Palm Beach federal courthouse on February 5 for a removal hearing.  In Manhattan, the case is assigned to U.S. District Judge John G. Koeltl.

U.S. Attorney Damian Williams said: “As alleged, the defendants devised a scheme to get rich quick by fraudulently billing Medicare, a taxpayer-funded service, for medical equipment.  Their alleged scheme bilked taxpayers of millions of dollars, and fraudulent practices such as this can drive up the cost of health care for everyone.  Close watch for fraud must be paid to our taxpayer-funded programs to ensure fairness for all Americans who rely on these critical systems for medical care.”

According to statements made in court and publicly filed documents in this case:[1]

From approximately 2016 through April 2019, SWISS operated Tropical Medical Marketing, Inc., a call center which cold-called Medicare beneficiaries and used their personal and medical information without the beneficiaries’ knowledge or consent to prepare orders for DME.  SWISS then sold these DME orders to co-conspirators who illegally obtained purported signatures or “authorizations” of health care providers so that fraudulent claims could be submitted to Medicare for reimbursement.

From approximately 2017 through April 2019, SWISS also operated two DME supply companies: Modern Medical Equipment, Inc., which SWISS used primarily to bill Medicare directly under Medicare Part B, and A&E Medical, Inc., which SWISS used primarily to bill private insurance companies under Medicare Part C, also known as “Medicare Advantage.”  To obtain the DME orders that SWISS used to support his unlawful claims to Medicare, SWISS used two unlawful methods: (i) purchasing such orders outright, and (ii) using patient information that SWISS had generated through his call center and purchasing the purported signatures or authorizations of health care providers.  SWISS caused the two DME supply companies that he controlled to submit claims to Medicare for more than $17 million — through the billing company operated by FOLEY and SWISS — on which Medicare paid out nearly $5 million.

FOLEY and ALBIN owned and controlled Grapevine Professional Services, Inc. (“Grapevine”), a billing company that they used to bill Medicare for more than $25 million, and to collect more than $9 million, through claims based on orders for DME that had been unlawfully sold and bought.  Most of these unlawful purchases of DME orders were by Grapevine customers that were registered with Medicare as DME supply companies.  Additional unlawful purchases were made directly by FOLEY and ALBIN through three DME supply companies that they themselves owned and controlled.  Once these DME orders were unlawfully purchased, FOLEY and ALBIN used those orders as the basis for fraudulent claims to Medicare and to private insurers covered by Medicare Part C.  Approximately 70% of the fraudulent billing submitted by Grapevine came from the two DME supply companies controlled by SWISS. 

In addition, FOLEY and ALBIN acted as brokers of DME orders, introducing Grapevine customers who wished illegally to buy DME orders to co-conspirators who illegally sold them orders.  In return for such introductions of buyers to sellers, FOLEY and ALBIN received additional kickbacks, both in the form of cash and in the form of additional DME orders.  FOLEY and ALBIN also profited through these introductions by gaining additional illegal billing business for Grapevine.  Following these introductions, FOLEY and ALBIN continued to oversee the relations between buyers and sellers of DME orders, for example by tracking how many orders particular sellers owed to particular buyers.

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SWISS, 51, of West Palm Beach County, Florida, is charged with conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison; health care fraud, which carries a maximum sentence of 10 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and conspiracy to violate the Anti-Kickback Statute, which carries a maximum sentence of five years in prison. 

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

Mr. Williams praised the outstanding investigative work of the U.S. Department of Health and Human Services, Office of the Inspector General.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that YOHAURIS RODRIGUEZ HERNANDEZ was sentenced to 79 months in prison in connection with her participation in a fraudulent scheme to obtain over $16 million in Government benefits intended to provide relief to individuals without employment during the COVID-19 pandemic.  RODRIGUEZ HERNANDEZ previously pled guilty to conspiracy to commit wire fraud, theft of government funds, and aggravated identity theft before U.S. District Judge Philip M. Halpern, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Yohauris Rodriguez Hernandez participated in a scheme that systematically targeted Government funds established as a safety net for millions of people across the United States struggling to make ends meet during the COVID-19 pandemic.  Today’s sentence demonstrates that this Office and our law enforcement partners continue to work tirelessly to prosecute those who sought to commit pandemic relief fraud.”

According to court documents and statements made during court proceedings:

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in unemployment insurance benefits payable to eligible, lawful workers and administered through state agencies, such as the New York State Department of Labor (“NYS DOL”) in New York, in accordance with federal laws and regulations.

From February 2020 through December 2020, RODRIGUEZ HERNANDEZ and her co-defendant, Henry Fermin, along with others, participated in a scheme to obtain COVID-19 unemployment benefits through the fraudulent filing and verification of hundreds of benefit applications using the names and social security numbers of numerous other individuals.  Law enforcement agencies were first alerted to the scheme after RODIRGUEZ HERNANDEZ and Fermin fled a Yonkers hotel in December 2020, leaving behind in their previously occupied room approximately 747 pieces of mail from the NYS DOL.  Those pieces of mail contained, among other unemployment benefit-related materials, NYS DOL-issued prepaid debit cards for numerous other individuals linked to approximately 568 New York State unemployment insurance benefit accounts.  Over the course of the relevant time period, RODRIGUEZ HERNANDEZ and Fermin exchanged numerous text messages, images, and other communications that included personal identifying information — such as names, social security numbers, and dates of birth — that were used in connection with the filing and verification of numerous fraudulent applications for unemployment benefits primarily in New York as well as other states.  RODRIGUEZ HERNANDEZ also recruited and bribed a letter carrier of the U.S. Postal Service, who in turn enlisted two other postal workers, to collectively intercept NYS DOL mail that RODRIGUEZ and her co-conspirators directed to addresses on each of the postal workers’ respective postal routes.

Overall, the fraudulent scheme resulted in at least approximately $16.1 million in unemployment insurance benefit payments authorized across hundreds of accounts and at least approximately $3.2 million in actual benefit payments disbursed.

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In addition to the prison term, RODRIGUEZ HERNANDEZ, 42, of the Dominican Republic, was sentenced to three years of supervised release and ordered to forfeit $3,294,368.50 and to pay $3,294,368.50 in restitution.

Mr. Williams praised the outstanding investigative work of the Department of Labor Office of Inspector General, the U.S. Postal Inspection Service, the Social Security Administration Office of Inspector General, and the U.S. Postal Service Office of Inspector General.  Mr. Williams also thanked the City of Yonkers Police Department, the NYS DOL, Homeland Security Investigations, Immigrations and Customs Enforcement, and the New York City Police Department for their assistance with the investigation.

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

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a six-count criminal Complaint charging NATHAN AUSTAD, a/k/a “Snoopy,” and KAMERIN STOKES, a/k/a “TheMFNPlug,” in connection with a scheme to hack user accounts at a fantasy sports and betting website (the “Betting Website”) and sell access to those accounts in order to steal hundreds of thousands of dollars from them.  AUSTAD was arrested today in Farmington, Minnesota, and is expected to be presented later today before U.S. Magistrate Judge David T. Schultz in the District of Minnesota.  STOKES was arrested today in Memphis, Tennessee, and is expected to be presented later today before U.S. Magistrate Judge Annie T. Christoff in the Western District of Tennessee. 

U.S. Attorney Damian Williams said: “As alleged, Nathan Austad and Kamerin Stokes were involved a scheme to hack into the accounts of tens of thousands of victims and then to sell access to those stolen accounts online.  Our office is relentless in tracking down the perpetrators of cybercrime.  Earlier this month, we announced an SDNY Whistleblower Pilot Program to encourage early and voluntary self-disclosure of criminal activity.  To all cybercriminals: call us before we call you.”

FBI Assistant Director in Charge James Smith said: “Cyberattacks are growing increasingly more sophisticated, targeting all manner of businesses and posing a great risk to economic security.  Nathan Austad and Kamerin Stokes were allegedly part of a cyber intrusion that resulted in hundreds of thousands of dollars being stolen from victims’ accounts.   As these defendants found out, if you conduct a cyberattack for profit, you can bet the FBI can and will bring you to justice.”

As alleged in the Complaint:[1]

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

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

Access to the Victim Accounts were sold on various websites that traffic in stolen accounts, which are frequently referred to as “Shops.”  AUSTAD and Garrison sold some of the Victim Accounts on shops that they each directly controlled, and AUSTAD’s shop was named after the character Snoopy from the Peanuts comic strip.  A photo of AUSTAD’s Shop website with victim companies redacted is below:

As to other of the Victim Accounts, AUSTAD and Garrison sold them in bulk to co-conspirators, who in turn sold them on their own Shops.  STOKES controlled his own Shop, used the alias “TheMFNPlug,” and purchased Victim Accounts in bulk from Garrison.  Garrison and STOKES messaged each other as to what prices STOKES should charge and what Garrison’s cut of the sales should be.  Garrison provided STOKES with Victim Accounts with a total listed account value of over $125,000.

Photos from STOKES’s Instagram account advertising the availability of Victim Accounts for purchase on his Shop are below, with the name of the Betting Website redacted:

On or about December 2, 2022, AUSTAD messaged about the existence of this investigation, “everyone 3hould’ve been prepared for this before cashing out lol,” and a co-conspirator replied, “lol fbi can’t do shit.”  On or about May 19, 2023, AUSTAD messaged about the existence of this investigation, “like we I know the risk when we started lol . . . everyone knows their committing fraud.”

In order to advertise the success of his Shop that sold stolen accounts, AUSTAD used artificial intelligence image generation tools to create images using the following prompts: “8k hyper-realistic digital art snoopy hacking into 8k hyper-realistic computer with hacker stuff on the screen,” “8k hyper realistic snoopy designed jet but instead of smoke trails it has money trails,” and, “100 bill hyper realistic but instead of the president its snoopy.”  AUSTAD also controlled cryptocurrency accounts that received cryptocurrency worth approximately $465,000, and those accounts appear to be proceeds of his credential stuffing attacks and sale of stolen accounts.

Ultimately, AUSTAD, STOKES, Garrison, and others stole approximately $600,000 from approximately 1,600 Victim Accounts.

Garrison was previously arrested in connection with the attack on the Betting Website, and, on November 15, 2023, he pled guilty to conspiracy to commit computer intrusion in connection with that attack.  Garrison’s sentencing is scheduled for February 1, 2024, at 4:00 p.m. before U.S. District Judge Lewis A. Kaplan.

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AUSTAD, 19, of Farmington, Minnesota, and STOKES, 21, of Memphis, Tennessee, are each charged with (i) conspiracy to commit computer intrusions, which carries a maximum sentence of five years in prison; (ii) unauthorized access to a protected computer to further intended fraud, which carries a maximum sentence of five years in prison; (iii) unauthorized access to a protected computer, which carries a maximum sentence of five years in prison; (iv) wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; (v) wire fraud, which carries a maximum sentence of 20 years in prison; and (vi) aggravated identity theft, which carries a mandatory minimum sentence of two 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 work of the FBI.  Mr. Williams also thanked the New York City Police Department, U.S. Secret Service, and the U.S. Attorney’s Offices for the District of Minnesota and the Western District of Tennessee 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 Micah Fergenson 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.

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[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 therein should be treated as an allegation.

Damian Williams, the United States Attorney for the Southern District of New York; Erin Keegan, the Acting Special Agent in Charge of the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced that ANGAD BEHARRY, an NYPD officer, and GISAINET CRISTINA CHIRINOS VILORIA were arrested yesterday and each charged with one count of sexual exploitation of a child.  BEHARRY was also charged with an additional count of possession of child pornography.

The Complaint charges that from at least on or about August 31, 2022, through at least on or about September 3, 2022, the defendants conspired to induce a female minor (the “Victim”) to engage in sexually explicit conduct, to take sexually explicit photographs and videos of the Victim, and to transmit them over the Internet to BEHARRY.  In addition, the Complaint charges that from at least in or about April 23, 2022, to June 20, 2023, BEHARRY knowingly possessed sexually explicit video and images of minors, including prepubescent minors and minors under the age of 12.  BEHARRY was presented yesterday before U.S. Magistrate Judge Judith C. McCarthy and detained without bail.  VILORIA was also presented yesterday in the Southern District of Indiana, where she was arrested, and detained without bail.

U.S. Attorney Damian Williams said: “The alleged actions of Angad Beharry and Gisainet Cristina Chirinos Viloria are unconscionable and despicable.  Moreover, Beharry, as New York City Police officer, is trusted in this community to protect us and stand up for what is right, but he now stands accused of victimizing a child to satisfy his own alleged repulsive desires.  We encourage anyone with additional information pertaining to this case to contact HSI at 1-866-DHS-2423.”

HSI Acting Special Agent in Charge Erin Keegan said: “Angad Beharry took an oath to protect the people of this great city.  As alleged, he betrayed his duty, chose to serve his vile desires, and, in turn, is accused of the same heinous crimes he once swore to combat.  Whether here or elsewhere around the world, HSI New York and our law enforcement partners remain steadfast in our commitment to ensuring the safety of all individuals, especially those victims who are too young or vulnerable to do so themselves.”

As alleged in the Criminal Complaint:[1]

Between on or about August 31, 2022, and September 3, 2022, BEHARRY — using the alias “Gad” — asked VILORIA to take sexually explicit photographs of a nine-year-old child with whom VILORIA appeared to be acquainted, which VILORIA did and then transmitted the photographs to BEHARRY via WhatsApp.  BEHARRY asked VILORIA the price “for everything” — and stated that he transmitted money to her.

In or about October 2022, members of the Colombian National Police rescued a one-year-old female from Medellin, Colombia, whose mother took sexually explicit photographs of her and distributed them via social media.  The mother was arrested and reported to Colombian law enforcement that she had communicated with BEHARRY via Facebook, and that BEHARRY had asked her for sexually explicit material depicting sexual acts between the mother’s infant and the mother, among other requests.  The mother also told law enforcement that she had a friend in Venezuela — i.e., VILORIA — who she believed was also in communication with BEHARRY.

In addition, between on or about April 23, 2022, and June 20, 2023, BEHARRY possessed multiple photographs and videos containing child sexual abuse imagery, including material depicting males engaged in sexual acts with young female children.

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ANGAD BEHARRY, 46, of, Yonkers, New York, and GISAINET CRISTINA CHIRINOS VILORIA, 23, a citizen of Venezuela residing in Goshen, Indiana, are each charged with one count of sexual exploitation of a minor, which carries a minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison.  BEHARRY is additionally charged with one count of possession of child pornography depicting prepubescent minors or minors under the age of 12, which carries a maximum sentence of 20 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 the judge.

Mr. Williams praised the outstanding investigative work of HSI’s New York Child Exploitation Investigations Team, HSI’s Transnational Criminal Investigative Unit, the Colombian National Police, and the NYPD Internal Affairs Bureau. 

Mr. Williams stated that the investigation is ongoing and requests that any individuals with information concerning ANGAD BEHARRY and GISAINET CRISTINA CHIRINOS VILORIA and any individuals who may have encountered someone using the WhatsApp name “Gad,” please contact HSI through its toll-free Tip Line at 1-866-DHS-2423 or sextrafficking_outreach@hsi.dhs.gov and reference this case.  From outside the U.S. and Canada, callers should dial 802-872-6199.  Hearing-impaired users can call TTY 802-872-6196. 

The prosecution is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Timothy Ly and Kathryn Wheelock 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.

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[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein are 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 MARK SCOTT was sentenced to 10 years in prison by U.S. District Judge Edgardo Ramos for laundering approximately $400 million of proceeds from the massive international fraud scheme known as “OneCoin.”  Today’s sentencing followed SCOTT’s conviction on all counts at trial on November 21, 2019.

U.S. Attorney Damian Williams said: “Mark Scott, previously convicted at trial of laundering over $400 million of OneCoin proceeds for ‘Crypto Queen,’ Ruja Ignatova, used his law license as a means to participate in a massive money laundering scheme for a cryptocurrency that had no value since its inception.  Scott, an equity partner at a prominent international law firm, had boasted of earning ‘50 by 50.’  Indeed, Scott accomplished his goal, but by fraud and deception, and will now spend a decade in prison and has been ordered to forfeit all of his illegal proceeds.”

According to the Indictment, documents filed in the case, and evidence introduced at trial:

OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level-marketing (“MLM”) network.  OneCoin began operating in the U.S. in or around 2015.  The OneCoin scheme was one of the largest fraud schemes ever perpetrated.  Between the fourth quarter of 2014 and the fourth quarter of 2016 alone, the scheme took in more than $4 billion from at least 3.5 million victims. 

OneCoin marketed its fake cryptocurrency through a global MLM network of OneCoin members.  Unlike legitimate cryptocurrencies, OneCoin had no actual value and was conceived of as a fraud from day one.  The misrepresentations made to OneCoin investors were legion, and the cryptocurrency was worthless.  Among other things, OneCoin lied to its members about how its cryptocurrency was valued, claiming that the price of OneCoin was based on market supply and demand, when in fact OneCoin itself arbitrarily set the value of the coin without regard to market forces.  The purported value of a OneCoin grew steadily from €0.50 to approximately €29.95 per coin, as of in or about January 2019.  The purported price of OneCoins never decreased in value.

SCOTT, who was employed between June 2015 and September 2016 as an equity partner at Locke Lord LLP, a prominent international law firm, was first introduced to OneCoin’s co-founder, RUJA IGNATOVA, in September 2015.  Beginning in early 2016, SCOTT formed a series of fake private equity investment funds in the British Virgin Islands known as the “Fenero Funds.”  SCOTT then disguised incoming transfers of approximately $400 million into the Fenero Funds as investments from “wealthy European families,” when in fact the money represented proceeds of the OneCoin fraud scheme.  SCOTT layered the money through various Fenero Fund bank accounts in the Cayman Islands and the Republic of Ireland.  SCOTT subsequently transferred the funds back to IGNATOVA and other OneCoin associated entities, this time disguising the transfers as outbound investments from the Fenero Funds.  As part of the scheme, SCOTT and his co-conspirators lied to banks and other financial institutions all over the world, including to banks in the U.S., to cause those institutions to make transfers of OneCoin proceeds and evade anti-money laundering procedures.

SCOTT, who boasted about earning “50 by 50,” was paid more than $50 million for his money laundering services.  He used that money to purchase, among other things, a collection of luxury watches worth hundreds of thousands of dollars, a Ferrari and several Porsches, a 57-foot Sunseeker yacht, and three multimillion-dollar seaside homes in Cape Cod, Massachusetts.

*                *                *

In addition to the prison term, SCOTT, 55, of Coral Gables, Florida, was sentenced to three years of supervised release.  SCOTT was also ordered to forfeit a money judgment in the amount of $392,940,000, several bank accounts, a yacht, two Porsche automobiles, and four real-estate properties.

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

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

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”); Joseph Spano, the Commissioner of the Westchester County Department of Correction (“WCDOC”); and Jose A Gomerez, Police Commissioner of the City of Newburgh, announced that RECALDO FRAY, a correction officer at Westchester County Jail in Vahala, New York, was charged on Monday, January 15 with committing an armed robbery in Newburgh, New York, and later returning to Newburgh to intimidate the robbery victim.  FRAY was arrested and presented on Tuesday, January 16 before U.S. Magistrate Judge Andrew E. Krause.  During his presentment, FRAY made an application for bail, which the court denied, and he has been detained.  Additionally, a Mount Vernon man, KAHEEM PALMER, was charged on Monday, January 22 with committing the armed robbery along with FRAY.  PALMER was arrested and presented yesterday before U.S. Magistrate Judge Judith C. McCarthy.  PALMER made an application for bail, which the court denied, and he was detained.

U.S. Attorney Damian Williams said: “Recaldo Fray, a correction officer at Westchester County Jail, and Kaheem Palmer are alleged to have committed a gunpoint robbery of two individuals, restraining them and stealing their cash and marijuana.  Fray allegedly betrayed his sworn duty to uphold the law, and he will now experience the justice system not as a partner, but as an accused violent offender.  Both men will be held accountable for their alleged violent and brazen behavior.”

FBI Assistant Director in Charge James Smith said: “As a correction officer, Recaldo Fray swore an oath to uphold the law, not break it.  Fray violated this oath when along with Kaheem Palmer, they allegedly committed an armed robbery.  Frey compounded his problems by later attempting to intimidate his victim.  Frey and Palmer now face significant time inside a jail cell.  The FBI’s Hudson Valley Safe Streets Task Force will continue to put violent offenders – no matter their profession – behind bars.”

