Southern District of New York

“Moments ago, a Manhattan jury convicted former NBA players Ronald Glen Davis and William Bynum of a criminal scheme to defraud the NBA Players’ Health and Benefit Welfare Plan.  While many of the more than 20 defendants convicted in this case were well-known NBA stars, their conduct was otherwise a typical fraudulent scheme designed to defraud the NBA’s health care plan and net the defendants over $5 million in illicit profits.  Today’s conviction exemplifies that despite notoriety or success in sports or any other field, no one is exempt from criminal charges if they engage in fraud.”

Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the recent seizures of approximately 219,000 counterfeit bags, clothes, shoes, and other luxury products with a total estimated manufacturer’s suggested retail price (“MSRP”) of approximately $1.03 billion.[1]  Two indictments were unsealed today charging ADAMA SOW and ABDULAI JALLOH, a/k/a “Troy Banks,” with trafficking in counterfeit goods.  The defendants were arrested this morning and presented before U.S. Magistrate Judge Robert W. Lehrburger.  SOW’s case is assigned to U.S. District Judge Valerie E. Caproni.  JALLOH’s case is assigned to U.S. District Judge Paul A. Crotty.

U.S. Attorney Damian Williams said: “As alleged, the defendants used a Manhattan storage facility as a distribution center for massive amounts of knock-off designer goods.  The seizures announced today consist of merchandise with over a billion dollars in estimated retail value, the largest-ever seizure of counterfeit goods in U.S. history.  This is a testament to the commitment of this Office and its law enforcement partners to combat counterfeit trafficking in New York City.”

HSI Special Agent in Charge Ivan J. Arvelo said: “Today's groundbreaking announcement underscores the unwavering commitment of HSI New York in the fight against intellectual property theft and serves as a testament to the dedication of our team and partner agencies, who have tirelessly pursued justice, culminating in the largest-ever seizure of this kind.  I extend my gratitude to all those involved for their relentless efforts and late nights dedicated to upholding the law.”

NYPD Commissioner Edward A. Caban said: “The trafficking of counterfeit goods is anything but a victimless crime because it harms legitimate businesses, governments, and consumers.  Today’s indictments show how seriously the NYPD and our federal partners take this offense.  And we will continue to work hard to hold accountable anyone who seeks to benefit by selling such items on the black market.”

According to the allegations contained in the Indictments and other publicly available information:[2]

From about January 2023, up to and including October 20, 2023, ADAMA SOW and ABDULAI JALLOH ran large-scale counterfeit goods trafficking operations out of a storage facility located in Manhattan.  JALLOH also trafficked counterfeit goods out of an offsite location in Manhattan.  Searches of premises controlled by SOW have resulted in the seizure of over 83,000 counterfeit items with a total estimated MSRP of over $502 million.  Searches of premises controlled by JALLOH have resulted in the seizure of over 50,000 counterfeit items with a total estimated MSRP of over $237 million.

A photograph of boxes of counterfeit goods seized from the storage facility is below.

            A photograph of one of the storage units controlled by ADAMA SOW inside the storage facility is below.

            A photograph of one of the storage units controlled by ABDULAI JALLOH inside the storage facility is below.

*                *                *

ADAMA SOW, 38, of Queens, New York, and ABDULAI JALLOH, 48, of New York, New York, are each charged with trafficking in counterfeit goods, which carries a maximum sentence of 10 years in prison. 

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

Mr. Williams praised the outstanding work of HSI and NYPD.  He further thanked U.S. Customs and Border Protection for its assistance and the management of the storage facility in Manhattan for its cooperation with the execution of the seizures.

The cases are being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Henry Ross is in charge of the prosecutions.

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

[1] The street value of counterfeit goods typically is significantly lower than the MSRP.

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

Damian Williams, the United States Attorney for the Southern District of New York, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a Complaint charging DANTE PETTEWAY with illegally possessing ammunition in connection with a shooting by PETTEWAY in front of a residential building in the Bronx on June 21, 2023.  PETTEWAY was arrested last night and presented today before U.S. Magistrate Judge Robert W. Lehrburger.

U.S. Attorney Damian Williams said: “As alleged, earlier this summer, Dante Petteway opened fire in a residential neighborhood in the Bronx, endangering not only the life of his intended victim, but also the lives of others in the community.  Thanks to our partners at the FBI and the NYPD as well as the career prosecutors of this Office, who have a longstanding history of combatting violent crime in the city, the defendant has now been apprehended.”

NYPD Commissioner Edward A. Caban said: “This arrest is another example of methodical policing in action.  The NYPD and our law enforcement partners are dedicated to identifying and charging anyone responsible for driving crime and violence in New York City.  The diligence of our NYPD detectives and our colleagues at the FBI and the office of the U.S. Attorney for the Southern District has resulted in one less criminal on our streets today.”

According to the allegations in the Complaint:[1]

On June 21, 2023, at approximately 8:20 p.m., PETTEWAY, accompanied by another individual, walked down the sidewalk of East 167th Street in the Bronx, drew a firearm, and shot multiple rounds across the street.  Below is a still image of PETTEWAY showing PETTEWAY as he fired the gun.

After shooting the firearm, PETTEWAY ran into a nearby apartment building while holding the firearm in his right hand.  A still image from the surveillance footage with PETTEWAY holding the firearm in his right hand is below.

Upon canvassing the scene, NYPD officers recovered five shell casings and also located a vehicle that had been damaged by several bullet holes.  Photographs of several of the recovered shell casings are provided below.

PETTEWAY was not permitted to possess ammunition because of a prior felony conviction for robbery. 

*                *                *

PETTEWAY, 27, of the Bronx, New York, is charged with 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 FBI and NYPD. 

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

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

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth 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 conviction in Manhattan federal court of OMAR LOPEZ CASTRO for his participation in a cocaine trafficking scheme between 2018 and 2022.  The jury convicted LOPEZ CASTRO following a one-week trial before U.S. District Judge P. Kevin Castel.  Sentencing of LOPEZ CASTRO is scheduled for February 22, 2024.

U.S. Attorney Damian Williams said: “The unanimous jury verdict holds Omar Lopez Castro accountable for his leadership role in a widespread cocaine trafficking organization that flooded the streets with hundreds of millions of dollars’ worth of cocaine.  After serving a 10-year sentence for a prior SDNY cocaine trafficking conviction, Lopez Castro returned to trafficking hundreds of kilograms of his cocaine, this time hidden inside of furniture.  He now faces the prospect of a lengthy prison sentence for his crime.”

According to the allegations contained in the Superseding Indictment and the evidence presented in court during the trial: 

LOPEZ CASTRO was a member of a drug trafficking organization (“DTO”) that engaged in a cocaine-trafficking scheme between 2018 and 2022 involving the concealment of cocaine inside custom-built furniture.  Between in or about September 2018 and October 2022, the DTO sent more than 30 shipments of cargo from Puerto Rico to the continental United States.  The cocaine was concealed in more than approximately 80 custom cube-shaped coffee tables or other furniture.  While the organization falsely represented that the cargo contained furniture, that furniture in fact concealed hundred-kilogram quantities of cocaine.  During the course of the investigation, law enforcement seized approximately 350 kilograms of cocaine from four of the DTO’s shipments.  In total, the DTO shipped approximately 4,500 kilograms of cocaine, worth at least $135,000,000 on the street.  Many of the organization’s shipments were sent to addresses in the Southern District of New York including in Yonkers and the Bronx.  Others were sent up and down the East Coast.

LOPEZ CASTRO was a Puerto Rico-based member of the DTO who owned approximately 274 kilograms of cocaine shipped from Puerto Rico to New Jersey and Pennsylvania.  Soon after his release from federal prison from a prior conviction in the Southern District of New York for trafficking cocaine from Puerto Rico to New York, LOPEZ CASTRO connected with other members of the DTO and hired the DTO members to ship his cocaine inside of custom-built furniture.  All told, the street value of cocaine that LOPEZ CASTRO owned and trafficked was more than $8 million.

*                *                *

LOPEZ CASTRO, 48, of Carolina, Puerto Rico, was found guilty of conspiring to distribute and possess with the intent to distribute narcotics, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. 

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

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.

Mr. Williams praised the outstanding investigative work of the New York City Police Department; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the U.S. Postal Inspection Service; and the Department of Homeland Security, Homeland Security Investigations in this investigation. 

The prosecution is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Juliana N. Murray and Andrew Jones, with the assistance of Paralegal Specialists Jacqueline Hauck and Sabrina Jim Munoz, 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 VAZHA GABADADZE, a/k/a “Natan Yusupov,” KAKHA KATSADZE, TEIMURAZ TAVBERIDZE, a/k/a “Tava,” and DAVIT TIKARADZE, a/k/a “Dato,” with extortion offenses.  GABADADZE, KATSADZE, TAVBERIDZE, and TIKARADZE were arrested today and will be presented this afternoon before U.S. Magistrate Judge Robert W. Lehrburger.

U.S. Attorney Damian Williams said: “As alleged in the indictment, Gabadadze, a leader within an international criminal syndicate, and his associates threatened their victim with physical violence in order to extract money.  Thanks to the dedication of the FBI and the prosecutors of this Office, all four defendants now face federal charges.”

FBI Assistant Director in Charge James Smith said: “Forcing a victim to pay money using intimidation and threats of violence is illegal and not how business is conducted in our city.  This illicit behavior is exactly what these defendants are alleged to have conspired to carry out over several months.  The FBI will not stand idly by while organized crime members take part in violence and extortion, instead we will hold them accountable in the criminal justice system.”

As alleged in the Indictment:[1]

From about September 2022 through about August 2023, GABADADZE, KATSADZE, TAVBERIDZE, and TIKARADZE engaged in a scheme of extortion.  GABADADZE is a leader within an organized criminal group.  He holds the title of “vor v zakone” or “vor,” which are Russian phrases translated roughly as “Thief-in-Law” or “Thief,” and which refer to an order of elite criminals from the former Soviet Union who receive tribute from other criminals, offer protection, and use their recognized status as “vor” to adjudicate disputes among lower-level criminals.  As part of the organized criminal group, GABADADZE and his associates, KATSADZE, TAVBERIDZE, and TIKARADZE, induced their victim to make monetary payments through the use of threatened force and fear.

*                *                *

GABADADZE, 41, KATSADZE, 45, TAVBERIDZE, 54 and TIKARADZE, 53, all of Kutaisi, Georgia, are each charged with one count of conspiracy to commit extortion and one count of extortion.  Each count carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of the FBI.  Mr. Williams also thanked U.S. Customs and Border Protection and the New York City Police Department for their assistance in the investigation.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises and General Crimes Units.  Assistant U.S. Attorneys Anden Chow and Chelsea Scism are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that EFREM ZELONY-MINDELL was sentenced to 90 months in prison by U.S. District Judge Paul A. Engelmayer for distribution of child pornography. 

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

From April 2022 to December 2022, ZELONY-MINDELL communicated with two undercover Federal Bureau of Investigation (“FBI”) agents on an encrypted messaging service.  In the conversations, ZELONY-MINDELL repeatedly expressed in graphic and unambiguous terms their desire to engage in sexual activity with minor children and sent the undercover agents numerous images and videos containing child pornography. 

In conversations with one of the undercover agents who was posing as the father of a nine-year-old boy, ZELONY-MINDELL made clear that they wanted to engage in sexual activity with the purported child.  ZELONY-MINDELL and the undercover agent discussed a plan to meet for the purpose of ZELONY-MINDELL engaging in sexual activity with the child.  When told by the undercover agent that the child would be “knocked out a little bit” on sleep medication during the planned sexual activity, ZELONY-MINDELL agreed to have sex with the drugged child.       

ZELONY-MINDELL and the undercover agent agreed to meet on December 16, 2022, in lower Manhattan with the understanding that they would return to the undercover agent’s apartment afterward, and ZELONY-MINDELL would then engage in sexual activity with the child.  ZELONY-MINDELL arrived at the scheduled time and location and was arrested.  Subsequently, law enforcement identified thousands of images and videos containing child pornography on the defendant’s phones and computers.

*                *                *

In addition to the prison term, ZELONY-MINDELL, 36, of Fayetteville, Arkansas, was sentenced to five years of supervised release.

Mr. Williams praised the efforts of the FBI and the members of the Child Exploitation and Human Trafficking Task Force in connection with this investigation. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict on November 9, 2023, against MOUNIR MRABET on four counts in a Superseding Indictment, including charges of narcotics conspiracy, narcotics trafficking, and a firearms offense.  MRABET will be sentenced at a later date by U.S. District Judge Jed S. Rakoff, who presided over the trial.

U.S. Attorney Damian Williams said: “The defendant was a prolific methamphetamine and fentanyl trafficker who received these dangerous drugs in the mail and sold them in wholesale quantities to other drug dealers in the heart of Manhattan.  He also used a gun to protect his drug enterprise.  His conviction should serve as a message to anyone who profits from fueling the methamphetamine and opioid crisis that continues to devastate our city and country: this Office is committed to prosecuting those responsible to the fullest extent of the law.”

According to the evidence presented at trial:

From about July 2022 to about January 5, 2023, MOUNIR MRABET coordinated with suppliers in Mexico and California to receive boxes of crystal methamphetamine and fentanyl in the mail.  He then worked with co-conspirators to distribute wholesale quantities of these drugs to other drug dealers in New York City.

On January 5, 2023, a search warrant was executed on the defendant’s Manhattan apartment after he was recorded selling drugs to an undercover detective, including fake oxycodone pills laced with fentanyl.  The search recovered approximately 24 pounds of methamphetamine, most of it pure, and half a pound of fentanyl powder.  At trial, text messages, photographs, and video evidence established that the defendant regularly supplied numerous drug dealers with bags of drugs, often in pound quantities, and that he also used a firearm and threats to protect and promote his drug operations.

*                *                *

MRABET, 40, of New York, New York, was convicted of (i) one count of conspiracy to distribute and possess with intent to distribute methamphetamine and fentanyl; (ii) two counts of distribution and possession with intent to distribute methamphetamine and fentanyl; and (iii) one count of use, carrying, and possession of a firearm in connection with, and in furtherance of, the narcotics conspiracy.  The charges carry a mandatory minimum sentence of 15 years in prison and a maximum sentence of life in prison. 

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

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.

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

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Jane Y. Chong, Edward C. Robinson, Jr., and Jun Xiang, with the assistance of Paralegal Specialist Alex Frenchman, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that IRINA DILKINSKA pled guilty today in Manhattan federal court to wire fraud and money laundering charges in connection with her participation in the massive OneCoin fraud scheme.  OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level-marketing (“MLM”) network.  As a result of misrepresentations made about OneCoin, victims invested over $4 billion worldwide in the fraudulent cryptocurrency.  Today, U.S. District Judge Edgardo Ramos accepted DILKINSKA’s guilty plea. 

U.S. Attorney Damian Williams said: “As OneCoin’s so-called ‘Head of Legal and Compliance’ Irina Dilkinska accomplished the exact opposite goal of her position.  As she has now admitted, Dilkinska facilitated the laundering of millions of dollars of illicit profits OneCoin accrued through its multi-level-marketing scheme.  The dedicated prosecutors of this Office and our law enforcement partners will continue to pursue this important case until every defendant is brought to justice.”

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

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

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

On October 12, 2017, IGNATOVA was charged with OneCoin-related fraud and money laundering charges in the U.S. District Court for the Southern District of New York and a federal warrant was issued for her arrest.  On October 25, 2017, IGNATOVA traveled on a commercial flight from Sofia, Bulgaria, to Athens, Greece; she has not been seen publicly since.  IGNATOVA was added to the Federal Bureau of Investigation’s (“FBI”) Top Ten Most Wanted List in June 2022.  The FBI is offering a $100,000 reward for information leading to IGNATOVA’s arrest.

*                *                *

DILKINSKA, 42, a citizen of Bulgaria, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum potential sentence of five years in prison, and one count of conspiracy to commit money laundering, which also carries a maximum potential sentence of five years in prison. 

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendant will be determined by a judge.  Sentencing before Judge Ramos is scheduled for February 14, 2024, at 10:00 a.m.

Mr. Williams praised the outstanding investigative work of the Internal Revenue Service-Criminal Investigation and the FBI, which jointly conducted this investigation with Special Agents from the U.S. Attorney’s Office. 

If you have any information about IGNATOVA’s whereabouts, please contact your local FBI office or the nearest American Embassy or Consulate.  Tips can be reported anonymously and can also be reported online at tips.fbi.gov.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that DERRICK HODGE and ISAAC BRIGGS III have been charged with running an investment fraud scheme through which they defrauded investors of approximately $7 million and misappropriated over $1.5 million of investor funds for personal use.  HODGE and BRIGGS III were arrested today.  BRIGGS III will be presented today in the U.S. District Court for the Southern District of New York, and HODGE will be presented today in the U.S. District Court for the Eastern District of Louisiana.

U.S. Attorney Damian Williams said: “As alleged, Derrick Hodge and Isaac Briggs III solicited millions of dollars of victim investments based on false promises of outsized returns.  Instead of using those funds to generate profits for investors, as promised, Hodge and Briggs III allegedly took those investments for themselves, using investor funds to pay for personal travel, entertainment, and luxury fashion purchases.  As we’ve shown time and time again, this Office will be tireless in prosecuting those who misappropriate investor funds to line their own pockets.”

FBI Assistant Director in Charge James Smith said: “For more than three years, Hodge and Briggs allegedly misled and deceived their victims out of more than seven million in investment funds, which they used in part for their own personal expenses.  Investment fraud schemes not only can ruin a victim’s life savings, but also erode the public’s faith in our financial institutions.  The FBI will continue to ensure that unscrupulous actors attempting to swindle investors are brought to justice.”

As alleged in the Complaint:[1]

From at least October 2020 through at least in or about November 2023, DERRICK HODGE and ISAAC BRIGGS III operated an investment fraud scheme that defrauded at least seven victims of at least $7 million.  HODGE and BRIGGS III operated this fraudulent scheme through their operation of the Heritage Integrity Investment Trust (“HIIT”).  HODGE and BRIGGS III falsely represented that victim funds would be invested in HIIT’s private placement trading program that would provide a return of five times the initial investment.

HODGE and BRIGGS III did not invest victim funds in any trading program.  Instead, HODGE and BRIGGS III transferred their victims’ investments through intermediary accounts to their personal accounts and used them to make payments for personal expenses such as food, travel, entertainment, and luxury goods.

*                *                *

HODGE, 52, of Avondale, Louisiana, and BRIGGS III, 52, of Somerset, New Jersey, are each charged with one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years in prison.  BRIGGS III is also charged with one count of aggravated identity theft, which carries a statutory mandatory penalty of two years in prison, which must run consecutively to any other prison term.

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.

This case is being supervised by the Office’s General Crimes Unit.  Assistant U.S. Attorney William C. Kinder is in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced yesterday that JOHN COSTANZO JR., a Drug Enforcement Administration (“DEA”) Special Agent currently on leave, and MANUEL RECIO, a former DEA Assistant Special Agent in Charge, were convicted of conspiracy to bribe a public official, conspiracy to commit honest services wire fraud, and honest services wire fraud, for a scheme in which RECIO funneled tens of thousands of dollars to COSTANZO in exchange for COSTANZO providing sensitive law enforcement information to assist RECIO in recruiting clients for defense lawyers.  In addition, COSTANZO was convicted of accepting bribes from RECIO, and RECIO was convicted of giving bribes to COSTANZO.  The verdict followed a 12-day trial before U.S. District Judge J. Paul Oetken.

U.S. Attorney Damian Williams said: “John Costanzo, a DEA Special Agent on leave, and Manuel Recio, a former DEA Assistant Special Agent in Charge, trafficked sensitive, nonpublic, confidential law enforcement information in exchange for cash and other valuable financial benefits.  In doing so, they endangered public safety by disclosing the timing of sealed indictments and arrests of DEA targets.  Recio and Costanzo were convicted by a unanimous jury for their brazen violation of the public’s trust and for providing information that could have put their former colleagues and others in harm’s way.  This case underscores that corruption in the ranks of any law enforcement agency will be met with zero tolerance, and we stand with the overwhelming majority of law enforcement officers who carry out their service with integrity and honor.”

