Southern District of New York

Damián Williams, el Fiscal de los Estados Unidos del Distrito Sur de Nueva York, y Michael J. Driscoll, el Subdirector a Cargo de la Oficina Local en Nueva York del Buró Federal de Investigaciones ("FBI"), han anunciado hoy que JIMMY SOLANO-ARIAS, un ex guardia de seguridad armado en el Jacob K. Javits Federal Office Building ubicado en el 26 de Federal Plaza en Manhattan, fue formalmente acusado por un Gran Jurado Federal, por haber violado los derechos constitucionales de un solicitante de asilo (la "Víctima") por forzar a la víctima, y haber utilizado amenaza de muerte o lesiones corporales graves, para que la misma realizara sexo oral en SOLANO-ARIAS mientras dicha víctima estaba adentro de una oficina cerrada en el 26 de Federal Plaza.  SOLANO-ARIAS fue arrestado y se le imputó un cargo por Querella Federal, el 5 de mayo del 2023.  El caso está asignado al Juez de Distrito de los Estados Unidos, su Señoría, El Honorable Paul G. Gardephe.

El Fiscal de los Estados Unidos, Damián Williams ha dicho: "Como se ha alegado, Jimmy Solano-Arias, un guardia de seguridad armado que tenía la tarea de mantener seguros a los muchos empleados federales y visitantes del 26 de Federal Plaza, usó su uniforme y arma de fuego para obligar a una persona vulnerable que buscaba asilo a que le practicara sexo oral en su persona.  Esta Oficina se compromete a responsabilizar a todos aquellos que actúan bajo el manto de la ley cuando abusan de su poder e infringen los derechos constitucionales de los demás.  Alentamos a cualquier persona que pueda tener información adicional sobre la conducta de Jimmy Solano-Arias, que llame al FBI al 1-800-CALL-FBI".

El Subdirector a Cargo del FBI, Michael J. Driscoll ha dicho: "Como se alega, Solano-Arias, quien estaba empleado como guardia de seguridad armado asignado al 26 de Federal Plaza, agredió sexualmente a la víctima, que había venido al edificio para completar su papeleo de asilo.  Al hacerlo, violó los derechos constitucionales de la víctima a través de la agresión sexual forzada.  Tal y cómo la Acusación Formal por Gran Jurado de hoy debiera demostrar, el FBI nunca tolerará este tipo de actividad, y Solano-Arias se verá obligado a enfrentar las consecuencias de sus acciones".

Según las alegaciones en la Querella y la Acusación Formal por Gran Jurado, que se presentaron en el Tribunal Federal de Manhattan:[1]

En o alrededor del 4 de mayo del 2023, SOLANO-ARIAS, estaba empleado como guardia de seguridad con una empresa que tiene un contrato con el Servicio Federal de Protección para proporcionar servicios de seguridad armada en el 26 de Federal Plaza.  SOLANO-ARIAS estaba vestido de uniforme negro y gris de guardia de seguridad y llevaba su arma de fuego en la cintura, la cual le proveía su empleador.

En o alrededor del 4 de mayo del 2023, la víctima acudió al 26 de Federal Plaza con el fin de presentar una solicitud de asilo.  Una vez allí, SOLANO-ARIAS se ofreció a ayudar a la víctima con su documentación de asilo.  En vez de prestar ayuda, SOLANO-ARIAS, sin embargo, llevó a la víctima a una oficina cerrada en el segundo piso del 26 de Federal Plaza, donde SOLANO-ARIAS exigió que la víctima practicara sexo oral en SOLANO-ARIAS.  Cuando la víctima intentó resistirse a las exigencias de SOLANO-ARIAS, SOLANO-ARIAS tocó su arma de fuego, que estaba enfundada en su cintura.  Temiendo que SOLANO-ARIAS lo matara, la víctima, le practicó sexo oral a SOLANO-ARIAS, lo que causó dolor físico y daños a la víctima.  Después del ataque, cuando la víctima pudo salir de la oficina, inmediatamente denunció la agresión sexual a las autoridades.

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SOLANO-ARIAS, 42, del Bronx, Nueva York, se le ha imputado un cargo de privación de derechos bajo el manto de la ley, lo cual incluyó el secuestro y el abuso sexual agravado, lo que conlleva una condena máxima de cadena perpetua.

La posible condena máxima, está prescrita por el Congreso y se menciona aquí sólo con fines informativos, ya que cualquier sentencia del acusado será determinada por un juez.

El Fiscal Williams elogió el impresionante trabajo de investigación por el FBI.  El Fiscal Williams, al igual, pide que cualquier persona que tenga información con respecto a JIMMY SOLANO-ARIAS, se comunique con la línea de información del FBI llamando al 1-800-CALL-FBI.

El proceso de este caso está siendo dirigido por la Oficina de Derechos Civiles, una unidad en la División Penal.  La Fiscal Auxiliar Lindsey Keenan está a cargo del enjuiciamiento.

El cargo contenido en la Querella y en la Acusación Formal por Gran Jurado, es meramente una acusación, y el acusado es presunto inocente a menos y hasta que se demuestre su culpabilidad.

[1] Lo que significa la frase introductoria, y la totalidad del texto de la Querella y la Acusación Formal por Gran Jurado y la descripción de la Querella y las acusaciones establecidas en este documento, constituyen sólo alegaciones, y cada hecho descrito debe tratarse como una alegación.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that CORNELIO CAZAREZ MADRID and SINOHE ANTONIO ARAJUO MEZA, both citizens of Mexico, were sentenced today to 38 and 30 years in prison, respectively, in connection with their importation of thousands of kilograms of cocaine, heroin, and methamphetamine into the United States.  The defendants pled guilty to the charges in the Indictment on July 30, 2019, which charged them with conspiring to import and distribute controlled substances into the United States.  U.S. District Judge Gregory H. Woods imposed today’s sentences.   

U.S. Attorney Damian Williams said: “Madrid and Meza were two prolific drug traffickers who worked with the Sinaloa Cartel to import thousands of kilograms of heroin, cocaine, and methamphetamine into this country and who relied on brutal violence to protect their drug organization.  Today’s sentence sends a message that anyone who participates in the Sinaloa Cartel’s assault on Americans by flooding our communities with poison will be held accountable and will face significant consequences.  This Office is committed to addressing the ongoing threat posed to the health and safety of all Americans by the Sinaloa Cartel and every partner in its distribution chain.”

According to the allegations in the Indictment, court transcripts, sentencing submissions, and other publicly filed documents:

CORNELIO CAZAREZ MADRID and SINOHE ANTONIO ARAJUO MEZA ran an illicit drug business in coordination with the Sinaloa Cartel — a notorious and violent drug trafficking organization based out of Sinaloa, Mexico.  The defendants sent massive quantities of narcotics to the United States.  Between 2015 and 2016, the defendants and their coconspirators were responsible for trafficking more than 2,000 kilograms of cocaine, more than 130 kilograms of heroin, and more than 300 pounds of methamphetamine.  During the course of the investigation, the Drug Enforcement Administration (“DEA”) seized approximately 675 kilograms of cocaine, 70 kilograms of heroin, and 26 kilograms of methamphetamine.  As the defendants flooded the United States with dangerous and addictive substances, they and other members of the Cartel made millions of dollars.  The DEA seized $3.4 million in cash through its investigation of the defendants and their coconspirators. 

This sprawling drug trafficking operation was not only dangerous in its importation of thousands of kilograms of poison into the United States but also in its use of firearms and violence, including murder, to protect the operation.  Through the course of the investigation, the DEA seized seven guns connected with the defendants’ drug shipments in the United States.  As an example of the violence used by this conspiracy, in April 2015, two Cartel associates exchanged messages with MADRID concerning two individuals suspected of cooperating with law enforcement (the “Victims”).  One of the Cartel associates then sent MADRID messages showing that the Victims had been brutally murdered and sent MADRID photographs of the Victims shot dead in a pool of blood. 

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MADRID and MEZA, both 42 and citizens of Mexico, were convicted of one count of conspiracy to import controlled substances and one count of distribution of controlled substances.  In addition to the prison terms, MADRID and MEZA were each additionally sentenced to five years of supervised release.  

Mr. Williams praised the outstanding work of the DEA’s Los Angeles Field Division, the New York Strike Force, the Hawthorne Police Department, the Los Angeles County Sheriff’s Department, the DEA’s Guatemala Country Office, the DEA’s Costa Rica Country Office, and the DEA’s Bogota Country Office.  Mr. Williams also thanked the Justice Department’s Office of International Affairs for their assistance in securing the extradition of the defendants.    

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Amanda L. Houle and Rebekah Donaleski are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, announced today that REGINALD FOWLER was sentenced to 75 months in prison for arranging to process more than $700 million of unregulated transactions on behalf of cryptocurrency exchanges, in violation of federal anti-money laundering laws, lying to U.S. banks to do so, and defrauding the Alliance of American Football (“AAF”), a short-lived professional football league, in connection with his acquisition of a significant ownership stake in the league. 

U.S. Attorney Damian Williams said: “Reginald Fowler evaded federal law by processing hundreds of millions of dollars of unregulated transactions on behalf of cryptocurrency exchanges as a shadow bank.  He did so by lying to legitimate U.S. financial institutions, which exposed the U.S. financial system to serious risk.  He then victimized a professional football league by lying about his net worth in exchange for a substantial portion of the league.  Let it be clear: this Office is committed to prosecuting people who lie to banks and skirt the law as a means to conduct their business.”

According to court filings and statements made in court proceedings:[1]

In or about February 2018, REGINALD FOWLER established Global Trading Solutions LLC (“GTS”) and began working with Crypto Capital and other related companies (the “Crypto Companies”), which were operated by Israeli nationals.  The Crypto Companies marketed themselves as providing a seamless way for individuals to exchange standard currency for cryptocurrency.  A number of cryptocurrency exchanges began using the Crypto Companies to process their fiat-to-cryptocurrency transactions.

Because banks were reluctant to handle cryptocurrency transactions, in reality, the Crypto Companies could not access legitimate financial institutions.  Instead, the Crypto Companies lied to banks in order to open accounts that were used to process cryptocurrency transactions without the banks’ knowledge.  FOWLER opened dozens of such accounts in the United States and around the world.  He did not disclose GTS’s involvement with the Crypto Companies and the fact that it was operating as a payment processor for hundreds of millions of dollars in cryptocurrency transactions.  FOWLER also directed other individuals to include false information on wire transfer instructions to further deceive banks about the nature of GTS’s business.  In less than 10 months, FOWLER processed approximately $750 million in cryptocurrency transactions in various currencies.  At no point were FOWLER, GTS, nor any of the Crypto Companies ever licensed as a money transmitting business in the United States, as required by federal law.      

Additionally, in 2018, FOWLER defrauded the AAF in connection with his acquisition of a significant ownership stake in the league.  In the course of negotiating his investment in the AAF, FOWLER falsely claimed personal ownership of GTS funds that, in fact, belonged to clients of FOWLER’s illegal money transmission service established in support of the Crypto Companies.  As he did when opening bank accounts, FOWLER lied to AAF executives, telling them that the funds in the GTS bank accounts derived from real estate investments as well as government contracts and that the tens of millions of dollars in the GTS accounts were liquid assets he could use to invest in the AAF.  FOWLER did not disclose his involvement with the Crypto Companies.  Moreover, although FOWLER experienced account closures and government seizure of GTS funds in the month leading up to his investment in the AAF, FOWLER did not disclose those facts to the AAF.  FOWLER acquired a significant investment stake in the AAF in November 2018 yet was unable to fund that investment.  Based, in part, on FOWLER’s lies, the AAF declared bankruptcy in about April 2019, ending the season and dashing the hopes of FOWLER’s victims.

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In addition to the prison sentence, FOWLER, 64, of Chandler, Arizona, was ordered to pay forfeiture of $740,249,140.52 and restitution in the amount of $53,189,261.80 to the AAF.

Mr. Williams praised the outstanding investigative work of Special Agents from the Federal Bureau of Investigation’s New York Money Laundering Investigation Squad and Special Agents from the Internal Revenue Service-Criminal Investigations.

The prosecution of this case is being overseen by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Jessica Greenwood, Samuel Raymond, Samuel Rothschild, and Sheb Swett are in charge of the case.

[1] As to FOWLER’s co-defendants, the entirety of the text of the Indictments and the descriptions in the Indictments 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, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that JIMMY SOLANO-ARIAS, a former armed security guard at the Jacob K. Javits Federal Office Building located at 26 Federal Plaza in Manhattan, was indicted in federal court for violating the constitutional rights of an asylum seeker (the “Victim”) by forcing the Victim, through the threat of death or serious bodily injury, to perform oral sex on SOLANO-ARIAS while inside a locked office in 26 Federal Plaza.  SOLANO-ARIAS was arrested and charged by Complaint on May 5, 2023.  The case is assigned to U.S. District Judge Paul G. Gardephe.

U.S. Attorney Damian Williams said: “As alleged, Jimmy Solano-Arias, an armed security guard who was tasked with keeping the many federal employees and visitors to 26 Federal Plaza safe, instead used his uniform and firearm to force a vulnerable individual who was seeking asylum to perform oral sex on him.  This Office is committed to holding all those who act under color of law accountable when they abuse their power and violate the constitutional rights of others.  We encourage anyone who may have additional information into Jimmy Solano-Arias’s conduct to please call the FBI at 1-800-CALL-FBI.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, Solano-Arias, who was employed as an armed security guard assigned to 26 Federal Plaza, sexually assaulted the victim, who had come to the building to complete his asylum paperwork.  In doing so, he violated the victim’s constitutional rights through forced sexual assault.  As today’s indictment should demonstrate, the FBI will never tolerate this type of activity, and Solano-Arias will be forced to face the consequences of his actions.”

According to the allegations in the Complaint and Indictment that were filed in Manhattan federal court:[1]

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

On or about May 4, 2023, the Victim went to 26 Federal Plaza for the purpose of submitting an asylum application.  Once there, SOLANO-ARIAS offered to assist the Victim with his asylum paperwork.  Instead of providing assistance, however, SOLANO-ARIAS led the Victim to a locked office on the second floor of 26 Federal Plaza, where SOLANO-ARIAS demanded that the Victim perform oral sex on SOLANO-ARIAS.  When the Victim attempted to resist SOLANO-ARIAS’s demands, SOLANO-ARIAS touched his firearm, which was holstered on his waist.  Fearing that SOLANO-ARIAS would kill the Victim, the Victim performed oral sex on SOLANO-ARIAS, which caused physical pain and injury to the Victim.  After the assault, when the Victim was able to leave the office, he immediately reported the sexual assault to law enforcement.

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SOLANO-ARIAS, 42, of the Bronx, New York, is charged with one count of deprivation of rights under color of law, which involved kidnapping and aggravated sexual abuse, and which carries a maximum sentence of life 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.  Mr. Williams requests that any individuals who have information with respect to JIMMY SOLANO-ARIAS contact the FBI Tip Line at 1-800-CALL-FBI.

The prosecution of this case is being handled by the Office’s Civil Rights Unit in the Criminal Division.  Assistant U.S. Attorney Lindsey Keenan is in charge of the prosecution.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that FRANCISCO JAVIER MECINA BARRERA, a/k/a “Angel,” pled guilty today to conspiring to import and distribute large quantities of methamphetamine and to using, carrying, and possessing a firearm which was brandished in furtherance of those drug crimes.  The charges stem from MECINA BARRERA’s leadership of a large-scale methamphetamine distribution and importation operation he called the “Cartel de Houston” — Spanish for “Houston Cartel” — or “CDH.”  MECINA BARRERA pled guilty before U.S. District Judge Victor Marrero.

U.S. Attorney Damian Williams said: “The defendant was the leader of a drug and firearms trafficking organization that smuggled large numbers of firearms from the United States into Mexico.  The organization then traded the firearms for hundreds of kilograms of methamphetamine, which were distributed throughout the United States.  Today’s guilty plea reaffirms our Office’s commitment to hold large-scale international drug and firearms traffickers accountable for their crimes.”

According to court filings and statements made in court proceedings:

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

CDH was also an international supplier of firearms.  At MECINA BARRERA’s direction, members of CDH smuggled numerous firearms into Mexico and delivered them to Mexico-based drug traffickers, often in exchange for methamphetamine that they then smuggled back into the United States for distribution.  MECINA BARRERA and other members of CDH also used firearms to threaten and intimidate a narcotics customer of CDH who owed MECINA BARRERA money for drugs. 

After establishing CDH, MECINA BARRERA appointed co-defendant Adalid Cabrera Huato, a/k/a “China,” as his right-hand man in Houston, and MECINA BARRERA recruited others, including co-defendants GIOVANNI DE LA MORA and JAIME SANTILLANO, to acquire and transport numerous guns from the United States into Mexico, trade them for substantial quantities of methamphetamine, and transport the drugs into the United States, where they would distribute them throughout the country, including to the Bronx, New York.  MECINA BARRERA provided his co-conspirators with vehicles and instructed them on how to hide the guns and drugs in the fuel tank to avoid detection.  MECINA BARRERA also utilized a Mexico-based religious figure known as “Lucifer” to bless the CDH’s members and drugs as they were crossing the border.

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MECINA BARRERA, 31, of Michoacan, Mexico, and Houston, Texas, pled guilty to (i) conspiracy to distribute and possess with intent to distribute methamphetamine; (ii) conspiracy to illegally import methamphetamine into the United States; and (iii) use, carrying, and possession of a firearm in connection with, and in furtherance of, the narcotics conspiracy and the narcotics importation conspiracy, which was brandished.  The charges carry a mandatory minimum sentence of 17 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.

CABRERA HUATO, DE LA MORA, and SANTILLANO previously pled guilty to conspiracy to distribute and possess with intent to distribute methamphetamine.  CABRERA HUATO is scheduled to be sentenced on June 23, 2023.  DE LA MORA and SANTILLANO were previously sentenced by Judge Marrero to 90 months and 86 months in prison, respectively.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today an Indictment charging CURTIS ELLINGTON with enticing a minor to engage in unlawful sexual activity and committing this offense while being a registered sex offender.  ELLINGTON was arrested in Kansas on April 27, 2023, and detained pending his transfer to White Plains federal court.  Today, ELLINGTON was arraigned in White Plains and detained.

U.S. Attorney Damian Williams said: “Curtis Ellington, a convicted rapist, was allegedly undeterred by his previous involvement with the criminal justice system.  This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them.  We will use every tool available to law enforcement to investigate and prosecute those alleged to have sexually exploited children.  We encourage anyone who may have additional information into Curtis Ellington’s conduct to please call the FBI at 1-800-CALL-FBI.” 

As alleged in the Complaint filed on April 26, 2023, and the Indictment filed on May 24, 2023, in White Plains federal court:[1]

CURTIS ELLINGTON was convicted on or about January 12, 2007, in Orange County Court of Rape in the First Degree: Intercourse with A Person Less Than 11 Years Old and sentenced to seven years in prison.  As a result of this conviction, ELLINGTON is required to register as a sex offender. 

On or about April 7, 2023, ELLINGTON slept at the home of a 15-year-old minor (“Victim-1”) and, while there, engaged in sexual activity with Victim-1.  Prior to engaging in sexual activity with Victim-1, ELLINGTON and Victim-1 engaged in numerous communications via Instagram in which ELLINGTON, who used the Instagram screen name “Godson,” discussed his desire to engage in sexual activity with Victim-1.

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ELLINGTON, 33, of Junction City, Kansas, is charged in Count One with enticing a minor to engage in unlawful sexual activity and in Count Two with engaging in this offense while a registered sex offender.  Count One carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.  Count Two carries a mandatory sentence of 10 years in prison, which must be imposed to run consecutive to any sentence imposed in connection with Count One. 

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.

Mr. Williams stated that the investigation is ongoing.  Mr. Williams requests that any individuals who have information with respect to CURTIS ELLINGTON contact the Federal Bureau of Investigation (“FBI”) Tip Line at 1-800-CALL-FBI.

Mr. Williams praised the efforts of the FBI, the Geary County Sheriff’s Office, the U.S. Attorney’s Office for the District of Kansas, and the Middletown Police Department in connection with this investigation.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that DIEGO MATEO, a/k/a “Casa,” was sentenced to 27 years in prison in connection with his participation in the Black Mob set of the Latin Kings and their distribution of narcotics, including heroin, fentanyl, and cocaine.  MATEO pled guilty on February 23, 2022, before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence. 

U.S. Attorney Damian Williams said: “For two decades, Mateo ran the largest and most violent set of the Latin Kings in the New York area.  He recruited hundreds of young men into his gang and used them to run a massive drug operation that committed countless acts of violence.  Today’s sentencing — along with the other significant sentences that have been imposed in this case — proves that gang life is not glamorous and will lead to years in prison.”     

According to public filings and statements made in court:

The Black Mob is a New York-based set, or “tribe,” of the nationwide Latin Kings gang.  In order to enrich the enterprise, protect and expand its criminal operations, enforce discipline among its members, and retaliate against members of rival gangs, members and associates of the Black Mob committed, conspired, attempted, and threatened to commit acts of violence; distributed and possessed with intent to distribute narcotics, including heroin, fentanyl, and crack; committed robberies; and obtained, possessed, and used firearms.

MATEO was the highest-ranking member of the Black Mob.  He founded the gang in 2002 and then grew the Black Mob into the largest Latin Kings set in the New York area with a power base built on massive amounts of drug trafficking and a reputation for violence.  Prior to the instant prosecution, the Black Mob had approximately 300 members.  The fear and power wielded by the Black Mob amplified MATEO’s own personal reputation, making him, at one point, the highest-ranking Latin King in the entire East Coast.  As the leader of the Black Mob, MATEO oversaw the Black Mob’s operations and also ordered and participated in acts of violence and narcotics trafficking.  This violence included multiple arsons and a November 18, 2012, shooting at a gang rival’s funeral that was ordered by MATEO.  Three of the deceased’s family members were shot.