WCDOC Commissioner Joseph Spano said: “It’s both disgraceful and upsetting when one of our correction officers betrays their oath to serve and protect as sworn peace officers.  Moreover, the alleged actions of this individual tarnishes the reputation of all honest and dedicated correction officers.  I commend all of the involved law enforcement agencies for their dedication to uncovering this unlawful behavior and our Major Case Squad for providing assistance.  Mr. Fray’s employment with the Westchester Department of Correction has been terminated.”

As alleged in the Complaints against FRAY and PALMER:[1]

On or about December 4, 2023, FRAY and PALMER forced entry into a residence in Newburgh, New York, restrained the two victims inside, and stole, at gunpoint, various items of value, including a large quantity of marijuana and approximately $4,500 in cash.  FRAY then returned to the same residence on or about December 16, 2023, and attempted to threaten and intimidate a victim.  

*                *                *

FRAY, 31, of Mount Vernon, New York, is charged with one count of Hobbs Act robbery, which carries a maximum sentence of 20 years in prison; one count of use, carrying, and possession of a firearm, which was brandished, in furtherance of a crime of violence, which carries a minimum sentence of seven years in prison to run consecutive to any other sentence imposed and a maximum sentence of life in prison; and one count of tampering with a witness or victim, and attempting to do the same, which carries a maximum sentence of 20 years in prison.

PALMER, 31, of Mount Vernon, New York, is charged with one count of Hobbs Act robbery, which carries a maximum sentence of 20 years in prison, and one count of use, carrying, and possession of a firearm, which was brandished, in furtherance of a crime of violence, which carries a minimum sentence of seven years in prison to run consecutive to any other sentence imposed 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 defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI’s Hudson Valley Safe Streets Task Force and the City of Newburgh Police Department.  Mr. Williams also thanked the Westchester County Department of Correction and its major case squad for their assistance in the investigation.

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Margaret N. Vasu and Jennifer N. Ong 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.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of a Complaint charging JAMES COLLINS, JR., with enticing a minor to engage in unlawful sexual activity and with sexual exploitation of a minor.  COLLINS was arrested this morning and will be presented later this afternoon before U.S. Magistrate Judge Judith C. McCarthy in White Plains federal court.

U.S. Attorney Damian Williams said: “This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them.  As today’s arrest shows, we will use every tool available to law enforcement to investigate and prosecute those alleged to have sexually exploited children.” 

As alleged in the Complaint:[1]

On or about November 7, 2023, COLLINS attempted to persuade an individual acting in an undercover capacity and posing as a 15-year-old boy to meet the defendant in Westchester County, New York, for the purpose of engaging in sexual activities. 

From at least on or about September 16, 2023, up to and including at least on or about November 7, 2023, COLLINS, who used the Snapchat username “jimc20237221,” persuaded a 17-year-old minor in Illinois to engage in sexually explicit activity and send COLLINS videos and photos of such activity.

COLLINS was previously arrested and charged in Westchester County with Criminal Sexual Act in the Third Degree in connection with his November 7, 2023, conduct.  He was on bail at the time of today’s arrest.

Anyone who may have encountered COLLINS or whose child may have had any communications with COLLINS is asked to contact the FBI at 1-800-CALL-FBI (225-5324).

*                *                *

COLLINS, 67, of Bedford Hills, New York, is charged with one count of attempting to entice a minor to engage in unlawful sexual activity, which carries a maximum sentence of life in prison.  He is also charged with one count of sexual exploitation of a minor, which carries a maximum sentence of 30 years in prison. 

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

Mr. Williams praised the efforts of the Federal Bureau of Investigation, the Westchester District Attorney’s Office, the New Castle Police Department, and the Oswego Police Department in Oswego, Illinois 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.

 

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[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 the guilty plea of JOSEPH LEWIS to charges of committing securities fraud and conspiring to commit securities fraud through insider trading.  LEWIS was arrested in July 2023 and pled guilty before U.S. District Judge Jessica G.L. Clarke today.  In addition, BROAD BAY LTD., a corporate entity owned and directed by LEWIS, pled guilty today before Judge Clarke to a superseding criminal information, regarding its participation in a securities fraud scheme to hide LEWIS’s ownership shares of a pharmaceutical company through a pattern of false filings and misleading statements.  In connection with this plea, BROAD BAY LTD. has agreed to pay $50 million in financial penalties, among other penalties, and to continue to cooperate with the Government in this investigation.   

U.S. Attorney Damian Williams said: “Today’s guilty pleas once again confirm — as I said in announcing the charges against Joseph Lewis just six months ago – the law applies to everyone, no matter who you are or how much wealth you have.  Billionaire Lewis abused inside information he gained through his access to corporate boardrooms to tip off his friends, employees, and romantic interests.  Now, he will pay the price with a federal conviction, the prospect of time in prison, and the largest financial penalty for insider trading in a decade.  His company, Broad Bay Ltd., who failed to detect and report this misconduct, has also been held to account and will plead guilty and pay more than $50 million in financial penalties.”

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

JOSEPH LEWIS is a billionaire businessman and investor who is the principal owner of the Tavistock Group, an international private investment organization.  By virtue of LEWIS’s investments in certain companies, he has controlled one or more board of director seats at those companies and has deputized employees to serve on various company boards.  In turn, through these employees, LEWIS received material, non-public information about these companies.  LEWIS, on multiple occasions over the course of several years, misused and misappropriated this confidential information to provide stock tips to various individuals in his life, including his employees, romantic partners, and friends, as a way to provide them with compensation and gifts.  These individuals, in turn, traded on the tips provided by LEWIS for vast personal gain. 

In addition, BROAD BAY LTD. and other corporate entities under the direction and control of LEWIS engaged in a scheme to hide LEWIS’s ownership and control shares of a pharmaceutical company through a pattern of false filings and misleading statements.  LEWIS and his companies were required to file schedules of share ownership with the Securities and Exchange Commission (the “SEC”) because he was an owner of more than 10% of the stock of Mirati Therapeutics (“Mirati”).  LEWIS and entities under his control reported to the SEC that he owned between 16 and 19.99% of the stock, when, in reality, he beneficially owned and controlled more than 19.99% of Mirati stock through offshore shell companies and other entities.  As a result of the false disclosure of his ownership, corporate entities under the direction and control of LEWIS were able to exercise warrants in Mirati that they would otherwise not have been able to exercise, at vast financial gain.  LEWIS and certain entities under his control falsely swore on SEC filings to incorrect Mirati share ownership totals on at least 13 separate occasions between in or about November 2013 and in or about November 2017.  In or about 2018, the Mirati shares held in offshore entities were sold, and then approximately $25 million in proceeds was transferred to an account controlled by BROAD BAY LTD. 

As part of the guilty plea of BROAD BAY LTD., LEWIS and BROAD BAY LTD. have agreed LEWIS and his companies will resign and relinquish their control over board of director seats and participation in board of director meetings of any corporation publicly traded in the United States, will cease ownership of certain investments over the five year period of probation, will cooperate with the Government’s ongoing investigation and prosecution, and will pay $50 million in financial penalties, including a $15,586,021 fine and $34,413,979 in forfeiture.

*                *                *

LEWIS, 86, a British national, pled guilty 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.

BROAD BAY LTD. pled guilty to one count of securities fraud, which carries a maximum sentence of five years’ probation. 

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.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.  He also expressed appreciation for the SEC, which previously initiated civil proceedings against LEWIS. 

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.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of KYLE TSUI in connection with a fraud scheme that resulted in sales of approximately $5.9 million worth of fabricated allergy and sensitivity tests to tens of thousands of customers.  TSUI pled guilty to wire fraud and mail fraud before U.S. Magistrate Judge Judith C. McCarthy earlier today, following his extradition from Spain in November 2023.

U.S. Attorney Damian Williams said: “As he has now admitted, Kyle Tsui defrauded tens of thousands of innocent victims, whose health was put at risk with false allergy and sensitivity testing results.  Tsui’s company advertised ‘highly-rated’ allergy and sensitivity testing services but didn’t even attempt to test the samples his paying customers sent in, instead directing others to throw the samples in the garbage.  Tsui now faces prison time for his brazen scam.”

According to the allegations contained in the Indictment, the defendant’s statements when pleading guilty, and statements made in related court filings and proceedings:

From September 2018 through April 2019, TSUI orchestrated a scheme to defraud customers of his company, the “Allergy Testing Company,” by purporting to sell food and environmental sensitivity testing services that TSUI knew were not, in fact, being performed.  In total, TSUI sold fabricated tests worth approximately $5.9 million to more than 88,000 victims through an online marketplace. 

TSUI’s company promoted its “[h]ighly-rated, top selling sensitivity and intolerance test” that “determines how your body responds to 800 different food and environmental items” with just “a small hair sample.”  But rather than actually test the hair samples as customers were promised, TSUI directed that the hair samples be discarded in the trash without any laboratory analysis.  Customers then received fabricated test results purporting to identify certain foods and environmental factors that were “safe” for them and others that the customers were supposedly “sensitive” to and should avoid.       

*                *                *

KYLE TSUI, 41, of Ontario, Canada, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of mail fraud, which carries a maximum sentence of 20 years in prison.  TSUI also agreed to pay forfeiture in the amount of $4,165,884.70.  

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.  TSUI’s sentencing is scheduled for May 30, 2024, before U.S. District Judge Kenneth M. Karas.

Mr. Williams praised the outstanding work of the U.S. Postal Inspection Service.  Mr. Williams also thanked the Hyde Park Police Department, the New York State Troopers, the Toronto Police Service, the Department of Justice’s Office of International Affairs, and the Canadian Anti-Fraud Centre for their assistance in the investigation, as well as the Government of Spain for working with U.S. authorities to arrest and extradite TSUI to the United States.

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

The case is being prosecuted by the Office’s White Plains Division.  Assistant U.S. Attorneys Qais Ghafary and Benjamin Levander are in charge of the prosecution, which was previously handled by former Assistant U.S. Attorney Daniel Loss.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SHAWN CRONIN and PAUL FELDMAN each pled guilty before U.S. Magistrate Judge Sarah Netburn to one count of securities fraud in connection with their participation in an insider trading scheme surrounding the announcement of Alexion Pharmaceutical, Inc.’s acquisition of Portola Pharmaceuticals, Inc.  CRONIN and FELDMAN were arrested in June 2023.

U.S. Attorney Damian Williams said: “As a law enforcement leader, Cronin was sworn to uphold the law and was trusted to set an example for junior officers.  And as a medical doctor, Feldman held a position of trust and respect in our society.  Rather than live up to their posts, these men broke the rules to try to make a quick buck.  Their convictions reflect my Office’s ongoing commitment to relentlessly rooting out corruption in our financial markets.”

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

In 2020, CRONIN, FELDMAN, and others engaged in an insider trading scheme surrounding the announcement of Alexion’s acquisition of Portola.  In April 2020, before that acquisition was publicly announced, CRONIN’s childhood friend, a then-vice president at Alexion, misappropriated material, non-public information (“MNPI”) about the acquisition and provided it to CRONIN so that CRONIN could profitably trade in securities.

In turn, CRONIN, who, at the time, was a police sergeant in Dighton, Massachusetts, and went on to become the police chief, provided another friend with the MNPI about Portola’s pending acquisition, both so that that friend could trade in advance of the acquisition and so that that friend would assist CRONIN in formulating trading strategies to maximize CRONIN’s trading profits.

The friend CRONIN tipped was a physician who went on to tip his friend and colleague, FELDMAN.  FELDMAN, for his part, aggressively bought Portola call options and also tipped at least five additional individuals who traded on the tip.

After Alexion’s acquisition of Portola was publicly announced on the morning of May 5, 2020, causing Portola’s stock price to increase significantly, CRONIN, FELDMAN, and others who had purchased shares and options based on the inside information sold their securities, reaping millions of dollars of illegally obtained profits.

*                *                *

CRONIN, 44, of Dighton, Massachusetts, and FELDMAN, 49, of Poughquag, New York, each pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  CRONIN and FELDMAN will be sentenced by U.S. District Judge Gregory H. Woods on May 13, 2024.

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

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Margaret Graham, Sarah Mortazavi, and Samuel P. Rothschild 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 unsealing of a Complaint charging DERICK COLON with producing, distributing, and possessing child pornography.  COLON was presented Monday, January 22 before Chief U.S. Magistrate Judge Sarah Netburn.

U.S. Attorney Damian Williams said: “Derick Colon’s alleged conduct is horrific and deeply disturbing.  Colon was entrusted to care for his daughter, but instead, as alleged, Colon violated that trust by filming himself performing heinous sex acts against her and other minors and distributing those videos through social media.  Investigating and prosecuting those who sexually exploit children is of paramount importance to this Office, and we will work around the clock to protect the children in our community.”

FBI Assistant Director in Charge James Smith said: “The alleged actions of Derick Colon are depraved and beyond disturbing.  Parents should nurture and protect a child, not subject them to extreme sexual exploitation and abuse.  Colon now faces severe punishment for his alleged inexcusable crimes.  The FBI’s Child Exploitation and Human Trafficking Task Force will continue to do whatever it takes to protect the most vulnerable members of society—our children—from predators, no matter who they are.” 

According to the allegations in the Complaint:[1]

On or about January 19, 2024, COLON shared videos with another individual on a social networking application that allows users to exchange private messages and send photos and videos to others within the network.  The videos depict COLON engaged in sexually explicit conduct with a minor who appears to be approximately six to eight years old (“Victim-1”).

On or about January 21, 2024, law enforcement officials executed a judicially authorized search warrant at a known residence of COLON.  Upon entering the residence, law enforcement officials observed COLON sitting on the couch beside a girl who appeared to be approximately four years old (“Victim-2”).  COLON stated that Victim-2 was his daughter.

Law enforcement officials seized COLON’s cellphone pursuant to the search warrant and discovered approximately 12 additional videos of COLON sexually abusing a minor who appears to be Victim-2.  Following his arrest and after waiving his Miranda rights, COLON stated, in sum and substance, that he “messed up” and that he had sexually abused Victim-2.

*                *                *

COLON, 24, of the Bronx, New York, is charged with one count of production of child pornography, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison, and one count of distribution of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison.  COLON is further charged with possession of child pornography, which carries a maximum sentence of 20 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 FBI and the New York City Police Department (“NYPD”) for their outstanding work on this matter, particularly the FBI-NYPD New York Child Exploitation and Human Trafficking Task Force.  Mr. Williams also thanked the Manhattan District Attorney’s Office for their assistance.  He added that the investigation is ongoing.  

Any individuals who believe they have information that may be relevant to this investigation should contact the FBI at 1-800-CALL-FBI or tips.fbi.gov.

The prosecution is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney William K. Stone 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.

 

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[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; Erin Keegan, the Acting Special Agent in Charge of the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”); and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a Complaint charging LEO HERNANDEZ with obstruction of justice in connection with his October 2022 sentencing proceeding in a federal narcotics case.  HERNANDEZ will be presented today before the Honorable Sarah Netburn.

Mr. Williams and Christopher Hileman, the Special Agent in Charge of the U.S. Department of State, Office of Inspector General (“State-OIG”), also announced the unsealing of an indictment charging OBIOMA IWOBI with obstruction of justice in connection with his March 2023 sentencing proceeding in a federal fraud case.  IWOBI’s case has been assigned to the Honorable Naomi Reice Buchwald.

U.S. Attorney Damian Williams said: “Leo Hernandez and Obioma Iwobi allegedly provided false information to federal judges in improper attempts to obtain leniency at sentencing.  The obstruction of justice charges announced today should send a clear message that this Office will not tolerate attempts by criminal defendants to manipulate the court system.”

HSI Acting Special Agent in Charge Erin Keegan said: “As alleged, Leo Hernandez has shown once again he is neither reformed nor remorseful for the crimes of which he is accused.  I commend HSI New York’s Border Enforcement Security Task Force and our law enforcement partners for their continued emphasis on securing justice.”

State-OIG Special Agent in Charge Christopher Hileman said: “Our office commends and appreciates the vigilance and efforts of the United States Attorney’s Office for the Southern District of New York in addressing the alleged attempts by a subject to obtain leniency during his sentencing hearing through the submission of false attestations.  This indictment shows that the U.S. criminal justice system will hold accountable those who seek to deceive and defraud it.”

According to the allegations in the Complaint charging HERNANDEZ and the Indictment charging IWOBI:[1]

HERNANDEZ was prosecuted for participating in a conspiracy to distribute narcotics in United States v. Leo Hernandez, No. 20 Cr. 79 (RMB).  In advance of the sentencing proceeding in that case, HERNANDEZ obstructed the sentencing proceeding by, among other things, (i) falsely stating to the U.S. Probation Office for the Southern District of New York that he had an opioid addiction, which was then incorporated into HERNANDEZ’s presentence investigation report, and (ii) causing his attorney in that case to make false representations to the Court in connection with sentencing regarding HERNANDEZ’s purported addiction, including a claim that the addiction motivated the criminal conduct for which HERNANDEZ was prosecuted.  However, in truth and in fact, HERNANDEZ had no such addiction and provided false information to the Court in an improper attempt to obtain leniency at sentencing. 

IWOBI was prosecuted for participating in a fraud and identity theft scheme in United States v. Obioma Iwobi, No. 22 Cr. 652 (ER).  In advance of the sentencing proceeding in that case, IWOBI caused false and fraudulent letters to be submitted, and caused false and misleading statements to be made, to the Court in an improper attempt to obtain leniency at sentencing.

*                *                *

HERNANDEZ, 42, of Staten Island, New York, and IWOBI, 43, who is currently incarcerated in Seagoville, Texas, are each charged with one count of obstruction of justice, which carries a maximum sentence of 20 years in prison. 

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

Mr. Williams praised the outstanding investigative work of HSI, HSI New York’s Border Enforcement Security Task Force’s Trade Enforcement and Interdiction Group, the NYPD, and State-OIG.

The cases are being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Samuel P. Rothschild and Robert B. Sobelman are in charge of the HERNANDEZ prosecution.  Assistant U.S. Attorney T. Josiah Pertz is in charge of the IWOBI prosecution.

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, and Michael Alfonso, the Acting Special Agent in Charge of the Newark Field Office of Homeland Security Investigations (“HSI”), announced today the unsealing of a Complaint charging Bronx-based immigration attorney KOFI AMANKWAA and his son, KOFI AMANKWAA, JR., with carrying out a large-scale immigration fraud scheme.  The defendants will be presented this afternoon before U.S. Magistrate Judge Sarah Netburn.

U.S. Attorney Damian Williams said: “As alleged, Kofi Amankwaa, an immigration attorney, and his son, Kofi Amankwaa, Jr., sought to make a mockery of the U.S. immigration system by conspiring to defraud the United States and commit immigration fraud.  Amankwaa and his son allegedly exploited the Violence Against Women Act — a law that allows noncitizen victims of domestic abuse a path to lawful permanent residence status — for their own financial gain by falsely claiming that their clients were victims of domestic abuse.  Thanks to the dedicated actions of our law enforcement partners and the career prosecutors of this Office, the defendants must now answer for these crimes.”

HSI Acting Special Agent in Charge Michael Alfonso said: “Kofi Amankwaa is charged with deceitful practices whereby he allegedly victimized clients who relied on his legal assistance with their immigration process.  HSI is committed to protecting the applicants, petitioners, and requestors of U.S. citizenship who, unfortunately, are often at risk of falling for scams or fraud.  HSI is thankful for the collaboration in this investigation with other Department of Homeland Security components, as well as other federal agencies, who continue to help us combat document and benefit fraud.”

According to the allegations in the Complaint:[1]

From September 2016 through November 2023, AMANKWAA and AMANKWAA, JR., met with clients and directed them to sign fraudulent Form I-360 Violence Against Women Act (“VAWA”) Petitions falsely stating that the clients were abused by their U.S. citizen children.  AMANKWAA also signed the petitions, under penalty of perjury, as the attorney preparer. 