According to the evidence presented in court during the trial:

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

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

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

*                *                *

COSTANZO JR., 48, of Arlington, Virginia, and RECIO, 54, of Miami, Florida, were each convicted of one count of conspiracy to commit bribery, which carries a maximum term of five years in prison, and one count of receiving or paying a bribe, respectively, which carries a maximum term of 15 years in prison.  COSTANZO and RECIO were also convicted of one count of conspiracy to commit honest services wire fraud and one count of honest services wire fraud, each of which carries a maximum term of 20 years in prison.

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

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

The prosecution is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Mathew Andrews, Emily Deininger, Sheb Swett, Nathan Rehn, and Sarah Mortazavi are in charge of the prosecution, with the assistance of Paralegal Specialists Dean Iannuzzelli and Nerlande Pierre.

Damian Williams, the United States Attorney for the Southern District of New York, and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced today the unsealing of a Complaint charging MAXIMO NUNEZ with theft of government property and conspiracy to commit theft of government property in connection with a years-long scheme in which he and others stole valuable construction utility vehicles (“Utility Vehicles”) from New York City Housing Authority (“NYCHA”) developments.  NUNEZ was arrested this morning and will be presented before U.S. Magistrate Judge Sarah Netburn later today. 

U.S. Attorney Damian Williams said: “As alleged, the defendant and others carried out a brazen scheme for years, stealing hundreds of thousands of dollars in valuable construction equipment that NYCHA needed to maintain the many public housing developments that thousands of New Yorkers call home.  Thanks to the persistent efforts of the New York City Department of Investigation and the Special Agents and career prosecutors of my Office, this man now stands charged with this bold scheme.”

DOI Commissioner Jocelyn E. Strauber said: “As charged, Nunez and other co-conspirators stole at least 16 utility vehicles worth over several hundred thousand dollars from NYCHA.  These vehicles are used to maintain NYCHA facilities for residents.  NYCHA referred this matter to DOI and cooperated in this investigation, which involved the placement of GPS tracking devices on certain NYCHA utility vehicles and allowed law enforcement to recover one of the allegedly stolen vehicles.  I thank the U.S. Attorney’s Office for the Southern District of New York for their partnership in this investigation and their commitment to hold accountable those who steal valuable government property.”

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

From in or about January 2021 through in or about September 2022, on at least 13 different occasions, NUNEZ and three other co-conspirators (“CC-1,” “CC-2,” and “CC-3”) stole at least 16 Utility Vehicles from over a dozen NYCHA developments throughout New York City.  Utility Vehicles are pieces of heavy equipment that NYCHA uses to complete regular construction and maintenance tasks. 

NUNEZ and others stole the Utility Vehicles in the middle of the night when NYCHA employees were not present.  They often used large trucks to carry out their scheme so that they could steal more than one Utility Vehicle at a time.  Photographs taken from surveillance video of two of the thefts are below:

Utility Vehicles often retail for anywhere from $25,000 to $65,000 each.  NUNEZ and others made hundreds of thousands of dollars by selling the Utility Vehicles to individuals who did not know that they were stolen. 

*                *                *

NUNEZ, 28, of the Bronx, New York, is charged with one count of conspiracy to commit theft of government property, which carries a maximum potential sentence of five years in prison, and one count of theft of government property, which carries a maximum potential sentence of 10 years in prison.

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

Mr. Williams praised the outstanding investigative work of DOI and the Special Agents and Investigative Analysts of the U.S. Attorney’s Office.

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

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

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

“John Costanzo, a DEA Special Agent on leave, and Manuel Recio, a former DEA Assistant Special Agent in Charge, trafficked sensitive, non-public, confidential law enforcement information in exchange for cash and other valuable financial benefits.  In doing so, they endangered public safety by disclosing the timing of sealed indictments and arrests of DEA targets.  Moments ago, Recio and Costanzo were convicted by a unanimous jury for their brazen violation of the public’s trust and for providing information that could have put their former colleagues and others in harm’s way.  This case underscores that corruption in the ranks of any law enforcement agency will be met with zero tolerance, and we stand with the overwhelming majority of law enforcement officers who carry out their service with integrity and honor.”

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 today charging DOUGLAS RAYMOND ARNTSEN with masterminding a fraudulent scheme to obtain more than $1.3 million in government-funded loans designed to provide relief to small businesses during the COVID-19 pandemic.  ARNTSEN was arrested this morning and presented this afternoon before U.S. Magistrate Judge Sarah Netburn.  The case is assigned to U.S. District Judge P. Kevin Castel.

U.S. Attorney Damian Williams said: “As alleged, Douglas Raymond Arntsen, a disbarred attorney, recruited multiple co-conspirators in a scheme to defraud the government out of more than $1 million by submitting fraudulent loan applications.  These loans were funded by the American taxpayers and meant to help small businesses struggling from the effects of the COVID-19 pandemic.  They were not meant to line people’s pockets for personal gain.  Today’s arrest demonstrates this Office’s ongoing commitment to holding accountable those who illegally profited from a national emergency.”

FBI Assistant Director in Charge James Smith said: “Arntsen allegedly recruited people who were facing financial stress amidst an unprecedented global pandemic into a fraudulent scheme to illegally obtain $1.3 million in COVID-19 relief funds intended for small businesses.  COVID-19 relief schemes abuse a government funded program that was designed to help small businesses who were struggling during a time of economic confusion.  The FBI will bring to justice anyone who attempted to fraudulently exploit COVID-19 relief programs for their personal benefit.”

According to the allegations in the Indictment, which was unsealed today:[1]

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

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

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

ARNTSEN and his co-conspirators enriched themselves through the fraud.  In total, ARNTSEN and his co-conspirators obtained at least approximately $1.3 million in fraudulent loans and attempted to obtain hundreds of thousands of dollars of additional loans that the SBA declined to fund.  After one fraudulent loan was approved by the SBA, ARNTSEN texted a co-conspirator, in sum and substance, “Need how you want your bank checks.  Your chariot has arrived this morning.” 

*                *                *

ARNTSEN, 45, of Staten Island, New York, is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.

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

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

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced earlier today that RUSSELL DWAYNE LEWIS, a/k/a “Clifford Ari Getz,” a/k/a “Clifford Ari Getz Cohen,” a/k/a “Ari Getz,” a/k/a “Aryeh Getz,” was sentenced by U.S. District Chief Judge Laura Taylor Swain to 102 months in prison for defrauding multiple individuals out of millions of dollars over a period of years, using several aliases and stolen identities.  LEWIS previously pled guilty to two counts of wire fraud and one count of aggravated identify theft.

U.S. Attorney Damian Williams said: “Russell Dwayne Lewis orchestrated a sophisticated fraud and stolen identity scheme to engage in a pattern of serial fraud, seeking to defraud friends, associates, and a major corporation by lying about his identity, wealth, and business activities.  As today’s sentence demonstrates, serial fraudsters like Lewis will be caught and brought to justice for their crimes.”

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

Between 2016 and 2020, RUSSELL DWAYNE LEWIS, a/k/a “Clifford Ari Getz,” a/k/a “Clifford Ari Getz Cohen,” a/k/a “Ari Getz,” a/k/a “Aryeh Getz,” engaged in a series of brazen schemes to misrepresent his identity, his wealth, and his professional and personal background in order to defraud multiple individuals and at least one corporate entity.  LEWIS used aliases for years, utilizing the name, birth date, and social security number of real individuals to perpetrate his schemes.  LEWIS told increasingly outrageous lies to individuals around him, including a close friend of many years, an individual who turned to him for his claimed expertise in astrology, and representatives of a major company he falsely purported to intend to purchase.

LEWIS repeatedly and falsely claimed that he was a billionaire businessman in order to commit several different frauds, including by soliciting “investments” from his victims totaling millions of dollars over the course of years.  As part of his fraudulent investment schemes, he defrauded and attempted to defraud friends, associates, and representatives of a major corporation.  In particular, LEWIS stole more than $3 million from one victim, more than half a million dollars from another, and fraudulently attempted to acquire a corporate entity in bankruptcy proceedings for $290 million.

This case resulted in LEWIS’s third felony conviction for fraud and theft offenses.

*                *                *

In addition to the prison term, LEWIS, 53, of Los Angeles, California, was sentenced to three years of supervised release and ordered to pay restitution in the amount of $3,788,143.58 and to forfeit the same amount of ill-gotten gains.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and thanked the Beverly Hills Police Department for its exceptional investigative assistance.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ALEXANDER GULKAROV pled guilty today to conspiracy to commit bribery, conspiracy to commit healthcare fraud, and aggravated identity theft in connection with his orchestration of a $40 million fraud targeting no-fault automobile insurance companies.  GULKAROV further admitted to obstructing law enforcement’s investigation by fabricating documents and intimidating witnesses.

U.S. Attorney Damian Williams said: “Alexander Gulkarov was one of the leaders of a multifaceted scheme to defraud automobile insurance companies; bribe hospital employees, 911 dispatchers, and others; launder hundreds of thousands of dollars; and obstruct law enforcement.  This complex scheme resulted in over $40 million in losses, which Gulkarov used to fund his lavish lifestyle, taking luxury vacations and renovating his multimillion-dollar home.  This Office has no tolerance for those who cheat the system to wrongfully enrich themselves, and we will continue to dismantle wide-ranging schemes such as this one.”

According to the Information to which GULKAROV pled guilty, the plea agreement, and statements made in court:  

The Healthcare Fraud Scheme

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

From 2014 through 2021, GULKAROV and others (collectively, the “Clinic Controllers”) agreed that they would unlawfully own, run, and profit from medical clinics in the New York area and that GULKAROV would also profit from pharmacies in the New York area that were unlawfully owned and controlled by other Clinic Controllers.  GULKAROV knew that clinics and pharmacies are unable to bill insurance companies for No-Fault benefits if the medical facilities are controlled by non-physicians.  GULKAROV nonetheless agreed with others to submit bills to insurance companies falsely representing that the clinics were owned and operated by licensed medical practitioners and for medical practitioners to lie under oath during Examinations under Oath about the ownership, control, and finances of the clinics.  GULKAROV personally coached medical practitioners to lie under oath.  GULKAROV and his fellow Clinic Controllers unlawfully obtained from insurance companies at least $40,000,000 as part of the scheme.

In connection with the scheme described above, GULKAROV personally approached medical practitioners, including physicians, and directed them to prescribe unnecessary medical treatments (including MRIs, EMG/NCV testing, spinal injections, and computerized radiologic mensuration analysis), unnecessary durable medical equipment (including cervical home traction devices and lumbar back support), and medically unnecessary medications (including prescription strength painkillers, topical creams, and topical gels).  GULKAROV received kickbacks from MRI facilities, pain management doctors, and other specialized care providers, who performed these unnecessary medical treatments.  GULKAROV further personally arranged for the unnecessary medications to be filled at pharmacies under the control of other Clinic Controllers.  The medical practitioners provided necessary procedures and treatments to patients as well.

GULKAROV also overbilled insurance companies for treatments provided by medical practitioners.  In connection with the scheme, GULKAROV owned and operated a billing company called “Billing for You.”  Billing for You submitted bills to insurance companies overstating the amount of time that practitioners spent treating patients.  Billing for You also used improper, unlisted billing codes to bill insurance companies in excess of what is permitted under No-Fault regulations.

The Bribery Scheme

GULKAROV and his fellow Clinic Controllers further agreed to pay bribes in connection with the above-described scheme.  From at least 2014 through November 2019, GULKAROV agreed with others to pay bribes to hospital employees, 911 dispatchers, and other individuals for the confidential names and numbers of motor vehicle accident victims.  As part of the scheme, GULKAROV and others provided approximately $150,000 for the creation of a call center, operated by Anthony Rose, a/k/a “Todd Chambers,” that called victims and lied to them to induce victims to receive medical treatment at, among other places, clinics controlled by GULKAROV and his associates.  GULKAROV further personally paid Anthony Rose hundreds of thousands of dollars in bribe payments in cash.

As part of the scheme, GULKAROV arranged for a New York City police officer to provide confidential information from New York City Police Department (“NYPD”) servers.  In particular, this officer sent GULKAROV over 400 photos of confidential NYPD motor vehicle accident reports using the encrypted messaging application, WhatsApp.  GULKAROV then re-transmitted the reports to Rose and others so that they could call patients, lie to them, and direct them to clinics controlled by GULKAROV and others.

Money Laundering and Obstruction Conduct

GULKAROV laundered the proceeds of the bribery and healthcare fraud from the bank accounts of the medical clinics and pharmacies to personal accounts using a variety of methods.  Among other things, GULKAROV personally told medical practitioners to sign blank checks from the clinics’ bank accounts, which GULKAROV used to pay personal expenses such as luxury vacations around the world, expensive meals, jewelry, and parties.  GULKAROV also used the blank checks to pay for hundreds of thousands of dollars of construction-related expenses for this three-story, multimillion-dollar home in Queens, New York.

GULKAROV arranged for checks from the clinics’ bank accounts to be cashed at over a dozen shell companies under his control or the control of co-conspirators, including, for instance, “Sign N Drive Auto GRP,” “Transport on Wheels,” and “Sancus Consulting & Trading Inc.”  Over two dozen of these shell companies were opened by foreign nationals, who entered the country on tourism visas, opened bank accounts for the shell companies, provided the debit cards to GULKAROV’s coconspirators, and then left the country.

GULKAROV additionally agreed to use Wisnicki & Associates and Wisnicki Neuhauser (collectively, the “Wisnicki Firm”) to launder proceeds from the No-Fault scheme.  GULKAROV and his fellow Clinic Controllers wrote over $150,000 in checks to the Wisnicki Firm from the No-Fault clinics’ bank accounts.  The Wisnicki Firm did not provide any legal services to the No-Fault clinics.  Instead, the Wisnicki Firm used this money to purchase real estate for one of GULKAROV’s coconspirators.  GULKAROV and his coconspirators deducted the payments to the Wisnicki Firm on the clinics’ tax returns as legal expenses.

Lastly, GULKAROV engaged in a multi-month obstruction scheme beginning in February 2021.  In February and March 2021, the Government served grand jury subpoenas on the medical practitioners involved in the No-Fault scheme.  GULKAROV immediately contacted at least half-a-dozen of his coconspirators and ordered them not to speak with law enforcement.  In return, GULKAROV gave his coconspirators money to pay for attorneys.  GULKAROV also obtained the phones of multiple practitioners and deleted his communications with them from their devices. 

Thereafter, on or about April 1, 2021, the Government served a grand jury subpoena on the Wisnicki Firm for documentation surrounding the $150,000 in payments made from the clinics to the Wisnicki Firm.  GULKAROV agreed with others that the Wisnicki Firm would fabricate retainer agreements for transmission to the grand jury.  The fabricated retainer agreements, which were backdated to 2016 and 2017, falsely represented that the No-Fault clinics had retained the Wisnicki Firm for legal services.

During the following months, in or about April and May 2021, GULKAROV approached multiple medical practitioners and ordered them to sign the backdated, fabricated retainer agreements.  The medical practitioners complied.  GULKAROV also provided these medical practitioners with checks, written from the Wisnicki Firm, returning the purported “retainer fees” paid to the Wisnicki Firm.  GULKAROV ordered the medical practitioners to deposit the checks, withdraw the money in small cash increments, and return the cash to GULKAROV.  At least one medical practitioner complied.

*                *                *

ALEXANDER GULKAROV, 37, of Queens, New York, pled guilty to one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison; one count of conspiracy to commit healthcare fraud, which carries a maximum sentence of five years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to run consecutively to any other prison term imposed.  As part of his plea agreement with the Government, GULKAROV agreed to pay forfeiture of $40,000,000 and restitution of $40,000,000.

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

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

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

“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history – a multibillion-dollar scheme designed to make him the King of Crypto – but while the cryptocurrency industry might be new and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time.  This case has always been about lying, cheating, and stealing, and we have no patience for it.  

When I became U.S. Attorney, I promised we would be relentless in rooting out corruption in our financial markets.  This is what relentless looks like.  This case moved at lightning speed – that was not a coincidence, that was a choice.  This case is also a warning to every fraudster who thinks they’re untouchable, that their crimes are too complex for us to catch, that they are too powerful to prosecute, or that they are clever enough to talk their way out of it if caught.  Those folks should think again, and cut it out.  And if they don’t, I promise we’ll have enough handcuffs for all of them.

This verdict would not have been possible without the amazing work by the career prosecutors from my Office and the FBI agents who have given their all for this case.  We have pushed them hard, and they have delivered every step of the way.  They are the best of the best, and I am grateful for them.

This case has received a tremendous amount of attention, and I understand why that is, but the women and men of the Southern District of New York consistently deliver outstanding public service on behalf of the American people – without fear or favor and often without any public recognition.  They do it because they believe in the rule of law, because they love this country, and because they are patriots.   I am proud to serve with them.” 

*                *                *

Bankman-Fried, 31, of Stanford, California, was convicted of two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years in prison.  He was also convicted of conspiracy to commit commodities fraud and conspiracy to commit securities fraud, each of which carries a maximum sentence of five years in prison.

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

Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the arrest of GIUSEPPI MICCIARI.  MICCIARI is charged with distributing, receiving, and possessing child pornography.  MICCIARI was presented today before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court.

U.S. Attorney Damian Williams said: “Giuseppi Micciari’s alleged conduct is vile and disturbing, especially given that, as a teacher, Micciari was entrusted with the care of children.  Investigating and prosecuting those who sexually exploit children remains of paramount importance to this Office, and we will do everything in our power to protect the children of our community.”

HSI Special Agent in Charge Ivan J. Arvelo said: “Giuseppi Micciari was entrusted with our most vulnerable segment of society – our children.  His alleged depraved acts betrayed that trust.  Not only is Micciari accused of collecting and sharing of these heinous acts, but also attempting to hack into a student’s social media.  HSI New York and our law enforcement partners will continue to work tirelessly to ensure predators seeking to exploit children face just consequences for their actions.”

According to the allegations in the Complaint filed on October 31, 2023, in White Plains federal court and unsealed today:[1]

A review of MICCIARI’s phone revealed the existence of numerous videos and images containing child sexual abuse material.

MICCIARI’s phone revealed the use of Telegram, an internet and cloud-based instant messaging service that permits its users to exchange messages, share media and files, and hold private and group voice or video calls.  Among the communications contained in the Telegram app were communications revealing a request by MICCIARI’s phone for an “account hack” of an individual’s Snapchat account, as well as communications in which another individual asked, “what age teen content you have,” and MICCIARI’s phone replied, “there one big Mega 10-17.”

A U.S. passport application submitted in connection with the issuance of a U.S. passport for GIUSEPPI MICCIARI identified MICCIARI’s occupation as “teacher.”

*                *                *

MICCIARI, 27, of Yorktown, New York, is charged with one count of receipt and distribution of child pornography and one count of possession of child pornography.  Both counts carry a maximum sentence of 20 years in prison.

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 efforts of HSI, the U.S. Secret Service, the New York State Police, the New York City Police Department, the Westchester County District Attorney’s Office, the Rockland County District Attorney’s Office, and the Yorktown Police Department.  He added that the investigation is ongoing.           

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ANDREW GARSON, a public relations executive, pled guilty today in Manhattan federal court in connection with a scheme to defraud his former employers of millions of dollars.  Pursuant to his plea agreement with the Government, GARSON agreed to pay $3,754,068 in restitution to the victims of his crime.  GARSON pled guilty before U.S. District Judge Laura Taylor Swain and is scheduled to be sentenced on February 28, 2024. 

U.S. Attorney Damian Williams said: “Andrew Garson betrayed his employers time and time again, causing millions of dollars in losses, and when he no longer had an employer to defraud, he applied for and received thousands of dollars in unemployment benefits to which he was not entitled.  Garson’s fraud scheme was multifaceted and manipulative, and he has now admitted to greedily exploiting his employers’ trust to line his own pockets.”