In December 2019, 17 members and associates of the Black Mob were charged with racketeering offenses, narcotics conspiracy, and firearms offenses.  In April 2021, seven additional members and associates of the gang were charged, including MATEO.  The defendants in this case have included the entire senior leadership of the gang and its most violent members.  In addition to today’s sentencing of MATEO, the sentences of the Black Mob leadership have included CARMELO VELEZ (228 months in prison), CHRISTOPHER RODRIGUEZ (210 months in prison), ANGEL LOPEZ (240 months in prison), LUIS SEPULVEDA (180 months in prison), EMMANUEL BONAFE (216 months in prison), MARK WOODS (228 months in prison), WILLIAM GONZALEZ (204 months in prison), ALBERTO BORGES (204 months in prison), RICARDO RICUARTE (168 months in prison), JUAN HERNANDEZ (192 months in prison), RAUL CUELLO (168 months in prison), and PAUL CUELLO (168 months in prison).

MATEO pled guilty to one count of conspiracy to distribute and possess with intent to distribute narcotics.  In connection with his guilty plea, MATEO further stipulated to his involvement in multiple acts of violence: the November 18, 2012, shooting at a gang rival’s funeral and a 2016 arson of a commercial wedding venue in Connecticut.

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In addition to the prison term, MATEO, 46, of the Bronx, New York, was sentenced to five years of supervised release.

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

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Adam Hobson, David Robles, Elinor Tarlow, and Patrick Moroney 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 JUAN EFREN PAULINO with conspiracy to distribute narcotics and distribution of narcotics.  PAULINO was arrested last night in the Washington Heights neighborhood of Manhattan.  Today, PAULINO was presented before United States Magistrate Judge Katharine H. Parker and detained. 

U.S. Attorney Damian Williams said: “Last night’s seizure not only removed substantial quantities of deadly narcotics from the streets, but it also hit drug dealers in their pockets and potentially saved the lives of countless New Yorkers suffering from addiction.  Thanks to the work of our law enforcement officers, another alleged narcotics trafficker’s operation has been disrupted.” 

DEA Special Agent in Charge Frank A. Tarentino III said: “This pill mill was a ticking time bomb for New Yorkers.  With the amount of fentanyl seized, potentially countless lethal doses were taken off the streets.  This multi-million-dollar seizure was in a prime location for distribution as the operation was being pumped out of the basement of an apartment building near major thoroughfares.  I applaud the hard work and resolve of the agents and officers who worked on this investigation.”

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

On or about May 31, 2023, law enforcement officers executed a search of the basement of a residential building located in the Washington Heights neighborhood of Manhattan.  During the course of that search, they encountered PAULINO and large quantities of illegal narcotics as well as manufacturing and distribution equipment used to press illegal narcotics into pill form.  In particular, law enforcement officers encountered three commercial-grade pill presses, one commercial mixer, approximately 200,000 pills, and blocks, baggies, and buckets of powder.  The following is a photograph of the various substances seized:    

Although lab testing is pending for the pills and powders discovered during the search, preliminary spectrometry tests reveal that the powders have tested positive for, among other things, fentanyl, methamphetamine, and cocaine.

In post-arrest statements, PAULINO stated that he was in the basement of the building to obtain a sample of cocaine to give to someone.  Additionally, a preliminary review of PAULINO’s cellphone, seized upon his arrest, reveals numerous photographs of what appear to be narcotics, including many of the same types of narcotics found during the search. 

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PAULINO, 52, of New York, New York, is 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 defendant will be determined by the judge. 

Mr. Williams praised the outstanding investigative work of the El Dorado Task Force, which is comprised of law enforcement officers from the DEA, HSI, and the New York City Police Department, in connection with this investigation.

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 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 the conviction of KENNETH WYNDER Jr., a former New York State Trooper and the president of the Law Enforcement Employees Benevolent Association (“LEEBA”), a labor union for law enforcement officers employed by the City of New York (the “City”), and ANDREW BROWN, a/k/a “Drew Brown,” the former financial advisor for LEEBA, for defrauding union members by misappropriating money from LEEBA’s Annuity Fund.  WYNDER was also convicted of personal income tax evasion and conspiring to evade federal taxes, including payroll taxes owed by LEEBA and its employees.  Steven Whittick, LEEBA’s former treasurer and a former police officer for New York City’s Department of Environmental Protection (“DEP”), previously pled guilty to conspiring to commit tax evasion and making false statements to law enforcement.  WYNDER and BROWN were convicted after a five-day jury trial before U.S. District Judge P. Kevin Castel and are scheduled to be sentenced on October 18, 2023, by Judge Castel.    

U.S. Attorney Damian William said: “As the jury unanimously found, Kenneth Wynder and Andrew Brown raided a union-sponsored retirement plan for years, placing their personal interest over the union members they were duty bound to look out for.  The jury also found that Wynder then evaded taxes on income he obtained from the union, including as a product of their theft from the union members’ retirement accounts.”

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

Law Enforcement Employees Benevolent Association and the Annuity Fund

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

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

WYNDER

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

BROWN

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

            WYNDER’s and BROWN’s Fraud Scheme

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

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

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

            WYNDER’s Tax Evasion

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

*                *                *

WYNDER, 59, of Stroudsburg, Pennsylvania, and BROWN, 55, of Putnam Valley, New York, were each convicted of one count of conspiracy of commit wire fraud and one count of wire fraud, each of which carry a maximum penalty of 20 years in prison.  WYNDER was also convicted of one count of conspiracy to defraud the United States and four counts of tax evasion, each of which carry a maximum penalty of five years in prison.

On November 17, 2021, Whittick was sentenced to 28 months in prison for conspiring to commit tax evasion and making false statements and was ordered to pay $179,766.80 in restitution to the IRS.

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

The case is being prosecuted by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Eli J. Mark, Kedar S. Bhatia, Andrew Rohrbach, and David R. Lewis were assigned to the prosecution, with the assistance of Paralegal Specialists Connor Hamill and Lauren Scarff.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ILONA DZHAMGAROVA and ARTHUR ARCADIAN were sentenced today by U.S. District Judge Mary Kay Vyskocil for their roles in an immigration fraud conspiracy.  DZHAMGAROVA, a leader of the scheme and an immigration lawyer, was sentenced to two years in prison, and ARCADIAN, also an attorney, was sentenced to six months in prison. 

U.S. Attorney Damian Williams said: “Out of her Brighton Beach law office, Dzhamgarova, assisted by Arcadian and others, invented offensive lies to cheat our country’s asylum process.  The asylum system is designed to help some of the world’s most vulnerable people — those who justifiably fear imprisonment, assault, torture, or death because of their religion, nationality, ethnicity, political views, gender, or sexual orientation.  When attorneys cynically exploit those fears and line their pockets by preparing and filing fraudulent documents and coaching clients to lie under oath, they abuse the trust placed in them and undermine the asylum system.”

According to the Indictment, other documents filed in this case, and statements made in open court:

Between November 2018 and December 2021, ILONA DZHAMGAROVA, an immigration attorney, ran the Dzhamgarova Firm, an immigration services firm based in Brooklyn, New York.  The Dzhamgarova Firm worked with clients — primarily aliens from Russia and the Commonwealth of Independent States — seeking visas, asylum, citizenship, and other forms of legal status in the United States.  Among other things, the Dzhamgarova Firm advised certain of its clients regarding the manner in which they were most likely to obtain asylum in this country, fully understanding that those clients did not legitimately qualify for asylum.  The firm also prepared and submitted to United States Citizenship and Immigration Services (“USCIS”) clients’ fraudulent Form I-589 asylum applications, asylum affidavits — statements of an asylum applicant’s personal history and claimed basis for asylum, often including allegations of past persecution — and related supporting documentation.  Members and associates of the firm also coached certain clients to lie under oath during interviews conducted by USCIS Asylum Officers and provided legal representation to their clients during various immigration proceedings.

Among other things, DZHAMGAROVA advised clients to seek asylum by falsely claiming that they were members of the Lesbian, Gay, Bisexual, Transgender, and Queer community who suffered persecution in their native countries, when DZHAMGAROVA fully understood that these clients were not members of that community and suffered no such persecution.  Additionally, DZHAMGAROVA and her husband, ARTHUR ARCADIAN, also an attorney, prepared and submitted clients’ fraudulent asylum applications and affidavits to USCIS, under penalty of perjury, fully understanding that these documents at times contained material falsehoods.  DZHAMGAROVA, ARCADIAN, and others, including co-defendant Igor Reznik, also coached certain clients to lie in asylum interviews conducted by USCIS asylum officers and represented these clients as they lied under oath during immigration proceedings.

The Dzhamgarova Firm also employed writers, including Reznik, who knowingly concocted and drafted clients’ fraudulent asylum affidavits so that they could be submitted as part of clients’ asylum applications.  These affidavits, which were designed to support clients’ persecution claims, conveyed narrations of clients’ personal histories that were filled with falsehoods, including events and incidents of alleged persecution that were fabricated by Reznik and his co-conspirators. 

*                *                *

DZHAMGAROVA, 46, and ARCADIAN, 44, both of Brooklyn New York, previously pled guilty on January 25, 2023, before Judge Vyskocil to immigration fraud conspiracy.  As part of their sentences, DZHAMGAROVA was sentenced to two years of supervised release, ordered to forfeit $540,000, and ordered to pay a $15,000 fine, and ARCADIAN was sentenced to two years of supervised release, ordered to forfeit $1,500, and ordered to pay a $5,000 fine.

Reznik, 41, of New York, New York, who also previously pled guilty to immigration fraud conspiracy, is scheduled to be sentenced by Judge Vyskocil on June 7, 2023. 

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation’s New York Eurasian Organized Crime Task Force, USCIS’s New York Asylum Office and Fraud Detection and National Security Unit, and Homeland Security Investigations.  Mr. Williams thanked United States Customs and Border Protection for its assistance.

This case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys David R. Felton and Jonathan E. Rebold are in charge of the prosecution. 

Damian Williams, the United States Attorney for the Southern District of New York, and Paul Kiecker, the Administrator of the Food Safety and Inspection Service of the U.S. Department of Agriculture (“USDA-FSIS”), announced that the United States has sued N and M Food Wholesale Supply, Inc. (“N&M”) and its owners AHMED OMAR, ELSAYED HALIM, and ASHRAF MOUSA (collectively, the “Defendants”) for repeatedly preparing and selling uninspected or misbranded poultry products in violation of the Poultry Products Inspection Act (“PPIA”).  The U.S. has simultaneously entered into a consent decree, approved by U.S. District Judge Denise L. Cote, which requires the Defendants to comply with the PPIA and complete mandatory training and imposes significant civil penalties for any future violations.

U.S. Attorney Damian Williams said: “New Yorkers should be able to eat food from food carts and other retailers with the peace of mind that upstream wholesalers have complied with USDA safety regulations.  Through this lawsuit, we are sending a message to food wholesalers that they must adhere to the law in order to protect the public health.”

USDA-FSIS Administrator Paul Kiecker said: “Every individual deserves the assurance that the food they purchase is properly inspected and safe to eat.  FSIS remains committed to public health and we will take swift action to protect American consumers.”

The PPIA protects public health by imposing requirements on food suppliers regarding the inspection, processing, labeling, and packaging of poultry and poultry products.  These requirements give consumers confidence in the safety of poultry products that they purchase and allow public health officials to trace food safety problems to their source.

According to the complaint filed in Manhattan federal court:

The Defendants repeatedly violated the PPIA by offering for sale over 900 pounds of misbranded poultry that had not been federally inspected.  On multiple occasions, the Defendants prepared marinated chicken kebab skewers in a processing room in N&M’s warehouse without federal inspection.  These products were prepared for sale to N&M’s wholesale customers, including food cart owners, who sell the chicken to consumers.  Despite repeated warnings from USDA-FSIS, N&M continued to offer uninspected poultry products for sale and violate the law.  For example, in May 2021, N&M — which does not have a grant of federal inspection to process poultry products — purchased approximately 280 pounds of chicken leg meat and cut and marinated the chicken in its warehouse before returning it to its original packaging.  N&M then offered this uninspected and misbranded product for sale to wholesale customers.  

In this consent decree, the Defendants admit and accept responsibility for having repeatedly sold or offered for sale non-federally inspected and misbranded poultry products to wholesale customers, in violation of the PPIA.  Among other instances, on or about November 12, 2018, August 26, 2020, February 10, 2021, and May 24, 2021, the Defendants processed, sold, and/or offered for sale non-federally inspected poultry products.  Defendants further admit and accept responsibility for the fact that, on at least one occasion, the poultry product was also misbranded and falsely marked as federally inspected.

Pursuant to the consent decree, the Defendants are enjoined from selling or transporting any uninspected poultry products that are required to be inspected and passed by USDA, selling any mislabeled poultry products, preparing or processing poultry or poultry products in unsanitary conditions, not keeping records regarding poultry or poultry product business transactions, and engaging in any other conduct that would violate the PPIA.  The Defendants are subject to additional actions, including civil monetary penalties and other relief, if they violate the provisions of the consent decree.

*                *                *           

Mr. Williams thanked the Food Safety and Inspection Service of the U.S. Department of Agriculture for its efforts on this matter.

This case is being handled by the Environmental Protection Unit of the Office’s Civil Division.  Assistant U.S. Attorney Mollie Kornreich is in charge of the case.

A federal court in the Southern District of New York today unsealed a complaint charging two individuals with acting and conspiring to act in the United States as unregistered agents of the People’s Republic of China (PRC), conspiring to bribe and bribing a public official, and conspiracy to commit money laundering.

According to the complaint, John Chen, aka Chen Jun, 70, a Los Angeles resident and former citizen of the PRC, and Lin Feng, a Los Angeles resident and PRC citizen, allegedly participated in a PRC Government-directed scheme targeting U.S.-based practitioners of Falun Gong — a spiritual practice banned in the PRC. Chen and Feng were arrested today in the Central District of California.

“The Chinese government has yet again attempted, and failed, to target critics of the PRC here in the United States,” said Attorney General Merrick B. Garland. “We allege the defendants in this case attempted to bribe someone they thought was an IRS agent in order to further the Chinese government’s campaign of transnational repression in the United States. But the individual they attempted to bribe was in fact an undercover law enforcement agent, and both defendants were arrested this morning. The Justice Department will continue to investigate, disrupt, and prosecute efforts by the PRC government to silence its critics and extend the reaches of its regime onto U.S. soil. We will never stop working to defend the rights to which every person in the United States is entitled.”

“The Department of Justice continues to expose the Chinese government’s brazen attempts to perpetrate transnational repression, this time through attempted bribery,” said Deputy Attorney General Lisa O. Monaco. “As highlighted by today’s arrests and charges of conspiracy, bribery, and money laundering, we will not tolerate efforts by the PRC or any foreign government to intimidate, harass, or undermine the rights and freedoms enjoyed by all who live in the United States.”

“China’s government has once again shown its disregard for the rule of law and international norms,” said FBI Director Christopher Wray. “The FBI will not tolerate CCP repression — its efforts to threaten, harass, and intimidate people — here in the United States. We will continue to confront the Chinese government’s efforts to violate our laws and repress the rights and freedoms of people in our country. No other nation poses as severe a threat to the democratic values of the United States as the government of the People’s Republic of China,” said FBI Deputy Director Paul Abbate. “The FBI will not stand by as the PRC attempts to weaponize our institutions and programs and attack the rights of those on U.S. soil. Any attempt to repress or harass individuals runs directly counter to the ideals our nation was founded upon, and it simply will not be tolerated. The FBI and our partners remain committed to confronting the illegal conduct of the PRC government that threatens our national security and freedom.”

“John Chen and Lin Feng allegedly waged a campaign at the behest of the Government of the People’s Republic of China to influence a U.S. Government official in order to further the PRC Government’s repression of practitioners of Falun Gong,” said U.S. Attorney Damian Williams for the Southern District of New York. “Efforts to manipulate and use the arms of the U.S. Government to carry out the PRC Government’s autocratic aims are as shocking as they are insidious. My office will work vigorously to protect against malign foreign influences.”

The complaint alleges that from at least approximately January 2023 to May 2023, Chen and Feng worked inside the United States at the direction of the PRC government, including an identified PRC government official (PRC Official-1), to further the PRC government’s campaign to repress and harass Falun Gong practitioners. The PRC Government has designated the Falun Gong as one of the “five poisons,” or one of the top five threats to its rule. In China, Falun Gong adherents face a range of repressive and punitive measures from the PRC government, including imprisonment and torture.                 

As part of the PRC government’s campaign against the Falun Gong, Chen and Feng allegedly engaged in a PRC government-directed scheme to manipulate the IRS’s Whistleblower Program in an effort to strip the tax-exempt status of an entity run and maintained by Falun Gong practitioners (Entity-1). After Chen filed a defective whistleblower complaint with the IRS (the Chen Whistleblower Complaint), Chen and Feng paid $5,000 in cash bribes, and promised to pay substantially more, to a purported IRS agent who was in fact an undercover officer (Agent-1), in exchange for Agent-1’s assistance in advancing the complaint. Neither Chen nor Feng notified the Attorney General that they were acting as agents of the PRC government in the United States.

In the course of the scheme, Chen, on a recorded call, explicitly noted that the purpose of paying these bribes, which were directed and funded by the PRC government, was to carry out the PRC government’s aim of “toppl[ing] . . . the Falun Gong.” During a call intercepted pursuant to a judicially authorized wiretap, Chen and Feng discussed receiving “direction” on the bribery scheme from PRC Official-1, deleting instructions received from PRC Official-1 in order to evade detection, and “alert[ing]” and “sound[ing] the alarm” to PRC Official-1 if Chen and Feng’s meetings to bribe Agent-1 did not go as planned. Chen and Feng also discussed that PRC Official-1 was the PRC Government official “in charge” of the bribery scheme targeting the Falun Gong.

As part of this scheme, Chen and Feng allegedly met with Agent-1 in Newburgh, New York, on May 14.  During the meeting, Chen gave Agent-1 a $1,000 cash bribe as an initial, partial bribe payment. Chen further offered to pay Agent-1 a total of $50,000 for opening an audit of Entity-1, as well as 60% of any whistleblower award from the IRS if the Chen Whistleblower Complaint were successful. On May 18, Feng paid Agent-1 a $4,000 cash bribe at John F. Kennedy International Airport as an additional partial bribe payment in furtherance of the scheme. Chen allegedly obtained funding from the PRC government to make bribe payments during his trips to the PRC in the course of the scheme.

Chen and Feng are each charged with (1) one count of conspiring to act as an agent of a foreign government without notifying the Attorney General and to bribe a public official, which carries a maximum sentence of five years in prison; (2) one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison; (3) one count of bribing a public official, which carries a maximum sentence of 15 years in prison; and (4) one count of conspiring to commit international money laundering, which carries a maximum sentence of 20 years in prison.

The FBI New York and Los Angeles Field Offices and Counterintelligence Division are investigating the case with valuable assistance provided by the Treasury Inspector General for Tax Administration (TIGTA).

Assistant U.S. Attorneys Shiva H. Logarajah, Qais Ghafary, Michael D. Lockard, and Kathryn Wheelock for the Southern District of New York and Trial Attorney Christina A. Clark of the Counterintelligence and Export Control Section are prosecuting the case.

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

Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the Attorney General of the United States, Lisa O. Monaco, the Deputy Attorney General, Matthew G. Olsen, the Assistant Attorney General for National Security, Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), Paul Abbate, the Deputy Director of the FBI, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the FBI, Donald Alway, the Assistant Director in Charge of the Los Angeles Field Office of the FBI, and J. Russell George, the Treasury Inspector General for Tax Administration (“TIGTA”), announced today the unsealing of a Complaint charging JOHN CHEN, a/k/a “Chen Jun,” a U.S. citizen and former citizen of the People’s Republic of China (“PRC”), and LIN FENG, a PRC citizen, with acting and conspiring to act in the United States as unregistered agents of the PRC Government, conspiring to bribe and bribing a public official, and conspiracy to commit money laundering.  The charges in the Complaint arise from CHEN and FENG’s alleged participation in a PRC Government-directed scheme targeting U.S.-based practitioners of Falun Gong — a spiritual practice banned in the PRC.  CHEN and FENG were arrested today in the Central District of California and will make an initial appearance later today before Chief U.S. Magistrate Judge Pedro V. Castillo.

U.S. Attorney Damian Williams said: “John Chen and Lin Feng allegedly waged a campaign at the behest of the Government of the People’s Republic of China to influence a U.S. Government official in order to further the PRC Government’s repression of practitioners of Falun Gong.  Efforts to manipulate and use the arms of the U.S. Government to carry out the PRC Government’s autocratic aims are as shocking as they are insidious.  My Office will work vigorously to protect against malign foreign influences.”

Attorney General Merrick B. Garland said: “The Chinese government has yet again attempted, and failed, to target critics of the PRC here in the United States.  We allege the defendants in this case attempted to bribe someone they thought was an IRS agent in order to further the Chinese government’s campaign of transnational repression in the United States.  But the individual they attempted to bribe was in fact an undercover law enforcement agent, and both defendants were arrested this morning.  The Justice Department will continue to investigate, disrupt, and prosecute efforts by the PRC government to silence its critics and extend the reaches of its regime onto U.S. soil.  We will never stop working to defend the rights to which every person in the United States is entitled.”

Deputy Attorney General Lisa O. Monaco said: “The Department of Justice continues to expose the Chines government’s brazen attempts to perpetrate transnational repression, this time through attempted bribery.  As highlighted by today’s arrests and charges of conspiracy, bribery, and money laundering, we will not tolerate efforts by the PRC or any foreign government to intimidate, harass, or undermine the rights and freedoms enjoyed by all who live in the United States.”