The defendants used the filing of the fraudulent Form I-360 VAWA Petitions, among other filings, as a basis to request advance parole travel documents for their clients — documents that enable individuals without legal status in the United States to travel abroad temporarily and return.  The defendants then directed their clients, upon obtaining the advance parole travel documents, to travel abroad and return to the United States.  Last, the defendants used the fraudulently procured advance parole as a basis for their clients to apply for lawful permanent resident status. 

The defendants carried out this illegal scheme knowing that their clients had not, in fact, been abused by their children or without ever asking whether any such abuse occurred.  Moreover, the defendants were often unsuccessful in obtaining lawful permanent resident status for their clients because the clients’ immigration applications were denied on the basis of fraud, among other reasons.  The defendants typically charged their clients $6,000 for their services, plus administrative fees.

In November 2023, following numerous complaints by clients regarding the fraudulent abuse allegations, AMANKWAA’s license to practice law in the State of New York was suspended. 

*                *                *

KOFI AMANKWAA, 69, and KOFI AMANKWAA, JR., 37, both of South River, New Jersey, are each charged with one count of conspiracy to defraud the United States and to commit immigration fraud, which carries a maximum sentence of five years in prison, and one count of immigration fraud, which carries a maximum sentence of 10 years in prison.

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

Mr. Williams praised the outstanding investigative work of the HSI.  Mr. Williams also thanked the U.S. Citizenship and Immigration Services’ Office of Fraud Detection and National Security for their support in this investigation.  He also noted that the New York State Attorney General’s Office separately initiated a parallel civil proceeding against AMANKWAA and AMANKWAA, JR., today.

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

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

 

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[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; Stuart M. Goldberg, the Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division; James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); Thomas M. Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”); and Jonathan Mellone, the Special Agent in Charge of the Northeast Regional Office of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), announced the arrests today of five defendants on fraud charges: MARK ANGAROLA, ALLISON ANGAROLA, JOSE GARCIA, MICHELLE COX, and LISA MINCAK.  The five defendants are charged with perpetrating a yearslong embezzlement scheme that involved both no-show jobs and disguising personal expenses as purported business expenses.  In addition, three of the defendants — MARK ANGAROLA, GARCIA, and COX — are charged with tax fraud for their failures to report income to the IRS, including income derived from the embezzlement scheme.  MARK ANGAROLA and ALLISON ANGAROLA were arrested earlier this week in Point Lookout, New York, and were presented in Manhattan federal court before U.S. Magistrate Judge Katharine H. Parker; JOSE GARCIA and MICHELLE COX surrendered today and will be presented in Manhattan federal court before Magistrate Judge Parker; and LISA MINCAK surrendered yesterday and was presented in the Eastern District of Texas before U.S. Magistrate Judge Kimberly C. Priest Johnson.  The case has been assigned to U.S. District Judge Dale E. Ho.

U.S. Attorney Damian Williams said: “As alleged, the five defendants engaged in a brazen, lengthy embezzlement scheme that involved no-show jobs, false timesheets, fraudulent billings, and disguising personal expenses as purported business expenses.  In total, they allegedly bilked a corporate victim out of more than $7 million.  As part of the alleged scheme, the defendants charged an array of personal expenses to a corporate victim, including a cruise, hotels, private car service, gentlemen’s clubs, and more.  Several defendants also allegedly sought to conceal the fraud by failing to report, or pay taxes on, the income they received from the scheme.  Today’s arrests are yet another example of this Office’s commitment to holding accountable those who commit financial fraud.”

FBI Assistant Director in Charge James Smith said: “When an individual puts in an honest day’s work, they deserve to be compensated fairly.  The defendants in this case allegedly sought to do the opposite, scheming to create a dishonest plan involving no-show jobs and reporting personal spending as business.  Through their alleged scam, they received significant benefits including payment, travel, and entertainment.  The FBI will ensure that anyone attempting to benefit from deceit is instead held accountable in the justice system.”

IRS-CI Special Agent in Charge Thomas M. Fattorusso said: “The five defendants allegedly created a web of lies, resulting in a scheme to embezzle millions, while three are additionally charged with evading taxes on their illicit gains.  Though it’s purported they ‘lived the good life’ through this deception, today’s arrests ensure that their very near future won’t be so comfortable.”

According to the allegations in the Indictment:[1]

From at least in or about May 2010 through at least in or about February 2019, the five defendants and others (the “Conspirators”) executed a fraudulent scheme to unlawfully enrich themselves by submitting and causing to be submitted fraudulent invoices and expenses to an information technology (“IT”) services company (the “Contractor”), at which MARK ANGAROLA was employed in a senior position. 

Specifically, MARK ANGAROLA was a Global Account General Manager at the Contractor, working out of the Contractor’s office in New York, New York.  MARK ANGAROLA was responsible for managing the Contractor’s relationship with a particular client, which was a subsidiary of a global financial institution (the “Client”).  The Contractor had a service contract with the Client, pursuant to which the Contractor would provide IT support services to the Client at locations across the United States.  The Contractor subcontracted certain of its work under the Service Contract to a technology solutions company (the “Subcontractor”) based in New Jersey.  Pursuant to the agreement between the Contractor and the Subcontractor (the “Subcontract”), the Subcontractor provided certain IT support services directly to the Client in the place of the Contractor.  MARK ANGAROLA was responsible for oversight of the Subcontractor’s performance under the Subcontract, which included approving payment to the Subcontractor on invoices submitted for work purportedly performed and expenses purportedly incurred in the Subcontractor’s performance on the Subcontract. 

MARK ANGAROLA used his position at the Contractor — and in particular his oversight of the Contractor’s relationship with the Client and the Subcontractor — to fraudulently enrich himself, his family, and his friends.  For example, MARK ANGAROLA arranged for the Subcontractor to hire certain of his family members, friends, and subordinates, despite the fact that these individuals — which included a schoolteacher, a homemaker, a police sergeant, and a manager in the construction industry — lacked apparent qualifications to perform deskside IT work.  MARK ANGAROLA arranged for the Subcontractor to hire, among others, ALLISON ANGAROLA, JOSE GARCIA, MICHELLE COX, and LISA MINCAK, the defendants.  Thereafter, ALLISON ANGAROLA, GARCIA, COX, MINCAK, and others who MARK ANGAROLA caused to be hired by the Subcontractor, repeatedly falsely reported to the Subcontractor that they had performed work under the Subcontract and incurred business expenses.  GARCIA also used nominee corporate and limited liability entities to further disguise his receipt of funds for purported work performed under the Subcontract, including for alleged “Management Fees” due.  The Subcontractor submitted invoices to the Contractor for the hours purportedly worked by several of the Conspirators, for purported management fees allegedly due and for the purported business expenses incurred by several of the Conspirators in connection with that work, which hours, fees, and expenses were falsely reported to the Subcontractor by the Conspirators.  MARK ANGAROLA, in turn, caused the Contractor to pay the Subcontractor on these fraudulent invoices.

The purported business expenses incurred by several of the Conspirators and ultimately paid for by the Contractor at the direction of MARK ANGAROLA included, among other things, restaurant meals, hotel stays, transportation fees, a cruise, and gentlemen’s clubs.  In fact, the expenses were personal expenses and were not reimbursable.  In addition, to circumvent the Contractor’s expense policies, MARK ANGAROLA charged certain of his own personal expenses — including a private car service that he used for personal travel to restaurants, cigar bars, and gentlemen’s clubs, and to transport his children to visit family regularly and his friends to parties at his residence — to credit cards in the name of co-conspirators, including LISA MINCAK.  MARK ANGAROLA, with the assistance of MINCAK and others, who falsely represented to the Subcontractor that the expenses were incurred in connection with work for the Subcontractor, fraudulently caused the Contractor to pay for such personal expenses of MARK ANGAROLA.

As a result of the scheme, MARK ANGAROLA, ALLISON ANGAROLA, JOSE GARCIA, MICHELLE COX, and LISA MINCAK, and entities controlled by certain Conspirators, received personal benefits, including travel, meals, and entertainment, and were paid substantial sums.  For example, despite the fact that most Conspirators provided few, if any services, to the Client, the Conspirators fraudulently obtained at least the following approximate amounts through this scheme: $1,468,215 to MARK ANGAROLA; $751,641 to ALLISON ANGAROLA; $4,554,950 to JOSE GARCIA and entities he controlled; $335,500 to MICHELLE COX; $88,793 to LISA MINCAK; and $90,521 to Anthony Lisi, a previously charged co-conspirator who pled guilty for his involvement in the embezzlement scheme on September 13, 2022, before U.S. District Judge Paul A. Engelmayer.

Several participants in this fraud scheme also committed related tax fraud by concealing from the IRS substantial income that they had obtained through the scheme.  For several years, MARK ANGAROLA and JOSE GARCIA committed tax evasion, and MICHELLE COX failed to file individual income tax returns.

*                *                *

MARK ANGAROLA, 50, of Point Lookout, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; and three counts of tax evasion, which each carry a maximum sentence of five years in prison.

ALLISON ANGAROLA, 53, of Point Lookout, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison.

JOSE GARCIA, 52, of New York, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; and three counts of tax evasion, which each carry a maximum sentence of five years in prison.

MICHELLE COX, 52, of New York, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; and two counts of failure to file an individual income tax return, which each carry a maximum sentence of one year in prison.

LISA MINCAK, 46, of Plano, Texas, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding efforts of the FBI, IRS-CI, and DOL-OIG.  Mr. Williams also noted that the investigation is ongoing.

This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Michael D. Neff, Timothy V. Capozzi, and Special Assistant U.S. Attorney Jorge Almonte of the Tax Division 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.

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[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 MARCO RUIZ OCHOA was sentenced principally to five years in prison for his role in promoting a large-scale cryptocurrency Ponzi scheme known as IcomTech.  OCHOA was sentenced today before U.S. District Judge Jennifer L. Rochon.  On September 27, 2023, OCHOA pled guilty to one count of conspiracy to commit wire fraud.  

U.S. Attorney Damian Williams said: “Ochoa took advantage of the hype around cryptocurrency to con unsuspecting victims into investing in the IcomTech pyramid scheme. This significant sentence sends a message to anyone considering following in his footsteps: that path leads to serious prison time.”  

According to the Indictment and statements made in court:

DAVID CARMONA started IcomTech in 2018, and IcomTech promotional materials put OCHOA forward as IcomTech’s CEO until 2019, when a new CEO replaced him.  IcomTech was a purported cryptocurrency mining and trading company that promised to earn its victim-investors (“Victims”) profits in exchange for their purchase of purported cryptocurrency-related investment products.  OCHOA and the other promoters of IcomTech, including his co-defendants CARMONA, JUAN ARELLANO, MOSES VALDEZ, and DAVID BREND, falsely promised their respective Victims, among other things, that profits from the company’s cryptocurrency trading and mining would result in guaranteed daily returns on Victims’ investments.  In reality, IcomTech did not engage in cryptocurrency trading or mining for its Investors, and OCHOA and IcomTech’s other promoters used Victim funds to pay other Victims to further promote the schemes and to enrich themselves.

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

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

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

*                *                *

In addition to the prison term, OCHOA, 35, of Nashua, New Hampshire, was sentenced to two years of supervised release and ordered to forfeit $914,000 in criminal proceeds.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of KYLE WHITE.  WHITE is charged with advertisement, receipt, and distribution of child pornography.  WHITE was presented this afternoon before U.S. Magistrate Judge Colin H. Lindsay of the U.S. District Court for the Western District of Kentucky.

U.S. Attorney Damian Williams said: “Kyle White’s alleged conduct is abhorrent and depraved.  As alleged, from behind a computer screen in the comfort of his own home, White ran a lucrative and illegal online pornography marketplace called ‘The Ho Zone,’ where he sold access to child pornography and illegally obtained adult pornography to thousands of people.  White’s alleged callous disregard for his victims is striking — White profited at the expense of innocent children, whose sexual abuse and trauma White broadcasted to the world in high definition.  Let these charges against White serve as a warning to anyone who seeks to capitalize on the sexual exploitation of children: this Office will work relentlessly to hold you accountable for your crimes.”

FBI Assistant Director in Charge James Smith said: “Kyle White’s actions – allegedly running an online marketplace selling access to child pornography – are unconscionable.  Thankfully, he now faces a lengthy punishment for his crimes.  The FBI remains vigilant in our efforts to protect children.  Removing predators who seek to exchange and profit from sexually explicit material of minors will remain a top priority.”

According to the allegations in the Complaint:[1]

WHITE ran an online pornography marketplace known as “The Ho Zone” on the messaging application Telegram.  WHITE categorized the pornography he advertised and sold on “The Ho Zone” into dozens of groups and channels with thousands of members and subscribers, such as “Other Teen (18+) Leaks,” “THZ Black Market,” “MOST POPULAR GIRLS LISTS,” “Tiktoker Private Leaks,” “ATHLEAKS,” and more.  Within each of these groups and channels, WHITE further categorized the pornography by the name of the woman or minor girl featured in the sexually explicit content.  Each group and channel on “The Ho Zone” featured a variety of free content as a preview of what users could get if they were to pay WHITE for full access.  Such access cost between $15 and $75 depending on the pornography purchased.  Once a user paid WHITE for the content of a specific woman or minor girl available on “The Ho Zone,” the user gained permanent access to numerous sexually explicit photographs and videos of that woman or minor girl that WHITE had compiled, enhanced, and edited.

WHITE advertised and sold child pornography on “The Ho Zone,” which depicted minor victims as young as 11 years old, as well as minor victims engaging in sexually explicit conduct with their minor victim siblings. 

WHITE also sold illegally obtained adult pornography on “The Ho Zone,” including pornography that had been hacked from women’s cellphones and pornography that was the product of blackmail.  The victims featured in such pornography included women with large social media followings and female athletes, among others.

WHITE knew that running “The Ho Zone” was illegal but he continued to sell child pornography and illegally obtained adult pornography on the marketplace because it was lucrative.  For example, WHITE claimed in a message to another Telegram user that he “made over 300k in the first year” of operating “The Ho Zone.”[2]  In a chat with another Telegram user, WHITE stated that he “[p]rob made over $10k off the girls” in the “THZ Black Market” channel.  WHITE also stated that he did not want to stop selling child pornography because “[i]t’s just easier said than done givin up $1,000’s.”

*                *                *

WHITE, 24, of Louisville, Kentucky, is charged with advertisement of child pornography, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison.  WHITE is also charged with receipt and distribution of child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison.

The mandatory 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 outstanding investigative work of the FBI’s Criminal Guardian Squad.

This case is being supervised by the Office’s General Crimes Unit.  Assistant U.S. Attorney Chelsea L. Scism 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.

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[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.

[2] Communications referenced herein are described in substance and in part.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that a jury returned a guilty verdict against AMIT DAGAR for insider trading and conspiracy to commit insider trading.  The defendant was found guilty following a two-week trial before U.S. District Judge Andrew L. Carter.

U.S. Attorney Damian Williams said: “As the jury’s swift verdict shows, the proof at trial was overwhelming that Amit Dagar stole information about Paxlovid from his employer, Pfizer, and used that illegal edge to profit in the stock market.  Combatting the corruption of our financial markets continues to be a top priority of this Office.  Would-be insider traders tempted by the prospect of easy money should know that the Southern District of New York is watching, we’ll catch you, and we’ll make sure you pay the price for violating the law.”

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

In November 2021, DAGAR participated in an insider trading scheme to reap illicit profits from options trading based on inside information about the results of clinical trials of Paxlovid, a medicine used to treat COVID-19.  DAGAR was an employee of Pfizer Inc. (“Pfizer”) and assisted in managing the data analysis in certain clinical drug trials.

On November 4, 2021, DAGAR learned that a Pfizer trial of the drug Paxlovid, a medicine designed to treat mild to severe COVID‑19 infection, had produced positive results.  The results were confidential and meant to remain so until Pfizer publicized them on November 5, 2021.

Later that same day, and while the results remained confidential, DAGAR purchased short-dated, out-of-the-money Pfizer call options that expired days and weeks later.  DAGAR also tipped a close friend, who also purchased short-dated, out-of-the-money Pfizer call options.

The following day, on November 5, 2021, Pfizer publicly released results of its Paxlovid study prior to the market opening.  That same day, following the publication of the positive results, Pfizer’s stock price increased substantially, opening — and eventually closing — more than 10% higher than the prior day’s closing price.  In the following weeks, DAGAR sold his Pfizer call options for profits of more than $270,000.

*                *                *

DAGAR, 44, of Hillsborough, New Jersey, was convicted of one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.

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

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action, for its assistance and cooperation in the investigation.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Alex Rossmiller and Justin V. Rodriguez are in charge of the prosecution, with assistance from Paralegal Specialists Madeline Sonderby and Anna Gamboa.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ELIZIER SCHER was sentenced to one year and one day in prison by U.S. District Judge Philip M. Halpern for his scheme to defraud the U.S. Small Business Administration (“SBA”) of more than $1.6 million in COVID-19 relief funds.  SCHER previously pled guilty before Judge Halpern to one count of wire fraud on February 1, 2023.  

U.S. Attorney Damian Williams said: “Elizier Scher schemed to steal taxpayer funds intended for small businesses in need of assistance during the pandemic.  His intent to illegally profit from a national emergency that affected countless businesses and uprooted lives resulted in a sentencing reflecting the severity of his actions.  Exploiting a crisis for personal gain will face the full force of the law.”

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

The SBA is a federal agency that administers assistance to American small businesses, including the Economic Injury Disaster Loan (“EIDL”) program, which was intended to provide funding to help small business recover from the economic impacts of the COVID-19 pandemic.  The maximum amount of an EIDL loan is determined by a formula based on the date the borrower began operating and the borrower’s gross revenue and cost of goods sold for the 12 months prior to January 31, 2020.  The loans can only be used for working capital and other normal operating expenses. 

Over an approximately four-hour period on or about July 13, 2020, SCHER submitted 12 applications for EIDL loans in a principal amount of $150,000 to the SBA online on behalf of 12 different corporations that he owned and controlled.  SCHER made materially false statements in each application with respect to each applicant’s gross revenue and cost of goods sold for the 12-month period prior to January 31, 2020.

Between on or about July 20, 2020, and on or about August 11, 2020, 11 of the 12 applicants received a net total of $1,648,900 in loan proceeds from the SBA.  SCHER used the proceeds to buy real estate and to pay credit card expenses instead of using it for working capital for the borrowers, as SCHER had agreed to do in the loan agreements he executed on behalf of the borrowers.

*                *                *

In addition to the prison term, SCHER, 34, of Spring Valley, New York, was sentenced to two years of supervised release and ordered to pay $1,648,900 in forfeiture.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that KENNETH WYNDER Jr., a former New York State Trooper and the president of the Law Enforcement Employees Benevolent Association (“LEEBA”), a labor union for law enforcement officers employed by the City of New York (the “City”), was sentenced to 40 months in prison, and ANDREW BROWN, a/k/a “Drew Brown,” the former financial advisor for LEEBA, was sentenced to 18 months in prison, for defrauding union members by misappropriating money from LEEBA’s Annuity Fund.  WYNDER was also sentenced for personal income tax evasion and conspiring to evade federal taxes, including payroll taxes owed by LEEBA and its employees.  WYNDER and BROWN were convicted after a five-day jury trial before U.S. District Judge P. Kevin Castel, who imposed today’s sentence.  In addition, STEVEN WHITTICK, LEEBA’s former treasurer and a former police officer for New York City’s Department of Environmental Protection (“DEP”), previously pled guilty to conspiring to commit tax evasion and making false statements to law enforcement and was sentenced to 28 months in prison.     

U.S. Attorney Damian William said: “Kenneth Wynder and Andrew Brown raided union-sponsored retirement accounts for years, placing their self interest over the hard-working public servants they represented as the president and financial advisor of the union, respectively.  Wynder also evaded taxes on cash, checks, and other income he obtained from the union, including as a product of their theft from the union members’ retirement accounts.  Union officials and advisors who violate their duties to the union members they represent will face serious consequences for their abuse of trust.”

According to the Indictment, Superseding Indictment, the underlying complaints filed in this case, as well as other publicly available information, prior court filings, and evidence presented during the trial in Manhattan federal court:

Law Enforcement Employees Benevolent Association and the Annuity Fund

LEEBA is a labor union that has acted as the collective bargaining representative principally for law enforce­ment personnel at various City agencies and has entered into agreements on behalf of those law enforcement employees, including agreements for insurance and retirement benefits.  The City agencies whose employees LEEBA represented included, at various times, DEP, the Department of Sanitation (“Sanitation”), and the Department of Transporta­tion (“Transportation”).