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

Between approximately 2014 and 2018, GARSON was employed as an executive at two different marketing public relations agencies located in New York, New York, the first between approximately 2014 and January 2018 (“PR Firm-1”), and the second between approximately January 2018 and November 2018 (“PR Firm-2”).  In his respective roles at those two firms, GARSON was responsible for working directly with clients, coordinating various marketing and public relations campaigns, and managing vendor relationships in connection with such campaigns.  In or about July 2018, GARSON was named a “40 Under 40” public relations executive by PR Week Magazine.  However, GARSON engaged in a scheme to lie to his two employers for years, causing his employers millions of dollars in losses.         

One such series of misrepresentations by GARSON resulted in the unauthorized payment by PR Firm-2 of expenses owed to vendors in connection with marketing campaigns led by GARSON while employed at PR Firm‑1.  Over the course of GARSON’s first several months of employment at PR Firm-2, GARSON lied to certain vendors, stating that PR Firm-2 had agreed to cover expenses still owed to those vendors related to GARSON’s prior projects at PR Firm-1.  In fact, PR Firm-2 did not authorize the payment of those expenses.  In order to cause PR Firm-2 to effect payment of these expenses, GARSON created fraudulent invoices falsely claiming that the vendors were due payment for work performed on PR Firm-2 projects.  In this fashion, GARSON caused PR Firm-2 to pay substantial expenses to vendors with which GARSON had worked on projects while employed at PR Firm-1.

In addition, while employed at PR Firm-1, GARSON used his corporate credit card for unauthorized personal expenses.  For example, in or about August 2017, GARSON purchased a luxury watch using his PR Firm-1 corporate credit card for approximately $14,000, claiming that the expense related to event production for a client marketing event.  GARSON later sold the watch to a New Jersey jewelry store in or about December 2018 for approximately $4,000.  GARSON deposited the money that he earned from the sale of the watch into his personal bank account.

GARSON similarly defrauded PR Firm-2 with respect to the unauthorized use of his corporate credit card.  For example, GARSON submitted expense reports to PR Firm-2 in which he claimed the same expense for reimbursement on more than one occasion, causing PR Firm-2 to reimburse GARSON twice for the same expenditure.

After uncovering certain aspects of the fraud scheme perpetrated by GARSON, PR Firm-2 terminated GARSON in or about November 2018.  While applying for unemployment insurance program benefits from the New York State Department of Labor following his termination, GARSON lied regarding the circumstances surrounding his separation from PR Firm-2.  As a result of his misrepresentations, between in or about December 2018 and in or about March 2019, GARSON received a total of over $5,000 in unemployment insurance benefits to which he was not entitled.

*                *                *

GARSON, 41, of Rockville Centre, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. 

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

Mr. Williams praised the outstanding investigative work of 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. Attorney Timothy V. Capozzi is in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that BRIJESH GOEL, a former investment banker at Goldman Sachs, was sentenced to 36 months in prison for insider trading and obstruction of justice.  GOEL was previously convicted after a seven-day trial before U.S. District Judge P. Kevin Castel.

U.S. Attorney Damian Williams said: “Today’s sentence vindicates the integrity of our financial markets and the investors who play by the rules and serves as a reminder that crime doesn’t pay.  If you try to cheat the system by engaging in insider trading, you will be punished, and if you try to cover your tracks while under investigation, you only make matters worse.”

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

BRIJESH GOEL was an investment banker at Goldman Sachs in New York, New York.  In that position, GOEL received confidential internal emails directed to Goldman Sachs’ Firmwide Capital Committee and Credit Markets Capital Committee, which contained detailed information and analysis about potential merger-and-acquisition transactions that Goldman Sachs was considering financing.  In violation of the duties that he owed to Goldman Sachs, GOEL misappropriated that confidential information and tipped a friend, Akshay Niranjan, who worked at another investment bank in New York, New York, with the names of potential target companies from those internal emails during in-person meetings such as when the two met at the New York Health and Racquet Club.  Niranjan then used that confidential information to trade call options, including short-dated, out-of-the-money call options, in brokerage accounts that were in the name of Niranjan’s brother.  GOEL and Niranjan agreed to split the profits from their trading.  Between approximately 2017 and 2018, GOEL tipped Niranjan on at least six deals in which Goldman Sachs was involved, yielding total illegal profits of approximately $280,000. 

Between approximately May and June 2022, GOEL also obstructed investigations by a grand jury in the Southern District of New York and the U.S. Securities and Exchange Commission (“SEC”).  Specifically, GOEL deleted and asked Niranjan to delete text messages regarding the insider trading scheme, including during an in-person meeting that Niranjan consensually recorded.

*                *                *

In addition to the prison sentence, GOEL, 39, of New York, New York, was sentenced to three years’ supervised release and ordered to forfeit $85,000 and a restitution in an amount to be determined at a future date to Goldman Sachs.  GOEL was also ordered to pay a $75,000 fine.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams further thanked the SEC and the Financial Industry Regulatory Authority for their assistance and cooperation. 

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

Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced the unsealing of a five-count Indictment charging MANISHKUMAR PATEL in connection with a health care fraud and kickback scheme involving the sale of fraudulent prescriptions.  PATEL was arrested this morning in Pelham Manor, New York, and was presented this afternoon before U.S. Magistrate Judge Gary Stein.  The case is assigned to U.S. District Judge Schofield.

U.S. Attorney Damian Williams said: “As alleged, Manishkumar Patel ran a scheme to get rich by generating fraudulent prescriptions used to bill Medicare for millions of dollars in unnecessary healthcare expenses.  Today’s charges send a message: our Office and our law enforcement partners are dedicated to holding accountable anyone who tries to rip off critical healthcare programs like Medicare.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Certain violations of the Anti-Kickback Statute can result in the inducement of medically unnecessary durable medical equipment, medications, and laboratory tests, which can affect the availability of services for others and drive up the cost of health care for everyone.  Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”

As alleged in the Indictment:[1]

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

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

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

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

*                *                *

PATEL, 44, of Pelham Manor, New York, is charged with (i) conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison; (ii) health care fraud, which carries a maximum sentence of 20 years in prison; (iii) wire fraud, which carries a maximum sentence of 20 years in prison; (iv) conspiracy to violate the Anti-Kickback Statute, which carries a maximum sentence of five years in prison; and (v) violation of the Anti-Kickback Statute, 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 a judge.

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

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that AMIR BRUNO ELMAANI, a/k/a “Bruno Block,” the founder of the cryptocurrency “Oyster Pearl,” was sentenced to four years in prison, the maximum sentence allowed by statute, for tax offenses ELMAANI committed in connection with the Pearl token.  ELMAANI had previously pled guilty on April 5, 2023, before U.S. District Judge Colleen McMahon, who imposed today’s sentence.  In connection with his guilty plea, ELMAANI admitted that he had secretly minted and sold for his own gain Pearl cryptocurrency tokens, which caused the price of Pearl tokens to plummet, and that he did not pay income tax on certain cryptocurrency profits.  ELMAANI agreed that he caused a tax loss of over $5.5 million.   

U.S. Attorney Damian Williams said: “Amir Elmaani violated the duty he owed to pay taxes on millions of dollars of cryptocurrency profits, and he also violated the trust of investors in the cryptocurrency he founded.  Participants in the cryptocurrency markets must play by the rules, and this Office will be tireless in prosecuting those who do not.”

Based on the allegations in the Indictment, in the Superseding Information to which ELMAANI pled guilty, the plea agreement, and other statements made and documents filed in court:

In September and October 2017, ELMAANI began promoting online a new cryptocurrency known as Pearl tokens.  Using a variation of his online pseudonym “Bruno Block,” ELMAANI stated that he planned to develop an online data-storage platform, known as Oyster Protocol, which would allow users to purchase online data storage with Pearl tokens.  Instead of using his real name, ELMAANI operated almost exclusively online under the pseudonym “Bruno Block.”  ELMAANI concealed his true identity from his prospective employees and business associates and never met them in person.

In the fall of 2017 and thereafter, ELMAANI sold Pearl tokens to the investing public through an “initial coin offering” and on cryptocurrency market platforms.  ELMAANI announced that he intended to take a “founder’s share” of Pearl tokens for his own personal use.  ELMAANI owned and controlled the subsequently established company Oyster Protocol Inc. through a shell company not associated with his true name. 

In a statement issued under ELMAANI’s online pseudonym on June 7, 2018, ELMAANI stated that he was retaining millions of Pearl tokens as his “ownership stake” in Oyster Protocol, but that he had to move the tokens to a different cryptocurrency wallet “in order to avoid being double-taxed.”  In truth, ELMAANI did not report or pay tax on any of his cryptocurrency proceeds.  At various points, ELMAANI used friends and family as nominees to receive cryptocurrency proceeds and transfer them or U.S. currency to his own accounts. 

ELMAANI dealt substantially in precious metals, kept gold bars in a safe on a yacht he owned, and used large amounts of cash to pay personal expenses. 

In late October 2018, although the number of Pearl tokens was purportedly fixed, ELMAANI used his access to the blockchain technology used to create Pearl tokens to mint new tokens, which he took for his own personal use (the “Exit Scheme”).  ELMAANI thereby increased the total volume of Pearl tokens.  Shortly after creating the new tokens, ELMAANI converted the Pearl tokens he had obtained to other types of cryptocurrency on an online marketplace or exchange.  As a result of ELMAANI’s conduct, trading in Pearl tokens halted on that exchange and the price of Pearl tokens held by investors dropped substantially.  Pearl tokens were subsequently de-listed from the primary exchange where they were traded.  Subsequent to the Exit Scheme, ELMAANI used his friends and family to receive cryptocurrency and to transfer funds to a bank account in his name. 

While ELMAANI initially attempted to hide even “Bruno Block’s” involvement in the Exit Scheme, he later effectively admitted to the conduct online under his “Bruno Block” pseudonym.  In a recorded call with the then-chief executive officer (“CEO”) of Oyster Protocol Inc. after the Exit Scheme, the CEO asked ELMAANI why he had to take the additional new Pearl tokens if he had already cashed out millions of dollars’ worth of Pearl tokens in the past.  ELMAANI responded, in part, that “taxes are pretty nasty.”   ELMAANI carried out the Exit Scheme only days before the exchange he had used to cash out his Pearl tokens was set to require “know your customer” personal identifying information from its users. 

In connection with his plea, ELMAANI admitted in the plea agreement that:

In or about 2017, using the alias “Bruno Block,” I began an online project called the “Oyster Protocol.”  In support of this project, an initial coin offering (“ICO”) was held in or about October 2017, in which a token named “Pearl” (“PRL”) was issued.  I stated in public forums that after the ICO, the supply of PRL would not increase, and that the smart contract that created PRL would be “locked.”  Contrary to these statements, on or about October 29, 2018, I used the smart contract to mint new PRL, without telling anyone, including others who worked on the Oyster Protocol project.  I then sold these newly minted PRL on a digital trading platform.  I was aware that the counterparties who were buying these newly-minted PRL likely were not aware of my reopening of the smart contract and did not know that I had just substantially increased the total supply of PRL.  After Oyster management learned of my reopening of the smart contract and alerted the public, the price of PRL plummeted.       

ELMAANI filed a false 2017 tax return stating that he had only approximately $15,000 of income from a “patent design” business, and he filed no return and reported no income to the IRS in 2018.  Nevertheless, ELMAANI spent, in 2018, over $10 million for the purchase of multiple yachts, $1.6 million at a carbon-fiber composite company, hundreds of thousands of dollars at a home improvement store, and over $700,000 for the purchase of two homes, one of which was titled in the name of a shell company and the other in the name of two of his associates.  The tax loss to the United States from ELMAANI’s conduct was approximately $5,523,794.

*                *                *

In addition to the prison term, ELMAANI, 31, of Martinsburg, West Virginia, was sentenced to one year of supervised release and was ordered to pay restitution in the amount of $5,523,794.

Mr. Williams praised the investigative work of the Internal Revenue Service and the Federal Bureau of Investigation and also thanked the Securities and Exchange Commission and the Commodity Futures Trading Commission for their assistance. 

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

Damian Williams, the United States Attorney for the Southern District of New York, and John Gay, the Inspector General of the Port Authority of New York and New Jersey (the “Port Authority”), announced the unsealing of an Indictment charging ALEKSANDR DEREBENETC, a/k/a “Sasha Novgorod,” and KIRILL SHIPULIN, a/k/a “Kirill Russia,” with two counts of conspiracy to commit computer intrusions.  The Indictment charges that DEREBENETC and SHIPULIN hacked the electronic taxi dispatch system (the “Dispatch System”) at John F. Kennedy International Airport (“JFK”).  Taxi drivers are required to wait in a holding lot at JFK before they are dispatched to pick up a fare.  A computer system ensures that taxis are dispatched in the order in which they arrived.  DEREBENETC and SHIPULIN conspired with DANIEL ABAYEV and PETER LEYMAN to hack the Dispatch System and move certain taxis to the front of the line in exchange for payment.  ABAYEV pled guilty today to one count of conspiracy to commit computer intrusions, and LEYMAN pled guilty to one count of conspiracy to commit computer intrusions on October 4, 2023.

U.S. Attorney Damian Williams said: “As alleged in the indictment, these four defendants conspired to hack into the taxi dispatch system at JFK airport.  Cyber hacking can pose grave threats to infrastructure systems that we rely on every day, and our Office is dedicated to pursuing criminal hackers, whether they be in Russia or here in New York.”

Port Authority Inspector General John Gay said: “The significant charges in this alleged hacking conspiracy show that the Port Authority takes seriously our obligation to safe and equitable operations across our facilities.  As alleged, this brazen scheme corrupted a system that hard-working taxi drivers rely on to earn a living, all so the defendants could make some extra cash.  We are grateful for our partnership with the U.S. Attorney’s Office for the Southern District of New York.”

As alleged in the Indictment:[1]

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

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

Beginning in 2019, DEREBENETC, SHIPULIN, ABAYEV, and LEYMAN explored and attempted various mechanisms to access the Dispatch System, including bribing someone to insert a flash drive containing malware into computers connected to the Dispatch System, obtaining unauthorized access to the Dispatch System via a Wi-Fi connection, and stealing computer tablets connected to the Dispatch System.  The members of the Hacking Scheme also sent messages to each other in which they explicitly discussed their intention to hack the Dispatch System.  For example, on or about November 10, 2019, ABAYEV messaged the following to DEREBENETC in Russian: “I know that the Pentagon is being hacked[.].  So, can’t we hack the taxi industry[?]”

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

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

*                *                *

DEREBENETC, 30, of Nizhniy Novgorod, Russia, and SHIPULIN, 30, of Moscow, Russia, are each charged with two counts of conspiracy to commit computer intrusion.  The charges carry a maximum sentence of 10 years in prison. 

ABAYEV, 47, and LEYMAN, 49, both of Queens, New York, each pled guilty to one count of conspiracy to commit computer intrusion, which carries a maximum sentence of five years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.  LEYMAN is scheduled to be sentenced by Judge Crotty on January 11, 2024, at 2:30 p.m., and ABAYEV is scheduled to be sentenced by Judge Crotty on February 12, 2024, at 3:00 p.m.  DEREBENETC and SHIPULIN remain at large.

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

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

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

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitutes 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, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of a Complaint charging TERRENCE ALLEN with illegally possessing ammunition in connection with a shooting by ALLEN in the courtyard of the Melrose housing complex in the Bronx on the evening of September 21, 2023.  ALLEN was arrested today and will be presented this afternoon before U.S. Magistrate Judge Katharine H. Parker.

U.S. Attorney Damian Williams said: “As alleged, Terrence Allen brazenly fired 13 shots from a handgun as he casually strolled down a walkway in the courtyard of a residential building in the Bronx.  New Yorkers deserve to be safe from gun violence.  Thanks to our partners at the NYPD and the FBI, the defendant has now been apprehended.”  

FBI Assistant Director in Charge James Smith said: “As we allege, in the shadow of a housing complex’s playground, Allen senselessly fired a gun, threatening the community’s right to live in safety.  Along with our law enforcement partners, the FBI will hold anyone who endangers innocent lives accountable in the criminal justice system.”

NYPD Commissioner Edward A Caban said: “Today’s arrest is the result of a thorough, intelligence-led investigation by the NYPD and our law enforcement partners that is just one layer of our continuing work to eradicate gun violence in New York City.  We are relentless in these efforts because the lives and quality of life of all New Yorkers depend on it.”

According to the allegations in the Complaint:[1]

On or about September 21, 2023, at approximately 8:28 p.m., TERRENCE ALLEN walked through the courtyard of the Melrose housing complex.  As he walked, ALLEN discharged a firearm multiple times by shooting to his right.  This still image from surveillance camera footage shows ALLEN firing one of those shots, as well as an individual seated on a park bench just a few yards to ALLEN’s left. 

Upon canvassing the scene of the shooting, NYPD officers recovered 13 9mm shell casings.    

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

*                *                *

TERRENCE ALLEN, 41, of Freeport, New York, is charged with 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 FBI and NYPD.  Mr. Williams also thanked the Bronx County District Attorney’s Office for its assistance in this matter.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ELIZABETH TORRES was sentenced to one year and one day in prison today for a decade-long workers’ compensation fraud scheme.  TORRES duped the U.S. Department of Labor (“DOL”) into paying her more than $600,000 in federal disability benefits by falsely claiming that she had a debilitating knee injury and therefore essentially could not work when in fact TORRES was not disabled and was even employed full-time for several years during her scheme.  TORRES’s sentence was imposed by U. S. District Judge Sidney H. Stein before whom she previously pleaded guilty.

U.S. Attorney Damian Williams said: “The federal workers’ compensation program protects qualifying employees who suffer legitimate work injuries or illness.  But some individuals, like Elizabeth Torres, take advantage of this disability benefit program.  For 10 years, Torres lied to the DOL in order to steal more than $600,000 in disability benefits.  For her criminal conduct, Torres has now been sentenced to prison.”

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

From approximately late 2009 until early 2020, ELIZABETH TORRES sought and received compensation under the Federal Employees’ Compensation Act (“FECA”).  FECA provides benefits to civilian federal employees who sustain an injury or illness as a result of their employment.  FECA benefits are administered by the DOL’s Office of Workers’ Compensation Programs (“OWCP”).  To receive FECA benefits, a claimant must prove that she is disabled by furnishing medical documentation and other evidence with her claim.

Until approximately 2006, TORRES worked as a Corrections Officer for the Bureau of Prisons (“BOP”).  BOP employees are eligible to receive FECA benefits.  For several years, TORRES submitted annual forms to OWCP seeking such benefits.  In these forms, TORRES lied in various respects, including by claiming that: (i) she was significantly disabled; (ii) she was not working or performing volunteer work; (iii) she was not receiving any pay for various years; (iv) she was not involved in any business enterprise; and (v) a dependent was living with her for various years.  More specifically, and among other things, TORRES claimed that she had a debilitating knee injury and therefore was essentially incapable of performing any work because she experienced pain and swelling within 30 minutes of sitting or standing.  But in fact, TORRES was not so disabled, and she had an array of volunteer and paid work from at least approximately 2010 through 2019.  Among other roles, TORRES was employed full-time from approximately 2015 through 2019 at a drug and alcohol addiction treatment center (the “Clinic”) in New York City, where she served as the Program Director for several years.  On one occasion in 2019, TORRES was caught on video dancing with ease in high-heeled boots on the sidewalk outside of the Clinic.  To conceal her Clinic employment from OWCP, TORRES was paid indirectly through an entity, and her salary payments were disguised as “rent.” 

On the basis of TORRES’s false representations to OWCP, TORRES received benefit payments of more than approximately $4,000 per month for 10 straight years, totaling over $600,000.

*                *                *

In addition to her prison sentence, TORRES, 57, of Brooklyn, New York, was sentenced to two years of supervised release and ordered to pay restitution of $603,372.92.

Mr. Williams praised the outstanding investigative efforts of DOL’s Office of Inspector General and the Federal Bureau of Investigation.