Assistant Attorney General Matthew G. Olsen said: “The Department of Justice continues to expose the Chinese government’s brazen attempts to perpetuate transnational repression, this time through attempted bribery.  As highlighted by today’s arrests and charges of conspiracy, bribery, and money laundering, we will not tolerate efforts by the PRC or any foreign government to intimidate, harass, or undermine the rights and freedoms enjoyed by all who live in the United States.”

FBI Director Christopher A. Wray said: “China’s government has once again shown its disregard for the rule of law and international norms.  The FBI will not tolerate CCP repression – its efforts to threaten, harass, and intimidate people – here in the United States.  We will continue to confront the Chinese government’s efforts to violate our laws and repress the rights and freedoms of people in our country.”

FBI Deputy Director Paul Abbate said: "No other nation poses as severe a threat to the democratic values of the United States as the government of the People's Republic of China.  The FBI will not stand by as the PRC attempts to weaponize our institutions and programs and attack the rights of those on U.S. soil.  Any attempt to repress or harass individuals runs directly counter to the ideals our nation was founded upon, and it simply will not be tolerated.  The FBI and our partners remain committed to confronting the illegal conduct of the PRC government that threatens our national security and freedom."

FBI New York Assistant Director in Charge Michael J. Driscoll said: “We allege Chen and Feng, acting on behalf of the Chinese government, attempted to execute a scheme to manipulate a United States government official to repress individuals opposed to the People’s Republic of China.  This appears to be another example of the Chinese government’s willingness to disregard the laws and freedoms of the United States as they attempt to harm anyone with views they oppose.  The FBI will continue to be resolute in protecting people from repressive actions.”

FBI Los Angeles Assistant Director in Charge Donald Alway said: “The alleged activity is antithetical to fundamental American values, and those who practice transnational oppression on behalf of the Chinese government must be held accountable.  The FBI will continue to invest resources to protect the rights of Americans and those who come to live, work, and study in the United States.”

TIGTA Inspector General J. Russell George said: “The attempt to undermine the integrity of our tax administration system is disturbing.  The individuals who thought they could do so have learned a hard lesson.  The Treasury Inspector General for Tax Administration is committed to protecting the Nation’s tax system.  I want to thank our law enforcement partners and the U.S. Attorney’s Office for their efforts.”

According to the allegations contained in the Complaint unsealed today in White Plains federal court:[1]

From at least approximately January 2023 to May 2023, CHEN and FENG worked inside the United States at the direction of the PRC Government, including an identified PRC Government official (“PRC Official-1”), to further the PRC Government’s campaign to repress and harass Falun Gong practitioners.  The PRC Government has designated the Falun Gong as one of the “Five Poisons,” or one of the top five threats to its rule.  In China, Falun Gong adherents face a range of repressive and punitive measures from the PRC Government, including imprisonment.                        

As part of the PRC Government’s campaign against the Falun Gong, CHEN and FENG allegedly engaged in a PRC Government-directed scheme to manipulate the Internal Revenue Service’s (“IRS”) Whistleblower Program in an effort to strip the tax-exempt status of an entity run and maintained by Falun Gong practitioners (“Entity-1”).  After CHEN filed a defective whistleblower complaint with the IRS (the “Chen Whistleblower Complaint”), CHEN and FENG paid $5,000 in cash bribes, and promised to pay substantially more, to a purported IRS agent who was in fact an undercover officer (“Agent-1”) in exchange for Agent-1’s assistance in advancing the complaint.  Neither CHEN nor FENG notified the Attorney General that they were acting as agents of the PRC Government in the United States.

In the course of the scheme, CHEN, on a recorded call, explicitly noted that the purpose of paying these bribes, which were directed and funded by the PRC Government, was to carry out the PRC Government’s aim of “toppl[ing] . . . the Falun Gong.”  During a call intercepted pursuant to a judicially authorized wiretap, CHEN and FENG discussed receiving “direction” on the bribery scheme from PRC Official-1, deleting instructions received from PRC Official-1 in order to evade detection, and “alert[ing]” and “sound[ing] the alarm” to PRC Official-1 if CHEN and FENG’s meetings to bribe Agent-1 did not go as planned.  CHEN and FENG also discussed that PRC Official-1 was the PRC Government official “in charge” of the bribery scheme targeting the Falun Gong.

As part of this scheme, CHEN and FENG allegedly met with Agent-1 in Newburgh, New York, on May 14, 2023.  During the meeting, CHEN gave Agent-1 a $1,000 cash bribe as an initial, partial bribe payment.  CHEN further offered to pay Agent-1 a total of $50,000 for opening an audit of Entity-1, as well as 60% of any whistleblower award from the IRS if the Chen Whistleblower Complaint were successful.  On May 18, 2023, FENG paid Agent-1 a $4,000 cash bribe at John F. Kennedy International Airport as an additional partial bribe payment in furtherance of the scheme. 

*                *                *

CHEN, 70, of the PRC and Los Angeles, California, and FENG, 43, a PRC citizen and resident of Los Angeles, California, are each charged with one count of conspiring to act as an agent of a foreign government without notifying the Attorney General and to bribe a public official, which carries a maximum sentence of five years in prison; one count of acting as an agent of a foreign government without notifying the Attorney General, which carries a maximum sentence of 10 years in prison; one count of bribing a public official, which carries a maximum sentence of 15 years in prison; and one count of conspiring to commit international 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 a judge.

Mr. Williams praised the outstanding investigative work of the FBI’s New York and Los Angeles Field Offices and Counterintelligence Division and TIGTA.  Mr. Williams thanked the Department of Justice’s National Security Division, Counterintelligence and Export Control Section and the U.S. Attorney’s Office for the Central District of California for their assistance.

The case is being handled by the Office’s White Plains Division and National Security and International Narcotics Unit.  Assistant U.S. Attorneys Shiva H. Logarajah, Qais Ghafary, Michael D. Lockard, and Kathryn Wheelock are in charge of the case, with assistance from Trial Attorney Christina Clark of the Counterintelligence and Export Control Section.

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

[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 that CHRISTOPHER MARGAIT was sentenced today to 65 months in prison for conspiracy to commit health care fraud by fraudulently trafficking in orders for durable medical equipment such as back, knee, and wrist braces.  MARGAIT previously pled guilty to the charge and was sentenced today before United States District Judge Denise Cote.

U.S. Attorney Damian Williams said: “Christopher Margait faced justice today for illegally selling orders for durable medical equipment and thus defrauding Medicare of at least $7 million.  Such fraud schemes do real harm to Medicare—a vital, taxpayer-funded program that provides affordable health care to people over 65 or with disabilities.”

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

From at least August 2019 through May 2021, MARGAIT and his co-defendant, Matthew Taylor Witkowski, engaged in a scheme to defraud Medicare by illegally obtaining and selling fraudulent orders for durable medical equipment (“DME”) paid for by Medicare.  Using a business that he jointly owned and operated with Witkowski, and a call center that Witkowski operated in the Dominican Republic, MARGAIT illegally generated and purchased fraudulent orders for DME and then sold those fraudulent orders to pharmacies and DME suppliers, including suppliers in New York City.  Those pharmacies and DME suppliers then used those fraudulent orders as the basis for at least $7 million in fraudulent claims to Medicare.  Many of these fraudulent orders used names and personal health information of actual Medicare beneficiaries, without the beneficiaries’ authorization or prior knowledge.  Many of these fraudulent orders also contained professional information of doctors and other health-care providers enrolled in the Medicare program, as well as the purported electronic signatures of these providers, which were falsified and created without the authorization or knowledge of these providers.

During the course of the scheme, MARGAIT and Witkowski received more than $3.8 million in illegal kickbacks from DME suppliers, who made these payments to True Prospects Marketing, Inc., a company controlled by MARGAIT and Witkowski.

*                *                *

MARGAIT, 45, of West Palm Beach, Florida, pled guilty on June 2, 2022, to a single count of conspiracy to commit health care fraud.  In addition, MARGAIT was sentenced to three years of supervised release and ordered to pay forfeiture of $3,853,442 and restitution of $7,000,000 to the Medicare program.

Witkowski, 38, a U.S. citizen who resided in the Dominican Republic since he was in college, was sentenced on April 20, 2023 to 60 months in prison and three years of supervised release.  He was also ordered to pay forfeiture of $4,065,995 and restitution of $8,131,990 to the Medicare program.

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

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

The U.S. Attorney’s Office for the Southern District of New York (“SDNY”) and the U.S. Department of Housing and Urban Development (“HUD”) are soliciting applications from qualified individuals to serve as monitor for the New York City Housing Authority (“NYCHA”) under the January 31, 2019 settlement agreement (“Agreement”) between HUD, NYCHA, and the City of New York, for the second five-year term of the monitorship.  The Agreement is available here.

The “primary purpose of the [Agreement] is to remedy the deficient physical conditions in NYCHA properties, ensure that NYCHA complies with its obligations under federal law, reform the management structure of NYCHA, and facilitate cooperation and coordination between HUD, NYCHA, and the City during the term of this Agreement.”  Agreement ¶ 8.  The monitor plays a significant role in providing strategic advice, technical support, and oversight necessary to achieve these purposes, in partnership with SDNY and HUD and in close collaboration with NYCHA’s own leadership, NYCHA’s residents and resident groups, and the City of New York.  Together with these and other stakeholders, the monitor is responsible for ensuring the implementation of reform efforts currently underway; developing additional strategies necessary to further the goals of the agreement; and leading data-driven assessments of NYCHA’s progress, including with respect to the obligations and metrics contained in the Agreement.[1]

SDNY and HUD anticipate that this selection will be for a five-year term beginning in early 2024.  Additional detail regarding SDNY and HUD’s expectations for the position is provided in Exhibit A to this notice.

Interested individuals should submit statements of interest for appointment to the monitorship position no later than July 22, 2023.  Statements of interest should be no longer than 20 pages (exclusive of exhibits), should address the applicant’s qualifications and monitoring plan, including how the applicant will successfully meet the expectations in Exhibit A, and should identify the key individuals and firms anticipated to support the monitorship.  Exhibits to the statement of interest should include a preliminary proposed budget for the first year of the monitorship term and an executed version of the form attached to this notice as Exhibit B. 

Statements of interest should be submitted electronically to USANYS.NYCHAmonitor@usdoj.gov; please do not submit paper copies. 

[1] Materials related to NYCHA’s reform efforts are available on NYCHA’s website, at https://www.nyc.gov/site/nycha/about/reports.page

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a complaint charging SANDEEP GROVER and SHIKHA SEHGAL with major fraud against the U.S. and conspiracy to commit wire fraud and bank fraud for their participation in a scheme to submit more than 100 applications containing false representations to seven financial institutions and fraudulently obtain over $13 million in government-backed Paycheck Protection Program (“PPP”) loans designed to provide relief to small businesses during the COVID-19 pandemic.  GROVER is also charged with aggravated identity theft for using an employee’s personally identifiable information without authorization to submit a loan application.  GROVER and SEHGAL will be presented today before U.S. Magistrate Judge Gabriel W. Gorenstein.

U.S. Attorney Damian Williams said: “Sandeep Grover allegedly used his tax preparation business to steal millions of dollars from a program created by Congress to assist struggling small businesses during the pandemic.  To pull off his scheme, Grover allegedly recruited co-conspirators like Shikha Sehgal, who opened bank accounts for shell companies and lied to banks about those companies’ loan eligibility.  This Office will continue to prosecute those who used the pandemic as an opportunity to defraud American taxpayers.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “The defendants allegedly devised a scheme to exploit the Paycheck Protection Program for millions of dollars for personal use rather than qualifying expenses.  Fraudulent schemes like these defraud not only a program intended to help small businesses weather a global pandemic but also the United States' taxpayers. The FBI will continue to ensure that anyone taking advantage of government backed programs are held responsible in the criminal justice system.”

As alleged in the Complaint[[1]]:

SANDEEP GROVER is the owner of Excellent Business Services Inc.  (“EBS”), a tax preparation business based in Seaford, New York.  From at least April 2020 through at least June 2021, GROVER submitted more than 100 PPP applications containing false representations to at least seven financial institutions, on behalf of dozens of his own companies as well as putative client companies on whose behalf GROVER created false IRS filings.  The applications certified to the United States Small Business Administration (“SBA”) that the companies each had multiple employees and spent tens of thousands of dollars in monthly payroll, but in fact the companies did not report wages to the Social Security Administration during the relevant time period.  Bank records also show that instead of using the PPP loan proceeds for allowable expenses, such as payroll costs, mortgage interest, rent, and utilities, GROVER moved millions of dollars in PPP loan proceeds between his many accounts and used those proceeds to purchase property, pay off personal loans, and pay expenses for other companies under his control.  GROVER used a variety of methods to increase the number of fraudulent loan applications he was able to submit.  Among other things, he recruited SHIKHA SEHGAL and others to open bank accounts for companies that did no business, create fake invoices and other supporting documentation, and submit fraudulent applications for numerous PPP loans.  GROVER also misused the personally identifiable information of one of his employees to obtain a loan.

*          *          *

GROVER, 54, of Massapequa, New York, and SEHGAL, 43, of Deer Park, New York, were each charged with one count of major fraud against the United States, which carries a maximum sentence of ten years in prison, and one count of conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison.  GROVER is also charged with one count of aggravated identity theft, which carries a mandatory sentence of two 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 would be determined by the judge.        

Mr. Williams praised the investigative work of the FBI and thanked the U.S. Small Business Administration’s Office of Inspector General and the New York Field Office of the Internal Revenue Service, Criminal Investigation, for their assistance.

This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jane Yumi Chong 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 VICENTE ESTEVES, a/k/a “El Bori,” was sentenced to 222 months in prison for being a supervisor in a conspiracy to possess with intent to distribute at least 150 kilograms of cocaine, which ESTEVES and his coconspirators hoped to import from Puerto Rico.  ESTEVES was convicted on August 4, 2022 following an eight-day jury trial.  Codefendants Heiver Ruiz-Patozano, Luis Gonzalez-Maldonado, and Alexander Almonte-Macea were previously sentenced for participating in the conspiracy by U.S. District Judge John G. Koeltl, who also imposed today’s sentence. 

U.S. Attorney Damian Williams said: “The business of cocaine ruins lives, destroys families, and foments violence.  Vicente Esteves returned to that business barely a year removed from serving a sentence for trafficking thousands of kilograms of cocaine into our communities.  Today’s sentence makes clear that this Office and our law enforcement partners will work tirelessly to ensure that the business of drug trafficking does not pay for anyone—least of all kingpins like Esteves.” 

According to the Superseding Indictment and the evidence at trial:

Between at least in or about September 2020 and in or about December 2020, ESTEVES belonged to a New York/New Jersey-based drug trafficking organization (“DTO”) that attempted to purchase 150 kilograms of cocaine from purported Colombian suppliers, who were in fact undercover law enforcement agents.  The DTO negotiated for the delivery of the cocaine in Puerto Rico, with the delivery of the purchase money in the Bronx, New York.  On the day of the exchange, December 4, 2020, ESTEVES and coconspirators arrived in the Bronx to complete the transaction with two suitcases stuffed with more than $1.3 million cash, which was intended as a payment for part of the overall 150-kilogram transaction.  A third suitcase, containing more than $644,000 in additional cash, was later recovered in a stash house that ESTEVES and coconspirators met at before the transaction.  During the transaction, a coconspirator described ESTEVES as “El Jefe”—that is, “the boss.”

ESTEVES participated in this conspiracy less than a year after being released on parole from a prior sentence for drug trafficking offenses.  Specifically, ESTEVES previously pled guilty to being the leader of a transnational drug enterprise that trafficked thousands of kilograms of cocaine—worth hundreds of millions of dollars—into the U.S..  In connection with that prior drug trafficking conduct, ESTEVES also admitted to conspiring with his then-defense attorney to kill potential witnesses.   

                          *                      *                      *

Mr. Williams praised the outstanding investigative work of the Drug Enforcement Task Force, the Drug Enforcement Administration, the New York City Police Department, the New York State Police, the Office of the Special Narcotics Prosecutor, Homeland Security Investigations, the Middlesex County Prosecutor’s Office, and the Edison Police Department. 

The case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Jun Xiang, Ashley Nicolas, and Frank Balsamello are in charge of the prosecution.

23-193                                                                                                 ###

The Justice Department today announced that Alexei Saab, aka Ali Hassan Saab, aka Alex Saab, aka Rachid, 46, was sentenced to 12 years in prison followed by three years of supervised release for receiving military-type training from Hezbollah, marriage fraud, and making false statements.

According to court documents, Saab was convicted by a jury in May 2022 after a two-week trial. The sentence was imposed by the Honorable Paul G. Gardephe, who also presided over the trial.

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

The Islamic Jihad Organization (IJO), which is also known as the External Security Organization and “910,” is a component of Hezbollah responsible for the planning and coordination of intelligence, counterintelligence, and terrorist activities on behalf of Hezbollah outside of Lebanon. In July 2012, an IJO operative detonated explosives on a bus transporting Israeli tourists in the vicinity of an airport in Burgas, Bulgaria. The detonation killed six people and injured 32 others. Law enforcement authorities have disrupted several other IJO attack-planning operations around the world, including the arrest of an IJO operative surveilling Israeli targets in Cyprus in 2012, the seizure of bomb-making precursor chemicals in Thailand in 2012, and a seizure of similar chemicals in May 2015 in connection with the arrest of another IJO operative. In June 2017, two IJO operatives were arrested in the U.S and charged with terrorism-related offenses in the Southern District of New York. In May 2019, a jury convicted one of those two IJO operatives on all counts, and in December 2019, he was sentenced principally to 40 years in prison.

Saab joined Hezbollah in 1996. Saab’s first Hezbollah operations occurred in Lebanon, where he was tasked with observing and reporting on the movements of Israeli and Southern Lebanese Army soldiers in Yaroun, Lebanon. Among other things, Saab reported on patrol schedules and formations, procedures at security checkpoints, and the vehicles used by soldiers. Saab also, alongside his brother, planted an improvised explosive device that detonated and hit Israeli soldiers, seriously injuring at least one.

In approximately 1999, Saab attended his first Hezbollah training. The training was focused on the use of firearms, and Saab handled and fired an AK-47, an M16 rifle, and a pistol, and threw grenades. In 2000, Saab transitioned to membership in Hezbollah’s unit responsible for external operations, the IJO, and he then received extensive training in IJO tradecraft, weapons, and military tactics, including how to construct and detonate bombs and other explosive devices and how to best use these devices in attacks. Specifically, Saab received detailed instruction in, among other things, triggering mechanisms, explosive substances, detonators, and the assembly of circuits. In pre-arrest interviews with the FBI, Saab was able to diagram multiple improvised explosive devices that would have been viable if constructed as diagrammed.

In 2000, Saab entered the United States. While living in the United States, Saab remained an IJO operative, continued to receive military training in Lebanon, and conducted numerous operations for the IJO. For example, Saab surveilled dozens of locations in New York City — including the United Nations headquarters, the Statue of Liberty, Rockefeller Center, Times Square, the Empire State Building, and local airports, tunnels, and bridges — and provided detailed information on these locations, including photographs, to the IJO. In particular, Saab focused on the structural weaknesses of locations he surveilled in order to determine how a future attack could cause the most destruction. Saab’s reporting to the IJO included the materials used to construct a particular target, how close in proximity one could get to a target, and site weaknesses or “soft spots” that the IJO could exploit if it attacked a target in the future. Saab conducted similar intelligence gathering in a variety of large American cities, including Boston and Washington, D.C., Saab admitted that his surveillance was designed to best position the IJO to attack the U.S. in the future. Saab also was tasked by Hezbollah with opening a front company that he could use to obtain fertilizer in the United States for use as an explosives precursor.

In addition to his attack-planning activities in the United States, Saab conducted operations abroad. For example, in or about 2003, Saab attempted to murder a man he later understood to be a suspected Israeli spy. Saab pointed a firearm at the individual at close range and pulled the trigger twice, but the firearm did not fire. Saab also conducted surveillance in Istanbul, Turkey, and elsewhere.

Finally, in or about 2012, Saab entered into a fraudulent marriage in exchange for $20,000. The purpose of the marriage was for Saab’s purported wife to apply for her citizenship. Saab later falsely affirmed, under penalty of perjury, and in connection with his purported wife’s efforts to obtain status in the U.S., that the marriage was not for any immigration-related purposes.

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 Assistant Director Robert R. Wells of the FBI Counterterrorism Division made the announcement.

The FBI and its New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department, investigated the case.

Assistant U.S. Attorneys Sam Adelsberg and Jason A. Richman for the Southern District of New York are prosecuting the case, with assistance from Trial Attorneys Jessica Fender and Alexandra Hughes of the National Security Division’s Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced that ALEXEI SAAB, a/k/a “Ali Hassan Saab,” a/k/a “Alex Saab,” a/k/a “Rachid,” was sentenced today to 12 years in prison for receiving military-type training from Hizballah, marriage fraud, and making false statements.  A jury convicted SAAB of those offenses in May 2022 after a two-week trial.  The sentence was imposed by the Honorable Paul G. Gardephe, who also presided over the trial.

U.S. Attorney Damian Williams said: “Alexei Saab’s actions as a Hizballah operative, both domestically and internationally, were deeply disturbing.  Saab trained extensively on military tactics and weapons use, he specialized in how to construct and detonate explosives, and he surveilled major American landmarks to identify potential attack sites.  But his apprehension by law enforcement before an attack could be carried out is a testament to the importance of our counterterrorism efforts.  We will continue to protect the American people by thwarting terrorist organizations’ pursuits of murder and mass destruction.  Thanks to the hard work of the career prosecutors of this Office and our law enforcement partners, Saab will now spend the coming 12 years in federal prison.”