The Annuity Fund is a LEEBA fund that received monthly contributions from the City for the benefit of LEEBA’s members and maintained separate accounts for each fund member.  These accounts were functionally similar to employer-sponsored 401(k) retirement accounts.  WYNDER was a Trustee of the Annuity Fund and signatory to agreements that governed the fund, and BROWN was a Plan Administrator and Financial Advisor of the Annuity Fund.  Under the relevant agreements and plans, the money in the Annuity Fund could be used for no purpose other than funding individual members’ retirement accounts and defraying reasonable administra­tive expenses of the Annuity Fund itself.

WYNDER

WYNDER, a former New York State Trooper, is the founder and former President of LEEBA and a former member of LEEBA’s board of directors.  WYNDER also formerly served as the Fund Administrator of the Annuity Fund and as a member of the board of trustees of the Annuity Fund, pursuant to which he owed a fiduciary duty to act in the best interests of the Annuity Fund and its account holders.  WYNDER also was on the board of trustees of the LEEBA Welfare Fund (the “Welfare Fund,” and collectively with the Annuity Fund, the “LEEBA Funds”), which provided supplemental insurance benefits to its members.  While occupying those positions, WYNDER centralized and controlled major decision-making authority for LEEBA and the LEEBA Funds, often acting without the proper approval of their respective boards of directors or trustees.  WYNDER’s de facto dominance of LEEBA and the LEEBA Funds enabled him to make decisions in his own self-interest and contrary to the interests of the Annuity Fund and individual members.

BROWN

BROWN, the founder of a Westchester-based financial services company, is the former Benefits Administrator and insurance broker for LEEBA and the LEEBA Funds.  As a LEEBA Annuity Fund Plan Administrator and Financial Advisor, BROWN helped manage the investments in the Annuity Fund, receiving a commission for his services, and had a responsibi­lity to act in the best interest of LEEBA’s members.

            WYNDER’s and BROWN’s Fraud Scheme

From at least in or about 2012 up to and including 2020, WYNDER and BROWN participated in a scheme to steal, embezzle, and misappropriate money from the Annuity Fund and individual members’ retirement accounts.  Specifically, WYNDER and BROWN made hundreds of thousands of dollars of fraudulent transfers from the Annuity Fund to LEEBA’s operating account, which WYNDER controlled, and WYNDER regularly used the funds, once transferred from the Annuity Fund, to enrich himself at union members’ expense, including through unauthorized and excessive checks to himself and cash withdrawals for his own benefit and to pay insurance benefits for which BROWN received commissions.  In addition, WYNDER caused the union to pay for various personal expenses such as the purchase of a Lexus automobile, travel expenses to Dallas to watch a Dallas Cowboys football game, and a sailing trip, all paid for by the union, and none of which were contemporaneously reported to the Internal Revenue Service (“IRS”), as required.           

To accomplish this fraudulent scheme, WYNDER and BROWN, acting in their capacity as the Annuity Fund’s Plan Administrators, repeatedly made false and misleading statements to a third-party retirement plan manager that served as the custodian for the Annuity Fund and the retirement accounts of individual union members, including through emails and faxes that WYNDER and BROWN used to withdraw increasingly large sums of money from the Annuity Fund, effectively causing such withdrawals to be made from the retirement accounts of individual members.  From in or about 2014 through in or about 2019, WYNDER and BROWN caused the withdrawal of more than $500,000 from the individual retirement accounts that constitute the Annuity Fund, thereby wiping out the entire balance of certain members’ accounts.  Without these improper withdrawals from the Annuity Fund, the LEEBA operating account would have been insolvent and would have had insufficient funds to pay for WYNDER’s excessive checks to himself and cash withdrawals and the personal expenses he caused to be charged to that account, as well as to pay for benefits for which BROWN made commissions as an insurance broker.

In addition, throughout the duration of this scheme, WYNDER and BROWN repeatedly made and approved false and misleading statements to LEEBA’s members and prospective members about how they were purportedly using and protecting their retirement accounts and the LEEBA Annuity Fund.  WYNDER further concealed the scheme by causing LEEBA to fail to timely file mandatory reports and financial disclosures with the City and public reports to the Annuity Fund’s members and by making false statements to the Annuity Fund’s auditors and accountants.

            WYNDER’s and WHITTICK’s Tax Evasion Scheme

From at least in or about 2015 through 2019, WYNDER participated in a conspiracy with LEEBA’s then-Treasurer, WHITTICK, to cause LEEBA to make payments to WYNDER and WHITTICK, by check and in cash, and to conceal those payments from the IRS.  WYNDER and WHITTICK further conspired to ensure that such payments were made outside of LEEBA’s payroll processor.  WYNDER and WHITTICK then concealed these payments from the IRS — including off-the-books payments to WYNDER of more than $400,000 — in order to evade their own personal income taxes and to evade the payroll taxes that were owed by LEEBA and certain LEEBA employees.

WHITTICK’s False Statements to Federal Agents

In or about October 2019, while serving as LEEBA’s Treasurer and after learning of a federal investigation into LEEBA’s finances – including the investigation of an alleged embezzlement scheme that ultimately resulted in wire fraud charges against WYNDER – WHITTICK repeatedly lied to federal agents in an effort to obstruct that investigation.  WHITTICK did so despite personal involvement in some of the financial improprieties with which WYNDER was convicted.  For example, on at least two occasions, on or about February 1, 2018, and March 30, 2018, WHITTICK withdrew $16,000 in cash from a LEEBA bank account and on each occasion deposited $15,000 cash into Wynder’s personal bank account and $1,000 cash into WHITTICK’s own personal bank account.

After the FBI executed a search warrant of LEEBA’s offices in September 2019, WHITTICK attempted to obstruct and to influence the ongoing federal investigation by making, in two different interviews with law enforcement agents, false statements about, among other subjects, cash withdrawals he made from LEEBA’s bank accounts, unauthorized withdrawals from LEEBA’s Annuity Fund and from the individual retirement accounts of Fund participants, and LEEBA’s payment for certain travel and entertainment expenses for union officers, including WHITTICK and WYNDER.

*                *                *

In addition to his prison term, WYNDER, 60, of Stroudsburg, Pennsylvania, was ordered to forfeit $529,000 and to pay $838,683 in restitution. 

In addition to his prison term, BROWN, 56, of Putnam Valley, New York, was ordered to forfeit $3,049 and to pay $529,000 in restitution.   

On November 17, 2021, WHITTICK, 54, of Kingston, New York, was sentenced to 28 months in prison and ordered to pay $179,766 in restitution.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation, the Department of Labor Office of Labor-Management Standards, and IRS, Criminal Investigation.  Mr. Williams also thanked the New York City Comptroller’s Office and the New York City Department of Investigation for their assistance.

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorney Eli J. Mark is in charge of the prosecution, with the assistance of Paralegal Specialists Connor Hamill and Lauren Scarff.

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”); Bryan DiGirolamo, the Assistant Special Agent in Charge of the New York Field Division of the Bureau of Alcohol, Tobacco and Firearms (“ATF”); Melvin Padilla, the Chief of the Bedford Police Department; and Terrance Raynor, the Acting Commissioner of the Westchester County Department of Public Safety, announced that DAMJAN STANIVUKOVIC and VLADAMIR RADUNOVIC were arrested on January 13, 2024, and each charged with one count of unlawful possession of a destructive device and one count of conspiracy to commit stalking.  The Complaint charges that on or about January 11, 2024, the defendants transported a homemade destructive device to a neighborhood in Mount Kisco, New York, and dropped the destructive device off in the driveway of the victim’s residence, where it exploded.  In addition, the Complaint charges that later that same day, as part of the conspiracy, the victim received a text message that this was his “final warning.”  STANIVUKOVIC, the owner of a contracting company, is involved in a long-running legal dispute with the victim.  When searching STANIVUKOVIC’s residence, law enforcement seized, among other things, multiple loaded firearms, items matching those used to make the destructive device, and written instructions on how to make explosives.  The defendants were presented on January 13, 2024, before U.S. Magistrate Judge Victoria Reznik and detained without bail.

U.S. Attorney Damian William said: “The career prosecutors of this Office and our law enforcement partners stand ready to act around the clock when our communities are threatened.  Damjan Stanivukovic and Vladamir Radunovic were in custody just two days after they allegedly planted a destructive device in the driveway of the victim’s residence.  This case is a testament to the critical and effective work that our interagency collaborations accomplish on a daily basis.  We have no tolerance for violence in the Southern District of New York.”

FBI Assistant Director in Charge James Smith said: “Damjan Stanivukovic and Vladamir Radunovic allegedly tried to resolve a contentious business relationship with threats of violence and a homemade bomb.  While business deals aren’t always successful, neither are overt acts of violence that bring forth federal charges.  Thankfully, in this case, no one was injured.  The FBI will continue to ensure that anyone willing to solve personal grievances with threats and attempts of violence are punished to the fullest extent in the criminal justice system.”

ATF Assistant Special Agent in Charge Bryan DiGirolamo said: “Perpetuating violence against others, under any context, is unacceptable behavior.  The men and women of ATF NY Hudson Valley Field Office will continue to work alongside our partners at FBI and Bedford Police to address acts of violence in our communities.”

Bedford Police Chief Melvin Padilla said: “The safety and security of our residents is our primary focus, and thanks to the diligent work of our detectives and the cooperation and assistance from our federal partners, the defendants were quickly identified and apprehended.”

Westchester County Department of Public Safety Acting Commissioner Terrance Raynor said: “I commend all the agencies involved for their skillful and effective collaboration in bringing this investigation to a swift conclusion.  This is yet another example of the value and importance of multi-agency partnerships, which help us keep Westchester safe.”

As alleged in the criminal Complaint:[1]

At approximately 5:11 a.m. on or about January 11, 2024, STANIVUKOVIC and RADUNOVIC traveled through Rockland County, New York, to Westchester County, New York, in a black Jeep Grand Cherokee and dropped a destructive device off at the victim’s residence in Mount Kisco, New York, where the destructive device exploded.  Law enforcement recovered a box from the scene, which bore STANIVUKOVIC’s name and address, as well as a 2.5-gallon gasoline can, firework tubing, and firework residue.

Later that day, on or about 12:11 p.m., the victim received a text message from a particular phone number, which stated “Knock knock, show up and what do you think is next.  This is your final warning.”  Around the time that text message was sent, the cellphone associated with that particular phone number was located in the vicinity of STANIVUKOVIC’s business address and the black Jeep Grand Cherokee.

A search warrant executed at STANIVUKOVIC’s residence, where RADUNOVIC had been staying, recovered, among other things, gasoline canisters and fireworks matching those used to construct the destructive device, multiple loaded firearms, and a book titled “Make Fireworks and Explosives at Home – The Ultimate Instruction Manual for Beginners and Pyrotechnicians to Build Firecrackers, Fireworks and Explosives from Scratch.”

*                *                *

DAMJAN STANIVUKOVIC, 52, of Closter, New Jersey, and VLADAMIR RADUNOVIC, 47, of Pompton Lakes, New Jersey, are each charged with one count of unlawful possession of a destructive device, which carries a maximum sentence of 10 years in prison, and one count of conspiracy to commit stalking, which carries a maximum sentence of five 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 the FBI’s Westchester Safe Streets Task Force, the ATF, the Bedford Police Department, the Westchester County Department of Public Safety, and the Closter, New Jersey Police Department.  

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of an Indictment charging AI ZHEN XU with criminal tax offenses.  XU was the vice president and secretary of the garment-manufacturing company Winner Fashions, Inc. (“Winner Fashions”).  XU is alleged to have conspired to perpetrate a long-running scheme to conceal more than approximately $3,800,000 in gross receipts attributable to Winner Fashions and to evade more than approximately $290,000 in federal payroll taxes owed by Winner Fashions to the Internal Revenue Service (“IRS”).  XU was arrested this morning and will be presented before U.S. Magistrate Judge Katharine H. Parker this afternoon.  The case is assigned to U.S. District Judge Mary Kay Vyskocil.

U.S. Attorney Damian Williams said: “For at least six years, Ai Zhen Xu allegedly engaged in a scheme by which she used the off-the-books services of a check-cashing business to conceal nearly $4 million in gross receipts paid to her company and evade payroll taxes.  Thanks to the skillful investigative work of IRS-CI and the career prosecutors of this Office, the defendant will be held accountable for her actions.”

IRS-CI Special Agent in Charge Thomas Fattorusso said: “It’s alleged Xu concealed millions to avoid paying the federal taxes that every legitimate business pays.  This is not a victimless crime.  While this failure to pay business taxes further widens the American tax gap, every other taxpayer is now responsible to cover the cost.  Xu’s alleged willful disregard for U.S. law has prompted this arrest, and she will now pay the price for her actions.”

According to the allegations in the Indictment:[1]

From 2016 through at least 2021, XU and others used the services of a check‑cashing business to cash checks issued to Winner Fashions as payment for its services.  XU concealed this cash revenue from Winner Fashions’ accountant, resulting in Winner Fashions’ relevant tax filings omitting substantial amounts of gross receipts.

During the same period, XU and others paid Winner Fashions’ employees via a combination of cash payments and payroll checks generated by Winner Fashions’ accountant.  XU concealed these cash payments from Winner Fashions’ accountant, resulting in Winner Fashions failing to pay to the IRS payroll taxes associated with these unreported cash payments.

*                *                *

XU, 70, of Port Washington, New York, is charged with one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison.  XU is also charged with 23 counts of failure to collect, account for, and pay over payroll taxes, each of which also carries a maximum sentence of five years in prison, and six counts of aiding and assisting the preparation and presentation of false U.S. corporation income tax returns, each of which carries a maximum sentence of three 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 IRS-CI.

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

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

---

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

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of CARLTON LLEWELLYN 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 and the honest services of its employees.  LLEWELLYN pled guilty today to conspiracy to commit wire fraud before U.S. District Judge Jesse M. Furman.

U.S. Attorney Damian Williams said: “Carlton Llewellyn was a senior executive entrusted with running the operations of a leading cargo airline.  He betrayed that trust and engaged in a kickback scheme to defraud his employer and enrich himself, and his plea is another step toward rooting out corporate fraud.” 

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

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

The Executive Defendants agreed to accept millions of dollars in kickbacks from the Vendor Defendants and 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. 

LLEWELLYN is the sixth defendant to plead guilty in the case thus far.

*                *                *

LLEWELLYN, 55, of Highland Mills, New York, pled guilty to one count of conspiring to commit wire fraud, which carries a maximum sentence of five years in prison.  LLEWELLYN also agreed to pay forfeiture in the amount of $347,879.44 and make restitution to Polar in the amount of $305,800.  LLEWELLYN is scheduled to be sentenced by Judge Furman on May 7, 2024.

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

Mr. Williams praised the outstanding 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 today that BAREND OBERHOLZER, a/k/a “Barry Oberholzer,” was sentenced to 15 months in prison by U.S. District Judge Andrew L. Carter, Jr. for soliciting investments in his defense technology start-up company on the basis of fraudulent misrepresentations regarding its financial solvency, access to cash, and use of investor funds.  OBERHOLZER was arrested in February 2021 and pled guilty in March 2023. 

U.S. Attorney Damian Williams said: “The defendant lied continuously about his company’s funding, endorsements, and capitalization to attract financing for his defense technology start-up.  Soon, he will begin serving a federal sentence.  Let this case be a warning to any entrepreneur who thinks that they can ‘fake it until they make it:’ this Office will protect investors and the public from lies designed to take their money.” 

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

Beginning in or around 2018, OBERHOLZER began soliciting investment in his defense technology start-up company (“Start-Up-1”), and a purported security device it had developed (“Security Device-1”), from at least two venture capital firms on false pretenses.  OBERHOLZER sent multiple emails to the firms, posing as a retired, four-star General in the United States Army (“Retired General-1”), who was employed by a private equity investment firm based in New York, New York.  Therein, OBERHOLZER, posing as Retired General-1, endorsed and solicited investment in Start-Up-1 and Security Device-1, a smartphone case that purportedly permitted its users to detect at a distance weapons or other dangerous items concealed on another person.

OBERHOLZER and his co-conspirator, Jaromy Pittario, a/k/a “Jaromy Jannard-Pittario,” also solicited investments in and loans for Start-Up-1 and Security Device-1 by falsely representing, among other things, their financial solvency, access to cash, and capitalization.  For instance, the pair repeatedly provided falsified financial statements to potential creditors to secure funding.    

*                *                *

In addition to the prison term, OBERHOLZER, 40, of Calabasas, California, was fined $100, ordered to forfeit $252,862, and ordered to pay restitution in an amount to be determined by the court. 

Mr. Williams praised the outstanding investigative work of the New York Office of the U.S. Postal Inspection Service.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Jilan J. Kamal and Timothy V. Capozzi are in charge of the prosecution.

Morgan Stanley & Co. LLC To Enter into a Non-Prosecution Agreement and to Pay $153 Million in Financial Penalties

Pawan Passi, Former Head of Morgan Stanley’s U.S. Equity Syndicate Desk, Admits Misconduct and Agrees to Enter into a Deferred Prosecution Agreement

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that Morgan Stanley & Co. LLC (“MORGAN STANLEY”) entered into a non-prosecution agreement (the “NPA”) with the U.S. Attorney’s Office and agreed to pay more than $153 million to the United States for making false statements in connection with the sale of certain “block trades” (the “Relevant Blocks”) from 2018 through August 2021.  The NPA requires MORGAN STANLEY to forfeit $72,515,141 to the United States, representing its profits from the Relevant Blocks; to pay $64,016,082 in restitution, representing the harm it caused to the sellers of the Relevant Blocks; and to pay a $16,900,000 fine.  The NPA requires MORGAN STANLEY to continue to cooperate with and provide information to the United States for at least three years from the date of the agreement.  In the event that MORGAN STANLEY violates the NPA, the U.S. Attorney’s Office may prosecute MORGAN STANLEY.

Today’s corporate action reflects a careful weighing of factors relevant to the appropriate corporate resolution.  The NPA recognizes that while the serious conduct to which MORGAN STANLEY has admitted was uncovered by the Government and was not voluntarily self-disclosed, (i) MORGAN STANLEY has provided extraordinary cooperation with this Office’s investigation; (ii) the investigation has not uncovered evidence of corporate management’s complicity in or knowledge of the wrongdoing; (iii) MORGAN STANLEY’s controls, while ultimately unsuccessful in uncovering the misconduct, were designed in part to detect misconduct in the block trades business and were applied in good faith; (iv) in 2022, MORGAN STANLEY implemented a series of remedial measures to create clearer policies governing its ability to communicate with the buy-side in advance of block trades and trained its employees on those policies; (v) MORGAN STANLEY has no prior criminal history of any kind, including no prior NPA or DPA; and (vi) MORGAN STANLEY has accepted full responsibility for its conduct and agreed to resolve with the U.S. Securities and Exchange Commission (“SEC”).

U.S. Attorney Williams also announced that PAWAN PASSI, the MORGAN STANLEY employee that supervised block trades during the relevant time, entered into a deferred prosecution agreement (the “DPA”) with the U.S. Attorney’s Office, pending court approval.  In the DPA, PASSI admitted that, from 2018 through August 2021, he promised sellers of certain equity blocks that MORGAN STANLEY would keep information concerning their potential sales confidential, knowing that he would disclose that information to buy-side investors and that those investors would use the information to trade in advance of the block sales.  The DPA provides that criminal prosecution of PASSI will be deferred during a period in which PASSI must demonstrate good behavior and fulfill the terms of the DPA, in which case PASSI will not be further prosecuted criminally.  The case has been assigned to U.S. District Judge Analisa Torres, and a court appearance has been scheduled before U.S. Magistrate Judge Robyn F. Tarnofsky today at 11:00 a.m.