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

U.S. Attorney Damian Williams said: “Moments ago, a jury unanimously found that Neil Phillips intentionally manipulated the Foreign Exchange, or ‘FX’ market — the world’s largest decentralized financial market — in order to trigger a $20 million windfall for his hedge fund under a barrier option.  The policing of the financial markets is critical to the health and sanctity of our economy.  I commend the Securities and Commodities Fraud Task Force of this Office for continuing to be a global law enforcement leader in ensuring fair market activity for investors at every level.”

Damian Williams, the United States Attorney for the Southern District of New York, announced today that a grand jury in Manhattan federal court returned a Superseding Indictment charging DARIUS A. PADUCH, a New York–area urologist, with seven counts of inducing a person to travel to engage in unlawful sexual activity and six counts of inducing a minor to engage in unlawful sexual activity, relating to his yearslong sexual abuse of eight victims who were his patients, six of whom were minors during part of the period of abuse.  On April 11, 2023, PADUCH was arrested after a four-count Indictment was unsealed charging him with sexually abusing two former patients who were minors during part of the period of abuse.  PADUCH has been detained on his federal charges since his arrest.  PADUCH’s case is assigned to U.S. District Judge Ronnie Abrams.  Trial is scheduled to commence on April 22, 2024.

U.S. Attorney Damian Williams said: “As alleged, Darius A. Paduch was a serial sexual abuser.  Purporting to provide clinical care, Paduch instead violated patients — including minors — to gratify his own sexual desires.  As alleged in today’s Superseding Indictment, Paduch’s abuse was pervasive, spanning over a decade and victimizing patients inside and outside the clinical setting.  With today’s additional charges, my Office seeks to hold Paduch accountable for the full measure of his reprehensible conduct.”

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

Over the course of several years, PADUCH sexually abused multiple male patients, including minor male patients, while conducting purported urological examinations in his capacity as a medical doctor employed by a prestigious medical institution in New York, New York (“Medical Institution-1”).

From at least in or about 2007 through at least in or about 2019, PADUCH, while working as a urologist, enticed and induced multiple victims to travel to his medical offices at Medical Institution-1, so PADUCH could, among other things, sexually abuse the victims.  PADUCH also induced victims to travel to New Jersey where he abused and assaulted the victims under the guise of medical care.  In or about 2019, PADUCH began practicing at a different hospital located in Long Island, New York (“Medical Institution-2”), where he continued to sexually abuse patients.  PADUCH used his position as a urologist at prominent medical institutions in New York to make or attempt to make the victims believe that the sexual abuse he inflicted on them was medically necessary and appropriate, when, in fact, it was not.  PADUCH often directed the victims to schedule follow-up visits, and he instructed victims to return to see him again.  As a result, some of the victims attended many appointments with PADUCH over the course of multiple years, at which PADUCH repeatedly abused them.

As alleged, PADUCH induced six victims to travel to New York, New York, from or through another state to engage in unlawful sexual activity — in other words, his abuse of the victims.  As alleged in Count Six, PADUCH induced one victim to travel from New York to another state to engage in unlawful sexual activity.  PADUCH also used a telephone and other means of interstate commerce to induce six minor victims to engage in the unlawful sexual activity.

If you have been victimized by DARIUS PADUCH in any way or have any additional information about his alleged illegal behavior, please call 1-800-CALL-FBI or reach out at www.tips.fbi.gov.

*                *                *

PADUCH, 56, of North Bergen, New Jersey, is charged as follows:

Count

Charge

VICTIM

Minimum/Maximum Penalties

1

Inducement of a Victim to Travel to Engage in Unlawful Sexual Activity

MINOR VICTIM-1

20 years in prison

2

Inducement of a Victim to Travel to Engage in Unlawful Sexual Activity

MINOR VICTIM-2

20 years in prison

3

Inducement of a Victim to Travel to Engage in Unlawful Sexual Activity

MINOR VICTIM-3

20 years in prison

4

Inducement of a Victim to Travel to Engage in Unlawful Sexual Activity

MINOR VICTIM-4

20 years in prison

5

Inducement of a Victim to Travel to Engage in Unlawful Sexual Activity

MINOR VICTIM-5

20 years in prison

6

Inducement of a Victim to Travel to Engage in Unlawful Sexual Activity

VICTIM-6

20 years in prison

7

Inducement of a Victim to Travel to Engage in Unlawful Sexual Activity

VICTIM-7

20 years in prison

8

Inducement of a Minor to Engage in Unlawful Sexual Activity

MINOR VICTIM-1

Life in prison

Mandatory minimum of 10 years in prison

9

Inducement of a Minor to Engage in Unlawful Sexual Activity

MINOR VICTIM-2

Life in prison

Mandatory minimum of 10 years in prison

10

Inducement of a Minor to Engage in Unlawful Sexual Activity

MINOR VICTIM-3

Life in prison

Mandatory minimum of 10 years in prison

11

Inducement of a Minor to Engage in Unlawful Sexual Activity

MINOR VICTIM-4

Life in prison

Mandatory minimum of 10 years in prison

12

Inducement of a Minor to Engage in Unlawful Sexual Activity

MINOR VICTIM-5

Life in prison

Mandatory minimum of 10 years in prison

13

Inducement of a Minor to Engage in Unlawful Sexual Activity

MINOR VICTIM-8

Life in prison

Mandatory minimum of 10 years in prison

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

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

The prosecution is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Marguerite B. Colson, Elizabeth A. Espinosa, and Jun Xiang are in charge of the prosecution. 

The charges contained in the Superseding 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 descriptions 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 ROBERT SCHIRMER 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.  SCHIRMER pled guilty today to conspiracy to commit wire fraud and honest services fraud before U.S. District Judge Jesse M. Furman.

U.S. Attorney Damian Williams said: “Polar senior executive Robert Schirmer admitted his guilt in a scheme to defraud his employer that lasted more than a decade.  Today’s plea reflects our Office’s longstanding commitment to rooting out corporate fraud.” 

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

From at least in or about 2009 through in or about July 2021, ROBERT SCHIRMER and nine other individuals participated in a massive scheme to defraud Polar.  At all relevant times, SCHIRMER and three codefendants were senior executives of Polar (the “Executive Defendants”), and six codefendants (the “Vendor Defendants”) owned and operated various Polar vendors and customers.  The Executive Defendants agreed to accept millions of dollars in kickbacks from the Vendor Defendants, and also reaped substantial financial benefits as a result of their secret ownership interests in certain Polar vendors, in exchange for ensuring that those vendors received favorable business arrangements with Polar.  The fraud they perpetrated — which involved a substantial portion of Polar’s senior management and at least 10 customers and vendors of Polar — led to pervasive corruption of Polar’s business, touching nearly every aspect of the company’s operations, for over a decade. 

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

*                *                *

SCHIRMER, 58, of Port Jefferson Station, New York, pled guilty to one count of conspiring to commit wire fraud and honest services wire fraud, which carries a maximum sentence of five years in prison.  SCHIRMER also agreed to pay forfeiture in the amount of $983,759.32 and to make restitution to Polar in the amount of $9,340,729.

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.  SCHIRMER is scheduled to be sentenced by Judge Furman on February 13, 2024, at 3:00 p.m.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that MALEK BALOUCHZEHI, a/k/a “Malek Khan,” was sentenced to 20 years in prison for conspiring to import heroin into the United States and distributing heroin for importation into the United States.  BALOUCHZEHI was convicted after a one-week jury trial in May 2023 before U.S. District Judge Jesse M. Furman, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Malek Balouchzehi was in the business of peddling poison.  His drug trafficking operations had already brought large-scale quantities of deadly narcotics around the world for at least a decade, but when he sought to expand his operation to the United States, our law enforcement allies, in partnership with the career prosecutors of this Office, swiftly put an end to his life-endangering trade.”

According to court documents and the evidence presented at the trial of BALOUCHZEHI:

BALOUCHZEHI is an Iran-based drug trafficker.  In or about September 2019, BALOUCHZEHI and his associate began communicating with individuals whom BALOUCHZEHI believed were heroin traffickers interested in large quantities of heroin for importation into the United States, as well as methamphetamine for distribution in Australia.  Those individuals were, in fact, a confidential source working at the direction of the Drug Enforcement Administration (“DEA”) and an undercover DEA agent posing as a New York-based heroin distributor.  In December 2019, BALOUCHZEHI caused a sample of approximately two kilograms of heroin to be delivered in Mozambique with the understanding that those drugs would be transported to the United States for testing and sale.  Following this sample shipment, BALOUCHZEHI planned to supply larger quantities of heroin for importation to and distribution within the United States.  In meetings in Nairobi, Kenya, in October 2021, BALOUCHZEHI agreed to distribute ton quantities of heroin for importation to New York and to provide the heroin via maritime routes, using a fishing company to conceal his narcotics activities, in order to make millions in profits.  During these meetings in Nairobi, BALOUCHZEHI also described his prior international drug trafficking activities over the last decade, including transporting loads of thousands of kilograms of heroin, and showed photographs evidencing his large-scale trafficking operation.

*                *                *

In addition to the prison term, BALOUCHZEHI, 40, of Iran, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding efforts of the DEA’s Special Operations Division, Bilateral Investigations Unit, and New York Field Division; the DEA’s Nairobi, Maputo, Pretoria, Bucharest, and Jakarta Country Offices; the Kenyan National Police; the Mozambique National Criminal Investigation Services; and the Western Australia Police Force.  Mr. Williams also thanked the U.S. Department of Justice’s Office of International Affairs for its assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Kaylan E. Lasky, Michael J. Lockard, Kimberly J. Ravener, and Elinor L. Tarlow, with the assistance of Paralegal Specialist Kayla Collins, are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a Complaint charging MIGUEL DIAZ with firing a weapon outside a Bronx deli, wounding a victim in the arm.  DIAZ was arrested this morning and was presented today before U.S. Magistrate Judge Katharine H. Parker.

U.S. Attorney Damian Williams said: “As alleged, Miguel Diaz — who was previously convicted of reckless endangerment — fired a bullet outside a deli in the middle of the day at the corner of Edward L. Grant Highway and Jesup Avenue in the Bronx.  Thanks to the swift action of our law enforcement partners and the prosecutors of this Office, Diaz will now be held accountable for his alleged reckless and violent actions.”

NYPD Commissioner Edward A. Caban said: “The dedicated men and women of the NYPD, who have accomplished a 26 percent reduction in shootings so far this year in New York City, are still battling a scourge of gun violence that threatens everyone who lives, works, and visits here.  And just as New Yorkers expect and deserve, we and our law enforcement colleagues vow to keep working tirelessly to investigate and arrest anyone brazen enough to carry and shoot an illegal weapon on our streets.”

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

On October 4, 2023, at approximately 6:00 p.m., as captured by surveillance video, DIAZ walked southbound to the corner of Edward L. Grant Highway and Jesup Avenue and stopped for several minutes outside a Bronx deli.  As DIAZ’s victim emerged from the deli, DIAZ approached the victim from behind, pulled a firearm from his right pocket, and fired a shot.  DIAZ was then seen returning the firearm to his pocket and fleeing the scene.

Below are still images of DIAZ, as captured by surveillance video, showing DIAZ as he fired the gun:

NYPD officers recovered a 9mm FC Luger shell casing from the scene.  Below is a photograph of the recovered shell casing:

DIAZ was not permitted to possess ammunition because of a prior felony conviction for reckless endangerment.  DIAZ was released from state custody on June 1, 2023, after serving a sentence of nearly five years in prison.  The Bronx shooting occurred only four months later.

*                *                *

DIAZ, 40, of the Bronx, New York, is charged with possession of ammunition after a felony conviction, which carries a maximum sentence of 15 years in prison.

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

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

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Ryan T. Nees is in charge of the prosecution.

The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth 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 that ADEDAYO ILORI was sentenced today by U.S. District Judge Mary Kay Vyskocil to 25 years in prison for his participation in a sophisticated identity theft and COVID-19 loan fraud scheme.   

U.S. Attorney Damian Williams said: “Even while on bail for federal fraud offenses, Adedayo Ilori could not help but continue his repeated fraud and identity theft crimes.  He saw the hardships and disruption of the COVID-19 pandemic and the federal government’s efforts to address those in need as an opportunity for fraud.  He lined his own pockets and recklessly used the identities of dozens of victims.  Today’s sentence sends a message to Ilori and others engaged in similar crimes that such conduct, especially when it is repeated, will be severely punished.”

According to court filings and evidence introduced 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 who suffered 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 forgivable loans to small businesses for job retention and certain other expenses through the U.S. Small Business Administration’s Paycheck Protection Program (“PPP”).  Pursuant to the CARES Act, the amount of PPP funds a business was eligible to receive was determined by the number of employees employed by the business and their average payroll costs.  Businesses applying for a PPP loan were required to provide documentation to confirm that they had previously paid employees the compensation represented in the loan application.  The CARES Act also expanded the separate Economic Injury Disaster Loan (“EIDL”) Program, which provided small businesses with low-interest loans of up to $2 million to help overcome the temporary loss of revenue they experienced due to COVID-19.  To qualify for an EIDL loan under the CARES Act, the applicant must have suffered “substantial economic injury” from COVID-19.

From at least in or about August 2020 through at least in or about October 2021, ILORI and his co-defendant, Chris Recamier, engaged in a rampant COVID-19 loan fraud scheme.  Utilizing false identities, sham tax records, and corporate documents, ILORI and Recamier successfully obtained more than $1 million, and attempted to obtain more than $10 million, through the PPP and the EIDL Program.  In particular, ILORI and Recamier applied for 14 PPP and EIDL loans.  In applying for these loans, ILORI and Recamier claimed stolen identities of third parties and claimed full control of a number of companies, which they purported, cumulatively, employed more than 200 people and paid monthly salaries of more than $3.2 million in wages.  In reality, they did not operate these companies.  In submitting these applications, ILORI and Recamier, among other things, submitted falsified tax documents which were never actually filed with the Internal Revenue Service.

ILORI and Recamier used the majority of the over $1 million in stolen government funds for cryptocurrency investments, the purchase of stocks, cash withdrawals, and personal expenses, including leasing luxury apartments and a Mercedes car.  The investment accounts were also opened by ILORI and Recamier in the stolen identities of third parties.

ILORI committed these offenses while facing charges in a separate case filed in the Southern District of New York involving fraud, identity theft, and money laundering in United States v. Ilori, 20 Cr 378 (LJL).  As part of that case, ILORI was sentenced on March 3, 2022, to 63 months in prison by U.S. District Judge Lewis J. Liman in connection with a commercial loan fraud and bank bribery scheme.

*                *                *

In addition to the prison term, which is to run consecutive to ILORI’s term of 63 months in prison that was imposed by Judge Liman, ILORI, 43, of Queens, New York, was sentenced to five years of supervised release and ordered to forfeit $1,039,424 and pay restitution in the amount of $1,120,462.40. 

ILORI’s co-defendant, Chris Recamier, 59, of New York, New York, previously pled guilty to major fraud against the United States and was sentenced on October 17, 2022, by Judge Vyskocil to nine years in prison.

Mr. Williams praised the outstanding investigative work of the U.S. Department of Justice, Office of the Inspector General, which conducted the investigation on behalf of the Pandemic Response Accountability Committee (“PRAC”) COVID-19 Task Force.[1]  Mr. Williams also thanked the U.S. Secret Service, the Drug Enforcement Administration, the New York City Police Department, the Federal Bureau of Investigation, and the Federal Aviation Administration for their assistance in this investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Juliana N. Murray, David R. Felton, and Daniel G. Nessim are in charge of the prosecution.

[1] Created by the CARES Act, the PRAC serves the American public by promoting transparency and facilitating coordinated oversight of the federal government’s COVID-19 pandemic response.  The PRAC’s 22 member Inspectors General identify major risks that cross program and agency boundaries to detect fraud, waste, abuse, and mismanagement in the more than $5 trillion in COVID-19 spending.

The United States today filed a civil forfeiture complaint in the Southern District of New York against the motor yacht Amadea – a 348-foot luxury vessel reportedly worth more than $300 million and beneficially owned by sanctioned Russian oligarch Suleiman Kerimov – which was seized in 2022 at the request of the United States.

Today’s filing alleges that the superyacht was improved and maintained in violation of applicable sanctions against Kerimov and those acting on his behalf. According to the complaint, the Amadea is forfeitable based on violations of U.S. law, including the International Emergency Economic Powers Act (IEEPA) and money laundering violations. The burden to prove forfeitability in a civil forfeiture proceeding is upon the government, and proceedings involving this property and its claimants remain ongoing.

“The United States brings this action today after a careful and painstaking effort to develop the necessary evidence showing Suleiman Kerimov’s clear interest in the Amadea and the repeated misuse of the U.S. financial system to support and maintain the yacht for his benefit,” said Task Force KleptoCapture co-director Michael Khoo. “Getting to this point required extensive cooperation across the U.S. government and with foreign partners. It underscores our resolve to undertake challenging, cross-border investigations and to send a message to Russian oligarchs and their enablers: if you flout the rule of law, you can expect to pay real and meaningful consequences.”

“The filing of this complaint exemplifies that the United States takes sanction evasion seriously and will use all tools at its disposal to ensure that sanctioned individuals are held accountable for their crimes,” said U.S. Attorney Damian Williams for the Southern District of New York. “I thank our partners with Task Force KleptoCapture as well as the dedicated prosecutors of this office for their important work holding Russian oligarchs responsible and aiding our allies in Ukraine.”

According to court documents, on April 6, 2018, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Kerimov as a Specially Designated National (SDN) under IEEPA in connection with its finding that the actions of the Government of the Russian Federation in Ukraine constituted an unusual and extraordinary threat to the national security and foreign policy of the United States. In imposing sanctions, OFAC determined that Kerimov was an official of the Government of the Russian Federation. As alleged, Kerimov never sought a license from OFAC authorizing any transactions including any transactions in connection with expenditures related to the yacht. On or about Sept. 30, 2022, OFAC redesignated Kerimov as an SDN.

In September 2021, following Kerimov’s designation by OFAC, Kerimov arranged to purchase the superyacht Amadea, contracting with the seller to receive use rights to the vessel even before he completed payment or obtained title to the vessel. Kerimov gained beneficial ownership of the vessel in or about September 2021 through a series of transfers between shell companies designed to conceal his ownership of the yacht. Beginning in October 2021 through its seizure, Kerimov and/or his family members took multiple trips aboard the Amadea, planned extensive renovations to the Amadea, made long-term plans for the Amadea’s travel schedule, and assumed all liability and responsibility for the Amadea’s upkeep.

During that time, individuals or entities acting on Kerimov’s behalf accrued U.S. dollar-denominated costs for the Amadea’s upkeep and sent or caused to be sent through the U.S. financial systems, payments in violation of applicable sanctions.

The Amadea is currently under the control of the U.S. government in San Diego, pursuant to a seizure warrant issued by the U.S. District Court for the District of Columbia, which was enforced by a court order issued by the Republic of Fiji following a mutual legal assistance request from the United States. The United States is deeply grateful to the Fijian police and prosecutors whose perseverance and dedication to the rule of law made this action possible.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Damian Williams for the Southern District of New York, and Task Force KleptoCapture co-directors Michael W. Khoo and David H. Lim made the announcement.

The FBI New York Field Office’s Eurasian Organized Crime Task Force is investigating the case. The Justice Department’s Office of International Affairs, as well as the U.S. Marshals Service, U.S. Embassy Suva, and the Diplomatic Security Service, provided valuable assistance and cooperation in this investigation.

Assistant U.S. Attorney Sarah Mortazavi for the Southern District of New York and Trial Attorneys Joshua L. Sohn of the Criminal Division’s Money Laundering and Asset Recovery Section and Andrew D. Beaty of the National Security Division’s Counterintelligence and Export Control Section are litigating the case.

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

A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards a judgment in favor of the United States.

Damian Williams, the United States Attorney for the Southern District of New York, announced that on October 20, 2023, a federal jury found SHAWN RAINS guilty of three counts — conspiracy to commit mail fraud, mail fraud, and conspiracy to commit money laundering — in connection with a scheme to steal over $4 million from a White Plains company where he was formerly a high-ranking executive.  The defendant was found guilty following a two-week trial before U.S. District Judge Nelson S. Román.  Sentencing is scheduled for January 31, 2024, before Judge Román.