According to court documents and evidence presented at trial:

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

The Islamic Jihad Organization (“IJO”), which is also known as the External Security Organization and “910,” is a component of Hizballah responsible for the planning and coordination of intelligence, counterintelligence, and terrorist activities on behalf of Hizballah outside of Lebanon.  In July 2012, an IJO operative detonated explosives on a bus transporting Israeli tourists in the vicinity of an airport in Burgas, Bulgaria.  The detonation killed six people and injured 32 others.  Law enforcement authorities have disrupted several other IJO attack-planning operations around the world, including the arrest of an IJO operative surveilling Israeli targets in Cyprus in 2012, the seizure of bomb-making precursor chemicals in Thailand in 2012, and a seizure of similar chemicals in May 2015 in connection with the arrest of another IJO operative.  In June 2017, two IJO operatives were arrested in the U.S and charged with terrorism-related offenses in the Southern District of New York.  In May 2019, a jury convicted one of those two IJO operatives on all counts, and in December 2019, he was sentenced principally to 40-years in prison.

SAAB joined Hizballah in 1996.  SAAB’s first Hizballah operations occurred in Lebanon, where he was tasked with observing and reporting on the movements of Israeli and Southern Lebanese Army soldiers in Yaroun, Lebanon.  Among other things, SAAB reported on patrol schedules and formations, procedures at security checkpoints, and the vehicles used by soldiers.  SAAB also, alongside his brother, planted an improvised explosive device that detonated and hit Israeli soldiers, seriously injuring at least one.

In approximately 1999, SAAB attended his first Hizballah training.  The training was focused on the use of firearms, and SAAB handled and fired an AK-47, an M16 rifle, and a pistol, and threw grenades.  In 2000, SAAB transitioned to membership in Hizballah’s unit responsible for external operations, the IJO, and he then received extensive training in IJO tradecraft, weapons, and military tactics, including how to construct and detonate bombs and other explosive devices and how to best use these devices in attacks.  Specifically, SAAB received detailed instruction in, among other things, triggering mechanisms, explosive substances, detonators, and the assembly of circuits.  In pre-arrest interviews with the Federal Bureau of Investigation (“FBI”), SAAB was able to diagram multiple improvised explosive devices that would have been viable if constructed as diagrammed.

In 2000, SAAB entered the U.S.  While living in the U.S., SAAB remained an IJO operative, continued to receive military training in Lebanon, and conducted numerous operations for the IJO.  For example, SAAB surveilled dozens of locations in New York City — including the United Nations headquarters, the Statue of Liberty, Rockefeller Center, Times Square, the Empire State Building, and local airports, tunnels, and bridges — and provided detailed information on these locations, including photographs, to the IJO.  In particular, SAAB focused on the structural weaknesses of locations he surveilled in order to determine how a future attack could cause the most destruction.  SAAB’s reporting to the IJO included the materials used to construct a particular target, how close in proximity one could get to a target, and site weaknesses or “soft spots” that the IJO could exploit if it attacked a target in the future.  SAAB conducted similar intelligence gathering in a variety of large American cities, including Boston and Washington, D.C.   SAAB admitted that his surveillance was designed to best position the IJO to attack the U.S. in the future.  SAAB also was tasked by Hizballah with opening a front company that he could use to obtain fertilizer in the United States for use as an explosives precursor.

In addition to his attack-planning activities in the United States, SAAB conducted operations abroad.  For example, in or about 2003, SAAB attempted to murder a man he later understood to be a suspected Israeli spy.  SAAB pointed a firearm at the individual at close range and pulled the trigger twice, but the firearm did not fire.  SAAB also conducted surveillance in Istanbul, Turkey, and elsewhere. 

Finally, in or about 2012, SAAB entered into a fraudulent marriage in exchange for $20,000.  The purpose of the marriage was for SAAB’s purported wife to apply for her citizenship.  SAAB later falsely affirmed, under penalty of perjury, and in connection with his purported wife’s efforts to obtain status in the U.S., that the marriage was not for any immigration-related purposes. 

*                *               *

In addition to the prison term, SAAB, 46, was sentenced to 3 years of supervised release.

Mr. Williams praised the outstanding efforts of the Federal Bureau of Investigation’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the New York City Police Department.  Mr. Williams also thanked the Counterterrorism Section of the Department of Justice’s National Security Division.

This prosecution is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Sam Adelsberg and Jason A. Richman are in charge of the prosecution, with assistance from Trial Attorneys Jessica Fender and Alexandra Hughes of the Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced the conviction in Manhattan federal court of MARIO POWELL for the armed robbery and shooting of a cab driver in the Bronx on March 17, 2018.  The jury convicted POWELL following a four-day trial before U.S. District Judge Paul A. Engelmayer.

U.S. Attorney Damian Williams said: “Over five years ago, Mario Powell robbed and brutally shot an innocent driver of a taxi, running away into the night and leaving the victim to die.  Yesterday, a jury of his peers held Powell accountable for this heinous crime.  We thank our partners in the NYPD and in the SPARTA NYPD/ATF Joint Robbery Task Force for their unwavering pursuit of justice for this victim and the public.  This Office will pursue violent criminals who commit firearms offenses on the streets of New York City with unceasing vigor and determination.”

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

On March 17, 2018, POWELL took a cab from one neighborhood in the Bronx to another.  Upon reaching his requested destination, POWELL robbed the cab driver at gunpoint, obtained $23 from the cab driver, and shot the cab driver nine times.  POWELL fled the scene and was subsequently arrested on March 23, 2018.

*                *                *

POWELL, 33, of the Bronx, New York, was convicted of one count of Hobbs Act robbery, which carries a maximum sentence of 20 years in prison; and one count of the use, carrying, and possession of a firearm, which was brandished and discharged, which carries a mandatory minimum sentence of10 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 would be determined by the judge.  POWELL is scheduled to be sentenced by Judge Engelmayer on October 3, 2023.

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

This case is being supervised by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Thomas John Wright, Chelsea L. Scism, and Emily A. Johnson are in charge of the prosecution, with the assistance of Paralegal Specialists Chanel-Ashley Foster and Mia Vuckovich.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a six-count criminal Complaint charging JOSEPH GARRISON in connection with a scheme to hack user accounts at a fantasy sports and betting website (the “Betting Website”) and sell access to those accounts in order to steal hundreds of thousands of dollars from them.  GARRISON surrendered this morning in New York, New York, and will be presented this afternoon before United States Magistrate Judge James L. Cott.

U.S. Attorney Damian Williams said: “As alleged, Garrison used a credential stuffing attack to hack into the accounts of tens of thousands of victims and steal hundreds of thousands of dollars.  Today, thanks to the work of my Office and the FBI, Garrison learned that you shouldn’t bet on getting away with fraud.”

FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged, Garrison attained unauthorized access to victim accounts using a sophisticated cyber-breaching attack to steal hundreds of thousands of dollars.  Cyber intrusions aiming to steal private individuals’ funds represent a serious risk to our economic security.  Combatting cyberattacks and holding the responsible threat actors accountable in the criminal justice system remains a top priority for the FBI.”

As alleged in the Complaint:[1]

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

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

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

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

*                *                *

GARRISON, 18, of Madison, Wisconsin, is charged with conspiracy to commit computer intrusions, which carries a maximum sentence of five years in prison; unauthorized access to a protected computer to further intended fraud, which carries a maximum sentence of five years in prison; unauthorized access to a protected computer, which carries a maximum sentence of five years in prison; wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; wire fraud, which carries a maximum sentence of 20 years in prison; and aggravated identity theft, which carries a mandatory minimum sentence of two years in prison. 

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

Mr. Williams praised the outstanding work of the FBI.  Mr. Williams also thanked the United States Attorney’s Office for the Western District of Wisconsin for their assistance in the investigation.

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

The charges contained in the Complaint are merely accusations, and the 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, today announced the selection of Andrea Griswold as Deputy United States Attorney, and Margaret Garnett as Special Counsel to the United States Attorney.  

Since April 2022, Ms. Griswold has served as Chief Counsel to the United States Attorney. From June 2020 until June 2022, Ms. Griswold served as a Chief of the Securities and Commodities Fraud Task Force, first as Deputy Chief and then as Chief or Co-Chief.  In this two-year period, Ms. Griswold supervised a series of significant individual and corporate investigations and prosecutions relating to market manipulation, insider trading, investor fraud, and accounting and valuation fraud.  Many of the cases brought under Ms. Griswold’s leadership related to private funds, SPACs, cryptocurrency and digital assets. Prior to assuming a supervisory position in that unit, Ms. Griswold investigated and prosecuted a wide variety of significant securities fraud and public corruption cases, and also served as an Acting Chief of the Narcotics Unit.  Ms. Griswold began her career as an Assistant U.S. Attorney in the Office in March 2013.  Prior to her public service, she worked for more than five years as an associate at Simpson Thacher & Bartlett LLP.  Ms. Griswold received her B.A. cum laude from Georgetown University and her J.D. from New York University School of Law. 

Following the announcement this week that Margaret Garnett has been recommended to the President for a judgeship in the Southern District of New York, Ms. Garnett has assumed the role of Special Counsel to the United States Attorney.  Since November 2021, Ms. Garnett has served as Deputy United States Attorney. Prior to her return to the Office, Ms. Garnett served as the Commissioner of New York City’s Department of Investigation (“DOI”), one of the oldest municipal anti-corruption agencies in the United States.  Prior to her service at DOI, Ms. Garnett served as Executive Deputy Attorney General for Criminal Justice in the Office of the New York State Attorney General.  Ms. Garnett was an Assistant U.S. Attorney in the Office for 12 years, serving at times as Chief of Appeals and Chief of the Violent and Organized Crime Unit.  She received the Director’s Award for Outstanding Performance and the Stimson Medal for her exceptional service in the Criminal Division.  Prior to her public service, Ms. Garnett worked as an associate at Wachtell, Lipton, Rosen & Katz.  She began her public service career as a law clerk to the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York.  Ms. Garnett received her B.A. from the University of Notre Dame, her M.A. from Yale University, and her J.D. from Columbia University.

In making these selections, U.S. Attorney Damian Williams said: “I am pleased to appoint Andrea Griswold as Deputy United States Attorney.  I have worked side-by-side with Andrea through our ascension in the Office, and know her to have the rare combination of not only being an exceptional prosecutor and litigator, but also possessing the exemplary judgement and leadership skills to help lead the most talented group of prosecutors in the country.  Margaret Garnett is an extraordinary lawyer, public servant, and friend.  She is brilliant, fair, kind, and wise.  She has and will continue to exemplify the best of this Office.”

Damian Williams, the United States Attorney for the Southern District of New York, Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), and John B. DeVito, the Special Agent in Charge of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), announced the arrest of IGGAL COPELAND for robbing at gunpoint an electronics store in Manhattan while a 74-year-old store employee was opening for business.  COPELAND was arrested this morning and will be presented today before Chief U.S. Magistrate Judge James L. Cott. 

U.S. Attorney Damian Williams said: “The defendant’s alleged conduct was violent and callous.  He and another suspect allegedly forced their way into an electronics store disguised as FedEx workers, held a gun to an elderly store employee’s head, hit the employee in the back of the head with the gun, and threatened that if the employee did not open a safe within the store, they would harm the employee’s young granddaughter while on her way to school.  This Office will continue to aggressively prosecute those who commit violent robberies and terrorize hardworking New Yorkers.” 

NYPD Commissioner Keechant L. Sewell said: “This arrest by the ATF/NYPD SPARTA Join Robbery Task Force is another example of New York City’s strong law enforcement partnerships combatting violent crime and holding accountable anyone who endangers people in our communities.  We vow to remain relentless in identifying and investigating anyone who wields an illegal gun on our streets.  Due to the efforts of our investigators and the prosecutors at the U.S. Attorney’s Office for the Southern District, this defendant now faces the prospect of significant federal prison time.”

ATF Special Agent in Charge John B. DeVito said: “This allegedly brazen and horrendous crime against anyone, let alone a hardworking New York family, is both atrocious and unacceptable within our society.  The men and women of ATF NY’s SPARTA (Strategic Pattern Armed Robbery Technical Apprehension) group will continue to work with our partners at the NYPD Manhattan Robbery Squad to protect the public from those who terrorize our communities.  Swift investigative follow up and this arrest highlight the indispensable work of our collaborative effort to identify and stop violent criminals on the streets of New York.”

According to the allegations contained in the Complaint and court filings:[[1]]

On or about April 21, 2023, COPELAND and another individual (“CC-1”) robbed at gunpoint (the “Robbery”) an electronics store in New York, New York (the “Store”).  COPELAND and CC-1 drove to the Robbery using a vehicle with stolen plates that was abandoned in Brooklyn after the Robbery.  To gain access to the Store, COPELAND and CC-1 disguised themselves as FedEx employees while a 74-year-old store employee (“Victim-1”) was opening the Store for business in the morning.  The FedEx uniforms the defendant wore are pictured below: 

COPELAND and CC-1 forced Victim-1 to a back room and attempted to gain access to a safe.  While CC-1 held a gun to Victim-1’s head, COPELAND said, “Stop yelling” and “Open the door [to the safe] . . . do you want your granddaughter [to overhear] when she comes down for school.”  COPELAND then said, “I’m about to kill his grandbaby . . . he’s fuckin’ playing games.”

After attempting unsuccessfully to gain access to the safe, COPELAND and CC-1 took approximately $1,500 from Victim-1.  They then ran to the front of the Store and CC-1 pushed the 73-year-old female employee of the Store (“Victim-2”) to the ground.  Two individuals outside of the Store heard screams coming from Victim-2 inside the Store, intervened to stop the Robbery, and unsuccessfully attempted to stop COPELAND and CC-1 from fleeing the scene.

*                *                *

COPELAND, 46, of Union City, New Jersey, is charged with one count of conspiracy to commit Hobbs Act robbery and one count of Hobbs Act robbery, which each carry a maximum sentence of 20 years in prison, and one count of using and brandishing a firearm in the commission of a crime of violence, which carries a mandatory minimum sentence of seven years in prison and a maximum sentence of life in prison.

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

Mr. Williams praised the outstanding investigative work of the ATF and NYPD, in particular, the Strategic Patterned Armed Robbery Technical Apprehension (“SPARTA”) Task Force, which is composed of agents and officers of the ATF and the NYPD.

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Jeffrey W. Coyle 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, and Raymond A. Tierney, Suffolk County District Attorney, announced today that JAMES CAHILL, former President of the New York State Building and Construction Trades Council, was sentenced to 51 months in prison for accepting bribes and illegal cash payments from a non-union construction contractor (“Employer-1”) while serving as a union officer.  Union officers CHRISTOPHER KRAFT, PATRICK HILL, MATTHEW NORTON, WILLIAM BRIAN WANGERMAN, KEVIN MCCARRON, JEREMY SHEERAN, a/k/a “Max,” ANDREW MCKEON, ROBERT EGAN, SCOTT ROCHE, and ARTHUR GIPSON have previously been sentenced for related conduct by U.S. District Judge Colleen McMahon, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Capitalizing on his position as a high-ranking union official, James Cahill accepted payment after payment to favor non-union labor at the expense of union members.  Whether it was a cash-stuffed envelope or in-kind benefit, each payment reflected a decision to place personal greed over the union interests that Cahill was duty-bound to serve.  Today’s sentence makes clear that this Office and our law enforcement partners will work tirelessly to hold responsible those who exploit their positions of power for personal gain.  I thank the Suffolk County District Attorney’s Office for their partnership in this case.” 

Suffolk County District Attorney Raymond A. Tierney said: “James Cahill repeatedly chose to enrich himself at the expense of the hard-working men and women whose interests he had a sworn duty to protect, and his sentence to a substantial term in federal prison should serve as a message to all others who would consider engaging in similar betrayals of trust.  I want to thank the U.S. Attorney's Office in the Southern District of New York for their collaboration in this investigation, and for their efforts in obtaining this just result.”

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

JAMES CAHILL was the President of the New York State Building and Construction Trades Council (the “NYS Trades Council”), which represents over 200,000 unionized construction workers, a member of the Executive Council for the New York State American Federation of Labor and Congress of Industrial Organizations (the “NYS AFL-CIO”), and formerly a union representative of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (the “UA”).  During the charged conspiracy from about October 2018 to October 2020, CAHILL accepted approximately $44,500 in bribes from Employer-1, as well as other benefits, including home appliances and free labor on CAHILL’s vacation home.  As part of his guilty plea, CAHILL acknowledged having previously accepted at least approximately $100,000 of additional bribes from Employer-1 in connection with CAHILL’s union positions.  As the leader of the conspiracy, CAHILL introduced Employer-1 to many of the other defendants, while advising Employer-1 that Employer-1 could reap the benefits of being associated with the unions without actually signing union agreements or employing union workers. 

KRAFT, HILL, NORTON, WANGERMAN, MCCARRON, SHEERAN, and MCKEON were Business Agents, EGAN was the Secretary-Treasurer, and ROCHE was the Business Agent At Large of the Local 638 of the UA (“Local 638”).  GIPSON was a Business Agent of the Local Union 200 of the UA (“Local 200”).  Each of these defendants accepted thousands and, in some cases, tens of thousands of dollars of cash bribes from Employer-1, a contractor who had projects and potential projects within the jurisdiction of Local 638 and Local 200.

All 11 defendants accepted cash from Employer-1 — usually stuffed in envelopes that Employer-1 handed off inside the restrooms of restaurants.  During the meetings at which the payments were made, Employer-1 repeatedly requested favorable action from Local 638 and/or Local 200, including the following: (i) that the relevant union would support Employer-1’s bids on various projects, (ii) that the union would consider signing Employer-1 to labor agreements that Employer-1 regarded to be favorable (including agreements that would pay union workers lower rates than their experience merited), and (iii) that the union would permit Employer-1 to falsely claim to developers that Employer-1 employed union workers.  Employer-1 contracted to work on — or would bid on — projects that otherwise could have employed union workers belonging to Local 638 and/or Local 200.  At the time Employer-1 was bribing the defendants, Employer-1’s business employed workers who were not members of Local 638 and/or Local 200 but would have been eligible for membership.

*                *                *

A chart containing the names, offenses of conviction, and sentences imposed by Judge McMahon is below.

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

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Jun Xiang, Jason Swergold, Danielle Sassoon, Frank J. Balsamello, Marguerite B. Colson, and Special Assistant U.S. Attorney Laura de Oliveira, are in charge of the prosecution.

Defendant

Statute of Conviction

Sentence

JAMES CAHILL

Honest Services Fraud Conspiracy

Sentenced on May 18, 2023, to 51 months in prison and $150,000 fine

CHRISTOPHER KRAFT

Honest Services Fraud Conspiracy

Sentenced on December 12, 2022, to 18 months in prison and $10,000 fine

PATRICK HILL

Honest Services Fraud Conspiracy

Sentenced on December 19, 2022, to 27 months in prison and $10,000 fine

MATTHEW NORTON

Taft-Hartley Act Violation (Felony)

Sentenced on December 13, 2022, to three years’ probation and $10,000 fine

WILLIAM BRIAN WANGERMAN

Taft-Hartley Act Violation (Felony)

Sentenced on April 12, 2023, to four years’ probation and $10,000 fine

KEVIN MCCARRON

Taft-Hartley Act Violation (Misdemeanor)

Sentenced on May 10, 2023, to 60 days in prison

JEREMY SHEERAN

Taft-Hartley Act Violation (Felony)

Sentenced on February 8, 2023, to two years’ probation and $10,000 fine

ANDREW MCKEON

Taft-Hartley Act Violation (Felony)

Sentenced on March 14, 2023, to two years’ probation and $10,000 fine

ROBERT EGAN

Taft-Hartley Act Violation (Felony)

Sentenced on March 14, 2023, to three years’ probation and $10,000 fine

SCOTT ROCHE

Taft-Hartley Act Violation (Misdemeanor)

Sentenced on December 6, 2022, to two years’ probation and $10,000 fine

ARTHUR GIPSON

Taft-Hartley Act Violation (Felony)

Sentenced on May 3, 2023, to 60 days in prison and $4,000 fine

Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today that the United States has filed and settled a civil fraud lawsuit alleging that MORRIS PARK NURSING HOME (“MORRIS PARK”), a skilled nursing facility located in the Bronx, New York, engaged in two fraudulent and illegal schemes that violated the False Claims Act and the Anti-Kickback Statute.  The first scheme involved cash payments made to a supervisor at a nearby hospital for patient referrals, and the second scheme involved switching residents’ Medicare coverage without their consent in order to increase the Medicare payments MORRIS PARK received.  The United States’ complaint also names as defendants TZODIK WEINBERG, a/k/a “Justin Weinberg,” MORRIS PARK’s former Administrator, and MAIER ARM for their roles in the fraudulent conduct.    

Under the settlement agreements approved by U.S. District Judge Jennifer H. Rearden, the estate of the owner of MORRIS PARK at the time of the conduct alleged in the Complaint will pay to the United States $2.85 million, WEINBERG will pay $495,000, and ARM will pay $115,000.  Each defendant also made extensive factual admissions regarding their conduct.  The settlement with the estate took into consideration MORRIS PARK’s prior voluntary self-disclosure of facts related to the improper changes made to residents’ insurance coverage. 

U.S. Attorney Damian Williams said: “Morris Park and its former Administrator prioritized boosting Medicare payments above compliance with the law.  They paid cash kickbacks to obtain patient referrals to fill empty beds and switched residents’ insurance coverage without properly obtaining the residents’ consent in order to increase the amount the facility was paid.  This Office is committed to pursuing all violations of the Anti-Kickback Statute and other laws designed to ensure that medical decisions are based only on the patient’s best interest.”

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “The misconduct that occurred at Morris Park exhibits the prioritization of profits over residents’ best interests.  This nursing home paid illegal kickbacks to manipulate the resident referral process and changed patients’ health coverage selections without properly obtaining their consent, with no apparent concern for how these events could negatively impact residents.  HHS-OIG and our fellow law enforcement agencies strive to ensure that entities furnishing services to Medicare enrollees are operating in accordance with federal health care laws.”