U.S. Attorney Damian Williams said: “Morgan Stanley, through the supervisor of its block trades business, Pawan Passi, deceived block sellers by promising confidentiality knowing that they would turn around and share that information with others to use to trade.  As the Statement of Facts makes clear, the Government’s investigation uncovered the misconduct at Morgan Stanley.  This fact serves as a reminder that we are watching.  And we will continue to use all the tools at our disposal to root out fraud in our financial markets.  Today’s actions show too that while we continue to act aggressively to enforce our nation’s laws, we evaluate each case and each prosecution on its facts and circumstances and will, where appropriate, consider alternatives to criminal prosecution, including declination, an NPA or DPA, whether for a corporation or an individual.  Here, with respect to Morgan Stanley, while many factors weighed in Morgan Stanley’s favor, including extraordinary cooperation and remediation, the misconduct was not uncovered and voluntarily disclosed.  Morgan Stanley now must comply with the terms of the NPA for the next three years and have a criminal resolution with the U.S. Attorney’s Office on its permanent record.”

Assistant Director in Charge James Smith said: “The integrity of our financial markets requires a level playing field, and when individuals and institutions intentionally tip the scales there must be consequences.  Morgan Stanley and Mr. Passi, as admitted in the agreements, utilized confidential information regarding block trades to benefit themselves.  The FBI, in order to maintain the public’s trust in our economic system, will hold any individual or financial entity engaging in complex financial crimes accountable in the criminal justice system.”

As part of the NPA, MORGAN STANLEY agreed to a statement of facts describing the deceptive conduct and the remedial measures that it took in response to learning of that conduct. 

*                *                *

Mr. Williams praised the outstanding work of the FBI.  Mr. Williams further thanked the SEC, which today announced resolutions with MORGAN STANLEY and PASSI.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Margaret Graham, Justin Rodriguez, and Samuel P. Rothschild are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that STEVEN JONES was sentenced to 200 months in prison by U.S. District Judge Kenneth M. Karas for his distribution of heroin and fentanyl that resulted in the death of Jamie Elliott, a 26-year-old woman from Cochecton, New York.  Today’s sentencing followed JONES’s guilty plea on November 29, 2021.

U.S. Attorney Damian Williams said: “Steven Jones sold the fentanyl-laced heroin that killed Jamie Elliott, a 26-year-old mother.  Even after Jones’s drugs killed Jamie Elliott, he continued to peddle dangerous opioids.  This senseless tragedy could have been avoided, and we will continue to seek lengthy prison terms for those who poison others and add to the death toll of the opioid epidemic.”

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

On June 1, 2018, the defendant sold fentanyl-laced heroin stamped “Dorney Park,” to Elliott, the mother of one of the defendant’s children.  Ms. Elliott was found dead inside her bedroom the following morning.  An autopsy conducted following Ms. Elliott’s death revealed that she had died from a lethal dose of fentanyl.  New York State Police (“NYSP”) investigators recovered additional bags of “Dorney Park” fentanyl-laced heroin in Ms. Elliott’s clothing. 

Facebook Messenger messages reflected that Ms. Elliott had purchased narcotics from JONES the evening before her death.  The day Ms. Elliott’s death was discovered, the defendant deactivated his Facebook account.  But the defendant did not stop selling dangerous drugs.  Shortly before his September 2, 2018, arrest the defendant obtained 500 more glassine envelopes of heroin for sale. 

*                *                *

In addition to the prison term, JONES, 37, of Monticello, New York, was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s Hudson Valley Safe Streets Task Force and the NYSP in connection with this investigation.

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

Trevor Bickford Traveled to the Times Square New Year’s Eve Celebration in 2022 for the Purpose of Killing U.S. Officials in the Name of Radical Islamic Jihad and Used a Machete-Style Knife to Attack Three NYPD Officers Working in Coordination with Federal Authorities to Protect the New Year’s Eve Event

Trevor Bickford, 20, of Wells, Maine, today pleaded guilty to multiple counts of attempting to kill officers and employees of the U.S. government and persons assisting them based on his jihadist attack using a machete-style knife against three New York City Police Department (NYPD) officers in Times Square on New Year’s Eve, Dec. 31, 2022.

“Last New Year’s Eve, Trevor Bickford attacked courageous NYPD officers protecting those celebrating in Times Square as part of his effort, as he later told law enforcement, to commit jihad in New York City,” said Attorney General Merrick B. Garland. “Today’s guilty plea should serve as a warning: terrorists who target and attack law enforcement and endanger the American people will be held accountable to the fullest extent of the law.”

“The defendant in this case, motivated by violent extremist views, traveled to New York City for the sole purpose of committing acts of violence and attacked three police officers causing serious injuries,” said FBI Director Christopher Wray. “Police officers bravely protect the American people and attacks against them cannot be tolerated. The FBI will work tirelessly with our law enforcement partners to hold accountable all those who engage in acts of terrorism.”

“As he admitted in court today, Trevor Bickford attempted to murder three NYPD officers while they were on duty protecting the thousands of civilians who flocked to Times Square just over a year ago to celebrate the New Year with friends and family,” said U.S. Attorney Damian Williams for the Southern District of New York. “Bickford targeted the iconic yearly celebration to carry out brazen acts of violence and hatred in the name of jihad. Bickford, as with countless others who have carried out acts of terrorism in support of misguided ideologies, is now going to spend lengthy time exactly where he deserves – in federal prison.”

According to court documents, in December 2022, Bickford, a U.S. citizen and resident of Maine, traveled from Maine to New York City to, in his own words, wage jihad and kill as many of his targets as possible. After considering his options, researching his target location, and settling on his plan of attack, he packed a large machete-like blade and went to one of the most densely populated areas in the United States at one of the most densely populated times possible: Times Square on New Year’s Eve. Bickford then chose to ambush three NYPD officers, declared “Allahu Akbar,” an Arabic phrase meaning “God is great” that other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks, and attacked them with his blade, seriously injuring all three officers. One of the officers managed to shoot Bickford in the shoulder, halting his violent rampage. Bickford later declared that he carried out his attack to wage jihad and admitted that his goal was to kill as many military-aged men who worked for the U.S. government as he could before himself becoming a martyr. The machete-style knife with a blade over a foot long that Bickford used to carry out his jihadist attack is shown below:

Bickford spent months consuming materials espousing radical Islamic ideology — including materials promoting the Taliban and reflecting the teachings of Sheikh Abu Muhammad Al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda — and contemplating ways to wage jihad. As he immersed himself deeper into this propaganda, Bickford devoted himself to violent Islamic extremism and pursuit of the jihad that he would eventually unleash in the heart of New York City. In the months leading up to his attack, Bickford focused on traveling overseas to support the Taliban in Afghanistan or elsewhere. He planned to ally himself with the Taliban to fight against governments that, in his view, oppress Muslims, and to wage jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government. Ultimately, Bickford decided that he would not travel overseas and instead turned his attention to an attack in the United States. After months of radicalization, this decision resulted in Bickford perpetrating his attack in Times Square on New Year’s Eve just over a year ago. Near the scene of the attack, law enforcement recovered a book from Bickford’s backpack with the following passage highlighted: “Fight in the Name of Allah and in the Cause of Allah. Fight against those who do not believe in Allah. Wage a holy war.”

Bickford pleaded guilty to three counts of attempted murder of officers and employees of the U.S. government and persons assisting them, each of which carries a maximum sentence of 20 years in prison; and three counts of assault of officers and employees of the U.S. government and persons assisting them, each of which carries a maximum sentence of 20 years in prison. The charges carry an aggregate potential sentence of 120 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI’s New York Joint Terrorism Task Force is investigating the case.

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

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

U.S. Attorney Damian Williams said: “A year and one day ago today, this Office charged Trevor Bickford with attempting to murder three NYPD officers while they were on duty protecting the thousands of civilians who flocked to Times Square just over a year ago to celebrate the New Year with friends and family.  Bickford targeted the iconic yearly celebration to carry out brazen acts of violence and hatred in the name of jihad.  Bickford, as with countless others who have carried out acts of terrorism in support of misguided ideologies, is now going to spend lengthy time exactly where he deserves – in federal prison.”

Attorney General Merrick B. Garland said: “Last New Year’s Eve, Trevor Bickford attacked courageous NYPD officers protecting those celebrating in Times Square as part of his effort, as he later told law enforcement, to commit jihad in New York City.  Today’s guilty plea should serve as a warning: terrorists who target and attack law enforcement and endanger the American people will be held accountable to the fullest extent of the law.”

FBI Assistant Director in Charge James Smith said: “Trevor Bickford deliberately plotted to bring terror to the streets of New York by targeting law enforcement officers purely carrying out their oath to protect and serve.  His plea today is a stark reminder of the threat terrorists, and those they inspire, pose to our country.  In this case, as in all others, the FBI's Joint Terrorism Task Force, along with our partners, remain unyielding in fulfilling our mission to protect the American people.”

According to the Complaint, the Indictment containing the charges to which BICKFORD pled guilty, and other documents and information in the public record:

In December 2022, BICKFORD, a U.S. citizen and resident of Maine, traveled from Maine to New York City to, in his own words, wage jihad and kill as many of his targets as possible.  After considering his options, researching his target location, and settling on his plan of attack, he packed a large machete-like blade and went to one of the most densely populated areas in the U.S. at one of the most densely populated times possible: Times Square on New Year’s Eve.  BICKFORD then chose to ambush three NYPD officers, declared “Allahu Akbar,” an Arabic phrase meaning “God is great” that other radical Islamic extremists have similarly proclaimed while carrying out terrorist attacks, and attacked them with his blade, seriously injuring all three officers.  One of the officers managed to shoot BICKFORD in the shoulder, halting his violent rampage.  BICKFORD later declared that he carried out his attack to wage jihad and admitted that his goal was to kill as many military-aged men who worked for the U.S. Government as he could before himself becoming a martyr.  The machete-style knife with a blade over a foot long that BICKFORD used to carry out his jihadist attack is shown below:

BICKFORD spent months before the attack consuming materials espousing radical Islamic ideology — including materials promoting the Taliban and reflecting the teachings of Sheikh Abu Muhammad Al-Maqdisi, a prominent radical Islamic cleric who was a spiritual mentor of al Qaeda — and contemplating ways to wage jihad.  As he immersed himself deeper into this propaganda, BICKFORD devoted himself to violent Islamic extremism and pursuit of the jihad that he would eventually unleash in the heart of New York City.  In the months leading up to his attack, BICKFORD focused on traveling overseas to support the Taliban in Afghanistan or elsewhere.  He planned to ally himself with the Taliban to fight against governments that, in his view, oppress Muslims, and to wage jihad against officials of governments that he believes are anti-Muslim, including the U.S. Government.  Ultimately, BICKFORD decided that he would not travel overseas and instead turned his attention to an attack here in the U.S.  After months of radicalization, this decision resulted in BICKFORD perpetrating his attack in Times Square on New Year’s Eve just over a year ago.  Near the scene of the attack, law enforcement recovered a book from BICKFORD’s backpack with the following passage highlighted: “Fight in the Name of Allah and in the Cause of Allah.  Fight against those who do not believe in Allah.  Wage a holy war.”

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BICKFORD, 20, of Wells, Maine, pled guilty to three counts of attempted murder of officers and employees of the U.S. Government and persons assisting them, each of which carries a maximum sentence of 20 years in prison, and three counts of assault of officers and employees of the U.S. Government and persons assisting them, each of which carries a maximum sentence of 20 years in prison.  The charges carry an aggregate potential sentence of 120 years in prison.  BICKFORD is scheduled to be sentenced by Judge Castel on April 11, 2024. 

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that FRANCISCO JAVIER MECINA BARRERA, a/k/a “Angel,” was sentenced to 21 years in prison for MECINA’s leadership of a large-scale firearms trafficking and methamphetamine distribution and importation operation he called the “Cartel de Houston” — Spanish for “Houston Cartel” — or “CDH.”  The organization smuggled substantial quantities of firearms to Mexico to trade them for hundreds of kilograms of methamphetamine, which they then distributed throughout the United States, while using firearms of their own to protect their organization and threaten others.  In June 2023, MECINA pled guilty before U.S. District Judge Victor Marrero, who imposed today’s sentence.  On December 1, 2023, Judge Marrero sentenced co-defendant ADALID CABRERA HUATO, a/k/a “China,” who was the CDH’s second-in-command, to 20 years in prison.

U.S. Attorney Damian Williams said: “These defendants sought nothing less than the establishment of a heavily armed drug cartel based in the United States, importing massive quantities of deadly drugs while exporting weapons to some of the most violent criminal organizations in the world.  They believed Satan was watching over them because they knew what they were doing was evil — plain and simple.  These crimes cause immense harm to communities on both sides of the border, all across the United States, and right here in New York City.  Our Office continues its unwavering commitment to dismantling all organizations that look to line their pockets through drugs, guns, and violence.” 

According to court filings and statements made in court proceedings:

From at least in or about March 2020 to at least in or about April 2021, MECINA was the leader of an international narcotics importation and distribution organization that imported hundreds of kilograms of crystal and liquid methamphetamine from Mexico into Texas and further distributed it throughout the United States, including to New York.  MECINA called his group the Cartel de Houston, or “CDH,” because it was based in Houston and had ties to Mexico-based drug trafficking cartels. 

CDH was also an international supplier of firearms.  At MECINA’s direction, members of CDH smuggled numerous firearms into Mexico and delivered them to Mexico-based drug traffickers, often in exchange for methamphetamine that they then smuggled back into the United States for distribution, hidden in the gas tank of a car that MECINA provided to his couriers.  A photograph of some of these firearms as they were packaged by members of CDH to be smuggled into Mexico is included below:

MECINA and other members of CDH also used firearms to threaten and intimidate a narcotics customer of CDH who owed MECINA money for drugs, intimidating him with an assault-style rifle with a 50-round drum magazine.  When MECINA was arrested, that rifle and loaded drum magazine were found in his apartment, as shown in the below photographs:

After establishing CDH, MECINA appointed co-defendant Cabrera as his right-hand man in Houston, and MECINA recruited others, including co-defendants GIOVANNI DE LA MORA and JAIME SANTILLANO, to acquire and transport numerous guns from the United States into Mexico, trade them for substantial quantities of methamphetamine, and transport the drugs into the United States, where they would distribute them throughout the country, including to the Bronx, New York.  MECINA provided his co-conspirators with vehicles and instructed them on how to hide the guns and drugs in the fuel tank to avoid detection. 

MECINA also utilized a Mexico-based religious figure known as “Lucifer” to bless the CDH’s members and drugs as they were crossing the border.  To exert control over his criminal organization, MECINA created a CDH Initiation Agreement that he sent to those working for him, marked it with a purportedly Satanic symbol, and detailed the “Rite of Initiation for New Applications to Enter the Fraternity of CDH,” as depicted below:

MECINA also created a logo for his criminal organization that he shared with co-conspirators, which had the same Satanic icon at the top:

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MECINA, 32, of Michoacán, Mexico, and Houston, Texas, pled guilty to (i) conspiracy to distribute and possess with intent to distribute methamphetamine; (ii) conspiracy to illegally import methamphetamine into the United States; and (iii) use, carrying, and possession of a firearm in connection with, and in furtherance of, the narcotics conspiracy and the narcotics importation conspiracy, which was brandished.  

CABRERA, 26, of Houston, Texas, pled guilty to narcotics conspiracy. 

As part of the same case, DE LA MORA and SANTILLANO, both of Houston, Texas, previously pled guilty to narcotics conspiracy.  DE LA MORA and SANTILLANO were sentenced by Judge Marrero to 90 months and 86 months in prison, respectively.  In addition to the prison terms, Judge Marrero sentenced DE LA MORA and SANTILLANO each to four years of supervised release.

Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration (“DEA”) and the Department of Homeland Security, Homeland Security Investigations New York City Border Enforcement Security Task Force, which is comprised of local, state, and federal law enforcement agencies, including the New York City Police Department.  Mr. Williams also thanked the Department of Alcohol, Tobacco, Firearms, and Explosives, the Houston Police Department, and the DEA Houston Division for their invaluable assistance in this investigation.

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

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Michael R. Herman, Mitzi S. Steiner, and Jane Y. Chong, with the assistance of Paralegal Specialist Jacqueline Hauck, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty pleas of ANTHONY VIGGIANO and his co-conspirator, STEPHEN FORLANO, Jr., in connection with their participation in a scheme to commit insider trading securities fraud based on information that VIGGIANO misappropriated from two leading global financial firms while VIGGIANO was employed at the firms.  VIGGIANO and FORLANO were arrested in May 2023 and pled guilty to securities fraud based on insider trading before U.S. District Judge Valerie E. Caproni.  CHRISTOPHER SALAMONE previously pled guilty for his role in the scheme. 

U.S. Attorney Damian Williams said: “Anthony Viggiano was placed in trusted positions by not one, but two leading global financial institutions.  Viggiano broke that trust repeatedly, illegally tipping Stephen Forlano, Jr., with material, confidential information.  Viggiano and Forlano knew their conduct was wrong but sought to cheat the system anyway.  Protecting the sanctity and integrity of the financial markets continues to be a cornerstone initiative for this Office, and we will continue to bring anyone attempting to illicitly disclose non-public information to justice.”

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

ANTHONY VIGGIANO was employed at two different, leading global financial institutions located in New York, New York, specifically an investment management firm (“Firm-1”) and an investment bank (“Firm-2,” and together with Firm-1, the “Firms”).  VIGGIANO worked as an analyst in Firm-1’s New York, New York, office between in or about April 2021 and in or about October 2021 and then worked at Firm-2 in New York, New York, as an associate in the asset management department.  While working at the Firms, VIGGIANO received confidential internal communications that contained detailed information about non-public potential strategic partnerships involving Firm-1 and acquisitions involving Firm-2. 

VIGGIANO attended college with FORLANO and was a childhood friend of SALAMONE.  In violation of the duties that he owed to each of the Firms, VIGGIANO tipped FORLANO and SALAMONE with material, non-public information (“MNPI”) relating to the names of potential counterparties for Firm-1’s strategic partnerships and, later, information that VIGGIANO learned during his employment at Firm-2 about companies that were potential acquisition targets.  After VIGGIANO started working at Firm-2, he continued tipping STEPHEN FORLANO, Jr., with MNPI that VIGGIANO obtained through his employer.  In total, VIGGIANO tipped FORLANO and/or SALAMONE with inside information in advance of at least eight different transactions involving publicly traded companies.

FORLANO and SALAMONE each used MNPI provided by VIGGIANO to purchase shares in companies and to trade call options, including short-dated, out-of-the-money call options.  VIGGIANO and SALAMONE agreed to split the profits from their illegal trading, which yielded total illegal profits of over approximately $300,000.  FORLANO further provided this MNPI to friends and family through, among other means, a video game console’s audio chat function in order to evade detection by law enforcement.  FORLANO himself illegally profited at least approximately $100,000 from the scheme. 

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VIGGIANO, 26, of Baldwin, New York, and FORLANO, 27, of Tampa, Florida, each pled guilty to one count of securities fraud under Title 15, which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of the FBI.  He also expressed appreciation for the SEC, which separately initiated civil proceedings against the defendants.

This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Peter J. Davis and Jared Lenow are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today SDNY’s criminal enforcement priorities for 2024.  In addition, U.S. Attorney Williams announced the creation of a Whistleblower Pilot Program designed to proactively uncover criminal conduct in the District.  A copy of the Whistleblower Pilot Program is attached to this press release and is available here on the SDNY website.

U.S. Attorney Damian Williams said:

“When I was sworn in as U.S. Attorney in 2021, I announced three co-equal priorities for my tenure.  First, I pledged that we would do everything possible to protect the people of this District from violent crime.  Second, I promised that we would be equally relentless in rooting out corruption in our financial markets.  And third, I promised to better connect with the communities we serve and to do more through enhanced civil rights enforcement to push back on the forces of hate that are on the march.  Fast forward to 2024 and these priorities are as urgent today as they were at the start of my tenure.  But SDNY, as always, continues to evolve – and be nimble – to meet new threats to the people of this District.  That’s why I am announcing that, in addition to these three priorities, SDNY will add two more for 2024: fighting the fentanyl epidemic and public corruption. 