U.S. Attorney Damian Williams said: “Shawn Rains, a former executive at a White Plains healthcare claims processing company, betrayed the trust of his employer by stealing millions of dollars.  Rains was the ringleader of a scheme in which he and his co-conspirators created fake vendors, submitted fake invoices, charged their company for work that was never done, and then disguised the proceeds of the fraud.  A federal jury has now convicted Rains of fraud and money laundering.  This verdict should remind those in positions of trust that if you engage in fraud, we will catch you and hold you accountable.”

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

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

On March 22, 2023, MAHARAJ pled guilty to conspiracy to commit mail fraud.  He is scheduled to be sentenced before Judge Román on December 4, 2023.

*                *                *

RAINS, 57, of Le Bouscat, France, was convicted of (i) one count of conspiracy to commit mail fraud, which carries a maximum term of 20 years in prison; (ii) one count of mail fraud, which carries a maximum term of 20 years in prison; and (iii) one count of conspiracy to commit money laundering, which carries a maximum term of 20 years in prison. 

MAHARAJ, 42, of Goldens Bridge, New York, was convicted of one count of conspiracy to commit mail fraud, which carries a maximum term of 20 years in prison.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Michael Khoo and David Lim, Co-Directors of Task Force KleptoCapture, announced today the filing of a civil forfeiture complaint against the Motor Yacht Amadea, a 348-foot luxury vessel reportedly worth over $300 million.  The Complaint alleges that the superyacht, which is beneficially owned by Russian oligarch Suleiman Kerimov, was improved and maintained in violation of applicable sanctions against Kerimov and those acting on his behalf.  The Complaint alleges that the Amadea is forfeitable based on violations of U.S. law, including International Emergency Economic Powers Act (“IEEPA”), and money laundering violations.  

U.S. Attorney Damian Williams said: “The filing of this complaint exemplifies that the United States takes sanction evasion seriously and will use all tools at its disposal to ensure that sanctioned individuals are held accountable for their crimes.  I thank our partners with Task Force KleptoCapture as well as the dedicated prosecutors of this office for their important work holding Russian oligarchs responsible and aiding our allies in Ukraine.”

Co-Director of Task Force KleptoCapture Michael Khoo said: “The United States brings this action today after a careful and painstaking effort to develop the necessary evidence showing Suleiman Kerimov’s clear interest in the Amadea and the repeated misuse of the U.S. financial system to support and maintain the yacht for his benefit.  Getting to this point required extensive cooperation across the U.S. government and with foreign partners.  It underscores our resolve to undertake challenging, cross-border investigations and to send a message to Russian oligarchs and their enablers: if you flout the rule of law, you can expect to pay real and meaningful consequences.”

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

On April 6, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Kerimov as a Specially Designated National (“SDN”) under IEEPA in connection with its finding that the actions of the Government of the Russian Federation in Ukraine constituted an unusual and extraordinary threat to the national security and foreign policy of the United States.  In imposing sanctions, OFAC determined that Kerimov benefited from the regime of Vladimir Putin, President of the Russian Federation, and played a key role in advancing Russia’s malign activities.  As alleged, Kerimov never sought a license from OFAC authorizing any transactions including any transactions in connection with expenditures related to the yacht.  On or about September 30, 2022, OFAC redesignated Kerimov as an SDN.

In September 2021, following Kerimov’s designation by OFAC, Kerimov arranged to purchase the superyacht Amadea, contracting with the seller to receive use rights to the vessel even before Kerimov had completed payment or obtained title to the vessel.  Kerimov gained beneficial ownership of the vessel in or about September 2021 through a series of transfers between shell companies conducted in a manner designed to conceal his ownership of the yacht.  Between in or about July 2021 and in or about September 2021, beneficial ownership of the Amadea was transferred from the former title holder, Nereo Management Ltd., to Millemarin Investments Ltd., which was incorporated approximately 30 days before the sale.  Ownership of the Amadea was then transferred to Errigal Marine Limited, another newly incorporated company, which was used to obscure Kerimov’s beneficial ownership of the Amadea.  Beginning in October 2021 through the date the yacht was seized by Fijian authorities in April 2022, Kerimov and/or his family members took multiple trips aboard the Amadea, planned extensive renovations to the Amadea, made long-term plans for the Amadea’s travel schedule, and assumed all liability and responsibility for the Amadea’s upkeep and running costs.

During that time period, individuals and/or entities acting on Kerimov’s behalf accrued U.S. dollar-denominated costs necessary for the upkeep of the Amadea and sent or caused to be sent through the U.S. financial systems payments in satisfaction of those expenses, in violation of applicable sanctions.

The Amadea is currently under the control of the U.S. Government in San Diego, California, pursuant to a seizure warrant issued by the U.S. District Court for the District of Columbia, which was enforced by a court order issued by the Republic of Fiji following a request from the United States.  The United States is deeply grateful to the Fijian police and prosecutors whose perseverance and dedication to the rule of law made this action possible.

*                *                *

Mr. Williams praised the outstanding investigative work of the FBI New York Field Office’s Eurasian Organized Crime Task Force.  Mr. Williams further thanked the Justice Department’s Office of International Affairs, as well as the U.S. Marshals Service, U.S. Embassy Suva, and the Department of State’s Diplomatic Security Service, for their assistance and cooperation in this investigation.

On March 2, 2022, the Attorney General announced the launch of Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.  The Task Force will leverage all the Department’s tools and authorities against efforts to evade or undermine the economic actions taken by the U.S. government in response to Russian military aggression.

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit in partnership with the Criminal Division’s Money Laundering and Asset Recovery Section and the National Security Division.  Assistant U.S. Attorney Sarah Mortazavi and Trial Attorneys Joshua L. Sohn and Andrew D. Beaty are handling the investigation.

A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime.  These allegations are not proven until a court awards a judgment in favor of the United States.

[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 the entry today of a Consent Decree with the Village of Airmont (“AIRMONT”) resolving the United States’ lawsuit against AIRMONT under the Religious Land Use and Institutionalized Persons Act (“RLUIPA”).  RLUIPA authorizes the Department of Justice to commence an action against any local government that implements a land use regulation that places a substantial burden on religious exercise or discriminates on the basis of religion.  The Consent Decree significantly reforms zoning code provisions enacted in 2018, which the United States alleged were enacted to discriminate against Orthodox Jewish residents.  In particular, the Consent Decree increases the amount of space in private homes that can be used as Residential Places of Worship (“RPW”), removes restrictions upon whom residents are allowed to invite into their own homes to pray, and eliminates the use of an arbitrary, drawn-out application process designed to delay and effectively deny permits for even minor alterations to private houses.  AIRMONT had previously consented to entry of a preliminary injunction on March 15, 2021, barring enforcement of the same zoning code provisions.  The Consent Decree makes this prohibition permanent in the context of a multiyear agreement that makes extensive changes to AIRMONT’s zoning code.

U.S. Attorney Damian Williams said: “When religious intolerance poses a threat to the unity of this nation of many faiths and traditions, it is vital to stand up for the First Amendment right to freedom of worship.  While we are pleased that Airmont has agreed to settle this matter, the fact that this is the third time we have sued the Village over similar concerns demonstrates that this Office will be ever vigilant in protecting the rights of religious minorities.” 

The U.S. Attorney’s Office first sued AIRMONT in 1991, alleging that its founders had formed the Village for the purpose of excluding Orthodox Jews from its boundaries by, among other things, adopting zoning policies that would preclude Orthodox Jews from using their homes for prayer services.  Following extensive litigation, including a jury verdict finding that AIRMONT engaged in discrimination, the U.S. District Court entered a judgment in 1996 barring the Village from engaging in discrimination and requiring the Village to create a new zoning classification ― Residential Places of Worship, or RPWs.  The United States was again compelled to sue AIRMONT in 2005, when the Village denied an application to build a yeshiva on the ground that its zoning code prohibited residential student housing, even while allowing other building projects with similar group residential components, such as sleep-away camps, hotels, and nursing homes.  That lawsuit ended with a consent decree in 2011 requiring AIRMONT to amend its zoning code to permit educational institutions with accessory housing.

Once the 2011 consent decree expired, however, a new political movement called “Preserve Airmont” won Village elections and, in February 2017, instituted a moratorium on all development pending consideration of a revision of its zoning code.  When the moratorium finally ended, the Preserve Airmont administration enacted a new zoning code in 2018, which, in violation of the 1996 court judgment, removed RPWs from AIRMONT’s zoning code altogether, created a new category of “residential places of assembly” (or “RPAs”), which were “permitted by special permit” only, and imposed an onerous and restrictive review process for such permit applications.  Following the filing of a lawsuit by private religious entities alleging that the 2018 zoning code was infringing upon their religious liberty (Congregation of Ridnik, et al. v. Village of Airmont, et al., 18 Civ. 11533 (NSR)), the U.S. Attorney’s Office conducted its own investigation, filed papers with the Court in the Ridnik case in 2019, and filed its third lawsuit against AIRMONT on December 2, 2020, obtaining a preliminary injunction on March 14, 2021.

Under the terms of the Consent Decree entered today by U.S. District Judge Nelson S. Román, and consistent with the March 15, 2021, injunction, AIRMONT:

• Must not impose any or implement any land use restriction in a manner that imposes a substantial burden on the religious exercise of any person, including a religious assembly or institution, unless the Village can demonstrate that the imposition of that burden furthers a compelling government interest and is the least restrictive means of furthering that compelling government interest;

• Shall neither impose nor implement any land use regulation in a manner that treats a religious assembly or institution on less than equal terms with a nonreligious assembly or institution; nor shall impose nor implement a land use regulation that discriminates against any assembly or institution on the basis of religion or religious denomination;

• Must restore RPWs as a recognized land use category permitted as of right in all residential districts and may not enforce contrary provisions of local law enacted in 2018 that removed RPWs as a recognized of-right use from its zoning code;

• Must restore in full zoning provisions protecting the right to residential worship imposed by the 1996 Court-entered final judgment, including those provisions AIRMONT removed from its code in 2018;    

• Must ensure that all applications for RPWs that are 49% or less of the total floor area of the residence are reviewed and approved on an expedited basis without public hearing; and

• May not adjudicate applications for RPWs that are 49% or less of the total floor area of the residence under the terms of the burdensome site development regulations enacted in 2018.

*                *                *

The case is being handled by the Office’s Civil Rights Unit in the Civil Division.  Assistant U.S. Attorney David J. Kennedy is in charge of the case, which was previously litigated by former Assistant U.S. Attorney Stephen Cha-Kim.                                      

Damian Williams, the United States Attorney for the Southern District of New York, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced today the filing of a Complaint in Manhattan federal court charging GRACE ROSA BAEZ and CESAR MARTINEZ with conspiracy to distribute narcotics and distribution of narcotics.  The defendants were arrested yesterday and were presented today before U.S. Magistrate Judge James L. Cott.

U.S. Attorney Damian Williams said: “Grace Rosa Baez took an oath to protect and serve the people of New York City.  As alleged, she flagrantly violated that oath by pushing poison, including fentanyl and heroin, which are driving the nation’s deadly opioid crisis and have been responsible for thousands of tragic deaths in this city and around the nation.  My Office and our law enforcement partners will continue to aggressively pursue those peddling these deadly poisons – no matter who they are.”

FBI Assistant Director in Charge James Smith said: “Baez and Martinez allegedly took part in a conspiracy to distribute dangerous narcotics on the streets of our city.  This is a direct violation of the oath Baez took to protect and serve.  The FBI along with our partners in law enforcement will continue to investigate and hold responsible anyone who endangers our community through narcotics sales.”

NYPD Police Commissioner Edward A. Caban said: “These charges are extremely troubling because there is no place for corruption within the NYPD.  If found guilty of these allegations, this officer will have tarnished the shield that she wore, as well as her sacred oath to New Yorkers.  She and her co-defendant will certainly be held to the highest account provided by the law.”

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

From at least on or about October 9, 2023, through on or about October 19, 2023, BAEZ and MARTINEZ had numerous conversations with a confidential source (the “CS”) working with law enforcement regarding wholesale narcotics trafficking.  In particular, during those discussions, BAEZ and MARTINEZ offered to sell the CS kilogram quantities of fentanyl, heroin, and cocaine.  For example, on or about October 11, 2023, BAEZ told the CS, in substance and in part, that BAEZ could sell the CS two kilograms of fentanyl for $30,000 per kilogram, could sell the CS an additional 400 grams of heroin with pricing to be negotiated later, and further agreed to provide the CS with a sample of the fentanyl.  BAEZ told the CS, in substance and in part, that the fentanyl was top quality and directed that the CS meet her on or about October 16, 2023, to obtain a sample of the drugs available for sale.

On or about October 16, 2023, BAEZ and the CS met in Yonkers, New York, near BAEZ and MARTINEZ’s shared apartment.  During the meeting, BAEZ handed the CS a plastic candy container and indicated that the fentanyl sample was inside.  As depicted below, the bottle contained a small, clear bag filled with a white powdery substance, which was later tested and confirmed to contain fentanyl.   

On or about October 17, 2023, BAEZ told the CS, in substance and in part, that BAEZ had a sample of heroin ready for the CS and asked the CS to meet her in Yonkers.  During their meeting, BAEZ handed the CS a clear plastic bag filled with a white powdery substance, which was later tested and confirmed to contain heroin.  BAEZ told the CS, in substance and in part, that she had additional heroin available for sale and that she would provide the CS’s phone number to her boyfriend, MARTINEZ. 

Later that day, on or about October 17, 2023, MARTINEZ called the CS and negotiated the sale of approximately one kilogram of heroin and 800 grams of fentanyl.  MARTINEZ further stated, in substance and in part, that he would have cocaine for sale in the following weeks.  Later in the evening on or about October 17, 2023, MARTINEZ told the CS, in substance and in part, that on or about October 19, 2023, MARTINEZ and BAEZ could sell the CS one kilogram of heroin for approximately $25,000 and an additional 800 grams of fentanyl with pricing to be negotiated later.  MARTINEZ directed the CS to test the purity of the fentanyl and then pay BAEZ and MARTINEZ based on the quality of the fentanyl.

On or about October 18, 2023, BAEZ and MARTINEZ continued to discuss narcotics transactions with the CS, including negotiations over pricing.  BAEZ and MARTINEZ told the CS, in substance and in part, that they would also sell the CS approximately 400 grams of a lesser-quality heroin and an additional sample of fentanyl. 

On or about October 19, 2023, the CS and BAEZ met in Yonkers to complete the narcotics transaction.  BAEZ handed the CS packages containing suspected narcotics, including what appeared to be one kilogram of suspected heroin, which was labeled “#1”; 400 grams of suspected heroin, which was labeled “400”; 640 grams of suspected fentanyl, which was labeled “640 MANZANA”; and an additional, separate sample of suspected fentanyl, as depicted below:

After BAEZ was arrested, members of law enforcement approached BAEZ and MARTINEZ’s shared apartment and observed a package of suspected narcotics being thrown from inside the apartment to outside the apartment.  Inside the apartment, law enforcement discovered a kilogram press machine, as well as additional suspected narcotics that MARTINEZ had apparently attempted to throw outside.

Up to the date of her arrest, BAEZ had been employed as a police officer with the NYPD.  BAEZ began her employment with the NYPD in or about 2012.  In or about 2020, following accusations of misconduct, the NYPD began to investigate BAEZ, who was ultimately placed on modified duty.  As of October 2023, during her participation in selling kilogram quantities of narcotics, BAEZ was assigned to modified desk duty at a particular NYPD facility.

BAEZ engaged in some of the above-described offense conduct while on duty.  For example, BAEZ was on duty: (i) on or about October 11, 2023, when BAEZ communicated with the CS regarding where to meet to discuss the drug sales; (ii) on or about October 13, 2023, when BAEZ negotiated the price and quality of the fentanyl and arranged to deliver a sample of fentanyl to the CS; and (iii) on or about October 18, 2023, when BAEZ negotiated the final delivery with the CS.

*                *                *

BAEZ, 37, of the Bronx, New York, and MARTINEZ, 43, of Yonkers, New York, are charged in Count One with conspiracy to distribute fentanyl and heroin and in Counts Two, Three, and Four with narcotics distribution.  Counts One and Four carry a mandatory minimum term of 10 years in prison and a maximum sentence of life in prison.  Counts Two and Three carry a maximum sentence of 20 years in prison. 

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

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

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

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

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

The Justice Department announced today that it has obtained a consent decree with the village of Airmont, New York (Airmont), resolving the United States’ lawsuit under the Religious Land Use and Institutionalized Persons Act (RLUIPA). 

The lawsuit alleged that Airmont had revised its zoning code in 2018 to discriminate against Orthodox Jewish residents and make it more difficult for them to worship in their own homes. The consent decree increases the amount of space in private homes that can be used for worship, removes restrictions that limited who residents are allowed to invite into their own homes to pray and eliminates the use of an arbitrary, drawn-out application process designed to delay and effectively deny permits for even minor alterations to private houses. Since 1991, this is the third lawsuit brought by the United States against Airmont for discriminating against the Orthodox Jewish community.

“Zoning laws that intentionally make it more difficult to engage in religious worship and that are designed to impair the rights of obstruct religious communities violate federal law,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This settlement should send a message to officials across the country that we will hold them accountable when they abuse zoning restrictions to stop religious communities from freely exercising their faith. The Justice Department will tirelessly defend the right of all faiths and religions to worship in the manner consistent with their religious beliefs and traditions.”

“When religious intolerance poses a threat to the unity of this nation of many faiths and traditions, it is vital to stand up for the First Amendment right to freedom of worship,” said U.S. Attorney Damian Williams for the Southern District of New York. “While we are pleased that Airmont has agreed to settle this matter, the fact that this is the third time we have sued the Village over similar concerns demonstrates that this office will be ever vigilant in protecting the rights of religious minorities.” 

This consent decree follows the department’s announcement commemorating the 23rd anniversary of the signing of RLUIPA. The department will host a series of outreach events and has released updated informational materials about RLUIPA to provide an overview of the law and the department’s enforcement efforts, as well as information about how to identify and report violations. The department’s first RLUIPA outreach event will take place at Seton Hall Law School in Newark, New Jersey, on Oct. 30. For more information about these events, please see the department’s RLUIPA website. All events will be open to the public.

In June 2018, the Justice Department announced its Place to Worship Initiative, which focuses on RLUIPA’s provisions that protect the rights of houses of worship and other religious institutions to worship on their land. RLUIPA authorizes the department to commence an action against any local government that implements a land use regulation that places a substantial burden on religious exercise, discriminates on the basis of religion, treats religious land uses worse than nonreligious assemblies or totally or unreasonable excludes religious land use. More information is available at www.justice.gov/crt/placetoworship.

Individuals who believe they have been subjected to religious discrimination in land use or zoning decisions may contact the Civil Rights Division’s Housing and Civil Enforcement Section at (833) 591-0291 or may submit a complaint through the complaint portal on the Place to Worship Initiative website. More information about RLUIPA, including questions and answers about the law and other documents, may be found at www.justice.gov/crt/about/hce/rluipaexplain.php.

View the consent decree here.

Damian Williams, the United States Attorney for the Southern District of New York, James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and 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 unsealing of Superseding Indictments charging BORIS AMINOV, CHRISTY CORVALAN, IRINA POLVANOVA, ROMAN SHAMALOV, JONATHAN GAVRIELOF, ANTONIO PAYANO, DAVID FERNANDEZ, CRYSTAL MEDINA, JUAN HERNANDEZ, a/k/a “Pop,” and ALBERT YAGUDAYEV, a/k/a “Jeff,” in connection with their participation in a years-long scheme to defraud Medicaid, Medicare, and private insurance companies out of at least approximately $20 million.  POLVANOVA, SHAMALOV, and YAGUDAYEV were arrested this morning and GAVRIELOF was arrested yesterday evening.  All four will be presented before Chief U.S. Magistrate Judge James L. Cott today.  AMINOV, CORVALAN, FERNANDEZ, and MEDINA were previously arrested in connection with an earlier indictment in the case, which is assigned to U.S. District Judge Mary Kay Vyskocil.  PAYANO and HERNANDEZ remain at large. 