Medicare beneficiaries may enroll in Medicare Parts A and B, known as Original Medicare, or in Medicare Part C Advantage Plans (“MA Plans”), which are administered by private companies that contract with the government.  Under Original Medicare, the Centers for Medicare & Medicaid Services (“CMS”) directly reimburses healthcare providers, like skilled nursing facilities, on a fee-for-service basis.  In contrast, when reimbursing services provided under MA Plans, CMS pays Medicare Advantage Organizations (“MAOs”), which operate the MA Plans, a fixed, capitated amount each month for each Medicare beneficiary enrolled in the MA Plan.  CMS advises individuals to consider various factors in deciding between enrolling in an MA Plan or Original Medicare, such as differences in out-of-pocket costs and doctor choice.

As alleged in the Complaint filed in Manhattan federal court:

It is well known within the skilled nursing facility industry that it is usually more profitable for the facility to admit residents enrolled in Original Medicare than in MA Plans.  The defendants engaged in two fraudulent and illegal schemes to increase the number of Original Medicare residents at MORRIS PARK.

Payment of Cash Kickbacks for Patient Referrals

From January 1, 2017, through December 31, 2019, MORRIS PARK offered and paid remuneration in the form of cash payments, meals, and sports tickets to a Jacobi discharge planning supervisor (the “Jacobi Manager”) to induce her to refer Original Medicare beneficiaries for admission to MORRIS PARK.  For much of this period, MORRIS PARK paid the Jacobi Manager $150 for each referred patient who was admitted to the facility.  WEINBERG was responsible for delivering the cash payments personally to the Jacobi Manager, often arranging to meet her at a CVS parking lot close to MORRIS PARK.  He regularly reached out to the Jacobi Manager to request patient referrals when MORRIS PARK had empty beds. 

MORRIS PARK paid the Jacobi Manager a total of approximately $5,000 to $10,000 for referring dozens of Original Medicare patients for admission to MORRIS PARK.  In addition, MORRIS PARK offered the Jacobi Manager tickets to Yankees games, invited her and her staff to a MORRIS PARK-sponsored holiday party, and frequently arranged for food to be delivered to her office.

Scheme to Switch Residents’ Medicare Coverage

From January 1, 2018, through December 31, 2019, MORRIS PARK, at the direction of WEINBERG, disenrolled residents from their self-selected MA Plans and enrolled them in Original Medicare without obtaining the consent of the residents or their authorized representatives.  WEINBERG pressured MORRIS PARK staff to disenroll residents from their MA Plans. 

MORRIS PARK staff approached residents, often at their bedside, to try to persuade them to switch their insurance coverage.  When talking to residents and their families, MORRIS PARK staff typically did not fully explain how the change to Original Medicare would impact the resident’s coverage, including potential changes to the resident’s co-payments and deductibles; the potential loss of supplemental coverage available under the resident’s MA Plan; any resulting change in the resident’s drug plan; or limitations on when the resident could re-enroll in the plan after leaving MORRIS PARK.  In most cases, the defendants switched residents’ insurance coverage without getting the residents or their family members to sign a consent form evidencing the resident’s consent to the insurance change.  In certain instances, at the direction of WEINBERG, MORRIS PARK staff offered to reduce or waive the co-payments that would be owed by residents under Original Medicare in order to try to persuade them to agree to disenroll from their MA Plan.   

In the summer of 2018, on WEINBERG’s recommendation, MORRIS PARK retained WEINBERG’s friend, ARM (who worked at another skilled nursing facility) to assist with the improper disenrollments.  MORRIS PARK paid ARM a $1,000 fee for each resident whom ARM helped to switch to Original Medicare.  ARM agreed to split this $1,000 fee with WEINBERG, so WEINBERG would pocket $500 for each resident who was disenrolled. 

The settlement with the estate of the owner of MORRIS PARK at the time of the misconduct includes the following admissions of conduct:

• During the period from 2017 through 2019, MORRIS PARK offered to make, and in fact made, cash payments to the Jacobi Manager for each Original Medicare patient referral that resulted in an admission to the facility.  For much of this period, the Jacobi Manager received the sum of $150 for each referral. 
• During the period from 2017 through 2019, MORRIS PARK admitted dozens of Medicare patients who were referred to the facility by Jacobi.
• In order to persuade residents to disenroll from their MA Plans, in many instances, MORRIS PARK staff did not fully explain to residents and their families how a switch to Original Medicare would affect the resident’s coverage, including potential changes to the resident’s co-payments and deductibles and the potential loss of supplemental coverage that was available under the resident’s MA Plan.  In some instances, MORRIS PARK staff offered inducements to residents or their family members to try to persuade them to agree to the disenrollment.  For example, at the direction of WEINBERG, staff sometimes offered to reduce or waive the co-payments that residents would be required to pay starting on the 21st day of their stay at the facility if they switched to Original Medicare. 
• In most cases, MORRIS PARK disenrolled residents from their MA Plans without obtaining from the resident or any family member a signed disenrollment form or any other document evidencing the resident’s consent to the insurance change.  In several instances, MORRIS PARK disenrolled residents even after the residents and/or their family members had indicated they did not want to switch their Medicare coverage.
• Starting in early 2019, MORRIS PARK paid WEINBERG monthly cash bonuses if the average number of Original Medicare residents at the facility was maintained at a certain level for a given month.  MORRIS PARK also paid bonuses to marketing and admissions staff members that were tied to the admission of new residents with Original Medicare.

As part of his settlement, WEINBERG admits, acknowledges, and accepts responsibility for the following conduct:  

• Starting sometime in 2017, WEINBERG was responsible for delivering the cash payments personally to the Jacobi Manager.  They texted to arrange a time and place to meet in person, often meeting at a CVS parking lot close to MORRIS PARK.  WEINBERG reached out to the Jacobi Manager on numerous occasions to ask for patient referrals so he could fill empty beds at MORRIS PARK.
• During his time at MORRIS PARK, WEINBERG sought to maximize the number of residents who were enrolled in Original Medicare. 
• Shortly after he became Administrator, WEINBERG directed MORRIS PARK’s staff to try to persuade many of the facility’s residents to disenroll from their MA Plans and to enroll in Original Medicare instead.  WEINBERG identified residents who were candidates for disenrollment and then pressured staff to take steps to switch those residents’ insurance coverage. 
• In the summer of 2018, WEINBERG contacted his friend, ARM, who worked full-time at another skilled nursing facility in the Bronx.  WEINBERG asked ARM to assist with the disenrollment process at MORRIS PARK.  MORRIS PARK reached an agreement with ARM under which MORRIS PARK would pay $1,000 to ARM for each MORRIS PARK resident whom ARM helped to disenroll from a Medicare Advantage Plan and enroll in Original Medicare.  WEINBERG and ARM agreed that they would split this $1,000 payment, so that WEINBERG would receive $500 for each resident disenrolled.  WEINBERG did not disclose this arrangement to MORRIS PARK.
• Once ARM was retained, the pace of disenrollments dramatically increased.  WEINBERG continued to exert significant pressure on MORRIS PARK staff to disenroll as many residents from Medicare Advantage Plans as possible.  In one instance in July 2019, WEINBERG directed the facility’s Financial Coordinator to disenroll a resident who clearly lacked the capacity to consent to a change in their insurance coverage.  The Financial Coordinator asked WEINBERG “[h]ow do we do a dis enrollment” when the resident “is not alert” and has no family.  WEINBERG responded: “We just do it.” 

As part of his settlement, ARM admits, acknowledges, and accepts responsibility for the following conduct:  

• ARM understood that MORRIS PARK would benefit from maximizing the number of residents who were enrolled in Original Medicare because the facility typically received a higher daily reimbursement rate for residents enrolled in Original Medicare as compared to MA Plans, and Original Medicare residents were often approved by Medicare for longer stays in the facility.  
• ARM reached an agreement under which MORRIS PARK would pay $1,000 to ARM for each MORRIS PARK resident whom ARM helped to disenroll from a MA Plan and enroll in Original Medicare.  WEINBERG asked ARM to split this $1,000 payment with him, so that WEINBERG would receive $500 for each resident disenrolled.  ARM agreed.  ARM did not disclose this arrangement to anyone else at MORRIS PARK.
• From August 2018 through December 2019, MORRIS PARK paid ARM $1,000 for each MORRIS PARK resident who was disenrolled from their MA Plan and enrolled in Original Medicare.  
• Although ARM usually relied on MORRIS PARK staff to obtain and document the resident’s consent, he did not confirm that the resident had actually consented or signed the disenrollment form before processing the disenrollment.

*                *                *

Mr. Williams thanked HHS-OIG for its assistance with the case. 

This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Jeffrey K. Powell is in charge of the case.

Sayfullo Saipov, 34, of Uzbekistan, was sentenced to eight consecutive life sentences, two concurrent life sentences, and a consecutive sentence of 260 years in prison for carrying out a terrorist attack on Oct. 31, 2017, in the name of the Islamic State of Iraq and al-Sham (ISIS), in which Saipov used a truck to murder eight victims and injure many more on a bike path in lower Manhattan.

On Jan. 26, a jury convicted Saipov of all 28 counts in the indictment, which charged Saipov with murder for the purpose of gaining entrance to a racketeering enterprise (ISIS); assault with a dangerous weapon and attempted murder for the purpose of gaining entrance to a racketeering enterprise (ISIS); providing material support to a designated foreign terrorist organization (ISIS) resulting in death; and damage and destruction to a motor vehicle resulting in death. On March 13, 2023, the same jury was unable to reach a unanimous verdict on whether Saipov should be sentenced to death, resulting in a mandatory sentence of life in prison.

“Today’s sentence means that Sayfullo Saipov will spend the rest of his life in federal prison for brutally murdering eight innocent victims during his carefully calculated ISIS terrorist attack,” said Attorney General Merrick B. Garland. “The Department of Justice honors the victims, their families, and the survivors of this horrific attack. We will continue to vigorously defend the American people from threats of terrorism and will work tirelessly to bring those who perpetrate terrorist attacks to justice.”

“Although it has been more than five years since Sayfullo Saipov carried out this horrific, senseless attack in the name of ISIS, the FBI never relented in our pursuit of justice for the victims and their loved ones,” said FBI Director Christopher Wray. “This case demonstrates the FBI’s steadfast commitment to working with our law enforcement partners to hold accountable those who commit acts of violence inspired by terrorist groups.”

“In March 2023, a jury determined that Sayfullo Saipov would spend the rest of his life in prison for his heinous crimes. Today, the court issued the maximum possible penalty on each count of conviction and ordered that eight of Saipov’s life sentences along with 260 years in prison will run consecutively to the other sentences imposed,” said U.S. Attorney Damian Williams for the Southern District of New York. “These eight life sentences account for the eight lives Saipov stole when he committed his vicious ISIS attack. The 260 years in prison constitutes the maximum penalty for the 18 attempted murders Saipov cruelly committed, which included the attempted murders of four children. More than just holding Saipov accountable for his depraved crimes, the proceedings today gave further voice to the victims. More than 20 victims and family members addressed the Court and confronted Saipov. They bravely and boldly shared their pain and devastation. While we cannot make these victims whole after what Saipov stole from them, this office along with our partners in the Department of Justice and the FBI are proud to have served the victims and sought justice on their behalf.”    

As set forth in public documents in the case and statements made during court proceedings:

On Halloween afternoon in 2017, Saipov used a 6,000-pound truck to strike more than 20 innocent people on the Hudson River Bike Path in lower Manhattan. Saipov killed eight of his victims and critically injured many others, including a 14-year-old child. Saipov’s surviving victims suffered amputations, serious brain injuries, life-altering physical injuries, and significant psychological trauma. Saipov committed his attack after years of devotion to the brutal terrorist organization ISIS and after months of careful planning. In the weeks before his attack, for example, Saipov rented a truck to practice maneuvering it so that he could hit as many people as possible. Saipov brought a note to the attack with the ISIS flag and rallying cry written on it. After his attack, while in custody at a hospital, Saipov told the FBI that he committed the attack in response to calls from the leader of ISIS and that he was proud of what he had done. Saipov smiled when describing his attack and sought to hang the ISIS flag in his hospital room.

After the attack, ISIS praised Saipov as an Islamic State soldier and called his attack one of the most prominent attacks in the United States. In the years since his attack, Saipov continued to demonstrate his devotion to ISIS, including though statements in court, recorded telephone calls, and writings seized from his prison cell. In prison, Saipov also made statements confirming his continued belief that enemies of ISIS should be eliminated and threatening to cut the heads off of corrections officers. At the liability and sentencing phases of trial, many of Saipov’s victims and their family members bravely described the terror he caused and the pain and suffering they continue to endure.

While the jury determined that Saipov would be sentenced to life in prison on six counts of conviction, Judge Broderick sentenced Saipov to the statutory maximum penalty on each count of conviction and ordered that Saipov’s sentences on the counts of conviction charging him with murder and attempted murder of particular victims would run consecutively to all other sentences imposed. In total, Saipov was sentenced to eight consecutive life sentences, 260 years in prison to run consecutively, and two additional life sentences to run concurrently to each other and to all other sentences imposed. The judge will issue an order concerning restitution to victims at a later date.

More than 20 victims and family members delivered emotional and powerful victim impact statements at Saipov’s sentencing.

The FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the New York City Police Department, and over 50 other federal, state, and local agencies investigated the case. The Department of Homeland Security’s Homeland Security Investigations; the Justice Department’s National Security Division’s Counterterrorism Section and Criminal Division’s Capital Case Section and Organized Crime and Gang Section provided valuable assistance, as did the Justice Department’s Office of Enforcement Operations and Office of International Affairs.

Assistant U.S. Attorneys Amanda L. Houle, Jason A. Richman, Alexander Li, and Andrew Dember for the Southern District of New York, with the assistance of Paralegal Specialist Daniel Sitko, and Trial Attorney John Cella of the National Security Division’s Counterterrorism Section and Trial Attorney Michael Warbel of the Criminal Division’s Capital Case Section prosecuted the case.

Damian Williams, the United States Attorney for the Southern District of New York, Merrick B. Garland, the Attorney General of the United States, and Christopher A. Wray, the Director of the Federal Bureau of Investigation (“FBI”), announced today that United States District Judge Vernon S. Broderick sentenced SAYFULLO SAIPOV to eight consecutive life sentences, two concurrent life sentences, and a consecutive sentence of 260 years in prison for carrying out a terrorist attack on October 31, 2017, in the name of the Islamic State of Iraq and al-Sham (“ISIS”), in which SAIPOV used a truck to murder eight victims and injure many more on a bike path in lower Manhattan. 

On January 26, 2023, a jury convicted SAIPOV of all 28 counts in the Indictment, which charged SAIPOV with murder for the purpose of gaining entrance to a racketeering enterprise (ISIS); assault with a dangerous weapon and attempted murder for the purpose of gaining entrance to a racketeering enterprise (ISIS); providing material support to a designated foreign terrorist organization (ISIS) resulting in death; and damage and destruction to a motor vehicle resulting in death.  On March 13, 2023, the same jury was unable to reach a unanimous verdict on whether Saipov should be sentenced to death, resulting in a mandatory sentence of life in prison.     

U.S. Attorney Damian Williams said: “In March 2023, a jury determined that Sayfullo Saipov would spend the rest of his life in prison for his heinous crimes.  Today, the Court issued the maximum possible penalty on each count of conviction and ordered that eight of Saipov’s life sentences along with 260 years in prison will run consecutively to the other sentences imposed.  These eight life sentences account for the eight lives Saipov stole when he committed his vicious ISIS attack.  The 260 years in prison constitutes the maximum penalty for the eighteen attempted murders Saipov cruelly committed, which included the attempted murders of four children.  More than just holding Saipov accountable for his depraved crimes, the proceedings today gave further voice to the victims.  More than 20 victims and family members addressed the Court and confronted Saipov.  They bravely and boldly shared their pain and devastation.  While we cannot make these victims whole after what Saipov stole from them, this Office along with our partners in the Department of Justice and the FBI are proud to have served the victims and sought justice on their behalf.”    

Attorney General Merrick B. Garland said: “Today’s sentence means that Sayfullo Saipov will spend the rest of his life in federal prison for brutally murdering eight innocent victims during his carefully calculated ISIS terrorist attack.  The Department of Justice honors the victims, their families, and the survivors of this horrific attack.  We will continue to vigorously defend the American people from threats of terrorism and will work tirelessly to bring those who perpetrate terrorist attacks to justice.”

FBI Director Christopher A. Wray said: “Although it has been more than five years since Sayfullo Saipov carried out this horrific, senseless attack in the name of ISIS, the FBI never relented in our pursuit of justice for the victims and their loved ones.  This case demonstrates the FBI’s steadfast commitment to working with our law enforcement partners to hold accountable those who commit acts of violence inspired by terrorist groups.”

As set forth in public documents in the case and statements made during court proceedings:

On Halloween afternoon in 2017, SAYFULLO SAIPOV used a 6,000-pound truck to strike more than 20 innocent people on the Hudson River Bike Path in lower Manhattan.  SAIPOV killed eight of his victims and critically injured many others, including a 14-year-old child.  SAIPOV’s surviving victims suffered amputations, serious brain injuries, life-altering physical injuries, and significant psychological trauma.  SAIPOV committed his attack after years of devotion to the brutal terrorist organization ISIS and after months of careful planning.  In the weeks before his attack, for example, SAIPOV rented a truck to practice maneuvering it so that he could hit as many people as possible.  SAIPOV brought a note to the attack with the ISIS flag and rallying cry written on it.  After his attack, while in custody at a hospital, SAIPOV told the FBI that he committed the attack in response to calls from the leader of ISIS and that he was proud of what he had done.  SAIPOV smiled when describing his attack and sought to hang the ISIS flag in his hospital room.  After the attack, ISIS praised SAIPOV as an Islamic State soldier and called his attack one of the most prominent attacks in the United States.  In the years since his attack, SAIPOV continued to demonstrate his devotion to ISIS, including through statements in court, recorded telephone calls, and writings seized from his prison cell.  In prison, SAIPOV also made statements confirming his continued belief that enemies of ISIS should be eliminated and threatening to cut the heads off of corrections officers.  At the liability and sentencing phases of trial, many of SAIPOV’s victims and their family members bravely described the terror he caused and the pain and suffering they continue to endure.

Judge Broderick sentenced SAIPOV to the statutory maximum penalty on each count of conviction and ordered that SAIPOV’s sentences on the counts of conviction charging him with murder and attempted murder of particular victims would run consecutively to each other and to all other sentences imposed.  In total, SAIPOV was sentenced to eight consecutive life sentences, 260 years in prison to run consecutively, and two additional life sentences to run concurrently to each other and to all other sentences imposed.  The Judge will issue an order concerning restitution to victims at a later date.

More than 20 victims and family members delivered emotional and powerful victim impact statements at SAIPOV’s sentencing.

*                *                *

In addition, SAIPOV, 34, of Uzbekistan, was sentenced to five years of supervised release. 

Mr. Williams praised the outstanding investigative efforts of the FBI’s New York Joint Terrorism Task Force, which consists of investigators and analysts from the FBI, the New York City Police Department, and over 50 other federal, state, and local agencies.  Mr. Williams also thanked the Department of Homeland Security, Homeland Security Investigations, the Department of Justice’s National Security Division, and the Criminal Division’s Capital Case Section, Organized Crime and Gang Section, Office of Enforcement Operations, and Office of International Affairs for their assistance.

The case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Amanda L. Houle, Jason A. Richman, Alexander Li, and Andrew Dember, with the assistance of Paralegal Specialist Daniel Sitko, are in charge of the prosecution, with assistance from Trial Attorney Michael Warbel of the Criminal Division’s Capital Case Section and Trial Attorney John Cella of the National Security Division’s Counterterrorism Section.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that OFER ABARBANEL was sentenced by U.S. District Judge Lewis A. Kaplan to four years in prison for defrauding investors and prospective investors in a mutual fund he founded and controlled.  ABARBANEL previously pled guilty to one count of investment adviser fraud.

U.S. Attorney Damian Williams said: “Ofer Abarbanel violated the trust placed in him by investors.  He promised investors safe and liquid investments, but instead transferred their money to counterparties he controlled and engaged in risky investments he was not authorized to make.  Today’s sentence should send a strong signal to investment advisers that violations of their fiduciary duties to investors will have consequences.”

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

Beginning in approximately 2018 through his arrest in June 2021, OFER ABARBANEL engaged in a scheme to defraud investors in a mutual fund he founded and controlled, called “Income Collecting 1-3 Months T-Bills Mutual Fund” (the “Fund”).  ABARBANEL also owned and controlled the investment adviser to the Fund.  In that capacity, ABARBANEL made materially false representations and omitted material information to the largest group of investors (the “Investor Group”) about how their money would be invested. 

Among other things, ABARBANEL falsely represented that investments in the Fund would be placed “primarily” in short-term United States Treasury securities, when instead of investing in such securities directly, ABARBANEL and his confederates transferred the investor funds to counterparties controlled by or otherwise closely associated with ABARBANEL for use, among other things, in trading not authorized by the Fund’s offering documents.

ABARBANEL further represented that, in order to enhance income, the Fund intended to invest in securities lending transactions as well as repurchase and reverse repurchase agreements.  ABARBANEL represented, as to these transactions, that the Fund would receive and maintain in its possession and control safe and secure collateral in the form of Treasury securities that could be quickly liquidated in the event a counterparty defaulted on its obligations.  ABARBANEL, however, failed to obtain for the Fund the promised collateral to secure the investments.  Nonetheless, ABARBANEL repeatedly represented, in substance, that the Fund had possession of the collateral.