The Fight Against Fentanyl

Fentanyl continues to inflict too much harm on too many people.  This Office has sought to and will continue to fight the problem on all levels.  We have brought groundbreaking charges against the leadership of the Sinaloa cartel and against some of the Chinese precursor chemical companies that fuel the cartels.  But even as we address the criminal networks that fuel the epidemic, we are also focused on addressing the devastation fentanyl brings to everyday people here in this District.  For instance, we brought a heartbreaking case involving the overdose death of a baby at a daycare center in the Bronx – a case that truly shocked the conscience of this city.  Our work is far from done.  In 2024, SDNY will continue to attack the fentanyl epidemic in a comprehensive way – from root to branch.  

The Fight Against Public Corruption

SDNY remains committed to aggressively rooting out corruption in our financial markets.  But, in this District, corruption doesn’t just pollute our financial markets, it also pollutes our politics and our public institutions.  It’s time to clean it up.  This Office has a long tradition of bringing complex public corruption cases.  We’re going to continue that focus in 2024.  We will proceed without fear or favor, and without any regard to partisan politics.  That’s in our DNA.  

SDNY Whistleblower Pilot Program

This Office is always looking for new ways to enhance our effectiveness and stay ahead of the curve.  We are pleased to announce a new tool in our toolkit that will enhance our 2024 enforcement efforts: SDNY’s Whistleblower Pilot Program.  The program encourages early and voluntary self-disclosure of criminal conduct by individual participants in certain non-violent offenses.  In exchange for self-disclosure and cooperation against others involved in the criminal conduct, SDNY will enter into a non-prosecution agreement where certain specified conditions are met, including, importantly, the condition that the Government was not previously aware of the criminal conduct that is the subject of the disclosure.  By providing clarity on the requirements and the benefits of such self-disclosure, we seek to incentivize individuals and their counsel to provide actionable and timely information.  That will, in turn, help us bring more misconduct to light and better protect the communities we serve.  We encourage people who qualify for the Whistleblower Pilot Program to take advantage of the opportunity to come clean, cooperate, and get on the right side of the law.  Our message to the world remains: Call us before we call you."

Damian Williams, the United States Attorney for the Southern District of New York, announced today that MATTHEW MILLS was sentenced to 15 years in prison by U.S. District Judge Nelson Román for his enticement of an 11-year-old minor.  Today’s sentencing followed MILLS’s guilty plea on September 29, 2023.

U.S. Attorney Damian Williams said: “Matthew Mills’s crimes are the nightmare of every parent.  Even after registering as a sex offender, Mills was able to prey on a young child from across the country, but the career prosecutors of this Office and our investigative partners were relentless in pursuing this predator.  Today’s lengthy sentence ensures that Mills will face justice for his reprehensible conduct.”

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

From on or about July 30, 2020, up to and including on or about July 31, 2020, MATTHEW MILLS exchanged text messages with an 11-year-old minor (“Victim-1”) and directed Victim-1 to take and transmit sexually explicit photographs and videos of Victim-1 to MILLS.  At the time of these communications, MILLS was in Colorado and Victim-1 was in Orange County.

Earlier in 2020, MILLS pled guilty to Sexual Exploitation of a Child, a Class 4 Felony, in the state of Colorado.  As a result of this offense, on or about July 10, 2020, MILLS was sentenced to an eight-year term of probation and was required to register as a sex offender in Colorado.

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In addition to the prison sentence, MILLS, 32, of Aurora, Colorado, was sentenced to a lifetime of supervised release.      

Mr. Williams praised the efforts of the Federal Bureau of Investigation (“FBI”), the FBI Hudson Valley Safe Streets Task Force, the Orange County Sheriff’s Office, and the Denver Police Department in connection with this investigation.      

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ROVIER CARRINGTON was sentenced today by U.S. District Judge Valerie E. Caproni to four years in prison for submitting false declarations to the Court in connection with a civil lawsuit.  CARRINGTON previously pled guilty to making a false declaration before a court. 

U.S. Attorney Damian Williams said: “Rovier Carrington submitted fake evidence and lied in an effort to win a $100 million sexual assault lawsuit.  Carrington now faces prison time for his brazen attempt to manipulate the court system.”

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

CARRINGTON filed a civil lawsuit (the “Civil Case”) in which he accused Hollywood executives of sexually assaulting and defrauding him.  CARRINGTON sought $100 million in damages in the Civil Case.  To support his allegations, CARRINGTON submitted several falsified email chains that purported to show that he had been sexually assaulted and defrauded. 

When confronted about those fake emails, CARRINGTON submitted a false affidavit to the Court in the Civil Case, swearing that the emails were real.  To cover up his lie, CARRINGTON deleted two of the email accounts, returned the phone he had used to send the emails to Apple, and failed to appear for the Court’s questioning about the emails.

The Court in the Civil Case ultimately dismissed the Civil Case and imposed sanctions on CARRINGTON, ruling, “these emails were fabricated, and that was bad enough, but the deactivation of the accounts, the efforts undertaken to really foreclose what is necessary discovery in this case, and the stream of lies to me, necessitate the sanctions that I am imposing.”

After the Court in the Civil Case imposed those sanctions, CARRINGTON attempted to pursue his claims in another court, violated an injunction issued by the Court in the Civil Case, and accused the Court in the Civil Case of taking bribes.

Then, even after pleading guilty in this case, CARRINGTON filed a lawsuit seeking over $1 billion and making similar allegations.

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In addition to the prison term, CARRINGTON, 34, of Los Angeles, California, was sentenced to three years of supervised release.

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

The case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Kevin Mead and Thomas S. Burnett are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JOSEPH DUPONT and SLAVA KAPLAN, a/k/a “Stanley Kaplan,” were sentenced to three years’ probation and five months in prison, respectively, for securities fraud in connection with their participation in an insider trading scheme surrounding the announcement of Alexion Pharmaceutical, Inc.’s acquisition of Portola Pharmaceuticals, Inc.  DUPONT and KAPLAN were arrested June 2023 and pled guilty before U.S. District Judge Gregory H. Woods in September 2023.

U.S. Attorney Damian Williams said: “This Office continues to keep a watchful eye over Wall Street, and we will work quickly to prosecute those who choose to cheat to make a quick buck.  These sentences reflect our commitment to ensuring fairness in the stock market and combatting corruption.”

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

In 2020, DUPONT, KAPLAN, and others engaged in an insider trading scheme surrounding the announcement of Alexion’s acquisition of Portola.  DUPONT was a vice president at Alexion and, on January 31, 2020, was informed of Alexion’s upcoming acquisition of Portola.  Before that acquisition was publicly announced, in April 2020, DUPONT provided material, non-public information (“MNPI”) that he misappropriated from Alexion about the acquisition to a friend so that the friend could use the information to trade profitably in securities.

In turn, DUPONT’s friend provided KAPLAN, who was also known to DUPONT, the MNPI about Portola’s pending acquisition, both so that KAPLAN could trade in advance of the acquisition and so that KAPLAN would assist DUPONT’s friend in formulating trading strategies to maximize DUPONT’s friend’s own trading profits.  KAPLAN further shared MNPI about the upcoming acquisition with a family member and a friend and colleague.  After Alexion’s acquisition of Portola was publicly announced on the morning of May 5, 2020, causing Portola’s stock price to increase significantly, KAPLAN and others who had purchased shares and options based on DUPONT’s inside information sold their shares of Portola and call options for Portola stock, reaping millions of dollars of illegally obtained trading profits.

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Additionally, JOSEPH DUPONT, 45, of Rehoboth, Massachusetts, was fined $75,000.  SLAVA KAPLAN, 45, of Hopewell Junction, New York, was sentenced to three years of supervised release and was ordered to forfeit $472,053.61.  

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

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Margaret Graham, Sarah Mortazavi, and Samuel P. Rothschild are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ANTHONY ELLISON and STARLIN NUNEZ, two former inmates of the Metropolitan Correctional Center (“MCC”), a federal jail, were found guilty today in Manhattan federal court for perpetrating wide-ranging bribery and prison contraband conspiracies with other inmates and MCC employees at the jail.  Six additional former MCC inmates and three former MCC employees previously pled guilty in this case.  NUNEZ will be sentenced by U.S. District Judge Andrew L. Carter, Jr., on June 6, 2024, and ELLISON will be sentenced by Judge Carter on July 9, 2024.

U.S. Attorney Damian Williams said: “Our federal detention centers are entrusted to provide care, custody, and order over inmates.  Anthony Ellison, Starlin Nunez, and their co-conspirators undermined the MCC’s mission through wide-ranging schemes of bribery and distribution of dangerous contraband, including drugs and cellphones.  Today’s unanimous verdict convicting Ellison and Nunez, and the convictions of their co-conspirators through guilty pleas, demonstrates that correctional officers and inmates who corrupt our detention centers will be held accountable.”

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

NUNEZ, a/k/a “Chino,” and ELLISON, a/k/a/ “Harv,” were both inmates at the MCC and perpetrated with other inmates and MCC guards an extensive bribery and contraband distribution scheme within the jail between approximately 2018 and 2021.  During the course of the conspiracy, between approximately 2019 and 2020, at least 10 MCC inmates, including NUNEZ and ELLISON, paid nearly $80,000 in bribes to Perry Joyner, a corrupt MCC correctional officer.  The inmates paid the bribes through friends and relatives outside the jail, who used money transfer applications such as CashApp to transfer money to associates of Joyner.  The associates then provided the bribes to Joyner himself.  In exchange for those bribes, Joyner smuggled large amounts of contraband into the MCC.  That contraband included drugs (such as oxycodone, alprazolam, Suboxone, marijuana, and synthetic cannabinoids, commonly known as “K2”), dozens of cellphones, and cartons of cigarettes, among other contraband.  MCC inmates, including NUNEZ and ELLISON, then sold much of that contraband to other inmates at a profit as part of a widespread illicit market within the MCC.  For example, ELLISON charged other inmates as much as $100 for a single cigarette and as much as $5,000 for a used iPhone.   

In approximately early 2020, Joyner left the MCC, and the jail initiated a series of lockdowns, first to search for contraband and then in response to the COVID-19 pandemic.  As a result of those lockdowns and Joyner’s departure, the contraband market in the MCC dried up until ELLISON found a new source of contraband.  In particular, between approximately 2020 and 2021, ELLISON conspired and had a sexual relationship with another corrupt MCC employee, Sharon Griffith-McKnight, who provided contraband to ELLISON, most of which he then re-sold to other inmates. 

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ELLISON, 36, from Brooklyn, New York, was convicted of one count of conspiring to commit honest services wire fraud, which carries a maximum sentence of 20 years in prison, and one count of conspiring to possess and provide prison contraband, including marijuana and other controlled substances, which carries a maximum sentence of five years in prison.

NUNEZ, 47, originally from the Dominican Republic, was convicted of one count of conspiring to commit honest services wire fraud, which carries a maximum sentence of 20 years in prison, and one count of conspiring to possess and provide prison contraband, including cellphones, which carries a maximum sentence of one year 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 a judge. 

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation, the Department of Justice’s Office of the Inspector General, the Special Agents from the U.S. Attorney’s Office for the Southern District of New York, and the U.S. Customs and Border Protection in New York.

The prosecution of this case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Aline R. Flodr, Jessica Greenwood, Jonathan E. Rebold, and Daniel H. Wolf are in charge of the prosecution, with the assistance of Paralegal Specialists Rachel Wechsler, Christopher de Grandpre, Andrea Gieseman, and Connor Hamill. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that SRINIVASA KAKKERA and ABBAS SAEEDI were sentenced by U.S. District Judge Gregory H. Woods to 18 months and five months, respectively, for their participation in a scheme to commit insider trading based on material, non-public information (“MNPI”) that a third co-defendant, Amit Bhardwaj, misappropriated from Bhardwaj’s employer, Lumentum Holdings Inc. (“Lumentum”).  Judge Woods previously sentenced Bhardwaj to 24 months in prison and a fine of $975,000.

U.S. Attorney Damian Williams said: “Srinivasa Kakkera and Abbas Saeedi traded on valuable material, non-public information about Lumentum’s planned acquisitions, knowing that their friend had stolen this information from his employer, Lumentum.  Kakkera and Saeedi used their informational advantage to make millions in combined illegal gains in the stock market.  But insider trading is not easy money: if you try to illegally profit from material, non-public information, there’s a price to be paid.”

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

In approximately December 2020, Bhardwaj learned that Lumentum was considering acquiring Coherent, Inc (“Coherent”).  Based on this information, Bhardwaj himself purchased Coherent stock and call options, and Bhardwaj tipped three associates, including SAEEDI, and these individuals all traded in Coherent securities as a result. 

In or about October 2021, Bhardwaj learned that Lumentum was engaged in confidential discussions with Neophotonics Corporation (“Neophotonics”) about a potential acquisition.  Bhardwaj provided this information to KAKKERA, SAEEDI, and Ramesh Chitor, and these individuals all traded in Neophotonics securities.  KAKKERA also caused other friends and family to purchase Neophotonics securities.  When Neophotonics’ stock price increased substantially following the announcement of the Lumentum acquisition in November 2021, KAKKERA, SAEEDI, and Chitor closed their positions in Neophotonics securities and made collectively approximately $4.3 million in realized and unrealized profits.  In particular, KAKKERA made $2,453,687.99 and SAEEDI made $691,104.73.

After they were interviewed by the Federal Bureau of Investigation (“FBI”) and served with federal grand jury subpoenas on approximately March 29, 2022, Bhardwaj, KAKEKRA, and SAEEDI took steps to obstruct the federal investigation of their conduct.  They met in person on multiple occasions and discussed, among other things, potential false stories that would conceal their insider trading scheme as well as creating false documents to buttress lies regarding payments that were, in reality, related to the insider trading scheme.

*                *                *

In addition to the prison sentence, KAKKERA, 48, of Pleasanton, California, was ordered to forfeit $2,453,687.99.  SAEEDI, 48, of Fremont, California, was ordered to forfeit $691,104.73. 

Mr. Williams praised the outstanding work of the FBI.  He also acknowledged the assistance of the Securities and Exchange Commission, which separately initiated civil proceedings against KAKKERA and SAEEDI. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that TYRIEK SKYFIELD pled guilty today to one count of illegally possessing ammunition after a felony conviction.  The charge of conviction arises from SKYFIELD’s firing two shots at an individual (“Victim-1”), one of which hit Victim-1, on a residential street in the Bronx on July 22, 2023.  SKYFIELD pled guilty before U.S. District Judge Lewis J. Liman and is scheduled to be sentenced on May 7, 2024.

U.S. Attorney Damian Williams said:  “On a summer night in the Bronx last July, Tyriek Skyfield fired two shots from a handgun at an individual from close range.  One shot struck the victim in the foot, injuring him.  Today’s plea underscores an important priority of my Office: We will not tolerate gun violence in the Southern District of New York.”

According to court filings and statements made in court proceedings:

On or about July 22, 2023, at approximately 9:56 p.m., TYRIEK SKYFIELD fired two shots with a handgun at Victim-1 near the intersection of Needham Avenue and East 223rd Street in the Bronx, New York.  Surveillance video from a building overlooking the scene showed SKYFIELD brandishing a firearm at Victim-1 seconds before shooting at him. 

Surveillance video then captured SKYFIELD fleeing down Needham Avenue and onto East 222nd Street.  During a canvass of the scene of the shooting on the following day, officers from the New York City Police Department recovered a 9mm Luger shell casing from one of the gunshots in the yard of a residential building near the shooting.

SKYFIELD was not permitted to possess ammunition because of prior felony convictions. 

*                *                *

TYRIEK SKYFIELD, 31, of New Rochelle, New York, pled guilty to one count of possession of ammunition after a felony conviction, which carries a maximum sentence of 15 years in prison. 

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

Mr. Williams praised the outstanding investigative work of the New York State Police and the Special Agents and Task Force Officers of the U.S. Attorney’s Office for the Southern District of New York, and he thanked the New York City Police Department for its assistance.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Adam Z. Margulies and Joseph H. Rosenberg 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 unsealing of an Indictment charging ODOGWU BANYE MMOBUOSI, a/k/a “Dozy Mmobuosi,” with securities fraud, making false filings with the Securities and Exchange Commission (“SEC”), and conspiracy charges.  MMOBUOSI is still at large.

U.S. Attorney Damian Williams said: “Dozy Mmobuosi allegedly orchestrated a massive scheme to inflate Tingo Group’s financial statements and make it appear as though the cellular and agriculture companies he founded were profitable and cash rich companies when, in fact, they were not.  With this Indictment, Mmobuosi’s alleged deceitful scheme comes to an end.”

FBI Assistant Director in Charge James Smith said: “Mmobuosi’s alleged fraud is an unseemly display of greed and corruption of our financial markets.  Securities schemes like this can be devastating for victim investors.  That’s why the FBI is committed to bringing financial fraud to light and perpetrators like Mmobuosi to justice.”

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

From at least in or about 2019 through in or about 2023, ODOGWU BANYE MMOBUOSI orchestrated a scheme to enrich himself by falsely representing that Nigerian companies he founded, Tingo Mobile and Tingo Foods, were operational, profitable businesses generating hundreds of millions of dollars in revenue respectively.  MMOBUOSI then sold Tingo Mobile and Tingo Foods to companies listed in the United States, including Tingo Group (listed on Nasdaq as “TIO”) and Agri-Fintech Holdings (traded in the Over-the-Counter Markets under symbol “TMNA”).  As a result, MMOBUOSI caused Tingo Group and Agri-Fintech to issue financial statements that falsely portrayed Tingo Mobile and Tingo Foods to be cash-rich, revenue-generating companies when, in fact, they were not.  MMOBUOSI then looted Tingo Group and Agri-Fintech by misappropriating cash from those companies and engaged in well-timed sales of their shares at inflated prices, generating millions of dollars of profits from his scheme.

*                *                *

MMOBUOSI, 45, of Nigeria, has been charged with one count of conspiracy, which carries a maximum sentence of five years in prison, one count of securities fraud under Title 15, which carries a maximum sentence of 20 years in prison, and one count of making false filings with the SEC, 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 purpose only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI.  He also expressed appreciation for the SEC, which separately initiated civil proceedings against the defendant.

This prosecution is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Peter Davis and Kiersten A. Fletcher are in charge of the prosecution.

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

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[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, 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 KARREM NASR, a/k/a “Ghareeb Al-Muhajir,” with attempting to provide material support to al Shabaab, a designated foreign terrorist organization.  NASR, a U.S. citizen, was taken into custody in Nairobi, Kenya, on December 14, 2023, and was transported to the United States yesterday, December 28, 2023.  NASR will be presented before U.S. Magistrate Judge Barbara Moses in Manhattan federal court later today.

U.S. Attorney Damian Williams said: “As alleged, Karrem Nasr, motivated by the heinous terrorist attack perpetrated by Hamas on October 7, devoted himself to waging violent jihad against America and its allies.  Nasr, a citizen of this country, traveled from Egypt to Kenya bent on joining and training with al Shabaab so that he could execute his jihadist mission of death and destruction.  Nasr was prepared to kill and be killed to support the jihadist cause, and in his own words, he described America as ‘evil’ and the ‘head of the snake.’  Thanks to the extraordinary efforts of the career prosecutors in my Office and our law enforcement partners who led the investigation, Nasr’s plan to train with a terrorist organization and wage violent jihad has been disrupted.  Make no mistake: My Office is committed to investigating, disrupting, and prosecuting anyone who is inspired by Hamas’s October 7 attack and seeks to harm Americans, whether here or abroad.”

FBI Assistant Director in Charge James Smith said: “Karrem Nasr traveled across the globe in an alleged attempt to join the ranks of a foreign terrorist organization – an organization that has repeatedly expressed its desire to harm Americans around the world.  This investigation highlights the ongoing efforts of the FBI’s New York Joint Terrorism Task Force and our domestic and international law enforcement partners to protect the U.S. against any form of terrorism and ensuring the safety of our community.”

NYPD Commissioner Edward A. Caban said: “Instead of embracing all that the United States had to offer him, Mr. Nasr allegedly moved abroad and committed himself to supporting a foreign terrorist organization. The provision of support to such a group – particularly by an American citizen – is a heinous threat to our entire country and way of life. In the face of this, NYPD investigators and our law enforcement partners on the FBI-led New York Joint Terrorism Task Force will remain relentless in our efforts to identify and investigate anyone who so clearly considers our nation their sworn enemy.”