U.S. Attorney Damian Williams said: “As alleged, the defendants orchestrated a scheme to get rich by lying to Medicaid, Medicare, and private insurance companies and depriving vulnerable HIV patients of legitimate and safe medications.  The defendants allegedly made millions of dollars through submitting fraudulent insurance claims, paying illegal kickbacks, and buying and selling black-market HIV medications.  Today’s charges send a clear message that this Office will be tireless in its pursuit of those who seek to line their pockets by lying to federal agencies and preying on vulnerable members of society.”

FBI Assistant Director in Charge James Smith said: “For more than half a decade, the defendants allegedly operated a health care fraud scheme that defrauded taxpayer-funded medical programs.  Black market medication frauds like this take advantage of vulnerable members of our community, exposing them to unnecessary risks.  The FBI will make sure anyone attempting to illegally benefit from government health care programs is held accountable in the criminal justice system.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “Health care fraud schemes that divert HIV medication harm patients who actually need the medication as well as put other patients at risk when black market medications are recirculated and dispensed by pharmacies participating in the scheme.  HHS-OIG will continue to work with our law enforcement partners to hold accountable individuals who exploit federal health care programs for their own greed.”

According to the allegations contained in the Superseding Indictments:[1]

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

AMINOV and PAYANO distributed black-market HIV medications to pharmacies that were owned and operated by, among others, CORVALAN (the “Corvalan Pharmacies”), POLVANOVA (the “Polvanova Pharmacy”), and SHAMALOV (the “Shamalov Pharmacy”).   

After purchasing black-market medication from AMINOV and PAYANO, CORVALAN, POLVANOVA, and SHAMALOV then dispensed that medication to patients of the Corvalan and Polvanova Pharmacies or otherwise distributed it to other pharmacies.  FERNANDEZ and MEDINA were employees of the Corvalan Pharmacies who participated in the day-to-day operation of the scheme. 

As part of the scheme, CORVALAN, POLVANOVA, FERNANDEZ, MEDINA, HERNANDEZ, and YAGUDAYEV also funded and paid illegal kickbacks to patients in order to recruit patients to their respective pharmacies.  CORVALAN, POLVANOVA, FERNANDEZ, MEDINA, HERNANDEZ, and YAGUDAYEV regularly attempted to recruit new patients to increase the number of prescription medications for which the Pharmacies could fraudulently bill government insurance.  CORVALAN, FERNANDEZ, and MEDINA also paid patients to sell back their HIV medications to the Corvalan Pharmacies, thereby inducing patients to forego using the medications they were prescribed.

From at least in or about 2021 through at least in or about October 2023, SHAMALOV and POLVANOVA engaged in a related scheme where they bought and then re-sold diverted black-market prescription HIV medication through online prescription drug marketplaces to other pharmacies around the country.

In order to further their schemes and conceal their proceeds, CORVALAN, POLVANOVA, and SHAMALOV used bank accounts associated with their respective pharmacies to funnel money to shell companies controlled by AMINOV.

The defendants spent the proceeds of the scheme to purchase luxury cars, including a 2021 Mercedes-Benz Maybach with an estimated fair market value of approximately $245,000; waterfront real-estate, including two properties in the Bronx purchased for a total of approximately $2.4 million; designer clothes; and jewelry and gold. 

*                *                *

AMINOV, 47, of Brooklyn, New York, is charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to defraud the United States, which carries a maximum potential sentence of five years in prison.

CORVALAN, 41, of the Bronx, New York, is charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to violate the Anti-Kickback Statute, which carries a maximum potential sentence of five years in prison; and one count of conspiracy to defraud the United States, which carries a maximum potential sentence of five years in prison.

POLVANOVA, 47, of Queens, New York, is charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to violate the Anti-Kickback Statute, which carries a maximum potential sentence of five years in prison; one count of mail fraud, which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to defraud the United States, which carries a maximum potential sentence of five years in prison.

SHAMALOV, 47, of Queens, New York, is charged with one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison; one count of mail fraud, which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to defraud the United States, which carries a maximum potential sentence of five years in prison.

GAVRIELOF, 28, of Woodmere, New York, is charged with one count of conspiracy to defraud the United States, which carries a maximum potential sentence of five years in prison.

PAYANO, 34, of the Bronx, New York, is charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison, and one count of conspiracy to defraud the United States, which carries a maximum potential sentence of five years in prison.

FERNANDEZ, 24, and MEDINA, 28, both of the Bronx, New York, are charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to violate the Anti-Kickback Statute, which carries a maximum potential sentence of five years in prison; and one count of conspiracy to defraud the United States, which carries a maximum potential sentence of five years in prison.

HERNANDEZ, 63, of New York, New York, and YAGUDAYEV, 35, of Queens, New York, are charged with one count of conspiracy to violate the Anti-Kickback Statute, which carries a maximum potential sentence of five years in prison.

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

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

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea today of ATUL BHIWAPURKAR in connection with an insider trading scheme to reap illicit profits from inside information about the results of clinical trials of Paxlovid, a medicine used to treat COVID-19.  BHIWAPURKAR was arrested in June 2023 and pled guilty to securities fraud based on insider trading before U.S. Magistrate Judge James L. Cott.

U.S. Attorney Damian Williams said: “Bhiwapurkar admitted in court that he received sensitive, non-public information about a confidential drug trial from his friend, an employee at Pfizer, so he could profit on that information.  The prosecution of those who steal and misuse confidential information to profit at the expense of other market participants continues to be a top priority of our Office, and people who engage in insider trading will be caught and held accountable.”

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

In November 2021, BHIWAPURKAR 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.  BHIWAPURKAR was provided material, non-public information about the Paxlovid trial by an employee of Pfizer who assisted in managing the data analysis in certain clinical drug trials. 

On November 4, 2021, prior to the public announcement that a Pfizer trial of the drug Paxlovid, a medicine designed to treat mild to severe COVID‑19 infection, had produced positive results, BHIWAPURKAR received a tip from a Pfizer insider with confidential information about the positive results and the timing of the upcoming press release.  On that same day, BHIWAPURKAR purchased short-dated, out-of-the-money Pfizer call options that expired days and weeks later.  BHIWAPURKAR also tipped another friend (“Individual-1”), who similarly purchased short-dated, out-of-the-money Pfizer call options that expired approximately three weeks later.

The following day, on November 5, 2021, and before the market opened, Pfizer publicly released results of its Paxlovid study.  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, BHIWAPURKAR and Individual-1 sold their Pfizer call options at significant profits.

*                *                *

BHIWAPURKAR, 45, of Milpitas, California, 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 defendant will be determined by the judge.  BHIWAPURKAR will be sentenced by U.S. District Judge Andrew Carter.

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 Alex Rossmiller and Justin Rodriguez are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that VIRGIL WARDLOW pled guilty today to one count of distributing fentanyl.  In connection with his guilty plea, WARDLOW stipulated that he paid for commercial sex with a minor using fentanyl-laced pills that caused the death of a 19-year-old victim.  WARDLOW pled guilty before U.S. District Judge Mary Kay Vyskocil and is scheduled to be sentenced on March 13, 2024. 

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

According to court filings and statements made in court proceedings:

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

Between at least on or about February 8, 2023, and on or about April 7, 2023, WARDLOW exchanged several messages with other individuals in which WARDLOW offered to provide pills in exchange for sex or money.  WARDLOW sent these messages using an anonymized cellphone number that masked his identity from his intended victims.

*                *                *

WARDLOW, 31, of the Bronx, New York, pled guilty to distribution and possession with intent to distribute mixtures and substances containing a detectable amount of fentanyl and oxycodone, 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 investigative work of the New York State Police, the New York City Police Department, and Special Agents from the U.S. Attorney’s Office for the Southern District of New York.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that WILLIAM JONES, a/k/a “Principe,” was convicted by a jury of racketeering conspiracy, murder in aid of racketeering, and firearms offenses for his role in the murder of Frederick Delacruz on December 28, 2019.  The defendant was found guilty on all counts following an eight-day jury trial before U.S. District Judge Edgardo Ramos.

U.S. Attorney Damian Williams said: “William Jones executed Frederick Delacruz in cold blood because Delacruz had the courage to do the honorable thing and cooperate with law enforcement.  We hope today’s verdict will bring some peace to the victim’s family and sends the message that we will not rest until justice is done.”

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

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

*                *                *

JONES, 45, of the Bronx, New York, was convicted of racketeering conspiracy, which carries a maximum penalty of life in prison; murder in aid of racketeering, which carries a mandatory minimum sentence of life in prison; a firearms offense, which carries a maximum penalty of life in prison; and murder through the use of a firearm, which carries a maximum penalty of life in prison.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Jocelyn E. Strauber, the Commissioner of the New York City Department of Investigation (“DOI”), announced today the indictment of PETER WEISER and THOMAS BRANSKY for conspiring to defraud the City of New York (the “City”) of millions of dollars through a multifaceted scheme to corruptly profit from the provision of temporary housing and homeless services in New York City.  BRANSKY was the Chief Executive Officer of Childrens Community Services, Inc. (“CCS”), a purported not-for-profit homeless services provider formed and initially funded in part by WEISER.  BRANSKY, in turn, fraudulently steered lucrative service contracts ultimately paid for by the City to a group of entities owned and controlled by WEISER.  WEISER and BRANSKY intentionally concealed WEISER’s involvement in the formation and operation of CCS and his ownership and control of certain entities that contracted with CCS, including by submitting false statements and documents to the City.  WEISER and BRANSKY were arrested earlier today and will be presented before U.S. Magistrate Judge Valerie Figueredo in Manhattan federal court later today.  The case is assigned to U.S. District Judge Vernon Broderick.

U.S. Attorney Damian Williams said: “As alleged, the defendants engaged in a yearslong scheme to pocket millions in taxpayer dollars through the systematic exploitation of City programs intended to meet the basic needs of some of the most vulnerable New Yorkers – homeless men, women, and children.  Worse still, the defendants allegedly perpetrated this massive scheme under the guise of a not-for-profit organization named ‘Childrens Community Services.’  Thanks to the persistent efforts of the New York City Department of Investigation and the Special Agents and career prosecutors of my Office, these two men will face justice for their brazen graft.”

DOI Commissioner Jocelyn E. Strauber said: “These two defendants, as charged, used New York City’s need for providers of homeless services as an opportunity for fraud and personal profit.  Through a nonprofit entity, Childrens Community Services, and related companies, the defendants caused the City to pay over $50 million that the City would not otherwise have paid to these entities, including in inflated prices and unreasonable mark-ups for goods and services, as alleged in the Indictment.  As charged, the defendants concealed their scheme by straw ownership of companies, false statements, and fictitious bids.  I am grateful for the meticulous, exhaustive work of DOI's investigators and of the U.S. Attorney's Office for the Southern District of New York, our partners in the fight to protect critical public resources from wrongdoers, and for the cooperation of the City Department of Social Services.”

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

From at least in or about 2014 through at least in or about January 2020, THOMAS BRANSKY, who was the Chief Executive Officer of CCS, and his business partner, PETER WEISER, conspired to defraud the City agencies responsible for the administration of homeless services.  Between in or about November 2014 and in or about February 2020, CCS was awarded 12 contracts with the City worth approximately $913 million.  BRANSKY fraudulently steered lucrative service contracts with CCS — contracts ultimately paid for by the City — to a group of affiliated entities owned and controlled by WEISER (the “Weiser Entities”).  To carry out their scheme, WEISER, BRANSKY, and other individuals who worked with them intentionally concealed WEISER’s involvement in the formation and operation of CCS and his ownership and control of certain of the Weiser Entities from the City, including by submitting false statements and documents to the City.

WEISER and his associates created the Weiser Entities to profit unlawfully from the City’s provision of homeless services by capturing downstream revenues arising from CCS’s massive contracts with the City.  For the most part, the Weiser Entities were created for the sole purpose of providing goods and services to CCS.  WEISER and BRANSKY attempted to disguise the Weiser Entities as legitimate providers of, among other things, IT services and hardware, security services, office and living furniture, and food services.  In reality, and with few exceptions, the Weiser Entities were fly-by-night companies with no or few employees.  In most cases, the Weiser Entities obtained goods and services from legitimate third-party vendors and then re-sold those goods and services to CCS at marked-up and, in some cases, grossly inflated prices.  For example:

• Delta IT Solutions LLC (“Delta”): In or about December 2016, WEISER and his associates created the Weiser Entity Delta to sell IT services and hardware to CCS at inflated prices and in violation of the City’s conflict-of-interest policies.  Internal Delta records reflect significant markups for goods that Delta purchased from vendors (such as Amazon and Staples) and resold to CCS.  For example, an internal Delta pricing list from 2019 shows markups of up to 330% for items such as routers, printer cables, and surge protectors.  Likewise, Delta charged a 331% markup for telecom services that Delta obtained from a third-party provider.  These exorbitant markups were not disclosed to the City.

• AMX Distributors, LLC (“AMX”): WEISER and one of his associates created the Weiser Entity AMX to source and supply various consumer goods, including furniture, to CCS at inflated prices and in violation of the City’s conflict-of-interest policies.  Through AMX, WEISER sold furniture and supplies to CCS, including, among other things, beds, mattresses, sheets, towels, pillows, sofas, cribs, microwaves, refrigerators, chairs, tables, and toiletries.  WEISER sold these goods to CCS at unjustified markups of up to 309%.

• 511 Realty Management, LLC (“511 Realty”): CCS contracted with a Weiser Entity called 511 Realty to lease certain residential and commercial properties.  However, 511 Realty provided no legitimate services.  Instead, 511 Realty made monthly rent payments to third-party landlords on CCS’s behalf.  For this, 511 Realty charged hefty markups to CCS and, as a result, the City.  For example, CCS would make monthly payments to 511 Realty of approximately $24,000 for CCS’s office space in the Rockaway Offices.  511 Realty, in turn, would pay the landlord $17,500 monthly, representing a 37% markup, for essentially doing nothing more than writing a check; the markup increased to 46% by in or around 2019.  

• Pronto Cleaning Services, LLC (“Pronto”): A Weiser Entity called Pronto Cleaning contracted with a legitimate janitorial services company to provide cleaning services at CCS offices and facilities.  Pronto, which had no employees, resold those cleaning services to CCS at an approximately 56% markup, which was paid for by the City. 

WEISER and BRANSKY, along with their coconspirators, attempted to conceal the scheme from the various City agencies and components responsible for the administration of homeless services.  The defendants and their coconspirators solicited straw owners to appear on paper as the owners of the Weiser Entities when, in reality, WEISER owned, financed, and controlled each Weiser Entity.  Moreover, WEISER, BRANSKY, and their coconspirators made and caused to be made false statements to City officials and personnel about, among other things, the ownership of the Weiser Entities, the interconnectedness of the Weiser Entities, the selection process through which CCS awarded contracts to the Weiser Entities, and the ability and experience of the Weiser Entities in providing quality goods and services.

Likewise, to evade and bypass the City’s fraud-detection and cost-saving policies and procedures, WEISER and BRANSKY, along with their coconspirators, caused CCS to award contracts to the Weiser Entities without using a competitive bidding process, conducting proper due diligence, completing necessary documentation, or obtaining requisite approvals.  When questioned by the City, BRANSKY at times made and caused to be made false statements, including that the required documentation had been misplaced when, in fact, it had never been completed.  At other times, WEISER created and/or solicited fictitious competing bids and caused those fictitious bids to be submitted to the City to secure contracts between CCS and the Weiser Entities and to conceal the inflated pricing. 

WEISER, BRANSKY, and their coconspirators caused CCS — and, as a consequence, the City — to pay the Weiser Entities more than $50 million for goods and services.  The City would not have authorized or made these payments had proper and truthful disclosures about the Weiser Entities been made.  The fraudulent scheme harmed the City in numerous ways, including: (i) the City paid inflated prices resulting from the unnecessary insertion of middlemen (the Weiser Entities) between legitimate providers of goods and services and CCS; (ii) the City paid objectively unreasonable markups for certain goods and services; and (iii) CCS’s subversion of the mandatory bidding process and concealment of its conflicts of interest exposed the City to the risk — often realized — that the City would not obtain the best value for its money.

Through the scheme, WEISER collected more than $7 million in illicit profits, and BRANSKY earned more than $1.2 million in salary as the CEO of CCS.

*                *                *

WEISER, 80, of Lawrence, New York, and BRANSKY, 47, of Woodmere, New York, are each charged with one count of conspiracy to commit wire fraud and one count of wire fraud, which each carry a maximum sentence of 20 years in prison, and one count of embezzlement of government funds, which carries a maximum sentence of 10 years in prison.  In addition, WEISER is charged with one count of money laundering, which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of DOI and the Special Agents of the U.S. Attorney’s Office. 

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas Chiuchiolo, Jilan Kamal, and Sagar K. Ravi are in charge of the prosecution.

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

[1] As the introductory phrase signifies, the entirety of the 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 VITALY FARGESEN and IGOR PALATNIK each pled guilty to one count of conspiring to commit securities fraud and one count of conspiring to commit wire fraud in connection with their fraudulent scheme to defraud investors in CanaFarma Corp. and later CanaFarma Hemp Products Corp. (together “CanaFarma”) by soliciting funds based upon false and misleading representations, failing to invest investors’ funds as promised, and secretly misappropriating millions of dollars of CanaFarma funds.  FARGESEN and PALATNIK pled guilty today before U.S. District Judge Loretta A. Preska.

U.S. Attorney Damian Williams said: “Vitaly Fargesen and Igor Palatnik orchestrated a sophisticated scheme to obtain millions of dollars from investors with the promise that their money would be spent on building a legitimate company.  Instead, they lied about their business, lied to their auditors, and stole millions of dollars of investor funds.  Today’s guilty pleas reflect my Office’s commitment to prosecuting those who greedily lie to investors to line their own pockets.”

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

From in or about March 2019 to in or about March 2020, CanaFarma was a privately held Delaware corporation with offices in New York, New York.  Beginning on or about March 19, 2020, CanaFarma was listed on the Canadian Stock Exchange, and beginning on or about March 23, 2020, CanaFarma was listed on the Frankfurt Stock Exchange.  CanaFarma marketed itself to the investors as a “fully integrated cannabis company addressing the entire cannabis spectrum from seed to delivery of consumer products.”  To the public, FARGESEN was held out as Senior Vice President of Strategic Planning at CanaFarma and PALATNIK was held out as Senior Vice President of Product Acquisition at CanaFarma.  In truth, the two men exercised full control of CanaFarma but hid their control from the investing public by, among things, convincing an experienced businessman to falsely present himself to the market as the CEO of the company.

Using their control of CanaFarma, FARGESEN and PALATNIK devised and carried out a scheme to defraud CanaFarma’s investors by soliciting approximately $14 million in funds, including investments in private shares of CanaFarma, with false and misleading representations concerning the company’s management, products, and financials; failing to invest investors’ funds as promised; and secretly misappropriating at least $4 million of CanaFarma funds for their own benefit.  FARGESEN and PALATNIK effectuated the scheme by, among other things, controlling CanaFarma through a nominal Chief Executive Officer who reported to FARGESEN and PALATNIK, lying to investors regarding CanaFarma’s actual and anticipated operations, attempting to artificially inflate CanaFarma’s reported revenue, making false statements to CanaFarma’s auditors, and misappropriating millions of dollars of investor funds.

*                *                *

FARGESEN, 54, of Manalapan, New Jersey, and PALATNIK, 49, of Morganville, New Jersey, each pled guilty to one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud, which combined carries a maximum sentence of 10 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.  FARGESEN is scheduled to be sentenced by Judge Preska on January 30, 2024, at 10:00 a.m., and PALATNIK is scheduled to be sentenced by Judge Preska on January 11, 2024, at 11:00 a.m.