In or about May and June 2021, ABARBANEL failed to honor a redemption request by the Investor Group for the entirety of its outstanding investment, totaling more than $100 million, instead placing conditions on the redemption that were contrary to the Fund’s offering document and to the Fund’s practices with respect to prior redemptions.  On or about June 16, 2021, the Fund transferred more than $10 million in investor funds from the Fund to a personal brokerage account of an attorney working with the Fund.

*                *                *

In addition to the prison sentence, OFER ABARBANEL, 48, of Woodland Hills, California, was ordered to forfeit $106 million and to pay restitution to victims in the amount of $106 million.

Mr. Williams praised the investigative work of the U.S. Postal Inspection Service.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today’s conviction in federal court of SIR MURRAY for witness tampering and conspiracy to commit witness tampering.  MURRAY threatened, intimidated, and offered bribes to a sex trafficking victim for the purpose of inducing her to recant testimony she gave in a prior trial against a sex trafficker.  The jury convicted MURRAY today following a three-day trial before U.S. District Judge Lorna G. Schofield.

U.S. Attorney Damian Williams said: “Sir Murray’s conviction sends a clear message to the public that efforts to corrupt the criminal justice system will not be tolerated.  Those who threaten, intimidate, or try to bribe witnesses will be held accountable, and those who engage in such efforts should be on notice that they will be brought to justice.”

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

In fall 2021, MURRAY agreed with Justin Rivera, who was convicted of conspiracy to commit sex trafficking following a trial in the Southern District of New York in June 2021, to tamper with a victim (“Victim-1”) who testified at Rivera’s trial.  MURRAY offered Victim-1 bribes, intimidated her, and threatened her for the purpose of persuading her to recant her testimony.  In executing the plan, MURRAY directly contacted Rivera, who was in custody, exclusively through a contraband cellphone that Rivera maintained where he was in custody. 

MURRAY and Rivera are both members of the Bloods street gang, and in his communications with Victim-1, MURRAY offered Victim-1 payment from “every Blood in [Long Island]” in exchange for Victim-1 recanting her testimony.  MURRAY also sent Victim-1 multiple written messages containing veiled threats stating that MURRAY had done an “investigation” of Victim-1, knew where she lived, and knew that Victim-1 had a “beautiful son.” 

MURRAY’s co-conspirator, Rivera, was convicted of one count of conspiracy to commit sex trafficking following a trial in June 2021 before U.S. District Judge Paul A. Engelmayer.  In October 2022, Judge Engelmayer sentenced Rivera to a prison term of 21 years.  Having considered much of the same evidence presented to the jury at MURRAY’s trial, Judge Engelmayer stated at Rivera’s sentencing that “the facts . . . set out a blatant instance of post-trial witness tampering” that “was transparently aimed at subverting a justly returned conviction.” 

*                *                *

MURRAY, 31, of Suffolk County, New York, was convicted of one count of witness tampering in connection with a criminal case and one count of conspiring to do the same.  The maximum sentence on both counts is life in prison.  

The maximum sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.  MURRAY is scheduled to be sentenced on September 18, 2023.

Mr. Williams praised the outstanding work of the Suffolk County Police Department and the Federal Bureau of Investigation’s Child Exploitation and Human Trafficking Task Force. 

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Thomas S. Burnett, Lisa Daniels, and Daniel H. Wolf are in charge of the prosecution, with the assistance of Paralegal Specialist Maria Gatica.

Damian Williams, the United States Attorney for the Southern District of New York, announced that a jury returned a guilty verdict today against MALEK BALOUCHZEHI, a/k/a “Malek Khan,” on charges of conspiring to import heroin into the United States and distributing heroin for importation into the United States.  U.S. District Judge Jesse M. Furman presided over the one-week trial.  BALOUCHZEHI is scheduled to be sentenced September 12, 2023.

U.S. Attorney Damian Williams said: “Malek Balouchzehi sought to expand his significant drug trafficking operations by importing massive quantities of heroin into the United States and sending it right here, to New York.  Balouchzehi has trafficked drugs around the world for at least a decade.  Today, Balouchzehi stands convicted of his crimes and faces the possibility of a lengthy prison sentence.  We will continue to work diligently with the DEA to curb the importation of heroin, a lethal drug plaguing our communities.”

As reflected in the Indictment, public filings, and the evidence presented at trial:

BALOUCHZEHI is an Iran-based drug trafficker.  In or about September 2019, BALOUCHZEHI and an Iranian drug trafficking partner 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 Drug Enforcement Administration’s (“DEA”) direction and an undercover DEA agent posing as a New York-based heroin distributor.  In December 2019, BALOUCHZEHI sent a courier in Mozambique to deliver a sample of approximately two kilograms of heroin, with the understanding that those drugs would be transported to the United States for testing and sale in New York City.  Following this sample heroin shipment, BALOUCHZEHI planned to supply thousands of kilograms 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 of dollars in profits.  During these meetings in Nairobi, BALOUCHZEHI also described his prior international drug trafficking activities over the last decade, including his loads of thousands of kilograms of heroin, and showed photographs evidencing his large-scale trafficking operation.

*                *                *

BALOUCHZEHI, 39, of Iran, was convicted of one count of conspiring to import heroin into the United States, and one count of distributing heroin for importation into the United States, each of which carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.

The statutory minimum and maximum 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 Judge Furman.

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 are in charge of the prosecution.

The former president of a New York-based non-governmental entity (NGO) was sentenced today to three years and six months in prison for paying bribes to elected officials of the Republic of the Marshall Islands (RMI) in exchange for passing certain legislation.

According to court documents, beginning in or around 2016 and continuing until at least August 2020, Cary Yan, 51, conspired with others – including his assistant, Gina Zhou – in connection with a multi-year bribery scheme. Yan offered and paid tens of thousands of dollars in bribes to high-level RMI officials, including members of the RMI legislature, in exchange for supporting legislation creating a semi-autonomous region within the RMI called the Rongelap Atoll Special Administrative Region (RASAR) that would benefit the business interests of Yan and his associates. Yan carried out the bribery scheme using the New York-based NGO, including the physical use of its headquarters in Manhattan, to meet and communicate with RMI officials.

In December 2022, Yan and Zhou each pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practice Act. On Feb. 16, Zhou was sentenced to two years and seven months in prison for her role in the scheme.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Damian Williams for the Southern District of New York, and Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division made the announcement.

The FBI New York Field Office investigated the case. The Royal Thai Government, the U.S. Department of State’s Diplomatic Security Service, the Embassy of the United States in Bangkok, and the Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of Yan.

Assistant Chief Gerald M. Moody, Jr. and Trial Attorney Anthony Scarpelli of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Hagan Scotten, Lara Pomerantz, and Derek Wikstrom for the Southern District of New York prosecuted the case.

The Fraud Section is responsible for investigating and prosecuting Foreign Corrupt Practices Act (FCPA) matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Damian Williams, the United States Attorney for the Southern District of New York, announced that CARY YAN, a/k/a “Hong Hui Yan,” a/k/a “Chen Hong,” was sentenced today by United States District Judge Naomi Reice Buchwald to 42 months in prison.  YAN led a multi-year scheme to bribe government officials in the Republic of the Marshall Islands (the “RMI”) to pass legislation that would benefit his business interests.  In addition, on February 16, 2023, Judge Buchwald imposed a sentence of approximately 31 months in prison on YAN’s co-defendant GINA ZHOU, a/k/a “Chaoting Zhou,” a/k/a “Angel Zhou,” for her role in the scheme.

U.S. Attorney Damian Williams said: “Bribery of government officials erodes faith in democracy, and the effects of the corruption of government officials, whether in the United States or abroad, are felt worldwide.  The defendants have now been held accountable for their corrupt and illegal conduct.”

According to court filings in the case and publicly available information:

Between 2016 and 2020, YAN and ZHOU sought to develop a semi-autonomous region within a part of the RMI known as the Rongelap Atoll.  The creation of the proposed semi-autonomous region was intended by YAN, ZHOU, and those associated with them to obtain business by, among other things, allowing YAN and ZHOU to attract investors to participate in economic and social development projects that YAN, ZHOU, and others promised would occur in the semi-autonomous region.

As proposed by YAN and ZHOU, the so-called Rongelap Atoll Special Administrative Region (the “RASAR”) would be created by legislation (the “RASAR Bill”) that, if enacted by the RMI legislature, would significantly change the laws on the Rongelap Atoll to attract foreign businesses and investors, such as by lowering or eliminating taxation and relaxing immigration regulations.  YAN and ZHOU offered and provided a series of cash bribes and other incentives to induce RMI legislators to support the RASAR Bill.  When, despite their bribes, the initial effort to pass the RASAR bill failed, YAN and ZHOU sought, unsuccessfully, to oust the then-President of the RMI, who opposed the bill.  And, in 2020, following elections that resulted in a change in presidential administration, YAN and ZHOU resumed their efforts to create the RASAR.  In the course of these renewed efforts, YAN and ZHOU continued to use bribery, and in March 2020, the RMI legislature passed a resolution endorsing the concept of the RASAR, with the support of legislators to whom YAN and ZHOU had provided bribes and other incentives.

In imposing a 42-month sentence on YAN today, Judge Buchwald remarked that there was “no question that bribery of public officials undermines democracy, and that it is important as a matter of general deterrence to take crimes like this seriously. And the Court does.”

*                *                *

YAN, 51, and ZHOU, 35, both of whom have traveled on passports issued by the RMI, each pled guilty to one count of conspiring to violate the Foreign Corrupt Practices Act.    

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.  Mr. Williams additionally thanked the Royal Thai Government, the U.S. Department of State's Diplomatic Security Service, the Embassy of the United States in Bangkok, and the Justice Department's Office of International Affairs for their assistance in securing the arrest and extradition of the defendants.  

The case is being prosecuted by the Office’s Public Corruption Unit and the Criminal Division’s Fraud Section.  Assistant U.S. Attorneys Hagan Scotten, Lara Pomerantz, and Derek Wikstrom are in charge of the prosecution.  Assistant Chief Gerald Moody and Trial Attorney Anthony Scarpelli were also assigned to the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Matthew G. Olsen, the Assistant Attorney General for National Security, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Matthew S. Axelrod, Assistant Secretary for Export Enforcement of the Commerce Department, announced the unsealing of an Indictment charging XIANGJIANG QIAO, a/k/a “Joe Hansen,” with sanctions evasion, money laundering, and bank fraud offenses based on QIAO’s alleged participation in a scheme to use a sanctioned Chinese company to provide materials used in the production of weapons of mass destruction (“WMDs”) to Iran, in exchange for payments made through the U.S. financial system.  QIAO is at large in China.

U.S. Attorney Damian Williams said: “As alleged, Xiangjiang Qiao conspired to send isostatic graphite to Iran, in violation of U.S. sanctions.  Isostatic graphite is a high-tech material used in the nose tips of intercontinental ballistic missiles.  The Iranian regime of terror and repression, and those who facilitate it, pose a grave threat to our national security.  This Office will continue to work relentlessly to bring to justice those who advance the interests of the Iranian regime and thereby threaten the safety and security of the American people.”

Assistant Attorney General Matthew G. Olsen said: “These charges demonstrate the Justice Department’s commitment to preventing sensitive technology from falling into the hands of foreign adversaries, including Russia, China, and Iran.  We will not tolerate those who would violate U.S. laws to allow authoritarian regimes and other hostile nations to use advanced technology to threaten U.S. national security and undermine democratic values around the world.”

FBI Assistant Director in Charge Michael J. Driscoll said: “Qiao, as alleged, participated in a yearslong scheme that directly violated United States sanctions by seeking to provide components used in manufacturing Weapons of Mass Destruction to Iran.  Evasions of sanctions designed to deter hostile foreign nations from producing dangerous weapons is a threat to the national security of the United States and our allies.  The FBI will be aggressive in its pursuit of any individual willing to deliberately violate imposed sanctions.”

Assistant Secretary for Export Enforcement Matthew S. Axelrod said: “Protecting sensitive American technology – like source code for ‘smart’ automotive manufacturing equipment or items used to develop quantum cryptography – from being illegally acquired by our adversaries is why we stood up the Disruptive Technology Strike Force.  The Strike Force actions announced today reflect the core mission of our Export Enforcement team – keeping our country’s most sensitive technologies out of the world’s most dangerous hands.”

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

XIANGJIANG QIAO, a/k/a “Joe Hansen,” is a national of the People’s Republic of China (“China”) and an employee of the China-based company Sinotech Dalian Carbon and Graphite Manufacturing Corporation (“Sinotech Dalian”).  Sinotech Dalian is part of a network of Chinese companies involved in the proliferation of WMDs and that, in particular, provide assistance in the procurement of materials for Iran’s ballistic missile program.  In 2014, the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) sanctioned Sinotech Dalian, adding the company to OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”), explaining that Sinotech Dalian is part of a network of China-based entities used to proliferate WMDs and, specifically, to aid Iranian ballistic missile procurement.  Sinotech Dalian’s inclusion on the SDN List prohibits it from using the U.S. financial system to conduct transactions without authorization from OFAC.  QIAO is an associate of Li Fangwei, a/k/a “Karl Lee,” who managed the Sinotech Dalian network of companies and was charged in 2014 in the Southern District of New York with sanctions evasion and other offenses based on his alleged illicit activities as a principal contributor to Iran’s ballistic missile program through China-based entities that have been sanctioned by the U.S. Government.  See United States v. Li Fangwei, 14 Cr. 144 (S.D.N.Y.).

In willful violation of U.S. sanctions on Iran and Sinotech Dalian, between at least March 2019 and September 2022, QIAO participated in a scheme to use Sinotech Dalian, including through transactions involving the U.S. financial system, to supply isostatic graphite to Iran for the production of WMDs.  Isostatic graphite is a type of graphite with an ultra-fine grain that is used in the manufacture of WMDs.  In particular, isostatic graphite is used in the manufacture of rocket nozzles and reentry vehicle nose tips in intercontinental ballistic missiles.  QIAO further took steps to conceal Sinotech Dalian’s involvement in the transaction by creating a bank account in the name of a front company to receive two transfers from a U.S. bank totaling over $15,000 as part of his efforts to facilitate the supply of isostatic graphite to Iran.

*                *                *

QIAO, 39, a Chinese national, is charged with one count of conspiracy to violate U.S. sanctions against Iran and Sinotech Dalian, in violation of the International Emergency Economic Powers Act (“IEEPA”), which carries a maximum sentence of 20 years in prison; two counts of violating the IEEPA, which each carry a maximum sentence of 20 years in prison; one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; two counts of attempted bank fraud, which each carry a maximum sentence of 30 years in prison; one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; and two counts of money laundering, which each 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 would be determined by a judge.

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

This case is being handled by the Office’s National Security and International Narcotics Unit.  Assistant U.S. Attorneys Gillian S. Grossman and Nicholas S. Bradley are in charge of the prosecution, with assistance from Trial Attorney S. Derek Shugert of the Counterintelligence and Export Control Section.

Today’s actions were coordinated through the Disruptive Technology Strike Force, an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.  Under the leadership of the Assistant Attorney General for National Security and the Assistant Secretary of Commerce for Export Enforcement, the Strike Force leverages tools and authorities across the U.S. Government to enhance the criminal and administrative enforcement of export control laws. 

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a six-count Indictment charging MONA FAIZ MONTRAGE for her role in a series of romance schemes and for laundering the proceeds of those schemes.  MONTRAGE was arrested in the United Kingdom on November 10, 2022, and was extradited from the United Kingdom on May 12, 2023.  MONTRAGE will be presented before U.S. District Judge Paul A. Crotty, to whom the case is assigned, later today.

U.S. Attorney Damian Williams said: “As alleged, Mona Faiz Montrage was a member of a criminal conspiracy that specifically targeted older Americans through romance scams.  These scams can be both financially and emotionally devastating for vulnerable victims.  Thanks to the efforts of our law enforcement partners, Montrage was arrested abroad and has been brought to the United States to face justice.”

FBI Assistant Director in Charge Michael J. Driscoll said: “We alleged today that Ms. Montrage participated in multiple romance scams – often targeting elderly victims – resulting in more than $2 million in fraudulent funds under her control.  Romance scams – especially those that target older individuals – are of major concern.  The FBI will be tireless in our efforts to hold fraudsters accountable in the criminal justice system.”

As alleged in the Indictment and other publicly filed materials:[1]

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

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

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

MONTRAGE received money from several victims of romance frauds whom members of the Enterprise tricked into sending money.  Among the false pretenses used to induce victims to send money to MONTRAGE were (i) payments to transport gold to the United States from overseas; (ii) payments to resolve a fake FBI unemployment investigation; and (iii) payments to assist a fake United States army officer in receiving funds from Afghanistan.

As to one victim, MONTRAGE used her real name and spoke to the victim several times by phone.  MONTRAGE sent the victim a tribal marriage certificate purporting to show that MONTRAGE and the victim had been married in Ghana.  The victim sent MONTRAGE approximately 82 wire transfers totaling approximately $89,000 to purportedly help with costs associated with MONTRAGE’s father’s farm in Ghana.

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

*                *                *

MONTRAGE, 30, of Accra, Ghana, is charged with one count of conspiracy to commit wire fraud, one count of wire fraud, one count of money laundering conspiracy, and one count of money laundering, each of which carry a maximum sentence of 20 years in prison.  MONTRAGE is also charged with one count of receipt of stolen money, which carries a maximum sentence of 10 years in prison, and one count of conspiracy to receive stolen money, 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 MONTRAGE will be determined by a judge.

Mr. Williams praised the outstanding work of the FBI.  Mr. Williams also thanked the United States Marshals Services, the National Extradition Unit, United States Customs and Border Protection, and the FBI Legal Attaché in London for their assistance in the investigation.  The U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division provided significant assistance in securing the defendant’s extradition from the United Kingdom.

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

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

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

Damian Williams, the United States Attorney for the Southern District of New York, and L. Scott Moreland, Special Agent in Charge of the Department of the United States Army Criminal Investigation Division’s (“Army CID”) Major Procurement Fraud Field Office, announced today the arrest YOUNG BEOM KIM, a native of the Republic of Korea (“Korea”) and a United States citizen, on charges of honest services wire fraud, bribery, and money laundering.  As alleged in an Indictment unsealed today in Manhattan federal court, KIM, while acting in his capacity as Chief of the Design Branch at Army Garrison Yongsan/Casey in Korea (“USAG-Y/C”), schemed to enrich himself through bribes and kickbacks from various manufacturers and suppliers of parts used in U.S. Army contracts.  KIM is expected to be presented today before United States Magistrate Judge James L. Cott.  The case has been assigned to United States District Judge Richard M. Berman.  

U.S. Attorney Damian Williams said: “As alleged in the Indictment, Young Beom Kim was responsible for overseeing construction contracts, including for the repair of bunkers, at Army Garrison Yongsan/Casey in Korea, located just miles from the North Korean border.  The importance of Kim’s work and duties to the Army and its troops cannot be overstated.  Kim betrayed those duties in exchange for a quick buck.  Individuals who would betray their positions of trust for personal financial gain will continue to be held to account by this Office.”

Special Agent in Charge L. Scott Moreland said: “Today’s arrest should serve as a stark reminder that our agents are relentless in their pursuit of those who choose to defraud the government.  We have a very robust group of highly trained special agents and analysts who are masters at combating and uncovering fraud, deception, and other criminal acts associated with government contracting and purchasing.  CID will continue to see to it that anyone suspected of contract fraud and corruption is brought to justice.”

According to the allegations in the Indictment unsealed today in Manhattan federal court and other publicly filed documents: [1]

From at least May 2017 through at least August 2021, KIM was a civilian employee for the U.S. Army, primarily serving as Chief of the Design Branch for the Directorate of Public Works at USAG-Y/C in Korea.  KIM’s responsibilities included designing, reviewing, approving, and/or amending various maintenance, repair, and construction contracts at USAG-Y/C.  While acting in that capacity, KIM helped ensure that certain Army contracts included the use of parts manufactured or supplied by specific companies.  Some of these parts included blast doors, blast valves, shock mounts, and shock isolators (i.e., equipment designed to protect Army personnel in the event of an attack).  In return, the companies manufacturing or supplying those parts collectively sent over $400,000 in kickbacks to KIM.  A significant portion of these funds were laundered through bank accounts controlled by KIM’s adult relatives – including one account held in the name of a shell company (i.e. a company which existed in name only and which performed no legitimate business functions) – and were ultimately used to enrich KIM and to pay for bills and expenses incurred by KIM.

*                *                *

KIM, 62, a resident of Korea, is charged with one count of conspiracy to commit honest services wire fraud and bribery, which carries a maximum sentence of five years in prison; two counts of honest services wire fraud; each of which carry a maximum sentence of 20 years in prison; two counts of bribery, each of which carry a maximum sentence of 15 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. 

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

Mr. Williams praised the outstanding work of Army CID and Special Agents from the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams thanked the Antitrust Division of the U.S. Department of Justice for its assistance in this case.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Frank J. Balsamello and Jonathan E. Rebold are in charge of the prosecution. 

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ONEKEY, LLC, a New Jersey construction company, was sentenced to three years of probation and ordered to pay a $218,417 fine and its principal, FINBAR O’NEILL, was sentenced to three months in prison today by U.S. Magistrate Judge Paul E. Davison, following their guilty plea to willfully violating Occupational Safety and Health Administration (“OSHA”) regulations, resulting in the death of a construction worker (“Victim-1”) in Poughkeepsie, New York, on or about August 3, 2017. 

According to statements and filings in federal court:

In 2017, ONEKEY and O’NEILL implemented a soil compaction plan at a construction site at 1 Dutchess Avenue in Poughkeepsie.  The soil compaction plan involved piling large quantities of dirt, called “surcharges,” on top of the sites of three future buildings.  An engineering firm designed a plan for the use of the surcharges.  ONEKEY and O’NEILL did not follow this plan.  Instead, they built a wall to hold back one of the surcharges, so workers could get started on the buildings next to it.  ONEKEY and O’NEILL did not consult with any qualified person to see if the wall could withstand the weight to be placed on it by the surcharge. 