As alleged in the Complaint:[1]

NASR is a 23-year-old U.S. citizen who moved from New Jersey to Egypt in or about  July 2023.  NASR is a supporter of al Shabaab, a designated foreign terrorist organization that has attacked Americans and American allies.  Since at least in or about November 2023, NASR has repeatedly expressed his desire and plans to join al Shabaab and wage jihad, including in communications with an FBI confidential source (the “CS”), who was posing as a facilitator for terrorist organizations.[2]

In communications exchanged with the CS and postings online, NASR stated that he had been thinking about engaging in jihad for a long time, and he was particularly motivated to become a jihadi by the October 7, 2023 Hamas terrorist attack in Israel.  For example, in communications with the CS, NASR stated that the number one enemy was “evil America,” which he called the “head of the snake.”  In recent public social media posts, NASR warned that “Jihad” was “coming soon to a US location near you,” posting airplane, bomb, and fire emojis:

In further communications with the CS, NASR expressed his intent to join al Shabaab to receive military training and engage in jihad, that he was prepared to kill and be killed, and that he specifically aspired to be a martyr for the jihadist cause.  Other examples of NASR’s online posts supportive of jihad and terrorist ideology are shown below:

NASR took specific steps to join and receive military training from al Shabaab, including making flight and lodging reservations for travel to Kenya, where he planned to meet members of al Shabaab for further travel to Somalia to join and train with the group.  NASR booked a flight for December 14, 2023, from Egypt to Kenya for purposes of ultimately joining and training with al Shabaab.  In addition, approximately thze day before his flight, NASR told the CS that he planned to delete data from his cellphone and computer to ensure that if he were detained, law enforcement would not be able to recover evidence of his jihadist activities from those devices.  On December 14, 2023, NASR flew from Egypt to Kenya, where he planned to transit into Somalia and join and train with al Shabaab.  Later that day, NASR was taken into custody by Kenyan authorities.

*                *                *

NASR, 23, of Lawrenceville, New Jersey, is charged with attempting to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD.  Mr. Williams also thanked the FBI’s Legal Attaché Office in Nairobi, Kenya, the Counterterrorism Section of the Department of Justice’s National Security Division, the Department of Justice’s Office of International Affairs, and the Kenyan Directorate of Criminal Investigations, including the Anti-Terrorism Police Unit and the Joint Terrorism Task Force-Kenya, for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Camille L. Fletcher and Kimberly J. Ravener are in charge of the prosecution, with assistance from Trial Attorneys Jennifer Burke and Lesley Woods of the Counterterrorism Section.

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

 

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[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.

[2] Communications referenced herein are described in substance and in part.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty plea of DAVID CARMONA for his role in founding and promoting a large-scale cryptocurrency Ponzi scheme known as IcomTech.  CARMONA pled guilty today before U.S. District Judge Jennifer L. Rochon to one count of conspiracy to commit wire fraud.

U.S. Attorney Damian Williams said: “IcomTech was a large-scale cryptocurrency scam founded by David Carmona that defrauded numerous investors.  Carmona and his co-defendants founded IcomTech on lies, and siphoned money away from victims at every opportunity.  Today’s guilty plea should send a clear message to those who engage in Ponzi schemes — whether in the cryptocurrency markets or elsewhere — that this Office is committed to rooting out fraud in all its forms and holding those responsible to full account.”

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

CARMONA started IcomTech in 2018, and MARCO RUIZ OCHOA — who pled guilty in September 2023 — was represented to be IcomTech’s CEO until 2019, when a new CEO replaced him.  IcomTech was a purported cryptocurrency mining and trading company that promised to earn its victim-investors (“Victims”) profits in exchange for their purchase of purported cryptocurrency-related investment products.  CARMONA and the other promoters of IcomTech, including his co-defendants OCHOA, JUAN ARELLANO, MOSES VALDEZ, and DAVID BREND, falsely promised their respective Victims, among other things, that profits from the companies’ cryptocurrency trading and mining would result in guaranteed daily returns on Victims’ investments.  In reality, IcomTech did not engage in cryptocurrency trading or mining for its Investors, and CARMONA and Icomtech’s other promoters used Victim funds to pay other Victims, to further promote the schemes, and to enrich themselves.

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

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

CARMONA worked with his co-defendant, GUSTAVO RODRIGUEZ, to build IcomTech’s website and online portal, where Victims were provided with personal accounts.  CARMONA and RODRIGUEZ discussed how to structure IcomTech’s compensation plan and investment products.  For example, RODRIGUEZ advised CARMONA on where CARMONA should set the purported daily returns on Victims’ investment packages and on the size of the investment packages that CARMONA should offer for sale.

In or about September 2018, CARMONA and OCHOA entered into a contract on behalf of IcomTech to purchase cryptocurrency mining equipment from a legitimate supplier and then began touting that investment as a means of generating interest among Victims to invest.  However, IcomTech did not meet its payment obligations to the supplier and never received any hardware.  Indeed, in or about July and August 2018, CARMONA admitted that his negotiations with the supplier were just for appearances and that he was just “using them.”  Even though RODRIGUEZ warned CARMONA that this would only work for a limited time before the supplier found out, CARMONA and OCHOA continued to promote IcomTech’s purported investment with the supplier.

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

*                *                *

CARMONA, 40, of Queens, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.

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

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

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

The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Michael D. Maimin, Cecilia E. Vogel, T. 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, announced that ROBERT ALCANTARA was sentenced today by U.S. District Judge Vernon S. Broderick to 68 months in prison for trafficking firearms.  ALCANTARA previously pled guilty to conspiring to traffic firearms and conspiring to launder money.

U.S. Attorney Damian Williams said: “Robert Alcantara alone trafficked over 100 untraceable ghost guns to the Dominican Republic.  The proliferation of unlawful ghost guns is a threat to public safety, and our response is clear: we will not let up.”

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

From approximately 2017 until January 2022, ALCANTARA operated a “ghost gun” factory out of his home in Rhode Island.  ALCANTARA purchased ghost gun kits at gun shows and other places and then machined the kits into working firearms.  Once he had completed the untraceable firearms, he exported and sold them to the Dominican Republic.  Most of those guns were handguns, but a number were rifles.  ALCANTARA and others then laundered the proceeds of his gun sales.

On November 20, 2021, ALCANTARA was stopped in his vehicle in possession of kits to build approximately 45 ghost guns. 

ALCANTARA was interviewed by law enforcement agents and stated that he was planning to turn the 45 kits into working firearms, and he had 50 additional similar ghost guns at his home.  A photograph of the 45 ghost gun kits is below:

Below are photographs of ALCANTARA’s home ghost gun factory:

Below are photos ALCANTARA sent of firearms he had available for sale in the Dominican Republic:

*                *                *

In addition to the prison term, ROBERT ALCANTARA, 36, of Providence, Rhode Island was sentenced to three years of supervised release.

Mr. Williams praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Department of Commerce’s Office of Export Enforcement, New York Field Office.  Mr. Williams also thanked the New York City Police Department, the New York State Police Department, the Providence Police Department, and the U.S. Attorney’s Office for the District of Rhode Island for their assistance in the case.

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

Damian Williams, the United States Attorney for the Southern District of New York, Fernando McMillan, Special Agent in Charge of the New York Field Office of the U.S. Food and Drug Administration’s Office of Criminal Investigations (“FDA-OCI”), and Daniel B. Brubaker, the Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an Indictment charging MOSES RABINOWITZ, a/k/a “Mark Rabin,” and MENACHIM SAMBER with conspiracy to commit wire fraud and conspiracy to obtain pre-retail medical products by fraud or deception in connection with a scheme to obtain medical devices and over-the-counter (“OTC”) drugs not approved for sale in the U.S. at discounted prices under the false pretense that they would be sold outside the U.S.  RABINOWITZ and SAMBER were arrested today and will be presented before U.S. Magistrate Judge Victoria Reznick.

U.S. Attorney Damian Williams said: “As alleged, the defendants defrauded manufacturers producing medical devices and over-the-counter drugs of millions of dollars and sold foreign medical products not approved for sale in the U.S. to unwitting consumers.  These charges should serve as a warning to fraudsters who think they can benefit financially by undermining the safety of our country’s medical supply chain.”        

FDA-OCI Special Agent in Charge Fernando McMillan: “The FDA is fully committed to the vigorous criminal investigation and prosecution of individuals who threaten the health and safety of American consumers by causing misbranded drugs and medical devices to be distributed.  Our office will continue to pursue and bring to justice those who place profits above the public health.”

USPIS Inspector in Charge Daniel B. Brubaker: “One of the USPIS's top priorities is to protect consumers from individuals who seek to profit from selling FDA-regulated products not intended for sale in the U.S.  Postal Inspectors relentlessly pursue criminals who further their criminal enterprises through the U.S. Mail.  In this case, Postal Inspectors collaborated with agents from FDA-OCI to help safeguard both the U.S. health care industry and American public.  I applaud their efforts on this investigation.”

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

RABINOWITZ was the owner and president of medical supply distributor Trasco, LLC (“Trasco”) and the owner of Trasco affiliates GlobalMed International, Ltd. (“GlobalMed”) and Panamedica Trading, Inc. (“Panamedica”).  SAMBER was an employee of Trasco whose functions included purchasing and sales.

From at least in or about January 2014 up to and including on or about January 3, 2019, RABINOWITZ and SAMBER engaged in a conspiracy to obtain FDA-regulated medical devices and OTC drugs that were not intended for sale in the U.S. at deeply discounted prices from manufacturers (the Victim Companies”) by falsely and fraudulently representing that the products would be sold and distributed outside of the U.S. when, in fact, RABINOWITZ and SAMBER, from the outset, intended to and did sell and distribute those medical devices and OTC drugs at a substantial profit to wholesalers, distributors, and others in the U.S.

The manufacturers relied on RABINOWITZ, SAMBER, and other co-conspirators’ false and fraudulent representations and sold their products to RABINOWITZ, SAMBER, Trasco, GobalMed, and Panamedica at deeply discounted prices, resulting in losses of more than $5 million.        

RABINOWITZ, SAMBER, and other co-conspirators created and caused to be created false and fraudulent documentation, which they provided and caused to be provided to the Victim Companies to conceal their fraudulent scheme.  At times, RABINOWITZ, SAMBER, and other co-conspirators arranged for the fraudulently obtained products to be diverted directly to locations within the U.S. and for “dummy” shipments to be exported instead in order to generate documentation to provide to the Victim Companies as proof of export.

RABINOWITZ, SAMBER, and other Trasco employees acting at their direction often removed the foreign language packaging or labeling on the medical devices and OTC drugs so that the provenance of the foreign medical products would also be hidden from the domestic consumers and distributors to whom they were sold.

*                *                *

RABINOWITZ, 42, of Clifton, New Jersey, and SAMBER, 29, of Hollywood, Florida, were both charged with one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to obtain pre-retail medical products by fraud or deception, which carries a maximum sentence of 15 years in prison.

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

Mr. Williams praised the outstanding investigative work of the FDA-OCI and the USPIS.

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

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, and Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, announced that ROLF SCHNELLMANN, a Swiss former executive, pled guilty today to conspiring to defraud the United States in connection with a scheme to help high-value U.S. taxpayer-clients conceal more than $60 million in income and assets held in undeclared, offshore bank accounts and to evade U.S. income taxes.  SCHNELLMANN pled guilty before U.S. District Judge Gregory H. Woods. 

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

SCHNELLMANN was the former head of Allied Finance Trust AG, a Zurich-based financial services company that was a subsidiary of the Allied Finance Group in Liechtenstein.  From in or about 2008 to in or about 2014, SCHNELLMANN and his co-conspirators defrauded the IRS by concealing income and assets of high-value U.S. taxpayer-clients with undeclared bank accounts at Privatbank IHAG Zurich AG (“IHAG”), a Swiss private bank.  In order to assist the U.S. taxpayer-clients, SCHNELLMANN and his co-conspirators devised and implemented a scheme dubbed the “Singapore Solution” to fraudulently conceal the bank accounts of the U.S. taxpayer-clients, their assets, and their income from U.S. authorities.  In furtherance of the fraudulent scheme, SCHNELLMANN and his co-conspirators conspired to transfer more than $60 million from undeclared IHAG bank accounts of the U.S. taxpayer-clients through a series of nominee bank accounts in Hong Kong and other locations before returning the funds to newly opened accounts at IHAG in the name of a Singapore-based asset-management firm that a co-conspirator helped establish.  The U.S. taxpayer-clients paid large fees to IHAG and others to help them conceal their funds and assets and evade taxes. 

SCHNELLMANN was arrested in August 2023 in Italy and extradited to the United States.

*                *                *

SCHNELLMANN, 61, of Switzerland, pled guilty to one count of conspiracy to defraud the United States, which carries a maximum sentence of five years in prison.  SCHNELLMANN is scheduled to be sentenced by Judge Woods on July 19, 2024, at 10:00 a.m.

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as SCHNELLMANN’s sentence will be determined by the judge.

Mr. Williams praised the outstanding work of the Internal Revenue Service, Criminal Investigation.  Mr. Williams also thanked the Department of Justice’s Office of International Affairs, Interpol, Italian law enforcement authorities, the Prosecutor General’s Office of Trieste, and the Italian Ministry of Justice for their assistance in the extradition of the defendant.  Mr. Williams thanked the Department of Justice’s Tax Division for their partnership on this case. 

This prosecution is being handled by the Complex Frauds and Cybercrime Unit and the Department of Justice’s Tax Division.  Assistant U.S. Attorney Olga I. Zverovich and Senior Litigation Counsel Nanette Davis of the Tax Division 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, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of terrorism charges against SAMUEL SALMAN EL REDA, a/k/a “Samuel Salman El Reda El Reda,” a/k/a “Salman Raouf Salman,” a/k/a “Sulayman Rammal,” a/k/a “Salman Ramal,” a/k/a “Salman Raouf Salman,” a/k/a “Hajj,” a dual Colombian-Lebanese citizen and member of Hizballah’s Islamic Jihad Organization (“IJO”), in connection with EL REDA’s alleged role leading decades of terrorist activity on behalf of Hizballah and the IJO.  EL REDA is charged with, among other offenses, conspiring to provide and providing material support to Hizballah, a designated foreign terrorist organization.  The charges are contained in an Indictment unsealed today in Manhattan federal court.  EL REDA is based in Lebanon and remains at large. 

U.S. Attorney Damian Williams said: “As alleged, for decades, Samuel Salman El Reda has led terrorist operations on behalf of the Islamic Jihad Organization of Hizballah, including a 1994 bombing in Buenos Aires that massacred 85 innocent victims.  The career prosecutors of this Office have not forgotten the pain and suffering that El Reda has allegedly caused, and we thank the dedication of our law enforcement partners for pursuing this important case.  The Southern District of New York continues to be a leader in prosecuting violent terrorists and terrorist organizations, and we will not rest until those who create chaos and destruction are brought to justice.”

Assistant Attorney General Matthew G. Olsen said: “Nearly three decades ago, long-time Hizballah terrorist operative Samuel Salman El Reda allegedly helped plan and execute the heinous attack on a Buenos Aires Jewish community center that murdered 85 innocent people and injured countless others.  This indictment serves as a message to those who engage in acts of terror: that the Justice Department’s memory is long, and we will not relent in our efforts to bring them to justice.”

FBI Assistant Director in Charge James Smith said: “The evil and horror wrought by terrorism reaches all corners of the globe.  Samuel Salman El Reda was allegedly involved in carrying out terrorist activity on behalf of Hizballah throughout the world.  The New York Joint Terrorism Task Force and our law enforcement partners are unwavering in our determination to bring any individual who supports the evils of terrorism to justice.”

NYPD Commissioner Edward A. Caban said: “As alleged, El Reda was an on-the-ground coordinator of the fatal attack against South America’s largest Jewish center nearly 30 years ago.  In the decades after that attack, he allegedly continued to direct and support terrorism activities in the Western Hemisphere on behalf of Hizballah and has been involved in plots all across the world.  We want this alleged killer brought to justice.”

According to the allegations contained in the Indictment charging the defendant and other public court documents:[1]

Hizballah is a Lebanon-based Shia Islamic organization with political, social, and terrorist components.  Hizballah was founded in the 1980s with support from Iran after the 1982 Israeli invasion of Lebanon, and its mission includes establishing a fundamentalist Islamic state in Lebanon.  Since Hizballah’s formation, the organization has been responsible for numerous terrorist attacks that have killed hundreds, including U.S. citizens and military personnel.  In 1997, the U.S. Department of State designated Hizballah as a foreign terrorist organization, pursuant to Section 219 of the Immigration and Nationality Act, and it remains so designated today.  In 2001, pursuant to Executive Order 13224, the U.S. Department of the Treasury designated Hizballah as a Specially Designated Global Terrorist entity.  In 2010, State Department officials described Hizballah as the most technically capable terrorist group in the world and a continued security threat to the United States.

The IJO, which is also known as the External Security Organization and “Unit 910,” is a component of Hizballah responsible for the planning and coordination of intelligence, counterintelligence, and terrorist activities on behalf of Hizballah outside of Lebanon.  In July 2012, an IJO operative detonated explosives on a bus transporting Israeli tourists in the vicinity of an airport in Burgas, Bulgaria, killing six people and injuring 32 others.  Law enforcement authorities have disrupted several other IJO attack-planning operations around the world, including through the arrest of an IJO operative surveilling Israeli targets in Cyprus in 2012, the seizure of bomb-making precursor chemicals in Thailand in 2012, the seizure of similar chemicals in May 2015 in connection with the arrest of another IJO operative, and the seizure of approximately three tons of ammonium nitrate in London in the fall of 2015.  Since June 2017, multiple IJO operatives have been arrested, charged, and convicted in the Southern District of New York for terrorism-related offenses.

Beginning in at least 1993, EL REDA has led terrorist operations on behalf of Hizballah and the IJO in South America, Asia, and Lebanon.  EL REDA was responsible for, among other things, helping to plan and execute the July 18, 1994, bombing of the Asociaión Mutual Israelita Argentina (“AMIA”) building in Buenos Aires, Argentina, which killed 85 people and injured hundreds more.  EL REDA’s activities for Hizballah in connection with the AMIA bombing included relaying information to IJO operatives that was used for planning and executing the attack.  In the decades following the attack, EL REDA continued to engage in terrorist activity on Hizballah’s behalf by recruiting, training, and managing IJO operatives around the world.  EL REDA deployed IJO operatives to Thailand, Panama, and Peru, among other places, to help Hizballah and the IJO conduct pre-operational surveillance in support of attack planning and stockpile explosive precursor chemicals, including ammonium nitrate.  For example, in or about May 2009, EL REDA instructed an IJO operative to travel to Thailand to help destroy a cache of ammonium nitrate and other explosive materials that the IJO believed was under law enforcement surveillance.  In or about February 2011, EL REDA instructed an IJO operative to travel to Panama to surveil the Panama Canal and Embassies maintained by the United States and Israel, and in or about January 2012, EL REDA instructed an IJO operative to travel again to Panama to conduct additional pre-operational surveillance. 

*                *                *

EL REDA, 58, of Lebanon, has been charged with: (i) providing material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; (ii) conspiring to provide material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison; (iii) aiding and abetting the receipt of military-type training from a designated foreign terrorist organization, which carries a maximum sentence of 10 years in prison or a fine; and (iv) conspiring to receive military-type training from a designated foreign terrorist organization, 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 sentence would be imposed by a judge.

Mr. Williams praised the outstanding investigative work of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD.  Mr. Williams also thanked the Department of Justice’s National Security Division, Counterterrorism Section, and the Department of Justice’s Office of International Affairs, for their assistance.

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Jacob H. Gutwillig and Jason A. Richman are in charge of the prosecution, with assistance from Deputy Chief Larry Schneider of the Counterterrorism Section.

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

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[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, and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of an Indictment today charging three members of a Bronx-based narcotics trafficking organization with conspiring to distribute narcotics and with possessing firearms in furtherance of the narcotics trafficking conspiracy.  BRYANT ESTEVEZ, a/k/a “Smack,” and TEREL BYERS, a/k/a “Rell,” a/k/a “Raff,” were arrested yesterday and will be presented today before U.S. Magistrate Judge Stewart D. Aaron.  A third defendant, JOHNNY MONTEDEOCA, a/k/a “Chi,” remains at large.  This case is assigned to U.S. District Judge Victor Marrero.