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.

The case is being overseen by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Margaret Graham, Adam Hobson, Sarah Mortazavi, and Andrew Thomas are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Patrick J. Freaney, the Special Agent in Charge of the New York Field Office of the United States Secret Service (“USSS”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced that ISHMAEL BENREUBEN pled guilty today to participating in a conspiracy to deposit approximately $760,000 in fraudulent checks into bank accounts across New York, New Jersey, and Washington, D.C., and to fraudulently withdrawing approximately $115,000 from those accounts.  BENREUBEN pled guilty before U.S. District Judge Jed S. Rakoff.

U.S. Attorney Damian Williams said: “My Office is committed to protecting the integrity of the United States banking system and the United States mail.  The defendant engaged in a scheme to steal three quarters of a million dollars by stealing real checks from the mail, forging the checks, falsifying identities, and taking advantage of multiple financial institutions.  The defendant’s fraudulent scheme affected real people and their businesses.  Today, he has been held accountable for his brazen conduct.”

USSS Special Agent in Charge Patrick J. Freaney said: “The defendant committed malicious fraud for his own personal gain.  With today’s guilty plea, he can no longer endanger the community.  This case should serve as a strong deterrent for criminal actors considering taking part in similar fraud schemes.  The U.S. Secret Service and its law enforcement partners will continue to investigate and pursue prosecution of these crimes in order to safeguard our communities.”

NYPD Commissioner Edward A. Caban said: “The charges Mr. Benreuben pled guilty to today are not victimless crimes.  In addition to compromising the integrity of our nation’s mail system, these offenses harm the people whose mail is stolen and the public at large.  The NYPD will continue to work closely with our law enforcement partners, including the U.S. Secret Service and the U.S. Attorney for the Southern District of New York, to always ensure that anyone who steals checks and commits fraud is held fully accountable.”

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

From approximately September 2021 through March 2022, BENREUBEN and others orchestrated an elaborate forgery and fraud scheme.  In furtherance of the scheme, BENREUBEN stole checks from the mail, forged and altered the stolen checks, deposited the checks into bank accounts across New York, New Jersey, and Washington, D.C. belonging to 26 co-conspirators, and then rapidly withdrew the funds before the banks could void the checks or shut down the accounts.  The checks ranged in amounts from approximately $5,000 to $42,000 and were drawn from the accounts of real businesses and individuals throughout the Northeast.  In total, BENREUBEN and his co-conspirators deposited approximately $760,000 in fraudulent checks and withdrew approximately $115,000 before the banks shut down the affected accounts.

Upon his arrest, BENREUBEN was found hiding under a couch at a co-conspirator’s home and was in possession of numerous images of the personal identifiable information on individuals’ identification cards, debit cards, and social security cards.     

*                *                *

BENREUBEN, 26, of Mount Vernon, New York, pled guilty to one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; one count of bank fraud, which carries a maximum sentence of 30 years in prison; and one count of aggravated identity theft, which carries a mandatory prison term of two years, which must run consecutively to any other prison term.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as BENREUBEN’s sentence will be determined by Judge Rakoff.  BENREUBEN is scheduled to be sentenced by Judge Rakoff on January 10, 2024, at 4:00 p.m. 

Mr. Williams praised the exceptional investigative work of the USSS and NYPD.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Amanda C. Weingarten, Diarra M. Guthrie, and Nicholas Folly are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced earlier today that NEIL COLE, the former Chief Executive Officer of Iconix Brand Group, Inc. (“Iconix”), was sentenced today in Manhattan federal court to 18 months in prison for participating in a scheme to fraudulently inflate Iconix’s revenue and earnings per share, making false filings with the U.S. Securities and Exchange Commission (“SEC”), and misleading the conduct of audits.  In November 2022, a jury found COLE guilty following a four-week retrial before U.S. District Judge Edgardo Ramos, who imposed today’s sentence.

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

Iconix, whose shares traded on the NASDAQ, was in the business of acquiring various brands, including clothing and fashion brands, and then licensing those brands to retailers, wholesalers, and suppliers who, in turn, produced and sold clothing and other products bearing the brand names.

Iconix utilized joint ventures (“JVs”) to profit from its brands in foreign markets.  With respect to these JVs, Iconix transferred ownership of a trademark or brand to the JV while maintaining a 50% ownership interest in the JV itself.  The other party involved in the JV purchased a 50% interest in the JV from Iconix.  As part of the JV agreements, each JV partner was generally entitled to 50% of the JV’s licensing revenue.  When it entered into a JV, Iconix recognized as revenue the buy-in purchase price paid by the JV partner, less Iconix’s cost basis in the trademarks.

Among the most critical financial metrics disclosed in Iconix’s public filings with the SEC were Iconix’s quarterly and annual revenue and non-GAAP diluted earnings per share (“EPS”).  Iconix executives, including COLE, publicly identified revenue and EPS as the principal metrics demonstrating Iconix’s growth.  They also touted Iconix’s consistent record of revenue and earnings growth and of meeting or exceeding Wall Street analyst consensus with respect to these metrics.

The Accounting Fraud Scheme

COLE engaged in a scheme to falsely inflate Iconix’s reported revenue and EPS by orchestrating a series of “round trip” transactions in which COLE and a senior Iconix executive induced a JV partner, a Hong Kong-based international apparel licensing company (“Company-1”), to pay artificially inflated buy-in purchase prices for JV interests, with the understanding that Iconix would then reimburse Company-1 for the overpayments.  COLE executed the scheme for the purpose of enabling Iconix to report fraudulently inflated revenue and EPS figures based on the inflated buy-in purchase prices it obtained from Company-1.

COLE arranged for Iconix to enter into at least two JVs with Company-1 that included inflated buy-in purchase prices from Company-1: (i) an amendment to a preexisting Southeast Asia joint venture, which closed on or about June 30, 2014 (“SEA-2”), and (ii) a second amendment to the Southeast Asia joint venture, which closed on or about September 17, 2014 (“SEA-3”).  SEA-2 and SEA-3 involved a fraudulent “round trip” transaction, lacking in economic substance, in which Company-1 paid an artificially inflated buy-in purchase price for its interest in the JV, in exchange for COLE’s agreement that Iconix would give back the inflated portion of the purchase price to Company-1.  COLE and a senior Iconix executive hid from Iconix’s lawyers and outside auditors that COLE had reached an understanding with Company-1 to artificially increase the consideration Company-1 paid Iconix in exchange for COLE’s agreement to round-trip the overpayment back to Company-1.

Through the scheme, COLE caused Iconix to report fraudulently inflated revenue and EPS figures to the investing public.  COLE did so, in part, to ensure that the reported figures met analyst consensus and to fraudulently convey the impression to the investing public that Iconix was growing quarter after quarter, as COLE had touted to the investing public.

*                *                *

In addition to his prison term, COLE, 66, of New York, New York, was sentenced to three years of supervised release and ordered to pay forfeiture in the amount of $790,200.       

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and the SEC Office of the Inspector General.  Mr. Williams also thanked the SEC Division of Enforcement, which previously brought a separate civil action.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Jared Lenow, Justin V. Rodriguez, and Andrew Thomas are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Frank A. Tarentino III, the Special Agent in Charge of the New York Field Office of the Drug Enforcement Administration (“DEA”), and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”),  announced today the filing of a Complaint in Manhattan federal court charging WELLINGTON EUSTATE ESPINAL, a/k/a “Ronny,” CRISTIAN EUSTATE ESPINAL, HERIBERTO EUSTATE ESPINAL, a/k/a “Daulin,” and ROBERTO JOSE VARGAS-PAULINO with conspiracy to distribute narcotics and distribution of narcotics.  The defendants were arrested yesterday afternoon in the Belmont neighborhood of the Bronx.  The defendants were presented today before U.S. Magistrate Judge Stewart D. Aaron. 

U.S. Attorney Damian Williams said: “Last night, while conducting a Court-authorized search of a residence in the Bronx, law enforcement made one of the largest-ever seizures of fentanyl in New York City’s history — apparently more than 50 pounds of the poisonous drug.  And now four defendants are in federal custody for allegedly operating a pill mill.  The thought of the potential damage this stunning amount of fentanyl could have inflicted on New Yorkers is terrifying.  I express deep gratitude to our law enforcement partners and the career prosecutors of this Office for their continued vigilance in keeping fentanyl off of our streets.”    

DEA Special Agent in Charge Frank Tarentino said: “This is one of the largest fentanyl pill mills we have seen in New York City.  The DEA recently announced that 7 out of 10 pills tested by the DEA laboratories across the county contain a lethal dose of fentanyl.  Allegedly, this industrial pill mill, located in the heart of the Bronx, had enough lethal fentanyl to dispense well over a million lethal doses.  Fentanyl pills are being manufactured in these clandestine pill mills right here, in our neighborhoods, and unleashed into our communities.  They are then marketed and sold to many who have no idea the pills — many of which are purposefully made to look like other prescription or party drugs — contain fentanyl.  With the growing increase of fentanyl-related poisonings, this toxic operation is unacceptable and law enforcement, at all levels, is vigilantly tracking down drug trafficking organizations responsible for bringing the most harm to our communities.”   

HSI Special Agent in Charge Ivan J. Arvelo said: “The HSI New York El Dorado Task Force, in conjunction with our dedicated partners, has dismantled yet another clandestine lab, suspected to have operated within a residential building, dangerously close to where families reside and children innocently play.  These areas were designated as 'drug-free zones,' emphasizing the severity of the situation.  In recent months, we have witnessed a devastating pattern, with multiple instances of deadly activities occurring mere feet away from places we entrust our children's safety.  This alarming reality underscores the urgency of our commitment to collaborate with our partners in the relentless fight of safeguarding our communities.  HSI New York remains steadfast in our vow to disrupt and dismantle criminal organizations who seek to poison our communities in the ongoing lethal epidemic of fentanyl poisoning.”

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

Since at least in or about September 2023, members of law enforcement have been investigating a network of drug traffickers who, among other things, appear to have converted an apartment within a two-family house in a residential neighborhood in the Bronx, New York, to be utilized for the purpose of packaging large quantities of fentanyl into portions for wholesale distribution.  In particular, the traffickers used the apartment (the “Fentanyl Mill”) to store kilogram-quantities of fentanyl, combine the fentanyl with other fillers, use dyes to color the combined powders, and use large industrial-scale pill presses to create hundreds of thousands of deadly fentanyl pills at a time. 

On or about October 5, 2023, members of law enforcement searched the Fentanyl Mill and found all four defendants inside.  During their search, investigators found, among other things, approximately 24 kilograms of suspected fentanyl in powder form — comprised of approximately 14 kilograms of compressed powder in brick-shapes members of law enforcement believe to contain  fentanyl and approximately 10 kilograms of loose powder members of law enforcement believe to contain fentanyl — as well as over 200,000 suspected fentanyl pills already packaged and ready for distribution to other traffickers for further sale.  Some of the pills appear to have been manufactured to mimic prescription drugs, and others were pressed into colorful shapes to resemble party drugs such as ecstasy.  A photograph of narcotics and other items recovered during the search is below:

Members of law enforcement also found three commercial pill presses and another disassembled pill press; one kilogram press; and various manufacturing and distribution paraphernalia including blenders, dyes, and jars of calcium citrate, that are used in connection with pressing narcotics into pill form and packaging narcotics for further distribution, as well as what appear to be industrial-grade protective face masks.  Two of the pill presses found are pictured below. 

Law enforcement further found that the interior of the Fentanyl Mill appeared to have been converted for dedicated use as a fentanyl repackaging and redistribution facility.  For example, in an apparent effort to conceal the narcotics operation occurring in the Fentanyl Mill, the first-floor windows were covered with black trash bags and dark fabric, preventing outside observers from a view of what was occurring inside.  The Fentanyl Mill also had a surveillance system, including a television screen mounted in the basement displaying a live feed of camera footage from outside the Fentanyl Mill.

Although lab testing is pending for the pills and powders discovered during the search, preliminary field tests reveal that the powders have tested positive for fentanyl.

*                *                *

WELLINGTON EUSTATE ESPINAL, 41, of New York, New York; CRISTIAN EUSTATE ESPINAL, 20, of the Bronx, New York; HERIBERTO EUSTATE ESPINAL, 27, of New York, New York; and ROBERTO JOSE VARGAS-PAULINO, 31, of the Bronx, New York, are charged in Count One with conspiracy to distribute narcotics and in Count Two with narcotics distribution.  Both Count One and Count Two carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. 

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

Mr. Williams praised the outstanding investigative work of the El Dorado Task Force International Narcotics and Money Laundering Unit, which is comprised of law enforcement officers from the DEA, the Department of Homeland Security, HSI, and the New York City Police Department, as well as the work of the New York State Police and the United States Postal Service.  Mr. Williams also thanked the New York State Police Contaminated Response Team and the DEA Chemist Team for their processing of the scene.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that MICHAEL ROWE, a/k/a “MJ,” was sentenced today to 22 years in prison for shooting another man over a $150 drug debt on a crowded sidewalk in Hell’s Kitchen on April 29, 2023.  ROWE was sentenced today by U.S. District Judge Denise L. Cote.

U.S. Attorney Damian Williams said: “Michael Rowe resorted to a reckless act of violence when his victim failed to pay him just $150.  Rowe could have taken someone’s life on that crowded sidewalk in Hell’s Kitchen over a trivial drug debt, but fortunately, no bystanders were hurt, and the victim survived his injuries.  Thanks to the quick work of our law enforcement partners and the prosecutors of this Office, Rowe now faces prison time for his dangerous behavior.”

According to the Complaint and Information, as well as statements by the Government and defense in connection with the plea and sentencing proceedings in this case:

On or about April 29, 2023, ROWE got into a disagreement with another individual (the “Victim”) on the sidewalk in the vicinity of 650 Ninth Avenue in Manhattan.  ROWE had given the Victim a quantity of cocaine base to sell, and the Victim had failed to pay ROWE a debt of $150.  After they exchanged words, ROWE brandished a firearm and shot the Victim several times as the Victim stood among other bystanders.  ROWE shot the Victim in the leg, among other places, and the Victim was hospitalized with serious physical injuries.  Video footage from the scene shows ROWE pointing the gun and shooting the Victim, as others in the area fled for safety.

ROWE (in black) and the Victim (in blue) Arguing

ROWE Shooting the Victim

*                *                *

ROWE, 23, of the Bronx, New York, pled guilty to possessing ammunition after sustaining three prior felony convictions for violent felonies and serious drug offenses and to conspiring to distribute cocaine base.  In addition to the prison term, ROWE was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of the FBI and the NYPD.  Mr. Williams also thanks the Bureau of Alcohol, Tobacco, Firearms, and Explosives for its assistance in this case.

This case is being handled by the Office's Violent and Organized Crime Unit.  Assistant U.S. Attorneys Frank Balsamello, Peter Davis, and Jamie Bagliebter are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that BILLY ORTEGA, a/k/a “Jason,” was sentenced to 30 years in prison today for running a drug delivery service that distributed dangerous drugs for over seven years, including the fentanyl that killed three New Yorkers on a single day: Julia Ghahramani, Amanda Scher, and Ross Mtangi.  ORTEGA was convicted following a two-week trial in January 2023 before U.S. District Judge Ronnie Abrams, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Billy Ortega ran a drug delivery service that delivered fentanyl, killing three victims on a single day.  Worse yet, Ortega was fully aware that a customer had previously overdosed from the deadly fentanyl Ortega laced into his product yet continued sending the drugs to his victims.  Even after Ortega learned that his drugs killed three people, he told another drug dealer that they were too strong and to give them to other unsuspecting victims.  Ortega’s callous and remarkably evil conduct rightly deserved a significant sentence.  This sentence sends a message to the fentanyl traffickers causing the fentanyl epidemic in our communities that they will bear the most serious consequences.”

According to court documents and the evidence presented at the trial of ORTEGA:

BILLY ORTEGA was the leader of a major drug trafficking conspiracy, distributing dangerous drugs in New York City via a crew of workers from at least in or about 2015 to in or about February 2022.  ORTEGA used his mother’s apartment in Manhattan as his stash house, employing family members and close friends to manage his drugs and cash and to deliver his drugs to customers.  ORTEGA carried guns, supplied guns to his workers, and stored guns in the stash house to protect his drugs and drug money.  For years, ORTEGA ran his drug delivery service by text message, acting like a dispatcher, coordinating drug deliveries by messaging his couriers and his customers.

In March 2021, ORTEGA mixed fentanyl into a weak batch of cocaine and sold it to at least five customers, who had no idea that they were receiving cocaine mixed with that deadly opioid.  In the course of a single day – March 17, 2021 – ORTEGA delivered, through one of his couriers, fentanyl-laced cocaine to Ghahramani, Mtangi, and Scher at three separate locations in Manhattan.  All three victims died after consuming the drugs distributed by ORTEGA. 

On the day of the three poisonings – and prior to the fentanyl being delivered to any of the three victims – ORTEGA received a text message from a different customer warning ORTEGA that his drugs had almost killed someone else.  Specifically, that other customer sent ORTEGA the following text message: “Hey man. Just on a follow up from yesterday - I gave most of my last bag to my buddy and he just called me this second to say he ended up in hospital last night. [. . .] He had to get a Narcan shot and was released in the early hours.”[1]  ORTEGA read this text message prior to coordinating the three deliveries of the drugs, from the same fentanyl-tainted batch of cocaine, that killed the three victims in this case. 

Later that night on March 17, 2021, after the victims had stopped responding to ORTEGA’s text messages, ORTEGA offered the fentanyl-tainted batch of cocaine to another drug dealer, so he could test it out on “some girls” and see what happens.  Specifically, ORTEGA texted the drug dealer: “If you[’re] going to be around [the] way let me know have some every one is saying it’s to[o] Strong . . . Give it to some girls and you let me know lol bro.”  And when it became clear that ORTEGA had killed his customers, ORTEGA did not change course and stop selling dangerous drugs.  ORTEGA changed his cellphone number and continued selling drugs every day until he was arrested nearly a year later.

*                *                *

BILLY ORTEGA, 37, of West Milford, New Jersey, was convicted of conspiracy to distribute and possess with intent to distribute fentanyl, acetylfentanyl, and cocaine, the use of which caused the deaths of Julia Ghahramani, Amanda Scher, and Ross Mtangi; distribution of fentanyl, acetylfentanyl, and cocaine to Ghahramani, the use of which caused her death; distribution of fentanyl and cocaine to Scher, the use of which caused her death; distribution of fentanyl and cocaine to Mtangi, the use of which caused his death; and carrying, use, and possession of a firearm in connection with, and in furtherance of, the narcotics conspiracy.  In addition to his prison sentence, ORTEGA was sentenced to five years of supervised release. 

Mr. Williams praised the outstanding investigative work of the New York City Police Department (“NYPD”), the Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force, the SDNY Digital Forensic Unit, and the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this matter. 

The OCDETF New York Strike Force provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location.  This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.  The specific mission of the New York Strike Force is to target, disrupt, and dismantle drug trafficking and money laundering organizations, reduce the illegal drug supply in the United States, and bring criminals to justice.  The Strike Force is affiliated with the Drug Enforcement Administration’s (“DEA”) New York Division and includes agents and officers of the DEA; NYPD; New York State Police; Homeland Security Investigations; U.S. Internal Revenue Service, Criminal Investigation; U.S. Customs and Border Protection; New York National Guard; U.S. Coast Guard; New York State Department of Corrections and Community Supervision; Bergen County Prosecutor’s Office; Fort Lee Police Department; Palisades Interstate Parkway Police; Teaneck Police Department; Hillsdale Police Department; Closter Police Department; Northvale Police Department; River Vale Police Department; Englewood Police Department; Saddle River Police Department; Bergen County Sheriff’s Department; Hawthorne Police Department; and Hackensack Police Department. 

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Micah F. Fergenson, Michael R. Herman, and Robert B. Sobelman, with the assistance of Paralegal Specialists Alex Frenchman and Christine Woods, are in charge of the prosecution.