While people were working next to the wall, ONEKEY kept using construction machinery to add dirt to the surcharge pressing up against the wall.  The people working near the wall were not warned about the dangers it created.  ONEKEY and O’NEILL heard from people working at the site that the wall was not safe.  They did not fix the wall.

On August 3, 2017, workers complained that construction machines were driving on top of the surcharge, adding dirt to it.  Later that day, the wall collapsed.  As it fell, Victim-1 ran away from the wall, but he could not get away in time and was killed.

*                *                *

In addition to the prison term, O’NEILL, 57, of Paramus, New Jersey, was sentenced to one year of supervised release.

Mr. Williams praised the outstanding work of OSHA and the Department of Labor, Office of the Inspector General.

The case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Steven J. Kochevar and Stephanie Simon are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today the arrest of VIRGIL WARDLOW for paying for sex with a minor with fentanyl-laced pills.  WARDLOW was arrested yesterday evening in the Bronx, New York, and will be presented today before U.S. Magistrate Judge Valerie Figueredo. 

U.S. Attorney Damian Williams said: “The defendant’s alleged conduct is reprehensible: He allegedly used pills laced with fentanyl to pay for sex with a 16-year-old minor victim.  The victim’s 19-year-old friend ingested one of those pills and died shortly thereafter.  Worse, the defendant’s conduct was allegedly part of a pattern of similar behavior in which he exchanged or attempted to exchange dangerous narcotics for sex.  This Office will be relentless in its efforts to seek justice for victims of child sexual exploitation and for the families facing the horrific tragedy of losing a loved one to fentanyl poisoning.”

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

WARDLOW engaged in a pattern of paying for sex with illicit pills laced with 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.  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 he provided.  Thereafter, Victim-1 and Victim-2 became ill, and Victim-2 died.

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

*                *                *

WARDLOW, 31, of the Bronx, New York, is charged with one count of sex trafficking of a minor, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and one count of unlawful distribution of narcotics, which carries a maximum sentence of 20 years in prison.

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

Mr. Williams praised the outstanding investigative work of the 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.

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, and Thomas M. Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing today of an Indictment charging JAMES ELLINGSON, a/k/a “redandwhite,” with narcotics trafficking and money laundering offenses in connection with his sale of large quantities of narcotics on the “Silk Road” online marketplace.  In connection with his drug trafficking on Silk Road, ELLINGSON claimed to have arranged for the murder of five people for Silk Road founder Ross Ulbricht, a/k/a “Dread Pirate Roberts,” for which he was paid hundreds of thousands of dollars in Bitcoin.  Law enforcement does not possess any evidence that the purported murders actually took place.  ELLINGSON was previously arrested in Canada.  The case is assigned to U.S. District Judge Jennifer L. Rochon.   

U.S. Attorney Damian Williams said: “As alleged, Ellingson used the Dark Web to ship dangerous drugs around the world, including to New York City.  He discussed with Silk Road’s founder a plot to kill five people and received hundreds of thousands of dollars in Bitcoin in exchange.  Others who would try to hide in the shadows of the Internet should know that federal law enforcement will continue to uncover crime, wherever and however committed.”

IRS-CI Special Agent in Charge Thomas M. Fattorusso said: “Ellingson’s alleged criminal actions are far more egregious than just money laundering or the large quantities of narcotics trafficked through the ‘Silk Road’ online marketplace.  He also claimed to have acted as the middleman between the Silk Road founder and murderers-for-hire.  Now, Ellingson will face the consequences of his actions.”

According to the allegations in the Indictment:[1]

ELLINGSON is a Canadian citizen who lived in the vicinity of Vancouver, Canada.  From 2011 to 2013, ELLINGSON sold large quantities of narcotics through the Silk Road online marketplace under the usernames “MarijuanaIsMyMuse” and “Lucydrop.”  Through his Silk Road usernames, ELLINGSON sold more than four kilograms of methamphetamine, more than 100 grams of heroin, more than two kilograms of cocaine, more than six grams of LSD, approximately seven kilograms of the drug commonly known as “ecstasy” or “MDMA,” and more than 19 kilograms of marijuana, among other narcotics, to Silk Road customers in exchange for Bitcoin, including to customers in New York City.       

In March 2013, ELLINGSON, using the Silk Road username “redandwhite,” contacted Ulbricht, Silk Road’s founder, regarding a purported Silk Road user who had threatened to release personal identifying information of Silk Road drug vendors and customers.  In these messages, Ellingson claimed to have control over most drug trafficking in Western Canada. 

In one message, Ulbricht informed ELLINGSON that “[the murder target] is a liability and I wouldn't mind if he was executed.”  In another message, Ulbricht stated: “[the murder target] is causing me problems . . . I would like to put a bounty on his head if it’s not too much trouble for you.  What would be an adequate amount to motivate you to find him?”  ELLINGSON responded, “[the p]rice for clean is 300k+ USD,” and the “[p]rice for non-clean is 150-200k USD depending on how you want it done.”  ELLINGSON further explained, in part, that “[t]hese prices pay for 2 professional hitters including their travel expenses and work they put in.” 

Ulbricht later sent ELLINGSON $150,000 worth of Bitcoin to pay for the purported murder.  ELLINGSON and Ulbricht agreed on a code to be included with a photograph to prove that the murder had been carried out.  In April 2013, ELLINGSON and Ulbricht exchanged messages reflecting that ELLINGSON had sent Ulbricht photographic proof of the murder.  A thumbnail of a deleted photograph purporting to depict a man lying on a floor in a pool of blood with tape over his mouth was recovered from Ulbricht’s laptop after his arrest.  A piece of paper with the agreed-upon code written on it is shown in the photograph next to the head of the purportedly dead individual.

Later in April 2013, ELLINGSON and Ulbricht exchanged additional messages regarding a plot to kill four additional people in Canada.  Ulbricht sent ELLINGSON an additional $500,000 worth of Bitcoin for the murders.  ELLINGSON claimed to Ulbricht in online messages that the murders had in fact been committed.  

Law enforcement does not possess any evidence that the purported murders ELLINGSON claimed to have arranged actually took place. 

*                *                *

ELLINGSON, 47, of Vancouver, British Colombia, Canada, is charged with one count of narcotics trafficking conspiracy and one count of narcotics importation conspiracy, which each carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and one count of money laundering conspiracy, which carries a maximum sentence of 20 years 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 would be determined by a judge.

Mr. Williams praised the outstanding investigative work of IRS-CI’s New York Field Office and thanked the U.S. Department of Justice’s Office of International Affairs for their assistance in the extradition proceedings. 

This case is being handled by the Office’s Complex Frauds & Cybercrime Unit.  Assistant U.S. Attorneys Sagar Ravi and Drew Skinner are in charge of the prosecution.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ABDI HUSSEIN AHMED, a citizen of Kenya, was sentenced to 48 months in prison for conspiring to traffic large quantities of rhinoceros horns and elephant ivory — both protected wildlife species — worth millions of dollars that involved the illegal poaching of more than approximately 35 rhinoceros and more than 100 elephants, as well as for conspiring to distribute and possess with intent to distribute one kilogram or more of heroin.  The sentence was imposed earlier today by U.S. District Judge Gregory H. Woods.

AHMED is the fifth and final member of these conspiracies to be sentenced in a case prosecuted over the course of several years, and which has involved the extradition of multiple individuals from several countries in Africa.  AHMED’s co-conspirators were previously sentenced to substantial prison terms by Judge Woods.  Specifically, MOAZU KROMAH, a/k/a “Ayoub,” a/k/a “Ayuba,” a/k/a “Kampala Man,” a citizen of Liberia, was sentenced to a prison term of 63 months; AMARA CHERIF, a/k/a “Bamba Issiaka,” a citizen of Guinea, was sentenced to a prison term of 57 months; MANSUR MOHAMED SURUR, a/k/a “Mansour,” a citizen of Kenya, was sentenced to a prison term of 54 months; and BADRU ABDUL AZIZ SALEH, a/k/a “Badro,” a citizen of Kenya, was sentenced to a prison term of 42 months.

U.S. Attorney Damian Williams said: “Wildlife trafficking is a serious threat to the natural resources and the ecological heritage shared by communities across the globe, and heroin trafficking poses deadly risks to countless individuals.  Moazu Kromah, Amara Cherif, Mansur Mohamed Surur, Badru Abdul Aziz Saleh, and Abdi Hussein Ahmed chose profit over compliance with various United States and international laws that prohibit both of these crimes.  This case demonstrates the crossover between cases involving wildlife trafficking and other kinds of transnational crime.  And the substantial sentences received by these defendants show the resolve of this Office to use every tool at our disposal to ensure the protection of endangered species and the safety of our communities.”

According to the charging and other documents filed in the case, as well as statements made in court proceedings:

KROMAH, CHERIF, SURUR, and AHMED were members of a transnational criminal enterprise (the “Enterprise”) based in Uganda and surrounding countries that was engaged in the large-scale trafficking and smuggling of rhinoceros horns and elephant ivory, both protected wildlife species.  Trade involving endangered or threatened species violates several U.S. laws, as well as international treaties implemented by certain U.S. laws.

From at least in or about December 2012 through at least in or about May 2019, KROMAH, CHERIF, SURUR, and AHMED conspired to transport, distribute, sell, and smuggle at least approximately 190 kilograms of rhinoceros horns and at least approximately 10 tons of elephant ivory from or involving various countries in East Africa, including Uganda, the Democratic Republic of the Congo, Guinea, Kenya, Mozambique, Senegal, and Tanzania, to buyers located in the United States and countries in Southeast Asia.  Such weights of rhinoceros horn and elephant ivory are estimated to have involved the illegal poaching of more than approximately 35 rhinoceros and more than approximately 100 elephants.  In total, the estimated average retail value of the rhinoceros horns involved in the conspiracy was at least approximately $3.4 million, and the estimated average retail value of the elephant ivory involved in the conspiracy was at least approximately $4 million.

Typically, the defendants exported and agreed to export the rhinoceros horns and elephant ivory for delivery to foreign buyers, including a buyer represented to be in Manhattan, in packaging that concealed the rhinoceros horns and elephant ivory in, among other things, pieces of art such as African masks and statues.  The defendants received and deposited payments from foreign customers that were sent in the form of international wire transfers, some of which were sent through U.S. financial institutions, and paid in cash.

On or about March 16, 2018, law enforcement agents intercepted a package containing a black rhinoceros horn sold by the defendants that was intended for a buyer represented to be in Manhattan: 

From in or about March 2018 through in or about May 2018, the defendants offered to sell additional rhinoceros horns of varying weights, including horns weighing up to approximately seven kilograms.  On or about July 17, 2018, law enforcement agents intercepted a package containing two rhinoceros horns weighing over five kilograms that were sold by the defendants and intended for a buyer represented to be in Manhattan:

Separately, from at least in or about August 2018 through at least in or about May 2019, SURUR, AHMED, and SALEH conspired with others to distribute and possess with intent to distribute a large quantity of heroin to a buyer represented to be located in New York.

KROMAH was arrested in Uganda on June 12, 2019, and expelled to the United States on June 13, 2019.  CHERIF was arrested in Senegal on June 7, 2019, and extradited to the United States on April 2, 2020.  SURUR was arrested in Kenya on July 29, 2020, and extradited to the United States on January 25, 2021.  SALEH was arrested in Kenya on May 30, 2022, and extradited to the United States on June 17, 2022.  AHMED was arrested in Kenya on August 1, 2022, and extradited to the United States on September 3, 2022.  The defendants all have been detained since their arrest and arrival in this country.

*                *                *

KROMAH, 53, of Liberia; CHERIF, 58, of Guinea; SURUR, 62, of Kenya; and AHMED, 49, of Kenya, each pled guilty to one count of conspiracy to commit wildlife trafficking.  In addition, KROMAH and CHERIF both pled guilty to two counts of wildlife trafficking.  SALEH, 52, of Kenya, SURUR, and AHMED each pled guilty to one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.

Mr. Williams praised the outstanding investigative work of the U.S. Fish and Wildlife Service and the U.S. Drug Enforcement Administration, and he thanked law enforcement authorities and conservation partners in Uganda and Kenya, including the Uganda Wildlife Authority, the Uganda Office of the Director of Public Prosecution, the Uganda Police Force, the Kenya Directorate of Criminal Investigations, and the Kenyan Office of the Director of Public Prosecutions, for their assistance in this investigation.  Mr. Williams also thanked the U.S. Department of Justice’s Office of International Affairs and the Department of State for their invaluable assistance, which made it possible to secure the arrest and return of these five defendants from Kenya, Senegal, and Uganda to the United States.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Sagar K. Ravi and Jarrod L. Schaeffer are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that MARCELO MARIN VARGAS was sentenced yesterday by U.S. District Judge Cathy Seibel to 20 years in prison following VARGAS’s guilty plea in September 2022 to three counts of coercion and enticement of minors to engage in illegal sexual activity.  

U.S. Attorney Damian Williams said: “This sentence sends a clear message to those who would coerce and entice minors to engage in illegal sexual conduct over the internet: Hiding behind a screen will not save you.  We will find you and we will put an end to your victimization of children.  Crimes like these cause real pain and create real victims.”

According to the Information to which VARGAS pled guilty:

VARGAS used a computer and the internet to persuade, induce, entice, and coerce three minor girls to send images and videos of themselves engaging in sexual activity to VARGAS over the internet.

*                *                *

In addition to the prison term, VARGAS, 45, of Putnam County, New York, was ordered to pay restitution for one of VARGAS’s victims in the amount of $3,000.

Mr. Williams praised Homeland Security Investigations for their outstanding investigative work. 

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that ARDAE HINES, a/k/a “Young Money,” a/k/a “YM,” pled guilty today to conspiracy to commit murder in aid of racketeering and distribution of narcotics in connection with his involvement in the August 1, 2016, murder of Deandric Little in Newburgh, New York.  As part of his guilty plea, HINES admitted that he knowingly and intentionally agreed to kill Little and that Little died as a result.  HINES pled guilty before U.S. District Judge Cathy Seibel.

U.S. Attorney Damian Williams said: “On August 1, 2016, Ardae Hines, a leader of the violent Southside street gang in Newburgh, directed a juvenile gang member to murder Deandric Little in what is considered to be Southside’s territory.  Today’s guilty plea, which comes nearly six years after Hines was initially arrested on federal racketeering charges shows that we will continue to vigorously pursue justice for as long as it takes and hold accountable those who commit acts of violence in our communities.  I commend the tenacity of our law enforcement partners, who worked tirelessly to investigate Deandric Little’s murder.”

According to the allegations in the Superseding Information and other documents filed in federal court as well as statements made in public court proceedings:

From at least 2014 through June 2017, HINES was a member of the Southside Gang, a criminal enterprise centered in and around the intersection of South Street and Chambers Street in an area of Newburgh known as the “Southside.”  In order to enrich the members of the enterprise; preserve and protect the power, territory, and profits of the enterprise; and to keep victims and potential victims in fear of the enterprise, Southside members and associates committed, conspired, attempted, and threatened to commit acts involving murder, assault, robbery, and other acts of violence; possessed and used firearms; distributed controlled substances, including crack cocaine and heroin; and committed acts of intimidation and made threats to deter and punish potential witnesses to their crimes.

On or about August 1, 2016, as part of his membership in Southside, ARDAE HINES orchestrated the murder of Deandric Little in Newburgh.  During the course of an argument with Little on South Street, the heart of Southside territory, HINES instructed a juvenile member of Southside to murder Little.  The juvenile shot Little, and Little died of his injuries soon thereafter. 

*                *                *

ARDAE HINES, 34, of Newburgh, New York, pled guilty to narcotics trafficking, which carries a maximum sentence of 20 years in prison, and conspiracy to commit murder in aid of racketeering, which carries a maximum sentence of 10 years in prison.  HINES will be sentenced before Judge Seibel later this year.

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 Federal Bureau of Investigation’s Hudson Valley Safe Streets Task Force and the City of Newburgh Police Department.  Mr. Williams thanked the Orange County District Attorney’s Office for its invaluable ongoing assistance in the case.  Mr. Williams also thanked the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Town of Newburgh Police Department, the New York State Police, the Orange County Sheriff’s Department, the Town of New Windsor Police Department, and the New York Department of Corrections and Community Supervision for their assistance in the case. 

This case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Lindsey Keenan, Jacqueline Kelly, and Samuel Raymond are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that NICKOLAS SHARP, a former employee of a public New York-based technology company (“Company‑1”) was sentenced today to six years in prison.  In December 2020, SHARP secretly stole gigabytes of Company-1’s data.  While purportedly working to remediate the security breach he created, SHARP extorted the company, as an anonymous hacker, for nearly $2 million for the return of the files and the identification of a remaining purported vulnerability.  SHARP subsequently re-victimized his employer by causing the publication of misleading news articles as a purported anonymous whistleblower about the company’s handling of the breach that he perpetrated, which were followed by the loss of over $4 billion in Company-1’s market capitalization.  SHARP previously pled guilty to intentionally damaging a protected computer, wire fraud, and making false statements to the Federal Bureau of Investigation (“FBI”) before U.S. District Judge Katherine Polk Failla, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Nickolas Sharp was paid close to a quarter million dollars a year to help keep his employer safe.  He abused that trust by stealing a massive amount of sensitive data, attempting to implicate innocent employees in his attack, extorting his employer for ransom, obstructing law enforcement, and spreading false news stories that harmed the company and anyone who invested into the company.  Sharp now faces serious penalties for his callous crimes.”

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

At all times relevant to the Indictment, Company-1 was a technology company headquartered in New York that manufactured and sold wireless communications products and whose shares were traded on the New York Stock Exchange.  SHARP was employed by Company-1 from in or about August 2018 through on or about April 1, 2021.  SHARP was a senior developer who had access to credentials for Company-1’s Amazon Web Services (“AWS”) and GitHub Inc. (“GitHub”) servers.

In about December 2020, while interviewing for a position at another company, SHARP repeatedly misused his administrative access to download gigabytes of confidential data from his employer.    During the course of this cybersecurity incident (the “Incident”), SHARP caused damage to Company-1’s computer systems by altering log retention policies and other files in order to conceal his unauthorized activity on the network.  SHARP modified session file names to attempt to make it appear as if other coworkers were responsible for his malicious sessions. 

In or about January 2021, while working on a team remediating the effects of the Incident, SHARP sent a ransom note to Company-1, posing as an anonymous attacker who claimed to have obtained unauthorized access to Company-1’s computer networks.  The ransom note sought 50 Bitcoin — which was the equivalent of approximately $1.9 million, based on the prevailing exchange rate at the time — in exchange for the return of the stolen data and the identification of a purported “backdoor,” or vulnerability, to Company-1’s computer systems.  After Company-1 refused the demand, SHARP published a portion of the stolen files on a publicly accessible online platform.

On or about March 24, 2021, FBI agents executed a search warrant at SHARP’s residence in Portland, Oregon, and seized certain electronic devices belonging to SHARP, including a laptop SHARP had used to steal Company-1’s data.  During the execution of that search, SHARP made numerous false statements to FBI agents.

Several days after the FBI executed the search warrant at SHARP’s residence, SHARP caused false news stories to be published about the Incident and Company-1’s response to the Incident.  In those stories, SHARP identified himself as an anonymous whistleblower within Company-1 who had worked on remediating the Incident and falsely claimed that Company-1 had been hacked by an unidentified perpetrator who maliciously acquired root administrator access to Company-1’s AWS accounts.  In fact, as SHARP well knew, SHARP himself had taken Company-1’s data using credentials to which he had access, and SHARP had used that data in a failed attempt to extort Company-1 for millions of dollars.

Following the publication of these articles, between approximately March 30, 2021, and March 31, 2021, Company-1’s stock price fell approximately 20%, losing over $4 billion in market capitalization.  SHARP also attempted to cause domestic and foreign regulators to investigate Company-1 based on his false allegations about the security breach he secretly caused.

*                *                *

SHARP, 37, of Portland, Oregon, pled guilty on February 2, 2023, to one count of transmitting a program to a protected computer that intentionally caused damage, one count of wire fraud, and one count of making false statements to the FBI.  In addition to the prison sentence, SHARP was sentenced to three years of supervised release and ordered to pay restitution of $1,590,487 and to forfeit personal property used or intended to be used in connection with these offenses.

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

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Vladislav Vainberg and Andrew K. Chan are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, Kenneth A. Polite, Jr., the Assistant Attorney General for the Department of Justice’s Criminal Division, and Ismail J. Ramsey, the United States Attorney for the Northern District of California, announced today the extradition and guilty plea of JOSEPH JAMES O’CONNOR, a/k/a “PlugwalkJoe,” a U.K. citizen.  O’CONNOR was extradited from Spain on April 26, 2023, and pled guilty earlier today before U.S. District Judge Jed S. Rakoff to two sets of charges: (i) conspiracy to commit computer hacking and other charges pending in the Southern District of New York relating to a fraudulent scheme perpetrated by O’CONNOR and his co-conspirators to use a cyber intrusion technique known as a SIM swap attack to steal approximately $794,000 worth of cryptocurrency from a Manhattan-based cryptocurrency company and then to launder the proceeds of the scheme (the “SDNY Case”) and (ii) a set of charges filed in the Northern District of California, and transferred to the SDNY under Federal Rule of Criminal Procedure 20, relating to O’Connor’s role in the July 2020 hack of Twitter, computer intrusions related to takeovers of TikTok and Snapchat user accounts, and cyberstalking two separate victims (the “NDCA Case”).

U.S. Attorney Damian Williams said: “Joseph O’Connor, a/k/a “PlugwalkJoe,” used his sophisticated technological abilities for malicious purposes – conducting a complex SIM swap attack to steal large amounts of cryptocurrency, hacking Twitter, conducting computer intrusions to take over social media accounts, and even cyberstalking two victims, including a minor victim.  O’Connor’s guilty plea today is a testament to the importance of law enforcement cooperation, and I thank our law enforcement partners for helping to bring to justice those who victimize others through cyber-attacks.” 