U.S. Attorney Damian Williams said: “As alleged, the defendants took over an apartment building in the Bronx and used it to sell fentanyl, heroin, and other drugs, and carried guns to protect their operation.  Worse still, they allegedly peddled these incredibly dangerous substances mere feet from a grade school.  Today’s arrests make abundantly clear that this level of disregard for the safety and well-being of the communities in this district will not be tolerated.  Thanks to the work of law enforcement and the prosecutors of this Office, these defendants now face serious federal penalties.”

NYPD Commissioner Edward A. Caban said: “Today’s charges exemplify the NYPD’s efforts to eliminate illegal drugs and guns from New York City neighborhoods – especially in the vicinity of our schools.  I commend our dedicated NYPD investigators and everyone involved in this case from the office of the U.S. Attorney for the Southern District because safeguarding our children will always be at the forefront of our shared public safety mission.”

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

From at least in or about February 2023 through at least in or about December 2023, ESTEVEZ, BYERS, and MONTEDEOCA were part of a narcotics trafficking organization that sold drugs and firearms in the Bronx.  This organization (the “Concord Avenue Crew”) operated principally out of a residential building (the “Building”) located on Concord Avenue in the Bronx across the street from an elementary and middle school.  The Concord Avenue Crew sold drugs — including fentanyl-laced heroin, crack cocaine, and powder cocaine — from the Building at all hours of the day and night, seven days a week.  These sales were conducted, among other places, on the sidewalk in front of the Building; through the window of a street-level apartment in the Building; and inside a side entrance to the Building.  The Concord Avenue Crew’s narcotics trafficking operation caused drug customers to line up on the street outside the Building, interfered with residents’ access to the Building, and prompted repeated complaints to the NYPD by residents and by parents whose children attended school across the street.

Members of the Concord Avenue Crew routinely carried firearms in connection with their narcotics trafficking operation, including by carrying firearms on their persons and storing them in areas where they were stashing and selling narcotics.  On multiple occasions, members of the Concord Avenue Crew also sold firearms to undercover officers.

*                *                *

ESTEVEZ, 25, of the Bronx, New York; BYERS, 21, of the Bronx, New York; and MONTEDEOCA, 34, of the Bronx, New York, are each charged with conspiracy to distribute and possess with intent to distribute 40 grams and more of mixtures and substances containing a detectable amount of fentanyl and mixtures and substances containing detectable amounts of heroin, cocaine base, and cocaine.  This charge carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison.  Each of the defendants is also charged with possessing firearms in furtherance of the narcotics trafficking offense charged in the Indictment, which carries a mandatory minimum sentence of five years in prison, which must be served consecutively to any other sentence imposed, 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 defendants would be determined by the judge.

Mr. Williams praised the outstanding investigative work of the NYPD and thanked the Office of the New York State Attorney General for its assistance. 

The prosecution of this case is being handled by the Office’s Violent & Organized Crime Unit and Narcotics Unit.  Assistant U.S. Attorneys Patrick R. Moroney and Alexandra S. Messiter 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.

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

Samuel Salman El Reda Participated in Terrorist Operations for Hezbollah in South America, Asia and Lebanon, and Helped Plan and Execute Hezbollah’s July 18, 1994, Bombing of the Asociación Mutual Israelita Argentina Building in Buenos Aires, Killing 85 People

A Manhattan federal court today unsealed terrorism charges against Samuel Salman El Reda, aka Samuel Salman El Reda El Reda, Salman Raouf Salman, Sulayman Rammal, Salman Ramal, Salman Raouf Salman, and Hajj, 58, a dual Colombian-Lebanese citizen and member of Hezbollah’s Islamic Jihad Organization (IJO), in connection with El Reda’s alleged role leading decades of terrorist activity on behalf of Hezbollah and the IJO.

El Reda is charged with, among other offenses, conspiring to provide and providing material support to Hezbollah, a designated foreign terrorist organization. El Reda is based in Lebanon and remains at large.

“Nearly three decades ago, long-time Hezbollah terrorist operative Samuel Salman El Reda allegedly helped plan and execute the heinous attack on a Buenos Aires Jewish community center that murdered 85 innocent people and injured countless others,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “This indictment serves as a message to those who engage in acts of terror: that the Justice Department’s memory is long, and we will not relent in our efforts to bring them to justice.”

“As alleged, for decades, Samuel Salman El Reda has led terrorist operations on behalf of the Islamic Jihad Organization of Hezbollah, including a 1994 bombing in Buenos Aires that massacred 85 innocent victims,” said U.S. Attorney Damian Williams for the Southern District of New York. “The career prosecutors of this office have not forgotten the pain and suffering that El Reda has allegedly caused, and we thank the dedication of our law enforcement partners for pursuing this important case. The Southern District of New York continues to be a leader in prosecuting violent terrorists and terrorist organizations, and we will not rest until those who create chaos and destruction are brought to justice.”

“While it’s been nearly 30 years since this horrific terrorist attack, the FBI and our partners throughout the U.S. government are committed to delivering justice for the victims’ families,” said Executive Assistant Director Larissa L. Knapp of the FBI’s National Security Branch. “Our reach and our memory are long, as this investigation shows. The charges unsealed today are a result of the hard work and determination of the men and women of the FBI and Justice Department, and the assistance of our international partners in law enforcement.”

According to court documents, Hezbollah is a Lebanon-based Shia Islamic organization with political, social and terrorist components. Hezbollah was founded in the 1980s with support from Iran after the 1982 Israeli invasion of Lebanon, and its mission includes establishing a fundamentalist Islamic state in Lebanon. Since Hezbollah’s formation, the organization has been responsible for numerous terrorist attacks that have killed hundreds, including U.S. citizens and military personnel. In 1997, the Department of State designated Hezbollah as a foreign terrorist organization, pursuant to Section 219 of the Immigration and Nationality Act, and it remains so designated today. In 2001, pursuant to Executive Order 13224, the Department of the Treasury designated Hezbollah as a Specially Designated Global Terrorist entity. In 2010, State Department officials described Hezbollah as the most technically capable terrorist group in the world and a continued security threat to the United States.

The IJO, which is also known as the External Security Organization and “Unit 910,” is a component of Hezbollah responsible for the planning and coordination of intelligence, counterintelligence and terrorist activities on behalf of Hezbollah outside of Lebanon. In July 2012, an IJO operative detonated explosives on a bus transporting Israeli tourists in the vicinity of an airport in Burgas, Bulgaria, killing six people and injuring 32 others. Law enforcement authorities have disrupted several other IJO attack-planning operations around the world, including through the arrest of an IJO operative surveilling Israeli targets in Cyprus in 2012, the seizure of bomb-making precursor chemicals in Thailand in 2012, the seizure of similar chemicals in May 2015 in connection with the arrest of another IJO operative, and the seizure of approximately three tons of ammonium nitrate in London in the fall of 2015. Since June 2017, multiple IJO operatives have been arrested, charged and convicted in the Southern District of New York for terrorism-related offenses.

Beginning in at least 1993, El Reda has led terrorist operations on behalf of Hezbollah and the IJO in South America, Asia and Lebanon. El Reda was responsible for, among other things, helping to plan and execute the July 18, 1994, bombing of the Asociaión Mutual Israelita Argentina (AMIA) building in Buenos Aires, which killed 85 people and injured hundreds more. El Reda’s activities for Hezbollah in connection with the AMIA bombing included relaying information to IJO operatives that was used for planning and executing the attack. In the decades following the attack, El Reda continued to engage in terrorist activity on Hezbollah’s behalf by recruiting, training and managing IJO operatives around the world. El Reda deployed IJO operatives to Thailand, Panama and Peru, among other places, to help Hezbollah and the IJO conduct pre-operational surveillance in support of attack planning and stockpile explosive precursor chemicals, including ammonium nitrate. For example, in or about May 2009, El Reda instructed an IJO operative to travel to Thailand to help destroy a cache of ammonium nitrate and other explosive materials that the IJO believed was under law enforcement surveillance. In or about February 2011, El Reda instructed an IJO operative to travel to Panama to surveil the Panama Canal and Embassies maintained by the United States and Israel, and in or about January 2012, El Reda instructed an IJO operative to travel again to Panama to conduct additional pre-operational surveillance.

El Reda is charged with: (i) providing material support to a designated foreign terrorist organization, which carries a maximum penalty of 20 years in prison; (ii) conspiring to provide material support to a designated foreign terrorist organization, which carries a maximum penalty of 20 years in prison; (iii) aiding and abetting the receipt of military-type training from a designated foreign terrorist organization, which carries a maximum penalty of 10 years in prison or a fine; and (iv) conspiring to receive military-type training from a designated foreign terrorist organization, which carries a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York Police Department, is investigating the case. The Justice Department’s Office of International Affairs provided valuable assistance.

Assistant U.S. Attorneys Jacob H. Gutwillig and Jason A. Richman for the Southern District of New York are prosecuting the case, with valuable assistance from Deputy Chief Larry Schneider of the National Security Division’s Counterterrorism Section.

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

​​​​​​​El Reda Indictment

Damian Williams, the United States Attorney for the Southern District of New York, announced today that AAMIR WAHAB was sentenced to three years in prison for his role in a scheme to defraud the National Basketball Association (“NBA”) Players’ Health and Welfare Benefit Plan (the “Plan”).  U.S. District Judge Valerie E. Caproni imposed the sentence. 

U.S. Attorney Damian Williams said: “Aamir Wahab exploited his dental practice to facilitate a million-dollar health care fraud scheme.  Wahab’s goals were ambitious, telling a codefendant to ‘get [him] the whole NBA,’ but the career prosecutors of this Office and our law enforcement partners were relentless in bringing Wahab and his codefendants to justice.”  

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

The NBA Players’ Health and Welfare Benefit Plan is a health care plan providing benefits to eligible active and former players of the NBA.  WAHAB is a dentist licensed in California who owns and operates a dental practice (“Dental Office-1”) located in Beverly Hills, California.

From at least in or about 2018, up to and including at least in or about 2019, WAHAB participated in a scheme with several other former NBA players, including Terrence Williams and Keyon Dooling, to defraud the Plan.[1]  WAHAB’s role in the scheme was to document that former NBA players or their spouses received certain dental services, when, in reality, the services were not provided. 

WAHAB accomplished his role in the scheme in two ways.  First, WAHAB created, and caused others to create, fraudulent invoices for former NBA players or their spouses.  The former NBA players would then submit the fraudulent invoices to the Plan to request reimbursements that they were not entitled to.  Second, WAHAB charged, and caused others to charge, the Plan-issued debit cards of former NBA players.  The Plan-issued debit cards were intended to be used by Plan participants to pay for eligible medical services at the point of service.  However, WAHAB charged the Plan-issued debit cards of former NBA players for medical services that were never actually provided.  In return for his participation in the scheme, WAHAB received a portion of the fraud proceeds.

As evidenced by text messages recovered in the search of WAHAB’s cellular phone, WAHAB was eager to take part in the fraud scheme, in the hopes of making illicit profits.  When Dooling wrote to WAHAB, “Let’s make this thing grow sir,” WAHAB responded “Lol I’m down bro Get me the whole NBA.”  Similarly, WAHAB and Williams had explicit conversations about the creation of fraudulent invoices.  In March 2019, Williams wanted WAHAB to charge co-conspirators’ Plan-issued debit cards more frequently, but WAHAB was initially reluctant.  While disagreeing about whether to charge the debit cards, Williams and WAHAB also argued about whether Williams owed WAHAB approximately $12,000 in fraud proceeds.  Annoyed and angry, Williams messaged WAHAB: “YOUVE MADE THOUSANDS OF F[----]ING DOLLARS TO PRINT A[N] INVOICE WITH A NAME AT THE TOP like you f[----]ing kidding me[?!]  We not gonna act like you doing dental work.”

*                *                *

In addition to his prison term, WAHAB, 44, of Los Angeles, California, was ordered to forfeit $458,576.50 and pay restitution of $1,192,522.

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

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

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[1] Williams and Dooling pled guilty.  Williams was sentenced to 10 years in prison, and Dooling was sentenced to 30 months in prison.

Damian Williams, the United States Attorney for the Southern District of New York, Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), Frank A. Tarentino III, Special Agent in Charge Drug Enforcement Administration (“DEA”) New York Division, and Erin Keegan, the Acting Special Agent in Charge of the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”), announced that a grand jury returned a five-count Indictment charging JYSHUN TROWER with transporting and selling over 40 firearms in New York and TROWER and STIVEN ARTURO MARTINEZ NIN with conspiracy to distribute large quantities of counterfeit pharmaceutical pills containing fentanyl.  TROWER and MARTINEZ NIN were arrested on Thursday, December 14, 2023, and presented in Manhattan federal court before U.S. Magistrate Judge Ona T. Wang on Friday, December 15, 2023.  The case is assigned to the Honorable Denise L. Cote.

U.S. Attorney Damian Williams said: “Jyshun Trower and Stiven Arturo Martinez Nin are charged with having allegedly peddled two of the deadliest threats to New Yorkers—illegal firearms and fentanyl.  The firearms recovered by law enforcement included military-style assault weapons, and the drugs seized included more than a kilogram of counterfeit pharmaceutical pills containing deadly fentanyl and fentanyl analogue.  I want to thank the law enforcement agents who investigated this case for their tireless work resulting in today’s charges and reiterate this Office’s commitment to ensuring that those who flood the streets with deadly guns and drugs will be brought to justice.”

NYPD Commissioner Edward A. Caban said: “This indictment shows that the dangerous work conducted by the NYPD and our law enforcement partners is effective, and that the proliferation of illegal guns and drugs on our streets continues.  I thank all the members of the OCDETF and the office of the U.S. Attorney’s Office for the Southern District of New York for their tireless dedication to our shared public safety mission.” 

DEA Special Agent in Charge Frank Tarentino said: “This investigation resulted in 43 firearms and thousands of fake pills containing fentanyl being taken off the streets and exemplifies law enforcement’s oath to safeguard our communities.  I commend the men and women from NYPD, DEA, HSI and the U.S. Attorney’s Office for the Southern District of New York for their diligent work on this investigation.”      

HSI Acting Special Agent in Charge Erin Keegan said: “The defendants are accused of crimes that threaten not only the lives of those purchasing these counterfeit drugs, but also potential victims of gun violence in New York City.  HSI New York is proud to work closely with our law enforcement partners, including the members of the Organized Crime Drug Enforcement Task Force, every day in preventing deadly narcotics and weapons from reaching the streets and the community.”    

According to the allegations in the Indictment and Complaint:[1]

From on or about May 3, 2023, through on or about December 14, 2023, JYSHUN TROWER illegally transported and sold firearms in Manhattan and the New York City area.  In almost a dozen transactions, TROWER illegally sold approximately 43 firearms to an undercover law enforcement agent and others.  The firearms included multiple semiautomatic pistols, semiautomatic rifles, assault style rifles and pistols, ammunition, high-capacity magazines, a ghost gun, and components used to convert a semiautomatic pistol into a fully automatic pistol, also known as a machine gun.  Images of several of the firearms that TROWER sold are below. 

Firearms TROWER sold in Manhattan on July 31, 2023.

Firearms TROWER sold in Manhattan on August 17, 2023.

Firearms TROWER sold in Manhattan on August 25, 2023.

Firearms TROWER sold in Manhattan on September 29, 2023.

In addition, TROWER and MARTINEZ NIN conspired to sell 10,000 fentanyl pills to an undercover law enforcement agent.  TROWER had also arranged with the undercover agent to include several firearms in the transaction.  On or about December 14, 2023, TROWER and MARTINEZ NIN arrived at the sale location. Law enforcement apprehended TROWER.  MARTINEZ NIN attempted to flee on foot and discard a bag containing over one kilogram of pills and their packaging. 

*                *                *

JYSHUN TROWER, 27, of Virginia Beach, Virginia, is charged with one count of illegally dealing firearms, which carries a maximum sentence of five years in prison, one count of illegally transporting and distributing firearms, which carries a maximum sentence of five years in prison, one count of conspiring to distribute fentanyl, which carries a maximum sentence of life in prison, one count of using and carrying firearms while engaging in the narcotics conspiracy, which carries a maximum sentence of life in prison, and one count of attempted transfer of a firearm for use in a drug trafficking crime, which carries a maximum sentence of 15 years in prison.

STIVEN ARTURO MARTINEZ NIN, 24, of Carlisle, Pennsylvania, is charged with one count of conspiring to distribute fentanyl, which carries a maximum sentence of life in prison.

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

Mr. Williams praised the outstanding investigative work of the NYPD, DEA New York Division, and HSI New York Field Office.  

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

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

 

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

Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services - Office of Inspector General (“HHS-OIG”), announced today the arrests of ERIN FOLEY and TED ALBIN on charges of health care fraud and conspiracy to violate the Anti-Kickback Statute.  As alleged in a four-count Indictment unsealed today in federal court, FOLEY and ALBIN ran a Medicare billing company that they used to bill Medicare for more than $25 million in fraudulent claims for durable medical equipment (“DME”), and on which Medicare and related private insurers paid out more than $9 million.  FOLEY and ALBIN are also charged with illegally buying such DME orders for use in their own DME supply companies and with introducing buyers to sellers in return for additional kickbacks.

FOLEY is expected to be presented later today before U.S. Magistrate Judge William Matthewman in West Palm Beach, Florida.  ALBIN is expected to be presented this afternoon before U.S. Magistrate Judge Shaniek M. Maynard in Fort Pierce, Florida.  The case was assigned to U.S. District Judge John G. Koeltl in Manhattan.

U.S. Attorney Damian Williams said: “Medicare is a valuable taxpayer-funded program designed to provide affordable health care to people over 65 or with disabilities, not to line the pockets of those who would enrich themselves through fraud.  Here, the defendants are charged with illegally profiting from the purchase and sale of millions of dollars’ worth of bogus orders for medical equipment, bilking Medicare in the process.  Such illicit conduct can affect the availability of medical services and drive up the cost of health care, but the career prosecutors of this office and our law enforcement partners will remain diligent in protecting these vital taxpayer-funded programs.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Violations of the Anti-Kickback Statute involving durable medical equipment can waste scarce federal health care program funds and corrupt the medical decision-making process.  Individuals who participate in the federal health care system are required to obey laws meant to preserve both the integrity of program funds and the provision of appropriate, quality services to patients.”

According to statements made in court and publicly filed documents in this case:[1]

From at least 2018 through 2021, FOLEY and ALBIN owned and controlled Grapevine Professional Services, Inc. (“Grapevine”), a billing company that they used to bill Medicare for more than $25 million, and to collect more than $9 million, through claims based on orders for DME that had been unlawfully sold and bought.  Such billing included both billing directly to Medicare through Medicare Part B and billing to private insurance companies that were reimbursed through Medicare Part C.  Most of these unlawful purchases of DME orders were by Grapevine customers that were registered with Medicare as DME supply companies.  Additional unlawful purchases were made directly by FOLEY and ALBIN through three DME supply companies that they themselves owned and controlled.  Once these DME orders were unlawfully purchased, FOLEY and ALBIN used those orders as the basis for fraudulent claims to Medicare and to private insurers covered by Medicare Part C. 

In addition, FOLEY and ALBIN acted essentially as brokers of DME orders, introducing Grapevine customers who wished illegally to buy DME orders to co-conspirators who illegally sold them orders.  In return for such introductions of buyers to sellers, FOLEY and ALBIN received additional kickbacks, both in the form of cash and in the form of additional DME orders.  FOLEY and ALBIN also profited through these introductions by gaining additional illegal billing business for Grapevine.  Following these introductions, FOLEY and ALBIN continued to oversee the relations between buyers and sellers of DME orders, for example by tracking how many orders particular sellers owed to particular buyers.

*                *                *

FOLEY, 46, of Loxahatchee, Florida, and ALBIN, 46, of Stuart, Florida, are each charged with conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison; health care fraud, which carries a maximum sentence of 10 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and conspiracy to violate the Anti-Kickback Statute, which carries a maximum sentence of five years in prison. 

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

Mr. Williams praised the outstanding investigative work of HHS-OIG.

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

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

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[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.