[1] “Narcan” is an opioid antagonist used to counteract the deadly effects of drugs like fentanyl. 

Damian Williams, the United States Attorney for the Southern District of New York, and Daniel B. Brubaker, the Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an Indictment charging ROBERT DIAZ with robbing two United States Postal Service (“USPS”) carriers of postal keys and, along with Matthew Modafferi, the Special Agent in Charge of the Northeast Area Field Office of the USPS, Office of Inspector General (“USPS-OIG”), 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”), also announced that 26 additional defendants have been charged in the past six months with federal crimes targeting the USPS and involving property stolen from the USPS as part of a multi-agency initiative to increase federal enforcement against perpetrators of mail-related robberies, frauds, and thefts.

U.S. Attorney Damian Williams said: “My Office is committed to working with our law enforcement partners to protect the safety of USPS employees and the integrity of the United States mail.  The indictment against Robert Diaz and the many others who have been charged with mail-related crimes over the past several months should send a clear message that criminally targeting the U.S. mail is a serious federal offense and will not be tolerated.”

USPIS Inspector in Charge Daniel B. Brubaker said: “As Postal Inspectors our primary mission is the protection of our people, the postal employees who serve the public dutifully each day.  We will bring a laser-sharp focus to any investigation of violent criminals and individuals who target our employees, and whose members by doing so seek to steal from the public.  The charges against these individuals prove the resolve of Postal Inspectors and our law enforcement partners to pursue these organizations with every resource at our disposal, and to ultimately see that justice is served.”    

USPS-OIG Special Agent in Charge Matthew Modafferi said: “We appreciate the outstanding effort by both our Law Enforcement partners and the Department of Justice.  The vast majority of Postal Service employees are honest, hardworking individuals who would not violate the public’s trust in this manner.  An employee who decides otherwise, however, will be aggressively investigated by OIG Special Agents.  These cases serve as an excellent example of the successful collaboration between the USPS OIG, our federal and state law enforcement partners, and the U.S. Attorney’s Office to pursue and prosecute Postal Service employees and their co-conspirators involved in criminal activity.”

FBI Assistant Director in Charge James Smith said: "The FBI is committed to working with our law enforcement partners to ensure that the United States Postal Service is not targeted for nefarious activity by criminal actors.”

NYPD Commissioner Edward A. Caban said: “The charges announced today allege crimes that targeted and, in some cases, betrayed our mail delivery system to prey on innocent victims.  Fortunately, our NYPD investigators and law enforcement partners worked in tandem to disrupt this conduct and bring these defendants to justice.  We will continue to work hand-in-hand with the U.S. Postal Inspection Service, the USPS Office of Inspector General, the FBI, and the U.S. Attorney for the Southern District of New York to stamp out mail-related crimes and protect the integrity of a service relied upon by millions of New Yorkers.”

According to the allegations in the Indictment, Complaints, and other public filings:[1]

On June 28, 2022, and July 8, 2022, ROBERT DIAZ robbed postal carriers and stole arrow keys belonging to the USPS.  Today, an Indictment was unsealed charging DIAZ with two counts of robbery of a postal carrier and two counts of postal key theft, which carry a total maximum sentence of 40 years in prison.

From January 19, 2022, through April 19, 2023, AUBREY FRAZER, an employee of the USPS, stole mail from a USPS facility in Manhattan.  He was charged on June 6, 2023, with mail theft by a postal service employee, which carries a maximum sentence of five years in prison.

From May through October 2022, ANDY ARIEL SANTANA cashed more than $100,000 of stolen and fraudulently altered postal money orders in the Bronx.  He was charged on August 14, 2023, with money order fraud and receipt of stolen mail, which carry a total maximum sentence of 10 years in prison.

From October 24, 2022, through April 15, 2023, SHERROD MURPHY and RAYSHAWN NIBLACK participated in a mail theft scheme targeting relay and panel boxes in the Bronx.  They were charged on April 24, 2023, with conspiracy to commit mail theft and postal key theft, which carries maximum sentence of five years in prison.

From January through August 2023, ERIC BROWN purchased stolen checks and other items worth more than $200,000 that had been unlawfully removed from the mail by a postal employee.  He was charged on September 28, 2023, with conspiracy to commit mail theft, which carries a maximum sentence of five years in prison. 

On June 15, 2023, KHAYYAM ALEXANDER, SAHEED DUPREE, and DIAMANTE PERRY used a stolen postal key to steal mail from one or more collection boxes in the vicinity of 73rd Street and Madison Avenue in Manhattan.  They were charged that same day with one count of conspiracy to commit mail theft and postal key theft, postal key theft, and mail theft, which carry a total maximum sentence of 20 years in prison.

On June 21, 2023, JOSE MATOS possessed more than $60,000 of checks that were stolen from the United States mail and a distribution quantity of crack cocaine.  He was charged the following day with receipt of stolen mail and possession with intent to distribute narcotics, which carry a total maximum sentence of 25 years in prison.

On June 26, 2023, LYDELL YANCEY possessed stolen mail and a stolen postal key and was apprehended after being near a collection box in the vicinity of 79th Street and Madison Avenue in Manhattan.  He was charged that same day with conspiracy to commit mail theft and postal key theft, postal key theft, and mail theft, which carry a total maximum sentence of 20 years in prison.

On July 6, 2023, DEANDRE JACKSON, QUAMEL PIERCE, and RAHEEM WALLACE possessed stolen mail and a stolen postal key and were apprehended being near a collection box in the vicinity of York Avenue and 72nd Street in Manhattan.  They were charged that same day with conspiracy to commit mail theft and postal key theft, postal key theft, and mail theft, which carry a total maximum sentence of 20 years in prison.

On July 10, 2023, MICHAEL EDWARDS and CARLOS MERCADO used a stolen postal key to steal mail in the vicinity of 74th Street and Lexington Avenue in Manhattan.  They were charged that same day with conspiracy to commit mail theft and postal key theft, postal key theft, and mail theft, which carry a total maximum sentence of 20 years in prison, and MERCADO was also charged with attempted assault of an officer engaged in official duties, which carries a maximum sentence of 20 years in prison.

On July 25, 2023, JONATHAN CARBUCCIA, JUAN CARBUCCIA, and MANUEL PEREZ stole mail from a collection box in the vicinity of 68th Street and Madison Avenue in Manhattan.  They were charged that same day with conspiracy to commit mail theft and postal key theft, postal key theft, and mail theft, which carry a total maximum sentence of 20 years in prison.

On August 1 and 8, 2023, CHRISTIAN CEBOLLERO, an employee of the USPS, stole checks and other items from a USPS facility in Manhattan.  On August 8, 2023, he was charged with two counts of mail theft by a postal service employee, which carry a total maximum sentence of 10 years in prison.

On August 14, 2023, EMMANUEL HERNANDEZ stole mail from a collection box in the vicinity of 79th Street and Madison Avenue in Manhattan.  He was charged that same day with one count of mail theft, which carries a maximum sentence of five years in prison.

On August 18, 2023, JOHN BURBANO used a stolen postal key to steal mail from collection boxes in the vicinity of 68th Street and Madison Avenue in Manhattan.  He was charged that same day with postal key theft and mail theft, which carry a total maximum sentence of 15 years in prison.

On August 23, 2023, JEREMY PINALES DIAZ stole mail from a collection box in the vicinity of 33rd Street and Madison Avenue.  He was charged that same day with mail theft, which carries a maximum sentence of five years in prison.

On September 18, 2023, JAYVAUGN VALENTINE and BRIAN GUTIERREZ used a stolen postal key to steal mail from a collection box in the vicinity of 68th Street and Madison Avenue in Manhattan.  They were charged the same day with conspiracy to commit postal key theft and mail theft, postal key theft, and mail theft, which carry a total maximum sentence of 20 years in prison.

On September 26, 2023, DONTE GOULBOURNE and ARMANDO KENNETH BENIQUEZ were apprehended in the Bronx after they used a stolen postal key to steal mail.  They were charged that same day with conspiracy to commit mail theft and postal key theft, postal key theft, and mail theft, which carry a total maximum sentence of 20 years in prison.

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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 USPIS, USPS-OIG, FBI, NYPD, and the Special Agents and Task Force Officers of the U.S. Attorney’s Office for the Southern District of New York. 

The cases are being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Benjamin M. Burkett, Katherine Cheng, Connie Dang, Lisa Daniels, Jackie Delligatti, Jerry J. Fang, Justin Horton, William Kinder, Henry Ross, Chelsea Scism, and Adam Sowlati are in charge of the prosecutions.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty pleas of NERIK ILYAYEV and MUKHIDDIN KADIROV for their respective roles in HIV medication fraud, no-fault automobile insurance fraud, and money laundering schemes totaling over $6 million.  ILYAYEV pled guilty to conspiracy to commit healthcare fraud for using two different pharmacies to defraud Medicare and Medicaid in connection with HIV medication claims and to defraud no-fault automobile insurance providers in connection with other medication claims.  KADIROV laundered several million dollars in fraud proceeds in connection with the HIV fraud scheme.  ILYAYEV and KADIROV pled guilty today before U.S. District Judge Gregory H. Woods.  

U.S. Attorney Damian Williams said: “Nerik Ilyayev brazenly defrauded Medicare and Medicaid and New York’s no-fault automobile insurance providers of over $6 million.  To execute his schemes, Ilyayev sourced pharmaceuticals from illegitimate sources and worked with others to pay kickbacks to low-income individuals.  Mukhiddin Kadirov facilitated the Medicare and Medicaid fraud by laundering millions in crime proceeds through shell companies.  Both Ilyayev and Kadirov went to great lengths to conceal their role in these crimes, including using the identities of other people.  Ilyayev and Kadirov will now pay for their crimes, and this Office will not stop pursuing those who seek to profit by defrauding our healthcare system.”    

According to the Complaint, Information, and statements made in open court:

From approximately February 2021 through March 2022, ILYAYEV owned and operated a pharmacy in Manhattan (“Pharmacy-1”).  ILYAYEV used Pharmacy-1 to pay illegal kickbacks to low-income HIV patients to recruit them to fill prescriptions for expensive HIV medications at Pharmacy-1 and to obtain HIV medications from unlawful sources.  ILYAYEV, on behalf of Pharmacy-1, then submitted fraudulent insurance claims to Medicare and Medicaid to cover the cost of the HIV medications.  In order to conceal his role in the fraud scheme, ILYAYEV used the identity of another person (“Individual-1”) and pretended to be Individual-1 to own and operate Pharmacy-1 using Individual-1’s identity.  Medicare and Medicaid collectively paid approximately $5.2 million in fraudulent claims for HIV medications to Pharmacy-1.      

After shutting down Pharmacy-1, ILYAYEV took control of another pharmacy in Queens, New York (“Pharmacy-2”).  Again, to conceal his role in the fraud, ILYAYEV used the identity of another person (“Individual-3”) and pretended to be Individual-3 to own and operate Pharmacy-2.  Pharmacy-2 submitted fraudulent insurance claims to no-fault automobile insurance providers.  Pharmacy-2 defrauded the no-fault automobile insurance providers of approximately $1.2 million.  In addition, Pharmacy-2 unlawfully sold pharmaceuticals to other pharmacies that ILYAYEV had obtained from illegitimate sources.      

KADIROV participated in a money laundering network that primarily launders healthcare fraud proceeds (the “Money Laundering Network”) that the Federal Bureau of Investigation (“FBI”) has been investigating since approximately 2020.  Members of the Money Laundering Network typically deposit checks from healthcare companies that represent healthcare fraud proceeds into New York-based bank accounts held by shell companies.  The shell companies often purport to be wholesale companies and use terms like “wholesale” in the company name to make the check deposits from the healthcare companies appear less suspicious to banks and law enforcement.  The conspirators controlling the shell companies collect cash typically from U.S.-based individuals who want to remit funds, often to Uzbekistan, through unlicensed channels.  The conspirators controlling the shell companies then provide that cash, minus a fee, to the conspirators providing the healthcare checks.  The conspirators controlling the shell companies next typically wire the check deposit proceeds from the shell companies to Chinese or other foreign companies to purchase goods from those foreign companies.  The foreign companies ship the goods to importers in Uzbekistan.  The importers pay the Uzbekistan-based partners of the conspirators operating the shell companies in U.S. Currency for the goods.  Those Uzbekistan-based partners would then give the U.S. currency to the families and friends of the individuals who had provided the cash to the conspirators controlling the shell companies in New York.

As part of his participation in the Money Laundering Network, KADIROV laundered approximately $4.2 million of Pharmacy-1’s fraud proceeds.  KADIROV used three bank accounts in the name of three shell companies that were purportedly wholesale companies (the “Shell Companies”) to launder Pharmacy-1’s fraud proceeds.  The Shell Company bank accounts were opened in the name of another person (“Individual-2”), although KADIROV controlled the bank accounts.  KADIROV took other steps to conceal his role in the money laundering scheme, including using a burner phone in connection with the Shell Company bank accounts, and he concealed his face when using ATMs to conduct transactions using the Shell Company bank accounts.  Pharmacy-1 deposited approximately $4.2 million in checks with the Shell Companies.  Consistent with the operations of the Money Laundering Network, the Shell Companies wired most of the check deposits to companies abroad, including China, Ukraine, and Russia.

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ILYAYEV, 36, of Queens, New York, pled guilty to one count of conspiracy to commit healthcare fraud, which carries a maximum potential sentence of 10 years in prison.

KADIROV, 44, of Queens, New York, pled guilty to one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison. 

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

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

The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorney Cecilia E. Vogel is in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced that SCOTT HUGHES, CECILIA MILLAN, and KARINA CHAIREZ were sentenced today for their roles in an internationally coordinated fraud and money laundering ring that deceived individuals into investing in AirBit Club, a purported cryptocurrency mining and trading company that was, in reality, a pyramid scheme.  HUGHES, an attorney who laundered approximately $18 million in AirBit Club fraud proceeds, was sentenced to 18 months in prison.  MILLAN, a senior level promoter of AirBit Club, was sentenced to five years in prison.  CHAIREZ, another senior level promoter of AirBit Club, was sentenced to one year and one day in prison.  On September 26, 2023, PABLO RENATO RODRIGUEZ, co-founder of AirBit Club with GUTEMBERG DOS SANTOS, was sentenced to 12 years in prison.  As part of their guilty pleas, the defendants in this case collectively have been ordered to forfeit their fraudulent proceeds of AirBit Club, which include seized or restrained assets consisting of U.S. currency, Bitcoin, and real estate currently valued at approximately $100 million.  U.S. District Judge George B. Daniels imposed the sentences.

U.S. Attorney Damian Williams said: “Hughes, Millan, and Chairez each played a key role in perpetuating the AirBit Club pyramid scheme.  At the top-tier of promoters, Millan and Chairez for years aggressively solicited investments from and misled hardworking and unsophisticated investors to line their own pockets.  Hughes abused his position as an attorney to launder millions in AirBit Club fraud proceeds and to give AirBit Club the false appearance of legality.  Pyramid schemes like AirBit Club would not be possible without facilitators like Hughes, Millan, and Chairez.  Today’s sentences send a message that anyone who facilitates cryptocurrency investment schemes — not only those at the very top of the pyramid — will face serious consequences for such crimes.”

According to public court filings and statements made in Court:

RODRIGUEZ, DOS SANTOS, HUGHES, MILLAN, and CHAIREZ participated in a coordinated scheme in which victim-investors (the “Victims”) were induced to invest in AirBit Club based on the false promise of guaranteed profits in exchange for cash investments in club “memberships” (the “AirBit Club Scheme” or the “Scheme”).  Beginning in late 2015, AirBit Club, through its founders, RODRIGUEZ and DOS SANTOS, as well as its promoters (the “Promoters”), including MILLAN and CHAIREZ, marketed AirBit Club as a multilevel marketing club in the cryptocurrency industry.  Promoters falsely promised Victims that AirBit Club earned returns on cryptocurrency mining and trading and that Victims would earn passive, guaranteed daily returns on any membership purchased.

RODRIGUEZ, DOS SANTOS, HUGHES, MILLAN, and CHAIREZ traveled throughout the United States and around the world to places in Latin America, Asia, and Eastern Europe, where they hosted lavish expos and small community presentations aimed at convincing Victims to purchase AirBit Club memberships.  In furtherance of the AirBit Club Scheme, the Victims were fraudulently induced to buy memberships in cash, including in the Southern District of New York.  Following a Victim’s investment, a Promoter provided the Victim with access to an online AirBit Club portal to view the purported returns on memberships (the “Online Portal”).  While Victims saw “profits” accumulate on their Online Portal, those representations were false; no Bitcoin mining or trading on behalf of Victims in fact took place.  Instead, RODRIGUEZ, DOS SANTOS, MILLAN, and CHAIREZ enriched themselves and spent Victim money on cars, jewelry, and luxury homes, and financed more extravagant expos to recruit more Victims. 

HUGHES, an attorney licensed to practice law in California, had previously represented RODRIGUEZ and DOS SANTOS in a Securities and Exchange Commission (“SEC”) investigation related to another investment scheme known as Vizinova.  He then aided RODRIGUEZ and DOS SANTOS in perpetrating the AirBit Club Scheme by, among other things, helping to remove negative information about AirBit Club and Vizinova from the internet. 

In many instances, as early as 2016, Victims who attempted to withdraw money from the AirBit Club Online Portal and complained to a Promoter were met with excuses, delays, and hidden fees amounting to more than 50% of the Victim’s requested withdrawal, if they were able to make any withdrawal at all.  In April 2020, another victim received a notice on the AirBit Club Online Portal that his account was closed – and principal investment lost – due to “execution of financial sustainability Reserve, policy #34 of the AirBit Club Terms and Conditions, due to the economic and financial crisis caused by (Covid-19).”

RODRIGUEZ, DOS SANTOS, HUGHES, CHAIREZ, and MILLAN sought to conceal the AirBit Club Scheme, as well as their respective control of the proceeds of that Scheme, by requesting that Victims purchase memberships in cash, using third-party cryptocurrency brokers, and by laundering the Scheme’s proceeds through several domestic and foreign bank accounts, including an attorney trust account managed by HUGHES (the “Hughes Trust Account”).  The Hughes Trust Account was ostensibly intended to maintain custody of HUGHES’s law practice’s client funds.  Instead, the Hughes Trust Account was used by RODRIGUEZ, DOS SANTOS, HUGHES, CHAIREZ, and MILLAN to conceal the nature and origin of the AirBit Club Scheme’s illicit proceeds.  Through that account, HUGHES directed Victim funds to the personal expenses of RODRIGUEZ, DOS SANTOS, CHAIREZ, MILLAN, and himself, and funded promotional events and sponsorships designed to further promote the AirBit Club Scheme. 

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HUGHES, 47, of Newport Beach, California, was also sentenced to three years of supervised release.  MILLAN, 41, of Greensboro, North Carolina, was also sentenced to three years of supervised release.  CHAIREZ, 47, of Modesto, California, was also sentenced to three months of supervised release.     

DOS SANTOS, 48, of Panama City, Panama, has pled guilty to charges including wire fraud conspiracy, which carries a maximum potential sentence of 20 years in prison; money laundering conspiracy, which carries a maximum potential sentence of 20 years in prison; and bank fraud conspiracy, which carries a maximum potential sentence of 30 years in prison. 

The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as the sentencing will be determined by the judge.  DOS SANTOS is scheduled to be sentenced on October 4, 2023, at 11:00 a.m.

Mr. Williams praised the outstanding investigative work of Special Agents from Homeland Security Investigations’ El Dorado Task Force.  Mr. Williams further thanked the New York Waterfront Commission for its assistance in the forfeiture process and the attorneys and investigators at the SEC whose expertise and diligence were integral to the development of this investigation.

If you believe you are a victim of the AirBit Club fraud, updated information regarding the case and victims’ rights, as well as contact information for the victim witness coordinator, is available here.  The U.S. Attorney’s Office will contact victims who have previously contacted the victim witness coordinator regarding the restitution process.

The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Kiersten A. Fletcher, Samuel L. Raymond, and Cecilia E. Vogel are in charge of the prosecution.