Assistant Attorney General Kenneth A. Polite, Jr. said: “O’Connor’s criminal activities were flagrant and malicious, and his conduct impacted multiple people’s lives.  He harassed, threatened, and extorted his victims, causing substantial emotional harm.  Like many criminal actors, O’Connor tried to stay anonymous by using a computer to hide behind stealth accounts and aliases from outside the United States.  But this plea shows that our investigators and prosecutors will identify, locate, and bring to justice such criminals to ensure they face the consequences for their crimes.”  

NDCA U.S. Attorney Ismail J. Ramsey said: “O’Connor has left an impressive trail of destruction in the wake of his wave of criminality.  This case serves as a warning that the reach of the law is long, and criminals anywhere who use computers to commit crimes may end up facing the consequences of their actions in places they did not anticipate.”  

According to the allegations in the publicly filed charging documents against O’CONNOR, court filings, and statements made in court:

The SDNY Case

During a cyber intrusion known as a SIM swap attack, cyber threat actors gain control of a victim’s mobile phone number by linking that number to a subscriber identity module (“SIM”) card controlled by the threat actors, resulting in the victim’s calls and messages being routed to a malicious unauthorized device controlled by the threat actors.  The threat actors then typically use control of the victim’s mobile phone number to obtain unauthorized access to accounts held by the victim that are registered to the mobile phone number.

Between approximately March 2019 and May 2019, JOSEPH JAMES O’CONNOR and his co-conspirators perpetrated a scheme to use SIM swaps to conduct cyber intrusions in order to steal approximately $794,000 worth of cryptocurrency from a Manhattan-based cryptocurrency company (“Company-1”), which, at all relevant times, provided wallet infrastructure and related software to cryptocurrency exchanges around the world. 

As part of the scheme, O’CONNOR and his co-conspirators successfully perpetrated SIM swap attacks targeting at least three Company-1 executives.  Following a successful SIM swap attack targeting one of the executives on or about April 30, 2019, O’CONNOR and his co-conspirators successfully gained unauthorized access to multiple Company-1 accounts and computer systems.  On or about May 1, 2019, through their unauthorized access, O’CONNOR and his co-conspirators stole and fraudulently diverted cryptocurrency of various types (the “Stolen Cryptocurrency”) from cryptocurrency wallets maintained by Company-1 on behalf of two of its clients.  The Stolen Cryptocurrency was worth at least approximately $794,000 at the time of the theft. 

After stealing and fraudulently diverting the Stolen Cryptocurrency, O’CONNOR and his co-conspirators laundered it through dozens of transfers and transactions and exchanged some of it for Bitcoin using cryptocurrency exchange services.  Ultimately, a portion of the Stolen Cryptocurrency was deposited into a cryptocurrency exchange account controlled by O’CONNOR.

The NDCA Case

Between 2019 and 2020, O’CONNOR participated in a variety of crimes associated with exploitation of social media accounts, online extortion, and cyberstalking.

In July 2020, O’CONNOR participated in a conspiracy to gain unauthorized access to social media accounts maintained by Twitter, Inc. (“Twitter”).  In early July 2020, O’CONNOR’s co-conspirators used social engineering techniques to obtain unauthorized access to administrative tools used by Twitter to maintain its operations.  Those co-conspirators were able to use the tools to transfer control of certain Twitter accounts from their rightful owners to various unauthorized users.  In some instances, the co-conspirators took control themselves and used that control to launch a scheme to defraud other Twitter users.  In other instances, the co-conspirators sold access to Twitter accounts to others.  O’CONNOR communicated with others regarding purchasing unauthorized access to a variety of Twitter accounts, including accounts associated with public figures around the world.  A number of Twitter accounts targeted by O’CONNOR were subsequently transferred away from their rightful owners.  O’CONNOR agreed to purchase unauthorized access to one Twitter account for $10,000.

O’CONNOR also accessed without authorization one of the most highly visible TikTok accounts in August 2020, which was associated with a public figure with millions of followers (“Victim-1”).  O’CONNOR and his associates obtained unauthorized access to Victim-1’s account via a SIM swap after discussing a variety of celebrities to target, and O’CONNOR used his unauthorized access to Victim-1’s platform to post self-promotional messages, including a video in which O’CONNOR’s voice is recognizable.  O’CONNOR also stated publicly, via a post to Victim-1’s TikTok account, that he would release sensitive, personal material related to Victim-1 to individuals who joined a specified Discord server.

O’CONNOR targeted another public figure (“Victim-2”) in June 2019.  O’CONNOR and his associates obtained unauthorized access to Victim-2’s account on Snapchat via a SIM swap.  They used that access to obtain sensitive materials, to include private images, that Victim-2 had not made publicly available.  O’CONNOR sent copies of these sensitive materials to his associates.  O’CONNOR and his associates also reached out to Victim-2 and threatened to publicly release the stolen sensitive materials unless Victim-2 agreed to publicly post messages related to O’CONNOR’s online persona, among other things.

Lastly, O’CONNOR stalked and threatened a minor victim (“Victim-3”) in June and July 2020.  In June 2020, O’CONNOR orchestrated a series of swatting attacks on Victim-3.  A “swatting” attack occurs when an individual makes a false emergency call to a public authority in order to cause a law enforcement response that may put the victim or others in danger.  On June 25, 2020, O’CONNOR called a local police department and falsely claimed that Victim-3 was making threats to shoot people.  O’CONNOR provided an address that he believed was Victim-3’s address, which would have the result of causing a law enforcement response.  That same day, O’CONNOR placed another call to the same police department and stated that he was planning to kill multiple people at the same address.  In response to that call, the department dispatched every on-duty officer to that address in reference to an armed and dangerous individual.  O’CONNOR sent other swatting messages that same day to a high school, a restaurant, and a sheriff’s department in the same area.  In those messages, O’CONNOR represented himself as either Victim-3 or as a resident at the address he believed was Victim-3’s.  The following month, O’CONNOR called multiple family members of Victim-3 and threatened to kill them.

The NDCA Case was transferred to the Southern District of New York pursuant to Federal Rule of Criminal Procedure 20 and consolidated with the SDNY Case before Judge Rakoff.

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O’CONNOR, 23, of the United Kingdom, pled guilty before Judge Rakoff to the following charges: (i) as part of the SDNY Case — conspiracy to commit computer intrusions, which carries a maximum sentence of five years in prison; conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and (ii) as part of the NDCA Case — conspiracy to commit computer intrusion and two counts of committing computer intrusions, each of which carries a maximum sentence of five years in prison; making extortive communications, which carries a maximum sentence of two years in prison; two counts of stalking, each of which carries a maximum sentence of five years in prison; and making threatening communications, which carries a maximum sentence of five years in prison.  As part of his guilty plea, O’CONNOR agreed to forfeit a sum of money equal to $794,012.64 and to make restitution to victims of his crimes.  O’CONNOR is scheduled to be sentenced by Judge Rakoff on June 23, 2023, at 3:30 p.m.

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

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  He also thanked the Justice Department’s Office of International Affairs for its assistance in the extradition.

The SDNY Case is being handled by the Complex Frauds and Cybercrime Unit of the United States Attorney’s Office for the Southern District of New York.  Assistant U.S. Attorney Olga I. Zverovich is in charge of the prosecution of the SDNY Case.  The NDCA Case is being handled by the United States Attorney’s Office for the Northern District of California and the Computer Crime and Intellectual Property Section (“CCIPS”) of the Department of Justice.  Assistant United States Attorney Andrew F. Dawson and CCIPS Assistant Deputy Chief Adrienne L. Rose are in charge of the prosecution of the NDCA Case.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that ISHAN WAHI, a former product manager at Coinbase Global, Inc. (“Coinbase”), was sentenced by U.S. District Judge Loretta A. Preska to two years in prison for providing Coinbase’s confidential business information about upcoming Coinbase crypto asset listings to his brother and his friend so that they could place profitable trades in advance of Coinbase’s listing announcements.  WAHI previously pled guilty to two counts of conspiracy to commit wire fraud.

U.S. Attorney Damian Williams said: “Ishan Wahi – a former Coinbase product manager – violated the trust placed in him by his employer by tipping others with valuable confidential information regarding Coinbase’s planned token listings.  Today’s sentence should send a strong signal to all participants in the cryptocurrency markets that the laws decidedly do apply to them.  The Southern District of New York will hold those who engage in insider trading to full account, regardless of whether their illegal conduct occurs in the equity markets or in the market for crypto assets.”

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

At all relevant times, Coinbase was one of the largest cryptocurrency exchanges in the world.  Coinbase users could acquire, exchange, and sell various crypto assets through online user accounts with Coinbase.  Periodically, Coinbase added new crypto assets to those that could be traded through its exchange, and the market value of crypto assets typically significantly increased after Coinbase announced that it would be listing a particular crypto asset.  Accordingly, Coinbase kept such information strictly confidential and prohibited its employees from sharing that information with others, including by providing a “tip” to any person who might trade based on that information.

Beginning in approximately October 2020, ISHAN WAHI worked at Coinbase as a product manager assigned to a Coinbase asset listing team.  In that role, WAHI was involved in the highly confidential process of listing crypto assets on Coinbase’s exchanges and had detailed and advanced knowledge of which crypto assets Coinbase was planning to list and the timing of public announcements about those crypto asset listings. 

On multiple occasions between June 2021 and April 2022, WAHI violated his duties of trust and confidence to Coinbase by providing confidential business information that he learned in connection with his employment at Coinbase to Nikhil Wahi and Sameer Ramani so that they could secretly engage in profitable trades around public announcements by Coinbase that it would be listing certain crypto assets on Coinbase’s exchanges.  Following Coinbase’s public listing announcements, on multiple occasions, Nikhil Wahi and Ramani sold the crypto assets for a profit. 

On April 12, 2022, a Twitter account that is well known in the crypto community tweeted regarding an Ethereum blockchain wallet “that bought hundreds of thousands of dollars of tokens exclusively featured in the Coinbase Asset Listing post about 24 hours before it was published.”  The trading activity referenced in the April 12 tweet was trading previously conducted by Ramani based on tips provided by WAHI.  Coinbase thereafter publicly replied on Twitter, noting that it had already begun investigating the matter and, a few weeks later, stated in a public blog post that any Coinbase employee who leaked confidential company information would be “immediately terminated and referred to relevant authorities (potentially for criminal prosecution).”  On May 11, 2022, Coinbase’s director of security operations emailed WAHI to inform him that he should appear for an in-person meeting relating to Coinbase’s asset listing process at Coinbase’s Seattle, Washington, office on May 16, 2022.  WAHI confirmed he would attend the meeting.

On the evening of May 15, 2022, WAHI purchased a one-way flight to India that was scheduled to depart the next day shortly before WAHI was supposed to be interviewed by Coinbase.  In the hours between booking the flight and his scheduled departure, WAHI called and texted Nikhil Wahi and Ramani about Coinbase’s investigation and sent both of them a photograph of the messages he had received on May 11, 2022, from Coinbase’s director of security operations.  Prior to boarding the May 16, 2022, flight to India, WAHI was stopped by law enforcement and prevented from leaving the country.

*                *                *

In addition to the prison sentence, ISHAN WAHI, 32, of Seattle, Washington, was ordered to forfeit various crypto assets that he received in connection with the scheme.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation.  He also acknowledged the assistance of the Justice Department’s National Cryptocurrency Enforcement Team, as well as that of the Securities and Exchange Commission, which separately initiated civil proceedings against WAHI.

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that CHRISTIAN VARELA, a former owner of a construction firm, was sentenced yesterday by U.S. District Judge Philip M. Halpern to two years in prison for failing to pay to the Internal Revenue Service (“IRS”) more than $4.4 million of payroll taxes he collected from his employees.  VARELA pled guilty to one count of failure to pay payroll taxes in September 2022.

According to the Information to which VARELA pled guilty and statements made in court:

VARELA owned and operated Gibraltar Contracting, Inc. (“Gibraltar”), a contracting firm with more than 55 employees that handled federal and state government construction contracts.  VARELA was responsible under federal law for collecting, truthfully accounting for, and paying to the IRS federal income tax and contributions to Social Security and Medicare withheld from Gibraltar’s employees’ pay.  In 10 different quarters from 2015 through 2018, VARELA failed to pay to the IRS a total of more than $4.4 million of these payroll taxes.   

*                *                *

In addition to his prison term, VARELA, 48, of Staten Island, New York, was sentenced to three years of supervised release and 12 months of home confinement.  The Court also imposed restitution to the IRS of $4,404,564.60.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that MICHAEL PASCHAL was found guilty of all four counts at trial, including sex trafficking a minor and conspiracy to commit sex trafficking of a minor.  The verdict followed a seven-day trial before U.S District Judge Vernon S. Broderick.

U.S. Attorney Damian Williams said: “Michael Paschal targeted a vulnerable teenager and prostituted her with others for his own profit.  He induced the minor victim with promises of food and shelter and then immediately exploited her.  The jury’s guilty verdict and the Court’s immediate remand of the defendant send a clear message to the public that those who prostitute minors will be held accountable.  We thank and commend the brave victim who came forward to law enforcement and testified at trial.  Her testimony was critical in holding the defendant accountable and ensuring that he cannot harm other victims, including minors, again.”

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

In or around July 2020, PASCHAL and a co-conspirator (“CC-1”) met a 17-year-old minor victim (“Minor Victim-1”) in another state.  PASCHAL and CC-1 induced Minor Victim-1 to travel with him from another state to his house in the Bronx with promises of food and shelter and with the intent to prostitute Minor Victim-1 from his Bronx residence. 

PASCHAL operated a prostitution business from his residence in the Bronx.  Minor Victim-1 stayed at PASCHAL’s residence for several weeks in July 2020, during which time PASCHAL prostituted Minor Victim-1. 

When Minor Victim-1 became sick, PASCHAL transported Minor Victim-1 to a children’s hospital for medical care.  PASCHAL communicated with employees of the Administration for Children’s Services while Minor Victim-1 was in the hospital in an attempt to have Minor Victim-1 released into his custody.

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

PASCHAL prostituted Minor Victim-1, and worked with others to prostitute Minor Victim-1, for weeks until she was recovered from PASCHAL’s residence in or about December 2020.  When confronted, PASCHAL told law enforcement, in substance, “what’s the big deal, she’s about to turn 18 anyway.”

*                *                *

PASCHAL, 52, of the Bronx, New York, was convicted of one count of conspiracy to commit sex trafficking of a minor, which carries a maximum sentence of life in prison; one count of sex trafficking of a minor, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; one count of transporting a minor for the purpose of prostitution, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; and one count of enticing an individual to travel interstate for the purpose of prostitution, which carries a maximum sentence of 20 years in prison.  The defendant was remanded into custody after the guilty verdict.

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 would be determined by the judge.  PASCHAL is scheduled to be sentenced on September 6, 2023.

Any individuals who believe they have information that may be relevant to this case should contact the U.S. Attorney’s Office at 1-866-874-8900 and reference this case.

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

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

Damian Williams, the United States Attorney for the Southern District of New York, announced that BRIAN O’NEILL, a Maryland attorney and escrow agent, was sentenced today by U.S. District Judge Valerie Caproni to nine years in prison for defrauding his clients of funds he was holding for them in escrow.  O’NEILL pled guilty to two counts of wire fraud in November 2022. 

According to the allegations contained in the Complaint and matters included in public filings:

Beginning at least as early as August 2020, O’NEILL engaged in two related fraudulent schemes.

First, O’NEILL engaged in a scheme to defraud a medical equipment company (“Victim-1”) by falsely promising to hold over $5 million of the company’s funds in escrow.  Specifically, in August 2020, Victim-1 entered into an agreement with a Florida-based medical wholesale company (“Seller-1”) for the purchase of personal protective equipment (“PPE”).  In connection with the transaction, Victim-1 and Seller-1 entered into an escrow agreement (the “Escrow Agreement”) with O’Neill & Partners, the firm at which O’NEILL was the managing partner.  Pursuant to the Escrow Agreement, O’Neill & Partners was to act as escrow agent for the transaction and hold $5.1 million deposited by Victim-1 in escrow.  Instead of holding that money as required, however, O’NEILL secretly used the funds to execute personal deals for the purchase of PPE and completely dissipated the funds by approximately November 2020.   

In November 2020, Victim-1 cancelled the transaction and sent a letter to O’Neill & Partners requesting that the $5.1 million in escrowed funds be returned to Victim-1.  When O’Neill & Partners refused to return Victim-1’s money, Victim-1 filed a civil action in U.S. District Court for the Southern District of New York (the “Civil Action”).  In connection with the Civil Action, the Court ordered O’Neill & Partners to deposit the $5.1 million with the Clerk of the Court.  On September 22, 2021, O’NEILL deposited $3.3 million with the Clerk.   

The $3.3 million deposited with the Clerk, however, formed the basis of O’NEILL’s second scheme to defraud.  That money was neither part of the $5.1 million Victim-1 had deposited nor was it O’NEILL’s own money.  Instead, it consisted of funds being held by O’NEILL in escrow for a separate transaction.  In other words, O’NEILL stole $3.3 million from a separate set of escrow clients in an attempt to satisfy the Court’s order in the Civil Action and repay Victim-1. 

*                *                *

In addition to his prison term, O’NEILL, 49, of Chevy Chase, Maryland, was sentenced to three years of supervised release.

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

This case is being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorneys Maggie Lynaugh, Amanda C. Weingarten, and Aline Flodr are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant ERIC LIRA pled guilty today for his role in providing banned performance-enhancing drugs (“PEDs”) to Olympic athletes in advance of the 2020 Olympic Games held in Tokyo in the summer of 2021.  LIRA is the first defendant to be charged under the Rodchenkov Anti-Doping Act, signed into law on December 4, 2020, which proscribes doping schemes for the purpose of influencing international sports competitions, including the Olympic Games.  LIRA pled guilty before U.S. Magistrate Judge Valerie Figueredo.

U.S. Attorney Damian Williams said: “This conviction is a watershed moment for international sport.  Lira provided banned performance-enhancing substances to Olympic athletes who wanted to corruptly gain a competitive edge.  Such craven efforts to undermine the integrity of sport subverts the purpose of the Olympic games: to showcase athletic excellence through a level playing field.  Lira’s efforts to pervert that goal will not go unpunished.”

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

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

LIRA is the first defendant charged and convicted pursuant to the recently enacted Rodchenkov Act.  On December 4, 2020, the Rodchenkov Act was signed into law, Pub. L. 116-206, and incorporated into Title 21 of the United States Code at sections 2401 through 2404.  The Rodchenkov Act prohibits any person, other than an athlete, to knowingly carry into effect, attempt to carry into effect, or conspire with any other person to carry into effect a scheme in commerce to influence by use of a prohibited substance or prohibited method any major international sports competition. 21 U.S.C. § 2402.

*                *                *

LIRA, 43, of El Paso, Texas, pled guilty to violating the Rodchenkov Act, which carries a maximum potential 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 defendant will be determined by a judge.

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

This case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Sarah Mortazavi and Benjamin Gianforti are in charge of the prosecution.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that JAMES JEREMY BARBERA, the founder and former chief executive officer (“CEO”) of a New York-based nanotechnology company, Nanobeak Biotech, Inc. (“Nanobeak”), was sentenced today to 48 months in prison by U.S. District Judge John G. Koeltl.  BARBERA was previously convicted following a one-week trial of securities fraud, wire fraud, and conspiracy offenses.

According to the Indictment, evidence presented during trial, court documents, and statements made in open court:

From in or about 2013 and in or about 2019, BARBERA was the founder and CEO of Nanobeak, a privately held nanotechnology company that represented to investors that the company had developed a breathalyzer sensor technology that could detect cancer and narcotics in human breath.

From at least in or about 2013 through in or about 2020, BARBERA and others perpetrated a scheme to defraud dozens of investors out of at least approximately $7 million (i) by soliciting investments through false and misleading statements, (ii) by failing to use investors’ funds as promised, and (iii) by converting investors’ money for his own use.  Specifically, BARBERA falsely represented that Nanobeak had developed a breathalyzer sensor that could detect narcotics and cancer in a person’s breath and that the company was expected to earn millions of dollars in sales revenue through distribution contracts.  In truth and in fact, Nanobeak never developed the purported technology, and it was impossible for the company to generate revenue because there was no breathalyzer device to sell and, accordingly, no distribution contracts.

BARBERA also falsely represented that he had undergraduate and graduate degrees in physics from New York University, that he had a business degree from the Massachusetts Institute of Technology, and that Nanobeak would soon have an initial public offering (“IPO”), which would result in large profits to investors.  In truth and in fact, the company was not close to an IPO, BARBERA was permanently barred from serving as the CEO of a public company as a result of a prior, unrelated proceeding brought by the U.S. Securities and Exchange Commission (“SEC”), and BARBERA never finished college and never attended MIT.

BARBERA converted for his own use approximately half of the investor funds raised in the form of cash withdrawals and to pay personal expenses, including private school and college tuition for his children, mortgage payments on his Central Park West apartment, and for other personal items, such as credit card bills, jewelry, automobiles, and daily living expenses.

*                *                *

In addition to his prison sentence, BARBERA, 67, of New York, New York, was ordered to pay more than $7 million in forfeiture. 

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and the National Aeronautics and Space Administration’s Office of Inspector General, and he also thanked the SEC for its assistance.

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

“Nathaniel Chastain exploited his advanced knowledge of which NFTs would be featured on OpenSea’s website to make profitable trades for himself.  Although this case involved trades in novel crypto assets, there was nothing particularly innovative about his conduct — it was fraud.  A jury has found that Chastain is guilty of using inside information for his own personal gain, and he now faces time in federal prison.”